Netanyahu confidant Yitzhak Molcho named as suspect in submarine probe

Netanyahu confidant Yitzhak Molcho named as suspect in submarine probe

Former peace envoy questioned under caution, suspected of breach of trust due to his diplomatic missions on behalf of PM

Raoul Wootliff is the The Times of Israel's political correspondent.

Attorney Yitzhak Molcho at the Jerusalem District Court on October 6, 2008 (Michal Fattal/Flash90)
Attorney Yitzhak Molcho at the Jerusalem District Court on October 6, 2008 (Michal Fattal/Flash90)

Yitzchak Molcho, Prime Minister Benjamin Netanyahu’s chief negotiator and personal envoy for over a decade, was named Tuesday morning as a suspect in the investigation into suspected corruption in Israel’s purchase of submarines from a German shipbuilder.

Molcho, along with his legal partner David Shimron, Netanyahu’s cousin and personal attorney, was detained by the Israel Police for questioning on Sunday and has since faced two marathon days of interrogation. While Shimron, who has previously been questioned under caution in the investigation, dubbed Case 3000, was publicly identified upon his detention, Molcho’s name remained under gag order until Tuesday.

Investigators suspect that state officials were paid bribes to influence a decision to buy submarines and patrol boats from German shipbuilder ThyssenKrupp, despite opposition from the Defense Ministry.

Police suspect that the Molcho tried to push the submarine deal during his diplomatic trips abroad, while Shimron sought to promote the interests of the German shipbuilders within Israel.

David Shimron, Prime Minister Benjamin Netanyahu’s personal lawyer, at a Likud press conference in Tel Aviv, February 1, 2015. (Flash90)

Despite the fact that both work as private lawyers, police are investigating Molcho on suspicion of breach of trust as a public servant, because his diplomatic missions were conducted on behalf of the prime minister.

Shimron has already been questioned several times as part of the investigation by Lahav 433, the police anti-corruption unit. He served as a lawyer for Miki Ganor, ThyssenKrupp’s local representative , who turned state’s witness in July and is considered a key suspect in the case.

Molcho is also believed to have been implicated by Ganor, who testified to the state that Shimron had touted his partner’s ability to push ThyssenKrupp’s interests in winning the naval vessel tender.

The investigation of Molcho as a criminal suspect comes just two weeks after he resigned as Netanyahu’s chief negotiator, a position he held since 2006.

Justice Minister Tzipi Livni, right, and Yitzhak Molcho, arrive at the State Department in Washington, Monday, July 29, 2013. (photo credit: AP Photo/Pablo Martinez Monsivais)

Molcho, who also served as a negotiator on Netanyahu’s behalf during the 2013-2014 Israeli-Palestinian peace talks, said he based his request to step down on a feeling of fulfillment.

However, the announcement came a day before the state was set to provide its response to a High Court of Justice petition calling on Molcho to suspend himself over an alleged conflict of interest due to Shimron’s suspected involvement in Case 3000.

The petition argued that Molcho, even when he was not a suspect in the case, could not continue as the prime minister’s envoy on international affairs given that his legal partner was profiting from deals made by the Israeli government.

Molcho’s confidants said at the time that he had simply grown tired over the years and that his weariness was compounded by incessant personal attacks, despite his work being on a volunteer basis.

Benjamin Netanyahu touring the INS Tanin submarine, built by the German firm ThyssenKrupp, as it arrived in Israel on September 23, 2014. (Kobi Gideon/GPO/Flash90)

Channel 2 news reported Sunday that Netanyahu is expected to provide testimony in the case this week. He has not been named as a suspect.

The report said Netanyahu would also be questioned by police in two separate corruption investigations in which he is a suspect, known as cases 1000 and 2000.

In Case 1000, Netanyahu and his wife, Sara, are suspected of receiving illicit gifts from billionaire benefactors, most notably hundreds of thousands of shekels’ worth of cigars and champagne from the Israeli-born Hollywood producer Arnon Milchan.

Case 2000 involves a suspected illicit quid-pro-quo deal between Netanyahu and Yedioth Ahronoth newspaper publisher Arnon Mozes that would have seen the prime minister weaken a rival daily, the Sheldon Adelson-backed Israel Hayom, in return for more favorable coverage from Yedioth.

Netanyahu has denied wrongdoing in both cases.

Netanyahu has already been questioned four times in connection with the investigations since the allegations surfaced in December last year.

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