Dov S. Zakheim, Flight of the Lavi: Inside a U.S. Israeli Crisis - Peter Myers, ; my comments are shown {thus}. Date December 2, 2002; update January 14, 2004.

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(1) Dov S. Zakheim, Flight of the Lavi (2) Israel's role in China's new warplane

Dov S. Zakheim, Flight of the Lavi: Inside a U.S. Israeli Crisis, Brassey's, Washington 1996

{p. ix} Foreword {by Caspar Weinberg, Reagan's Defense Secretary}

Flight of the Lavi is a very important book because it takes us inside the highest governmental levels of two close allies, the United States and Israel, as they dealt with a serious disagreement. In Dov Zakheim's intriguing narrative of his personal involvement, the reader is introduced to the key players and to how high-level decisions are made and influenced.

Beginning in 1983, the Israeli embassy and American friends of Israel worked with key congressional staff members and politicians to introduce some unusual modifications to the U.S. military assistance program. The proposed legislation supported the sharing of specific advanced technologies and identified large amounts of U.S. funding to be allocated to the Israeli development of a new advanced fighter aircraft, the Lavi. I was told of many misgivings of my staff to this legislation. I agreed with Fred Ikle, our undersecretary for policy, that we needed an objective U.S. assessment of the proposed Israeli fighter aircraft program. Fred recommended Dr. Dov Zakheim (at that time our assistant undersecretary for policy/resources) to lead this assessment. I immediately agreed. Dov seemed ideal. He was a former congressional staffer with excellent analytical abilities and good contacts on the Hill and in the media. He had earned a reputation in the Defense Department for effective action and negotiating skills. An Orthodox Jew, he spoke Hebrew fluently. At the time I

{p. x} was unaware that Dov's father had grown up in a small European town with scveral of the political leaders of Israel. I also could not foresee the trauma this difficult assignment would bring to him and his family.

This book tells the rest of that story. Dov very quickly found and documented that Israel and its U.S. friends already had effectively mobilized our Congress and the Department of State for support. He then began a two-year odyssey of investigation, negotiation, and persuasion. In the process, he faced strong enemies and found sturdy allies at the top of the Israeli political, defense, and industrial sectors.

Dov found the Lavi to be a project requiring the investment of billions of U.S. taxpayers' dollars. Moreover, he learned the Israelis were planning to sell the Lavi - and its advanced American-designed weapon systems - to other countries in direct competition with the very U.S. aerospace companies that would provide their proprietary technology.

This book describes Dov's findings that the objectives of the fighter development went well beyond export revenue and included Israeli national pride, stimulus to the high-technology sector of Israel's economy, and making the country more self-sufficient in its defense. The driving force, however, for the new plane came from Moshe Arens, a former defense minister, who held a doctorate in aeronautical engineering from the Massachusetts Institute of Technology. He was strongly supported by Israeli labor unions and the industries involved in the Lavi development.

Zakheim describes an intriguing series of U.S. and Israeli studies, and the difficulties of obtaining information necessary to answer his inquiries. Nevertheless, Zakheim's expert team, after a full and careful analysis, concluded that the Lavi would be far over budget and would cost significantly more than if the Israelis continued their earlier policy of buying additional advanced U.S. fighters to add to those already in their inventory.

The fight then began in earnest. Zakheim reports his amazement that the Israeli development team felt sure it could persuade the United States to pay for all cost overruns on the proposed new plane. Zakheim is forced to argue against the Lavi on two fronts: at home in the United States and in Israel's political and defense systems. His story of personal meetings with members of the Israeli government, business, and media are fascinating. Particularly reveal-

{p. xi} ing are his private meetings in the homes and offices of three Prime Ministers, Yitzchak Rabin, Yitzchak Shamir, and Shimon Peres.

The political battle ebbed and flowed as Zakheim tried to bolster allies inside the Israeli govermnent and armed forces by reinforcing their concerns about how the growing costs of the Lavi would starve the army, the navy, and civilian social programs. I find particular poignancy in his book because Dov never told us how this "assignment" was deeply affecting him emotionally in both positive and negative ways. His narrative shares with us how his required trips to Israel permitted intense personal communion with the land of his religion and reinforced his personal spirit. But he also found that those Israelis who saw him as "a traitor to the family" would adopt the biblical adage of "an eye for an eye and a tooth for a tooth." He reports how he and his family ran into severe criticism bordering on harassment in the media of both countries, at synagogue, at meetings of Jewish organizations, and even from his children's classmates in elementary school.

The fate of the Lavi was finally decided in a suspenseful, contentious, extremely close vote of the Israeli cabinet. Readers of this book can enjoy the extraordinary insider's perspective it provides about how Israel and the United States influence each other's governments and decisions. They can also be grateful, as I am, that we had Dov Zakheim as an American official who did what was best for the United States - and for Israel.

Flight of the Lavi is a captivating story of courage, loyalty, passionate beliefs, and fateful decisions. I was there and I know it to be true. All those who want to understand better how political systems really work should read this book.

CASPAR WEINBERGER
Washington, D.C.

{the remainder of the book is by Dov S. Zakheim}

{p. xiii} Preface

On a mild Tel Aviv November night in 1995, at a huge rally in support of the Middle East peace process, a lone gunman, an Orthodox Jew, gunned down the prime minister of Israel, Yitzchak Rabin. I was in Tunisia at the time, having been in Israel just a few days ear- lier. A Tunisian friend, a Muslim, tried to console me: "I know you're alone here in Tunisia, and that you're hurting. I am hurting with you." I was overwhelmed by his remark, both because it was so reflective of the peace that was beginning to envelop the troubled Middle East and because it evoked my personal memories of Israel's fallen leader.

I had come to know Yitzchak Rabin quite well, primarily professionally, but to a not small extent personally as well. I had worked with him, at times seemingly at cross purposes, but in the end very much in concert, to defeat the Lavi, an Israeli aircraft development program that was being funded by hundreds of millions of American taxpayer dollars, when cheaper American-built alternatives were readily available.

The Lavi was more than just a very costly weapons project, however. To its supporters, it was a manifestation of Israel's growing technological prowess and its ability to develop advanced weapons systems independently, without reliance on any other state. Paradoxically, it was also in many ways the culmination of a pattern of

{p. xiv} increasing American support for Israel that had begun in the aftermath of the June 1967 Six-Day War and had accelerated after the signing of the Camp David Accords and Israel's peace with Egypt in 1979. The United States had become the major guarantor of Israel's security and had defined security as maintaining Israel's "qualitative edge" over its Arab adversaries. The Lavi, which drew upon American high technology and American research dollars, was seen as the latest expression of that edge.

As the cost of weapons and their technological complexity had grown, so too had the intricate web of security commitments and relationships that marked American policy toward Israel. Israel was not an American ally in the formal, legal sense of the term. The relationship with America also suffered from frequent irritants such as Israel's bombing of Iraq's Osirak reactor in 1981, its invasion of Lebanon and confrontation with American forces there in 1982, and frequent American arms sales to Arab states. Still, the personal ties between the leading elites of both countries were remarkable. The frequency with which leading politicians from both states visited each other's capitals was virtually unmatched in relationships between the United States and any of its other allies. So too was the general degree to which each country figured in the workings of the other's political system, extending even to the private lives of officials in both.

Perhaps more than any other project, the struggle over the Lavi illustrated the nature and unique intimacy of those ties. It also underscored the problems they could engender as a result of the fundamentally different notions of cost and benefit, security and national pride, that governed perceptions in Washington and New York, Tel Aviv and Jerusalem. Conceived in Israel but implemented in the United States by a coalition of Israeli and American politicians and staff-level operatives, the Lavi became entangled in Israeli partisan politics, in American pressure-group politics, and even in the frictions between the Reagan administration's departments of State and Defense.

I was thrown into this maelstrom of pressures and counter-pressures several years after the project had been started. What the Israelis have come to call parashat ha-lavi, the Lavi episode, was for me far more than just another aspect of my duties as a fourth-tier Pentagon official. I found myself in direct conflict with powerful leading Israeli politicians with whom I was personally linked, albeit indirectly. In fact, the Lavi's most vociferous Israeli proponent, Moshe Arens, himself a former defense minister and, during my involve-

{p. xv} ment with the project, a minister without portfolio, was the son of one of my father's former business clients. My father had known Moshe Arens since he was a boy. In Arens's eyes, my opposition to the Lavi was an unforgivable sin. He had once told Yitzchak Rabin, his successor at the defense ministry (and Rabin later told me), "Zakheim is a traitor to the family."

The language Arens used was ugly; Rabin was himself shot down by people who also freely used the same epithet. But it was clear that my involvement in the fight to stop the plane did have a certain "man-bites-dog" quality about it. The media, ever attuned to every nuance of American-Israeli relations, quickly seized on the fact that it was an American Jew who was taking on Israeli officialdom. And not just an American Jew. I am a practicing Orthodox Jew, born in Brooklyn, and I speak Hebrew fluently, albeit with a horrible American accent. I was educated in Jewish schools and attended a Zionist summer camp. My father has been active in Zionist affairs all his life: he numbered Menachem Begin among his friends and grew up in the same small Polish town as Yitzchak Shamir. It was almost as if I fit the stereotype of the West Bank settler. Small wonder, then, that I found my life turned upside down as I was assigned to investigate and then lead the opposition to the production of Israel's prized plane, which threatened to demand billions more U.S. taxpayer dollars before it was complete.

It may be that the Lavi episode was unique in the annals of American-Israeli relations and never to be repeated under any circumstances. I doubt it. The intimate connections between Israel and the United States are such that even lower-level officials can continue to determine the outcome of major decisions in each other's countries. To ensure that citizens of both countries understand how these complex and often difficult and painful relations are conducted, I have written this insider's view of a major crisis between Israel and the United States.

