Barak campaign broke Israeli law, subsidized by Clinton supporters

JERUSALEM -- Prime Minister Ehud Barak violated Israel's election finance law during his successful campaign last year by laundering more than $1 million in illegal contributions through registered charities, the chief state watchdog said on Thursday.

State Comptroller Eliezer Goldberg, who presented his report to the Knesset, said Barak's campaign "crushed the law in a blunt manner." He said Attorney General Elyakim Rubinstein will decide whether to prosecute Barak and his aides as well as others who violated the campaign law.

Goldberg said the investigation took place both in Israel and abroad. Opposition parliamentarians said Barak received millions of dollars from supporters of President Bill Clinton in the United States through fictitious nonprofit organizations.

Israel Radio said Rubinstein has decided to open a criminal investigation against Barak's party, the opposition Likud and other Knesset factions. The Justice Ministry refused to confirm the report.

"I am not convinced that the data I presented in the report is the complete picture," Goldberg, a former chief justice, said. "I expressed criticism in the report regarding the behavior of the prime minister. The question of what is the conclusion should be up to the public to judge. It is not for me to judge."

"I said in this report that the law was violated and this is what must stand before public scrutiny," the comptroller said.

In his report, the comptroller dismissed Barak's claim that he didn't know of the improprieties. The report said the extent of the illegal financing should have "light a red light" with Barak, who as head of the campaign was responsible for its activities.

The report said Barak's current Cabinet secretary Yitzhak Herzog funnelled 5 million shekels [$1.2 million] of unreported campaign contributions through Israeli charities. Sources said Herzog is most likely to resign and face prosecution in the wake of the report.

The comptroller fined Barak's One Israel faction 13.5 million shekels [$3.3 million]. Party leaders said the fine would be appealed to the High Court.

Barak has denied that he knew about the improprieties. Goldberg later told reporters that he found no evidence that demonstrated that the prime minister was lying.

"From a legal point of view this does not matter whether the prime minister knew," legal analyst Moshe Negbi told Israel Radio.

Goldberg said he did not call for a criminal probe because he did not want this to clash with his own civil investigation.

The comptroller also said the Center Party, which was aligned with the Barak campaign, overspent its ceiling by 17 million shekels [$4 million]. The Center Party was fined 3 million shekels [$720,000].

The Likud Party was also found to have engaged in campaign overspending. It was fined 500,000 shekels [$120,000].

At a news conference after the report, Likud leaders asserted that Barak knew of the election improprieties. Likud chairman Ariel Sharon called on Rubinstein to open an immediate criminal investigation against Barak.

Later, Barak dashed the accusation that he "bought" the election, saying he entered the campaign with a clear lead. He said he disagreed with the findings of the comptroller.

"I didn't know the organizations," he said. "I didn't raise funds. I wasn't updated on the details."