Gantz calls for state commission of inquiry into submarine scandal

Blue and White party leader Benny Gantz on Sunday called for a state commission of inquiry to probe the so-called submarine affair, after fresh allegations emerged that Prime Minister Benjamin Netanyahu may have earned millions of shekels off the deal, calling it the “greatest security-related corruption case in the history of the State of Israel.”

He was referring to the high-profile Case 3000 investigation, which has snared several close associates of Netanyahu, but not the premier himself, on suspicion they received illicit funds as part of a massive graft scheme in the multi-billion shekel state purchase of naval vessels from Germany.

Speaking at an event in Haifa on Sunday, Gantz said reports that Netanyahu has earned NIS 16 million [$4.5 million] off the deal were “unimaginable and hard to comprehend.”

“I hope they are not true,” said Gantz, but noted that Netanyahu is already facing charges, pending a hearing, in three corruption cases and is “suspected of looking out for himself, before the security of Israel.”

Prime Minister Benjamin Netanyahu shakes hands with members of the Israeli Navy at a ceremony welcoming the INS Tanin submarine, built by the German firm ThyssenKrupp, in the Port of Haifa on September 23, 2014. (photo credit: Kobi Gideon/Government Press Office )

“It seems like it is not reasonable and I hope that it is not true, but I call for the establishment of a state commission of inquiry to investigate the greatest security-related corruption case in the history of the State of Israel,” he said. “It can’t be that Netanyahu only worries about Netanyahu, and to my sorrow it really seems he has lost his way.”

An Israeli Dolphin submarine at the shipyards in Kiel, northern Germany (photo credit: AP/Philipp Guelland)

A statement from the Likud party called Gantz’s comments an “embarrassment.”

“On a day when a soldier was killed, (Yair) Lapid and Gantz are trying to forcefully resurrect the submarine scandal, where it has already been found that the prime minister never had any connection ever,” the statement said, adding that Netanyahu has never “earned a shekel from the deal.”

The statement said that Gantz had completely “lost his sense of judgement.”

The investigation, which centers on the $2 billion purchase of submarines and combat ships from German shipbuilder Thyssenkrupp, has already seen police recommend bribery charges against Netanyahu’s attorney and cousin David Shimron; his former bureau chief David Sharan; his former pick for National Security Adviser Avriel Bar-Yosef; the former head of the navy Eliezer Marom; and former minister Eliezer Sandberg. Netanyahu has been interviewed as a witness in the case, but is not a suspect.

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 to protect the country’s offshore natural gas fields.

Blue and White alliance leaders, left to right, Moshe Yaalon, Benny Gantz, Yair Lapid, and Gabi Ashkenazi speak to the press during a tour at the Israel-Gaza border near the kibbutz of Kfar Aza, on March 13, 2019. (MENAHEM KAHANA / AFP)

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 vessels.

The NIS 16 million sum cited by Blue and White refers to the money that Netanyahu is alleged have made from selling an ownership stake in a company that supplies some materials to Thyssenkrupp.

According to a Channel 13 report aired last week, the attorney general’s office is probing the sale of the shares to another cousin of Netanyahu, US billionaire Nathan Milikowsky, after the State Comptroller’s Office recently discovered that the premier had not disclosed his holdings in GrafTech, a US-based manufacturer of graphite electrodes, used in the production of steel and other metals.

The accusation by Blue and White, which has mounted a formidable challenge to Netanyahu’s Likud party ahead of April’s election, comes as Gantz has been in the headlines over a purported Iranian hack of his phone.

The initial report about the hack was carried Thursday by Channel 12, which said Iranian intelligence had managed to gain access to Gantz’s cellphone and all its contents. A follow-up report on Saturday night said that no sensitive security information had been housed on Gantz’s phone at the time of the breach, but suggested that the incident was “embarrassing” for him.

Responding to the report, Blue and White number two Lapid said that the phone hack story was leaked in an attempt to divert attention away from the Case 3000 revelations.

“This is Netanyahu’s spin which just happens to leak a day after reports are published on the submarine affair,” Lapid told Channel 13. “It turns out that he had received NIS 16 million for deals he and his cousin had done with Thyssenkrupp… and suddenly a day later, a crazy story about Iranians and phone calls appears.”

This photo taken on December 11, 2012, shows the headquarters of German heavy industry giant Thyssenkrupp AG in Essen, Germany. (AFP/Patrik Stollarz)

Sunday’s call by Gantz for commission of inquiry followed previous claims made by Blue and White directly accusing the prime minister of having benefited financially “in exchange” for pushing the deal with Thyssenkrupp.

The sale of the shares 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 other corruption cases in which he is embroiled. Ruling 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 $300,000 he already accepted from Milikowsky to help pay his legal bills.

But according to Channel 13, while researching Milikowsky, the committee noticed that Netanyahu asked the committee in 2009 for permission to take a loan from his cousin 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’s all fake news,” a spokesperson for Netanyahu said last week in response. “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 about its connection to Thyssenkrupp.”

Last month, Attorney General Avichai Mandelblit announced his intention to indict Netanyahu on charges of fraud and breach of trust in three separate cases, 1000, 2000 and 4000, and for bribery in the last of the three. The prime minister denies the allegations, and says the cases are part of a political witch hunt designed to oust him, involving the left, the media and the police, in turn pressuring a weak attorney general who shares their agenda.

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, likely before July, according to the Justice Ministry.