Special Analysis the Lavi is a Target of U.S. Anger

Earlier this month at a private meeting at the White House, a group of Jewish leaders was briefed by Reagan Administration officials about the Lavi, the fighter jet Israel wants to build.

According to one source at the meeting, the sharpest warning came from Secretary of Defense Caspar Weinberger, who said that a decision by Israel to develop the plane would result in a refusal by the United States to allocate additional military assistance for the Lavi.

Weinberger’s warning shows the extent to which the Administration, while publicly stating that the decision about the Lavi is up to Israel, has been trying nevertheless both publicly and privately to get Israel to scrap the project. On Aug. 11, the day after members of the Israel Knesset’s Defense and Foreign Affairs and Finance committees voted to continue the Lavi project by a vote of 22 to 6, the State Department made an announcement about the plane at its daily briefing–a procedure not always used.

“Given the budgetary constraints we and Israel face, we believe a decision by Israel to terminate the Lavi would be in the best interests of both our countries,” said spokesperson Charles Redman.

One official of a Jewish organization called the statement “unprecedented” because of its “harsh tone,” but another commented that “what you are seeing is a lot of frustrated people who think they’ve given good advice and who haven’t been listened to.”

DEFENSE OFFICIALS ARE CONCERNED

This “good advice” has been to scrap a jet which, in the words of a Pentagon spokesperson is “so, so expensive” and keeps “getting bigger and bigger.” About $1.5 billion dollars has already been spent on the Lavi, most of it from U.S. military assistance, and analysts believe about another billion dollars will be required before the planes roll off the assembly line in the early 1990’s.

Defense officials say they are concerned that the Lavi, which will soak up about 30 percent of Israel’s $1.8 billion military package, will leave little else for Israel’s other defense needs. This includes naval modernization, continuation of the Merkava tank and other Air Force equipment.

The U.S. has already made it clear that Israel cannot expect to receive any additional funds from the U.S., which is facing its own budgetary restraints. “There is no more money. We have this thing here called Gramm-Rudman (the deficit reduction act). There is no more money,” a Defense spokesperson said.

Pentagon officials are hoping that Israel will be induced to accept what they consider to be a generous package offered to Israeli Defense Minister Yitzhak Rabin when he met with Administration officials last month. This package included 75 to 100 F-16cs fighters, at rates cheaper than sold to other allies by waiving research and development costs with delivery to be made in the early 1990s, and allowing Israel to keep $300 million of its $1.8 billion military budget for offshore procurement.

Also being considered is a proposal to have the Israelis co-produce General Dynamics, F-16 fighters. Ironically, the Israelis sought co-production 10 years ago when they were seeking new planes to update their aging fighter planes which suffered bruising losses from Soviet-made surface-to-air missiles in the Yom Kippur War. It was only after the Carter Administration rejected co-production that the Israelis turned to development of their own plane–the Lavi.

BASIS FOR PENTAGON OPPOSITION

Some observers say the Pentagon opposition to the Lavi is based on more than a desire to save Israel from itself. The cost of the Lavi has risen only because the plane has become more sophisticated, not because of cost overruns, say the plane’s supporters. They argue that costs have been very low, especially compared to programs in the Pentagon, often criticized for wasteful spending.

“They (the Pentagon) are frightened to death Israel will be able to produce a sophisticated airplane at such a low price which will embarrass the Pentagon,” suggested one Lavi proponent.

Marvin Klemow, Washington representative of the Israel Aircraft Industries, also points out that about 40 percent of the work on the Lavi will be done in the U.S. by American firms, which amounts to $1.5 billion in contracts and 37,000 U.S. jobs.

“If the Lavi was cancelled tomorrow, that means money would be spent on other programs not spent here,” he said.

Some also say the Pentagon has been reacting to opposition from defense corporations who are worried that the Lavi might be competition for their planes or would gain from selling F-16s. General Dynamic denies that it is lobbying against the plane.

