Netanyahu thwarts risk of submarine scandal resurfacing

Prime Minister Benjamin Netanyahu has apparently managed to distance himself from any risks of being implicated in the submarine scandal.

al-monitor Israeli Prime Minister Benjamin Netanyahu climbs out after a visit inside the Rahav, the fifth submarine in the fleet, after it arrived in Haifa port, Israel, Jan. 12, 2016. Photo by REUTERS/Baz Ratner.

Jun 9, 2020

At the beginning of May, the Egyptian navy received the third submarine out of four that Egypt had bought from the German corporation Thyssenkrupp Marine Systems. These submarines were greeted by headlines not only in Egypt but also in Israel, because here they star in the “submarine affair,” which is considered by pundits to be the most severe case of corruption since the founding of the State of Israel. The affair includes the three new submarines acquired by Israel from Thyssenkrupp, but also the ones purchased by Egypt from the same source.

One of the arguments made by all the Blue and White seniors during the recent election campaigns is that Prime Minister Benjamin Netanyahu approved the Egyptian sale to Chancellor Angela Merkel without consulting or updating the heads of Israel’s defense system. Germany does not need Israel’s approval, but because of the special bilateral relations, Berlin did ask Jerusalem’s acceptance. According to former chiefs of staff Moshe Ya’alon, Gabi Ashkenazi, Benny Gantz (and also Yair Lapid), Netanyahu’s lone approval had effectively waived Israel’s veto power regarding the sale of German strategic weapons to Israel’s neighbors. They even argued that his conduct was alarming and on the border of treason for allowing the Egyptian navy to acquire sophisticated, expensive and lethal weapons. They hinted that this was connected to personal interests of Netanyahu’s close friends and family members in Thyssenkrupp.

Of course, since then, Egypt received most of the submarines it bought from the Germans — Israel did not receive any of the three submarines it was supposed to purchase in this round since the entire deal was never completed. And what was the fate of the submarine affair? This, too, has disappeared from the public agenda. Having joined the unity government, Gantz and Ashkenazi are embedded in Netanyahu’s Cabinet. Only Ya’alon continues the battle cry from the opposition, but in vein. The police investigation ended, the principal state’s witness Michael Ganor retracted his words and Netanyahu continues on his merry way.

When the story exploded in the media more than three years ago, it had seemed that the case had the potential to bury Netanyahu and his regime for good. While Netanyahu was able to brand the other corruption cases as “petty persecution” on the part of investigative authorities, the submarine affair bears signs of something close to treason. The fact that several people close to the prime minister were involved in strategic weapon deals, and that they were under suspicion of doing so for personal gain — tantamount in Israel to violating the “holy of holies," its national security — threatened to damage Netanyahu’s reputation even among his most devoted followers.

But much time has passed since then, and Netanyahu now acts as if the submarine affair never existed. The investigation was not able to prove that his lawyer David Shimron (who was also Netanyahu’s adviser and cousin) told Netanyahu what he was doing. To this very day, the prime minister claims that he didn’t know that attorney Shimron was the mediator between Thyssenkrupp and the Israeli navy. Even when it turned out that Netanyahu secretly gave Germany’s chancellor the go-ahead to sell strategic submarines to Egypt, the prime minister somehow managed to get off the hook while Israeli Attorney General Avichai Mandelblit will not allow the police to conduct an investigation connected to diplomatic decisions.

The third chapter of the affair erupted when it emerged that Netanyahu had allegedly accumulated tremendous capital gains — about $4.6 million — through joint investments with his American cousin Nathan Milikowsky. Meanwhile, it was discovered that Milikowsky owns a company that does business with the Thyssenkrupp corporation; this chapter has not yet been investigated in Israel. Al-Monitor learned that Israeli investigative authorities are waiting for answers from American authorities in order for Mandelblit to decide whether to open another criminal investigation against the prime minister. Many in Israel believe that ultimately, this investigation will be opened. Netanyahu apparently did not report his global business transactions with his cousin; it is not clear whether these profits are listed in his declaration of capital. Worst of all is the fact that the details that were uncovered ostensibly prove that Netanyahu is tainted with conflict of interest regarding everything connected to Thyssenkrupp.

But until, and if, all of this takes place, Netanyahu appears to have successfully survived this allegedly severe case of corruption without significant damage. As aforementioned, Ganor has retracted his testimony and backed away from the deal with the persecution. With the state-witness deal canceled, the prosecution is now preparing to serve him with a severe indictment and recommends that less severe indictments be served to other suspects. Thus, this affair that was once viewed as being critical enough to bring down Netanyahu and his cronies is now being leveraged by Netanyahu’s associates in the opposite direction. They are now blaming Netanyahu’s opponents and law enforcement agencies for having persecuted an innocent prime minister.

The last remaining political potential is the option of establishing an official inquiry commission to investigate the circumstances. This demand featured prominently in Blue and White’s last three election campaigns. Over and over, the demand for such a commission was made by Lapid, Gantz, Ashkenazi and Ya’alon to “clean the filthy Augean stables” once and for all. In this, Blue and White enjoyed much public support. But then the unity government was founded and Gantz and Ashkenazi were swallowed up whole. Now, only Ya’alon — who served as defense minister at the time of the affair — is out there, insisting on bringing up the affair. But even Ya’alon is getting worn out. The public has tired of this issue and the political system moves on.

Knesset member Ofer Shelah (Lapid’s No. 2 in Yesh Atid) was recently appointed chairman of the State Control Committee — the very committee that has the power to establish such an official inquiry commission. However, the Likud took care to enlarge its representation in the committee in time by one additional parliamentarian. Thus, the committee does not have the necessary two-thirds majority for establishing such a commission. And so it seems that Netanyahu has thwarted that option as well.

Ya’alon and Lapid’s last hopes are now pinned to a potential investigation into the monies earned by Netanyahu in the United States. They are waiting for Mandelblit’s decision; Mandelblit is waiting for an answer from the Americans.

There is the feeling that we are in for a long, long wait.

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