Witness said to accuse Netanyahu aide of undermining German shipbuilder’s rivals

Witness said to accuse Netanyahu aide of undermining German shipbuilder’s rivals

ThyssenKrupp’s former representative Miki Ganor reportedly tells police David Shimron was instrumental in preventing a meeting with a South Korean company

Stuart Winer is a breaking news editor at The Times of Israel.

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

A state witness in a major investigation into Israel’s purchase of military submarines and ships has reportedly told police he wielded direct influence over the defense establishment during negotiations for the multi-billion-dollar deal, via a confidant of Prime Minister Benjamin Netanyahu.

Miki Ganor, the former local representative of German shipbuilder ThyssenKrupp, recalled to investigators an incident during which he claimed to have played an instrumental role in preventing an Israeli delegation from flying to South Korea to meet a rival shipbuilder, the daily Yedioth Ahronoth reported Tuesday.

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

Ganor, who turned state’s witness after being investigated as a key suspect in the investigation, had hired Netanyahu’s cousin and attorney David Shimron as his own personal representative during the negotiations for purchasing the vessels.

Netanyahu has not been named as a suspect in the case.

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

Ganor told investigators that when he heard an Israeli delegation was heading out to South Korea, he contacted Shimron, the report said.

“I called David Shimron in a panic and I told him the director general of the Defense Ministry and his team were supposed to be taking off for Korea and that he must prevent the meeting,” he was quoted as saying.

Shimron, he said, understood the significance of the matter and made some calls, and the trip was canceled. Afterward, claimed Ganor, Shimron called him and said the issue had been “taken care of.”

Ganor’s testimony alleged that Shimron was far more involved in the business side of the deals with ThyssenKrupp than Shimron’s statements to date have suggested.

Sources close to Shimron were quoted by Yedioth as saying, “He doesn’t respond to matters related the investigation, and that is not to be taken as a confirmation or denial of anything.”

Shimron has claimed that he “wasn’t in touch with any state official over the issue of Israel’s purchase of naval vessels” and said that his work for the German company via Ganor, while also serving as Netanyahu’s personal lawyer, did not cause a conflict of interest, the daily Haaretz reported in November 2016.

The purchase of four patrol boats and three Dolphin-class submarines, costing a total of 2 billion euros, has been mired in controversy. The investigation, dubbed Case 3000, has seen several senior officials arrested and questioned by police.

Last week, police sought to arrange a face-to-face confrontation between Ganor and the former deputy director of the National Security Agency, Brig. Gen. (res.) Avriel Bar-Yosef, to establish the veracity of Ganor’s claims. However, the confrontation was delayed at the last minute, Yedioth reported, without citing a reason.

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

In November police announced a raft of fraud and bribery charges against Bar-Yosef, 62, whom Netanyahu nominated in 2016 to serve as national security adviser, a top administration post. He had withdrawn his candidacy in July of that year after advocacy groups alleged he had received money from foreign business associates, constituting a conflict of interest.

Bar-Yosef is suspected of bribery, money laundering, fraud and breach of trust, police said in a statement at the time. Those charges, however, appear to be unconnected to the submarine deal.

According to the Yedioth report, in 2013 Israel’s defense establishment contacted a South Korean shipbuilder with a proposal to build four 1,200-ton ships to guard the country’s natural gas rigs in the Mediterranean Sea. Another Korean shipbuilder demanded to also be involved in the deal, so an international tender was issued. ThyssenKrupp was not involved at the time because it wasn’t manufacturing the right kind of boat.

In late 2014, after South Koreans had already invested a considerable sum of money toward winning the tender, ThyssenKrupp was asked to participate, the report said. The German company claimed that its government would subsidize 30 percent of the deal to make it more attractive for Israel.

Illustrative photo of Israeli natural gas rigs in the Mediterranean Sea, September 2, 2015. (Flash90)

Brig. Gen. (res.) Shmuel Zucker, a former head of the Defense Ministry’s Acquisition Administration, was quoted in the report as saying that after ThyssenKrupp joined the tender the Israeli navy altered its specifications for the ships, increasing the size to 1,800 tons — a development that helped the Germans win the tender.

Zucker also reportedly said that the change in specifications “smelled off” to him at the time, and that a National Security Council representative had urged him to cancel the tender and award ThyssenKrupp the contract for the sake of ties between Israel and Germany.

In October 2017, Yedioth reported that then defense minister Moshe Ya’alon had told associates that pressure was brought to bear on him directly, at the time, to ensure the tender was scrapped so ThyssenKrupp could get the deal.

Earlier in 2017, Hadashot TV news reported Ya’alon had told police Netanyahu actively went over the heads of the defense establishment to talk to German government sources about ThyssenKrupp getting the contract.

Ya’alon, who opposed the deal, was pushed out of his post by Netanyahu in May 2016 in a coalition shakeup and has since maintained the prime minister was directly involved in corruption in the agreement with the German shipbuilder.

Times of Israel staff contributed to this report.

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