Email Purportedly Shows Netanyahu's Lawyer Intervened in German Boat Deal

Channel 10 reports that an email written by the legal adviser to the Defense Ministry claims that David Shimron asked for bidding to be halted to benefit German shipyard, as per Netanyahu's request. Shimron denies report.

An email from a Defense Ministry official purportedly shows that Prime Minister Benjamin Netanyahu’s attorney David Shimron personally intervened on behalf of a German shipyard concerning a sale of missile boats to the Israel Navy. The email was divulged Tuesday night by Channel 10.

According to the TV report, the legal adviser to the Defense Ministry, Ahaz Ben-Ari, said in a 2014 email to the ministry’s director general, Dan Harel, that Shimron had contacted him and asked that he act for the benefit of the shipyard, ThyssenKrupp, as per Netanyahu’s request. Shimron denies Ben-Ari’s account.

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The email, dated July 22, 2014, reportedly states: “Attorney David Shimron, who represents the German firm, called me and wanted to know if we are halting the bidding process in order to negotiate with his client, as was requested of us by the prime minister.” 

Revelations of alleged conflicts of interest regarding the military deal have roiled Israel’s political leaders and defense establishment in recent days. Haaretz has learned that Shimron, Netanyahu’s confidant and attorney, was appointed to the board of a firm advising ThyssenKrupp, which already sold six submarines to Israel and hopes to sell even more, despite the IDF’s insistence that they are an unnecessary purchase.  

David Shimron, Benjamin Netanyahu, Ahaz Ben-Ari, Dan Harel.
Moti Milrod, Olivieh Fitoussi, Eyal Toueg, Sasson Tiram.

Responding to the Channel 10 story, Shimron told the station: “I didn’t tell attorney Ben-Ari a thing about the prime minister. I also didn’t know a thing about a request from the prime minister, which I have only learned about now from the media, and how Ben-Ari linked the matters. The only possible interpretation of this email, if your quote is correct, is that Ben-Ari knew about the prime minister’s request, about which I didn’t have the vaguest notion. I also didn’t have the vaguest notion about involvement by the prime minister in the shipyard issue. Any other interpretation is not connected to the truth.”  

The Prime Minister’s Office said that Shimron never discussed the tender with Netanyahu. “After the defense establishment issued a tender for the purchase of ships, the German government compromised on the price. In light of that, the National Security Council and the Foreign Ministry recommended that the prime minister and the defense minister cancel the tender and accept the upgraded German offer, also in light of the importance of the strategic ties with Germany.” 

The Defense Ministry published the international tender for the boats, which will be used to protect Israel’s natural gas fields, on July 22, 2014, according to the ministry’s website. 

That same day, according to a report by Channel 10 television’s Raviv Drucker, the ministry’s legal advisor, Ahaz Ben-Ari, informed ministry director general Dan Harel about a phone call he had received from attorney David Shimron about the tender.

In September 2014, Israel held a conference for all the companies that wanted to bid in the tender. Interest was expressed by companies from South Korea, Spain, Italy and Israel. 

One month later, however, the Defense Ministry announced that it was freezing the tender. In a statement issued at the time, it said it was doing so because the German government had approached the Israeli government with an offer to subsidize the ships if they were bought from a German shipyard. 

A source involved in the issue, then-Defense Minister Moshe Ya’alon opposed halting the tender.According to the source, the Germans offered the subsidy after being shown the bids of the other companies that competed in the tender.

“The envelopes were opened, and with the proposals and prices they saw in those envelopes, they went to the Germans – who hadn’t made a bid. And they offered a better deal,” the source said. The source stressed that the Defense Ministry, which ran the tender, had obtained legal opinions authorizing this conduct.  

In fact, the Germans were not involved in the tender and didn't file a bid. Even before the tender was issued, Israel negotiated with German shipyards over a possible deal. After Germany decided not to give Israel a discount worth hundreds of millions of dollars, in light of the suspension of peace talks with the Palestinians, the Defense Ministry decided to issue an international tender. According to the tender, the price of every ship was to be no more than $100 million, a condition that made it clear to Navy officials that German shipyards would not be able to file a bid. 

However, according to the source, the Germans eventually compromised on the price. Another source confirmed that when the Germans announced that they can provide the ships for less than $100 million per vessel, it was recommended that the tender be aborted and for a deal to be struck with the German shipyards. Israel signed a deal with the shipyards last May to buy four ships to protect the gas fields for $470 million, with Germany paying a third of the cost.

Earlier on Tuesday, Netanyahu defended Shimron against allegations of his possible conflict of interest regarding Israel’s purchase of submarines from Germany. 

“Netanyahu knows David Shimron to be as straight as an arrow, a man extra careful to respect the law and regulations, and who is a first-rate lawyer,” the Prime Minister’s Office said in a statement.  

Last week, Channel 10 reported how Shimron also represents Miki Ganor, an Israeli businessman employed by the German company that built the submarines, ThyssenKrupp. Haaretz later reported that Shimron was also appointed to the board of Ganor’s firm.

Netanyahu said Sunday he acted promptly to advance the submarine deal because he wanted to ensure it was agreed on while Angela Merkel, a friend of Israel, was still chancellor. 

Also Tuesday, ThyssenKrupp opened its own investigation over Israel’s controversial submarine purchase from the company. “We are currently doing what we always do when indications are received of irregularities. We will fully investigate this to clarify the facts,” a senior company official, Donatus Kaufmann, told the Frankfurter Algemeine Zeitung newspaper. 

The company learned of the allegations of irregularities in connection with the submarine sale from Israeli media reports, Kaufmann said, and has therefore not commented on them in a concrete manner. But Kaufmann was critical of the alleged involvement of David Shimron on Michael Ganor’s behalf. Ganor, Kaufmann said, was the only individual with whom Thyssen-Krupp contracted to represent it in Israel, and it was Ganor’s obligation to inform the company of the involvement of other individuals in the sale negotiations.