Former Keren Hayesod chair, an ex-minister, convicted in ‘submarine affair’

In plea bargain, Eliezer Zandberg found guilty of breach of trust for having received over NIS 100,000 from shipbuilder’s representative while serving as fundraising group’s head

Jeremy Sharon is The Times of Israel’s legal affairs and settlements reporter

Former Keren Hayesod chair and government minister Eliezer (Modi) Zandberg on July 21, 2004. (Flash90)
Former Keren Hayesod chair and government minister Eliezer (Modi) Zandberg on July 21, 2004. (Flash90)

Former government minister and onetime Keren Hayesod chief Eliezer Zandberg was convicted Monday for breach of trust, as part of a plea bargain in the so-called submarine affair.

Zandberg’s conviction by the Tel Aviv District Court is the first in the affair, also known as Case 3000, which involves allegations of graft surrounding massive defense contracts with the German industrial and ship-building conglomerate Thyssenkrupp for the acquisition of several naval vessels.

He was convicted for having conveyed information he received from state employees through his role as Keren Hayesod chairman to Thyssenkrupp representative Miki Ganor, who made significant payments to Zandberg during the period in question.

He was originally charged with accepting a bribe, money laundering, fraud, breach of trust, and tax offenses. However, the indictment was later amended in line with the plea bargain and he was only convicted for the lesser crime of breach of trust.

According to the verdict, Zandberg arranged and participated in three meetings between Ganor and former prime minister Benjamin Netanyahu’s bureau chief Eyal Haimovsky during his time as Keren Hayesod chair from 2010 to 2018.

Keren Hayesod — United Israel Appeal is the major Diaspora fundraising organization for the State of Israel outside of the US.

Israeli businessman and Thyssenkrupp representative Miki Ganor at a hearing at the Supreme Court in Jerusalem on March 22, 2019. (Yonatan Sindel/Flash90)

Zandberg also spoke with state employees to obtain and pass on information that would be helpful to Ganor in advancing the Thyssenkrup deal.

At the same time, Zandberg received some NIS 103,000 from Ganor between 2012 and 2016 when the contract was being negotiated.

“Zandberg acted while being in a conflict of interests between his ongoing business contacts with Ganor, his receipt of money from Ganor, and his awareness of the substantial economic interests which Ganor had in advancing the deal for the naval vessels from Thyssenkrupp, and his position as chairman of Keren Hayesod whose interests alone he was supposed to advance,” the verdict stated.

“Zandberg caused substantial injury to ethical conduct, public trust, and to the integrity of the administrative behavior,” it added.

As part of the plea bargain, both the prosecution and the defense will request that the court hand Zandberg a seven-month jail sentence and a NIS 50,000 fine.

The investigation into the submarines affair began in 2017 and was led by the National Unit for Economic Crime of the Lahav 433 serious crimes police department.

Former IDF generals attend a protest demanding a commission of inquiry for the so-called submarine affair, outside the home of then Alternate Prime Minister Yair Lapid, in Tel Aviv, January 7, 2022. (Avshalom Sassoni/Flash90)

Several close associates of Netanyahu were implicated in the scandal, as well as high-ranking military officials, but not the former prime minister himself.

In May last year, indictments were filed at the Tel Aviv District Court for a variety of charges including bribery, money laundering, fraud, breach of trust, and tax offenses against several suspects.

Among them were Ganor, Netanyahu’s former chief of staff David Sharan and former deputy National Security Committee head Avriel Bar-Yosef, among others.

Cases were closed against David Shimron, a cousin and former personal lawyer to Netanyahu, as well as former commander of the Israeli Navy Eliezer Marom.

In January this year, the government approved the establishment of a state commission of inquiry into the submarine and naval vessel deals that were negotiated during Netanyahu’s tenure.

Netanyahu, who is on trial in three separate corruption cases in which he denies wrongdoing, was not a criminal suspect in the affair.

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