JERUSALEM – In a dramatic turnabout, Ehud Olmert, a former prime minister of Israel, was cleared on Tuesday by a Jerusalem court on two counts in a high-profile corruption case that cut short his term in office and changed the course of Israeli politics and diplomacy.
Mr. Olmert was convicted of breach of trust on a third, less pivotal charge but was expected to appeal.
The result rocked Israel and immediately raised questions about the possibility of overzealous police investigators and state prosecutors and their motives.
It was also likely to raise the question of a possible political comeback, although Mr. Olmert, who resigned as prime minister in 2008, is still embroiled in another serious corruption case in which he is charged with taking bribes in the construction of a huge residential complex while he was the mayor of Jerusalem.
Mr. Olmert’s three-year term as prime minister was marked by high-wire peace talks and military actions and dogged by multiple police investigations. Intensive peace talks with the Palestinians were interrupted by a devastating three-week Israeli offensive in Gaza in the winter of 2008-2009 and elections that followed Mr. Olmert’s resignation brought Benjamin Netanyahu, of the conservative Likud Party, to power. The peace process has been mostly stalled since.
Mr. Olmert has admitted to making mistakes in the years before he became prime minister but always denied criminal wrongdoing. His lawyers always maintained that he would prove his innocence in court.
Quoting Menachem Begin, a late prime minister, Mr. Olmert declared on Tuesday, “There are judges in Jerusalem.”
Mr. Begin, a stickler for the law, had uttered those words in a very different context, in the late 1970s, after Israel’s Supreme Court accepted the state’s position allowing the expropriation of land for a Jewish settlement in the West Bank. For Israelis, the phrase has since come to symbolize the principle that the law and judicial system should always stand above the government.
Mr. Olmert came of age politically in Mr. Begin’s Likud Party but by the time he became prime minister he was the leader of Kadima, a centrist party established in 2005.
Mr. Olmert, who was visibly relieved and admitted to being a bit emotional, said he respected the court’s decision regarding the third charge, on which he was found guilty, and that he would “learn the necessary lessons.” He emphasized that the court found him guilty of procedural irregularity but not of corruption. In that episode, known as the Investment Center affair, Mr. Olmert was charged with making decisions as minister of industry and trade that benefited clients of a close associate.
After keeping a low profile for most of the years since he left office, Mr. Olmert promised on Tuesday that Israelis would be hearing much more from him in the coming days.
Eli Zohar, the attorney who led Mr. Olmert’s defense team, said this was “A great day first of all for Israeli justice.”
Eli Abarbanel, a Jerusalem district attorney, said that while the result was unexpected, “We cannot dismiss the fact that such a senior figure was found guilty. The court strongly criticized his conduct.”
While Mr. Olmert’s supporters expressed joy and satisfaction at the court's decision, Ram Caspi, a prominent Israeli lawyer, told Israel’s Channel Two television that it was a “sad day for Israel” because a prime minister had been pushed out of office, then cleared.
The panel of three judges ruled unanimously that the evidence did not prove beyond doubt that Mr. Olmert had acted with criminal intent in the most sensational charge, which involved Morris Talansky, an American businessman whose testimony was instrumental in Mr. Olmert’s downfall.
Israelis were stunned when in May 2008, Mr. Talansky told a court here that he gave about $150,000, mostly in cash stuffed into envelopes, to Mr. Olmert over the course of 13 years.
Mr. Talansky said at the time that much of the money was earmarked for election campaigns but that some was for Mr. Olmert’s personal expenses. It included at least $25,000 meant for a vacation in Italy and almost $5,000 to cover Mr. Olmert’s bill at a Washington hotel because Mr. Olmert’s own credit card was “maxed out,” Mr. Talansky testified.
He added that some of the money was intended as a loan but was never repaid. According to the prosecution, the money was provided between 1992, when Mr. Olmert first ran for mayor of Jerusalem, and late 2005, when Mr. Olmert was minister of industry and trade. He became prime minister in early 2006.
Mr. Olmert declared outside the court on Tuesday that “There were no envelopes of money and there are no envelopes of money.” He added, “It never happened.”
The second charge on which Mr. Olmert was cleared was dubbed “Olmert Tours,” in which the prime minister was accused of having billed multiple state and charitable agencies for the same flights when he was mayor of Jerusalem and a government minister, using the extra money for private family trips. He was indicted in that case in August 2009.
The accusations included fraud, breach of trust, falsifying corporate records and failing to report income. If convicted, he could have faced years in prison.