Analysis

Israel's Submarine Affair: Police Indictment Recommendations Drown in a Sea of Questions

It's one of Israel's worst corruption cases. But how deep does it go?

A new submarine built for the Israel Navy at a site of ThyssenKrupp Marine Systems in Kiel, northern Germany, April 4, 2013.
CARSTEN REHDER / AFP

The police's announcement Thursday that it recommends indicting six people for alleged involvement in the corruption case surrounding the procurement of submarines and boats for the Israel Navy has revealed more of one of the worst and most worrying graft cases in Israel's history.

But at the same time, it has concealed even more of the case. 

The so-called submarine affair, also known as "Case 3000," involves alleged corruption surrounding a $2-billion deal to purchase submarines and boats from the German shipbuilder ThyssenKrupp.

>> Police: Charge Netanyahu confidant, PM's former bureau chief and ex-navy generals with bribery

The police seem to have chosen to focus on the criminal significance of one central aspect of the affair, which is how gargantuan commissions wound up being paid to the mediator, Michael Ganor, who has meanwhile turned state's witness. But the police also left a sea of questions wide open in their announcement. 

What they did reveal, however, is grave enough to sound alarms. 

Clockwise from top left: David Sharan, David Shimron, Eliezer Marom, Modi Zandberg, Avriel Bar-Yosef and Shay Brosh.
Moti Milrod, Alon Ron, David Bachar, Moti Kimche, Ilan Assayag

According to the police, a network of movers and shakers – some of who hold or held very high positions while others are advisers and cronies – decided to seize control of a key part of the Israeli defense establishment's humongous military procurement. The Defense and Justice Ministry's oversight mechanisms failed. Ganor, with his friends in the right places, managed to supplant former Brig. Gen. Shaike Barkat as mediator and started pushing deals. The role brought Ganor many millions, with potential for long-term gains for his many partners, too.

The list of suspects against which the police recommend charges – subject to the prosecution agreeing, of course – is long and star-studded. It includes the former commander of the Israel Navy, a general; two brigadier generals in reserves, one of whom was poised to chair the National Security Council when the submarine affair blew up; a former chief of staff to the finance minister who later became the prime minister's chief of staff; and of course string-puller David Shimron, the prime minister's cousin, confidant and personal lawyer.

Another suspect, Shimron's partner who somehow managed to also serve as the prime minister's special envoy, was saved from indictment.

But hovering over everyone is Prime Minister Benjamin Netanyahu, who apparently knows everything and nothing. There's a long list of suspects and interrogees embroiled in the submarine affair, many of whom are close to the prime minister to some degree. Some, the police announcement implies, are exploiting their ties in government to cut a hefty personal coupon. And Netanyahu? Not only did he hear nothing of any of this, he wasn't even questioned under caution in the affair – even as the list of his assistants, associates cronies embroiled in criminal activity kept growing. 

But the police announcement fails to touch on several important things, some of which arose during the initial investigation by Channel 10 journalist Raviv Drucker; and other things that arose later on in the media. Here are some of those unanswered questions:

1. During the investigation, suspicions of a secondary serious affair arose: Germany agreed to sell advanced submarines to Egypt after Israel rescinded its objections. It seems, however, that the political and professional echelons at the Defense Ministry, then-Defense Minister Moshe Yaalon and his diplomatic branch leader, Amos Gilead, were bypassed. Did somebody high up compromise on Israeli security for personal gains? Or were there other considerations? The police aren't saying. 

2. During the negotiations with the German shipyard, the Israel Navy significantly changed its requirements for the ships it needed and finally decided to buy much bigger, better and more expensive ones, arguing that they could help defend Israel's offshore gas rigs.  But an inquiry by Haaretz found that the navy intended to use the boats for that purpose only part of the time. Meanwhile, it turns out that the state wanted to station the gas rigs nearer to shore – the drilling itself is deep under water and doesn't need protection. Were all those considerations "clean"? And what does this have to do with deals for Israel to sell gas, in which some of the suspects were involved?

3. How did the defense establishment's biggest and most important deals become tainted by such corruption in the first place? Why didn't alarm bells go off in the relevant Defense Ministry offices? Where was the procurement administration (led by Shmuel Zucker, who did write a letter of warning), the department that assists with defense transactions, the defense establishment's director of security and the legal counsels? Didn't anyone warn the minister in time? Were the navy officers involved in procurement tainted? And what happened with that internal probe the army promised to pursue when the affair came to light?

4. Police were told that Shimron, along with other suspects, acted to divert the job of ongoing maintenance on the fleet – which is a huge contract – from the navy's shipyard to a competing shipyard. The army's auditor, Ilan Harari, even inspected the poor labor relations at the shipyard. By choosing to focus on the commission fee, are the police ignoring a wider conspiracy?

The answers to these questions cannot be gleaned from the police announcement and neither the ministries involved nor the defense establishment seem to be bending backwards to explain what they’ve done to prevent recurrence. The revelations surrounding the navy deals, which are worth billions of Israeli (and German) taxpayer money, should also spur investigations into other military procurement – if it happened with submarines and boats, there's no reason to believe the procurement of tanks and planes is clean.