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Since President Truman recognized the state of Israel in 1948, the United States has been Israel's most supportive ally. Since 1950, the United States has provided more than $46 billion dollars in grant military aid to Israel, a sum that outstrips military aid to Egypt, America' s next largest beneficiary, by at least $20 billion.  Israel has also received many billions more in grant 'economic' aid, loans for military purchases, and used American armaments. 

However, Israel has been accused of actions that may violate U.S. arms export control laws. Specifically, some Israeli military operations and reported retransfers of U.S. weapons or technology may have violated the Arms Export Control Act (AECA) and the Foreign Assistance Act. More broadly, Israel serves as an example of how vast amounts of arms sales and military aid eventually contribute to a loss of U.S. control over conventional arms proliferation.  

Arms to China | The 'Dotan' Scandal 
Respect for Civilians and Human Rights | U.S. Military Aid | Arms Exports

Arms to China

Israel. s independent policy on its own arms exports has been a source of tension with the United States for the past decade.  Israel has a long-standing history of defense cooperation with China, and is currently, and controversially, the PRC. s second largest arms supplier.  

An initial public accusation against Israel came in 1992, with a State Department Inspector General. s report on the potential re-transfer of U.S. military equipment and technology without U.S. permission. In 1992, the State Department Inspector General  found that 

reports of significant alleged violations of the AECA and ITAR [International Traffic in Arms Regulations] retransfer restriction by a major recipient of U.S. weapons and technology [Israel] had not been properly acted upon by PM [State Department Bureau of Politico-Military Affairs], which is responsible for initiating the reports of violation and ensuring compliance with U.S. laws and regulations governing arms exports. The violations include sales of sensitive U.S. items and technology to countries prohibited by U.S. law from receiving such items. The violations cited and supported by reliable intelligence information show a systematic and growing pattern of unauthorized transfers by the recipient dating back to about 1983. Despite receiving recurring evidence of violations over the past few years, and only after OIG [Office of the Inspector General] involvement, PM has recently taken action to curtail the unauthorized transfers (p.17). 

A focus of concern surrounded allegations that Israel incorporated U.S. technology into its own weapons and then exported those weapons without the approval of the U.S. government. Senator Byrd said in a 1 April 1992 floor speech that "the kinds of products we are talking about are such things as the Israeli versions of the United States-made AIM-9L Sidewinder air-to-air missile [Python 3] and TOW-2 anti-tank missile [MAPATS] (Congressional Record, 1 April 1992, p. S4602)." U.S. intelligence says that Israel's Python 3 air-to-air missile has a "high degree"of U.S. technology (Wall Street Journal, 9 April 1992). Israel said the U.S. government approved the export of MAPATS in 1986. In one case a license was denied and the U.S. components were replaced (Jane's Defence Weekly, 28 March 1992, p. 504). In the case of the Python 3, Israel claims that the version in Israeli service use U.S. components while those that are exported do not. The manufacturer, Rafael, declined State Department requests to identify "non-U.S. sources of supply" claiming it involves proprietary business information. As a result, all pending Python 3 retransfer applications were "returned without action" from the State Department. (Wall Street Journal , 9 April 1992)

At the same time the inspector general's report came out, the State Department said a separate investigation found "no evidence that Israel had transferred a Patriot missile or Patriot missile technology" to China, as had been rumored. (New York Times , 3 April 1992, p. A1) 

Matters recently came to a head during a stand-off over a sale of radar to China.  Israel Aircraft Industries (IAI) agreed in 1999 to sell China a Phalcon airborne early warning and intelligence system for $250 million.  The sophisticated radar would enable Chinese aircraft to view up to sixty aerial targets in all directions over a radius of up to 250 miles.  Israel had signed a contract and accepted a deposit from China.  Though Israel insists that the Phalcon does not contain U.S. technology, . U.S. officials say the system is closely related to the [American] AWACS, or airborne warning and control system. ('Israel-China Radar Deal Opposed', Washington Post , April 7, 2000).  

