Netanyahu’s narrative on the Submarines Affair
As of November, Prime Minister Benjamin Netanyahu was not even an official suspect in the Submarines Affair.
However, suddenly, as of March 14, Attorney-General Avichai Mandelblit opened an initial review into whether Netanyahu is connected to the affair in which many of his top aides are suspected of skimming off funds in Israel’s transaction with a German company Thyssenkrupp regarding nuclear submarines.
After months of following public statements and appearances by Netanyahu and his lawyers, reviewing extensive documents and off-record conversations with a wide range of sources, the prime minister’s narrative can finally be pieced together in greater detail.
BACKGROUND:
When Netanyahu purchased 1.7% of the shares in the company NMDM in 2007 for around $600,000, it was a supplier for Thyssenkrupp, which later sold submarines to Israel and Egypt. At some point, NMDM merged with Graftech International and in 2010 Netanyahu sold his shares to his cousin Natan Milikovsky for around $4,300,000.
This was more than a year after he became prime minister.
In July 2014, the Defense Ministry opened bidding for offering submarines to Israel. Reportedly, a representative for the prime minister tried to push the ministry to choose Thyssenkrupp one week later.
Sometime between 2014 and 2015, Netanyahu also told German officials that Israel would remove its longstanding opposition to the Germans selling submarines to Egypt.
Netanyahu kept the Defense Ministry and the IDF in the dark regarding aspects of purchasing the submarines and about removing opposition to Germany’s sale of submarines to Egypt.
THE CLAIM AGAINST NETANYAHU:
The $4,300,000 Netanyahu made from selling his shares in NMDM came due to the prime minister’s interventions to promote the submarine sales between Israel and Germany. By green-lighting Germany to sell submarines to Egypt, Netanyahu either directly benefited or indirectly smoothed relations with Germany to benefit him or Milikovsky (who later returned the favor) in the Israel deal.
The Defense Ministry and the IDF opposed buying the submarines, saying they were excessive and a waste of valuable defense funds since Israel already possessed other nuclear submarines from Germany. Nonetheless, Netanyahu seems to have chosen his personal gain over the country’s interests.
Likewise, green-lighting the sale to Egypt went against Israel’s national interests to keep advanced weapons out of the hands of its neighbors in the Middle East. Netanyahu changed aspects of his story about the timing regarding when he sold his shares and going “behind the back” of the defense establishment, and also changed his story about green-lighting the deal with Egypt.
They also claim that Netanyahu may have known about the bribery scheme that so many of his close aides were involved in.
NETANYAHU’S SIDE OF THE STORY:
His changing narratives and the idea that he hid his business relations and profits with Milikovsky – until it came out accidentally in a series of letters with the State Comptroller on an unrelated issue – are problematic to his image, but are non-issues legally.
His most vulnerable point has been his claim that there is a top-secret reason he removed Israel’s opposition to Germany selling Egypt submarines, but people who he said knew the reason for the decision – like Mandelblit – have since said that they do not.
But he was not legally obligated to disclose to anyone his decision to green-light the selling of the submarines to Egypt. It can be he got mixed up when he said that he told Mandelblit about the decision, but even if he didn’t tell him, Mandelblit agreed that he had offered to tell him at the time, but Mandelblit declined of his own accord.
Maybe it looks problematic to hide this move from the Defense Ministry, the IDF, the Mossad and to not have told his former advisers Jacob Nagel and Yaakov Amidror. But his mistaken statements about who he told were not statements made under oath to the police, and in any case, he was not obligated legally to tell anyone at all.
Beyond that, he will attack the idea that there is any possible chronology or actual supplier function between his business interests and Thyssenkrupp’s submarines. He sold his interests in 2010 and the submarine deals were not finalized until 2016-2017. If someone somehow finds that negotiations in 2010 could be tied to the final deal years later, he will double down that his business interests never had anything to do with the submarines. So what if his business interests related to a tiny amount of Thyssenkrupp’s other business items that were not submarines.
Also, he will say that people are connecting him to the submarine issue using primitive non-legal guilt-by-association in which if you can somehow manage to connect the dots between two corporations – even if there are several rounds of separation – that makes someone guilty. He will say this will be laughed out of court.
He can also argue that he purchased the shares in NMDM when he was in the opposition, which is allowed. When he sold the shares, he got approval from the relevant authorities.
Even with the “top-secret” issue, Amidror has said that he believes Netanyahu made the right move by buying additional submarines regardless of whether the reason was top-secret.
He also made indications about supporting Egypt once President Abdel Fattah al-Sisi took over from the Muslim Brotherhood. Sources indicate that one reason might be that it was expected that Egypt would succeed in acquiring submarines, and it was preferred that they acquire a design Israel was familiar with as opposed to a less familiar design from Japan, France, South Korea or others.