Sharon Vows to Prove Innocence on Loan Scandal

With a widening corruption scandal engulfing his reelection campaign, Israeli Prime Minister Ariel Sharon proclaimed his innocence Wednesday as reports surfaced that he is under police investigation for receiving $1.5 million from a South African businessman.

Atty. Gen. Elyakim Rubinstein confirmed a Haaretz newspaper report that police are investigating the money transfer a year ago to bank accounts in the names of Sharon’s sons. But Sharon said he would prove he did nothing wrong.

“This is a despicable political libel, and I will refute this ... with facts,” Sharon said.

The Haaretz report was based on a secret Justice Ministry document stating that Sharon and his sons, Omri and Gilad, obtained the $1.5 million as a loan from businessman Cyril Kern to repay illegal campaign contributions given Sharon in 1999 in his bid to become Likud Party leader.

It is unclear whether the loan was illegal or simply “stinks to high heaven,” as a columnist wrote Wednesday, but allegations of a cover-up are fueling the controversy.

According to the document cited by Haaretz, when investigators asked Sharon how he repaid the campaign contributions, which the state comptroller had deemed illegal, the prime minister did not mention Kern’s loan. In the document, the paper said, “state attorneys make clear that Sharon is suspected of receiving bribes, fraud and breach of trust.”

The investigation comes after weeks of allegations of vote-buying and underworld involvement in Likud’s primary last month, in which the party chose its candidates for parliament.

A poll published on the Haaretz Web site found that the scandals have hammered Likud’s support ahead of the Jan. 28 presidential vote. It forecast only a narrow victory for the right-wing party, which would make forming a stable coalition government difficult for Sharon.