Israeli Defense Official on Submarine Deal: I Wasn't Aware of Iranian Connection

Amos Gilad says that while he himself didn't know of any Iranian stake in the German company that supplies the Israeli navy, it doesn't mean that the defense establishment was ignorant of it.

Prime Minister Benjamin Netanuyahu, President Reuven Rivlin and Navy Commander Maj. Gen. Ram Rothberg stand on top of the new submarine in Haifa, September 23, 2014.
Kobi Gideon, GPO

A senior defense ministry official said Saturday that he was “not aware of Iranian involvement” in the deal to purchase submarines from Germany, but added that “I did not say that the [defense establishment] did not know.”

The head of the Defense Ministry’s political security department, Maj. Gen. (Res.) Amos Gilad, answered questions at a Be’er Sheva event about a Haaretz report that found that Iran has received tens of millions of euros in dividends from ThyssenKrupp, the German corporation that has supplied the Israeli navy with ships and submarines. Yedioth Ahronoth was first to report on Friday that the Iran Foreign Investment Company holds nearly 5 percent of ThyssenKrupp’s shares.

Gilad added that any such Iranian involvement, if it exists at all, is marginal – but that it should be investigated. “Iran does not sell submarines to Israel. If it depended on Iran we would not have a single submarine,” he said.

He noted that there are exacting confidentiality agreements in place concerning the construction of the submarines, which allow them to be built while preserving Israeli security.

Staff at the Defense Ministry claimed last weekend that they were unaware of Iranian involvement in the ThyssenKrupp firm. On Saturday, Haaretz approached the ministry with the question as to whether they still were unaware of the stake that the Iranian investment firm has in ThyssenKrupp. The Defense Ministry replied that they had nothing to say in response on the subject. 

The Prime Minister’s Bureau declined to respond to the report, but a senior official said Netanyahu and the National Security Council, which led negotiations with Germany for the purchase of the naval craft, was unaware of Iran’s holdings in the German company.

The source added that every company involved in security deals with Israel undergoes extensive checks beforehand, and the defense establishment does not believe there was any risk of an information leak to Iran as a result of Israel’s contracts with ThyssenKrupp.

Prime Minister Benjamin Netanyahu has pushed to do business with the corporation without a tender, against the wishes of the Defense Ministry. Netanyahu’s attorney and confidant, David Shimron, represents ThyssenKrupp’s Israeli mediator, Miki Ganor. Resulting concerns of a conflict of interest led Attorney General Avichai Mendelblit to open a police investigation into the affair.

The Iranians, who at the end of the 1970s held a quarter of shares in ThyssenKrupp, reduced their stakes in the company to some 5 percent in 2003 in order to prevent sanctions from being placed on the company by Western governments.

Reports from ThyssenKrupp said that the company tried to receive an exemption from these limits, but was unsuccessful and bought back IFIC's shares and bring their total involvement in the company to less than 5 percent.

In 2004, U.S. threats to put the company on a "black list" led to the removal of ThyssenKrupp's Iranian board member, Mohamad-Mehdi Navab-Motlagh, who was the Iranian government's deputy minister for commerce and foreign affairs. ThyssenKrupp's exclusion of the Iranian investment firm angered Tehran, and an official with the investment firm said at the time that they were considering selling their stake in the company.

In 2010, ThyssenKrupp said it would freeze all new business with Iran with immediate effect and terminate existing contracts there in response to ever-harsher sanctions against the Islamic Republic.

ThyssenKrupp was one of a series of German companies that reduced business ties with Iran.