JERUSALEM (AP) _ Four political allies of Prime Minister Ehud Olmert received key jobs in a state-funded agency linked to a government ministry he headed in 2004, Israel's top government watchdog said Monday.

The report has been handed to the attorney general to determine whether criminal charges should be filed, said Zvi Vertikovsky, deputy director general in the State Comptroller's office.

At issue are appointments of four members of the Likud Party's Central Committee to the Small Business Administration, an agency that received government funding and was linked to the Trade and Industry Ministry. The ministry was headed at the time by Olmert, then a senior Likud member.

The comptroller said he found ``serious defects'' in the hiring process.

``This fact, together with their political connection with the minister (Olmert), raises concern that political considerations were the basis for selecting the projects,'' the report said.

Vertikovsky said the Small Business Administration was convenient for political appointments because, as a private agency, it did not come under the same scrutiny as government offices.

``We found that they made use of the Small Business Administration as a comfortable bypass of supervision,'' Vertikovsky told Israel Army Radio.

Asked about Olmert's possible involvement in the appointments, Vertikovsky said: ``According to the documents, there are tracks leading in his direction as well.''

Olmert's office said in response that the Small Business Administration was restructured to address serious organizational flaws. The statement said the Trade Ministry was not involved in hiring project managers for the Small Business Administration.

In a 2005 radio interview, after a TV report on the appointments, Olmert denied wrongdoing.

``We're not talking about political appointments,'' he said in the interview, which was rebroadcast Monday. ``We're talking about people who are the right people for their jobs and of course they went through all the suitable channels. If the channels weren't suitable, their appointments would have been rejected by the attorney general.''

Olmert left Likud late last year and joined the Kadima Party founded by his political mentor, Ariel Sharon. After Sharon suffered a stroke in January, Olmert became acting prime minister and was elected to the job in March.

The state comptroller is also looking into a Jerusalem property deal involving Olmert.