Case 3000

Ex-minister Eliezer Sandberg named as suspect in widening submarines probe

World Chair of Keren Hayesod held over corruption-tainted multi-million-dollar deal with German shipyard

Raoul Wootliff is the Times of Israel's former political correspondent and producer of the Daily Briefing podcast.

Prime Minister Benjamin Netanyahu (R) meets with former minister and World Chair of Keren Hayesod, Eliezer Sandberg, at the Prime Minister's Office in Jerusalem, October 24, 2010. (Amos Ben GershomGPO)
Prime Minister Benjamin Netanyahu (R) meets with former minister and World Chair of Keren Hayesod, Eliezer Sandberg, at the Prime Minister's Office in Jerusalem, October 24, 2010. (Amos Ben GershomGPO)

A former minister and associate of Prime Minister Benjamin Netanyahu was named Monday as a suspect in the ongoing and ever-expanding corruption investigation into the multi-million-dollar purchase of naval vessels from Germany.

Eliezer (Moodi) Sandberg, who served short stints as minister of science and technology and minister of national infrastructure in 2003 and 2004, was questioned at the police’s anti-corruption unit Lahav 433 in Lod on Monday morning before being formally arrested on suspicion of fraud, breach of trust, and conspiring to commit a crime.

His identity, initially withheld by a gag order, was cleared for publication by the Rishon Lezion Magistrate’s Court during his remand hearing on Monday evening. The court ordered Sandberg to remain in police custody until Wednesday afternoon.

Currently serving as the World Chairman of Keren Hayesod and a partner in the H2 Technology venture capital fund, Sandberg was first elected to the Knesset in 1992 and served 14 years as an MK in both the now defunct-Tzomet and Shinui centrist parties. Leaving Shinui in 2006 two years after he and his fellow party ministers were fired from the government by then-prime minister Ariel Sharon due to their opposition to the budget, Sandberg joined the Likud party, but did not run on the list in that year’s elections.

World Chair of Keren Hayesod, Eliezer Sandberg. (CC BY-SA 3.0 LenCam/Wikipedia)

Three years later, Sandberg returned to the political scene, heading up the Likud’s coalition talks after the 2009 elections that saw Netanyahu become prime minister, despite gaining one seat less than his rival Tzipi Livni of the Kadima party. He was initially appointed to serve as Netanyahu’s cabinet secretary, a position seen as one of the most influential within the Prime Minister’s Office, but he withdrew before assuming the role, citing personal reasons.

Sandberg declined to comment Monday on the investigation and his role in the purchase of the naval vessels.

Also Monday, Attorney General Avichai Mandelblit authorized police to summon Energy and Infrastructure Minister Yuval Steinitz (Likud) to give testimony in the case, although he did not give permission for investigators to question the minister under caution, Channel 10 reported.

Unnamed officials at the Justice Ministry told the television channel that Steinitz is not a suspect in the case. Earlier, police named Rami Taib, a senior aide to Steinitz, as a suspect in the corruption investigation. Taib was arrested on suspicion of bribery, money laundering, and conspiracy to commit a crime.

On Sunday evening, it was reported that former deputy head of the National Security Council Atalia Rosenbaum, who served as the number two on the NSC from 2009 to 2010, was questioned 10 days ago as part of the probe on suspicion of mediation for bribery. After her interrogation, she was released under restricted terms.

Earlier Sunday, six suspects were arrested in police raids including David Sharan, who served as Netanyahu’s bureau chief from late 2014 to 2016, and who is suspected of bribe-taking, fraud, breach of trust, and conspiring to commit a crime. Also arrested was senior reserve IDF officers and strategic adviser Nati Mor, who has worked with several senior government officials.

Rosenbaum is suspected of leaking information from NSC meetings to Miki Ganor, the local representative of German shipbuilder ThyssenKrupp. After being identified as a key suspect in the case, Ganor turned state’s witness in July.

Also among the suspects detained on Sunday was a former commander of the elite naval commando unit Shayetet 13, whose detention was extended by four days. Although the court rejected a request by his legal representative that he not be identified in the media, it agreed to maintain a blackout on his name for 24 hours while an appeal is filed.

Investigators suspect that Ganor, along with former National Security Council deputy head Avriel Bar-Yosef, paid bribes in connection with the decision to buy three submarines from ThyssenKrupp, despite opposition from the Israeli Defense Ministry.

Miki Ganor attends a hearing at the Rishon Lezion Magistrate’s Court on July 21, 2017. (Flash90)

They also reportedly influenced decisions to buy naval corvettes to protect Israel’s offshore gas fields and awarded ThyssenKrupp a contract to service other naval vessels.

While Netanyahu is not suspected in the case, his personal lawyer, David Shimron, has been questioned several times by Lahav 433, the police anti-corruption unit.

Ganor has reportedly claimed that Shimron (who was also his attorney) was to receive 20 percent of his own commission of $45 million. Shimron was hired by Ganor to negotiate the ship and submarine purchases.

In a statement given to his attorneys, Shimron reportedly denied he was to receive a cut from the deal beyond his legal fees.

When he turned state’s witness, Ganor was suspected of fraud, money laundering and conspiracy to commit a crime. He has reportedly been transferred to a police safe house.

Times of Israel staff contributed to this report.

read more:
Never miss breaking news on Israel
Get notifications to stay updated
You're subscribed