By Jeffrey Heller
JERUSALEM (Reuters) - A U.S. businessman at the centre of abribery case against Prime Minister Ehud Olmert testified onTuesday he gave the Israeli leader cash-stuffed envelopesincluding personal loans that were never repaid.
Morris Talansky told the Jerusalem District Court he hadpassed $150,000 (77,000 pounds) to the veteran politician overa 15-year period, praising Olmert as "a man who couldaccomplish a great deal" for Israel and who deserved hissupport.
"I gave (Olmert) cash in envelopes," Talansky, a NewYork-based fundraiser, said in preliminary testimony requestedby prosecutors.
Both Olmert and Talansky have denied any wrongdoing in thecase that has raised questions about the prime minister'spolitical surival at a time when he is talking peace with thePalestinians and pursuing indirect negotiations with Syria.
Olmert, 62, has said he will resign if indicted, but chiefprosecutor Moshe Lador said it was too early to say if anindictment would be issued and that a decision would only betaken on completion of the police probe.
Even in a country where many people assume corruption inhigh places is rampant, the image that the prosecution paintedof Olmert as a politician with a penchant for expensive cigarsand a preference for cash over cheques offered by an AmericanJewish businessman was extraordinary.
Olmert, who was questioned by police twice in recent weeks,has said he took cash from Talansky for his two successfulcampaigns for mayor of Jerusalem in 1993 and 1998, a failed bidto lead the right-wing Likud party in 1999 and a furtherinternal Likud election in 2002.
A judicial source said the sums involved totalled hundredsof thousands of dollars.
"MAXED-OUT"
Legal experts have said investigators want to examinewhether the money was declared to authorities and if Olmertdispensed any favours in return. Israeli law broadly prohibitspolitical donations of more than a few hundred dollars.
Talansky said he handed over sums ranging from $5,000 to$15,000 at a time, in Israel or in hotel suites during visitsOlmert made to New York before becoming prime minister.
"I asked him why I couldn't write a check and he said it'sbecause of the way the money is channelled," Talansky said.
During one visit to an upscale Washington hotel, Olmertasked Talansky to pick up a bill for more than $4,700 for athree-day stay, according to the testimony.
"He was the guest of my credit card," Talansky said, addingthat Olmert told him, 'I can't use my card because it's maxedout'."
Asked if he received receipts for the money he said he gaveOlmert -- a question that touched off laughter in the courtroom-- the 75-year-old Talansky replied that he had not.
He dismissively used the phrase "famous last words" todescribe what he called Olmert's unfulfilled promise to repayloans that he said included $25,000 for a family trip to Italyin 2004.
"I figured we don't need any notes from him. His word wasgold. He was a friend, a very close friend. It was a loan."
Talansky said he "never expected anything personally" fromOlmert in return and "never had any personal benefits from thisrelationship, whatsoever".
But he also said Olmert had offered to help him with hismini-bar business and put him in touch with two major playersin the U.S. hotel market. Talansky said Olmert phoned and wrotethem but nothing came of it.
Talansky, visiting family in Israel, was ordered by thecourt to extend his stay and testify before returning to theUnited States. Olmert's lawyers said they planned tocross-examine him at length during his next trip to Israel inJuly.
Olmert has said that his ex-law partner was responsible foroverseeing the funds received for his election campaigns. Heand Olmert's former chief of staff have been questioned in thecase.
(Editing by Tim Pearce)
