Germany said to approve controversial submarine deal with Israel

Germany has secretly approved a Memorandum of Understanding with Israel for the construction of three dolphin type submarines that will be added to Israel’s fleet of six submarines despite an ongoing corruption investigation into the deal, Hebrew media reported on Friday.

Germany had held up the signing of the deal amid an ongoing and wide-ranging corruption investigation in Israel into a series of naval contracts signed between the two countries.

According to the reports citing Israeli officials, over the past few weeks the text of the MOU was amended to include a paragraph saying it will not be advanced so long as the investigation continues. It also gives Germany the right to withdraw from the deal if any criminal activity is found, the Ynet news site reported.

President Reuven Rivlin, on a recent visit to Germany, defined the submarines as an existential need for Israel.

While Germany stressed on Friday that an agreement had not been finalised and signed, Israeli officials implied it was a done deal.

“The Germans have given their approval to the deal,” an Israeli official familiar with the issue told AFP condition of anonymity.

Housing Minister Yoav Gallant, who was a senior commander in the Israeli navy, “welcomed the German approval” to allow the purchase of the three submarines.

In a tweet, Gallant said the three new submarines would replace three old ones in a decade and bring the number of new submarines at Israel’s disposal to six.

Germany, however, stressed that the deal on the three submarines “is not yet signed.”

“We had other talks about it, but a deal was not made until now,” a spokesman for the German government told AFP.

The three additional submarines will cost 2 billion euros. All changes in the MOU were done at Berlin’s behest, Channel 2 reported.

The corruption case centers around  Miki Ganor, who had been the local representative of German shipbuilder ThyssenKrupp. After being identified as a key suspect in the case, Ganor turned state’s witness in July.

Investigators suspect that Ganor, along with former National Security Council deputy head Avriel Bar-Yosef, paid bribes in connection with the decision to buy three submarines from ThyssenKrupp, despite opposition from the Defense Ministry.

They also reportedly influenced decisions to buy naval corvettes to protect Israel’s offshore gas fields and awarded ThyssenKrupp a contract to service other naval vessels.

While Prime Minister Benjamin Netanyahu is not suspected in the case, his personal lawyer, David Shimron, has been questioned several times by Lahav 433, the police anti-corruption unit.

Ganor has reportedly claimed that Shimron (who was also his attorney) was to receive 20 percent of his own commission of $45 million. Shimron was hired by Ganor to negotiate the ship and submarine purchases.

In a statement given to his attorneys, Shimron reportedly denied he was to receive a cut from the deal beyond his legal fees.

When he turned state’s witness, Ganor was suspected of fraud, money laundering and conspiracy to commit a crime. He has reportedly been transferred to a police safe house.

While police have said several times that Netanyahu is not a suspect, he has been accused of corruption in the deal by former defense minister Moshe Ya’alon.

Ya’alon, who was ousted as defense minister last year, was known to have disagreed with Netanyahu over the need to purchase the three extra submarines. The purchase was opposed by parts of the defense establishment, including Ya’alon.

“This was the straw that broke the camel’s back with Netanyahu,” Ya’alon said recently “I had never suspected that he was corrupt. But then he went behind the back of the chief of staff and the head of the navy to sign the deal with (German Chancellor Angela) Merkel, when the whole professional consensus — from the navy to the Defense Ministry — was that we needed five submarines, not six.”

Netanyahu has dismissed Ya’alon’s comments as “utter garbage.”


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