The State Prosecutor’s Office plans to investigate the prime minister’s business dealings during his time in office after reports said he made a return of over 700 percent on stocks he had held in a firm tied to a high-profile corruption case, a television report said Friday.
However, the report on Channel 13 news said the investigation would solely examine the business aspects, as investigators apparently believe there were no connections at all between the shares and the so-called submarine scandal.
At the heart of the reportedly planned investigation is Netanyahu’s purchase of the shares in Texas-based SeaDrift Coke in 2007 for $400,000, and his selling them in 2010 for $4.3 million to his cousin, US businessman Nathan Milikowsky.
Beyond the specific deal, Channel 13 said investigators want to examine the functioning of a blind trust that Netanyahu was supposed to have set up to handle his business affairs when he took office, probe if he misled the State Comptroller’s Office on his financial assets, and check if he paid taxes on the deal, Channel 13 reported.
It also said that Netanyahu could be liable for taxes in the US over the deal.
Netanyahu’s political opponents have sought to link the stock deal to the submarine scandal.
In November 2010, SeaDrift, which produces needle coke used for manufacturing graphite electrodes, was acquired by a conglomerate in the same field, GrafTech International, a longtime supplier of Germany’s ThyssenKrupp, which manufactures Israel’s submarines.
ThyssenKrupp is the company at the center of the submarine case, also known as Case 3000. The probe has ensnared several close associates of Netanyahu, but not the premier himself, on suspicion that they received bribes as part of a massive graft scheme in the multi-billion-shekel state purchase of naval vessels and submarines from ThyssenKrupp. Some have called it the largest suspected graft scandal in the country’s history.
Netanyahu’s opponents have suggested that his dealings with SeaDrift could constitute a conflict of interest, and have hinted at nefarious motives behind his decision in 2016 to green-light the purchase of three new submarines from ThyssenKrupp — despite objections from then-defense minister Moshe Ya’alon and other defense officials, who contended that Israel did not require that many submarines.
On Friday Netanyahu said he would sue the leaders of the Blue and White party for libel after Ya’alon suggested his behavior in the case “could constitute treason.”
Ya’alon’s charge appears to be directed at a subplot in the affair — Netanyahu’s green-lighting circa 2014 of Germany’s sale of submarines to Egypt, which critics have said potentially puts national security at risk. There have been reports that Netanyahu told Berlin he approved of the deal with Egypt, without notifying Ya’alon. A former top defense official reportedly recently testified that he too was caught off guard by the move.
In a Facebook video Friday Netanyahu denied any wrongdoing.
“Here are the facts,” Netanyahu said in the video. “There is no connection between the shares I bought and sold years ago and the purchase of submarines that took place years later. This purchase was decided upon by the cabinet for security considerations only.
“In 2007, when I was a Knesset member and not a member of the government, I invested in a private firm with specialty technology. This company does not make submarines. It doesn’t make steel. It doesn’t even make the electrodes used to make steel. This company is as far from submarine construction as east is from west.”
He went on: “In 2010 I sold my shares in the company. This was a year and a half before Israel signed the deal to buy the first submarine during my term. It was two years before the Germans sold submarines to the Egyptians. So there was no connection between the issues. It’s libel.”
Netanyahu is facing indictments on fraud and bribery, pending a hearing, in three other corruption cases. He has denied any wrongdoing in those cases.
A probe into Netanyahu’s financial dealings could potentially lead to a new investigation similar to Case 1000, in which he 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.
On Monday the Blue and White party’s top echelon accused Netanyahu of being implicated in “the greatest security-related corruption case in the history of the State of Israel.”
Blue and White leader Benny Gantz said if he wins the election, Blue and White will establish a parliamentary commission of inquiry into Netanyahu’s ties to the case.
The investigation into the submarine affair has already seen police recommend bribery charges against another cousin of Netanyahu, his long-time attorney David Shimron, his former bureau chief David Sharan, his former pick for National Security adviser Avriel Bar-Yosef, former head of the navy Eliezer Marom and former minister Eliezer Sandberg. Netanyahu has been interviewed as a witness in the case, but was not a suspect.
Shimron represented ThyssenKrupp in the sale and is suspected of trading his influence over the prime minister in return for a hefty cut of the deal. Police believe he pushed for a NIS 6 billion ($1.5 billion) defense contract to purchase submarines for the Israeli Navy and other vessels to protect the country’s offshore natural gas fields.
Much of the case is based on the testimony of state’s witness Miki Ganor, who was ThyssenKrupp’s Israel agent. Ganor has admitted to bribing a string of senior officials in order to help secure contracts for the company. In a surprise development Ganor on Tuesday told police he was retracting his testimony, saying he had not bribed anyone. He has since been arrested by police.