Benjamin Netanyahu hasn’t been implicated in Israel’s so-called submarine affair, but the announcement of pending criminal charges against very close associates is likely to darken the cloud over the prime minister following his indictment in three other corruption cases.
Suspicions linger over whether Netanyahu really could have been unaware of the activities of so many people he appointed and worked with closely. All the men involved have denied any wrongdoing.
The affair that the police call Case 3000 centers around an agreeement with Germany’s ThyssenKrupp to buy three submarines and four patrol boats; the latter would protect Israel’s natural gas rigs in the Mediterranean. At issue in these deals worth 1.5 billion euros and 430 million euros, respectively, are the dealings between top Israeli officials and ThyssenKrupp’s representative in Israel.
How did Case 3000 get started?
In 2017, the Israel Police launched an investigation into allegations that Netanyahu’s personal lawyer, adviser and cousin, David Shimron, improperly lobbied defense officials on behalf of ThyssenKrupp for the submarine sales.
According to media reports, Moshe Ya’alon, who was defense minister from 2013 to 2016, told the police that Netanyahu was actively involved in canceling a previous Defense Ministry offer to buy submarines so that the vessels could be acquired from ThyssenKrupp. Ya’alon reportedly told the police that Netanyahu went behind the back of defense officials and spoke with German government officials about doing the deal with ThyssenKrupp.
According to the reports, the prime minister also pushed for the purchase of two anti-submarine ships, but that deal was shelved amid vehement opposition by Ya’alon and other defense officials. In any case, prosecutors and police investigators found no evidence directly implicating Netanyahu. Ya’alon, now a leader of Benny Gantz’s Kahol Lavan party, wants a commission of inquiry to further probe the case and Netanyahu’s possible involvement.
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After Ya’alon left the Defense Ministry, the national security adviser went to Germany with representatives of Ya’alon’s successor, Avigdor Lieberman, to negotiate over the submarines. The security cabinet then approved a memorandum of understanding to replace three old submarines by buying three new ones.
Who will be charged?
On Thursday, the State Prosecutor’s Office said it would indict Shimron, former navy chief Eliezer Marom and a number of other former officials. Pending a hearing, Shimron will be charged with money laundering, while Marom and Michael Ganor, Thyssenkrupp’s representative in Israel, will be charged with bribery. Ganor signed a state’s evidence deal in July 2017 but later withdrew it.
The police have also recommended an indictment for a former deputy national security adviser, Avriel Bar-Yosef, for bribery, fraud, breach of trust and conspiracy to commit a crime, but prosecutors have yet to announce their decision. Also facing indictment is David Sharan, a former close aide to Netanyahu, for taking bribes, breach of trust, money laundering and violating the law on campaign financing.
Pending a hearing, Eliezer Sandberg, a cabinet member in 2003 and 2004, will be indicted for taking bribes, money laundering, fraud, breach of trust and tax evasion. Rami Tayeb, a former adviser to Energy Minister Yuval Steinitz, will be charged with mediating bribery, while media consultant Yitzhak Lieber will be indicted for money laundering and abetting tax evasion.
Before the indictments are handed down, all the suspects will have a chance to argue their case at a hearing with prosecutors.
The small print
A draft indictment describes Ganor, the ThyssenKrupp representative in Israel, as “acting in various ways, using various public officials in order to promote his business ventures while promising to pay bribes and agreeing on payments for steps related to the roles of those public officials, in order to promote a deal between Israel and the corporation for the acquisition of naval vessels, thus increasing his own profits.”
According to the draft indictments, Ganor and Shimron engaged in money laundering in 2013 when Ganor asked Shimron to sign in his stead in a deal between a German-Israeli research foundation and Swiss bank Credit Suisse. Shimron allegedly agreed and the bank transferred $140,000 to his account as a commission.
According to the draft indictments, Shimron then transferred $32,000 to a company owned by Ganor, minus a 20 percent commission; Discount Bank refused an attempt by Shimron to transfer the remaining $80,000 to Ganor. According to the draft indictments, they both then tried to transfer funds from Shimron’s account at Credit Suisse to the account of Ganor’s company at Bank Hapoalim. Both men are accused of presenting a false document to the bank to convince it to approve that transfer.
According to the draft charges, Ganor and Bar-Yosef, who knew each other from their military service, collaborated to get Ganor appointed as ThyssenKrupp’s agent in Israel, after which he would reward Bar-Yosef financially. This implicated former navy chief Marom as well, prosecutors say.
“An understanding was reached with the expectation that Ganor would reward the other two [Marom and Bar-Yosef] for their support in getting the appointment, and for promoting the acquisition of the naval vessels, something they could do in the framework of their positions,” the draft charges say.
Sharan has been accused of bribery, breach of trust and money laundering for activities including helping “Ganor coordinate meetings with Steinitz that were intended to further these deals and other Ganor ventures .… Ganor and Sharan had an understanding that Ganor would reward Sharan in the future for helping with these ventures.”
According to the draft indictments, Sharan also asked Ganor for a bribe in exchange for his activities as Steinitz’s chief of staff, where he allegedly promoted Ganor’s business. Ganor also allegedly made payments to Sharan in exchange “for taking action as part of his role as the finance minister’s chief of staff and the head of the prime minister’s office, for promoting the deals with the vessels” and making “Sharan act for him in his role as head of Netanyahu’s office.”