Israel is today building a major antiballistic missile system, the Arrow, funded primarily with hundreds of millions of American taxpayer dollars. The program has been bolstered by support from many of the same political elements, in some cases the very same people, who put the Lavi on the Israeli-American agenda. The Arrow has thus far avoided the controversy that surrounded the Lavi, partly because there is no real American alternative to it. If, as I hope, the U.S.-Israeli relationship cndures, there may be other jointly devel-

{p. xvi} oped, American-funded projects that will come to the fore. With luck, they will avoid the pitfalls that ultimately grounded the Lavi.

Luck will not be enough, however. What will also be required, in large doses, will be knowledgeable and courageous leadership in both the United States and in Israel. Leadership such as that which Defense Minister Yitzchak Rabin provided when he patiently and cautiously, yet with a shrewd understanding of both American and Israeli political gamesmanship, reversed Israel's nearly decade-long decision to build the Lavi. Leadership such as that which Rabin, the former chief of staff and war hero, afforded his country and the world when, as prime minister, he extended his hand in friendship to his former Arab adversaries, and then sacrificed his life on the battle-ground of peace.

Thus, I solemnly dedicate this volume to Yitzchak Rabin's blessed memory, to the unique relationship between his country and mine, and to my family, which stood behind me during a very trying time when that relationship was sorely tested.

{p. 3} Israel's New Fighter

I knew very little about the Lavi, other than that lavi meant "lion" in Hebrew, when I learned in early March 1985 that my boss, Under Secretary of Defense Fred Ikle, was planning a trip to Israel the following month. I hadn't been to Israel in nearly a decade, and at that time, as always in the past, solely as a tourist. I had minimal professional association with Israelis, the only exception having been my championing the Pentagon's purchase of Israeli remotely piloted vehicles in the aftermath of the Lebanon War.

My remoteness from Israeli politico-military affairs had been quite deliberate. I felt that it was virtually impossible to deal with Middle Eastern matters in a rational way: they were permeated by ideology, theology, or both. For me, the State of Israel was not a religion; at best it was a manifestation of religion. I did not even see myself as a Zionist per se, though Arab acquaintances of mine labeled me a Zionist simply because I maintained that the state had a right to exist. I felt, however, that the essence of Zionism was a belief that all Jews must return to Israel, and I could not subscribe to that belief. I have always believed that there will be a Diaspora until the coming of the Messiah, and I have no great insights as to when precisely that might occur.

{p. 4} The origins of the projcct dated back to the French embargo of Israel in the aftermath of the Six-Day War. The embargo was still in effect in the mid 1960s. The Israelis had concluded that thcy had to develop their own aelospace industry, that they could never again

{p. 5} solely rely on "friends" from abroad. The most prominent exemplar of the new Israeli emphasis on indigenous military industrial development was Israel Aircraft Industries. IAI had been founded in the 1950s by an expatriate American and built aircraft, missiles, and lesser products; it serviced these systems and provided many of their components through its own subsidiaries.

By the late 1970S, IAI had built its own fighter plane, the Kfir, from a French Mirage design, which it had sold to the Israeli air force and which it was marketing worldwide. For its part, the Israeli air force began planning for a Kfir replacement, which it hoped would also serve as a replacement for its fleet of small A-4 attack aircraft, purchased from the United States in the 1970s. Given IAI's success with the Kfir, it wasn't surprising that the Israelis preferred to replace it with another indigenously built aircraft. The problem, however, was that such a plane would not be truly indigenous, any more than the Kfir or indeed other aircraft built outside the United States or the Soviet Union were likely to be. The Israelis recognized that they would have to look overseas for the plane's engines, as well as for other key components. Indeed, the more sophisticated the plane they wished to build, the more dependent they would be on foreign support.

To minimize their degree of dependence on foreign suppliers, the Israelis conceived of a relatively simple plane, termed the Aryeh, that would capitalize upon the technical advances that IAI was expected to have achieved in the 1980s but would nevertheless remain on the low end of the spectrum of sophistication associated with ground attack aircraft. It was in that spirit that Minister of Defense Ezer Weitzmann approached his American counterpart, Harold Brown, in April 1980, to obtain American support for the coproduction of General Electric F-404 engines in Israel.

Brown assented to Weitzmann's request, but with several critical technological, financial, and political reservations. He insisted that certain sensitive engine components would have to be produced in the United States. He refused to release any American foreign military sales FMS credits for purchases of Israeli goods or services for the aircraft. These credits were normally provided to Israel, as well as other foreign countries, for the purchase of American military equipment Finally, Brown denied the release of any FMS credits for any portion of the aircraft that might then be reexported by the Israelis to third countries.

Weitzmann, nephew of Israel's first president (and since 1992

{p. 6} himself president of Israel), former air force commander, flamboyant hero of the Six-Day War, and hawk-turned-dove, agreed to these conditions without reservation. He recognized the need to assuage American fears about Israeli competition in sales to other countries and, ln any event, did not have sufficient confidence in the ability of Israeli industry to produce a complex, multirole aircraft that could compete with the newest generation of American fighter and attack planes. Weitzmann hoped that Israel would develop a prototype plane by 1984 and would begin production by 1988.

The plane was renamed the Lavi, a more appropriate appellation relative to its mission. Kfir in Hebrew is a young lion; aryeh, on the other hand, is a mature king of beasts. A lavi is more mature than a kfir, but still not as developed as the fully maned variety - and the new plane, as Weitzmann conceived it, was indeed to be the junior partner in Israel's air force.

Israel had already begun a program to acquire more sophisticated F-15 and F-16 fighters from the United States. It also anticipated employing F-16s in an air-to-ground role as well, as the 1981 Israeli F-16 bombing of Iraq's Osirak reactor spectacularly demonstrated to the world. Weitzmann's concept, therefore, was for the modernization of Israel's air force with what military analysts termed a "highlow" mix: the top-of-the-line F-15s and F-16s would provide Israel with air superiority and deep strike capability; the yeoman's work of supporting the ground battle would be undertaken by the new plane.

Weitzmann resigned from the defense ministry in May 1980, in protest over the government's policies regarding West Bank autonomy and the expansion of settlements. His departure signaled a fundamental change in the nature of the aircraft. Weitzmann's successor, Ariel Sharon, was an armor officer who never claimed to be an expert on aircraft. Both he and Prime Minister Menachem Begin were therefore swayed by the arguments of Moshe Arens, a leading Likud Party figure and the chairman of the Knesset's foreign affairs and defense committee (and opponent of the Camp David Accords), that what Israel really required was an ultrasophisticated fighter/attack plane, at least on a par with the F-16, and probably superior to it.

Arens was not an uninterested party. He was a former senior official of Israel Aircraft Industries. Moreover, he was an aeronautical engineer by profession. He had earned his doctorate at MIT and had taught aeronautical engineering at the Technion, Israel's world-class technical institution of higher learning. ...

{p. 7} Whatever the reason, Arens's case prevailed, and Ariel Sharon approached the new American defense secretary, Caspar Weinberger, with a request for additional support for the project. Sharon wanted Weinberger to grant export licenses for the wing and vertical tail composite design produced by the Grumman Corporation of New York; servo-actuators, produced by the Moog Corporation, also of New York; the Lear Siegler flight control computer; and a variety of software tools. He also had a list of future license requests that he was expecting to forward early in 1983. These and other subsystems and design capabilities underscored the Lavi's utter dependence for its success on not only American dollars, but also American technological know-how.

The courtly Weinberger, whose Middle Eastern ties prior to entering office were exclusively with the Arabs and primarily with the Saudis, viscerally disliked the bumptious Israeli minister. He was to clash time and again with the former general; the word around the Pentagon was that no one had ever seen Cap lose his temper, except when he lost it arguing with Ariel Sharon. Not surprisingly, Sharon's request was denied.

There were other reasons for Weinberger's opposition. A number of American defense companies, most notably Northrop, vehemently opposed the creation of yet another competitor for their products. Northrop was hoping to market its own F-5G fighter (later renamed the F-20) overseas, as a replacement for its wildly successful F-5. The Lavi threatened to be the F-5G's primary foreign competitor, particu- larly in Latin America and possibly in East Asia as well.

Northrop was aided by the silence of key defense figures, particularly John Lehman, secretary of the navy, who otherwise were known to be solidly pro-Israel. But John had been a Northrop consultant prior to joining the Reagan administration in early 1981, and he quite properly in my view kept himself away from the Lavi debate.

At the same time as Sharon was pressing Weinberger for additional technical support for the project, Arens, now Israel's ambas-

{p. 8} sador to the United States, began to marshal financial support for the project on Capitol Hill. The Hill has traditionally been Israel's best friend. Countless books, articles, and doctoral dissertations have analyzed just why it is that Israel is so successful at obtaining whatever it wishes from the Congress, often despite bitter opposition from the executive branch. Whatever the reasons, the reality cannot be denied, and Arens clearly exploited his advantage.

In February 1983, after a judicial panel asserted that he had been indirectly responsible for the massacre of Palestinians in the Lebanese refugee camps of Sabra and Shatila, an unrepentant Ariel Sharon resigned as defense minister. Moshe Arens replaced him. Not long before he returned to Israel, Arens hit upon the idea of the United States providing direct support for research and development on the Lavi in Israel. The notion was almost revolutionary. Heretofore, and as Harold Brown had decided, even in the case of sales to Israel, American security assistance took the form of grants or loans that were tied to the purchases of American equipment. Dollars were to be spent at home; if the buyer could not afford those dollars, the U.S. government, through its assistance programs, would pick up the tab. Arens wanted the dollars to go abroad, however. American industry and workers would see no immediate benefit from those dollars. Some critics argued that the American economy would see no benefit at any time. Arens was undeterred.

Arens worked especially closely with a congressman from east Texas, Charles Wilson. Unlike other politicians and their staffers who were sensitive to Jewish votes or financial support, Wilson would have done just as well politically without supporting Israel. In fact, at first glance, the partnership between the jovial Texan and the dry professor-turned-diplomat seemed a most unlikely one. But the two men did hit it off, and Wilson, convinced by the need to do everything possible to strengthen the Jewish state - which Arens interpreted for him to mean strengthening the Lavi program - crafted the plan for an amendment to the fiscal year 1984 foreign aid bill to allow Israel to spend foreign military sales credits on the Lavi in Israel.

