Proposed Loan Conditions on Israel Not Applied to Others, Jews Charge

Flexing its muscle in a battle to win $10 billion in U.S.-guaranteed loans for Israel, a powerful Jewish umbrella group accused the Bush administration Thursday of proposing conditions on the Jewish state that are not applied to other countries seeking similar assistance.

The Conference of Presidents of Major American Jewish Organizations said Secretary of State James Baker had “misstated the history of U.S. loan guarantees to foreign lands” when he told lawmakers Tuesday “the United States conditions its economic and military assistance to countries when we give them that assistance.”

According to Shoshana Cardin, chairman of the Conference of Presidents, “only in the case of Israel has the administration insisted on demanding a political requirement as the price of its approval” for such aid.

She said that last year, Algeria, Egypt, Tunisia and Yemen had received a total of $3 billion in credits through the Export-Import Bank and that “none of these loan guarantees were tied to political conditions.”

And during the past five years, she said, the United States has “unconditionally guaranteed more than $12 billion in loans to Arab countries, irrespective of the policies of the governments involved.”

At a Senate appropriations subcommittee hearing Thursday, Sen. Frank Lautenberg (D-N.J.) pressed Baker on why the United States had placed no political conditions on that $12 billion in loans.

“Senator, I don’t know, because I don’t know what guarantees you’re talking about,” the secretary of state replied. “I’ll be glad if you give me the list of guarantees; then I’ll send you an answer for the record,” he added.

MEETING WITH BAKER AIDE

But it was Baker’s testimony to a congressional panel last week that set off the sharp reaction from the Conference of Presidents, which represents 48 major American Jewish groups.

Baker announced that the Bush administration would only be willing to guarantee $10 billion in loans for Israel if it agreed to halt all construction in the administered territories.

The United States would be willing to guarantee less than that amount, he said, if Israel stopped all new construction and only completed building projects already begun.

Israel plans to use the loans to help absorb up to 1 million immigrants expected to arrive by 1995. While the Bush administration has committed itself in principle to assisting in this humanitarian cause, Baker basically told lawmakers the amount of loans Israel gets depends on the amount of money it spends on West Bank settlements.

The Conference of Presidents held a closed-door meeting Thursday with one of Baker’s chief aides to express dissatisfaction with that stance and with hints this week that the secretary might even toughen it with new conditions.

The meeting with Dennis Ross, director of the State Department’s policy planning staff, was described as a friendly but intense exchange.

The Jewish leaders were said to have expressed concern about the administration’s willingness to reach an agreement on the loan guarantees and the implications that would have on both U.S.-Israeli relations and the Middle East peace talks.

Key members of the Senate subcommittee that controls foreign appropriations have been meeting throughout the week with Baker to try to reach agreement on a loan guarantees package. They want to achieve a deal soon so that the guarantees can be included in the foreign aid bill that Congress must adopt by March 31.

TWO SIDES STILL FAR APART

But on Thursday, Sen. Robert Kasten (R-Wis.), the ranking Republican on the subcommittee, told reporters that the two sides are still far apart.

Sen. Patrick Leahy (D-Vt.), the subcommittee chairman, has proposed that Congress approve the guarantees now and give the Bush administration the discretion to work out the timing and terms under which they will be released.

Kasten, who favors extending the guarantees to Israel with no strings attached, is reportedly willing to give the administration that discretion but only after the first installment of guarantees for $2 billion is released. Israel has asked that the $10 billion in guarantees be spread over five years.

But Baker is said to be hanging tough on retaining full discretion.

Leahy and Kasten were hoping to bridge their differences with Baker before he departs this weekend for a meeting in Belgium of the North Atlantic Council.

That way, Leahy can convene his subcommittee next week to begin moving the foreign aid bill through the legislative cycle.

Kasten told reporters he expects the bill to reach the Senate floor in such a way that it can ultimately be sent to Bush by the March 31 deadline.

While Kasten was making that comment on the street outside a Senate office building, Baker suddenly appeared in front of him and gave the startled senator a big bear hug.

Kasten smiled and said they would be talking to each other soon.

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