Kern answers on loan, but …

Cape Town businessman Cyril Kern has given authorities his version of the story of the controversial $1,5-million loan that helped Israeli Prime Minister Ariel Sharon repay illicit campaign funding. But Kern remains silent on a critical question — whose money was it anyway?

In a carefully worded statement addressed to the Ministry of Justice last week, Kern claims the loan was to Sharon’s son Gilad and ”was never intended to go to, or benefit in any way, Ariel Sharon”.

Kern also maintains that his friend Sharon did not bestow any benefit in return. ”I have never asked for any assistance from Prime Minister Sharon.”

Kern was dragged into the funding scandal, which has threatened Sharon’s political career, earlier this month when details were leaked of a request by the Israeli attorney general for judicial assistance from South Africa. The request said Kern’s loan was used indirectly to repay earlier illegal campaign funding, accepted by Sharon’s 1999 primaries campaign. And it suggested that Sharon and his sons may again have broken the law by accepting Kern’s loan.

Sharon, while not denying the loan, has branded the accusations of illegality a ploy by the political opposition.

The Mail & Guardian last week reported that Kern is a former business partner of Arie Genger, an Israeli-American who is Sharon’s quasi-official emissary to the White House [ Kern drawn further into Sharon funding row].

Israeli media have alleged that Genger was the main source of the 1999 illegal funding.

The discovery of the Kern-Genger connection has fuelled speculation in Israel that Kern was not the real source of the $1,5-million (about R19-million at the time) loan; that he was fronting for someone like Genger, who may have wanted to help Sharon out of the hole the 1999 funding dumped him in.

Kern’s affidavit to the South African justice ministry lends some credence to that scenario, as he carefully avoids claiming the $1,5-million as his own. Kern says he ”arranged for a foreign trust” to hand over the money — he does not say whose trust — and that the funds ”originated from outside South Africa and were the proceeds of transactions and activities with no connection to South Africa”.

The Israeli request for assistance said the money, which ended up in a bank account of Sharon’s sons, Gilad and Omri, had come from a Kern account in Austria. The mystery that Kern’s affidavit does not solve is how the money reached that account in the first place.

Kern commented on Thursday: ”With respect, I made an affidavit. These are the facts, and I am not prepared to go into [details] … I hope to go back to my privacy very soon.”