Attorney General orders probe of German submarine deal

Former defense chief Ya’alon calls episode ‘disturbing’

November 18, 2016 02:38
4 minute read.
Israeli submarine

A dolphin-class submarine constructed by German company Howaldtswerke- Deutsche Werft for the Israel Navy. (photo credit: AMOS BEN GERSHOM, GPO)

In what may pose a significant legal threat to Prime Minister Benjamin Netanyahu, Attorney-General Avichai Mandelblit on Thursday asked State Attorney Shai Nitzan to examine a major arms acquisition from Germany.

Mandelblit, the government’s legal adviser, asked Nitzan, in charge of the state prosecution, to check whether Netanyahu’s trusted lawyer and right hand-man David Shimron violated a conflict-of-interest agreement.

According to an investigation by Haaretz published on Thursday, Shimron not only provides legal representation for Miki Ganor, ThyssenKrupp’s representative in Israel, but also was a director at M.G. 2015, which reportedly was advising ThyssenKrupp in 2013. M. Ganor Yam 2012 was owned directly by Ganor until it was transferred to M.G. 2015 last year.

ThyssenKrupp is the German submarine maker that sold the Israel Navy its newest Dolphin- class submarines.

In a letter to Mandelblit, Shimron wrote that he did not represent Ganor or his company in its dealings with Israel, nor did he mediate between the company and Israel, saying he only represented Ganor in dealing with Germany.

“I did not meet or speak with security officials on the matter,” Shimron wrote.

ThyssenKrupp itself has been accused of being involved in bribing officials around the world to promote sales of its submarines. According to the German financial newspaper Handelsblatt, ThyssenKrupp launched an internal investigation into suspicions that employees of its Marine Force International subsidiary had bribed officials in Greece, Turkey, South Korea, Pakistan and Indonesia.

Channel 10 reported on Wednesday that Shimron had pushed Netanyahu to reach the submarine deal with the German company even though he faced stiff opposition from the Israeli military establishment, including then-Defense Minister Moshe Ya’alon.

According to an earlier report by Channel 10, Netanyahu began negotiations with the Germans without telling Ya’alon, who only found out about the deal when it was leaked to the media. Ya’alon initially succeeded in stopping the planned purchase, but Netanyahu renewed the negotiations with Germany after Ya’alon stepped down.

“I do not know what was done and what was signed after leaving the Defense Ministry, but the report by [Channel 10’s] Raviv Drucker on the subject is very disturbing and requires a comprehensive examination of the relevant facts,” Ya’alon wrote in a statement on his Facebook page on Thursday night. “The description of the sequence of events described by the National Security Council is missing and does not reflect the reality as it is,” he added.

Speaking in Ashdod, Defense Minister Avigdor Liberman supported Netanyahu’s version of events, saying he believed the prime minister had no idea about the connection between Shimron and the German company. He also defended the professional considerations in purchasing the submarines.

The National Security Council released its own statement that included a timetable of the submarine purchases to show that proper procedures were followed.

“The purchasing of the submarines was done in a professional manner with no external influences,” the NSC said on Wednesday in response to the Channel 10 report, noting that the submarines were purchased after “operational, technological, budgetary and diplomatic consideration were taken into account.”

On Tuesday, Avriel Bar-Yosef, the former deputy head of the NSC, was arrested on suspicion of taking bribes from a German associate to promote business deals involving Israel’s growing offshore natural gas resources, which the Dolphin-class submarines are said to have been purchased to protect.

Israel currently has three Dolphin- class submarines and two Dolphin 2-class submarines (another one is expected to be delivered in 2018). The new Dolphin 2-class submarines, which will not reach Israel’s coast for another decade, are expected to replace the older Dolphins at a combined price of NIS 5 billion ($1.3b.).

The IDF Spokesperson’s Unit said on Thursday the submarines were indeed needed to replace the older vessels. “The need of those submarines was pointed out by the army at the latest cabinet meeting, which was attended by all relevant parties including the prime minister, defense minister and foreign minister,” the IDF statement said.

A statement from the Prime Minister’s Office on Thursday said the first time Netanyahu heard that Shimron had business interests in the company that built the submarines was when Channel 10 asked for a response to the report. Netanyahu said he never spoke to Shimron about submarines or any issue related to his clients. The statement said all those who work with Netanyahu, including Shimon, know very well that the prime minister forbids them talking to him about their business interests.

“The only consideration standing before the prime minister is strengthening Israel with strategic naval vessels that are necessary to guarantee its future,” the PMO statement said. “Any attempt to hint that other considerations were part of the decision to purchase the submarines is a lie and not connected to reality.”

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