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November/December 1993, Page 6 Special Report Did U.S. Pressure to Curb Israeli Arms Sales Prompt Peace Accord?By Tim KennedyThe 14 rounds of secret negotiations in Oslo between Israel's Labor government and the Palestine Liberation Organization that led to the agreement signed Sept. 13 at the White House caught participants in the 22-month-long Middle East peace talks by surprise. Mideast specialists in the American defense and intelligence communities, however, have long been predicting that shifts in U.S. policies regarding Israel eventually would force Israel to alter the way it conducts its affairs. ''It's a matter of cause and effect," says a Mideast expert at the State Department. ''We finally realized that the threat of withholding funding was the only tangible influence that we could apply. It's quite possible that Israel's sudden willingness to budge a little in the peace negotiations is an indirect product of that influence." Some U.S. government sources credit shifts in Israel's attitude toward Palestinian self-determination to policies implemented by the administration of President Bill Clinton regarding arms proliferation, foreign aid and financial oversight at the U.S. Defense Department's Defense Military Assistance Agency. A first indication of significant changes in U.S.-Israel relations was the public statement last March by newly appointed ambassador to Israel William Harrop that ''it may prove difficult" for the United States to continue giving such large amounts of foreign aid to Israel, which amounted to $4 billion in military and economic aid and $2 billion in U.S. Loan guarantees in 1993. The Clinton administration subsequently dismissed Harrop for what it called a statement contrary to U.S. policy. But there were other indications of a hardening attitude toward Israeli misconduct in various parts of the U.S. government. Israel officially denies that it possesses nuclear arms, but defectors such as Mordechai Vanunu, investigative reporters like Seymour Hersh, author of The Samson Option, and former U.S. President Richard Nixon all have described Israel's atomic weapons programs. Last May, Inside Israel, an investigative journal published in Jerusalem, reported that Louis Dunn, the former head of the Non-Proliferation Bureau within the State Department's Arms Control and Disarmament Agency, was dispatched to Israel four days after Clinton took the oath of office to warn Prime Minister Yitzhak Rabin to shut down the Israeli nuclear reactor at Dimona. During conversations with Israel's nuclear arms officials, Dr. Dunn, now a vice president of Science Applications International Corp. in San Diego, reportedly said: ''Close down the Dimona reactor... We're trying to control [nuclear proliferation in] the whole world, and everyone's asking us, 'What about Israel?"' At the same time the Clinton administration made it clear that it was serious about controlling the proliferation of weapons of mass destruction throughout the Third World. It escalated enforcement of sanctions imposed on Iraq following the Gulf war cease-fire in April 1991. The fact that, since June, U. N. inspectors have obtained access to Iraqi defense facilities suspected of developing nuclear, biological or chemical weapons was the direct result of pressure on the part of the White House, and President Clinton appears willing to continue applying this pressure on Iraq or any other "rogue regime" which hopes to produce or acquire weapons of mass destruction. "Rogue regimes" was the very phrase employed by Robert J. Einhorn, the State Department's deputy assistant secretary for non-proliferation, when he described the Clinton administration's arms control policies. Speaking at a Washington foreign policy think tank, Einhorn said the White House plans to "convince major arms suppliers that the continued sale of destabilizing military hardware and dual-use technologies to the Middle East undermines international peace and security.'' America's new "get tough" arms sales policy has affected some of the traditional suppliers of sophisticated arms to the Third World—North Korea, China and the former Soviet Union. In recent months, U.S. arms control agencies also have begun to break an apparent conspiracy of silence regarding Israel's complicity in a majority of the efforts by Third World countries both to create and to export weapons of mass destruction. The new openness regarding Israeli export of arms or U. S. arms technology has produced some startling revelations: In March of this year, South Africa acknowledged that, in the late 1970s, it created six nuclear bombs with the technical assistance of Israel. South Africa also revealed that it is working with Israel to develop an intermediate-range ballistic missile called the "Jericho II." It will be able to deliver a nuclear, biological