Gantz Is Probing Israel’s 'Submarine Affair,' but as Army Chief He Saw Nothing Wrong

In statements to the police in 2017, two and a half years after he left the military, Netanyahu’s main rival today found nothing wrong with Israel buying more submarines from Germany’s ThyssenKrupp

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Then-IDF chief Benny Gantz, right, and then-navy chief Ram Rothberg on a submarine in Haifa, 2014.
Then-IDF chief Benny Gantz, right, and then-navy chief Ram Rothberg on a submarine in Haifa, 2014.Credit: Rami Shllush

In July 2017, former army chief Benny Gantz visited the police’s anti-corruption unit to testify in Israel’s “submarine affair” that was already shaking the political and security establishments. Two and a half years after hanging up his uniform, Gantz was now chairman of the Fifth Dimension computer security company.

The police had just arrested a few primary suspects in the case; the main one was the ThyssenKrupp conglomerate’s representative in Israel, Michael Ganor, who was suspected of bribing senior officials.

The head of the investigation team, Yoram Neeman, wanted to hear Gantz’s version of events that took place when he headed the Israel Defense Forces. These included discussions on buying a sixth submarine for Israel’s fleet and canceling the bidding to sell the navy missile ships for protecting Israel’s natural gas rigs in the Mediterranean; the contract would instead go to the German company.

Gantz of course has since become Prime Minister Benjamin Netanyahu’s main political rival, a standoff that continued even when the two formed a unity government in May. And the submarine case has turned into a major weapon in their struggle against each other, as the prime minister faces a trial on unrelated corruption charges.

Even though Attorney General Avichai Mendelblit said Netanyahu wasn’t a suspect in the submarine case, people once linked to him are. Confidants of his were interrogated and testimonies about his office’s involvement in the acquisitions raised questions.

After weeks of flip-flopping, Gantz, as defense minister, announced last week he was setting up a government commission of inquiry to investigate what he has called the worst corruption case in Israel’s history. But when he headed the IDF, Gantz saw nothing wrong with the purchase of submarines from ThyssenKrupp, according to his statements to the police.

People who heard Gantz’s testimony say they noticed a gap between his rhetoric today and the laconic manner in which he described events to police investigators. According to Haaretz’s sources, Gantz’s testimony to the police shows that his familiarity with the details of the acquisition of the naval vessels was limited.

He struggled to remember the positions of key players, and didn’t detect anything untoward at the time regarding the shopping spree from ThyssenKrupp. And he believed it had been reasonable and effective.

Prime Minister Benjamin Netanyahu climbs out after a visit inside the Rahav submarine after it arrived in the port of Haifa, January 12, 2016.Credit: Baz Ratner / Reuters

Sixth sub one too many?

Over the past decade a fierce argument took place among Israel’s political and military leaders about the need to acquire a sixth submarine, whose purchase price and maintenance costs are believed to run into the billions of shekels. In 2010, Netanyahu and then-Defense Minister Ehud Barak supported the acquisition of another submarine at a discount. The military chief at the time, Gabi Ashkenazi, and the navy commander, Eliezer Marom, strongly objected, arguing that a sixth sub was not needed.

“The defense establishment’s position, since then and up to when I was defense minister, has been that we don’t need more than five submarines,” Moshe Ya’alon, who succeeded Barak, has said.

When the police investigators asked Gantz about the purchase of a sixth submarine, he said: “I don’t remember the details regarding the option to buy the sixth submarine and I don’t remember the signature date.”

Information obtained by Haaretz shows that the former chief of staff also didn’t remember details from discussions on the matter or from his conversations with navy commanders.

Asked to describe the dialogue with Barak, Gantz said, “I don’t know what his opinion was, whether he supported it or not, and what it was based on.” Asked about his talks with Ya’alon about the submarines, his said: “I don’t remember.”

The talks to buy the sixth submarine took a long time, also because the Germans linked the deal to progress in Israel’s peace negotiations with the Palestinians. When the contract was signed in March 2012, Gantz was already IDF chief of staff.

“I remember the IDF thought five submarines were enough to maintain what we believed we needed,” he testified. “The discussion on the submarines happened as it happened and was summed up as it was summed up. It’s an option that existed and I saw the decision as legitimate.”

When told of Ya’alon’s position, Gantz said both positions seemed reasonable to him. When shown evidence that others said he had supported buying a sixth submarine, he told the investigators: “It sounds plausible to me.”

Regarding the missile ships, in the first debates on the issue around a decade ago, the navy and Defense Ministry said that small warships – corvettes – made in South Korea would be suitable. Later, when it turned out that other shipyards were offering similar ships, it was decided to invite bids.

But then came a plot twist: The navy changed its stance and demanded larger warships, frigates, the kind ThyssenKrupp specialized in.

