Where does PM stand in Submarines Affair? – analysis

If Netanyahu is connected at all to the submarines case, it started when he purchased 1.7% of the shares in NMDM in 2007 for around $600,000.

Prime Minister Benjamin Netanyahu climbs out of the 'Rahav,' the fifth submarine in the navy's fleet, in 2017 (photo credit: BAZ RATNER/REUTERS)
Prime Minister Benjamin Netanyahu climbs out of the 'Rahav,' the fifth submarine in the navy's fleet, in 2017
(photo credit: BAZ RATNER/REUTERS)
What we know about Netanyahu and Case 3000
Very little so far. Until a few weeks ago, the “Submarines Affair” was about top defense officials and top officials close to Prime Minister Benjamin Netanyahu skimming off the top of a deal for Israel to buy diesel submarines from Germany. After actively keeping Netanyahu clear from being viewed as a suspect for more than two years, Attorney-General Avichai Mandelblit opened an initial review 10 days ago into the prime minister’s conduct regarding the case.
If Netanyahu is connected at all to the submarines case, it started when he purchased 1.7% of the shares in NMDM in 2007 for around $600,000. NMDM was a supplier for the German company Thyssenkrupp, which later sold submarines to Israel and Egypt.
Miki Ganor, a key player in coordinating the affair’s alleged bribery and fraud aspects, became Thyssenkrupp’s representative in Israel in 2009.
At some point, NMDM merged with Graftech International, and in 2010, Netanyahu sold his shares to his cousin, Natan Milikovsky, for around $4.3 million. This was more than a year after he became prime minister.
In July 2014, the Defense Ministry opened bidding for providing submarines to Israel.
Reportedly, a representative for the prime minister tried to push the Defense Ministry to choose Thyssenkrupp one week later.
Sometime in 2014-2015, Netanyahu also told German officials that Israel would remove its longstanding opposition to the Germans selling submarines to Egypt.
The cabinet approved purchasing the submarines in principle in October 2016.
A criminal investigation was opened into the affair in February 2017.
Germany approved the sale of the submarines in July 2017, the same month that Ganor became a state’s witness.
Netanyahu kept the Defense Ministry and the IDF in the dark about aspects of purchasing the submarines and about removing opposition to Germany’s sale of submarines to Egypt.
Though the police issued their recommendations last November – which left Netanyahu clear of suspicion – in February, the State Comptroller indirectly revealed a new potential piece which the police had not investigated.
Critics’ Accusations
Somehow the $3.7m. Netanyahu profited was because of his interventions to promote the submarine sales between Israel and Germany. It is also possible that Netanyahu’s green-lighting Germany to sell submarines to Egypt either directly benefited him or indirectly smoothed relations with Germany to benefit him in the Israel deal.
It is presumed that the Defense Ministry and the IDF opposed buying the submarines as being excessive and a waste of valuable defense funds, since Israel already possessed other German diesel submarines, but that Netanyahu chose his personal gain over the national interest. It is also presumed that green-lighting the sale to Egypt went against Israel’s national interests to keep advanced weapons out of the hands of its neighbors in the Middle East, lest they some day be used against Israel.
To establish the above criticism as a potential crime, police would need to prove that there was a direct connection between Netanyahu’s profits and his actions in the Submarines Affair and that his actions went against Israel’s national interests.
Critics also slam Netanyahu for changing aspects of his story about the timing of when he sold his shares, for his “going behind the back” of the defense establishment and for his changing story regarding whether he green-lighted the deal with Egypt. They also wonder if his connection to the case relates to Ganor recently blowing up his partial immunity deal, though there is no evidence of this to date. There has also been a presumption that Netanyahu might have known about the bribery scheme since so many of his close aides were involved, but Mandelblit has found this argument to be legally weak.

Netanyahu’s Side of the Story
He purchased the shares in NMDM when he was in the opposition, which is allowed. When he sold the shares, he got approval from the relevant authorities. His ownership shares in NMDM were insignificant to have control and NMDM did tons of business besides Thyssenkrupp’s submarine deals.
In any event, he did not and does not know about any connection between his profits and the submarines. He contends there is none, at least not on the basis that he sold his shares years before the bidding opened, the cabinet approved the deal and the deal went through. Critics say that there were important early-stage negotiations about the submarines going back to 2010, but Netanyahu correctly points out that no one has produced evidence about this.
Many of Case 3000’s developments date back to 2012-2016, which would seem to be too late to relate to the prime minister. Although Ganor stepped into the picture in 2009, no one has made a connection yet between him and the prime minister.
Netanyahu has said that he cannot explain why he green-lighted the deal with Egypt without revealing classified secrets that even the Defense Ministry and the IDF do not know. There have been general comments about supporting Egypt once Abdel Fattah el-Sisi took over from the Muslim Brotherhood.
But sources indicate that one reason might be that it was expected that Egypt would succeed in acquiring submarines, and it was preferred that they acquire a design Israel was familiar with as opposed to a less familiar design from Japan, France, South Korea or others. Some sources even say that Netanyahu’s decision appears to have been sound after the fact. Explanations of why Netanyahu did not update the Defense Ministry are hazier, but there are possible explanations which would not violate the law.