or chemical warhead 900 miles away. Several months prior to South Africa's nuclear arms disclosure, the London Financial Times quoted a classified report by the U.S. Central Intelligence Agency (CIA) alleging that, since 1985, South Africa has been receiving technical assistance for its medium-range and nuclear-capable ballistic missile program from another Mideast country: Iraq. Last August, the United States imposed trade sanctions against China, claiming it illegally exported M-ll medium range ballistic missiles to Pakistan. The M-11 would be capable of carrying a 1,100-pound nuclear warhead from Pakistan to most major population centers in India. News stories and intelligence sources say China also has provided technical expertise and sophisticated equipment to assist nuclear arms programs in Pakistan, South Africa, Algeria, Iran and Iraq; and has sold medium-and long-range ballistic missiles to Saudi Arabia, Iraq, Iran, Pakistan, Syria and Kuwait. Early in 1992, Robert Gates, then director of the CIA, charged that China had illegally obtained ballistic missile secrets from the American-made ''Patriot" ground-to-air missile system, which figured prominently in defending both Israel and Saudi Arabia during the Gulf war. While Patriot missiles deployed to Saudi Arabia had U.S. crews, however, some of the Patriots in Israel were manned by Israeli crews. Gates said Israel was suspected of supplying China with these secrets, thereby making public suspicions that had circulated within the Pentagon since allegations of technology theft against Israel were formally raised immediately after the end of the Gulf war. Revelations about Israel’s seemingly ubiquitous role in China's missile development and export program have resulted in The Economist reporting that the "black joke" among arms proliferation experts is that "Israeli technicians had secretly helped China improve the . . . accuracy" of missiles shipped to most of Israel's Arab neighbors. Disgust among informed U.S. officials at Israel's covert involvement in many Mideast arms sales has prompted the Clinton White House to take a hard look at all military and foreign aid for Israel. A tangible result of Clinton administration reassessment of aid programs to Israel could be the termination of Israel's ''Arrow" anti-missile program, a $10 billion weapons program that has been largely funded by the U.S. "Arrow" has no friends in the White House and no longer seems to have many friends in Congress. Although the Oslo agreement has raised cautious hopes in Congress, as throughout the world, for Middle East peace, these hopes could be dashed unless serious efforts are made to reduce the proliferation of sophisticated arms in the region. At present, Middle Eastern governments are spending an average of 13.9 percent of gross national product (GNP) on arms, compared to an average expenditure of 4.7 percent of GNP by governments in the rest of the world. If the Mideast's total 1991 military expenditures were divided equally among the people living in the region, it would amount to $300 for every man, woman and child in the Middle East. That is 10 times the average per capita arms expenditure of all Latin American countries. Convinced that enormous arsenals were counterproductive to the Middle East peace talks, President George Bush, in May 1991, proposed a Middle East arms control initiative whereby the major arms suppliers in the region, Britain, China, France, the former Soviet Union and the United States, would mutually impose limits on their weapons sales to the region. The Bush Middle East arms control initiative has yet to be ratified by the five principal suppliers, however, and it likely will remain unratified unless the U.S. takes the lead. At present, American arms suppliers are the biggest winners in the Middle East arms race, having sold an estimated $35 billion worth of military goods and services in the region since the end of the Gulf war. Money, however, may be the means to bring a halt to the seemingly boundless proliferation of arms in the Middle East. Robert McNamara, the former U.S. secretary of defense who later served as president of the World Bank, persuasively recommended last April that international donors should make development assistance conditional upon such performance criteria as the percentage of GNP countries spend on the military. The U.S. is identifying the Middle East countries most heavily involved in the procurement or development of sophisticated weaponry, and is evidently considering linking development assistance to how much a recipient nation spends on defense. One of the first Middle East countries to be affected would be Israel. As one of the top arms purchasers in the region, Israel spent the equivalent of 12 percent of its GNP on military expenditures in fiscal year 1991, but it had spent as much as 20 percent in previous