It appears that Israeli Prime Minister Olmert may be in some legal hot water. The Jerusalem Post is reporting that the State Attorney will announce that a criminal investigation will proceed when the PM returns from a far east trip:

The state has decided to open a criminal investigation against Prime Minister Ehud Olmert on his alleged role intervention in the government tender for the sale of the controlling interest in Bank Leumi stock, Channel 10 reported Tuesday evening.

Due to a conflict of interest, Attorney General Menahem Mazuz, who would ordinarily be the official to declare a criminal investigation involving a head of state, has removed himself from the Olmert affair. According to Channel 10, Mazuz’s sister may have had a role in the Bank Leumi affair.

Instead, State Attorney Eran Shendar will announce the criminal investigation after Olmert returns from his visit to China.

According to Channel 10, the extent of the investigation has not yet been announced. While police will likely concentrate on the alleged Bank Leumi improprieties, it is possible that other scandals in which Olmert is suspected of taking a role will also be addressed, such as a number of real estate deals that may have been conducted illegally, including the purchase of Olmert’s home on Rehov Cremieux in Jerusalem.

Olmert is alleged to have intervened in the government tender for the sale of the controlling interest in Bank Leumi stock. And the real estate deals that are under investigation were sweet:

A Jewish-American businessman who has donated money to Prime Minister Ehud Olmert bought a home owned by the Olmert family for 30 percent more than its market value in the mid-1990s, the Haaretz daily reported Wednesday.

The reported deal marked the latest sign of trouble for the Israeli leader, who is already facing criticism for his handling of the war in Lebanon and is being investigated for other another questionable real estate deal.

According to the report, Uri Harkham bought the home in Jerusalem’s Nahlaot neighborhood in 1995 for the inflated price of about $660,000. He sold the house several years later for $430,000 a significant loss, the report said.

Harkham, a California real-estate owner and clothing maker, contributed $25,000 to Olmert’s 1993 campaign for mayor of Jerusalem, according to the paper.

And that’s just one of Olmert’s problems. He may also be in trouble for trying to stack the Income Tax Authority with cronies:

Prime Minister Ehud Olmert is a suspect in the case that exploded into the headlines today, in which “connected” businessmen are suspected of influencing top officials at the Income Tax Authority, some allegedly through the prime minister’s bureau chief Shula Zaken, to get tax breaks, reports journalist Yoav Yitzhak.

He claims the police have preliminary information but it isn’t clear if and when Olmert will be questioned.

Through his website News First Class, Yitzhak claims that Olmert enabled Zaken and her brothers to influence appointments at the Income Tax Authority, though he knew of her contacts and the businesses of her brothers.

The apex was the appointment of Jacky Matza as tax commissioner, whom the police suspect Olmert appointed at Zaken’s urging.

But Olmert had an interest in the matter, according to the suspicion, because Zaken and her brother Yoram Karashi had been involved in obtaining tax breaks for the prime minister’s personal friends and supporters.

For a guy who showed a curious lethargy in prosecuting a war against Israel’s deadliest enemy, Olmert sure exhibits a lot of energy when it comes to the finer points of political corruption and influence peddling.

In the meantime, the military man most responsible for the Lebanon debacle, IDF Chief of Staff Dan Halutz, has refused to resign and Olmert refuses to fire him. This has caused a crisis in the upper echelons of the IDF:

A senior Israel Defense Forces officer told Haaretz on Monday that many of the army’s senior officers believe the confidence crisis among the top brass is still strong, and that the coming months will test Israel Defense Forces Chief of Staff Dan Halutz’s ability to lead the army in reforms.

“A large segment of conference participants doubt the ability of the current leadership to lead,” a major general on the General Staff told Haaretz, during the first day of a two-day conference for senior IDF commanding officers.

The conference, located at the Hatzor air force base in southern Israel, was held to discuss the findings of the in-house investigations into the army’s wartime performance.

And given some of the criticisms emanating from this conference, Olmert may have to bite the bullet and fire Halutz due to the performance of the general staff during the war:

The following were mentioned among the lessons of the war: over-reliance on the Israel Air Force as a counter to Hezbollah; late call-up of reservist divisions; inability to solve the threat posed by short-range rockets; poor training and equipping of ground forces, particularly of reservist units; and failures in how decision making was made at the General Staff level.

Sources at the conference told Haaretz that in taking lessons from the war, Halutz is focusing on ways to prepare the IDF for future confrontations. They also stressed that the gathering was not presented as a setting for disagreements, and therefore many of those in attendance chose not to challenge the investigators’ findings and the relatively minor measures taken against individual officers.

It sounds like what’s wrong with the IDF won’t be fixed over night, especially the training of reserves that in recent years has suffered from budgetary concerns and perhaps a false sense that with Egypt and Jordan at peace with the Jewish state, the regular IDF forces would be able to handle most conflict scenarios that would come up. This kind of wake up call was a painful lesson and will almost certainly be addressed by Halutz or whoever is appointed to replace him.

And Olmert? He has chosen a foreign venue to admit his policy of unilateral concessions to Hamas and Hizbullah has been a failure:

Prime Minister Ehud Olmert recently expressed his disappointment with the results of Israel’s two unilateral withdrawals, saying that the violence that broke out in both Lebanon and the Gaza Strip in recent months convinced him that there is no point in any future unilateral moves of this kind.

In an interview with the Chinese news agency Xinhua prior to his departure Monday for a three-day visit to China, the prime minister said that he believes in the establishment of a Palestinian state alongside Israel. In order to achieve this, he added, Israel will have to withdraw from a large part of the territories that it controls today, and “we are ready to do this.”

“A year ago, I believed that we would be able to do this unilaterally,” the prime minister said, referring to a withdrawal from the West Bank. “However, it should be said that our experience in Lebanon and the Gaza Strip is not encouraging. We pulled out of Lebanon unilaterally, and see what happened. We pulled out of the Gaza Strip completely, to the international border, and every day they are firing Qassam rockets at Israelis.”

My reaction to that can be summed up in one utterance:

DUH!

Here’s a man who has a knack of “trivializing the momentous and complicating the obvious.” (HT: Gettysburg)

It will be interesting to see how long Olmert can survive these scandals and investigations. And it will also be interesting to see if there will be new elections in the next 6 months in Israel that may bring big changes both to the office of the Prime Minister as well as the Knesset.