State prosecutors are reportedly considering opening yet another criminal graft investigation against Prime Minister Benjamin Netanyahu, this time in the so-called submarine affair, citing “dramatic” new information.
The high-profile Case 3000 investigation has ensnared several close associates of Netanyahu, but not the premier himself, on suspicion that they received illicit funds as part of a massive graft scheme in the multi-billion-shekel state purchase of naval vessels and submarines from German shipbuilder ThyssenKrupp. Some have called it the largest suspected graft scandal in the country’s history.
As the complex bribery probe takes more twists and turns, with new revelations tying the prime minister himself to the case and a key state witness seeking to retract his testimony, what is the case actually about?
Here’s everything you need to know.
What are the deals at the root of the so-called submarine scandal?
Four deals involving Israel and German shipbuilder ThyssenKrupp are linked to the probe.
The first of the deals is the purchase of an advanced Dolphin-class submarine for the Israeli Navy, its sixth, which was pushed by Netanyahu since taking office in March 2009 and officially signed with ThyssenKrupp in 2012. The submarine is due to arrive in Israel later this year. Israel currently has five operational Dolphin-class submarines.
A second deal, which hasn’t yet been implemented, was pushed by the government in 2016 to purchase three more Dolphin-class submarines (numbers six to nine) from ThyssenKrupp. This went against the opinion of then-defense minister Moshe Ya’alon and other defense officials, who contended that Israel did not require that many submarines.
A third deal, which also hasn’t been implemented, was the purchase of four Sa’ar 6-class corvettes to protect Israel’s offshore gas assets. A tender for supplying four 1,200-ton ships yielded bids from South Korean, Italian and German shipbuilders. ThyssenKrupp, however, did not participate in the tender process as it did not build ships in the range requested, but around 2016, the tender was abruptly canceled, and the government handed the project exclusively to ThyssenKrupp. The size requirements were suddenly changed from 1,200 tons to around 2,000 — a size within ThyssenKrupp’s portfolio.
The fourth deal connected to the affair is Egypt’s purchase of two Dolphin-class submarines, similar to the ones the Israeli Navy has, and two anti-submarine warships. Cairo ordered the naval vessels in 2014. Though Germany does not require Israeli permission to sell the advanced submarines to other countries, it has shown Jerusalem that courtesy in order to maintain Israel’s qualitative edge in the region.
In 2015, then-defense minister Ya’alon asked President Reuven Rivlin, who was meeting German Chancellor Angela Merkel, to inquire why the sale was going ahead despite Ya’alon not approving it. Some time later, Merkel reported that Jerusalem had indeed green-lighted it. A report this week said Amos Gilad, who was the director of policy and political-military affairs in the Defense Ministry at the time, told police that Netanyahu had approved the deal without consulting or notifying the ministry.
Netanyahu has denied approving the German-Egyptian deal.
Who are the known suspects in the case?
Miki Ganor, a former agent in Israel for ThyssenKrupp, signed an agreement with prosecutors in July 2017 to cooperate in the probe, which focused on the period he worked for the company between 2009 and 2017. He has admitted to bribing a string of senior officials in order to help secure contracts for ThyssenKrupp with Israel’s Defense Ministry.
As a result, police in November 2018 recommended bribery charges against senior figures in the Israeli defense elite, as well as several close confidants to the prime minister.
According to police documents, there is sufficient evidence to charge Netanyahu’s personal lawyer and cousin David Shimron with bribery and money laundering offenses for his role in the case.
Shimron’s involvement in the case stems from his legal representation of Ganor. He is suspected of mediating bribes, acting “on Ganor’s behalf as a representative of the German corporation in order to promote the deal between Israel and the corporation while using his status and proximity to the prime minister and public officials he worked with.”
Besides Shimron, police said the former director of Netanyahu’s bureau, David Sharan, is also suspected of bribery, as is the former head of the Israeli Navy, Eliezer Marom. Brig. Gen (res.) Shay Brosh, former commander of the navy’s elite Shayetet 13 commando unit, Brig. Gen (res.) Avriel Bar-Yosef, former deputy national security adviser, and former minister Eliezer Sandberg were also named as suspects.
Police said there was insufficient evidence for an indictment against another Netanyahu lawyer and longtime associate, Shimron’s law partner Yitzhak Molcho.
But in a shock move, Ganor on Tuesday evening asked to change parts of his testimony, telling police investigators that he “didn’t bribe anyone.” Ganor was arrested following the development (though he was released to house arrest on Thursday), and prosecutors are considering stripping him of his state’s witness status, a step that would remove his immunity from prosecution in the case.
An official in the state prosecution has claimed that Ganor’s retraction would not meaningfully hamper the investigation.
“Under the [state’s witness] agreement he signed with the state, we are still allowed to use his testimony and any evidence he handed over even if he tries to retract them,” the official was quoted as saying on Tuesday by the Maariv website. “Also, his version of events is corroborated by external evidence. So it’s not really so terrible if he changes his testimony at this point.”
