The State Prosecutor's Office announced plans on Thursday to indict Prime Minister Benjamin Netanyahu's attorney and confidant David Shimron, a former Israel Navy commander and a list of other former officials in a corruption case dubbed "The Submarines Affair."
Shimron will be charged with money laundering, pending a hearing, in the case involving the acquisition of submarines from German shipbuilder Thyseenkrupp, the draft charge sheet says.
Businessman Miki Ganor, Thyssenkrupp's representative in Israel, will be charged with bribery, as well as former navy chief Eliezer Marom, also pending a hearing. Ganor signed a state’s witness agreement in 2017 but later recanted.
The case was launched after an investigative report broadcast by TV Channel 10 in November 2016, which led to an inquiry followed by a criminal investigation.
It involves two deals signed by Israel and Thyssenkrupp, one involving the purchase of three submarines for 1.5 billion euros, the other involving the purchase of missile boats for protecting gas drilling platforms, a deal worth 430 million euros.
The police had also recommended indicting National Security Council deputy, Avriel Bar-Yosef, for bribery, fraud, breach of trust and conspiracy to commit a crime. But the prosecutor has yet to announce its decision on Bar-Yosef's case.
Also facing indictment are David Sharan, a former head of the Prime Minister’s Bureau under Netanyahu, for taking bribes, breach of trust, money laundering and violating the law regulating campaign financing.
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Former cabinet minister Eliezer Zandberg 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.
The draft charge sheet accuses Shimron of money laundering as part of a deal with Ganor. It says that in 2013, Ganor asked Shimron to sign in his stead for a deal between the German-Israel Research Foundation and the Credit Suisse Bank. Shimron agreed, and the bank transferred $140,000 to his account, as a commission.
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. They both then tried to transfer funds directly from Shimron’s account at Credit Suisse to Ganor’s company’s account at Bank Hapoalim. Both men are accused of presenting a false document to the bank to convince it to approve that transfer.
The indictment describes Ganor 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.”
Ganor and Bar-Yosef, who knew each other from military service, met again in 2009, and Bar-Yosef proposed they collaborate to further Ganor’s appointment as Thyssenkrupp’s agent in Israel for Bar-Yosef's own financial gain, the charges say.
“Ganor agreed, and to this end met with then-navy commander Marom, in order to get him to support this goal," the charges say.
The men then met with the manager of the Thyssenkrupp shipyard, Walter Freitag. The corporation’s agent in Israel at the time, Yeshayahu Barkat, was kept away from that meeting.
Ganor presented Freitag with his connections in Israel’s government and navy, assisted by Marom and Bar-Yosef. After Freitag’s visit Ganor was appointed as the corporation’s agent in Israel, replacing Barkat, the charges 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 charges say.
Sharan is accused of bribery, breach of trust and money laundering. Bar-Yosef introduced Ganor to Sharan in 2008, the charges say. Ganor thought Sharan would be helpful in promoting his businesses due to his proximity to Steinitz.
As Steinitz’s chief of staff, (following his service at Netanyahu's office) Sharan promoted various Ganor ventures, chiefly the acquisition of the naval vessels, the charge sheet says.
“Sharan helped 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,” it adds.
Sharan also asked Ganor for a bribe in exchange for his activities as Steinitz’s chief of staff, where he promoted Ganor’s business. Sharan asked for the money to be transferred via a third person, the charges say.
Other details in the indictment include how at Ganor’s instructions, his assistant issued a check for 35,000 shekels ($10,000) to Sharan’s associate, with money intended for Sharan. Tayeb acted as a middleman.
They say that Ganor transferred a further 35,000 shekels to Sharan, through an account held by Yitzhak Lieber, a friend of Sharan's, and that Ganor transferred 58,000 shekels to a company owned by Lieber’s partner. Later, Lieber transferred these funds to Sharan.
The charge sheet says that Ganor “made these payments to Sharan for taking action as part of his role as the Finance Minister’s chief of staff and the head of the Prime Minister’s bureau, for promoting the deals with the vessels. The second payment was given by Ganor to make Sharan act in his favor in his role as head of Netanyahu’s bureau.”
Ganor’s attorneys responded that “as is customary in such acquisitions, Ganor employed several consultants as part of his operations regarding the submarine purchase. All the payments made to these consultants were legitimate and transparent, paid in exchange for their work.
The charge sheet relating to Ganor was inflated artificially after Ganor decided to listen to his conscience and testify truthfully. This did not agree with headlines on this case. In any case, all the facts, documents, recordings and photos prove that this case was inflated out of proportion. One can assume that after the hearing the full picture will emerge, a very different picture than the one described in the charge sheet.”
Marom's attorneys Zion Amir and Eyal Rozovsky said in their client's name:
“I received with pain and sadness the State Prosecutor’s erroneous decision to indict me. I respect this country's legal authorities but believe that the indictment is groundless. I know the facts and I’m convinced of my innocence. I intend to fight and to prove to all those who were under my command for 40 years, that my actions were without blemish. I’m convinced that the decision will be reversed after a hearing and that I will not be prosecuted."
Shimron responded: “There are no submarines, no bribery. There is no fraud. So what is there? A technical violation, described pompously with many factual errors. After a hearing this affair will be taken off the public agenda…I have no doubt that during the hearing any remaining suspicion will be removed.”
Attorney Yaron Kostelitz, representing Zandberg, said that “obviously we were sad to get a summons to a hearing, since we believed the case should have been closed after the police investigation. We believe we’ll be able to persuade state prosecutors during the hearing that the case should be closed.”