THYSSENKRUPP AG (ISRAEL - "CASE 3000")

INDUSTRY

Manufacturing

CORPORATE HEADQUARTERS

Essen, Germany

SUMMARY OF ALLEGATIONS

Nationality of Foreign Officials: Israel

Summary of Allegations:

Israel awarded a USD 1.5 billion contract to ThyssenKrupp for three submarines and four heavy corvette-class warships. ThyssenKrupp was allegedly awarded the contract with no tender issued by the Ministry of Defense.

Michael Ganor, TyssenKrupp's intermediary for the deal, allegedly retained David Shimron to act on his behalf in the transaction. Shimron is Israeli Prime Minister Benjamin Netanyahu's personal lawyer and distant relative. Shimron reportedly said he did not discuss the deal with Netanyahu to avoid potential conflict of interest. On 30 July 2017, Israel's Channel Two reported that Ganor told police that Shimron was his 'full partner' and was set to receive 20% of his commission, which was previously reported by Israeli media to be around 10 million euros. Shimron is suspected by police of lobbying Israeli defense officials on behalf of ThyssenKrupp while at the same time standing to personally profit from the purchase, as Ganor's lawyer.

In addition, a ThyssenKrupp subsidiary allegedly bribed senior Israeli navy officers.

Germany announced on July 18, 2017 that it will be postponing the signing of a memorandum of understanding for the sale of the three submarines to Israel, in light of investigations into the allegations of corruption surrounding the deal.

 

 

 


Approximate Alleged Payments to Foreign Officials: Unspecified

Business Advantage Allegedly Obtained: USD 1.5 billion contract to replace Israeli military submarines

ENFORCEMENT RESULTS

Agencies: Germany: Ravensburg Public Prosecutor's Office
Results:
Year Resolved:
Compliance Monitor:
Ongoing: Yes
Details:

The investigation is ongoing.



Agencies: Internal Investigation
Results:
Year Resolved:
Compliance Monitor:
Ongoing: Yes
Details:

In November 2016, ThyssenKrupp released a statement indicating that the company works exclusively with Ganor as a sales partner in Israel and sales partners are contractually obligated to consult ThyssenKrupp before engaging sub-contractors. However, ThyssenKrupp was not aware that Ganor had engaged anyone else in the submarine transaction. 

ThyssenKrupp initiated an internal investigation to establish whether any rules were broken.



Agencies: Israel: Attorney General, Israel: National Police
Results: No Action, Plea Agreement
Year Resolved:
Compliance Monitor:
Ongoing: Yes
Details:

On 23 November 2016, the Israeli Justice Ministry announced that the attorney general had ordered the police to look into the submarine contract as well as an agreement for ThyssenKrupp to build four patrol ships for Israel. The financial crimes investigation unit has taken over the investigation.

David Shimron is under investigation under this probe. Israeli Prime Minister Benjamin Netanyahu may soon be investigated under this probe, as well.

Israel and Germany agreed to rescind the contract if Israeli uncovered corruption in the deal.

In July 2017, Michael Ganor entered into a plea agreement under which, in return for his testimony in the case, he will serve one year in prison and pay a fine of USD 2.8 million.

On September 3, 2017, Israeli police said that they arrested six people, including Prime Minister Benjamin Netanyahu's former chief of staff and a former navy commander, David Sharan, and Eliezer Marom, the retired head of the Israeli navy, on suspicion of accepting bribes, fraud, breach of trust and conspiracy in connection with the investigation into ThyssenKrupp. Police also questioned former Israeli officials in connection with the investigation on September 4. Prime Minister Netanyahu was questioned for the fifth time by police regarding this and another corruption case on 9 November 2017. On 23 November 2017, the Israel Police recommended that former National Security Council official Avriel Bar-Yosef be charged with bribery.

26 January 2018 - Israel Television News Company reported that Benjamin Netanyahu will be summoned to testify in this case and may be questioned under caution, indicating that he had become a suspect in the case. The investigation team also intends to request that Energy Minister Yuval Steinitz be summoned to testify at a later date. 

22 March 2018 - The Lahav 433 serious crime unit of the Israeli police questioned Energy Minister Yuval Steinitz concerning suspected corruption in the "Case 3000" scandal. Steinitz himself is not implicated in the scandal and is not a suspect, though some of his former aides and others close to him are.

Netanyahu is also still not a suspect in this case.

The Israel police established David Shimron as a suspect and believe bribes were paid by ThyssenKrupp representative Miki Ganor and former National Security Council deputy head Avriel Bar-Yosef to secure a purchase contract of three submarines and other ships.

12 June 2018 - Israeli police questioned Netanyahu as their witness in connection with the Thyssenkrupp "Case 3000" scandal. He is not under suspicion in this case and spoke about details that led to his professional decisions on the matter of the submarines purchase, explaining their importance for state security. 

 



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