The conviction could send Olmert to prison for five years, in addition to a six-year prison sentence he received last year in a separate bribery conviction, all but ensuring the former PM will not return to politics for many years to come.
After the verdict, prosecutor Uri Korev said: “His behaviour constitutes a breach of trust which harms the public, harms morality, and harms the public’s trust, in how he behaved corruptly.”
Olmert’s lawyers said they were likely to appeal the Jerusalem District Court ruling. A sentencing hearing is due in May.
Olmert has claimed he was on the brink of a historic agreement with the Palestinians when forced to resign in early 2009 amid corruption allegations. His departure cleared the way for hard-liner Benjamin Netanyahu’s election, and subsequent peace efforts have not succeeded.
Olmert, 69, was acquitted in 2012 of a series of charges that included accepting cash-stuffed envelopes from US businessman Morris Talansky when Olmert was mayor of Jerusalem and a Cabinet minister. Olmert was found to have received about $600,000 (£400,000) from Talansky during his term as mayor, and more in cash during his term as a Cabinet minister, but a court did not find evidence the money had been used for unlawful personal reasons or illegal campaign financing.
Talansky, an Orthodox Jew from New York’s Long Island, had testified the money was spent on expensive cigars, first-class travel and luxury hotels, while insisting he received nothing in return.
The acquittal on the most serious charges at the time was seen as a major victory for Olmert, who denied being corrupt. He was convicted only on a lesser charge of breach of trust for steering job appointments and contracts to clients of a business partner, and it raised hopes for his political comeback.
But Olmert’s former office manager and confidante Shula Zaken later became a state witness, offering diary entries and tape recordings of conversations with Olmert about illicitly receiving cash, leading to a retrial. In the recordings, Olmert is heard telling Zaken not to testify in the first trial so she would not incriminate him.
Yesterday, judges ruled that Olmert had accepted $153,950 from Talansky when a Cabinet minister, with the money kept hidden in a safe by an aide.
The judges concluded that Olmert gave Zaken part of that money in exchange for her loyalty, and used the money for his own personal use without reporting it in accordance with the law. They convicted him of illicitly receiving money, fraud and breach of trust.