Of course, Wilson had no idea just how much the Israelis needed. He therefore turned to the American Israel Public Affairs Committee, with whose leaders Arens also had excellent ties. AIPAC had long been recognized as one of the most effective lobbying orgamzations in Washington. Long known for its clout with legislative offices, which recognized that its endorsement could be critical to financial

{p. 9} support and electoral success, AIPAC had recently expanded its staff to include military systems analysts, so as to bolster the "objective" case for support to Israel. It had also moved to new, impressive quarters just off Capitol Hill and had added lobbying of administration officials to its long-standing Hill lobbying mission.

While AIPAC was prepared to help Wilson derive an appropriate figure for his amendment, it had no clearer idea of how much was needed than he did. AIPAC therefore turned to Marvin Klemow, IAI's veteran Washington representative, who knew how to play the political game as well as anyone. I don't know whether Klemow or someone else actually proposed the figure that ultimately found its way into Wilson's amendment: $550 million for the Lavi, of which 300 million would be spent in Israel. Whoever derived the number had a good imagination, however. One Israeli embassy official later recalled, "The figure came right out of thin air."

With the text of the amendment settled, Arens and Wilson solidified their powerful coalition in support of the proposal, whose only precedent was a much smaller 1977 grant of $30 million for development of the Merkava tank in Israel. While AIPAC remained a critical source of support, it was only one of the allies to which Arens turned. The Hill was stocked with staffers with whom Arens was extremely friendly. One of them, Jim Bond, proved especially helpful. Bond was Senator Bob Kasten's key staffer on the Foreign Operations Subcom- mittee of the Senate Appropriations Committee. With the Republicans in control of the Senate and Kasten chairing the subcommittee, Bond had considerable clout over the foreign aid budget. Kasten was a strong supporter of Israel and had many Jewish connections both in Wisconsin, his home state, and in Washington. He was very close to AIPAC, as was Bond. What AIPAC suggested, Bond could make happen; indeed, Bond had worked with Wilson in first crafting the House amendment.

In the end, Charlie Wilson's name did not appear on the amendment that created the offshore assistance program for the Lavi. The congressman claims no hard feelings over the fact that others attached their names to the legislation he had conceived. That others were so eager to attach their names to the proposal and that Arens could fashion the sponsorship so that it was bipartisan testify to the political astuteness as well as determination of the Israeli ambassador-turned-defense-minister. An amendment to stop foreign offshore funding was roundly defeated. IThe following year another

{p. 10} such amendment was withdrawn, with its sponsor explaining, in a deliciously mixed metaphor, "I didn't want to be a goy kamikaze." In the event, the Congress was guilty of overkill. As Klemow later put it, "We couldn't spend it all."

Within two months of taking office, Arens had engineered another coup for the Lavi. Caspar Weinberger had viewed the program with suspicion from the moment it was briefed to him, and not only because it was Ariel Sharon who was its sponsor when he first addressed the issue. Thus when Weinberger blocked the export licenses required by American companies bidding for Lavi contracts, he threatened to slow the program's progress, if not undermine it entirely.

On April 13, 1983, Arens chaired a five-hour meeting in Jerusalem to discuss how to obtain the necessary licenses. Among those attending the meeting were not only about twenty members of the Lavi project team but Danny Halperin, Israel's economics minister in Washington, a lean, wiry man with narrow eyes who had worked closely with Arens during his tenure as ambassador, and Marv Klemow, the portly, affable IAI representative. Like Marv, Halperin also was adept at the Washington game, probably more so than virtually any foreign diplomat. Both men had many friends in the press and on Capitol Hill; they got along well with each other, and had flown to Israel together from Washington. It was therefore a group of close comrades in arms that met in Arens's office that day.

Eight months earlier, Klemow had pressed the Israelis to attempt to convince the International Security Affairs (ISA) staff at the Department of Defense as well as the Israel desk at State to support the Lavi. Now, however, he recommended that Arens bypass Defense. He was later quoted as having told Arens, "Our strategy should be that the Pentagon doesn't exist. This is a political decision." Halperin agreed, and urged Arens to phone Secretary of State George Shultz to break the contracts logjam. Arens concurred. That evening he spoke to Shultz and requested his help. Within forty-eight hours the licenses were unblocked, and the Lavi program moved ahead. It was widely assumed that President Reagan personally intervened to break the impasse.

Arens made one other decision in April 1983 that was critical to the Lavi's future. He brought David Ivri back into the ministry of defense (MoD). Ivri was a former air force commander who was serving as chairman of Israel Aircraft Industries, the Lavi prime contrac-

{p. 11} tor. Arens named him deputy chief of staff of the Israel Defense Forces. Ivri subsequently returned to IAI, but in mid-1986 returned once again to the MoD as its director general. He proved to be as tenacious as Arens in his support of the Lavi program. Like Arens, he clung to the fantasy that the Lavi was an Israeli national program that was essential to Israeli national honor.

In the late summer of that year, Menachem Begin resigned as prime minister of Israel as a result of Israel's increasingly bitter fruits of victory in Lebanon. He was replaced by Yitzchak Shamir, who, though foreign minister, was still very much an unknown quantity to the United States, in part because of his poor command of the English language. Arens was retained as Shamir's defense minister.

Arens and Shamir went back many years; he proved over time to be Shamir's closest adviser. My father knew them both, from his days in Lithuania as a leader of the Betar movement, to which all of them belonged. ...

Shamir's background was intelligence; he had been an agent of the Mossad. His best years were spent in France, as he wistfully recalled to me during a private evening I had at his home in 1986. Shamir was also a key leader of Lehi - the Hebrew acronym for three words that mean "fighters for Israel's freedom." Lehi was better known as the Stern Gang, a group of violent extremists who were despised by the mainstream Zionist organizations and their military arm, the Haganah. Many Lehi personnel moved into intelligence at the war's end.

Not surprisingly for a man with a lifetime's background in covert operations of one sort or another, Shamir was not one to trust many people He had even met his wife in the resistance underground. But he trusted Arens, particularly on security matters ...

Arens was also a Betari. His father was one of my father's clients. ...

{p. 12} When Arens succeeded Ariel Sharon as defense minister, he immediately canceled a Lavi study initiated by his predecessor in December 1981 to examine the possibilities of incorporating Lavi technology with the General Dynamics F-16 airframe. The study had been prepared by General Dynamics, which was in the midst of delivering its first batch of F-16 aircraft to Israel. In fact, it was the govermnent of Israel that requested the study; it was based on Israeli ground rules for its analytical framework.

The study was not GD's first effort to address a partnership with Israel for Lavi production, nor did it represent the first time Israel had broached the subject with the company. Like several other American firms, GD had been visited in 1980 by a senior IAI executive regarding joint production of the Lavi. GD had responded the same year by visiting Israel for a further round of talks.

In providing a preliminary briefing of its study findings on February 15, 1982, the company had insisted that the Lavi involved not only operational considerations, but also those associated with Israel's need both to bolster its economy and achieve self-sufficiency. Moreover, the company stressed that it had maintained a consistent policy of noninterference with respect to the Lavi program and had volunteered information and assistance where feasible. GD's disclaimer was both honest and not surprising; the company could ill afford to alienate one of its most important F-16 clients. The study postulated that Israel Aircraft Industries would remain the overall prime contractor for both the new aircraft and the program as a whole. Nevertheless, by incorporating the F-16 airframe and the American F-100 engine, the Israelis would likely lower their nonrecurring development costs by about 50 percent. Even more interesting was GD's assertion that the Israeli man-hours content of its proposed hybrid, which it estimated to be about 8 percent of the total, might actually exceed the Israeli man-hours total of the Lavi, which relied very heavily on American-manufactured subsystems, despite being advertised as an indigenous Israeli aircraft.

Arens was not impressed by the numbers or the analysis. He was simply not interested in an F-16 or in a hybrid plane. He wanted a

{p. 13} product that was primarily, if not solely, Israeli, and did not accept the argument that a program with an American airframe could be more "Israeli" than the Lavi. In fact, he particularly wanted the airframe to be Israeli. Sharon, the former tank commander, may not have been as sensitive to this matter as Arens, the engineer. Whatever the reason, the study was canceled, and the stage was set for a full-court press to obtain American money for an Israeli-dominated development program.

November 1983 was a triumphant month for Arens. With the help of his friends in AIPAC and on the Hill, the Congress passed on November 14 a new foreign assistance bill that reflected virtually in its entirety the original amendment that Charles Wilson and Marvin Klemow of IAI had jointly conceived. Like the text of Wilson's draft amendment, the bill included $500 million in funding for Lavi research and development. Only the amount of money that could be spent in Israel for the project had been reduced, from Wilson's original amount of $300 million to the smaller but still significant total of $250 million. The latter sum did not actually constitute all of the "offshore procurement" (OSP) made available to the Israelis. It was noteworthy, however, because it was "earmarked" for the Lavi. In other words, even if elements within the Israeli military, few of whom were enamored with the project, wished to spend the monies on other programs, they could not do so.

Arens then accompanied Shamir on the prime minister's first visit to Washington since he took office. The atmosphere was exceedingly cordial, a welcome change for Israel after the tensions that had clouded relations between the two countries since the invasion of Lebanon the year before. On November 30, Ronald Reagan signed a memorandum of understanding with Israel that set the basis for a new level of Israeli-American "strategic cooperation." Included among the many commitments that the United States made to Israel was Reagan's support for funding the Lavi development program, thereby ensuring that the Pentagon, whatever its doubts about the plane - and these were legion both in the Office of the Secretary of Defense and in the Joint Staff - would salute smartly and not try to subvert in any way the recently passed legislation.

