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  July 12, 2017

Weapon Corruption Scandal Threatens Netanyahu's Administration

Israeli police investigate three corruption cases involving the prime minister
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Shir Hever is an economist working at The Real News Network. His economic research focuses on Israeli occupation of the Palestinian territory; international aid to the Palestinians and to Israel; the effects of the Israeli occupation of the Palestinian territories on the Israeli economy; and the boycott, divestment and sanctions campaigns against Israel. His first book: Political Economy of Israel's Occupation: Repression Beyond Exploitation, was published by Pluto Press.


AARON MATÉ: It's the Real News. I'm Aaron Maté. A bribery scandal in Israel could engulf Prime Minister Benjamin Netanyahu. Six Israelis linked to Netanyahu have been detained for questioning. Israeli police are looking into potential corruption in a controversial purchase of German submarines. At the center is David Shimron, Netanyahu's personal lawyer. Shimron was said to be representing ThyssenKrupp, the German company that sold submarines and naval patrol craft to Israel in a $2 billion deal. Israel's Channel 10 reports that it is has proof Shimron used his ties to Netanyahu to lobby for that sale. Shimron was among those detained along with other Netanyahu associates, including former government officials.

The controversy has dominated Israeli headlines and fueled anti-corruption protests. Shir Hever is a real correspondent, and he joins me now. Shir, welcome.

SHIR HEVER: Thank you, Aaron.

AARON MATÉ: Thanks for joining me. Shir, talk about this latest corruption case potentially engulfing Netanyahu.

SHIR HEVER: The Israeli police call it case 3000. It's about an arms purchase from ThyssenKrupp, the Germany company, which is not just for the submarines but also for patrol ships. The Israeli Navy wanted to obtain five attack submarines from any kind of company that would sell them, and ThyssenKrupp actually didn't make the lowest offer. They got a better offer from South Korea, but Prime Minister Netanyahu intervened and demanded that the Israeli Navy will not buy five submarines but nine, and that they will buy them from ThyssenKrupp. He said, "We have to go about this deal very quickly because the German chancellor, Angela Merkel, supports the deal. There are elections in Germany in September, and if she is not reelected, then the deal is in danger." That is the context of why the Israeli government was pushing for this deal with ThyssenKrupp.

The question, of course, is whether ThyssenKrupp has paid a bribe to Israeli officials in order to promote the deal, which officials, and if Netanyahu is so deeply and personally involved, was he one of the recipients? The former head of the navy of Israel is one of the people detained on Monday, and also his bank accounts were frozen in order to investigate what kind of money he received from ThyssenKrupp, if at all. Indeed, there are reports that he told ThyssenKrupp that unless they appoint a very specific mediator, called Miki Ganor, who was a very close friend of Benjamin Netanyahu, to be the mediator in the deal and receive a very exorbitant commission of about 2%, and when we're talking about a $2 billion deal, this is a lot of money, if they don't accept him as a mediator, the deal is off.

AARON MATÉ: Okay. Ganor, this guy Miki Ganor, the intermediary, he is also represented by the same lawyer as Netanyahu, David Shimron, who I mentioned before, who has also been detained for questioning. Can you talk about Shimron's role here and what Israel's Channel 10 now says he did, in terms of they say they have an email proving his connection to the German arms company?

SHIR HEVER: It all revolves around the question of who know what. Netanyahu asserts that he knew nothing about the details of the deal, but when you have this direct connection through the lawyer David Shimron, and who at first said he had no idea who the mediator is, and had no direct contact with ThyssenKrupp, but now this email, there is evidence or at least alleged evidence that he had a direct connection to ThyssenKrupp. That would mean that he knew exactly it's Miki Ganor who has been selected by ThyssenKrupp to be the mediator, and it makes it very unlikely and very unbelievable that Netanyahu didn't know about it.

Miki Ganor himself is not a very remarkable person, but Netanyahu has insisted to appoint him to Israel's National Security Council. The head of the Israeli National Security Council, the former head, is also among the six people being detained because he's also under suspicion of receiving a bribe from ThyssenKrupp, allegedly. That means that there was a whole conspiracy of senior Israeli officials, all of them rather close to Netanyahu, and David Shimron is the one accused of organizing it and getting everybody to cooperate with each other.

AARON MATÉ: You mentioned that the police are calling this case 3000, but there's also the cases 1000 and 2000. Can you talk about those and the context of these multiple corruption scandals that Netanyahu faces?

