Top Blue and White candidate suggests ‘treason’ by Netanyahu in submarine case

Likud says remark by Ya’alon ‘crosses a red line,’ amid calls by rival candidates to reexamine PM’s involvement in ‘worst corruption case in Israel’s history’

Defense Minister Moshe Ya'alon, left, speaks with Prime Minister Benjamin Netanyahu at the weekly cabinet meeting on August 10, 2014. (photo credit: Haim Zach/GPO/Flash90)
Defense Minister Moshe Ya'alon, left, speaks with Prime Minister Benjamin Netanyahu at the weekly cabinet meeting on August 10, 2014. (photo credit: Haim Zach/GPO/Flash90)

Moshe Ya’alon, a senior candidate on the Blue and White slate who once served as defense minister under Benjamin Netanyahu, on Wednesday said the prime minister’s actions in a corruption case involving submarine purchases could amount to “treason,” drawing rebuke from the Likud party.

Netanyahu’s election rivals have launched an all-out offensive over fresh allegations that he may have earned millions of shekels from the so-called submarine affair, calling it “the greatest security-related corruption case in the history of the State of Israel.”

The high-profile Case 3000 investigation has snared 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 a 2016 multi-billion-shekel state purchase deal — which has been frozen — of three Dolphin-class submarines and four Sa’ar 6-class corvettes from German shipbuilder Thyssenkrupp, and a separate purchase deal from Thyssenkrupp of a Dolphin-class submarine advanced since 2009 and signed in 2012. (That submarine is supposed to be delivered later this year.)

According to a Channel 13 news report last week, the State Comptroller’s Office has discovered that Netanyahu was once a shareholder in a company, SeaDrift, in turn acquired by a conglomerate named GrafTech, that supplies Thyssenkrupp.

Netanyahu has called allegations of impropriety on his part “contrived slander,” saying he “didn’t get a shekel from the submarine deal” and that the matter was “checked extensively by the prosecution and the attorney general, who stated unequivocally that I am not suspected of anything.”

Prime Minister Benjamin Netanyahu leads the weekly cabinet meeting, at the Prime Minister’s Office in Jerusalem, on March 17, 2019. (Marc Israel Sellem)

Ya’alon, Blue and White’s No. 3 — who, like his party’s leader, Benny Gantz, is a former IDF chief of staff — told Israel Radio Wednesday that it was possible that Attorney General Avichai Mandelblit had been deterred from pursuing charges against the prime minister “by someone who said Israel’s security would be harmed if corruption is discovered in the case, because in that case Germany won’t be able to sell us submarines.”

Ya’alon, who served as defense minister under Netanyahu in 2013-2016, said he had written a letter to Mandelblit asking him to investigate the matter.

“This issue is so important that it could even amount to treason,” he charged in the radio interview.

Netanyahu’s Likud party quickly reacted, saying Ya’alon’s remark “crossed a line.”

“After examining all the information, law enforcement authorities have already determined that Prime Minister Netanyahu isn’t connected to the submarine affair. That doesn’t stop Lapid and Gantz from continuing with the blood libel,” it said in a statement.

(L-R) Blue and White chief Benny Gantz and party members Yair Lapid, Moshe Ya’alon and Gabi Ashkenazi during a campaign event on March 18, 2019. (Courtesy: Blue and White)

“The use of the term ‘traitor’ against the prime minister dangerously crosses a red line, which testifies to [party No. 2 Yair] Lapid and Gantz’s stress from the embarrassing phone affair,” it added, referring to reports in the past week that Iranian intelligence hacked Gantz’s device several months ago.

Former prime minister Ehud Barak repeated Ya’alon’s allegation in an interview later Wednesday morning with Army Radio, saying the case “bordered on treason.”

“The attorney general announced already at the beginning of the investigation that Netanyahu isn’t connected to anything,” Barak said. “This is why there is a fear that the attorney general is protecting the prime minister.

“Purchasing a submarine isn’t something Netanyahu is authorized to do [alone] as prime minister. He cannot decide to buy a submarine without involving the defense minister, and Ya’alon claims he didn’t know about it. That is a step that constitutes blatant breach of trust.”

According to the Channel 13 report last week, the State Comptroller’s Office found that Netanyahu and his cousin Nathan Milikowsky were shareholders in a graphite electrodes manufacturing company, SeaDrift, which in November 30, 2010 was acquired by a conglomerate in the same field, GrafTech International, a longtime supplier of Thyssenkrupp.

Having previously claimed he obtained the shares as 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. He sold his SeaDrift shares to Milikowsky on November 29, 2010, according to The Marker website; he was elected prime minister 20 months earlier.

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)

On Monday, in their first full press conference since launching the party, Blue and White’s top echelon accused Netanyahu of being implicated in “the greatest security-related corruption case in the history of the State of Israel.”

Gantz, speaking with Lapid, Ya’alon, and candidate Gabi Ashkenazi, another former IDF chief, at his side, accused Netanyahu of receiving a reported NIS 16 million [$4.5 million] “right into his pocket” from the sale of his GrafTech shares.

Gantz said that if he wins the election, Blue and White will establish a parliamentary commission of inquiry into Netanyahu’s ties to the case, as well as his alleged 2015 green-lighting of German sales of two advanced Dolphin-class submarines and two anti-submarine warships to Egypt.

In addition to Milikowsky’s involvement, the investigation has already seen police recommend bribery charges against another cousin of Netanyahu, his long-term 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 is 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 the 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.

Netanyahu’s own role in the purchase decision, including his insistence that Thyssenkrupp be exempted from the usual Defense Ministry tender process, raised concerns of a conflict of interest for Shimron. Part of the agreement allegedly pushed by Shimron would also have seen Thyssenkrupp construct a lucrative shipyard in Israel, where the company would maintain the new vessels.

Miki Ganor attends a hearing at the Rishon Lezion Magistrate’s Court on July 21, 2017. (Flash90)

Further stoking speculation, Miki Ganor, the key witness in the case, in a shock move on Tuesday evening asked to change parts of his testimony. 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.

But now he has reportedly told police investigators, “I didn’t bribe anyone.”

Ganor was arrested following the development, and on Wednesday police requested that his remand be extended by five days.

Separately, last month, Mandelblit announced his intention to indict Netanyahu on charges of bribery fraud and breach of trust in three other cases. The prime minister denies the allegations, and says the cases are part of a political witch hunt designed to oust him, involving the left, the media and the police pressuring a weak attorney general.

While a sitting Israeli prime minister has never been this close to indictment before, Netanyahu is not obligated to resign at this stage. The planned indictment is still subject to a hearing, during which Netanyahu can plead his case before formal charges are filed. That process will take place after April 9 elections, likely before July, according to the Justice Ministry.

Raoul Wootliff contributed to this report.

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