This turnabout raised eyebrows among defense officials. “The reasons for this change are puzzling to me,” wrote a former Defense Ministry director general, Ehud Shani, in a statement he gave as part of a petition filed by the Movement for Quality Government in Israel.

“A thorough inquiry into the changing of the specifications and procedures is required not only in the criminal context, if there is one, but also in view of the considerable budget repercussions.”

Asked about the navy’s preference for South Korean vessels, Gantz said: “I don’t even remember the process. I don’t remember the sequence in which this debate developed.”

The investigators said Shani’s opinion had been similar. “I don’t remember that,” Gantz said again. Asked to explain the surprising change in the navy’s position, Gantz said he had no knowledge of how the navy made its new demand.

In 2014 the Defense Ministry invited bids to sell Israel the warships. This triggered a pressure campaign, mainly from the Prime Minister’s Office, to cancel the process and buy the ships from ThyssenKrupp, making the German company the sole supplier. The revocation of the tender was a major reason former defense chiefs demanded that a commission of inquiry be set up.

“Canceling an international tender is a strategic malfunction,” Maj. Gen. (ret.) Amos Gilead said in a deposition. “I attended one of the discussions on the matter ... and asked blatantly who was getting paid off here.”

Others said that despite the cut price that German Chancellor Angela Merkel was ensuring for Israel, the choice of frigates over corvettes was expected to make the deal more expensive due to the higher maintenance costs.

Defense Minister Benny Gantz during a visit to Jerusalem City Hall, November 10, 2020.Credit: Ohad Zwigenberg

‘It made sense to me’

When the police asked Gantz about it he said the decision to buy from the Germans without a bidding process seemed reasonable due to financial, political and operational considerations. He mentioned the lower price (“We were happy with how it turned out”), and said the ThyssenKrupp frigates could “in part fulfill other needs as well.”

He also said that navy chief Ram Rothberg, who succeeded Marom, backed the deal. “It made sense to me, and I supported it,” Gantz said. “It sounded to me like a good decision.”

Gantz did not know Ganor, who is charged with bribing senior public officials to advance the German shipyard’s interests. Nor did he know Ganor’s (and Netanyahu’s) lawyer David Shimron.

Asked what he thought about businesspeople who are interested parties roaming around navy headquarters, Gantz said: “I can’t say where they’re roaming. I don’t know in what framework he came, and if they invited someone to such debates and others, you can think they have a reason for it.”

Marom – who is set to stand trial, pending a hearing, for taking a bribe – is suspected of trying to improperly replace the former ThyssenKrupp representative in Israel with Ganor.

When Gantz was asked about Marom’s involvement in this switch, he replied: “It’s seems to me that it’s certainly not his business, but maybe he has considerations that I don’t know about.”

Gantz also had no memory of the discussions on purchasing three additional submarines, to bring the fleet up to nine, which began around the time he left the military. “What I know is what I read in the paper,” he told the investigators.

A former defense officials who is familiar with the case told Haaretz this week: “In principle, a chief of staff should be familiar with these matters. He’s a factor in the process, especially regarding the ships’ purchase.”

Attorney General Avichai Mendelblit at a conference, March 2020.Credit: Meged Gozani

Also as a politician, Gantz has had a hard time presenting a clear position on the issue. In Israel’s three general elections this year and last, he promised to set up a state commission of inquiry to probe the affair.

In a recording uncovered by Channel 13 News, Gantz was heard saying about the attorney general: “Someone who didn’t investigate the sixth submarine can’t open the seventh, eighth and ninth .... Someone who didn’t investigate the warships won’t find this story. Mendelblit was also afraid to investigate it.”

But after Gantz’s Kahol Lavan party formed a government with Netanyahu’s Likud in May, Gantz ordered his legislators to steer clear of the Knesset and foil an attempt by the Yesh Atid-Telem party to set up a commission of inquiry.

“I won’t be able to conduct all the inquiries I’d like to in the world,” he said, explaining his breaking of an election promise. “There’s an attorney general who didn’t see fit to investigate it. I’ll have to make do with this matter.”

A few months later, in the shadow of the coalition crisis, Gantz remembered the idea again. Several jurists suggested he adopt a clause in military law letting the defense minister establish a commission to investigate any matter regarding the military.

Gantz chose to set up a commission for military purchasing procedures, mainly for the acquisition of submarines and warships. The panel can summon witnesses with no restrictions but can’t force them to appear.

It’s doubtful whether the commission will be formed soon. When Gantz unveiled it, he argued that he had already done intense preparatory work. But it seems he didn’t discuss the issue in depth with at least one person, the attorney general.

This week Mendelblit instructed Gantz to put the commission on hold, until he makes sure its work “won’t interfere with the criminal proceedings.” If Mendelblit gives Gantz the green light, presumably the commission’s members will once again want to hear the impressions of the man who set it up.

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