The Phalcon radar had significant potential to assist China vis-�-vis its bitter cross-strait rival, Taiwan.  Richard Aboulafia, an aircraft analyst with the Washington, DC Teal Group explained that  . . A couple of AWACS can make a greater difference in the scheme of things [between China and Taiwan]. than anything else.[& ] The purchase of these planes could tip the scales in Beijing' s favor in the cross-strait balance . if they deploy [the Phalcon] correctly and use it correctly. . (quoted in Defense Week , 4-10-2000).  The United States, of course, is committed to providing the defense of Taiwan. In spring 2000, the U.S. had denied Taiwan. s request for a AWACS.  

The sale had been in the works since 1996 and proceeded smoothly until fall 1999, when reports surfaced that the Pentagon objected to the sale of such sophisticated technology to China. Israeli officials at first refused consider the American request to cancel the sale.  It took more than half a year of intense pressure, including . unofficial sanctions. and threats to further withhold certain types of U.S. technology, before Israel was forced to abandon the sale (Jerusalem Post, Feb. 24, 2000, . US Plans to Punish Israel for China Sales,. by Janine Zacharia). The administration refused to go as far as some members of Congress, who suggested that Israel. s military aid should be cut if the Phalcon was delivered. 

From the Israeli perspective, the U.S. pressure was unwarranted interference in a legitimate sale.  A senior Israeli defense official hinted to the Israeli press that U.S. responses were "motivated by other than purely defense considerations, and [were] influenced by [...] desire to help U.S. defense industries competing with Israeli industries," and complained that "the U.S. demand is in violation of all the rules of the business world." ("Requiring Prior U.S. Approval for Israel Arms Sales to 27 Countries Will Wipe Out Defense Exports," Globes, June 15, 2000).  The reference to . rules of the business world. is telling; it is precisely because most arms sales, American and Israeli, are conducted primarily as business transactions that stopping a sale for strategic reasons is so difficult. 

While the Phalcon sale seems to have been prevented, it was not an isolated incident. According to the findings of the Cox Committee. s congressional report, Israel has "offered significant technology cooperation to the PRC, especially in aircraft and missile development," including helping China build its current F-10 fighter jet.  The Chinese F-10 is virtually identical to the discontinued Israeli Lavi fighter, an aircraft designed using $1.5 billion in American aid.  . The Lavi program, funded by the United States, was intended to provide Israel with its first domestically built fighter jet.  Based largely on the F-16, the Lavi design incorporated an advanced canard-delta wing.  The Chinese F-10 reportedly has the same configuration and can compete in the same class as the Eurofighter 2000. (Defense Week, 4-10-2000). Taiwan will likely ultimately demand the U.S. F-22, a next-generation fighter still under development, to counter the Chinese F-10.  

Less serious violations of the AECA have also been documented that demonstrate how closely U.S. technology and Israeli arms manufacturing are intertwined.  For instance, in April 1998, Israel informed the United States after the fact of a transfer of the fuselage of a crashed F-16 jet to a private Israeli firm, Elbit, for use in other weapons testing (letter from U.S. Department of State to Congress, January 7, 1999). Compliance with the AECA would have demanded that Israel get U.S. consent ahead of time.  

The 'Dotan' Scandal

Another past difficulty in military relations between Israel and the United States involves the "Dotan affair," in which Israeli citizens and military officers diverted as much as $70 million in U.S. Foreign Military Financing funds (Washington Post, 27 October 1993, p. A14). Pratt & Whitney, General Electric and National Airmotive Corporation directed subcontract work to companies that were fronts for Israeli Air Force General Rami Dotan and others.

While the Israelis have insisted that this was a rogue operation, Congressman John Dingell, Chairman of the House Energy and Commerce Subcommittee investigating the affairs, said at a July 1992 hearing that "it is not clear how General Dotan was laundering tens of millions of dollars of U.S. funds and making this scarce currency available for unauthorized purposes on various military bases without top [Israeli] Ministry of Defense officials questioning where the money was coming from."

It is not known what the diverted funds were used for since U.S. investigators have had limited access to relevant records or individuals outside the United States. Chairman Dingell said at an October 1993 hearing that this problem "emphasizes the need for cooperation from those receiving foreign military assistance (Arms Sales Monitor No. 23, p. 8).

Respect for Civilians and Human Rights

Israel is a democracy that protects the human rights of its citizens.  In its battle against guerilla forces, however, Israel has a pattern of disregarding the rights of civilians and accepted international humanitarian law.  Furthermore, Israeli security forces commit human rights abuses against Palestinians and others in the occupied territories.  

