U.S. is Funding Israel's Multibillion-Dollar Arrow Boondoggle

By Shawn L. Twing

Official announcements by both Israeli and American officials that the July 30 test launch of Israel's Arrow-2 anti-tactical ballistic missile (ATBM) had been a success highlighted how little accurate information about the program and its cost to U.S. taxpayers is available to the general public. Most U.S. newspapers carried small announcements of the launch, invariably adding that the Arrow is a joint U.S.-Israeli program "funded 72 percent by the United States and 28 percent by Israel." The U.S. press reports also gave total cost estimates for the project ranging from $270 million to $500 million.

The truth about the Arrow program is considerably different in every respect. For the research and development phase alone of the Arrow missile and its associated requirements (battle command systems, radar, test bed facilities), the U.S. government has allocated upwards of three-quarters of a billion dollars. But that's only the beginning. Increasingly the United States also has been drawn into funding the full-scale deployment of the system. U.S. and Israeli officials suggest that that second phase could cost U.S. taxpayers an additional $2 billion to $7 billion over the next several years. Even more astonishing, and equally unknown to the general public, is the fact that the Pentagon has stated explicitly that it will not buy the Arrow system because the Arrow is unsuitable for U.S. Defense Department needs. Therefore, if the program is successful, the U.S. subsidy for Israel's Arrow missile will lead to direct competition on the international arms market between an Israeli system paid for by the U.S. government and American theater missile defense (TMD) systems.

What is the Arrow and What Does It Do?

Equally misleading are U.S. and Israeli reports about the performance of the Arrow (Chetz in Hebrew). It often is compared to Raytheon's Patriot missile of Gulf war fame, and they have similar missions. The Arrow and improved versions of the Patriot are designed to intercept and destroy incoming tactical ballistic missiles like the Al-Husayn Scud-class missiles launched by Iraq against coalition forces in Saudi Arabia and against Israeli cities during the Gulf war. The Arrow-2 is a relatively large 23-foot-long missile that uses ground-based radar to locate, track and intercept missiles at nine times the speed of sound (Mach-9), detonating a focused fragmentation explosive warhead to destroy the target missile when it is within range. Unlike the Patriot, which is a point defense system, meaning that it has a limited range and also is limited in the height it can reach to intercept incoming missiles, the Arrow is an area defense system, engaging enemy missiles at much longer ranges (50 kilometers) and higher in the earth's atmosphere (40 kilometers), creating a larger "footprint" than systems like the Patriot. Israeli officials have stated that they plan to use the Arrow as a medium-range area defense system and improved versions of the Patriot for point defense around major military installations and population centers.

Advocates for the Arrow argue that Israel is in growing danger of ballistic missile attack and many argue that the Patriot did not perform adequately during the Gulf war. In fact, however, the Patriot missile system used in the Gulf war was not originally intended to intercept tactical ballistic missiles. Patriots first were built in the 1960s to shoot down incoming enemy aircraft travelling much more slowly than today's ballistic missiles.

During the initial phases of Operation Desert Shield, revisions were made in the Patriot's software and hardware to deal with a missile threat. Since then three newer versions of the Patriot have vastly improved its capacity to protect targets like airbases and cities. These are the Patriot Advanced Capability (PAC)-2, the PAC-2 Guidance Enhanced Missile (GEM) and the PAC-3, which uses the Extended Range Intercept (ERINT) missile to destroy enemy ballistic missiles. Citing inadequacies of the Patriot used in the Gulf war five years ago to justify spending money on the Arrow ATBM now and in the future is a classic example of comparing apples and oranges.

Now there also are other U.S. theater missile defense systems even more advanced than the Patriot upgrades. All offer much greater protection than the fully operational Arrow-2. The most notable of these is the Theater High Altitude Area Defense (THAAD) system being developed by the U.S. Army. THAAD's speed, range and the altitude at which it engages tactical missiles make it far superior to the Arrow design, as does its kinetic "hit to kill" warhead that destroys missiles with metal-to-metal contact.

In arguing to continue their Arrow program, the Israelis claim that the superior THAAD will not be operationally deployed until 2002. In fact, the Pentagon plans to deploy 40 of the planned 1,400 THAAD missiles in late 1996. What is even more puzzling is that even though some Israeli officials have suggested that Israel forget about the Arrow and pursue THAAD, there has been little U.S. government pressure on Israel to do so. Asked to explain this, some U.S. officials go off the record to say they would rather see Israel spending U.S. money on the relatively low-technology Arrow program than let THAAD's high-technology components get into Israeli hands and then have Israel illegally retransfer the technology to other countries, as it has been accused of doing with Patriot technology (see "Israel's Retransfer of U.S. Technology Exposed," on page 8 of the September 1995 Washington Report).

How Much Does the Arrow Cost and Who Pays for It?

The Arrow project began in 1988 when the Israeli government signed a memorandum of agreement with the United States Strategic Defense Initiative Organization, which was renamed the Ballistic Missile Defense Organization in 1993. According to a 1993 General Accounting Office (GAO) report, the United States has paid $553.4 million of the Arrow/ACES projects' $579.5 million cost as of the end of fiscal year 1995. This is concealed from the casual observer because the U.S. "share" comes directly from the Pentagon's budget, and $97.9 million of Israel's $124 million "share" comes from Israel's annual $1.8 billion military aid grant from the United States. Thus Israel has put in only $26.1 million of its own money, or five percent of the cost to date. (See accompanying chart for details.) Further, Pentagon planners project that the Arrow and related Israeli programs will consume an additional $711.3 million in United States tax dollars through FY2001, with the likelihood that the U.S. will have to appropriate still more money for the project after that year.

Will the Arrow Work?

Perhaps the most frequently asked question about ballistic missile defense systems in general and the Arrow in particular is, will they work? The technical challenge of intercepting an incoming ballistic missile with another has been compared to shooting a bullet with a bullet, which makes it clear how difficult the task is. So far, the Arrow has not performed very well, especially when compared to its American counterparts. Even if the Arrow ultimately proves successful, many critics both in the United States and Israel argue that neither it nor any other ballistic missile defense system will work. Decoys and counter-measures used to confuse missile defenses, the existence of nuclear, chemical and biological warheads capable of inflicting unsustainable damage even if destroyed high in the atmosphere, the use of multiple independent re-entry vehicles (MIRVs) that turn one warhead into many, and the ability of even Third World countries to overwhelm missile defense systems with a barrage of relatively cheap Scud-class missiles (possibly saving more accurate and/or unconventionally-armed missiles until after missile defense systems are exhausted), have led critics of ballistic missile defense to the conclusion that it is not worth the large investment that it requires.

There also are many critics in Israel's defense establishment who argue that the defensive nature of the Arrow system is contrary to Israel's offensive military doctrine that encourages pre-emptive strikes to compensate for Israel's lack of strategic depth. They cite the classic dictum that "the best defense is a good offense" and argue that the money spent on the Arrow could be better utilized on offensive weapons systems, especially those enabling the Israeli air force to ferret out and destroy enemy launch systems before their missiles are activated, or immediately after they are launched during the missiles' powered, or boost, phase.

Currently, the Israeli air force plans to use modified Python air-to-air missiles to accomplish this task, and the U.S. government has also spent a significant amount of money on a joint U.S.-Israeli boost phase intercept program. Such a program, if successful, destroys missiles over the enemy's territory and before MIRV-ed warheads separate from the delivery missile. The Israeli share of funding for the Boost Phase Intercept program apparently is classified, because no one in the Pentagon, Congress or the Israeli embassy will discuss how BPI funding is distributed between the two countries. The obvious reason for such classification is not to keep the information from potential enemies, but rather from U.S. taxpayers.

Competition for American Companies

American critics of the Arrow argue that U.S. tax money given to Israel is subsidizing an Israeli firm that eventually will compete with American companies in the international theater missile defense market, which industry analysts suggest will be a lucrative business in the coming decade. Not only has the United States provided the overwhelming share of money for the research and development of the Arrow/ ACES programs, but U.S. technicians and engineers have been involved in many aspects of the project, especially during the early phases of Arrow-1 development when the missile was unable to perform a successful flight test. Significant amounts of U.S. technology also have been given to Israel for use on the Arrow, in violation of the spirit and probably the letter of the 1987 Missile Technology Control Regime to which the United States is a signatory. This combination of U.S. funding, technical knowledge and input of advanced missile equipment has been the driving force behind the Arrow/ACES projects that will, if successful, create competition for United States defense firms trying to sell their theater missile defense systems on the international market.

Conclusion

A recent Congressional Research Service report about U.S. funding for Strategic Defense Initiative (SDI) projects, commissioned by Senator David Pryor (D-AZ), has raised a fury on Capitol Hill. The essence of the report is that the United States has spent $70 billion on SDI and SDI-related programs since the Reagan years, using "smoke and mirror" tactics to hide the funding throughout the Pentagon's budget, all the while claiming that only $36 billion has been spent. No one has mentioned that one part of the SDI facade is the Arrow anti-tactical ballistic missile program. Using the same methods of hiding Arrow funding in different budgets for the U.S. Air Force, for U.S. ballistic missile defense and for foreign military aid to Israel, friends of Israel in Congress and the Pentagon have spent over $650 million of U.S. taxpayer money on a program the U.S. will never use. To make matters worse, at the same time members of Congress are arguing for economic austerity, they have supported Pentagon promises of $711 million more for Israel's use on the Arrow ATBM program, with the possibility of providing still more if that runs out.

Shawn L. Twing is the news editor of the Washington Report.