Ironically, Arens was only briefly able to watch the Lavi funding flow to Israel from his vantage point as defense minister. Begin's resignation had rocked the Likud Party, and Shamir was unable to lead it to victory in the July 1984 elections. By September, Arens had lost

{p. 14} his job under the complex terms of the agreement hetween thc Likud and Labor parties that resulted in the creation of a National Unity government. The new defense minister was Labor's Yitzchak Rabin: war hero, former chief of staff, former ambassador to Washington, former prime minister, seemingly former everything. Rabin had returned from political oblivion and, under the terms of the two party agreement, was ensconced as defense minister for the lifetime of the National Unity government. Arens was relegated to the job of "minister without portfolio," which meant that he was too important to be left entirely out in the cold, but could get no closer than the government's front porch; he had no ministry to call his own.

With little by way of administrative duties, Arens was able to act as a sort of government gadfly, particularly on national security matters. He still had considerable clout within the Likud Party, and his relationship with Shamir, once again foreign minister - and prime minister designate in two years' time under the terms of the National Unity deal - was as close as ever. He also sat in the so-called inner cabinet that made key national security decisions. If he had a pet project, it was a fair bet, therefore, that he could push it to fruition. And no pet project meant more to him than the Lavi. It was his creation, and he was determined to make it fly.

{p. 15} Something About This Program Stinks

Having been formally given Fred Ikle's charge to head a new Defense Department review of the Lavi program, I received my first briefing on the subject on March 13, 1985. Actually, it was Fred Ikle who received the briefing in his office; he asked me to sit in. I remember almost nothing about it, because I was still consumed by my negotiations with the Canadians. I remember the exact time, as well as day, that I completed the agreement to upgrade our common North American early warning system: 10:00 A.M., on March 17, 1985. It was St. Patrick's Day. Several months earlier, not long after I had been assigned to revive the stalled negotiations, I had been given an additional "tasker": to complete them in time for the president's visit to Canada on St. Patrick's Day. The North Warning agreement was to be one of the highlights of this "Shamrock Summit" with Reagan's fellow Irishman and conservative Brian Mulroney.

{p. 21} Moreover, I had heard of the virtual brutality with which the Israelis dealt with those who opposed them, especially if they were Jewish. The chief rabbi of England, Sir Immanuel later Lord Jakobovits, a longtime supporter of Israel, had been bitterly defamed in a whispering campaign launched by the Israelis after he criticized their 1982 Lebanon operation. No one could prove that any Israeli had actually said anything for the record, and Jacobovits, whom I knew from my student days at Oxford and my membership in the chief rabbi's University Chaplaincy Board, never responded to the slurs and whispers. He was too much the gentleman to do so. Never- theless, my friends in England all confirmed that they had heard the attacks, which were also spread in South Africa, Australia, and the rest of the English-speaking Jewish world. Since the Israelis played hardball, and played it personally, I figured that I would soon be on their hit list.

Whatever my apprehensions about the Israelis, I had a more immediate problem: my boss. Ikle was pressing me for some material to take with him on his trip to Israel, which was scheduled for late April. Early in the first week of April he asked me to find the analytical basis for dissuading the Israelis from moving ahead with

{p. 22} the program. I did not get the sense that Ikle really expected me to succeed this time.

It was by now very clear to me that the Israelis intended to block my efforts to obtain cost data from them in time for our trip. They hoped that we would arrive in Israel with nothing other than vague concerns about the project. Ikle would make a little bit of noise and we would then all go away. The project could proceed as planned, with no further perturbations from nosy Americans. And I would disappear into the Pentagon woodwork from which I had so inconveniently emerged.

Since the Israelis were obviously not going to be forthcoming about their costs, we had to generate estimates of our own. I recognized, of course, that whatever estimates we put forward were likely to be attacked by the Lavi's proponents, both in Israel and in the United States. Therefore, I intended to use the figures we produced to elicit the real numbers from the Lavi program management. If we could infuriate them sufficiently, we could flush them out, find out what costs or cost factors they were hiding, and, on the basis of evaluating their own true calculations, expose them to public debate in Israel - and, for that matter, in America. If, as I anticipated, those costs were much higher than the figures the Israelis had thus far made public, we might then make so strong a case against moving ahead with the Lavi that we ultimately could get the Israeli government, if not our own Congress, to reconsider the wisdom of pressing ahead with the airplane.

{p. 25} Glenn's memo noted that the Congress was broadening the scope of its Lavi-related assistance to Israel. Both houses of Congress were inserting language that awarded Israel funds to spend on the Lavi (in the language of the House Foreign Affairs Committee "if the Government of Israel requests that funds be used for such pur- poses." As DSAA saw it, Israel's supporters were attempting to "insure that Israel clearly has the option of either spending or not spending the earmarked funds for the Lavi on the Lavi program." No doubt Israel's supporters had no intention of curtailing the Lavi pro- gram. But the change meant that I could now seek the termination of the Lavi without any financial loss to Israel. This development was to prove critical eighteen months later as I sought to make clear to many Israelis that there was an "opportunity cost" to the Lavi; the money could be spent on more deserving and financially starved Israeli military programs.

{p. 41} But ours was by helicopter, and the pilot took us around the Temple Mount. No sight is more moving for a believing Jcw than the sight of the Temple Mount, the spiritual and emotional heart of Judaism for two and a half millennia. Yet to see it from several hundred feet in the air is incomparably more thrilling than to behold it from the ground. There is no obstruction to one's view; indeed, aircraft cannot fly over the Temple area because the airspace, like the ground, is holy. It is for that reason, incidentally, that Orthodox Jews will not venture up to the Dome of the Rock. For them it is sanctified terrain forbidden to all but the high priest, whose job has been vacant for a while.

{i.e. Judaism may once again have a high priest (pope)}

It was a clear day; the golden dome on the Mosque of Omar (or Dome of the Rock), and the silver dome on the al-Aqsa Mosque gleamed as if they had just been polished. I closed my eyes, and opened them again, just to be sure I really was seeing what I was seeing. I stealthily put on my yarmulke, and uttered, in Hebrew, the catchall formula by means of which Jews thank the Almighty for special gifts: Blessed art Thou, O Lord our God, King of the Universe, who hast kept us in life, and hast preserved us, and enabled us to reach this festive season. The Lord must surely have been in a good mood: what seemed like seconds after my reciting the prayer, the pilot took us for a second circuit around the holy mount, careful as ever to skirt its airspace.

{p. 59} The technical team that I took with me to Israel for a weeklong study visit beginning July 29, 1985, found the Israelis forthcoming on some issues, but not on others. The team, which included members of our interagency group, as well as the air force's Colonel Mike Foley and Captain Linda Hardy, did ascertain that the Israelis were having serious problems with major elements of their program. The Lavi appeared to have stability problems because of tail-heaviness. The Lear Siegler flight control system, which was being installed on both the Lavi and the Swedish Gripen, suffered from malfunctions in both aircraft. The Lavi was also experiencing system integration difficulties. Worst of all, the plan for coproducing the plane's Pratt Whitney PW1120 engine had completely collapsed.

I had already learned of the engine program's problems in an article that appeared in the Hartford Courant on July 2 and was reproduced in the DoD "Yellow Bird" the following morning. The "Yellow Bird," formally called "Current News," is the daily set of clippings that the department's public affairs office compiles from that day's Washington Post, New York Times, Wall Street ournal, and Washington Times, as well as from the previous day's editions of other major and not-so-major newspapers. The Courant fits into the latter category; it is important for defense readers because it tends to have the best-informed coverage of the Connecticut con- tractors, for example, the Electric Boat shipyard and United Tech- nologies and its Pratt &. Whitney engine subsidiary.

The Courant reported that the plan to coproduce the PW1120 engine for the Lavi was likely to be canceled. The Israeli Bet Shemesh engine plant, nominally the "prime" contractor Iwith P&W as its subcontractor, was having such severe difficulties that production sched- ules were reportedly three years behind schedule.

The situation was actually worse than even the Courant had reported, and it offered some real insights into the management problems that were bedeviling the aircraft. The Israelis had planned initially to coproduce the engine with Pratt & Whitney, and then to produce the follow-on engines entirely on their own. In the event, the Bet Shemesh engine plant was incapable of carrying out even the initial, more limited, task. Pratt & Whitney had reapportioned the coproduction work several times, giving the Israelis increasingly less complex tasks. Finally, frequent changes of managcmcnt, labor prob-

{p. 60} lems, and other management deficiencies forced the cancellation of the coproduction effort only a few weeks after our visit to Israel in April, although the decision to cancel coproduction remained a closely held secret. ...

Perhaps the Eini team's readiness to defy some of our requests may have been due to their perception that Rabin, while willing to humor Weinberger and the DoD, had no serious intention of curtailing the program. They certainly had reason to take heart from his response to a very blunt question in a July 19 Israeli radio interview ...

Rabin labeled the questioner's assertion "baseless." He argued that it would cost Israel just as much to purchase aircraft from the United States as to build the Lavi. He added:

{p. 61} {quote} If we do not develop the Lavi ... and manufacture it ... we will ... have to devote the same sums to purchasing planes from the United States, because Israel is investing almost none of its own resources in the Lavi's development, and this applies to its manufacture as well. ... U.S. money ... is being given to be used either for the development and manufacture of the Lavi in Israel or for the purchase of a suitable equivalent air force plane from the United States. {endquote}

{p. 102} Faced with the need to defend the suddenly beleaguered plane, the Lavi's proponents often were so carried away in their attempts to make the Lavi a symbol of Israeli jingoism that they resorted to arguments that seemed to make Americans look like fools. Thus, for example, IAI chairman David Ivri, who was soon to replace Mendy Meron as the ministry of defense's top civil servant, told the leftwing Al Hamishmar, which was generally critical of the project, that the Lavi was actually a "national American project." He added that the choice was "the purchase of an Israeli plane with American money or an American plane with American money. This choice boils down to providing employment for U.S. industry or for its Israeli counterpart, and the preferred alternative is to provide jobs for Israeli workers." Needless to say, the Ivri statement infuriated us in the Pentagon. It was bad enough that we felt we were being taken for suckers; it was worse that Ivri was advertising the fact.