According to section 4 of the Arms Export Control Act, U.S. arms may only be used for the purposes of "legitimate self-defense." But what defines self-defense? Israel's 1981 bombing of the Osirak nuclear reactor in Iraq, the 1982 invasion of Lebanon, and the 1985 bombing of PLO headquarters in Tunisia elicited little response from the U.S. government. On 15 July 1982 the Reagan administration said that Israel's invasion of Lebanon "may" have violated the 1952 U.S.-Israeli Mutual Defense Assistance Agreement, but no action was taken. (Richard F. Grimmett, CRS Report for Congress [86-18F], 6 February 1986, p. 6.) 

Violent conflict in south Lebanon and part of northern Israel erupted again in 1996, among Lebanese guerillas and the Israeli military. Military activities between April 11-27, named . Operation Grapes of Wrath. by Israel, were particularly deadly.  Both sides bombed each others. territory, killing 154 civilians in Israel and injuring three Israeli women (. Operation Grapes of Wrath:  the Civilians Victims,. Human Rights Watch, September 1997, Vol. 9, No. 8(E). According to Human Rights Watch (HRW), a non-profit human rights advocacy group, Israel. s strategy of forcing civilians to evacuate their homes or risk bombing . constituted acts or threats of violence the primary purpose of which was to spread terror among the civilian population, and thus a grave violation of international humanitarian law..   U.S. built F-16 fighter jets with laser-guided bombs were used in the attacks.

During 1999-2000, HRW again reports Israel has repeatedly attacked Lebanon. s civilian electrical structures.  Such attacks, according to HRW, were also . clear violations. of international humanitarian law, did not significantly improve security for Israelis, and also violated a 1996 agreement with Syria against targeting civilians.  Moreover, HRW found that . U.S. military equipment plays an important role in Israeli attacks on civilian target,. and called upon the United States to cease selling air-to-ground missiles to Israel.  . No Additional U.S. Air-to-Ground Missiles to Israel. HRW Backgrounder, May 23, 2000.

The U.S. State Department criticized the Israeli attacks, but did not address the role of American missiles.  HRW. s documentation indicates that Israeli troops used U.S. attack helicopters to fire AGM-114 Hellfire missiles in May 2000.  The Section 655 annual arms sales reports for FY 1996-98 reveal that the U.S. has already delivered twenty Hellfire missiles to Israel, as well as authorizing DCS licenses for AGM-65 Maverick missiles, air-to-ground munitions for the F-15 or F-16.  The U.S. Defense Department announced a sale of forty-one AGM-142D Hellfire missiles in February 2000, and a sale of twelve SH-64D Apache attack helicopters equipped with state-of-the-art missiles is currently in the works.  Given past Israeli patterns, all of these arms sales risk contributing to future violations of humanitarian law.  Hopefully, the chances of such abuses will decrease as Israel pulls out of southern Lebanon.
In Israel. s occupied territories, both Israeli and Palestinian Authority security forces have committed human rights abuses.  According to the U.S. State Department. s annual human rights report, in 1999 . several Palestinians were killed in violent confrontations with Israeli security units, who at times used live ammunition against Palestinian demonstrators and shot at demonstrators or individuals indiscriminately. Israeli security forces abused Palestinians suspected of security offenses..   The United States willingly sells Israel a range of weapons that could be used in the commission of such human rights abuses, such as an export licenses granted by the State Department for $3.5 million worth of anti-personnel riot control chemicals authorized in FY1998, plus 28,539,400 rounds of ammunition, 12,768 military guns, and 32 grenade launchers delivered or authorized for export during FY 1996-98.  

U.S. Military Aid

Israel has traditionally received $1.8 billion dollars worth of Foreign Military Financing (FMF) every year.  In FY 2000, Congress also appropriated $949 million of . Economic Security Funds.. Israel is one of the wealthiest countries to receive economic aid, absorbing over one third of total global ESF funds. ESF aid to Israel is being gradually phased out, to be replaced by more FMF; in FY 2001 foreign military financing for Israel is expected to approach $1.98 billion. 

