German CEO: Submarine deal with Israel only going ahead if ‘clean’

The CEO of the German ThyssenKrupp manufacturer said Thursday that an agreement to supply Israel with submarines will only go ahead if investigators establish there was no high-level corruption in the multi-billion-shekel deal.

According to Channel 10, Heinrich Hiesinger confirmed that the deal between the German and Israeli governments was conditioned on the agreement having been “completely clean.”

The purchase of the Dolphin-class submarines, costing a total of 2 billion euros, has been mired in controversy since it came to light that a close ally of Netanyahu was representing the German company that manufactures them. A probe led to an ever-expanding investigation that has seen several senior officials arrested and questioned by police.

The TV report also cited unnamed German sources as saying the deal was still “in limbo” as the investigation went ahead, despite an official memorandum of understanding inked between Berlin and Jerusalem.

Israeli media has reported in the past that the agreement had been amended to allow Germany to pull out if it were found to have been advanced illegally.

In late October, Prime Minister Benjamin Netanyahu announced that Israel had officially signed a deal for the purchase of three submarines from Germany that was stalled in the course of the ongoing investigation.

“Three hours ago, we signed a memorandum with the German government and I thank Chancellor [Angela] Merkel for this,” Netanyahu said in remarks opening the Knesset’s winter session.

Israel and Germany were previously set to sign a memorandum of understanding in July but Germany imposed a freeze due to the investigation.

The initial sale agreement was replaced with one that is said to include language precluding the sale if impropriety is found. The three new submarines are to replace three old ones in a decade and bring the number of new submarines at Israel’s disposal to six.

Dubbed Case 3000, the investigation centers around Miki Ganor, who had been the local representative of German shipbuilder ThyssenKrupp. After being identified as a key suspect in the case, Ganor turned state’s witness in July.

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 Defense Ministry.

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, and close adviser Yitzhak Molcho have 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.

While police have said several times that Netanyahu is not a suspect, he has been accused of corruption in the deal by former defense minister Moshe Ya’alon.

Ya’alon, who was ousted as defense minister last year, was known to have disagreed with Netanyahu over the need to purchase the three extra submarines. The purchase was opposed by parts of the defense establishment, including Ya’alon.

Attorney General Avichai Mandelblit ordered the Israel Police to formally look into the submarine affair in November 2016, after accusations surfaced that Netanyahu may have been swayed to purchase vessels by Shimron.