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Peres Resigns Knesset As State Comptroller Investigates Him


Israel's State Comptroller Micha Lindenstrauss has launched an investigation into suspicions that former Prime Minister Shimon Peres broke campaign finance laws, accepting illegal donations from foreign sources. It was abruptly announced on Sunday that Peres had resigned from the Knesset. He supplied no reason for his resignation. Peres received $320,000 for the Labor Party primaries, which he lost to Amir Peretz despite polls predicting a landslide in his favor. The donations came from billionaires Chaim Saban, S. Daniel Abraham and Bruce Rappaport. The three men serve on the board of the Peres Center for Peace

Israel's Sharon Undergoes Successful Tracheotomy

By Robert Berger (VOA-Jerusalem)

Prime Minister Ariel Sharon underwent a tracheotomy Sunday, 11 days after his massive stroke. Doctors remain worried.

Jerusalem's Hadassah Hospital said the tracheotomy took less than an hour and was successful. Doctors cut a small hole in Sharon's neck and inserted a tube into his windpipe. The aim is to wean him from a respirator that has helped him breathe since a massive stroke and cerebral hemorrhage early this month. Medical experts say the tracheotomy is another bad sign for the 77-year-old prime minister.

"The chances are very poor for recovery," said neurosurgeon Harry Rappaport. "We have to take into account the massiveness of the hemorrhage and his age and usually in such circumstances the prognosis is very bad."

Doctors are especially concerned that Sharon has not emerged from a coma, even though he has been taken off anesthetics. The Prime Minister's condition remains critical, but stable.

Israel Approves Palestinian Vote in Arab East Jerusalem, but Sets Condition

By Robert Berger (VOA-Jerusalem) &

Israel will allow Palestinian voting in East Jerusalem, resolving a dispute that had put elections in doubt. A powerful Islamic terrorist group has been banned from the campaign. The Israeli Cabinet's unanimous vote cleared the way for Palestinian parliamentary elections on January 25.

Israel sees all of Jerusalem as its capital, and it had threatened to prevent Palestinians in the city from voting. But the Palestinian Authority warned it would postpone the election, if voting rights were not granted. The U.S. sees the election as an important step toward Palestinian democracy and statehood, so it pressured Israel to soften its position.

Acting Prime Minister Ehud Olmert told the Cabinet that voting would be allowed on one condition. "Israel will not allow the Islamic militant group Hamas to participate in the Jerusalem vote," Olmert said. (Editor's Note: Olmert uses the word "militant," rather than the commonly accepted noun for Hamas - terrorist.)

Hamas has carried out dozens of deadly suicide bombings, and Israel said it is a terrorist organization. Israeli hawks are angry over the Cabinet decision. Parliamentarian Yuri Stern said it strengthens Palestinian claims to Jerusalem. "It's terrible decision, a wrong one, and it clearly shows that this government is accepting the division of the city," he said.

Palestinian officials welcomed the decision to allow the vote, but they condemned the exclusion of Hamas. "Palestinian legislative elections on the 25th of January 2006 must take place, without any interference from Israel or anybody else," Palestinian chief negotiator Saeb Erekat told VOA.

Hamas is expected to make a strong showing in the elections, because many Palestinians are fed up with the government of President Mahmoud Abbas, which is widely seen as corrupt and ineffective. But Hamas seeks the destruction of Israel. Israeli officials have warned that, if Hamas joins a Palestinian government, it would doom the peace process.

The top Israeli security and diplomatic brass fear that Hamas will decisively win the PA elections in Jerusalem. Hamas is expected to win all four eligible Jerusalem legislature seats. Some 1.3 million voters are registered on the official PA Voters' List throughout the Palestinian Authority.

In Jerusalem, only about 40,000 voters are registered on the Voters' List. Though this list determines who can vote in the PA, a PA Elections Committee official informed Arutz-7 that the PA would be ignoring it in Jerusalem, and will permit any PA resident of Jerusalem over age 18 to vote. The number of eligible Jerusalem voters is thus 123,000. Of these, the Oslo Agreements allow some 5,000 to vote in Jerusalem post offices, and the others are to vote in Jerusalem suburbs.

According to an arrangement with Israel, those who vote in Jerusalem will do so in an absentee ballot-type arrangement. This, in order not to allow the PA to display signs of sovereignty in Israel's capital. In practice, however, election observers will be present in the post offices, and the ballots will be placed in a ballot box, as opposed to a mailbox, thus defeating the above-mentioned purpose. The Jerusalem district is to receive six seats, with two reserved for Christians. Israel assumes that Hamas will win the remaining four.