The irony was that it was not really a matter of American jobs versus Israeli jobs, however noxious and chutzpahdik such argument seemed to be. Rather it was a case of American jobs versus other American jobs, with Israel Aircraft Industries getting a lot but not all of the business if the Lavi was procured, and only somewhat less if Israel chose to acquire an American plane.

Ivri was not loath to speak to the press about our analysis, even as his transfer to the MoD became imminent. Late in April, he told the

{p. 103} Israeli air force journal that our estimates had becn dropping steadily, from an initial guess of $10 billion for research and development costs to the $2.6 billion that he claimed was in the report. Since IAI had stated that rcsearch and development (r&d) would total $2.2 billion, he argued that it was the DoD whose estimates were being refined in the direction of those of Israel, and that, once other errors were accounted for, the Israeli estimates would be validated.

{p. 118} My father, an active member of the American Betar, which staunchly supportcd the Israeli Likud, was hounded by Moshe Arens's American-based minions, many of whom he had worked closely with for years. On one occasion, he had written a preface to a Likud docu- ment that was meant to be circulated nationwide. He was extremely proud of what he had written. As a Betari since his student days, he was delighted to be both active and appreciated for the nearly six decades that he had devoted to his beloved cause. Shortly before the publication deadline, Dad learned that his preface had been dropped. The pamphlet appeared with a preface written by Moshe Arens. My father soon learned that Arens had exploded at the prospect of having anyone named Zakheim associated with a major Likud paper. Needless to say, my father was stung. To his credit, he did not turn on me, which he could have done, since he bitterly disagreed with my attitude toward the Lavi. Never once did Dad utter a word of criticism; to the contrary, he insisted to me that if I felt as strongly as he thought I did, I should follow through on my beliefs. As for Arens, Dad had never thought much of him anyway, and the incident with the preface gave him no reason to change his evaluation of the man.

Of course, the fact that my dad was given a hard time because of me did not prevent the Israelis from giving me a hard time because of my father, often in the presence of other members of my family. I recall one encounter with Meir Rosenne, the rather stiff Israeli ambassador to Washington, at the home of Eli Rubenstein, who was then Rosenne's deputy. In response to my hello, Rosenne, a longtime Likudnik and sometime acquaintance of my father's, barked out within earshot of at least a dozen people, "How could a father like yours have had a son like you?" I must admit, it was hard to think of a quick rejoinder to that one and turn away. My wife, who was stand- ing beside me, guided me to another part of the room, clearly upset by the encounter.

My children didn't escapc the hassle either. Chaim, my eldest son, was told by his camp counselor that his father was a traitor. Curiously, Chaim long held the opinion that I was wrong about the

{p. 119} Lavi and should bc more lenient with Isracl. He oftcn would say as much at dinners we hosted, to the amusement of our other guests. But I was proud that my twelve-year-old had a mind of his own, and I never sought to change his mind. He did that on his own. One day, he came home from school announcing that he was now fully behind me. I asked him what had happened. He answered that the class had launched into a discussion of the program - as part of its focus on cur- rent events - and he thought he heard the teacher say that the United States was paying for the Lavi. He wasn't sure that he had heard her correctly, so he asked her explicitly if that was the case. He was told that it was. He then told me that he had supported the plane because he thought the Israelis were spending their own money, and I had no business trying to stop them. "But it's our money they're spending," he said. "You're right, Daddy, I support you." Only a parent can appreciate the wonderful feeling I derived from that particular policy shift .

As annoying as these incidents were, I found equally upsetting my abandonment by the Orthodox community of which I had been a part since birth. Time and again I found Orthodox leaders, rabbis, and institutions unwilling to acknowledge that I had any connection with their denomination, with the one major exception of the Satmar Chassidic community, which had no truck with the govern- ment of Israel anyway. Again an incident involving a family member stands out among the rest. My brother Josh had inquired of a friend who worked in the public affairs office of a major Orthodox institu- tion with which I had once been closely associated whether it would list my name in one of its publicity vehicles. The reply upset him. "Once the Israelis have nice things to say about him," Josh was told, "of course we'll mention him; until then, we have no connection with him at all." Evidently the USSR wasn't the only place where nonpersons could be reinstated to acceptability in consonance with shifting political winds.

My immediate family also found that our lives had become rather transparent, at least to Israeli readers, a rather unusual development for the family of an unelected official - from another country, no less. When I played in my children's school's father-son basketball game, the Hebrew press even gave details of the number of points I scored (four). And when I attended my youngest son's Purim holiday play, the Israeli prcss considered this major event on the nursery school calendar to be sufficiently newsworthy for its readers.

{p. 120} One evening, my wife received a call for me from a lournalist in Israel who wanted to interview me. My home number was available in the suburban Maryland telephone book, and I often received calls at home. So the call itself was no great surprise. What did surprise her was the journalist's reply when she said that I was out: "Okay, can I interview you?" The journalist then proceeded to ask how she could sleep at night when her husband was quarreling with Israel over such a major issue. "Easy enough," she said. "When you have three active boys, you sleep very well at night." The rest of the interview was conducted along very similar lines, and, sure enough, a few days later, the paper carried the story: "Zakheim's wife has no trouble sleeping despite the Lavi."

{p. 121} Two Sides of Dual Loyalty: Cap Weinberger and the Pollard Affair

American Jewry and the Israeli public have long viewed senior administration officials as either "good" for Israel or "bad." Caspar Weinberger was most definitely viewed in the latter category, the bad guy, the black hat - the official who opposed any American initiative that might be of assistance to Israel.

The tradition of black hats and white hats stretched back to the years of Israel's creation. During the Truman administration, the black hats were General George Marshall and James Forrestal - the latter was an avowed anti-Semite - and the white hat was Clark Clifford, who convinced Truman to recognize the fledgling Jewish state. During the Eisenhower years, John Foster Dulles wore the black hat, and there was no obvious counterpart wearing a white one. By the time Jimmy Carter was in office, and the Lavi was becoming slightly more than a gleam in Menachem Begin's eye, the black hat was worn by Zbigniew Brzezinski, the white one by Stuart Eisenstat, Carter's domestic affairs adviser. I happen to be acquainted with both men. Stu Eisenstat, later ambassador to the European Union, certainly has always been a friend of Israel, though I am not aware of his lobbying on behalf of the Israelis from his domestic affairs vantage point during the Carter years. Still, Eisenstat is a discreet man, not prone to showmanship of any kind. He may well have been a strong advocate

{p. 122} of pro-Israeli positions in a White House that, despite Camp David, was often lcss than triendly to the Israelis

Yet if Eisenstat deserved his white hat status, Brzezinski certainly did not merit being branded as an anti-Israeli desperado. ...

Cap Weinberger's grandfather was Jewish. Weinberger never hid that fact, even though he himself was raised as an Episcopalian by his Protestant parents. My dear friend the late Rabbi Seymour Siegel, professor of philosophy at the Jewish Theological Seminary, was shocked at Weinberger's treatment at the hands of the American Jewish press and communal leaders.

{p. 123} Jonathan Pollard was a low-level Jewish-American intelligence research specialist who was arrested by the FBl in November 1985 on charges ot spying for Israel

{p. 124} Virtually from the day he was sentenced, Pollard sought to portray himself as a Jewish martyr whose efforts on behalf of Israel deserved approbation, not renunciation. Pollard quickly became something of a hero to the rank-and-file American Jewish community, though the communal leadership was very slow to speak out in his favor, or, for that matter, to speak out about him at all. But to the Jew in the street, bombarded by a very clever public relations campaign organized by Pollard's family and close supporters, Pollard was being "set up" by that anti-Semite Weinberger. While the Israeli government was embarrassed by Pollard and continued to disown him, Pollard increasingly became something of a hero to the Israeli public. And, in the course of doing so, he became my antithesis. As Israei television put it in an interview shortly after I left the department in 1987: "Jonathan Pollard is seen in Israel as the American Jew who helped Israel; Dov Zakheim is seen as the American Jew who hurt Israel."

Much continues to be made, especially within the Jewish com- munity, of Pollard's motives and the purported harshness of his treatment since his imprisonment. I have never involved myself in these matters, although I was on occasion approached by various people, including Israelis, to lend my voice to the chorus calling for leniency. I have no real knowledge of the details of his case since his arrest and do not feel qualified to speak on the matter, other than to reiterate that my visceral repulsion at his behavior remains unchanged . ...

When Israeli television contrasted me unfavorably with Pollard during a 1987 telecast, it was done as a preface to the question "How do you feel about such a characterization of your activities?" My answer then is the same today. Pollard was a spy - whatever is said and done about his sentence or his treatment cannot alter that fact. If he was a true Zionist, he had the option of moving to Israel as so many other American Jews have done, who also have never hurt, and often assisted, America, the country of their birth, both before and since their aliyah. He chose not to go on aliyah. Instead he chose to betray his country. That there were not further anti-Semitic repercussions, as many American Jews feared, was due to the maturity and essential decency of all Americans, who could tell a rotten apple when they saw one.

{p. 126} Run-up to Another Study Visit

Once Defense Minister Yitzchak Rabin had agreed in May 1986 that we undertake an alternatives study, the issue arose as to how not only to produce the report, but also to ensure that it was the knockout blow against the airplane. I felt that we had to present the Israelis with the widest possible set of alternatives. We therefore had to offer each of the major aircraft manufacturers, and not only General Dynamics, whose F-16 was the Lavi's most obvious competitor, the opportunity to be included in the alternatives study. I also felt that we needed to impose a new, tougher go-slow on all Lavi contracts, so as to increase the pressure on the Israelis and demonstrate that the United States no longer would fall over itself to satisfy the program's needs.

We first had to reconstitute the Lavi team. The fact that the initial study had been an interagency effort clearly had impressed the Israelis; we needed the same degree of government-wide support if we were to convince the Israelis of the viability of an alternative to the Lavi. Accordingly, with Fred Ikle's approval, I established a new "Lavi Alternatives Steering Group," with roughly the same membership as the original Lavi team.

