In order to preserve its military advantage over regional adversaries like Iran, Israel ordered three new submarines from the Essen, Germany-based ThyssenKrupp Marine Systems, with a $1.5-billion price tag.
Concerns arose after it was revealed that Miki Ganor, an Israeli businessman who acted as an intermediary in the transaction, retained the services of David Shimron, Netanyahu’s personal counsel and distant relative, to act as his representative during the deal.
German business newspaper Handelsblatt reported that Ganor would be receiving between 10 and 30 million euros for his role as middleman on the deal, according to Jerusalem Post. The German "submarine king" released a statement saying they were conducting an internal investigation, as they were not aware that someone had been acting on Ganor’s behalf.
The statement read, "In Israel, ThyssenKrupp Marine Systems works exclusively with Mr. Ganor as a sales partner….Our sales partners are contractually obligated to consult with ThyssenKrupp Marine Systems before engaging sub-contractors. This has not happened. "
Netanyahu has denied any wrongdoing, calling the scandal "an empty balloon." Haaretz quoted a statement released from his office that said, "Attorney Shimron never spoke with the prime minister about the issue of submarines, ships or any other subject related to his clients. Attorney Shimron did not speak with the prime minister about this client or any other client."
Some members of the Knesset, the Israeli parliament, seem to be taking the accusations a little more seriously. On Wednesday lawmakers will vote on whether to form a commission to inquire on the submarine agreement, with the Jerusalem Post quoting opposition leader Isaac Herzog saying, "Bibi, you are afraid from the light of the sun in your submarine…The time has come to give answers to the public."
Yesh Atid leader Yair Lapid also expressed doubt over the legitimacy of the deal, remarking that, "No one hires the lawyer of the prime minister to handle the largest deal in the state’s history without thinking he can gain from it."
Israel’s Justice Ministry announced in a statement last week that, "Following new information received from the police and in view of other developments,the attorney general has ordered an investigation to be carried out by police concerning various aspects of the affair."
The submarines are not set to be delivered for almost a decade, and although the contract does not appear to be in jeopardy, transparency advocates in Israel are calling for clarification on how a person as close to the Prime Minister as Ganor come to be involved in the deal, replacing a former brigadier general.
Maozia Segal, chairman of transparency group Ometz said that, "This is a really big deal, worth billions of shekels…If it's fishy, it should be checked. We don't know who knew what and when and why certain decisions were taken. There are serious concerns, and they deserve a national inquiry."