The weird thing about the German-Israeli submarine scam

Last week, The Bulletin of Atomic Scientists talked about how Germany’s supply of Dolphin submarines to Israel encourages nuclear proliferation.

While that may be, there a number of significant curiosities in this controversy. Firstly, Prime Minister Benjamin Netanyahu and a firm advising the submarine manufacturer in question, ThyssenKrupp Marine Systems (TKMS), appear to share the same lawyer.

There’s also a bunch of other stuff. Read all about it at Haaretz.

But here’s the weird part. Israel is acquiring the Dolphin submarines to defend itself against aggression – well, probably to prop up a nuclear deterrent against Iran. But 4.5 percent of the submarine manufacturer, TKMS, is owned by the Iran Foreign Investments Company, an Iranian government-owned company. The Iranian company first invested in the company in the 1970s, during the Shah’s regime and ended up owning 24.9 percent. ThyssenKrupp didn’t build submarines at the time. But ThyssenKrupp became TKMS in 2005 when it acquired Howaldtswerke-Deutsche Werft. That’s right – HDW. They’re famous in India for building submarines.

Around 2003, TKMS paid off the Iranian company to reduce their shareholding to below five percent. A report in Forbes, reads: ‘In May 2003, as a result of President George W. Bush’s pressure on Europe to restrict their business with Iran, ThyssenKrupp “made a bitter decision and repurchased 16.9 million shares from its Iranian partner, IFIC, for $437 million,” Reza Yeganehshakib, a professor of Middle Eastern studies at Fullerton College and a geopolitical and energy analyst told me on Saturday.’

Haaretz reported that “In 2006, the Iranian investment firm reported receiving 18.5 million euros in dividends from ThyssenKrupp. The Haaretz investigation has revealed that since 2006, the company has paid shareholders dividends amounting to 2 billion euros.”

According to a Deutsche Welle report, “The Israeli newspaper Haaretz estimates that Iran has made roughly $100 million dollars in profits from its investment in ThyssenKrupp over the last 10 years.”

So if Israel buys submarines that could deter/threaten Iran, the Iranian government could get a dividend.

There’s also a separately enticing reference in this Reuters report, saying, “For decades Israel relied on a former brigadier general, dubbed the “Submarine King”, to broker orders with Germany.”

Irritatingly, the report makes no further reference to the ‘Submarine King’, his activities or identity.