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Ariel Sharon cleared in campaign funds scandal

Ariel Sharon will not face charges in an election campaign funds scandal but his son Omri will be indicted, the Israeli Attorney-General has ruled.

The younger Sharon, now a member of parliament, is suspected of setting up a shell company to direct illicit foreign donations to his father’s primary campaign in 1999. Sharon was later elected prime minister in 2001 and 2003.

An investigation continues into a questionable loan paid to Sharon’s sons in connection with the 1999 campaign.

If the Israeli Prime Minister had been indicted, it could have jeopardised his plan - highly controversial with right-wing Jews - to disengage Israeli troops from Gaza and parts of the West Bank. Parliament yesterday removed a major hurdle by approving compensation to Jewish settlers to be evacuated from occupied land in Gaza and parts of the West Bank.

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Foreign funding of political campaigns is illegal in Israel. Mr Sharon senior has denied any wrongdoing in the funding case, saying that his two sons alone handled the financing for his 1999 primary campaign for leadership of the right-wing Likud party. Sharon’s sons have remained silent on the scandal.

Prosecutors will have to ask the Knesset to lift parliamentary immunity for Omri Sharon, one of his father’s closest political advisers, to put him on trial.

Sharon and his sons also face a separate investigation into allegations that a $1.5 million loan from a South African businessman was used as collateral to repay alleged illicit contributions to his primary race.

Last June, Meni Mazuz, the Israeli Attorney-General, dropped a long-running bribery case against Mr Sharon that had threatened to topple him, citing lack of evidence, despite the chief prosecutor’s recommendation to indict him.

Investigators had looked into whether Sharon, as foreign minister in the 1990s, had used his influence to help an Israeli developer win approval for an Aegean resort.