Israeli Navy Backs Netanyahu's Submarine Deal

File image

By MarEx 2017-04-21 20:26:26

The Israeli Navy has decided to back Prime Minister Benjamin Netanyahu's accelerated contract with a German defense firm for the construction of three more Dolphin-class submarines, asserting that it needs to fast-track the acquisition and take delivery as quickly as possible. The statement, provided to Defense News by a senior official, represents a full reversal of the service’s stance late last year, when officials said that they would prefer a standard multi-year bidding process. 

Netanyahu's office negotiated the submarine deal with ThyssenKrupp directly, without input from the Navy and despite the objections of then-defense minister Moshe Yaalon. The abruptness of the arrangement – and the involvement of Netanyahu's personal lawyer, who had ties to a firm advising ThyssenKrupp in Israel – has raised questions of conflicts of interest, and the deal is now the subject of a criminal investigation.

At Germany's insistence, both sides have recently agreed to add a clause to the submarine contract that would cancel the deal if the Israeli investigation finds evidence of corruption. 

It is not the first time that ThyssenKrupp has found itself involved in a defense procurement scandal: it launched an internal investigation in 2015 when rumors emerged that subsidiary had bribed foreign government officials, and in 2016 German prosecutors searched its offices for evidence of suspected bribery at a joint venture, Atlas Elektronic.

Neither is it the sole corruption investigation involving individuals close to Netanyahu. On Thursday, the prime minister's cousin gave testimony in an unrelated inquiry that seeks to determine whether Netanyahu accepted illegal gifts from businesses. Separately, prosecutors are reportedly nearing an indictment for Netanyahu’s wife, Sara, who may soon face charges of "fraudulent receiving" for allegedly using state funds to decorate and maintain the family's private home. Netanyahu and his family have firmly rejected any accusations of wrongdoing.