The Movement for Quality Government in Israel has hired an American law firm to pursue an investigation into a violation of the law that relates to Israel. The subject of the investigation and documents relating to it have not been made public, and the Movement for Quality Government refused to respond to a request from Haaretz for additional information.
The good governance organization plans to contact the Internal Revenue Service and the Securities and Exchange Commission in the United States regarding the case. The group’s decision to take action overseas on a matter relating to possible Israeli corruption is considered highly unusual, and under the circumstances, appears to be an effort to have Prime Minister Benjamin Netanyahu investigated regarding alleged improprieties involving Israel’s purchase of submarines from Germany as well as his business ties in the United States to his cousin Nathan Milikowsky.
The Israeli organization is paying the Washington law firm Miller & Chevalier at least $60,000 to help the group obtain whistleblower status in the United States. That would enable it to be paid a percentage of any funds that U.S. authorities may expropriate as a result of the complaint and the information that the group provides. The law firm specializes in tax issues, international law and white-collar crime.
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The contract with the firm, which was signed in September, states that the firm will provide the Israeli group legal advice and represent it in its contacts with American authorities regarding alleged violations of American law on issues relating to Israel. The firm is to be paid $30,000 for presenting the corruption case to the authorities, $20,000 for correspondence with U.S. investigating authorities that show an interest in the material and $10,000 for completing the application forms seeking whistleblower status with the Internal Revenue Service or the Securities and Exchange Commission.
Under American law, anyone who provides the tax authorities with information about violations can receive up to 30 percent of whatever amounts are recovered. The law firm is to get 20 percent of whatever sums are obtained.
The Movement for Quality Government is among the entities that have petitioned the Israeli High Court of Justice seeking a criminal investigation into Netanyahu in connection with Israel’s purchase of submarines and missile boats from the German firm ThyssenKrupp. The three submarines cost 1.5 billion euros ($1.8 billion), while the missile boats, which were purchased to protect Israel’s offshore natural gas rigs, cost 430 million euros.
According to an indictment filed in Israel in connection with the purchases, senior naval officers, civil servants and associates of Netanyahu demanded and received bribes to promote the deals. Netanyahu has not been charged in the case and denies any wrongdoing. It has been alleged that he initiated the submarine purchase against the recommendation of the defense establishment.
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The suspicions involving the prime minister’s business dealings with his cousin Nathan Milikowsky involve the profits that Netanyahu allegedly earned from trading in shares of stock of the Texas-based steel firm Seadrift Coke. Seadrift has links, in turn, to a supplier of ThyssenKrupp.
Israeli Attorney General Avichai Mendelblit investigated suspicions that Netanyahu purchased the shares at a discount and sold them following his election as prime minister for more than their market value, in the process obtaining an improper financial benefit.
In October, Mendelblit decided not to open an investigation into the matter. The attorney general also looked into possible criminal violations over an alleged failure to report the sale of the shares to the State Comptroller’s Office.