Israel and Germany agreed a number if weeks ago that if the Israeli investigation of the submarine purchase would reveal corruption in connection with the transaction, the negotiations would be terminated and the transaction would be cancelled, according to a report by the Haaretz newspaper.
According to the report, senior officials in Israel and Germany stated that the agreement is a condition for Germany's agreement to sign the contract on the transaction.
Last October, it was reported that Prime Minister Netanyahu had reached an interim agreement to purchase three new submarines from Germany. Immediately afterwards it was made public that attorney David Shimron, the personal lawyer of the Netanyahu family, was representing the German company from which the submarines were supposed to be purchased.
Channel 2 reported at the time that Shimron had undergone a polygraph test in which he was asked "Did you inform the prime minister of your connection to the shipping company? Did you ever speak with the Prime Minister about your involvement in purchasing submarines or other ships?" as well as other questions. Shimron answered all the questions in the negative and was found to be telling the truth.
Officials close to the prime minister stated that he had not known of the connection between Shimron and the company and had not spoken with Shimron on the matter.
Attorney General Avichai Mandelblit originally announced that he did not intend opening an investigation of the matter. However after he conducted meetings with the State Prosecutor and other Justice Ministry officials regarding the issue, he decided to open a police inquiry to investigate the various aspects of the affair. The investigation later turned into a criminal investigation, but it was emphasized by the Prosecutor that Netanyahu is not a suspect in the matter.
MK Erel Margalit (Zionist Union) responded to the reports of a new clause in the interim agreement and claimed that "the prime minister is trying to snatch an advantage while under investigation, at a price of 1.5 billion euros and Germany's demand of a fraud clause demonstrates the severity of our situation.
"I demand that the implementation of the agreement be delayed until the Foreign Affairs and Security committee has discussed the deal in the presence of the Prime Minister," said Margalit.