Several indicted in submarine affair; ex-navy chief, Netanyahu’s cousin off hook

Cases closed against PM’s former lawyer David Shimron and past navy leader chief Eliezer Marom; other suspects face charges including money laundering, tax offenses

File: An Israeli Navy submarine sails in front of a Sa'ar 5-class corvette in the waters south of Tel Aviv as part of the Israeli Navy's flotilla in honor of Israel's 70th Independence Day on April 19, 2018. (Judah Ari Gross/Times of Israel)
File: An Israeli Navy submarine sails in front of a Sa'ar 5-class corvette in the waters south of Tel Aviv as part of the Israeli Navy's flotilla in honor of Israel's 70th Independence Day on April 19, 2018. (Judah Ari Gross/Times of Israel)

Four years after a probe was first launched, state prosecutors filed indictments Monday against suspects in a sprawling alleged corruption scandal involving the purchase of navy vessels worth hundreds of millions of dollars from a German shipbuilder.

Alongside the indictments, cases were closed against David Shimron, cousin and former personal lawyer to Prime Minister Benjamin Netanyahu, as well as former commander of the Israeli Navy Eliezer Marom, after prosecutors accepted their defenses at their respective pre-indictment hearings.

The so-called submarine affair, also known as Case 3000, revolves around allegations of a massive bribery scheme in the multibillion-shekel state purchase of the naval vessels from German shipbuilder Thyssenkrupp. The case netted several close associates of Netanyahu, as well as high-ranking military officials, but not the premier himself.

Indictments for bribery, money laundering, and tax offenses were filed at the Tel Aviv District Court Monday against Miki Ganor, who was the local agent for Thyssenkrupp, and Avriel Bar-Yosef, once Netanyahu’s pick to be head of the Israel National Security Council, was indicted for bribery and breach of trust.

In addition, indictments for bribery, money laundering, and breach of trust were filed against Netanyahu’s former chief of staff David Sharan; former chair of the fundraising organization Keron Hayesod (United Israel Appeal) Eliezer Sandberg; Brig. Gen.(res.) Shay Brosh, a former commander of the Israeli Navy’s commando unit; Rami Taib, a former political adviser to Likud minister Yuval Steinitz; and media adviser Yitzhak Liber.

David Shimron, then Prime Minister Benjamin Netanyahu’s personal lawyer, in Tel Aviv on February 17, 2015. (Ben Kelmer/Flash90)

Prosecutors had previously said they planned to file, pending a hearing, money-laundering charges against both Shimron and Marom, with the latter also facing accusations of bribery and tax offenses.

Initial suspicions of bribery against Shimron were based on a claim that Ganor hired him as an attorney in order to take advantage of his access to Netanyahu. Those suspicions were later dropped. The money laundering charges were related to a separate case involving transactions between Shimron, Ganor and a foreign bank. During a pre-indictment hearing, held in June 2020, Shimron’s lawyers argued that there was no basis for the money-laundering suspicion.

Marom was suspected of having carried out activities while still head of the navy to further Ganor’s interests, on the understanding that he would get a payback after leaving the service, when he would no longer be a public servant. However, Marom argued at the hearing that no such arrangement existed.

Shimron, who is Netanyahu’s second cousin, responded to the dropping of charges against him in a statement, saying, “I am very, very happy. At last, this unnecessary case is closed.”

His attorneys, Amit Hadad and Noa Milstein, said in a statement, “We are happy and welcome the decision by the prosecution to accept our claims, and to close also the last set of suspicions against Shimron. Today we know what we have known all along — that Shimron did not commit any offense.”

Marom’s attorney Tzion Amir said the decision marked “the end of Marom’s agony” and showed that his client was completely innocent.

Attorneys for Bar-Yosef said in a statement that “with regret, we received the prosecutor’s mistaken decision,” but added they hoped the trial will prove his innocence.

The submarine scandal involves suspicions Israeli officials were bribed to push for the acquisition of naval vessels and submarines from ThyssenKrupp. It also involves the sale of two Dolphin-class submarines and two anti-submarine warships by Germany to Egypt, allegedly approved by Netanyahu without consulting or notifying the Defense Ministry, which was then led by Moshe Ya’alon. Then-IDF chief of staff Benny Gantz, now the defense minister, was also kept out of the loop. Israel had long been granted unofficial veto over such sales by Germany.

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)

According to the indictments, in 2009 Bar-Yosef pushed for Ganor, with whom he was acquainted from their time together in the navy, to be the local agent for ThyssenKrupp. As the agent, Ganor would be entitled to commissions for each deal he secured, each of which could amount to millions of euros, and there was an alleged understanding between Bar-Yosef and Ganor that the latter would funnel some of his eventual commissions back to the former, prosecutors say.

In October 2009 Ganor got the job as Thysenkrupp agent and worked at promoting lucrative deals between Israel and Germany, allegedly with the assistance of other suspects.

Bar-Yosef, at the time on the National Security Council, acted to advance deals while maintaining close contact with Ganor, but hiding their relationship from superiors and authorities, prosecutors claim.

Avriel Bar-Yosef attends a hearing at the Rishon Lezion Magistrate’s Court on July 24, 2017. (Flash90)

In 2011 Bar-Yosef approached Ganor with various demands for payments and to invest in real estate and business deals that would be profitable to Bar-Yosef, who was acting as mediator. Ganor is alleged to have paid Bar-Yosef some NIS 420,000 ($129,348) as part of their dealings, with the cash concealed as payments for consultation services. Brosh is accused of acting as a go-between in some of the activities.

From 2013 to 2016 Ganor is believed to have also paid around NIS 130,000 ($40,000) to Sharan for using his position to promote Ganor’s business interests with officials. Sandberg, who between 2010 and 2018 was chair of Keren Hayesod and a public servant, is alleged to have received NIS 103,000 ($31,720) from Ganor from 2012 to 2016, with the payments disguised as consultation fees.

According to prosecutors, in total Ganor earned some 10 million euros in commissions for the deals he was able to set up from the schemes.

Critics and rivals of Netanyahu allege he had a possible conflict ‎of ‎interest surrounding the massive deal for the vessels.

In October 2020, the state prosecutor told the High Court of Justice that it believes there is no justification to open a criminal probe into Netanyahu over the matter.

Netanyahu is on trial for fraud and breach of trust in three other cases, and bribery in one of them. He denies any wrongdoing and claims to be a victim of an attempted political coup involving the police, prosecutors, left-wing opposition and the media.

In November Defense Minister Gantz established a committee to probe the affair but its members stepped down a month later, citing a dispute over the scope of their inquiry.

Most Popular
read more: