IN A police guesthouse somewhere in Israel, a retired naval captain is writing his explosive memoirs. Michael Ganor’s story will not dwell on his exploits on the high seas. It will talk of bribe-trousering generals and politicians. Mr Ganor was the representative in Israel of ThyssenKrupp, a German industrial firm, and the middle-man in some of the largest arms deals in recent years between Israel and Germany. On July 21st he signed a state’s witness arrangement with Israel’s justice ministry, agreeing to serve a reduced sentence of a year in prison and to pay a 10m-shekel ($2.8m) fine in return for disclosing all that he knows.

Corruption in public life is far from unknown in Israel. A former prime minister, Ehud Olmert, went to prison last year for accepting bribes. Yet this case is different. The Israel Defence Forces (the IDF) come first in surveys of Israel’s most respected institutions, and IDF commanders are household names. So details of how millions of shekels changed hands in the purchase of submarines and surface ships are galvanising the country. Along with Mr Ganor, a celebrated former commander of the navy and a former brigadier-general have also been arrested as prime suspects. More generals will be questioned in the coming weeks.

Mr Ganor is part of an industry in which former IDF officers represent Israeli and foreign companies, all competing to win contracts for which their old comrades have drafted the specifications. This revolving door often allows officers to work on the systems they use on their frequent reserve stints back in uniform. The blurred lines between Israel’s armed forces and arms industry are a strategic advantage, some claim. They allow Israel, facing multiple enemies on rapidly evolving battlefields, to develop and adapt unique tailor-made weapons, such as advanced missile-defence systems and “killer drones”, unusually quickly. But it also opens the door to corruption.

“When a general leaves the military and is hired by an arms company, they’re being hired for their connections as well. It leads in many cases to an ethical grey zone,” says Yaakov Katz, the author of “The Weapon Wizards”, a book about Israel’s arms industry.

The investigation is not only shaking the defence establishment. It is also piling pressure on the prime minister, Binyamin Netanyahu. Another of the main suspects is the prime minister’s personal lawyer of four decades (and second cousin) David Shimron, who was also Mr Ganor’s lawyer and allegedly involved in many of his business dealings. Another of the submarine suspects, former Brigadier-General Avriel Bar-Yosef, long served Mr Netanyahu on Israel’s National Security Council, and was appointed by him as its head, resigning before the scandal broke.

Mr Ganor would undoubtedly have received hefty commissions from Israel’s submarine and corvette deals with ThyssenKrupp. Mr Netanyahu did push for the purchase of more submarines than the defence chiefs had recommended, but the prime minister has denied any knowledge of his lawyer’s involvement in the arms deals and, according to the justice ministry, is not a suspect in the case.

Nonetheless, he has faced other investigations for a year now. Police have recommended indicting him for fraud and breach of trust for accepting expensive gifts from business folk he claims are “close friends”, but the decision to prosecute rests with the attorney-general. The prime minister strenuously denies wrongdoing; his allies say he would remain in office even if he were indicted. Then, though, the question would become not just “What did he know or gain?” but “How can he continue to govern?”