SHIR HEVER: Right. In the Israeli political tradition, if charges are pressed against an acting prime minister, he must resign. This happened, actually, to former Prime Minister Olmert in 2008. He had to resign. Charges were pressed against him. Eventually, he was convicted of receiving bribery, and only this July he was released from jail after serving 16 months. Netanyahu is dreading that kind of eventuality, but he is trying to continue appearances that everything is fine.

Case 1000, which the police began investigating quite a long time ago, is about various presents that the Netanyahu family received, not just [inaudible 00:06:18] but also his wife and son, from various international millionaires and billionaires. These are various luxury items like champagne and cigars, and also hotel stays and travel costs, that they received from these billionaires. Netanyahu is not denying the fact that the presents have been given, but he says, "Friends are allowed to give gifts to their friends."

The problem of course is whether they received anything in return, and it appears that there is very clear evidence that the Netanyahu family actually dictated to these billionaires what they wanted and when. Now there is also evidence that at least one of those billionaires received preferential tax treatment by the Israeli tax authorities. If that is the case, that already shows a quid pro quo relationship. In fact, senior members of the Israeli police leaked that they intend to recommend that presses will be charged against Netanyahu on that case, on case 1000, even though of the three cases it's actually the smallest one.

Case 2000 is much bigger, and that relates to Netanyahu allegedly coordinating with the chief editor of the newspaper Yedioth Ahronoth, one of the two largest newspapers in Israel, telling him that he's going to curb the newspaper Israel Hayom, which is also one of the two largest Israeli newspapers in Israel, and is a very pro-Netanyahu newspaper, funded by American billionaire Sheldon Adelson. Netanyahu will tell Adelson, "Stop with the newspaper or sell or give away fewer copies, and in exchange," Yedioth Ahronoth will change their coverage and give more favorable coverage to Netanyahu.

There was a conversation between Netanyahu and the chief editor. It was recorded, and parts of it were released. That certainly paints him in a very bad light, and this is a corruption case that is worth not tens of thousands of dollars, like the presents case, but hundreds of thousands or even millions. Even the case 2000 is small in terms of money compared to case 3000, which is this $2 billion deal of attack submarines and the patrol boats.

AARON MATÉ: Shir, finally, Netanyahu has been around for a while. He was first elected prime minister in the mid-'90s and reelected multiple times. How are all these corruption cases being received right now inside Israel? Do they stand to impact his political future?

SHIR HEVER: I think it says a lot about the Israeli political culture that corruption cases regarding money and luxury items and even the media are not really getting a lot of attention in the Israeli public. There are some demonstrations. There are some calls for Netanyahu to resign, but all in all, this is not a direct threat to his government. When it comes to security, that's where people are less flexible. When they hear that in fact the minister of defense was opposed to buying nine submarines and wanted to use the money for other things, and to hear that the navy didn't think that they should buy the boats and the submarines from such an expensive provider like ThyssenKrupp but should actually buy them from a cheaper source, then that creates more outrage.

At the moment, there are constant demonstrations against the Israeli state attorney, Avichai Mandelblit. The state attorney actually has the final say. Even if the police say, "We want to press charge," only Avichai Mandelblit can make the decision. He has been postponing and delaying that decision for over eight months now. People are very angry, and Mandelblit is a close friend of Netanyahu and very loyal to him, but there's so much that he can get away with. If at some point he decides to press charges, that will probably spend the end of the Netanyahu administration.

Within Netanyahu's own party, no one dares to contemplate that eventuality. Within the Likud Party that Netanyahu rules, he has absolute control. There is no dissenting voices within his party. At least, nobody dares to say anything out loud. There are some other parties which are now starting to raise their heads a little bit, and are already starting to contemplate that if this corruption case or at least one of the three will reach a point of pressing charges, then they should get ready to form the next government.

AARON MATÉ: Shir, I'm sorry to nitpick here, but I just want to say that when you say that Israelis are sensitive about security, I have to put the word security in quotes, because it's questionable whether billions of dollars on submarines really is about Israeli security versus simply its own military goals, whatever they are. Your thoughts on that?

SHIR HEVER: That is right. Nobody can make the case, there is no Israeli general or admiral who can explain to the public how could nine attack submarines possibly help protect Israeli security. There is no conceivable scenario that this actually has to do with security.

AARON MATÉ: A criticism that I think extends to many of Israel's policies over the years when it comes to military activities. We'll leave it there, though. Shir Hever, Real News correspondent. Thanks very much.

SHIR HEVER: Thank you, Aaron.

AARON MATÉ: Thank you for joining us on the Real News.


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