Israel is so secure in the inevitability of large quantities of U.S. military aid that it has arranged for cushy private financing for some arms sales secured by expected future earnings of U.S. aid (. Israel to Buy F-16s With Private Loans:  Pentagon to Facilitate Deferred Payment Option Between Lockheed Martin, Israel,. Barbara Opall-Rome, Defense News, August 2, 1999).  Israel also benefits from the Excess Defense Articles program; following the Gulf War, the Army gave Israel surplus Apache attack helicopters, Blackhawk transport helicopters, Multiple Launch Rocket Systems, and Patriot tactical anti-missiles.

The Wye River agreement that Israel signed with Jordan brought with it $1.2 billion more dollars worth of military aid. The cumulative effect of all U.S. aid programs significantly impact Israeli defense expenditures:  according to the State Department. s 1998 Annual Report on Military Expenditures, . new U.S. assistance to Israel for its long-term defense modernization program, as well as aid expected under the Wye Agreement, means that overall defense spending will not decrease but in fact will rise over the next 8-10 years..

Unique among FMF recipients, Israel is allowed to use up to 27% of U.S. funds on its own indigenous arms production, and is currently pushing to keep even more aid within Israeli industry.  The United States agreed to waive the usual requirements about Israel spends U.S. aid money for the Wye River aid package, letting Israel spend the aid on indigenous arms, a precedent likely to continue in future peace deals (. U.S. Agrees to Allow Israel to Spend More Aid at Home,. Defense News, Barbara Opall-Rome, no date).  

American dollars and technology also pours into the Israeli arms industry via offsets, incentives that American weapons manufacturers offer to convince Israel to sign deals, including co-production of weapons, transfers of technology, and non-military related investment.  Israel enjoyed record high levels of offsets in 1999, and of defense-related offset purchases 90% came from the United States.  Lockheed Martin, for instance, promised to spend $900 million in Israel to secure a $2.5 billion F-16 sale; other offsets included a $750 million counter-trade investment from Boeing for the sale of F-15I fighters and Black Hawk helicopters.  In fact, Israeli law says that all companies selling to Israel must commit to investing 35 % of contract value into the local economy.  Israel even demands offsets on FMF-financed arms sales, a practice for which America pays twice, by taxpayers and the economy at large (a practice which the U.S. Commerce Dept. recommends prohibiting).

Arms will be the price of any future peace deals: when an agreement with Syria was under discussion, Israel floated a $17 billion wish list.  Sami Haijjar, director of Middle East studies at the U.S. Army War College, warned that if these software codes, cruise missiles, advanced surveillance systems, and smart bombs were provided to Israel in exchange for a deal with Syria, . You trigger an arms race unwittingly.  You cannot expect to arm to the teeth one nation in the region and expect all others to accept it willingly.. (in . Israel. s Request for $17 Billion in U.S. Weapons Stirs Concern,. Christopher Marquis for Knight Ridder, Fort Worth Star-Telegram, February 8, 2000).  

Arms Exports

The Israeli defense-industrial complex that the United States helps to underwrite is becoming one of the world. s most competitive arms exporters.  Israel will export an estimated $2 billion in weaponry in 2000; the 48 entities who receive Israeli arms or defense cooperation include Cambodia, Colombia, Eritrea, Ethiopia, the South Lebanon Army (an Israeli-backed militia), and Russia (. Tel Aviv Flexes Military, Commercial Muscles,. Barbara Opall-Rome, Defense News, January 17, 2000).  According to a Tel Aviv University study, India, China, Burma, and Zambia are as Israeli customers despite the fact that the U.S. either embargoes or severely restricts its own arms sales to those countries. The UN reportedly had to ask Israel to stop supplying warring countries Ethiopia and Eritrea with arms, including an air surveillance system to Ethiopian Air Force and two boats to the Eritrean Navy (. UN to Israel:  Stop Supplying Arms to Ethiopia,. Yosi Melman, Tel Aviv Ha. aretz, May 19, 2000).  

Given many years of military aid and defense industrial cooperation, the United States bears some responsibility for the effects of all Israeli arms sales, not just for retransfers of weapons which contain U.S. equipment.  As a Pentagon official said to the New York Times, . given the amount of weaponry that the United States shared with Israel, it was difficult to separate American military technology from Israel. s own. (. U.S. Seeks to Curb Israeli Arms Sales to China,. November 11, 1999). 


Background Information

Last Updated: March 2002

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