Netanyahu's Confidant Appointed Director in Firm Advising German Submarine Maker

Haaretz investigation finds that prime minister's lawyer David Shimron is listed as board member for firm which advised ThyssenKrupp, the manufacturer of Israel's subs

Prime Minister Benjamin Netanyahu climbs out after a visit inside the Rahav, the fifth submarine in Israel's fleet, after it arrived from Germany. January 12, 2016.
Baz Ratner, Reuters

A Haaretz investigation revealed Thursday that Prime Minister Benjamin Netanyahu's confidant and attorney, David Shimron, was appointed to the board of a firm tied to a German submarine maker that sold the Israeli navy its wares.

Haaretz found that not only is Shimron the lawyer for businessman Miki Ganor – who represents the German submarine manufacturer in Israel – but he is also listed as a board member in Ganor's holding company whose subsidiary advised ThyssenKrupp Marine System.

According to a report in Channel 10 from Tuesday, businessman Ganor and Shimron worked together in recent months to move vessel maintenance service from the navy shipyard to Ganor's company and had lobbied Israel's labor union to support the move.

Haaretz has learned that Shimron was appointed to the board of directors of M.G. 2015. The company has two holdings: One is a luxury apartment in the affluent Tel Aviv suburb of Ramat Hasharon, the second is a subsidiary called M. Ganor Yam 2012 – which was in contact with German submarine maker Thyssenkrupp Marine Systems in 2013.

M. Ganor Yam was established in 2012 and belonged directly to Ganor until it was transferred to M.G. 2015 in 2015.

Prime Minister Benjamin Netanyahu's confidant and attorney David Shimron.
Daniel Bar-On

M. Ganor Yam entered an agreement with Thyssenkrupp in December 2013. All of the company's profits from the dealings with Thyssenkrupp went through Bank Hapoalim, which also loaned M.G. 2015 money for the purchase of the 12-million-shekel Ramat Hasharon apartment. That loan was paid back within four months.

Shimron responded to the report, saying that, "with the establishment of M.G. 2015, which is a company that bought real estate, I was appointed a board member. The company is fully owned by Miki Ganor. The company does indeed hold a subsidiary, in which I'm not a board member. The subsidiary does consulting. To the best of my memory, I resigned from my role as board member a long time ago, since the appointment was only for the purpose of the establishment period."

In recent weeks, the prime minister announced the decision to purchase three submarines from Germany, in addition to the six-submarine fleet Israel currently holds, but the Prime Minister's Office denied that there was any connection between Shimron's interests and the decision to purchase the new equipment for the Israel Navy.

The Prime Minister's Office issued the following response: "Following the reports of recent days, the prime minister wishes to make absolutely clear that the first time on which he learned that attorney David Shimron was representing a business party connected to the project to equip the navy was the day before yesterday [Tuesday], when Channel 10 asked for a response to a report on the subject. Attorney Shimron never spoke with the prime minister about the issue of submarines, ships or any other subject related to his clients. Attorney Shimron did not speak with the prime minister about this client or any other client."

Miki Ganor, a businessman who reportedly represents German submarine manufacturer ThyssenKrupp Marine System in Israel
Motti Kimchi

All of the people associated with the prime minister, including Shimron, know that Netanyahu bars them entirely from approaching him regarding their business interests, the statement said, adding that the only consideration that the prime minister had in mind was strengthening Israel's strategic naval fleet. "Any attempt to hint that other considerations intruded in the decision to buy submarines for the navy is false and devoid of any semblance of reality."

Second statement in two days 

In an additional effort to address criticism over the handling of the purchase of German submarines, the National Security Council in the Prime Minister's Office issued its second statement on the issue in two days, saying that there was "full coordination with the Defense Ministry" through "entirely proper" procedures.

The statement detailed the various stages of the transaction over the past year, noting that on October 12 of last year, in advance of a visit to Germany by Prime Minister Netanyahu, a Defense Ministry official provided national security adviser Yossi Cohen with a document spelling out the IDF's request for three submarines to replace three others that would be taken out of service in the future.

A week and a half later, Netanyahu raised the matter in Germany with German Chancellor Angela Merkel, who responded positively, the National Security Council said. On November 14, 2015, Netanyahu briefed the inner security cabinet, at a meeting at which the defense minister at the time, Moshe Ya'alon, was present.

The statement then provides the following timeline:

In February 7 of this year, prior to another meeting between Netanyahu and Merkel, acting national security adviser Jacob Nagel provided a draft of a memorandum of understanding regarding the submarine purchase to the Defense Ministry director general and the defense minister's military secretary and invited their comments.

Two days later, the director general expressed his support in principle for a future purchase of the submarines but asked for flexibility regarding the timing. The memorandum was revised that week and a final draft settled on for submission to the Germans.

On February 16, Netanyahu provided the draft to Merkel when the two leaders met in Berlin, two days after which acting national security adviser Nagel briefed the defense minister in writing on the meeting. The document spoke of agreement to negotiate a memorandum of understanding on the purchase of three subs, in accordance with the needs as determined by the Defense Ministry.

On June 30, Nagel headed an inter-ministerial delegation that included IDF representatives and which went to Germany to begin the negotiations on the memorandum of understanding.

On October 5, 2016, Netanyahu and Nagel briefed the inner security cabinet on progress in the negotiations to buy three subs. Later that month, on October 26, the agreement with Germany was presented to the security cabinet, which unanimously approved the project. 

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