The story

A U.S. businessman testified Tuesday that thousands of dollars he donated or loaned to Israeli Prime Minister Ehud Olmert for political reasons also appeared to pay for luxury expenses.

"I only know that he loved expensive cigars. I know he loved pens, watches. I found it strange," said Morris Talansky, 75, who gave Olmert $150,000 in loans and direct payments over 14 or 15 years.

Olmert is under investigation for allegedly receiving illegal funds and bribes before becoming prime minister. The Israeli leader says the money he received was for legitimate campaign purposes and has vowed to resign if indicted. Read full article »

CNN's Kevin Flower contributed to this report.

All About Israel • Ehud Olmert • Israeli Likud Party