years. Israel also has been irrefutably linked as a partner in ballistic missile and nuclear arms production programs in China and South Africa. However, it apparently was the U.S. intention to link the level of U.S. aid to reform of Israel's economy that prompted Harrop's remark that it is not "economically prudent for one country to rely on another for seven to eight percent of its national budget." "The government of [Israel] is changing national economic priorities," Harrop said. "It is committed to further deregulation and promotion of the private sector. But the pace of reform has been slow—in fact, rather disappointing.'' It may not have been Harrop's words, but the fact that they were spoken in a public forum in Israel that prompted Peter Tarnoff, a Clinton appointee in the State Department, to ask for Harrop's immediate resignation. Other U.S. activities that will influence how Israel deals with the rest of the world can be seen in the trade sanctions the U.S. maintains against two of Israel's defense partners: South Africa and China. Sources at the Defense and State Departments assert that South Africa's decision to reveal the details of its Israeli-supported ballistic missile and nuclear arms programs last May was largely an attempt to curry stronger trade relations with the United States now that apartheid has been abolished officially and international economic sanctions are starting to come down. These same sources in the U.S. government say that the State Department's decision to impose Category II sanctions on China because of Bejing's refusal to heed U.S. concerns about missile technology transfers to Pakistan was "a sort of a warning to all their friends back in Israel." The Israeli Hand"Every time we discover a new program in the Third World arms proliferation game, we always find that the Israelis have got some hand in it,'' says a senior analyst with the U.S. State Department's Arms Control and Disarmament Agency, who spoke to the Washington Report on condition of anonymity. "Israeli scientists helping with a Third World arms program [are] about as inevitable as ants at a picnic." The State Department analyst says Israeli technical expertise exported to the Third World has a strange way of contributing to a military threat that has caused Israel's military budgets to comprise such a huge share of the country's GNP. "Israeli military technology transfers have a perverse way of winding up in the hands of the people they consider their biggest enemies," the analyst says. "Take just a couple of examples: For South Africa the [Israelis] helped build a [nuclear] bomb and the Jericho II [ballistic missile], while South Africa was trading all the military secrets it can lay its hands on with Iraq. "Meanwhile,'' the State Department analyst adds, "Iraq was working with Egypt to co-produce the Condor II missile in Argentina, while also presumably trading nuclear secrets it has gleaned from the South Africans to aid its own nuclear program and the one it's working on with Argentina. Plus, the Iraqis are trading conventional arms secrets, like cluster bomb technology Israel stole from the U.S., with their buddies in Argentina and Chile. "In China, meanwhile, Israeli scientists are helping out with the Silkworm, M-1 I and other Chinese ballistic missiles which—see if you can figure this out—will wind up on launchers in Iraq, Iran, and just about any Arabic-speaking country you can name. Plus the Israelis working for the Chinese are wittingly or unwittingly having their expertise transferred to North Korean missile factories." ''Well," he concluded, "I think you get the idea." Some members of Congress, traditionally a bastion of Israeli strength, apparently have. Sen. Robert C. Byrd (D-WV), chairman of the powerful Senate Appropriations Committee, does not plan to stand for reelection. Since making that decision, he has been outspokenly critical of Israel's ever-increasing share of the total U.S. foreign aid budget. Senator Byrd has asked the U. S. General Accounting Office (GAO) to conduct a classified study of the problem-plagued "Arrow" anti-missile weapon jointly produced by Israel and the United States. He commissioned GAO to examine the cost, schedule and technical risks of the "Arrow" program, the extent to which the United States is monitoring the use of "Arrow" technologies and funds, "Israel's record on making unauthorized sales of U.S.