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Israeli PM Takes Bank Loan to Repay Illegal Campaign Donations - 2001-11-13

Israeli Prime Minister Ariel Sharon has acknowledged taking a private bank loan to pay back more than $1 million worth of illegal campaign donations.

Mr. Sharon's office issued a statement Monday saying that he has taken out a loan from a commercial bank to repay overseas donors who contributed to his successful bid in 1999 to lead the Likud Party.

The donations were funnelled through a fictitious overseas company, Annex Research Inc., in an effort to disguise the identity of Mr. Sharon's backers. Israeli law requires that the financial activities of political parties and politicians must be openly available to the public.

Mr. Sharon's son Omri established the bogus, American-based company to finance his father's campaign for the Likud leadership against Ehud Olmert, the mayor of Jerusalem.

The prime minister's office issued its statement following demands from the Israeli parliament's law committee, which called for Mr. Sharon to disclose who had given him the money to pay back the fundraisers.

While the details of the loan were not made public, Israel's Channel Two, a private television station, reported that Mr. Sharon had been forced to mortgage his personal property, a farm known as "Sycamore" in the Negev area of southern Israel.

He took out the loan after pledging to Israel's state comptroller, Eliezer Goldberg that he would return the donations. It was Mr. Goldberg who, earlier this year, uncovered the unlawful election funding.

Mr. Goldberg confirmed to the law committee that Mr. Sharon had repaid about $1 million to the donors.

It is still unclear whether Mr. Sharon may also face legal proceedings.

Earlier this year, Mr. Goldberg referred the case to Israel's attorney general, Elyakim Rubinstein, who on October 10 instructed police to probe the matter further. The results of the police investigation have not been made public.