Netanyahu said to have okayed sub sale to Egypt to get discount from Germany

Former state witness Miki Ganor reportedly contradicted PM’s claim that there was a secret security reason for approving deal at center of graft probe

Michael Bachner is a news editor at The Times of Israel

Prime Minister 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)
Prime Minister 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)

A state witness in a corruption case involving associates of Prime Minister Benjamin Netanyahu gave police testimony contradicting the premier’s statement earlier this year that there was a classified reason for him authorizing the sale of several advanced submarines to Egypt without updating the defense minister and IDF chief of staff, a report said Tuesday.

Police believe Israeli officials were bribed to push a massive deal to buy military vessels from Germany worth hundreds of millions of dollars, in what some have called the largest suspected graft scandal in the country’s history. The case has ensnared several associates of Netanyahu, though not the premier, who is already facing corruption charges, pending a hearing, in three other cases.

In March, during a rare and contentious interview with Channel 12 news, Netanyahu said only a select few officials were briefed in real time about the reason for Israel not objecting to Germany’s 2014 and 2015 submarine deal with Egypt, citing a secret security concern and adding that “whoever needed to know, knew.”

Though Germany does not need 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.

However, Miki Ganor, a former state witness in the case who has since recanted some parts of his testimony, told police that the real reason Netanyahu hadn’t updated his top officials was a massive discount offered by Germany on the sale of submarines to Israel on the condition that Jerusalem approved the deal with Egypt, Channel 13 reported Tuesday.

That discount, worth some half a billion shekels ($142 million), was what ensured the deal would go ahead, handing Ganor and his partners a significant finders fee, according to Ganor.

Channel 13 pointed out that in a previous Germany-Egypt submarine deal, Berlin had similarly conditioned a discount to Israel on Jerusalem approving the sale to Cairo.

Israeli businessman Miki Ganor, arrested in the submarine affair also known as ‘Case 3000,’ is brought for a court hearing at the Supreme Court in Jerusalem on March 22, 2019. (Yonatan Sindel/Flash90)

Ganor, a former agent in Israel for the German shipbuilder Thyssenkrupp, was the prosecution’s key witness in the Case 3000 submarine acquisitions corruption investigation. He signed an agreement with prosecutors in July 2017 to become a state witness and cooperate in the probe, which focused on the period he worked for the company between 2009 and 2017.

Under the deal, he admitted to bribing a string of senior officials in order to help secure contracts for Thyssenkrupp with Israel’s Defense Ministry.

But in a shock move in March, he told police that he wished to alter key parts of the testimony he gave in the case. Ganor claimed that while he stood behind the facts he had given to police, the payments he gave were consulting fees and not bribes. He said police had pressured him to describe the circumstances so that they could shore up the claim he had acted to bribe senior state employees.

That move reportedly came after Ganor discovered that signing a state witness agreement had put his name on an international banking blacklist and blocked his access to tens of millions of shekels under his name in banks in Cyprus and Austria.

In May, state prosecutors informed Ganor that his deal with the state had been canceled, stripping him of his immunity from prosecution. Police have now recommended that bribery charges be brought against him.

But his testimony is still usable in court, and the part about Netanyahu’s reason for approval the submarine deal hasn’t been affected by Ganor’s retraction of some of his testimony.

Prime Minister Benjamin Netanyahu, left, and then-IDF chief of staff Benny Gantz at the Eshkol Regional Council in southern Israel, on September 22, 2014. (Edi Israel/Pool/Flash90)

Following Tuesday’s report, Blue and White party chief Benny Gantz — Netanyahu’s main rival in the upcoming September 17 elections, who was the IDF chief left in the dark about the submarine deal approval — called on Attorney General Avichai Mandelblit to open an investigation into Netanyahu’s involvement in the case.

“It is unacceptable for the prime minister to carry out arms deals that affect the strategic balance in the region while being suspected of involving personal considerations,” he said in a statement.

Blue and White’s No. 2 Yair Lapid called for the formation of a state committee of inquiry into the affair, repeating the claim that it was the “worst corruption scandal in Israel’s history” and adding that Netanyahu was “deflecting and lying as to why he approved the sale of advanced submarines to Egypt.”

Similar claims were made by the party’s No. 3, Moshe Ya’alon, who had been defense minister at the time Netanyahu approved the sale without updating him. He claimed that the reason was “greed.”

Netanyahu’s Likud party responded by saying the premier “has never been suspected in the submarine affair, which has been investigated and probed by all law enforcement bodies and he was found not to be linked to it.

“The reason for the desperate attempts by Gantz and Lapid to revive this corpse is to divert the public’s attention from the internal mess in their party,” Likud added.

Democratic Camp candidate Ehud Barak, a former prime minister and defense minister, said the report showed that Netanyahu “severely harmed Israel’s security, in a manner bordering on treason, in circumstances that raise a strong suspicion of greed by him or his associates.”

Times of Israel staff contributed to this report.

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