Pope Paul VI Allegedly Helped Croatian Fascists

By Yossi Melman (Ha'aretz)

It is possible that within a short time a court in the United States will prohibit the publication of the account before us. In the meantime, Ha'aretz has obtained the testimony given last month by William Gowen, a former intelligence officer in the U.S. Army, at a federal court in San Francisco.

The testimony contains historical and political explosives. It links Giovanni Battista Montini, who later became Pope Paul VI, to the theft of property of Jewish, Serb, Russian, Ukrainian and Roma victims during World War II in Yugoslavia.

Many studies and stories have already been written about the thundering silence of Pope Pius XII, who reigned in the Vatican during World War II. Now the former intelligence officer's testimony has revealed that after the war, Montini, who during the war served as the Vatican's deputy secretary of state under the pope, helped hide and launder property that had been stolen from, among others, Jews and was involved in the sheltering and smuggling of Croatian war criminals, such as the leader of the Ustashe movement, Ante Pavelic.

The smuggling and hiding of Croatian war criminals was part of the extensive network known as the Rat Lines. Senior officials at the Vatican were involved in hiding and smuggling Nazi war criminals and their collaborators so they would not be arrested and tried. Hundreds of war criminals were provided with church and Red Cross papers that enabled them to hide in safe houses and then flee from Europe, mainly to the Middle East and South America. Among them were Klaus Barbie ("the butcher of Lyon"), Adolf Eichmann, Dr. Josef Mengele and Franz Stengel, the commander of the Treblinka death camp.

Leaders of the Ustashe - the nationalist Croatian Catholic movement that was active in Croatia and collaborated with the Nazi occupation, also used the Vatican network. "The Reverend Dr. Prof. Krunoslav Draganovic seemed to be in cooperation with the Ustasha network. And he was given a Vatican assignment as the apostolic visitator for Croatians, which meant he reported directly to Monsignor Giovanni Battista Montini," states an American document based on a report from the Italian police; the document was recently placed in evidence at the court in San Francisco where Gowen testified.

The leaders of the Ustashe headed by Pavelic are the ones who stole the victims' property: art and jewelry - silver and mostly gold. After the war they fled with the treasure and laundered it with the help of Vatican institutions. According to Gowen's testimony, Montini, who in 1964 became the first pope to visit the State of Israel, was also involved in the Vatican's help in laundering the wealth.

In 1999 a suit was filed at a court in San Francisco against the Vatican Bank (Institute for Religious Works) and against the Franciscan order, the Croatian Liberation Movement (the Ustashe), the National Bank of Switzerland and others. Jewish, Ukrainian, Serb and Roma survivors, as well as relatives of victims and various organizations that together represent 300,000 World War II victims filed the suit. The plaintiffs demanded accounting and restitution.

One of the lawyers representing the plaintiffs is Jonathan Levy. "Many of the plaintiffs have been reluctant to be pictured, after all these years," said Levy. "Many are still terrified of the Ustashe, the Serbs particularly. Unlike the Nazi Party, the Ustashe still exist and have a party headquarters in Zagreb."

The Ustashe was founded in 1929 as a Croatian nationalist movement with a deep connection to Catholicism. From the day it was founded the movement made its aim the establishment of an independent Croatian state and declared to fight the monarchy in Yugoslavia. The movement was banned and its founders, Pavelic and Gustav Percec (who was later murdered at Pavelic's orders) were condemned to death in their absence. The Ustashe was linked to the assassination of Yugoslav King Alexander and French foreign minister Louis Barthou in Marseilles in 1934.

Upon the occupation of Yugoslavia, the German Nazis and the Italian Fascists formed an "independent" state in Croatia, which was basically a Nazi puppet state. Pavelic was appointed poglovnik, the leader of the country. He hastened to meet with Hitler and allied himself with the Fuehrer.

When Hitler invaded the Soviet Union, Pavelic sent Ustashe units to fight alongside the Nazis and then joined the declaration of war against the United States. Ustashe leaders declared they would slaughter a third of the Serb population in Croatia, deport a third and convert the remaining third from Orthodoxy to Roman Catholicism. Anyone who refused to convert was murdered.

Immediately upon the establishment of its puppet government, the Ustashe set up militias and gangs that slaughtered Serbs, Jews, Romas and their political foes. Catholic priests, some of them Franciscans, also participated in the acts of slaughter. The cruelty of the Ustashe was so great that even the commander of the German army in Yugoslavia complained.

