The State Attorney’s Office is probing a possible link between Prime Minister Benjamin Netanyahu and shipbuilder Thyssenkrupp, the German defense contractor at the heart of a high-profile corruption scandal, Channel 13 reported Wednesday.
The State Comptroller’s Office recently discovered that Netanyahu and his cousin Nathan Milikowsky were shareholders in publicly traded steel manufacturing company GrafTech International, which is a longtime supplier of Thyssenkrupp, the report said.
A conflict-of-interest case involving Israel’s $2 billion purchase of German submarines from Thyssenkrupp is thought to be one of the biggest graft schemes in the country’s history. It has snared several close associates of Netanyahu, but not the premier himself.
According to the report, Netanyahu did not disclose his holdings in GrafTech, which he had acquired when he was not prime minister.
Milikowsky reportedly held 11 percent of GrafTech, while the number of shares held by Netanyahu was withheld by the comptroller. Netanyahu sold his shares to his cousin after he was elected prime minister in 2009, he said.
The link was revealed last month when Netanyahu sought permission from the State Comptroller’s Permits Committee for Milikowsky to pay for his legal defense in the three corruption cases he is facing.
The committee denied Netanyahu’s request and ruled that it was inappropriate for wealthy benefactors to pay the legal fees in a criminal case relating to receiving funds from wealthy benefactors. The committee also ordered Netanyahu to return the $300,000 he already accepted from Milikowsky to help pay his legal bills.
In one case against Netanyahu dubbed 1000, the prime minister is suspected of accepting benefits from wealthy associates in return for using his offices to advance their interests.
When Netanyahu’s attorneys made the request in February, the committee noticed that a request the prime minister made to the panel vis-a-vis Milikowsky in 2009 was linked to another corruption case, known as case 3000. At the time, then-opposition chief Netanyahu asked the committee for permission to take a loan from Milikowsky so he could cover the tax liability owed on GrafTech’s profits due to his holdings.
The loan was supposed to be repaid from Netanyahu’s share of the corporation’s profits.
“It was thus shown that the two have, or at least had, business relations, beyond mere family ties,” the committee said, according to a February report in the Haaretz daily.
State Comptroller Yosef Shapira forwarded the committee’s finding to Attorney General Avichai Mandelblit, who has opened an investigation into the possible link, Channel 13 reported.
Though Netanyahu himself was not a suspect in Case 3000, a number of his close associates have been accused of wrongdoing, including David Shimron, his former personal lawyer who is also his cousin.
According to the report, if a direct financial link between Netanyahu and Thyssenkrupp is established, the prime minister could face additional corruption charges.
The Prime Minister’s Office in a statement denied there was any link between Netanyahu and Thyssenkrupp or GrafTech.
“It’s all fake news,” it said. “In 2010, after being elected prime minister, he sold his shares in his cousin’s company with full approval of authorities, and for the last 10 years the prime minister has no connection to the company, and does not know its connection to Thyssenkrupp.”
The prime minister has repeatedly denied any wrongdoing and claims the investigations are part of efforts by the media and the left to remove him from power, with the support of a dishonest police investigating team, overseen by a “weak” attorney general.
Last November, police said they had sufficient evidence to charge Shimron with bribery and money laundering offenses for his role in promoting the $2 billion purchase of submarines from Thyssenkrupp.
Shimron represented Thyssenkrupp in the sale and is suspected of trading his influence over the prime minister in return for a hefty cut of the deal. Police believe he pushed for a NIS 6 billion ($1.5 billion) defense contract to purchase submarines for the Israeli Navy and other vessels for protecting the country’s maritime natural gas fields.
Netanyahu’s own role in the purchase decision, including his insistence that Thyssenkrupp be exempted from the usual Defense Ministry tender process, raised concerns of a conflict of interest for Shimron. Part of the agreement allegedly pushed by Shimron would also have seen Thyssenkrupp construct a lucrative shipyard in Israel, where the company would maintain the new vessel.
Shimron has also denied any wrongdoing on his own part and said he believes prosecutors will close the case against him without an indictment.
Last month, Mandelblit announced his intention to indict Netanyahu on charges of fraud, breach of trust and bribery in cases 1000, 2000 and 3000.
While a sitting Israeli prime minister has never been this close to indictment before, Netanyahu is not obligated to resign at this stage. The planned indictment is still subject to a hearing, during which Netanyahu can plead his case before formal charges are filed. This process will take place after April 9 elections.