Israel's Sharon accused of corruption and fraud

With 3 weeks before vote, emerging reports could threaten re-election bid


JERUSALEM - Prime Minister Ariel Sharon, riding high in the polls three weeks before elections because of his tough treatment of Palestinians, has been hit with corruption accusations that threaten his candidacy. The potential scandal surfaced Tuesday in the daily Haaretz and was eagerly taken up by Israel's fiercely competitive news media.

According to the accusations, Sharon, leader of the right-wing Likud Party, committed bribery, fraud and breach of trust by taking a private $1.5 million loan from a South African businessman, Cyril Kern, to repay a political contribution in mid-2001 by an American company called Annex Research. Under Israeli law, foreigners are not allowed to contribute to election campaigns.

Sharon - whose reputation as a fierce and often controversial figure was built in all of Israel's wars, from early commando raids that killed civilians to the 1982 invasion of Lebanon - called the charges "a despicable political libel, and I will refute this libel with documents and facts."

"Whoever is disseminating this libel has one single aim - to bring down the prime minister," Sharon told reporters during a tour of the new security fence that is being built to separate Israelis and Palestinians.

The Haaretz article, citing a Justice Ministry document, said that Sharon, acting through sons Omri and Gilad, had tried to deceive the police and Israel's state comptroller in a complicated scheme to disguise the loan as a mortgage on his ranch.

The police have opened an investigation and asked for the cooperation of the South African authorities.

The daily Yedioth Ahronoth quoted a senior police officer as saying the charges were "a bombshell." The officer added, "This is a very serious case, beginning from the way things were conducted, the process the loans underwent and including what the prime minister said under questioning."

The allegations came just as campaign advertising on radio and television moved into high gear, with Israelis still shocked by a double suicide bombing that killed 22 people in Tel Aviv on Sunday.

"I am the one who can bring security and peace," Sharon says in one of his television spots. It is a message that had found increasing favor among Israelis, even though the violence has drastically increased during Sharon's tenure.

Yesterday, Israeli forces killed a gunman in the Golan Heights, Israel Radio reported. The Israeli military said the man was killed and another was captured during a clash with a group of armed men who were crossing into Israeli-controlled territory near the Syrian and Jordanian borders.

Meanwhile, the prime minister's main challenger, Labor candidate Amram Mitzna, a former general who has called for negotiations with the Palestinians, said Sharon was turning into an "unworthy" candidate.

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