Key witness testifies in Olmert bribery case

A US businessman at the centre of a bribery case against Prime Minister Ehud Olmert testified he gave the Israeli leader cash-stuffed envelopes including personal loans that were never repaid. "I never expected anything personally. I never had any personal benefits from this relationship whatsoever," Morris Talansky told the Jerusalem District Court, estimating he had passed $150,000 to the veteran politician over a 15-year period.

Talansky, 75, gave preliminary testimony, at the request of prosecutors, in a case that has raised questions about Olmert's political survival at a time when he is talking peace with the Palestinians and pursuing indirect negotiations with Syria.

Both Olmert and Talansky, a New York-based fundraiser who broke down in tears during his court appearance, have denied any wrongdoing. Olmert has said he would resign if indicted.

Olmert, who was twice questioned by police in recent weeks, has said he took cash from Talansky for his two successful campaigns for mayor of Jerusalem in 1993 and 1998, a failed bid to lead the right-wing Likud party in 1999 and a further internal Likud election in 2002.

A judicial source said the sums involved totalled hundreds of thousands of dollars.

"I gave (Olmert) cash in envelopes," Talansky testified in English, praising him as "a man who could accomplish a great deal" for Israel and who deserved his support.

Legal experts have said investigators want to examine whether the money was reported to the proper authorities and if Olmert dispensed any favours in return for the cash. Israeli election law broadly prohibits political donations of more than a few hundred dollars.

Asked if he received receipts for the money he said he gave Olmert - a question that touched off laughter in the courtroom - the white-haired Talansky replied that he had not. He dismissively used the phrase "famous last words" to describe what he called Olmert's unfulfilled promise to pay him back for loans that he said included $25,000 for a family trip to Italy in 2004.

"I figured we don't need any notes from him. His word was gold. He was a friend, a very close friend. It was a loan," Talansky said.