Ariel Sharon's Investigations
In late 1999, during Ariel Sharon's election campaign for the Likud leadership, Sharon collected donations totaling six million NIS in ways that were prohibited under the law regulating the funding of political parties. The Comptroller's Report published in early September 2001 stated that these contributions were breaking the law (a previous similar complaint against Netanyahu led to the issuing of a warning, and a similar complaint against Ehud Barak even led to an investigation regarding the organizations that helped him get elected). As a result, Sharon returned 1.5 million NIS to the donors on October 4th, but had difficulties in raising the more funds. On October 22, Sharon's son Gilad was able to get a loan at a relatively high interest from Bank Leumi, and then made contact with the South African businessman Cyril Kern, who gave him a loan for the rest of the balance on November 30 (even though the money was actually transferred only on 17 January 2002). Cyril Kern's money was transferred to the Israel Discount Bank on 30 April 2002 and was returned to Cyril Kern on 17 December.
These facts, coupled with the lack of clarity regarding the extent of Cyril Kern's businesses in Israel, became "political dynamite," and were investigated during the election campaign by the State Attorney's Office. On 6 January 2003, the details of the affair were revealed by Ha'aretz (It turned out later on that the attorney Liora Glatt-Berkowitz, who was in charge of the investigation, leaked the information).
The exposure of the affair caused a political storm and led to calls for the resignation of Ariel Sharon from the opposition. On the other hand, Likud members alleged that the leak of the affair's details was politically motivated and intended to harm Sharon's popularity.