Ganor, Shimron and the Caucasus submarine deal

David Shimron photo: Eyal Izhar

German businessman Michael Herzog: Miki Ganor seemed to regard David Shimron as his business partner.

The state's witness in the submarines affair, Michael (Miki) Ganor, and the main suspect in the affair, Adv. David Shimron, were involved in another deal, for the sale of submarines to a country friendly to Israel in the Caucasus. This is according to the German businessman behind the deal, Dr. Michael Herzog, who told "Globes" that although the deal fell through, he formed the impression that Ganor saw Shimron as a business partner.

The question of the connection between the two men is at the center of the police investigation into the affair, in which Ganor has admitted passing money to Israeli officials, among other things in order to further the interests of ThyssenKrupp, which he represented. According to reports of the investigation, whereas Ganor claims that he and Shimron were partners and were to have shared the money that flowed from the submarines deal, Shimron claims that he acted purely as Ganor's lawyer.

What Herzog relates offers a glimpse into the business relationship between Ganor and Shimron, even before the affair broke. Herzog is currently on trial in Germany on charges of fraud in the millions of euros, and he is also involved in the affair of the Tzemach committee on the gas industry in Israel, in which the police have recommended an indictment against former deputy National Security Council head Avriel Bar-Yosef on charges of accepting a bribe from the German businessman to promote his business interests on the committee.

"I was the one who approached Ganor at the end of 2014 with a proposal for a business initiative concerning the submarines," Herzog told "Globes" at a meeting held at his house the other week. "It was after I received information that the country in question wanted to invest in its fleet, and to buy surface vessels and submarines." The business venture involved the sale of relatively small submarines, built by German company ThyssenKrupp, to be transferred to it via shipyards in Israel and in the country itself . According to documents which he showed to "Globes", companies from the US and the Persian Gulf were also involved in the deal.

"I knew Ganor from the Tzemach committee, and I knew that he was ThyssenKrupp's representative in Israel," Herzog said. Herzog has described to "Globes" in the past how he met Ganor in his office before the sessions of the Tzemach committee on exports of gas from the gas fields in Israel's exclusive economic zone. "Ganor expressed interest in the deal I proposed. We did not meet personally in that context. I sent him a few e-mail messages on the matter, and he sent messages to me, but mainly we spoke by telephone.

"Ganor told me he had a lawyer, and that he was the same lawyer as advised Prime Minister Benjamin Netanyahu. After I looked into Shimron's name, I discovered that he was also related to Netanyahu (Shimron is Netanyahu's second cousin, A. U.), but Ganor didn’t mention this in our meeting."

Did he say explicitly that Shimron was his partner?

"That was the impression I received from Ganor. You can be a private lawyer, or a lawyer who is a kind of permanent adviser, who always works with you and practically belongs to the company. I had the impression that Ganor thought that Shimron was a sort of partner of his, but because he worked for the prime minister, among other people, as a politician and as private individual, he did not work only with him. Not exclusively."

Herzog goes on to relate that he tried to promote the deal in the Caucasian country, and to that end he organized a visit there by representatives from Germany, Israel, the US, and the Gulf. He sent a message to a senior person in the government of that country, which said, "I just wanted to reconfirm that our delegations will be flying in on the 14th… the Israeli delegation will be led by Michael Ganor and David Shimron (cousin of Prime Minister Netanyahu)." The information in parentheses was stated in the original. The message continues, "The matter on the agenda: a military naval project and infrastructures in your country."

"The scans of the documents arrived too late"

At "Globes'" request, Herzog presented an email message sent to him from the Israeli side in advance of the meeting in the Caucasian country. The message, sent by Ganor from the email address of Hallmark Properties which he headed (in addition to his role at that time as representative of ThyssenKrupp), contains scans of the first two pages of Ganor's German passport and of David Shimron's Israeli passport. It was sent in early January 2015, and according to Herzog the background was the need to send Ganor and Shimron's details to government representatives for them to approve the visit.

Ganor sent Herzog further email messages. The day before he sent him the passports, Ganor wrote to Herzog with a complaint: "I think that it's very important that we first of all fulfill the first, basic requirement!" The header of the message is the first letter of the name of the country with which they apparently wanted to do business together, alongside the word "Country". Herzog says that he is not sure what Ganor meant, and that at the time he thought that it was a complaint that the business partnership of all the different parties to the deal had not yet been set up. A day later, Herzog wrote to him that he did not understand what the message was about, but that in any event the scans of the passports had arrived too late and that the meeting with the Israeli delegation could not take place. "That was the last time I was in touch with him," says Herzog. The deal, he says, did not go ahead because of other alternatives.

Advs. Amit Hadad, Osher Rubinger and Noa Milstein of Weinroth & Co., who represent Shimron, stated in response: "Adv. Shimron has never dealt in the sale of submarines - neither in the Caucasus nor in Israel nor anywhere else. All along, Adv. Shimron represented Miki Ganor as his lawyer, and no more than that. In the course of representing him, Adv. Shimron sent Miki Ganor a photocopy of his passport for the purposes of a business trip (that trip too had no connection to submarines). If there is any truth in your claim that Shimron's passport was sent to Herzog, it was done without Adv. Shimron's approval or knowledge.

"If there is any substance to your claim that Dr. Herzog made use of Shimron's name and presented him as the prime minister's cousin, such use was made without Adv. Shimron's knowledge, and he takes a severe view of the matter. Adv. Shimron has always acted lawfully and we have no doubt that at the end of the investigation everything will become clear."

Miki Ganor's lawyers, Eli Zohar and Ilan Sofer of the firm of Goldfarb Seligman did not send a response to the questions put to them.

"To take care that matters run smoothly"

Concerning the submarines affair, Herzog adds that in his view the importance of ThyssenKrupp's role in the corruption that took place has been underestimated. "It wasn't unusual that they should use a local representative to do the work. His role was to receive the money from the company, and then distribute it to whomever necessary and take care that things ran smoothly," he said. ThyssenKrupp has in the past denied all connection to suspicions of corruption, and said that an internal investigation it carried out into the matter found that no-one in the company had been involved in such a thing. "That's their method," says Herzog, "Otherwise, why do you need a representative who earns a commission on the deal?"

Published by Globes [online], Israel business news - www.globes-online.com - on February 12, 2018

© Copyright of Globes Publisher Itonut (1983) Ltd. 2018

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David Shimron photo: Eyal Izhar
David Shimron photo: Eyal Izhar
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