But a spokesperson for Northrop, which is not producing any part of the Lavi, acknowledged that in 1983 they were opposed to the Lavi when it might have competed with one of their planes, the F-20, in which they had invested $1 billion of their own funds and were hoping to sell to the Air Force.

“We were concerned that we were competing with an offshore aircraft program funded with U.S. money,” said a Northrop spokesman. Northrop was forced to drop the F-20 program when the Air Force chose to modify existing F-16s.

DIFFICULTY OF EXPORTING THE LAVI

Some experts have pointed out that it would be very difficult for the Israelis to export the Lavi when so much of the world market is off limits to them and potential customers like South Korea, Taiwan and Argentina would only be able to afford a few planes. The exporting of the Lavi would also be restricted by the U.S because so many of the plane’s parts are made in the U.S.

But Klemow said while the “first goal is to produce the airplane for the Israelis, exporting is something ten years down the road.” Klemow also suggested that a Lavi-type plane might be considered for use by the U.S. in development of a close air support program.

“It would save the Pentagon hundreds of millions of dollars, and makes sense since the U.S. taxpayer is heavily involved in the jet,” he said. But the Pentagon official stated flatly, “The Air Force has no interest in the Lavi whatsoever, none.”

Whatever its reasons, the Pentagon has long been opposed to the Lavi, which would never have gotten off the ground without assistance from Secretary of State George Shultz and the Congress. Although the Israelis started work on the plane in 1980, it wasn’t until 1983, when Moshe Arens became Secretary of Defense, that the U.S. got involved.

Arens had the double credentials of being an aeronautics engineer who envisioned a jet that would be more sophisticated, and a former Ambassador to U.S. who could help get U.S. backing for the plane. In 1983 Shultz helped to issue necessary licenses enabling U.S. companies to transfer technology to Israel. The same year Congress passed an amendment earmarking $550 million of Israel’s $1.7 billion aid for the Lavi. A year later Congress allocated $1.3 billion for the jet through 1987.

PRESSURE BY THE PENTAGON

But the Pentagon was hesitant about the project all along and in 1986 even tried to impound $67 million authorized by Congress. Weinberger was reacting to a study by Dov Zakheim, then Deputy Undersecretary of Defense for planning and resources, which suggested that the Israelis had strongly underestimated the Lavi’s cost.

When Zakheim came into the Pentagon in 1984 he found all the costs analyses done on the Lavi were two years old. When he completed his own estimates in the winter of 1986, he projected the Lavi’s cost at $22 million, compared to an Israeli figure of $15.2 million. And even his numbers, he insisted, were conservative, because it did not take into account such factors as delays.

If there’s any lesson to be learned in working with Israel on a major project it is that “it’s to everyone’s advantage to get our systems analysts together to get an understanding,” said Zakheim, who has since left the Pentagon. “Our analysts should have started out together. If they would have they (the Israelis) would have realized the (Lavi’s) cost in 1981 and 1982,” he said.

But a highly regarded study of the Lavi’s cost by the Congressional watchdog service, the General Accounting Office, says Zakheim’s figures were too high. The GAO put the annual figure at $18 million, a figure which the Pentagon says is accurate only if Israel produces 300 planes, when only up to 150 are planned.

ISRAELI OFFICIALS FEEL SQUEEZED

It is still not clear whether Weinberger will be able to stop military funds from going to the Lavi, which will require congressional approval. But Israeli officials and Jewish groups say they are worried a vote by the Israeli Cabinet to continue with the Lavi will prevent them from obtaining defense contracts.

“There will be a lot of anger” towards Israel, predicted an official of one Jewish organization. A vote to go with the Lavi would also require Jewish organizations to support the plane, this same official added, something they may do with “little enthusiasm.”

But another proponent of strong U.S.-Israel relations was more sanguine about the ramifications of a decision to proceed with the Lavi: “It’s definitely not the Lebanon war or annexing the West Bank. This is a watershed, it may cause a little bit of discomfort, projects will be delayed.

(But) I can’t see the Lavi being a catalyst for negative U.S.-Israel relations. We’ve been through so much worse.”