I encountered no significant opposition to my strategy, though some elements on the Air Staff felt that another study effort would seriously drain the air force's analytical resources. The original air

{p. 127} force members of the team, as well as the other agency representa- tives, were eager to get started and shared my view about the importance of the study. As for the go-slow on the contracts, that idea had already been foreshadowed in DSAA the previous month Most important, Cap Weinberger approved the plan. I briefed him on Mon- day, May 12, outlining our approach to the alternatives and our go-slow strategy on contracts. He quizzed me as to which plane was really more effective, the F-16 or the Lavi. I told him I was convinced that the F-16 was the better plane. "Then maybe we should let them build the Lavi after all," he deadpanned, and for a moment I thought he was serious.

Our slowdown of Lavi-related contract approvals soon found its way into the Israeli press. Even Cap Weinberger was quoted as stating that Israel would do better to terminate the project and face a public outcry rather than to continue to waste its money. Everyone had long known that Weinberger felt that way. What was significant was that he was now openly voicing this view. It signaled a new hard- ball approach to the project that left no doubt as to the readiness of the U.S. government, or at least the Department of Defense, to push for the program's termination.

Weinberger was not being mean-spirited about the program, as many of his detractors sought to portray him. The Israelis had made a habit of pushing for spending approvals on elements of the program well ahead of schedule, so as to lock in spending on the Lavi for future budget years. It was to this practice that we most objected. We made it quite clear to the Israelis, both publicly and privately, that such an approach was no longer acceptable. Given both cost and schedule uncertainties surrounding the program, it made little sense to approve contractual arrangements well in advance of their being implemented. If the Israelis wanted us to approve new Lavi production contracts, they needed first to recalculate the plane's costs in a realistic manner.

As was their wont, the Israelis expressed bitter outrage, and sought through their various official and unofficial channels in Wash- ington to have the policy reversed. Abraham Ben-Joseph of the New York purchasing office protested the policy to me when we met on May 20. The following day I met with the MoD's senior economic adviser, Zvi Tropp, who was also unhappy with our policy. Tropp was heading a small delegation to Washington that was attempting to convince anyone who might listen of the correctness of their cost

{p. 128} estimates and the flaws in ours. Thcy hopei therehy to free the contractual logjam. They got nowhcre; we insisted that in the absence of a clear long-term cost and program plan for the system, accelcrated components acquisition made little sense.

Although they failed to convince us, the Israelis were determined to free the contracts and to vindicate the program. The pressure was so great that for the first time since I had begun working on the Lavi issue, I fully expectcd to be pulled off the case. Weinberger had seen the press account of his stated opposition to the program, and the report had carried several of my own statements regarding the plane's dim prospects. With Israeli protests mounting to a crescendo, if ever there was a time to shoot the point man, this was it. But no one in the Pentagon was particularly interested in giving way to the Israelis. Quite the contrary; Cap Weinberger and Assistant Secretary Rich Armitage in particular were very sensitive to any attempts to undermine me personally. Instead of being made the scapcgoat as a result of Israeli pressure, I constantly received support and encouragement, especially from Rich.

During the week that I met with Tropp, I also got together with Colonel Mike Foley of the air force to plan our next visit to Israel and our overall analytic approach to the alternatives effort. We preferred not to ilssue another report. Rather, we would produce a briefing that could be presented to Rabin, his ministerial colleagues, and the senior MoD people.

Our effort borrowed heavily from my experience at the Congressional Budget Office, which among its other analytical strengths has developed a well-deserved reputation as a source of unbiased force alternatives and their budgetary implications. I turned for help to Bob Levine, who had been deputy director of CBO when I first came on board there in 1975. For additional advice and suggestions, I looked to two of the nation's top economists, Stan Fischer of MIT and Herb Stein, former chairman of the Council of Economic Advisors, now at the American Enterprise Institute IAEI, a Washington think tank. Both men had played a leading role in the American effort to assist Israel out of its inflationary mess in the mid-1980s, and both were keenly interested in the Lavi debate. Of the quartet, however, the fourth person serves in the Clinton cabinet only Bob Levine was prepared to allow his name to be mentioned in the context of what I was trying to do. The others felt that it would be impolitic for them to do so. What I needed was advice, assistance, and, in some in-

{p. 129} stances, comments on our draft report, and it was easy to accede to their wishes. We never mentioned their involvement - not even Bob Levine's.

Together with my deputy, Dick Smull, Mike Foley and I outlined a detailed schedule for the report. We anticipated that the "terms of reference" would be approved by June 30, that the preliminary analysis would be completed six weeks later, and that the draft would be completed by September 3. As we had done in the case of the first study, we gave other interested parties, both inside and outside DoD, a chance to "coordinate" on the study. We allowed ten days for the study to make the rounds of the government; we indicated that if we had not received comments from recipients by the due date, we would assume that they concurred with the report.

The schedule then called for a final round of analysis and a final draft to be completed on September 22. We allowed three days for final coordination, to give agencies a last chance to speak up or forever hold their peace; and we anticipated handing the complete version to Caspar Weinberger on September 29. We hoped to brief the Israelis before October 15, or just after the Lavi was meant to make its first flight. As things turned out, the first flight was delayed by a few months, and we did not get to present our report until January 1987.

We expected that the basic work on the study would be undertaken by industry, with the air force Systems Command's Aeronau- tical Systems Division (ASDI at Wright-Patterson Air Force Base, near Dayton, Ohio, providing quality control. We also assumed that the navy would help with whatever material was required to evalu- ate the F-18. In fact, we later received a copy of a note from Air Force Secretary Pete Aldridge to Weinberger indicating that the air force planned to approach the navy to coordinate their efforts.

We determined that the study's alternatives should all include an American airframe and Israeli avionics. We did not want to peddle an off-the-shelf American fighter, since the Israelis knew all about that option anyway. We reckoned that the alternatives should at least include the F-16, F-18, and the F-20; we later added the AV-8B and the F-15.

As for the content of Israeli avionics and electronics, we felt that the package should go further than that which General Dynamics had outlined to Defense Minister Ariel Sharon. At a minimum, we hoped the alternatives would incorporate a radar, weapons control systems, electronic countermeasures (to spoof enemy systems, for example) ...

{p. 131} McDonnell Douglas had as much good reason to be camera-shy as Northrop. The Israclis were courting the contractor with great assiduousness. Officially, they said they were seeking help with the Lavi's avionics integration, with which IAI was experiencing difficulties that it desperately hoped to overcome. There was a more subtle purpose to IAI's attentions. The company, and more important, the MoD, hoped that with an American partner, prospects for sales both to the United States and to third parties would brighten considerably. Israel desperately needed a big production run; its plan for producing three hundred Lavis was clearly in jeopardy. Only with an American partner could Israel hope not only to 'market" the air force but also to obtain the necessary permission to transfer American-built technology to third parties.

{p. 132} Together with McDonnell Douglas, GD knew that many Israeli air force officers were not interested in the Lavi. Moreover, officials in both companies recognized that were Israel to require another plane, MoD director general David Ivri would have no choice but to swallow his hard feelings over the Lavi and turn to the United States, and therefore to either of the three companies that were offering alter- natives to his preferred program. By not obstructing our efforts yet at the same time not actively assisting them, the two major contrac- tors could, and did, manage to avoid alienating either side in the controversy.

{p. 134} The Israelis, as is their wont, were very cagey about their prefe ences. They egged on all the potential bidders, not only the Americans, but also the German yard that was competing for the submarine contract, HDW of Kiel. Later, when Thyssen of Emden joined the bidding in June, the Israelis simply pushed at it as well. For our part, we pressed on with our estimates, trying not to bias them in favor of the numbers put forward by one or another contractor.

{p. 135} One sign of the changing nature of the domestic debate was the outburst of vocal opposition to the project on the part of Yossi Sarid, a member of the Knesset from the left-wing Ratz Party. Sarid, who served on the Knesset's foreign affairs and defense committee, submitted an "urgent" motion on May 22, demanding a debate on the need to call off the Lavi project because of the lack of resources in the defense establishment. Sarid was no great hero to the military. His intervention resembled those of American legislators known for their opposition to defense spending who would seize upon the supposed interests of the military to justify calling for the cancellation of an expensive weapons system.

Sarid and his party were slowly moving away from nuisance status to political respectability (although they did not really "make it" until they joined Yitzchak Rabin's governing coalition, and Sarid became a minister, in the summer of 1992). His opposition was therefore more than merely that of an antidefense gadfly. It signaled that the Lavi was now a sufficiently well understood issue in the public mind that politicians could score points from their opposition to it. It also meant that the Labor Party would have an increasingly more difficult time pacifying its left wing, which shared Sarid's views on this matter and several others besides.

The Israelis were soon to feel the heat in other ways as well. Prior to our departure, I met with officials from State's Near East and Politico-Military bureaus to ensure that the two agencies were marching in lock step on the alternatives issue. We also "coordinated" on letters that both Weinberger and Secretary of State George Shultz were to send to Defense Minister Rabin and Prime Minister Peres, respectively, outlining the need for a more forthcoming Israeli attitude to our efforts. The Shultz letter was a first; the secretary had not yet taken a public position on the airplane, other than to support it.

Although I had always benefited from excellent cooperation with the State Department at the "working level," that is, from officials at or below the rank of deputy assistant secretary, we had long failed to obtain any public statement of support from George Shultz. Shultz had not yet felt ready to take on the Lavi. He was in the midst of overseeing a radical overhaul - and bailout - of the Israeli economy

{p. 136} and did not wish to complicate matters with a spat that was very much the domain of the Defense Department. Indeed, as he later wrote in his memoirs, Shultz viewed the Lavi as part of his overall effort to revive and stabilize Israel's economy, which was not a particularly surprising perspective for a profcssional economist. His view merged with that of Arens, at least superficially, since both men stressed the importance of preserving the country's high-technology workforce.

