U.S. to Release Loan Guarantees to Israel in Lump Sum, Says Baker

Secretary of State James Baker this week said publicly for the first time that when the United States gives Israel $400 million in loan guarantees to build housing for Soviet immigrants, it will do so in one lump sum.

In making the announcement Wednesday during testimony before the House Foreign Affairs Committee, Baker acknowledged reports that the State Department had been leaning toward the idea of releasing the guarantees in three installments.

But doing so would have created additional delays beyond the current ones blocking U.S. release of the guarantees, the secretary said. He said Israel has yet to provide the United States with promised technical data on “the Israeli housing sector and plans for immigrant absorption.”

Baker said his department is “continuing to follow up as well on various aspects of Foreign Minister (David) Levy’s letter of assurances to me” last fall that pledged, among other things, that Israel would not use any of the $400 million to build homes in the West Bank.

“We are working on it as diligently as we can, because we’d like to release this at the earliest opportunity,” Baker said.

Rep. Donald Payne (D-N.J.) asked Baker to query Levy about news reports last November that said Israel would buy from South Africa some of the 33,000 prefabricated housing units needed for Soviet immigrants.

Payne expressed deep concern about the reports in an interview in December with the Jewish Telegraphic Agency.

But the Jan. 9 edition of the International Trade Reporter, published by the Washingtonbased Bureau of National Affairs, reported that Israeli Prime Minister Yitzhak Shamir had instructed the Housing Ministry to give preferences to U.S. firms in making the purchases.

The newsletter, paraphrasing Shamir spokesman Avi Pazner, said the prime minister, upon returning from a U.S. trip in December, “canceled government negotiations with South African firms intending to undercut the prices of their U.S. competitors and instructed Housing Minister Ariel Sharon to buy only from American firms.”