Analysis |

Israel's Submarine Case: Jaw-dropping Deals Made Without Any In-depth Staff Work

In the highly complicated case involving a former navy chief and people close to Netanyahu, the police were shocked to discover that huge procurement deals were signed almost as an afterthought

Josh Breiner
Josh Breiner
Send in e-mailSend in e-mail
Israeli Prime Minister Benjamin Netanyahu climbs out of a navy submarine after it arrived in Haifa Port, Israel, on January 12, 2016.
Israeli Prime Minister Benjamin Netanyahu climbs out of a navy submarine after it arrived in Haifa Port, Israel, on January 12, 2016.Credit: REUTERS/Baz Ratner/File Photo
Josh Breiner
Josh Breiner

The police unit that investigated the submarine case described it as a “watershed event” for the defense establishment’s purchasing system and the National Security Council. Still, investigators tried to avoid the security implications and focus strictly on whether ethics rules were violated in the decisions to buy the naval vessels, even though the probe raised questions on whether these decisions suited Israel’s security needs.

The case, which the Lahav 433 unit described as its most complicated and sensitive case in years, involved the purchase of both submarines and missile boats. It first came to light in an investigative report on Channel 10 television in November 2016. The police then opened a preliminary inquiry, which became a full-fledged criminal investigation three months later.

To really understand Israel and the Middle East - subscribe to Haaretz

The case revolved around two deals between Israel and the German conglomerate ThyssenKrupp. One was for the purchase of three submarines at a cost of 1.5 billion euros, and one was for the purchase of missile boats to protect Israel’s natural gas fields at a cost of 430 million euros.

Police suspect that senior officers, above all former navy chief Eliezer Marom, as well as civil servants and people close to Prime Minister Benjamin Netanyahu, all demanded and received bribes to promote the company’s deals with Israel.

In July 2017, ThyssenKrupp’s Israeli representative, Michael Ganor, turned state’s evidence. He told the police he used various senior officials to promote the deals, which would have earned him millions of dollars.

Ganor’s testimony led to a breakthrough in the investigation, which culminated in Thursday’s recommendations to indict. Investigators from Lahav 433 said they were shocked to discover that these mammoth deals had been signed almost as an afterthought, without any in-depth staff work being done.

“Ganor’s stories made our jaws drop,” one said. “As citizens, at first we couldn’t believe that decisions about national security were made like this.”

“I greased the wheels so they’d be ready for D-Day,” Ganor said of his bribes to senior officials. Those officials then opened doors for him and applied pressure on his behalf. He disguised the bribes by signing fictitious consultancy agreements with them.

The two main bribe-takers, the police say, were Marom and a former deputy national security adviser, Avriel Bar-Yosef. For both men the police have recommended charges of bribery, fraud and breach of trust.

Regarding the involvement of Netanyahu’s personal lawyer, David Shimron, Ganor said, “I realized that I had to reach the prime minister’s bureau, because that’s where things are decided.” To conceal the way he was using Shimron, Ganor initially hired him as a lawyer on real estate deals, but quickly began using him instead for the naval deals.

The police say Ganor sought to exploit Shimron’s closeness to Netanyahu to promote the naval deals. Several government officials told the police they were shocked that Shimron had approached them on this issue. The police therefore seek to charge him with mediating a bribe.

Even now that the probe has ended, the police continue to say they never had any intention of investigating Netanyahu in this case. But the fact that people very close to him were working to promote Ganor’s interests, combined with Netanyahu’s involvement in both deals, will require him to testify.

>> Read more: Israel's Submarine Affair: Police Indictment Recommendations Drown in a Sea of Questions | Analysis ■ Bibi Bombshells Explained: Your Guide to All the Netanyahu Cases

The police are convinced that Marom was promoting Ganor’s interests even while he was still in the navy, in the hope of receiving payment from Ganor after he retired. As commander of the navy, the police say, Marom made “surprising” decisions that suited Ganor’s interests.

After leaving the navy, Marom received 120,000 shekels ($32,670) in consulting fees from Ganor that the police suspect were fictitious.

Bar-Yosef demanded money from Ganor for his work in lobbying the Defense Ministry and the National Security Council, the police say. But Ganor feared he would be caught if he paid Bar-Yosef directly. So he asked a friend, Shaike Brosh, to pay Bar-Yosef 120,000 shekels in consulting fees.

Ganor gave the police recordings of his conservations with Marom and Bar-Yosef that included Bar-Yosef’s demands for payment. The police believe that Ganor kept these recordings to protect himself in case a criminal investigation was opened.

Like Marom, Bar-Yosef apparently began making plans with Ganor while still in the civil service to prepare for his retirement. These plans involved setting up deals that would force the state to buy naval vessels from ThyssenKrupp for years to come.

At one point, the police thought Energy Minister Yuval Steinitz should be questioned as a suspect, after discovering that at the request of Steinitz’s crony David Sharan, Ganor had contributed tens of thousands of shekels to Steinitz’s Likud-primary campaign via third parties. Given that Steinitz supported the ThyssenKrupp deals, this seemed suspicious.

But the police found no evidence that Steinitz had been motivated by improper considerations and eventually cleared him completely.

Click the alert icon to follow topics:



Automatic approval of subscriber comments.
From $1 for the first month

Already signed up? LOG IN


The Orion nebula, photographed in 2009 by the Spitzer Telescope.

What if the Big Bang Never Actually Happened?

Relatives mourn during the funeral of four teenage Palestinians from the Nijm family killed by an errant rocket in Jabalya in the northern Gaza Strip, August 7.

Why Palestinian Islamic Jihad Rockets Kill So Many Palestinians

בן גוריון

'Strangers in My House': Letters Expelled Palestinian Sent Ben-Gurion in 1948, Revealed


AIPAC vs. American Jews: The Toxic Victories of the 'pro-Israel' Lobby

Bosnian Foreign Minister Bisera Turkovic speaks during a press conference in Sarajevo, Bosnia in May.

‘This Is Crazy’: Israeli Embassy Memo Stirs Political Storm in the Balkans

Hamas militants take part in a military parade in Gaza.

Israel Rewards Hamas for Its Restraint During Gaza Op