Caspar Weinberger’s Revenge: U.S. Aid Package May Cut Israel's Local Defense Procurement

Reagan's defense secretary is gone, but the measure he was forced to accept - the use of U.S. military aid money for procurement in Israel - may finally be eliminated.

Moshe Arens
Moshe Arens
Moshe Arens (left), then Israeli defense minister, and his U.S. counterpart Caspar Weinberger at the Pentagon, July 27, 1983.
Moshe Arens (left), then Israeli defense minister, and his U.S. counterpart Caspar Weinberger at the Pentagon, July 27, 1983. Credit: Robert Ward
Moshe Arens
Moshe Arens

For many months now discussions have been held between Israel and the U.S. regarding the American military aid package for the coming years. Israel has to decide whether to accept the offer made by the present administration in Washington or wait and gamble that a better deal can be struck with the next administration.

The major problem for Israel in the present proposal is the elimination of the arrangement whereby Israel can use a quarter of a billion dollars of U.S. military aid provided through the Foreign Military Financing program each year for procurement in Israel, rather than for procurement in the U.S., an arrangement that has existed ever since Washington decided to participate in the abortive program to produce the Lavi fighter jet.

The U.S. Foreign Military Financing program is designed to provide grants and loans to help countries purchase weapons and defense equipment produced in the United States. The beneficiaries of the program are the countries being granted the financial aid and the U.S. defense industries whose products will be purchased with the help of this financing. The exceptional provision that has allowed Israel to use a quarter of a billion dollars of this aid in Israel is of considerable importance to Israel’s defense industries, and will be sorely missed should it be deleted in the next aid package.

The unprecedented agreement to use U.S. military aid funds for procurement in Israel had been obtained specifically for the Lavi program as the result of intensive efforts by myself during my tenure as ambassador in Washington, and by Danny Halperin while he was the economic counselor at the embassy. Both houses of Congress and the administration lent their support to this unusual measure. President Ronald Reagan publicly endorsed it.

Those who plotted to kill the Lavi program realized that their efforts could not succeed if cancellation of the Lavi were to entail the elimination of the use of U.S. military aid for procurement in Israel. Their first objective was therefore to bring about a change in that provision so that it would not be limited to the Lavi program. For Caspar Weinberger, the U.S. secretary of defense at the time, this was a bitter pill to swallow, but he was prepared to go along with it as long as his immediate objective, killing the Lavi program, was achieved.

Weinberger and his assistant Dov Zakheim, who were flouting the policy of the president and the will of Congress, could not have brought down the Lavi without the active collaboration of a number of Israelis, who, each for their own reason, decided to pressure the Israeli government and bring about the one-vote majority decision that cancelled the Lavi: Shimon Peres, who argued in the government that the Lavi was not a sufficiently advanced aircraft, and in its place a new fighter aircraft should be developed, which he named “Lavi 2000”; Ezer Weizman, who insisted the Lavi was too advanced an aircraft and therefore should be cancelled; Air Force Commander Avihu Ben-Nun, who told the government that the air force was going to be downsized, so only 80 Lavi aircraft would be needed rather than the planned 120, and that in any case the air force planned to procure the American F-22, which would be superior to the Lavi.

Also, the economic wiz kids from the Finance Ministry who told the government Israel would face economic catastrophe if the program continued. And the hapless minister of health, Shoshana Arbeli-Almozlino, who was browbeaten by Peres and forced to abstain in the vote while tears streamed down her face.

Some of them are not with us anymore, others would probably prefer to forget what they said at the time. And of course the Lavi was shot down and Israel Aircraft Industries was dealt a mortal blow from which it has not recovered to this day. Weinberger is gone, too, but after all these years he may be getting his revenge. The use of U.S. military aid money for procurement in Israel, one of the many achievements of the Lavi program, may finally be eliminated.

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