AG says won’t investigate Netanyahu over lucrative stock sales, submarine case
Mandelblit says police, prosecutors believe evidence doesn’t justify formal probe of PM’s sale of shares to cousin at $4m profit, particularly as statute of limitations has expired
Attorney General Avichai Mandelblit on Thursday said he won’t order a formal investigation into Prime Minister Benjamin Netanyahu over his stock dealings — though he acknowledged the premier may have received significant benefits from a relative in the affair — or reopen the so-called submarine affair that embroiled some of the premier’s associates to look into Netanyahu himself.
The so-called stock affair pertains to allegations that Netanyahu illicitly profited by several million dollars from selling shares in a company to his cousin Nathan Milikowsky. Mandelblit’s office had been looking into the allegations for nearly a year and a half, after TV reports claimed Netanyahu made a suspicious return of over 700 percent on stocks he held in Seadrift Coke.
In his decision, the attorney general noted that the statute of limitations had long expired for the potential suspicions of fraud and breach of trust in the 2007 case.
Netanyahu purchased the shares in Texas-based SeaDrift Coke in 2007 for $400,000, before selling them in 2010 for $4.3 million — an over sevenfold increase, Channel 12 news reported.
Netanyahu has insisted that he received no favors from his cousin in the affair.
According to a Channel 13 report, prosecutors suspected Netanyahu misled the State Comptroller’s Office on his financial assets. The report said Netanyahu did not disclose his past holdings in SeaDrift, which he had acquired when he was not prime minister but sold after entering the post.
Noting the significant difference between the price Netanyahu paid for the shares and the price for which he sold them back, Mandelblit wrote that it “raises the possibility that Netanyahu bought the rights from the Milikowsky family for a price drastically lower than its true value, and thus received much more significant benefits.
“However, given the passage of time, there is a difficulty in collecting a comprehensive evidentiary basis that will allow findings about the existence and scope of benefits,” he said.
Mandeblit also said it was unclear that Netanyahu was aware of such benefits, if he received them.
“Under these circumstances, I accepted, as stated, the recommendation of the Israel Police and State Attorney’s Office that the evidentiary basis on the issue does not justify an investigation,” wrote Mandelblit.
“This takes into account the claim about the unique relationship between Milikowsky and Netanyahu, and comes in light of the long period of time that passed, which also strongly affects the possibility of reaching the truth, particularly due to the… [expired] statute of limitations.”
Seadrift Coke produces needle coke used for manufacturing graphite electrodes. After Netanyahu bought the shares the company was acquired by a conglomerate in the same field, GrafTech International, a longtime supplier of Germany’s ThyssenKrupp shipbuilding company.
Thysennkrupp is at the center of another corruption probe involving the premier’s associates, the high-profile Case 3000. The case, nicknamed “the submarine affair,” snared several close associates of Netanyahu, but not the premier himself, on suspicion that they received bribes as part of a massive graft scheme in the multi-billion-shekel state purchase of naval vessels from the German shipbuilder.
The scandal also involves the sale of two Dolphin-class submarines and two anti-submarine warships by Germany to Egypt, allegedly approved by Netanyahu without consulting or notifying the Defense Ministry.
Netanyahu’s political opponents have accused the premier of a possible conflict of interest in the ThyssenKrupp affair, and have alleged he may have benefited financially from it. Netanyahu’s ruling Likud party suggested the reports were politically motivated.
Mandelblit said Thursday he would not reappraise Netanyahu’s role in the affair, even after a former Defense Ministry director’s affidavit was leaked to Israeli media, apparently tying Netanyahu to the case.
Dan Harel’s leaked testimony was said to be included in a High Court petition filed recently by the Movement for Quality Government in Israel demanding that a criminal investigation be opened against Netanyahu in the case. The statute of limitations in the case expires next month, after which courts will no longer have the jurisdiction to deal with it if an investigation is not opened.
Harel was quoted saying: “Netanyahu told me and [former defense minister Moshe] Ya’alon very resolutely that he wants another, seventh, submarine to be purchased, while banging with his fist on the table. My impression was that behind this purchase initiative was an interest that was unclear to me, to broaden the connection with Thyssenkrup and increase the value for the company in an unjustified way. That impression became stronger due to the article referring to the purchase of two anti-submarine vessels.”
The state asked the High Court of Justice on Thursday to ban the publication of the affidavit.
“The claims present behavior that is not in line with the… standards of a public office dealing with such an important issue for the national interests of the State of Israel,” said Mandeblit. “But it appears that as of now, there are gaps on important issues to build a thesis of criminality — these gaps can’t be filled in this case with assumptions, guesses and general statements.”
The attorney general noted that Netanyahu’s first submarine purchase as prime minister in 2012 was an option that dated back to 2005 and negotiations began years before he was in office. Mandelblit also noted that GrafTech was not a major supplier to Thyssenkrupp, and that Netanyahu pursued additional submarine orders after Milikowsky left GrafTech.
Mandelblit concluded his 13-page decision by noting that “should new material arise justifying a new check in the future, the appropriate action will be taken.”
The Movement for Quality Government said Mandelblit’s decision was a “whitewashing of corruption” and called on the public to take to the streets in response.
“The biggest corruption case in the country’s history cannot be whitewashed,” the group said.
The prime minister is currently on trial for fraud and breach of trust in three other cases, and bribery in one of them. He denies any wrongdoing, and claims to be victim of an attempted political coup involving the police, state prosecutors under Mandelblit’s authority, left-wing opposition and the media.
