Key suspect in submarine fraud said to implicate Netanyahu’s lawyer

A suspect seeking to turn state witness in a major corruption probe into the multi-billion-shekel purchase of naval ships and submarines from Germany told investigators that the attorney he hired to negotiate the deal was able to assure him that it would go ahead as planned, Channel 2 reported Wednesday.

Miki Ganor, a former agent for the German submarine company ThyssenKryupp, said David Shimron — who is also Prime Minister Benjamin Netanyahu’s cousin and personal attorney — assured him that Israel would agree to buy three submarines and four corvette ships without the issue of tenders.

According to the report, Ganor told investigators that all of the assurances that he received throughout the deal from Shimron proved reliable and that he paid Shimron a fee for the work he had done, with the understanding that if the purchase was completed there would be a significant bonus.

Channel 2 provided no sources for the report from inside closed police interrogations.

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

Netanyahu is not suspected in what has been dubbed Case 3000 but his personal lawyer, Shimron, who was under house arrest for several days until his release on Saturday, has been questioned several times by the police investigation unit Lahav 433.

The prime minister has said he did not know his lawyer was also representing the Israeli agent of the German defense firm selling the submarines.

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 being pushed by Shimron would also have seen ThyssenKrupp construct a lucrative shipyard in Israel, where the company would maintain the new vessels.

Ganor is suspected of fraud, money laundering and conspiracy to commit a crime. He was arrested a week ago and remains behind bars, along with Bar-Yosef. Both men’s detention was extended Monday for a further four days.

Negotiations between Ganor and investigators for becoming a witness for the prosecution are progressing well, the television station said, although an agreement has not yet been reached.

Bar-Yosef, who played a central role in recommending that Israel buy the submarines, is suspected of bribery, conspiracy to commit a crime, fraud, breach of trust and money laundering.

Another suspect in the case, the former commander of the Israeli Navy Maj. Gen. (res) Eliezer Marom, was also released from house arrest on Saturday evening.

Germany has reportedly told Israel that it is delaying inking the submarine deal amid the rapidly expanding corruption scandal

Berlin and Jerusalem were said to sign a memorandum of understanding next week, but this has been postponed indefinitely.

Earlier Wednesday Netanyahu, on an official visit to Hungary, told reporters: “As soon as things clear up, I assume that the deal will go forward. I have no idea [how the current investigation into the matter will end] but believe it will go ahead.”

In 2015 Israel also agreed to buy four warships from Germany to protect its offshore natural-gas drilling platforms, in a €430 million ($480 million) deal.

Under the contract, Germany will provide four advanced Sa’ar-class corvettes to the Israeli navy, to be delivered over the next five years, and will finance approximately one-third of the cost of the deal with a special grant of €115 million.

The three new submarines are intended as replacements for older models which will be retired in around 10 years.

Times of Israel staff contributed to this report.