On the other hand, reports of Israeli stubbornness on the issue could not have failed to reach the secretary of state. I suspect that he intended his letter, which yet another Jerusalem Post story rightly described as "friendly but firm," to be more a plea to the Israelis somehow to reconcile their differences with us than a threat to terminate the project. Nevertheless, the fact that Shultz was prepared to intervene at all on the matter was certain to chill the hearts of the Lavi project team.

The news was not all bad for the Lavi's supporters, however. They still had the prime minister and the cabinet firmly in their camp. Shimon Peres assured the cabinet at its regular Sunday-morning meeting on May 26 that he remained committed to the Lavi. The cabinet reaffirmed its support of the program, though not without the misgivings of several ministers. Among them, we were sure, were Finance Minister Yitzchak Modai and former defense minister Ezer Weitzmann. This show of support was to be repeated, like some political mantra, over and over again during the following twelve months.

{p. 137} Our arrival in Israel was greeted by a new spate of editorial comment and public debate about the Lavi program. Naval modernization, the reason for our trip, attracted only a modicum of commentary. The cabinet's May 26 decision had done little to dampen the debate. The mass-circulation Ma'ariv encapsulated growing public skepticism by noting that the burden of proof was on the government to demonstrate that its figures were correct and that ours were wrong. Ma'ariv added that there was opposition to the project from within the prime minister's office, which indicated to me that Peres's eeonomic adviser, Amnon Neubaeh, felt sufficiently confident about the tide turning against the plane that he could give more explicit, and critical, backgrounders to the press.

Another eause for press eomment prior to our arrival was the release of a major review of the Lavi issue by a senior researeher at Tel Aviv University's Jaffee Center for Strategie Studies. The report foreeast that as a result of the Gramm-Rudman-Hollings legislation,

{p. 138} Israel might have to livc with reductions of 300 million in security assistance. In the "worst case," the study added, those reductions could he twice as large. It concluded that Israel simply could not afford the airplane.

The report raised eyehrows for several reasons. The Jaffee Center is Israel's first, and at the time arguably its foremost, strategic studies think tank. It had an international reputation for balanced and forward-looking analysis on major Israeli security issues; for example, it was among the first institutions to issue serious proposals for a potential settlement with the Palestinians. It was led with a firm hand by a former chief of intelligence who was known to be close to Rabin. Given the center's status, it was hardly surprising that the press played up the report, which was likely to have a considerable impact on mainstream Lahor Party thinking.

Rabin angrily rejected the Jaffee Center's report and conclusions. Nevertheless, since he had only recently imposed a ceiling on the project's expenditures, his outrage may have been more for the benefit of his party's Lavi supporters than from genuine irritation at the study's findings.

Among the more interesting published reactions to the Jaffee Center's report was an op-ed piece in the Jerusalem Post on the day of our arrival. In a seathing analysis, the author cited the study to support his assertion that it would be exceedingly difficult for the United States to increase its security assistance budget if our estimates proved correct. ...

The op-ed was but one of three that filled an entire page of the Post's Focus section in the edition that appeared on the weekend of our arrival and anticipated our upcoming talks. Like all Isratli papers, the Post gets its largest readership on the weekend, which in Israel takes place on Friday and Saturday. With no papers publishtd on Saturday in Israel, it is the Friday edition that is the equivalent to the American Sunday paper.

{p. 157} None of the foregoing deterred the IAI marketeers, of course. It was not long after our study appeared that we began to hear rumors of IAI representatives trying to sell the Lavi in the company's traditional hunting grounds, notably in Latin America. Late in April we obtained evidence on this score that was considerably more concrete. Fred Ikle was sent a copy of a full-page advertisement for the Lavi that IAI had placed in Fuerza Aerea, the Chilean air force's official publication. The page carried a picture of the plane in its hangar, with the caption "Avion Lavi, fabricado por la Industria Aeronautica de Israel."

{p. 158} Both Ikle and I found the ad infuriating. It not only conveyed the impression that the Lavi was for sale overseas - which was impossible without our consent - it also gave the lie to the Israelis' claim about its uniqueness to the Middle Eastern context, which on its face was the most telling operational case for the plane.

The White House was also caught by surprise, and made no bones about its annoyance. Aviation Week quoted a "White House official" who asserted that "we were told categorically that the Lavi was not being developed for export. Now they want to export to the U.S. and third countries." The journal also reported that American officials had concluded that the Israeli cost estimates presupposed export sales of up to two hundred aircraft. In fact, we had not explicitly attempted to reconstruct the Israeli estimates. But it was clear to us that unless Israel exported a significant number of aircraft, production runs would be too low to enable IAI to come even close to meeting Israel's stated cost targets.

It was good, from the DoD perspective, that the White House was being quoted on the issue of exports, and that the Israelis saw that other agencies shared our concern about the long-term prospects for the airplane. The Israeli response to the White House concern was a bit too cute: Israel had no present intention to export the Lavi. "With U.S. permission to re-export U.S.-made parts, export sales might be a possibility," an official told Aviation Week. It was not easy to figure out how this response squared with the advertisement in the Chilean air force magazine. After dealing with the Israelis for over a year, however, nothing surprised me anymore.

{p. 170} Some members of Congress actually did speak out against the plane. One notable example was Gary Hart, senator from Colorado and putative presidential candidate. Hart went so far as to suggest in a television interview that the Lavi was not necessary for Israel and that the country would do better to acquire American jets instead. Hart, a member of the Armed Services Committee, had a reputation as a champion of Israel's cause. His statement came as a shock and surprise to Lavi advocates, who identified all opponents of the plane with Israel's enemies. Hart's statement was even more irritating because he had only recently returned from Israel, where he had toured IAI and seen the Lavi, and because it was made just before the rollout. The Israeli response was churlish, reflecting an attitude that had permeated too large a portion of the upper reaches of the governing establishment: "The dogs are trying to bark," said an official who was too much of a coward to allow his name to appear in print beside the quotation.

Meanwhile, the issue of the blocked contracts finally came to a head. George Shultz had never agreed with Weinberger's position, and was upset that he had moved unilaterally. Rabin was even more upset. On the Friday before the rollout he went public on the issue of the contracts and said that Pickering and I had agreed to a "study for

{p. 171} contracts" arrangement. He was furious that we had not delivered on what he considered to be our part of the bargain. "As long as there is no understanding with the U.S. on the release of those funds meant for the Lavi project which it is withholding," he asserted, "we will not cooperate in examining the alternatives proposed by the Americans."

{p. 172} I had barely had time to breathe after the cable incident when I was told by Larry Icenogle that Moshe Arens, in the course of an Israeli television interview relating to the Lavi rollout, had branded me as "the number one enemy of the Lavi project in the United States." I was floored that I commanded such importance in his eyes. I was particularly irked by the remark after having spent the better part of a week working to carry out my assurance land Tom Picker- ing's to Rabin that the contracts would be released so as to ensure the study went forward. I then learned that the Israelis had been led to believe that other "pro-Israel" officials had worked the compro- mise; no doubt they erroneously concluded that I opposed it.

I felt no better when a reporter for Defense News phoned to get my response, as an Orthodox rabbi, to my characterization by Moshe Keret, the president of IAI (the prime beneficiary of the just-released contracts, in a series of four-letter words. I could only reply that my religious preferences were my own business, and that Keret's indelicacy was unseemly for a major Israeli industrial figure.

I later learned that Keret had spoken to an American audience on hand for the rollout of the Lavi. I rcceived a variety of reports of what

{p. 173} he actually said; the only differences among them were the exact nature of the epithets he used. To their credit, Jim Roche, now a senior official of Northrop-Grumman, and Edward Luttwak, the internationally acclaimed strategist, proved to be true friends by standing up to Keret - in front of the assemblage - and telling him that they, unlike him, knew me personally, and that his outburst reflected badly on him rather than on me. Both his remarks and those of Arens also indicated to me that they were desperately afraid of the alternatives study, and of the damage to their program that was sure to follow in its wake.

{p. 174} The Israelis gave Kemp the red-carpet treatment. He met with Rabin, Peres, and Keret. He was photographed in the Lavi cockpit. For his part, Kemp said all the "right" things that the Israeli press and public wanted to hear. He paid his "highest compliments for the technological and engineering expertise of all here who have labored to produce this amazing fighter aircraft. It is a beauty to behold." Like Jewish mothers when their precious little boy conducts a flaw- less Torah reading at his bar mitzvah, Arens, Keret, IAI vice president Bully Blumkine, and Eini must have soaked up Kemp's words, sat back in their seats, and "kvelled."

Rabin and Peres also spoke to the crowd, who enjoyed a typically bountiful Israeli reception afterward. Peres insisted that the country had "no alternative." Rabin told foreign correspondents that since Israel was not requesting American forces during a war, it was Israel's right to determine its own defense policy and programs.

{p. 178} The major American papers and newsmagazines also were devoting ever increasing attention to the story. For example, the Washington Post's unflattering page-one portrait of the Lavi program included a quotation from a former State Department official who likened the creation of the Lavi to the "story of the stone soup." In the old tale, a man offers his stone to cook soup for a gullible stranger. He then requests water, carrots, onions, meat, and seasoning. Soon the soup has become a beef stew at the stranger's expense. The former official said he was reminded of the story when the Israelis proposed the Lavi in 1981. "They were going to build this airplane ... all they needed was American technology and American money." That it was a fo mer diplomat, rather than a DoD official, relating the tale made it even more compelling. It was becoming increasingly clear that most Americans who were involved with the project recognized it was nothing more than a rip-off.

{p. 252} The cabinet had finally come to grips with thc Lavi issue. The vote was 12-ll to cancel the plane. Four ministers had abstained, but the critical abstention was Arbelli. She finally had given in to tremendous pressure from the Labor leadership and did not vote for the Lavi. Nissim voted against the plane, the only Likud minister to do so.

