The verdict was seen as a major victory for Olmert, who stepped down as prime minister for the centrist Kadima Party in 2009 to battle allegations that included accepting cash-stuffed envelopes from a supporter and pocketing the proceeds from a double-billing scam on overseas travel.
His conviction on the lesser charge of “breach of trust” made him the first Israeli prime minister ever convicted of a crime.
He will be sentenced on Sept 6 and is currently standing trial in a separate property bribery case.
Olmert, 66, appeared relieved as the verdict was delivered in the Jerusalem court. As he left, he smiled and kissed defence lawyers and advisers.
Speaking to reporters afterwards, he proudly declared his innocence. “There was no corruption. There was no taking of money. There was no use of money. There were no cash envelopes.”
Olmert said the lone conviction was merely a “procedural lapse” from which he would draw the necessary lessons.
The verdict, which capped a two-year trial, covered three separate allegations — illegally accepting funds from an American supporter, double-billing Jewish groups for trips abroad, and channelling state grants to firms linked to a friend.
He was acquitted in the first two cases and found guilty in the last.
The first case was the most dramatic, with Jewish American businessman Morris Talansky flown in to testify that he handed the former Israeli leader envelopes stuffed with hundreds of thousands of dollars in cash, painting him as a globe-trotter fond of fancy hotels and first- class travel.
The second case of double-billing assured his resignation, with Olmert unable to withstand public pressure to step down.
In the last case, Olmert was convicted of breach of trust for steering job appointments and contracts to clients of a close friend when he served as minister of industry and trade.
The court called it a “harsh conflict of interest that amounted to a breach of trust because there was a conflict between his personal commitment to this man and his public responsibilities”.
Olmert’s lawyer said he would not appeal against this conviction.