PM announces signing of deal for 3 more submarines from Germany

Two billion euro transaction mired in controversy amid police investigation into alleged corruption

This file photo taken on January 12, 2016, shows the German-made INS Rahav Dolphin 2-class submarine arriving at the military port of Haifa on January 12, 2016. (AFP Photo/Jack Guez)
This file photo taken on January 12, 2016, shows the German-made INS Rahav Dolphin 2-class submarine arriving at the military port of Haifa on January 12, 2016. (AFP Photo/Jack Guez)

Prime Minister Benjamin Netanyahu announced Monday that Israel had officially signed a controversial purchase of three submarines from Germany that was stalled in the course of an ongoing investigation into alleged corruption and bribes to seal the deal.

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

“The Memorandum of Understanding is of strategic importance to Israel’s security, and its signing reflects the commitment of Germany and Chancellor Angela Merkel to Israel’s security along with the deep cooperation between the two countries,” the Prime Minister’s Office said in a statement later Monday evening.

Prime Minister Netanyahu expressed his deep appreciation to Nasseria Merkel, and to the defense and foreign ministers of Germany.

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 saw several senior officials arrested or probed by police.

Merkel’s spokesman, Steffen Seibert, had said the government planned to sign an agreement later Monday on German participation in financing three new vessels, as in previous deals.

Seibert, who noted “our historical responsibility toward the State of Israel,” said the two sides agreed not to disclose details.

Israeli media has  reported that the agreement had been amended to allow Germany to pull out if the deal were found to have been corrupt at high levels.

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 corruption 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.

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.

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.

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