Israel Police: Netanyahu Confidant Doesn't Deny Talking With Player in Submarine Scandal

But Isaac Molho reportedly says he did not discuss any submarine deal with Michael Ganor, who turned state's evidence in the case and has shared a lawyer with Netanyahu

Isaac Molho and David Shimron.
Daniel Bar-On and Tess Scheflan

The police say Isaac Molho, a longtime confidant and diplomatic envoy for Prime Minister Benjamin Netanyahu, did not deny meeting with state witness Michael Ganor at the latter’s request and helped promote Israel’s purchase of naval vessels in deals where the police suspect corruption, sources told Haaretz.

Ganor has turned state’s evidence in the case where Israel bought submarines and missile boats from Germany’s ThyssenKrupp Marine Systems, which he represented. David Shimron, Netanyahu’s personal lawyer, adviser and cousin, has also served as Ganor’s attorney. Shimron is also Molho’s law partner and brother-in-law.

When the police arranged a confrontation between Molho and Ganor on Monday, Molho reportedly did not deny that he had met with Ganor, but said he had done nothing for him. The police confronted Molho with their suspicion that in the meeting between the two, Ganor told Molho about difficulties with a submarine deal, and Molho then acted to assist him in the matter.

According to Channel 2 News, Molho told police investigators that he had met with Ganor only once, briefly, at Ganor’s request. Molho said they did not discuss any submarine deal at the meeting.

Channel 2 reported that Ganor said to Molho: “I have good connections in Germany and I want to ask you to open a door for me with the prime minister.” Molho reportedly responded: “I don’t work in Europe. I only work vis-à-vis the Americans and the Palestinians, and I can’t help you.”

According to Channel 10, the police suspect Molho of acting to promote a German initiative to build a sewage treatment plant in Gaza. According to the report, the Germans conditioned moving ahead on a submarine deal on progress on the sewage treatment plant. According to Channel 10, Molho said he met Ganor one time briefly, in a passing conversation.

In the past, Shimron said he represented Ganor, and Molho was not involved. “We are very strict about Chinese walls between matters of the firm and government matters that [Molho] dealt with,” Shimron told Channel 10.

According to Shimron, “my partner, attorney Isaac Molho, knew that I represented Mr. Ganor, but was not involved in the representation in any way and did not know the details of the matters that the firm handled for Mr. Ganor.”

Moreover, Molho signed a conflict-of-interest agreement in which he pledged that as long as he was serving as Netanyahu’s special envoy he would not directly handle any matter connected to his and Shimron’s law firm, or his clients. He also pledged not to raise any matter connected to his clients during his trips for the government, and not to discuss matters relevant to them with U.S. officials.

The agreement states: “In the framework of my role as the prime minister’s special adviser and emissary, I pledge during my official trips not to handle matters of clients of the law firm with any American official or any local, and not to hold working meetings with those clients.”

However, a loophole in the agreement allowed him to continue working as a lawyer, “at times when he is not acting as the prime minister’s emissary” and in instances of individuals “with whom he has no connection in the framework of his role” other than those defined in the agreement. The conflict-of-interest agreement was reported by Haaretz in 2010.

During the interrogation, Molho was also questioned about the fact that he had not reported being approached by Ganor, and that even after he knew that his law partner Shimron represented Ganor, he did not inform the relevant officials.

Molho’s attorney, Zvi Agmon, declined to comment.