Netanyahu in Deep Water: Everything You Need to Know About the Submarines ScandalE
A timeline of the prime minister's stake in a U.S. company with links to a German shipbuilder, Israel's purchase of submarines and developments in the police investigation
2007 | Netanyahu buys shares in a company that in 2010 was acquired by a firm with ties to ThyssenKrupp
According to Prime Minister Benjamin Netanyahu’s most recent account of events, in 2007, while he was opposition leader, he acquired shares in the Texas-based company Seadrift Coke, which was managed by his cousin, Nathan Milikowsky. Seadrift was later acquired by Ohio-based GrafTech International, a maker of materials needed for steelmaking, which was a supplier to German industrial group ThyssenKrupp.
2009 | Michael Ganor is appointed ThyssenKrupp’s representative in Israel
Ganor replaced Yeshayahu Barkat as the representative in Israel of ThyssenKrupp, one of whose many activities is shipbuilding. Barkat had held the position for 25 years. According to Barkat, the ThyssenKrupp chief executive, while visiting Israel, was told that if Barkat remained in his position, no additional submarines would be ordered from the company. Netanyahu’s personal lawyer and confidant, David Shimron, represented Ganor in connection with Ganor’s activities in Israel.
2010 | Netanyahu sells his shares to his cousin, who becomes a key shareholder in the firm with ties to ThyssenKrupp
According to Netanyahu’s most recent account of events, in November 2010, about a year and a half after becoming prime minister for the second time, he sold the shares he acquired in 2007 to Milikowsky. The stock was sold for 16 million shekels ($4.4 million), earning the prime minister a profit of 12 million shekels. During this period, Seadrift Coke was acquired by GrafTech International. Milikowsky became a significant shareholder in GrafTech.
July 22, 2014 | Defense Ministry invites bids for the supply of naval patrol boats
The boats would protect Israel’s gas-production sites in the Mediterranean; the invitation went out after Germany withdrew an offer to finance Israel’s purchase of the vessels. Shipyards from South Korea, Italy and Spain expressed an interest, but because of the modest price that Israel was offering, ThyssenKrupp did not bid.
July 22, 2014 | Defense Ministry’s legal adviser says Netanyahu’s lawyer requested preference for Thyssenkrupp
According to Channel 10 News, on the day bids were invited, Defense Ministry legal adviser Ahaz Ben Ari wrote to the ministry’s director general at the time, Dan Harel, telling him that Shimron, Netanyahu’s lawyer and close associate, had called Ben Ari and asked him to act on behalf of ThyssenKrupp, at the request of the prime minister. Ben Ari also wrote that Shimron, who represented ThyssenKrupp, had asked if the ministry intended to halt the bidding process, as the prime minister had requested. Shimron denied the allegations in the Channel 10 report.
August 2014 | Germany offers to fund a third of the cost of the ships
According to a defense source, this offer was made after German representatives saw the bids that other foreign shipyards had submitted.
August 2014 | Defense Minister Ya’alon opposes the ThyssenKrupp deal
Then-Defense Minister Moshe Ya’alon expressed concern that Israel would become a “captive customer” of ThyssenKrupp, unable to negotiate from a position of strength. Ya’alon and Netanyahu disagreed bitterly on the issue, which resurfaced a year later in the form of disagreement on the acquisition of submarines.
October 2014 | Bidding is halted due to pressure from Netanyahu and the National Security Council
Netanyahu and the members of the National Security Council, including deputy chief Avriel Bar-Yosef, lobbied to have the bidding process halted and for contacts to resume with ThyssenKrupp, which could make heavier vessels. In a surprise move, three months after the invitation for bids was issued, the Defense Ministry suspended the bidding process.
2015 | Agreement reached to buy four naval boats from Germany
Netanyahu and members of the National Security Council argued that diplomatic considerations required that the boats be bought from Germany, and a better price could be obtained there. In 2015, the Defense Ministry agreed to the purchase of four naval boats, dubbed Sa’ar 6 boats in Hebrew, at a cost of 430 million euros ($490 million) from ThyssenKrupp.
August 2015 | Milikowsky held shares in the firm with ties to ThyssenKrupp during talks on submarine deals
In August 2015, Nathan Milikowsky sold his shares in GrafTech, the ThyssenKrupp supplier, after an agreement had been reached for the purchase of the patrol boats from ThyssenKrupp and while contacts were underway on Israel’s acquisition of submarines from the German company. In the so-called lavish-gifts affair, the police’s Case 1000, it was learned that Netanyahu had been receiving cash from Milikowsky for years.
