Key suspect in submarine fraud probe turns state’s witness
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Central figure in alleged scandal will reportedly serve a year in jail, pay fine of up to NIS 10m.

Key suspect in submarine fraud probe turns state’s witness

Miki Ganor, former representative in Israel for German shipmaker, signs deal that could lead to indictments of senior public officials

Raoul Wootliff covers politics, corruption and crime for The Times of Israel.

Miki Ganor is seen at a hearing at the Rishon Lezion Magistrate's Court following his arrest in the 'Case 3000' affair on July 10, 2017. (Moti Kimchi/Pool/Flash90)
Miki Ganor is seen at a hearing at the Rishon Lezion Magistrate's Court following his arrest in the 'Case 3000' affair on July 10, 2017. (Moti Kimchi/Pool/Flash90)

In a major development that could lead to indictments of senior public officials, one of the men arrested in connection with suspected corruption in the multi-million-dollar purchase of naval vessels from Germany signed a deal to become a state’s witness on Friday.

Miki Ganor, a former agent for the German submarine company ThyssenKryupp, agreed to the conditions presented by the State Prosecutor and, under the agreement, was released by the Petah Tikva Magistrates Court to house arrest.

Ganor’s lawyer, Eli Zohar, who previously represented former prime minister Ehud Olmert, confirmed to The Times of Israel that his client has signed the deal but declined to comment on the conditions he had agreed with the state prosecutor.

Under the deal, Ganor will reportedly serve one year in prison and pay a fine of up to 10 million shekels (some $2.8 million), in return for his cooperation in the ongoing probe. Until trial, he will remain under house arrest with no access to the media and a ban on leaving the country.

Ganor, along with former National Security Council deputy head Avriel Bar-Yosef, is suspected of giving bribes in connection with a decision by Prime Minister Benjamin Netanyahu to buy three submarines from the Germany company ThyssenKrupp, a deal reached despite opposition from the Israeli Defense Ministry.

Ganor was arrested last week on charges of fraud, money laundering and conspiracy to commit a crime.

Germany has temporarily frozen the deal. Berlin and Jerusalem were said set to sign a memorandum of understanding next week, but this has been postponed indefinitely. “There’s now an asterisk in the deal,” Netanyahu acknowledged Wednesday, adding that the German side is waiting to see how the ongoing corruption investigation will play out. “There’s a probe, let the probe be concluded,” he said.

Netanyahu is not suspected in the case but his personal lawyer, David Shimron, who was under house arrest for several days until his release on Saturday, had been questioned several times by the police investigation unit Lahav 433. Shimron acted as Ganor’s lawyer.

Prime Minister Benjamin Netanyahu (L) and Coalition Chairman David Bitan attend a Likud faction meeting in the Israeli parliament on January 30, 2017. (Miriam Alster/Flash90)
Prime Minister Benjamin Netanyahu (L) and Coalition Chairman David Bitan attend a Likud faction meeting in the Israeli parliament on January 30, 2017. (Miriam Alster/Flash90)

In response to the news earlier in the week that Ganor could turn state’s witness, coalition chairman MK David Bitan of Netanyahu’s Likud party said that he wasn’t worried. “When they look for a state’s witness, it means that they had nothing to begin with,” he said.

Bar-Yosef, who played a central role in recommending that Israel buy the submarines, is suspected of bribery, conspiracy to commit a crime, fraud, breach of trust and money laundering.

According to the German newspaper Handelsblatt, Ganor stood to make 10 to 30 million euros from what the paper estimated was a 1.5-billion-euro deal.

Another suspect in the case, the former commander of the Israeli Navy Maj. Gen. (res) Eliezer Marom, was also released from house arrest on Saturday evening.

David Shimron seen at a Likud press conference in Tel Aviv on February 01, 2015. (Flash90)
David Shimron seen at a Likud press conference in Tel Aviv on February 01, 2015. (Flash90)

Attorney General Avichai Mandelblit ordered the police to formally look into the submarine affair — dubbed Case 3000 — in November 2016, after accusations surfaced that Netanyahu may have been swayed to purchase the vessels by business ties that Shimron had with ThyssenKrupp. Late last year, Channel 10 News revealed that Shimron had also served as an adviser to Ganor.

Police are planning to summon Netanyahu to testify on what he knows about the issue and specifically as to whether he knew of the corruption allegations against Bar-Yosef when he sought to appoint him head of the National Security Council in 2016.

Bar-Yosef’s candidacy was later withdrawn when it emerged that he was suspected of accepting bribes in exchange for promoting the interests of German businessmen involved in the development of Israel’s offshore gas fields.

Among other suspects are Ronen Shemer, a lawyer who also worked for Ganor and who is suspected of shredding documents.

Netanyahu has complained that his name is being linked to several investigations as part of a left-wing conspiracy to oust him.

The prime minister is being investigated directly by police in two affairs known as Case 1000 and Case 2000. Case 1000 concerns expensive gifts he allegedly received from wealthy friends, while Case 2000 deals with an alleged quid pro quo deal he discussed with the publisher of a major newspaper to push legislation against a competing daily in return for more favorable coverage.

The submarines affair is known as Case 3000.

In addition, in what is sometimes called Case 4000, Shlomo Filber, the director-general of the Communications Ministry, is under investigation over securities offenses related to a merger involving the national telephone company Bezeq. Israel’s State Comptroller released a report last week that accused Netanyahu of failing to originally disclose his close ties with Bezeq head Shaul Elovitz, and raised suspicions that the prime minister — who at the time held the post of communications minister — and Filber made decisions at the ministry in favor of Bezeq.

Screen capture from video of an interview with Prime Minister Benjamin Netanyahu broadcast on Channel 20, July 13, 2017. (YouTube/uz72777)
Screen capture from video of an interview with Prime Minister Benjamin Netanyahu broadcast on Channel 20, July 13, 2017. (YouTube/uz72777)

“We are in the midst of an unprecedented media campaign to smear me with empty accusations with the intention of replacing the government,” Netanyahu told Channel 20 in an interview last Thursday. The media was behaving like the Soviets, he charged. “That is the method of the fake news,” he said. “They know one thing: I am the obstacle preventing the rise of the left, so they have to get rid of me.” The media, he continued, has adopted an attitude in which he is considered “guilty until proven innocent, and even guilty when proven innocent.”

His former defense minister, Moshe Ya’alon, said last weekend there was no way that the premier could not have been involved in the scandal-plagued multi-billion-shekel naval deals with ThyssenKrupp, and has predicted that the prime minister will eventually be indicted.

Times of Israel staff contributed to this report.

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