What has this got to do with Netanyahu?
Despite the prime minister reportedly being the driving force behind the naval vessel deals, until recently there wasn’t evidence pointing to wrongdoing on his part.
However, according to a Channel 13 report last week, the State Comptroller’s Office recently found that Netanyahu and his cousin, US businessman Nathan Milikowsky, were both once shareholders in a company with ties to ThyssenKrupp: The company, SeaDrift Coke, which produces needle coke used for manufacturing graphite electrodes. These, in turn, are used in furnaces for steel production. In November 2010, SeaDrift was acquired by a conglomerate in the same field, GrafTech International, a longtime supplier of ThyssenKrupp.
Having previously claimed he obtained the shares when he was a private citizen, Netanyahu has appeared to change his story, admitting he became a SeaDrift shareholder in 2007 while serving as the leader of the opposition, Haaretz reported Monday. The Marker website has reported a different timeline, saying Netanyahu purchased the SeaDrift shares in April 2005, when he was the finance minister.
He sold his SeaDrift shares to Milikowsky on November 29, 2010 — a day before its merge with GrafTech was completed — according to The Marker — 20 months after being elected prime minister.
Netanyahu’s business affiliation with Milikowsky was revealed recently by the State Comptroller’s Permits Committee, during research leading up to its rejection of a request to retroactively approve a $300,000 donation by Milikowsky and businessman Spencer Partrich to fund Netanyahu’s legal defense in three other cases in which he faces corruption charges.
What are the allegations against Netanyahu?
On Wednesday, both Israeli commercial TV channels said state prosecutors were mulling a criminal probe against Netanyahu in the case.
Netanyahu’s political opponents have accused the premier of a possible conflict of interest in the ThyssenKrupp deal, and have alleged he may have benefited financially from it.
According to the new information, from the time Netanyahu became prime minister in early 2009 until November 2010, GrafTech was simultaneously a shareholder and potential buyer of his own company, and a key supplier for ThyssenKrupp, with which he was pushing a deal to purchase a submarine, which could potentially indicate a conflict of interest.
But analysts have observed that it would be difficult to link Netanyahu’s shares in SeaDrift with the later deals, which were advanced after he had sold his shares and some of which happened after Milikowsky ended his affiliation with GrafTech, around 2015.
However, questions have also been raised about Netanyahu’s selling of his Seadrift shares in 2010 to Milikowsky for NIS 16 million ($4.5 million) — reportedly four-to-seven times more than the amount he paid for the shares several years earlier. Analysts, including Channel 12’s Amnon Abramovich and the Yedioth Ahronoth daily’s Sever Plotzker, have said the premier received the shares from his cousin “virtually for free.”
That could potentially lead to a new investigation similar to Case 1000, in which Netanyahu faces fraud and breach of trust charges, pending a hearing, for allegedly receiving illicit gifts from billionaire benefactors. Milikowsky has reportedly given Netanyahu sums of money several times over the last two decades, and the fact that they are cousins isn’t likely to shield them from scrutiny.
Why are some suggesting Netanyahu’s actions constitute treason?
Ya’alon, who was defense minister under Netanyahu in 2013-2016 and is now a top candidate for the Blue and White party challenging the premier in next month’s elections, told Israel Radio on Wednesday that he had written a letter to Attorney General Avichai Mandelblit asking him to investigate the matter since “this issue is so important that it could even amount to treason.”
Former prime minister Ehud Barak, a longtime rival of Netanyahu’s, and like Ya’alon, a former IDF chief of staff and defense minister under the premier, repeated the allegation the same day, saying the case “borders on treason.”
That charge, which was slammed by Netanyahu as “crossing a dangerous red line,” appeared to be directed at Netanyahu’s green-lighting of the submarine sale to Egypt, which critics have said puts national security at risk.
But proving that sort of allegation — treason is one of the most severe offenses in Israeli law — would likely be impossible unless significant additional hard evidence is found.
What does Netanyahu say?
The prime minister has contended that his push for the submarine purchases was for the sole reason of protecting Israel against the Iranian nuclear threat and ensuring it will have a counter-attack available at all times.
Responding to reports that an investigation may be opened into the prime minister, Netanyahu’s ruling Likud party on Wednesday suggested they were politically motivated and intended to harm Netanyahu’s chances of re-election in the upcoming vote.
“Twenty days before the elections there is a leak about an attempt for another investigation against Prime Minister Netanyahu,” the party said in a statement. “Only the citizens of Israel will choose the prime minister.”
Netanyahu has called allegations of impropriety on his part in the submarine deals “contrived slander.”
“I didn’t get a shekel from the submarine deal,” the premier told local authority leaders in the West Bank settlement of Shiloh on Tuesday.
“This was checked extensively by the prosecution and the attorney general,” Netanyahu added. “They stated unequivocally that I am not suspected of anything.”
Netanyahu is facing indictments, pending a hearing, in three other corruption cases, known as cases 1000, 2000 and 4000. He has denied any wrongdoing in those cases.