2015 | Contacts with ThyssenKrupp on the purchase of submarines
Michael Ganor, ThyssenKrupp’s representative in Israel, signed a memorandum of understanding for the manufacture of three new submarines for the navy. At first, Netanyahu pushed to have the three subs added to the existing fleet, and in 2015 talks with ThyssenKrupp were launched on the matter. Defense Minster Ya’alon and other defense officials opposed the expansion of Israel’s submarine fleet, which with the purchase would grow to nine subs. The subject was therefore dropped. There had also been a disagreement between the political leaders and the military over the separate acquisition of a single submarine to bring the fleet up to six. According to news reports, Israel’s military chief at the time, Gabi Ashkenazi, and navy chief Eliezer Marom opposed the purchase for budgetary reasons. But the defense minister before Ya’alon, Ehud Barak, made the decision to proceed with the purchase.
2015 | Netanyahu lets Germany sell subs to Egypt, Defense Ministry official says
According to Raviv Drucker of Channel 13 News, Amos Gilead, who headed the Defense Ministry’s political-military division, told the police that in early 2015, Netanyahu gave Germany approval to sell submarines to Egypt. According to the report, Gilead had reservations about the sale and approached an adviser to German Chancellor Angela Merkel on the matter. Gilead told the police that the adviser, Christoph Heusgen, said Netanyahu was the one who approved the sale. Germany hadn’t needed Israel’s formal approval for the sale to Egypt, but because of the special relationship between Israel and Germany, Berlin approached Israel on the issue. In May 2015, Merkel told President Reuven Rivlin that Israel had agreed to the deal.
October 26, 2016 | Security cabinet approves nonbinding deal to buy three German subs
The security cabinet unanimously approved the memorandum of understanding to purchase three submarines from ThyssenKrupp to replace three old subs, which would be taken out of service.
February 27, 2017 | State Prosecutor orders investigation into the submarine affair
State Prosecutor Shai Nitzan ordered that the inquiry into the submarine purchases become a full-fledged criminal investigation, dubbed Case 3000. Nitzan was supported by Attorney General Avichai Mendelblit. Investigators began looking into the process through which both the three subs and the four naval patrol boats were bought from ThyssenKrupp. The prosecutor’s office said Netanyahu was not suspected of wrongdoing in the case.
July 2017 | Germany approves the submarine purchase
Germany’s Federal Security Council approved the sale of three submarines worth 1.5 billion euros to Israel. Because at that point the sale was the subject of an Israeli corruption investigation, Germany included a provision that would let the Germans rescind the deal if corruption suspicions were proved.
July 22, 2017 | Ganor turns state’s evidence in submarine case
Michael Ganor, the intermediary between Israel and ThyssenKrupp, agreed with prosecutors to turn state’s evidence in the case, in return for assurances that his sentence would be limited to a year in prison and a fine of 10 million shekels.
November 8, 2018 | The police recommend charging six suspects, including Shimron and Marom
The police said there was enough evidence to charge David Shimron as an intermediary to bribery. They said there was also enough evidence for bribery charges against former navy chief Eliezer Marom, former National Security Council official Avriel Bar-Yosef, former Shayetet 13 commando chief Shai Brosh, former legislator and minister Eliezer Sandberg, and former Netanyahu bureau chief David Sharan.
March 19, 2019 | Ganor retracts his testimony and is arrested
State witness Michael Ganor recanted his testimony to the police in the submarine case. He was then arrested on suspicion of obstructing an investigation, tax offenses and bribery. The police and prosecution are also considering rescinding his state’s evidence agreement. Under questioning following his arrest, Ganor said: “I didn’t bribe anyone. All the payments that I made to those involved in the case were for professional services that they provided me.” He said his statement to investigators that the payments were bribes stemmed from the police’s great pressure.
March 27, 2019 | Netanyahu bought shares in cousin’s firm at 95% discount, SEC filing suggests
Netanyahu may have earned several million dollars buying at a steep discount shares in a U.S. company controlled by his cousin Nathan Milikowsky and selling it three years later at an enormous profit, documents indicate. Netanyahu's 2007 purchase of shares in Seadrift Coke came three months before a third party offered to pay 19 times more for the same stock, U.S. Securities and Exchange Commission filing suggests. The implication is that Netanyahu, who was a Knesset member in the opposition at the time, received a 95 percent discount on the stock when he bought it. Because Seadrift was experiencing problems in the years that Netanyahu held the stock, Seadrift’s valuation declined from its peak. Nevertheless, the return on Netanyahu’s three-year investment amounted to 600 percent. Read more>