The High Court of Justice heard arguments on Monday regarding petitions asking to open a criminal investigation against Prime Minister Benjamin Netanyahu in the submarines and missile corvettes corruption affair.
Hundreds of protesters gathered outside of the Supreme Court building in Jerusalem before the hearing, having arrived in a convoy of dozens of cars that travelled from Tel Aviv to the capital carrying inflatable submarines on their roofs in protest.
At the center of the submarine affair are two agreements between Israel and the German company Thyssenkrupp Marine Systems made five years ago: One was to buy three submarines for 1.5 billion euros, and the other was the purchase of missile corvettes for the purpose of defending Israel’s offshore natural gas fields and production platforms for 430 million euros.
According to indictments that have been filed as part of the affair, senior IDF officers, public officials and a number of people close to Netanyahu are suspected of demanding and receiving bribes in order to advance the deals with ThyssenKrupp. The main accusations against Netanyahu is that he allegedly purchased additional submarines for the navy despite opposition from the defense establishment.
The Movement for Quality Government, which filed one of the petitions, asked the High Court justices to order Attorney General Avichai Mendelblit to open an investigation against Netanyahu. The movement also asked the court to order the establishment of an official commission of inquiry into the corruption affair.
The Ein Matzav protest movement said Monday that burying the submarine affair “is the gravest possible [act] for Israel and Israeli society.” They referenced some of their members’ background as former senior military officials, saying “We will not rest until a commission of inquiry is formed and will not allow anyone to prevent it.”
Roi Peleg of the Investigation Now organization said the submarine scandal was “the most serious defense corruption affair in the history of the country. Today we are drawing a red line.”
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Another petition heard Monday, which was submitted by the Democracy Guard movement, also asked to investigate Netanyahu in the related steel shares affair, which concerns the prime minister’s buying and selling of shares in a company controlled by his cousin, Nathan Milikowsky.
In 2007, Netanyahu purchased a 1.6 percent stake in Seadrift Coke, a Texas-based company controlled by Milikowsky that makes products for the steel industry, for $600,000. The deal assigned a value of just $37.5 million for the entire company, but a sale of Seadrift shares believed to have occurred not long afterward valued Seadrift at nearly 19 times that figure.
This implies that Netanyahu, then a member of the Knesset opposition, received a 95 percent discount on the stock when he bought it. A filing from the U.S. Securities and Exchange Commission suggests that Netanyahu may have earned several million dollars by buying the shares at a steep discount and selling them three years later at an enormous profit. Seadrift also has a connection to the submarine affair: ThyssenKrupp is one of Seadrift’s four biggest customers, according to the SEC filings.
In October, Mendelblit looked into the suspicion of whether Netanyahu bought the Seadrift shares at a discount and sold them after he was elected prime minister at a profit that does not seem to reflect the company’s financial situation and market conditions, which would amount to receiving a forbidden economic benefit while in office. The attorney general decided not to open an investigation into the matter. Mendeblit also examined whether Netanyahu’s failure to disclose the selling of the shares to the state comptroller constituted a criminal act.