Special Report / The Schlaff Saga

Austrian billionaire Martin Schlaff has long-time connections to Israeli leaders, as well as European and Arab heads of state. Israel Police now suspect him of taking part in illicit activities involving Avigdor Lieberman and the Sharon family. A series of investigative articles on big money, politics, gambling and ties to Stasi spies.

Son of a very wealthy but modest man, Martin Schlaff's lavish lifestyle was foreign to his family. 'A former top official in the Israeli civil service who was interviewed for this story told me he was afraid of what would happen to him if it was discovered that he was a source.'

Schlaff is considered very daring in business, a man who takes great risks and has succeeded in refining to an art the alliance between wealth and government, and not just in his home country. Israeli attorney Ram Caspi describes him as 'a sophisticated and tough businessman,' adding that Schlaff combines 'Austrian squareness and Jewish cunning.'

On the evening of November 4, 1995, Schlaff met with Rabin in his home in Tel Aviv just before the prime minister left for the peace rally at Kikar Malchei Yisrael. Schlaff was one of the last people to converse with him alone. Two hours after they parted, Rabin was assassinated by Yigal Amir, as he left the stage. By then, Schlaff was dining at a restaurant in Jaffa.

Toward the end of 2001, in the wake of a ruling by the state comptroller that donations of such a magnitude were illegal, prime minister Sharon announced his intention to return $1.5 million to donors in the United States. The money had been given to Sharon in the context of the primary election for head of the Likud in 2001.

'I am prepared to cut off both my hands if Martin gave Sharon a bribe. The State of Israel has lost him, and in a huge way,' says good friend Moti Finkelstein.

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