Isaac Molho Revealed to Be Netanyahu Confidant Detained in Submarines Scandal

The 'PM confidant' quizzed Sunday turned out to be Isaac Molho, Netanyahu's special diplomatic envoy and partner of the PM's personal lawyer, David Shimron, who was also questioned in the case

Isaac Molho
Tess Scheflan

Isaac Molho, a lawyer, long-time confidant and special diplomatic envoy of Benjamin Netanyahu, is the prime minister's associate who was detained for questioning by police Sunday in connection with alleged corruption in Israel’s procurement of submarines and missile boats from Germany.

Molho is suspected of promoting the deal with Germany during his diplomatic missions, part of the so-called "Case 3000" investigation. David Shimron, his law partner and his brother-in-law, was representing the German shipbuilder ThyssenKrupp Marine Systems in Israel.

>> A discreet man for sensitive missions: Meet Isaac Molho, Netanyahu's confidant detained by Israeli police <<

Because the diplomatic missions were at the behest of the prime minister, the police are treating Molho as a public servant suspected of breach of trust. As part of a conflict-of-interest agreement he had signed, Molho committed to avoid dealing with any matter connected to his law firm’s clients during his diplomatic missions or in his conversations with Israeli officials.

>> Under interrogation: Netanyahu's right-hand man and left-hand man | Analysis <<

Michael Ganor (left) and David Shimron.
Moti Milrod and Tomer Appelbaum

Police staged a confrontation between Molho and Michael Ganor, the former representative of the German shipbuilder building the submarines who turned state’s evidence in the case. The short confrontation, held in the offices of the police’s Lahav 443 anti-corruption unit in Lod, lasted about 10 minutes and was part of a larger eight-hour interrogation. On Sunday he was questioned by police for 15 hours. Shimron was also questioned again on Monday.

Molho said he had no connection to the submarine affair and did conduct any activities concern the submarine deal. 

Netanyahu’s name did not come up during the confrontation, said a source involved in the investigation. Molho’s interrogation on Monday did not concern his promoting the submarine deal during his diplomatic missions to Germany, said the source.

After questioning, Molho was released without any limitations except for being prohibited from leaving the country for 30 days. No date has yet been set for further questioning. 

Shlomit Shimron, Molho’s wife and the sister of David Shimron, Netanyahu’s personal lawyer who also represented Ganor in the submarine business and is himself a major suspect in the corruption affair, declined to comment on the suspicions against her husband and brother. 

“We are waiting for the truth to take the place of the lies, the evil and hatred. There are leaks and the media that is simply feasting on fake news,” she said.

Molho announced his resignation as Netanyahu’s special diplomatic envoy two weeks ago, but was expected to remain on the job until February. 

Molho resigned only a day before the state was meant to respond to a petition to the High Court of Justice against his continued service as a diplomatic envoy. The petition argued that it was improper for Molho to be given sensitive diplomatic assignments while he was not a civil servant, and especially since his partner, Shimron, had been involved in the controversial submarine deal.

In a hearing on the petition Monday, the court accepted the state’s position that the resignation made the petition superfluous, but added that the question of whether a private person should be appointed a diplomatic envoy could be examined if Molho’s replacement is also a private citizen.

The court also added that Molho should leave his position as soon as possible, noting, “Under the current situation, [his remaining] does him no honor.” The state’s representative, Meital Buchman Schindel, argued that staying on the job until February was a reasonable amount of time to allow for “handing over the job in a careful and thought-out manner, without undermining the State of Israel’s foreign relations,” and that the public good required that he be part of the transition. “If we leave aside this new development [of Molho’s questioning,] Molho has filled a sensitive position for the State of Israel for many years and his sudden disappearance won’t serve the public interest,” Schindel added.

Molho’s own lawyer, Michael Rabello, noted during the hearing that no restrictions had been imposed on his work as an envoy.

Ganor signed a state’s witness agreement following his arrest earlier this year. Ganor was among the first of those arrested in the submarines case, for allegedly bribing Israeli officials and associates of the prime minister in order to lock in Israel’s purchase of three submarines and four missile boats from ThyssenKrupp for nearly 2 billion euros ($2.3 billion).

Molho served as special envoy twice, from 1996 to 1999 and then beginning in 2009. He conducted negotiations on Netanyahu’s behalf with the Palestinian Authority, was involved in cease-fire negotiations with Hamas in Gaza and has been a central figure in contacts with the Egyptians. He attended meetings of the security cabinet and was also involved in coalition negotiations.

Yesh Atid chairman Yair Lapid, who was finance minister when the deal with Germany was signed and who has given evidence in the case, said Monday at the start of his Knesset faction’s meeting, “All of Netanyahu’s closest circle is tainted by this case. I know what has not yet been published. There is no scenario under which Netanyahu won’t be summoned for questioning in the submarine case.”

After Molho was summoned for questioning, Likud tried to distance Netanyahu from the case.

“Prime Minister Netanyahu is not in any way a suspect in the submarines case,” the party said in a statement. “That was correct, it is correct and it will always be correct. The media effort to cast doubt on the prime minister because some of his associates have been questioned is futile.”

Molho's lawyer, Zvi Agmon, commented on the allegations, saying his client had "contributed for years voluntarily to Israel's civil service, working for the benefit of the nation and not himself, and he has nothing to do with the submarine affair."