THE LAVI VOTE: KEY MINISTERS

For

Arens (Likud) Shamir (Likud) Sharon (Likud) Levy (Likud) Modai (Likud) Sharir (Likud)

Against

Peres (Labor) Rabin (Labor) Nissim (Likud) Weitzmann (Labor) Yaacobi (Labor) Navon (Labor) Bar Lev (Labor) Tzur (Labor)

Abstaining

Arbelli-Almozlino (Labor)

The cabinet adopted a compromise proposal by Peres to allocate $100 million to Lavi technologies; it was Peres who got Arbelli to change her vote and support his compromise. "Immediately after the vote Mrs. Arbelli-Almozlino ran from the govermnent meeting and burst into tears." At long last, the Lavi was grounded.

{p. 253} Aftermath

The Lavi decision caused an uproar in Israel. There were massive demonstrations orchestrated by the IAI unions. Workers blocked the main roadways in Tel Aviv and Jerusalem, as well as Highway 1 that links the two cities, by creating barricades of burning tires. Workers' committees pleaded with Prime Minister Shamir to freeze the decision for three months while studying alternatives that might save the program. Shamir would not commit himself.

For three days the workers continued to demonstrate, snarling traffic on Israel's main highways and delaying flights at Ben Gurion Airport. Demonstrators marched to Labor Party headquarters in Tel Aviv, venting their spleen at Peres and what they perceived as his betrayal of thc program. There were also demonstrations outside Shamir's home in Jerusalem, which was guarded by riot police on horseback. Workers also demonstrated outside the finance ministry, and at the Wailing Wall, where they blew shofars to mourn the decision. Some demonstrators even tried to bring a model of the Lavi to the Wailing Wall plaza, but they could not get by the policc.

IAI and the unions announced that the decision would touch off a brain drain. Within days of the cabinet's decision, hundreds of engineers had lined the streets in front of the American and Canadian embassies seeking immigration visas. But the cabinet decision

{p. 254} was not reversed. Shamir announced that "we must not teach the public that government decisions will not be kept."

The U.S. govcrnment hurriedly began to make good on its various promises. It agreed to sell Israel off-the-shelf F-16s, with Israeli components, in effect an updated Peace Marble II. The Israelis ultimately purchased seventy-five aircraft, though at a price considerably higher than they had hoped to pay. Still, as even David Ivri pointed out, it was about $5 billion lower than what the Lavi would have cost them.

Ivri quickly negotiated the additional $100 million in offshore funding that the United States had promised and obtained an exten- sion of the directed offsets agreement beyond fiscal year 1988, when they had originally been meant to be phased out. The two countries also began a complicated negotiation on the size of the termination liabilities; virtually all the American companies supporting the Lavi took the news in stride.

It took somewhat longer for the United States to agree to fund the lion's share of an Israeli ATBM program, later called the Arrow, along the lines that I had recommended in my final briefing to Rabin and the MoD. The Israelis originally hoped that the United States would foot 90 percent of the bill; the initial U.S. position was to offer 50 percent. I felt that 50 percent was too low, and urged Assistant Secretary Richard Armitage to raise the offer to 80 percent. The two sides ultimately agreed on 80 percent, and much of the work went to IAI.

{end quotes}

(2) Israel's role in China's new warplane

By David Isenberg

Asia Times December 4, 2002

http://atimes.com/atimes/China/DL04Ad01.html

The recent unveiling (sort of) of China's first domestically designed (sort of) fighter jet was the culmination of a long saga of international military-hardware wheeling and dealing that has seen US-designed or -funded high-tech weaponry fall into the hands of potential military rivals

...  China confirmed the existence of, but did not unveil, the Jian-10 fighter jet. ...  the J-10 (F-10 being the export version ...) ...

The program began in the late 1980s and is thought to be based on an Israeli design. It contains Israeli and Russian avionics, and is powered by Russian engines.

Chinese engineers developed the J-10 from a single F-16 provided by Pakistan, and with assistance from Israeli engineers associated with Israel's US-financed Lavi fighter program, which was canceled in 1987, according to the Federation of American Scientists website. The Lavi was based on the US F-16 and built with US$1.3 billion in aid from Washington.

In 1983, when US support for the Lavi commenced, the program was opposed vigorously by the Defense Department, partly because of re-export concerns. An early supporter of the Lavi was George Shultz, then secretary of state in the administration of US president Ronald Reagan. Shultz would later label his advocacy of the program a "costly mistake".

Only in early 1995 did the US government make public its concerns about Israel's Lavi-related technology re-exports to China. David Lari, director general of Israel's Ministry of Defense, acknowledged in an Associated Press interview that "some technology on aircraft" had been sold to China and that some Israeli companies may not have "clean hands".

Yet China's acquisition of the Russian Su-27, after China had attempted for years to develop the J-10 aircraft with equivalent technology to perform similar functions, is seen by some experts as a sign that China lacks confidence in its domestic industrial capabilities.

Though it has never been certain precisely what specific technologies and systems Israel provided, it was reported that the Jian-10's radar and fire-control system is the Israeli-made ELM-2021 system, which can simultaneously track six air targets and lock on to the four most threatening targets for destruction.

In December 1991, US intelligence officials announced that Israel planned to open a government-coordinated and -sponsored "arms office" in China. Given what the Israelis had to offer, and what the Chinese needed, it was most likely that a transfer of avionics and other technologies developed in the Lavi program would ensue, since there was a void in the Chinese avionics and fire-control system capability due to the 1989 termination of a US-Chinese program in response to Tiananmen Square.

China and Israel started collaboration in the early 1980s and full-scale cooperation was under way officially by 1984. As neither China nor Israel was capable of developing the propulsion system required by the J-10, in 1991 China acquired the AI31F turbofan engine from Russia for incorporation into the J-10 fighter. This engine is also used in the Su-27 air-superiority fighter that Chinese acquired from Russia. As the performance of the AL31F engine is significantly better than that of the American PW1120 originally slated for the Lavi, it may be anticipated that the performance of the J-10 will be accordingly enhanced. Built by the Chengdu Aircraft Industrial Corp, the J-10 attempts to rival current fourth-generation Western fighters. China has inked a 10-year deal with the Russian engine maker SRPC Salut for 300 Al-31F engines for its J-10 program and will begin production of the jets next year.

The plane is said to have capabilities similar to the Su-27, the Russian MiG-29 and the US F-16 fighter jets, but with an estimated cost of less than $10 million, it could rival other jet makers on the international market.

In March 1997, despite official denials from Israeli officials, the US Office of Naval Intelligence in its unclassified "Worldwide Challenges to Naval Strike Warfare" restated more strongly than it had the previous year its belief that US-derived technology from the canceled Israeli Lavi fighter was being used on China's new F-10 fighter. It said, "The design has been undertaken with substantial direct external assistance, primarily from Israel and Russia, with indirect assistance through access to US technologies." In fact, according to the annual intelligence report, "the F-10 is a single-seat, light multi-role fighter based heavily on the canceled Israeli Lavi program".

Until it was canceled in 1987, much of Lavi technological development was paid for by the United States. Ironically, the potential capability of F-10 fighters was cited by both the US Navy and Air Force as one of the future threats justifying the expenditure of billions on new tactical aircraft, such as the F-22, F/A-18F, and Joint Strike Fighter. The fact that possibly US-derived technology provided by an ally might be contributing to that potential threat is a delicate subject.

However, this is not the first time accusations of illegal technology have been made. A March 1992 report by State Department inspector general Sherman Funk, "Report of Audit: Department of State Defense Trade Controls", states that alleged Israeli violations of US laws and regulations "cited and supported by reliable intelligence information show a systematic and growing pattern of unauthorized transfers ... dating back to about 1983".

In the summer of 2000, the Washington Times reported that a memo circulating inside the Pentagon's Defense Threat Reduction Agency told analysts they no longer had to gain input from the Defense Intelligence Agency before deciding whether controlled technology should be transferred to Israel. The DIA had compiled evidence that Israel had violated US export regulations by transferring missile, laser and aircraft technology to China.

Subsequently, when Israel tried to sell the Phalcon to India, the US government demanded that Israel limit arms exports. Israel was told that it must inform the US of all weapons transfers to 27 nations regarded as "countries of concern" such as China, India and Yugoslavia.

"Israel ranks second only to Russia as a weapons-system provider to China and as a conduit for sophisticated military technology, followed by France and Germany," stated a report this year by the US-China Security Review Commission, a panel established by Congress to examine security and economic relations between the two countries. "Recent upgrades in target acquisition and fire control, probably provided by Israeli weapons specialists, have enhanced the capabilities of the older guided missile destroyers and frigates" in the Chinese navy's inventory, it said.

The commission cited Israel as a supplier to Beijing of radar systems, optical and telecommunications equipment, drones and flight simulators.

Arms exports have not only played a crucial role in offsetting Israel's trade imbalance but have also performed a key role in furthering its diplomatic efforts. The sale of arms and technology has become one of the most effective techniques to furthering Israeli goals overseas. The quiet ties with China and India and the growing alliance with Turkey in the 1980s and the 1990s are good examples of strong links based on such cooperation.

The J-10 is hardly the only result of Israeli-Chinese military cooperation. For example, the Chinese F-8, the same type of plane that collided with the US reconnaissance plane last year, is armed with Israeli Python-3 missiles. The Python, adapted from the US ALM-9L Sidewinder missile, has a high degree of US technology. Ironically for Israel, China apparently sold its version of Python-3, called the PL-8, to Iraq.

And, as was widely publicized, Israel was set to sell China the Phalcon, an airborne early-warning radar system, until it was forced by the United States to cancel the deal. The US Central Intelligence Agency also believed Israel was marketing its STAR cruise missile in China. The STAR incorporates sensitive US technology.

And former US officials report that both Israel and the Dutch company Delft made unauthorized sales of US thermal-imaging tank sights to, among others, China. The sights were installed on China's 69 MOD-2 tanks, some of which were sold to Iraq. The United States acquired physical evidence of this transfer after these tanks were used against US marines in the 1991 Gulf War.

{end quotes}

(©2002 Asia Times Online Co, Ltd.

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