-origin defense articles and technologies," and "whether Israel engaged in missile proliferation activities. " Byrd also asked GAO to determine to what extent these factors were considered in the decision to award funding to a project which some procurement experts estimate will cost the United States as much as $10 billion over its entire lifetime. According to agreements signed in 1988 by the U.S. Department of Defense, Israel, and the joint co-production teams of Lockheed Missiles & Space and Israel Aircraft Industries, the "Arrow" system will be an anti-tactical ballistic missile system that includes launchers, radars and associated support equipment. The "Arrow" missile will measure 10.98 meters in length, travel at speeds 10 times the speed of sound, and is supposed to intercept targets 70 kilometers from its launch point with a kill probability of 90 percent. Since the program started five years ago, however, the first three of five "Arrow" test launches ended in failure and the next two had limited success. To date, the "Arrow" project has cost $487.6 million—all but $26.1 million paid for by the U.S. government. The GAO study determined that the Department of Defense (DOD) "has no operational requirement for the Arrow missile and has no plans to buy it." The unclassified report states that the United States is directly funding 75 percent of "Arrow." In addition, DOD research and development funds indirectly are paying an additional 20 percent. The study expresses concern that the United States may be drawn into funding most of the system without sound information on the "Arrow's" cost, development schedule or performance. The GAO study says "the U.S. government has exercised inadequate control over the technology and funds it has supplied to the Arrow missile program," and expresses grave concern about a DOD proposal to suspend funding of the "Arrow" and provide Israel with one of the newer generation of American-made anti-ballistic missile systems being fielded. "There are concerns about potentially providing a leading-edge U.S. system to the Israeli industrial base," GAO warns with typical understatement. Put more bluntly, the GAO questions whether Israel can be trusted with U.S. technology because of lingering suspicions of previous unauthorized arms technology transfers by Israel. The GAO study observes that, with U.S.-funded projects in Israel, DOD officials seldom make an effort to determine the "background" technology of a project (the pre-existing technology Israel has on hand at the start of a project). Nor do Defense officials make much effort to keep track of the new "licensed" technologies that the U.S. contributes to an Israeli project. This lax control of U. S. defense technology, says GAO, has permitted Israel to claim U.S. military technology as its own, incorporate it into Israeli-built weapons, and sell them (and the U.S. technology) for a profit to other countries. The GAO concludes that DOD's "overall management approach to date [regarding Israeli projects] is 'hands off' or 'management by exception."' The report recommends that Israel permit representatives from the Defense Contract Management Agency, the Arms Control and Disarmament Agency, and various congressional and DOD auditing agencies to have access to ''Arrow" production facilities for the thorough monitoring of U.S. defense hardware, technologies and funds. The study also criticizes the Strategic Defense Command, the DOD funding agency for "Arrow," for neglecting to account properly for all of the highly classified focal plane arrays shipped to the Israelis. A focal plane array is a small energy detector that enables the most sophisticated U.S. weapons to seek targets accurately. GAO states that more comprehensive audits in the future of all U.S.-supported Israeli projects "could encourage accountability and provide assurance that funds are not used to support other Israeli projects." The GAO study does not bode well for continued congressional support of the "Arrow'' program. There is speculation on Capitol Hill that Senator Byrd plans to terminate funding for "Arrow," and that he sought the documentation from the GAO to back up his decision. If Senator Byrd wants tangible evidence of Israel's mismanagement of its U.S. funded projects, he likely will be interested also in the findings of a Defense Department inquiry that grew out of a recent scandal involving Rami Dotan, an Israeli air force general who has been jailed for defrauding the U.S. of $40 million on aircraft engine contracts. A random audit of several other DOD contracts with Israel revealed that Israeli defense contractors routinely "demanded questionable commissions," were "paid reimbursements to which they were not entitled," and were "paid for items which they falsely represented as being of U.S. origin." Regardless of congressional response to these politically unpopular findings, it will be interesting to watch the Clinton administration's reactions to the allegations. The reactions will be a good indication of how much pressure it will put on an ally gone awry, but whose American supporters were a key element in the coalition that put Clinton into the White House. Tim Kennedy, an analyst based in Washington, DC, writes about defense technology and foreign affairs.
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