Under the leadership of Pavelic's right-hand man Andrija Artukovic, who earned the nickname "the Himmler of the Balkans," the Ustashe set up concentration camps, most notably at Jasenovac. According to various estimates, about 100,000 people were murdered at the camp, among them tens of thousands of Jews (it is interesting to note that some of the heads of the Ustashe were married to Jewish women). Throughout Croatia about 700,000 people were murdered. The partisans, led by the Croat Communist Josip Broz Tito, and the Chetniks - Nationalist Serb royalists - fought the Ustashe.

After the war, Pavelic and other Ustashe heads fled to Austria and, with the help of the British intelligence and their friends in the Vatican, found refuge in Italy. They hid in Vatican monasteries and were provided with false documents that gave them a new identity. Secret documents that were disclosed at the court in San Francisco show that at the end of the war, British intelligence took Pavelic under its wing and allowed him and a convoy of 10 trucks that carried the stolen treasure to travel to the British occupation zone in Austria. The British did this with the intention of using him as a counterweight to the Communist takeover in Yugoslavia.

The Ustashe brought the treasure convoy to Rome, where they put it into the hands of the Croatian ambassador to the Vatican, Rev. Krunoslav Draganovic. Draganovic also saw to hiding Pavelic and his aides in Vatican institutions and safe houses in Rome. American military intelligence located Pavelic's hiding place. But according to a secret document Gowen wrote in July 1947, that was submitted to the court, Gowen's unit received the instruction: "Hands off" Pavelic.

This was an order from the American Embassy, stressed Gowen in his testimony. It is also stated in the document, which is classified as top secret, that Pavelic, via his contacts with Draganovic, was receiving Vatican protection. From Italy, Pavelic was smuggled on the Rat Lines to Argentina, where he served as a security adviser to president Juan Peron (Peron granted entry visas to 34,000 Croats, many of them associated with the Ustashe and Nazi supporters).

In 1957 there was an attempt to assassinate him, in which he was wounded. The operation was attributed to Tito's Yugoslav intelligence, although the possibility that this was an attempt at revenge by a Chetnik activist was not dismissed.

Pavelic had to leave Argentina and found refuge with the Spanish dictator Franco. Two years later, in 1959, he died as a result of complications caused by the wound. The Ustashe has continued to exist over the years and until the 1980s its operatives were involved in acts of terror against diplomats and other Yugoslav targets abroad.

The suit filed in San Francisco is based on earlier investigations and reports from U.S. government agencies, the Simon Wiesenthal Center and committees of historians who researched the matter of the Jewish property in Swiss banks. The case was preceded by successful legal battles by attorney Levy and his colleagues against the CIA and the U.S. Army to obtain secret documents.

The defendants, on their part, led by the Vatican Bank and the Franciscan order and others, deny the charges against them and made every effort to have the charges dismissed. So far, the court has rejected these efforts outright and determined that the deliberations would continue. But the defendants are tenacious and now they are demanding that publication of Gowen's testimony be prohibited.

After the end of the war Gowen served as a special agent, meaning an investigations officer in the Rome detachment of American counter-intelligence. This unit's role was to track down, among others, Italian fascists, Nazi war criminals and their collaborators, including the Ustashe leaders

(Gowen said another mission included, at the request of British intelligence, surveillance of Irgun and Lehi activists in its Palestinian mandate. The code name for the unit's actions was "Operation Circle."

Parallel to the counterintelligence unit, other U.S. Army intelligence units, and mainly the Office of Strategic Services (OSS, from which the CIA developed) and British intelligence were engaged in contradictory actions. They made contact with Nazis and with the Ustashe people and enlisted them in their service as agents, collaborators and informers, with the intention of forming a front against the Soviet spread into Eastern Europe and the Balkans. "To try and find Pavelic you had to discover how the Ustashe network in Italy was constituted, how it operated, what were its bases," testified Gowen.

A key person in the Pontifical Croatian college was Rev. Draganovic, the Croatian ambassador to the Vatican. Draganovic and the college issued false papers to Croatian war criminals, among them Pavelic and Artukovic. "I personally investigated Draganovic - who told me he was reporting to Montini," emphasized Gowen.

Gowen related that at a certain stage Montini learned, apparently from the head of the OSS unit in Rome, James Angleton, who nurtured relations with Montini and the Vatican, of the investigation Gowen's unit was conducting. Montini complained about Gowen to his superiors and accused him of having violated the Vatican's immunity by having entered church buildings, such as the Croatian college, and conducting searches there. The aim of the complaint was to interfere with the investigation.

In his testimony, Gowen also stated that Draganovic helped the Ustashe launder the stolen treasure with the help of the Vatican Bank: This money was used to fund its religious activities, but also to fund the escape of Ustashe leaders on the Rat Line.

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