Israel: New Deal with Germany Postponed after “Submarine Affair” Investigation Expands

Published: 19 July 2017

128px-I.n.s. dolfin-03Israeli Naval Ship Dolphin, 2010 (Photo: shlomiliss, CC BY 3.0)

By Kyle Mackie

Germany postponed the sale of three submarines to Israel after authorities in Tel Aviv expanded their investigation into a series of multi-million dollar purchases of naval equipment that have become known as the “submarine affair,” The Times of Israel reported Tuesday.

The move came after Monday’s reports that the Israeli businessman and representative of Germany’s ThyssenKrupp, Michael (or Miki) Ganor, is in talks to become a witness for the state.

Ganor and the former National Security Council Deputy Director Avriel Bar-Yosef were arrested last week on suspicion of fraud, money laundering and conspiracy to commit a crime in connection with the Israeli government’s purchases of German vessels.

Their detentions were extended Monday to last through Thursday.

Investigators believe the two paid bribes in order to ensure that the Israeli government’s purchases from ThyssenKrupp went through despite opposition from the country’s ministry of defense.

Prime Minister Benjamin Netanyahu is reported to have supported the deals, according to Haaretz. But he is not currently under investigation as part of the case, Reuters reported.

Ganor has given police more information during his detention about the recent arms deals in question, which has prompted authorities to start interviewing currently serving naval officers, Haaretz reported.

Following the reports that Ganor could become a state’s witness, a senior diplomatic official confirmed to The Jerusalem Post that the signing of the Memorandum of Understanding to confirm the €1.5 billion (US$ 1.7 billion) purchase of three new submarines was postponed by German officials.

ThyssenKrupp said in a statement Tuesday that it didn’t find any evidence of corruption in the handling of the deal during an internal investigation, Reuters reported.

“We found no concrete indications of corruption – neither with regard to submarine projects, nor in connection with the procurement of corvettes [the type of warship ordered by Israel],” the statement read.

The company declined to comment on both Israeli and German media reports that the newest deal had been indefinitely postponed.