Cora Currier / Pro Publica & Anjali Kamat and Nicole Salazar / Al Jazeera America – 2013-10-16 00:55:39
http://www.propublica.org/article/in-big-win-for-defense-industry-obama-rolls-back-limits-on-arms-export
In Big Win for Defense Industry, Obama Rolls Back Limits on Arms Exports
Cora Currier / Pro Publica
(October 14, 2013) — The United States is loosening controls over military exports, in a shift that former US officials and human rights advocates say could increase the flow of American-made military parts to the world’s conflicts and make it harder to enforce arms sanctions.
Come tomorrow, thousands of parts of military aircraft, such as propeller blades, brake pads and tires will be able to be sent to almost any country in the world, with minimal oversight — even to some countries subject to UN arms embargos. US companies will also face fewer checks than in the past when selling some military aircraft to dozens of countries.
Critics, including some who’ve worked on enforcing arms export laws, say the changes could undermine efforts to prevent arms smuggling to Iran and others.
Brake pads may sound innocuous, but “the Iranians are constantly looking for spare parts for old US jets,” said Steven Pelak, who recently left the Department of Justice after six years overseeing investigations and prosecutions of export violations.
“It’s going to be easier for these military items to flow, harder to get a heads-up on their movements, and, in theory, easier for a smuggling ring to move weapons,” said William Hartung, author of a recent report on the topic for the Center for International Policy.
In the current system, every manufacturer and exporter of military equipment has to register with the State Department and get a license for each planned export. US officials scrutinize each proposed deal to make sure the receiving country isn’t violating human rights and to determine the risk of the shipment winding up with terrorists or another questionable group.
Under the new system, whole categories of equipment encompassing tens of thousands of items will move to the Commerce Department, where they will be under more “flexible” controls.
Final rules have been issued for six of 19 categories of equipment and more will roll out in the coming months. Some military equipment, such as fighter jets, drones, and other systems and parts, will stay under the State Department’s tighter oversight.
Commerce will do interagency human rights reviews before allowing exports, but only as a matter of policy, whereas in the State Department it is required by law.
The switch from State to Commerce represents a big win for defense manufacturers, who have long lobbied in favor of relaxing US export rules, which they say put a damper on international trade.
Among the companies that recently lobbied on the issue: Lockheed, which manufactures C-130 transport planes, Textron, which makes Kiowa Warrior helicopters, and Honeywell, which outfits military choppers.
Overall, industry trade groups and big defense companies have spent roughly $170 million over the last three years lobbying on a variety of issues, including export control reform, a ProPublica analysis of disclosure forms shows.
The administration says in a factsheet that “spending time and resources protecting a specialty bolt diverts resources from protecting truly sensitive items,” and that the effort will allow them to build “higher fences around fewer items.”
Commerce says it will beef up its enforcement wing to prevent illegal re-exports or shipments to banned entities. The military has also supported the relaxed controls, arguing that the changes will make it easier to arm foreign allies.
An interview with Commerce Department officials was canceled due to the government shutdown, and the State Department did not respond to questions.
The shift is part of a larger administration initiative to update the arms export process, which many acknowledge needed to be streamlined. But critics of the move to Commerce say that decision has been overly driven by the interests of defense manufacturers.
“They’ve cut through the fat, into the meat, and to the bone,” said Brittany Benowitz, who was defense adviser to former Senator Russ Feingold, D-Wisc., and recently co-authored a paper on the pending changes.
“I think it’s fair to say that the views of the enforcement agencies and actors charged with carrying out the controls haven’t won the day,” said Pelak, the former Justice Department official.
Current controls haven’t prevented the US from dominating arms exports up to now: In 2011, the US concluded $66 billion in arms sales agreements, nearly 80 percent of the global market. The State Department denied just one percent of arms export licenses between 2008 and 2010.
At a recent hearing, a State Department official touted the economic benefits, saying the “defense industry is going to become even more competitive than they are already.”
Under the new policy, military helicopters, transport planes and other types of military equipment that typically need approval may be eligible for license-free export to 36 allied governments, including much of Europe, Argentina, Japan, South Korea, and New Zealand.
According to Colby Goodman, an arms-control expert with the Open Society Policy Center, once an item is approved for that exemption, it’s not clear that there will be any ongoing, country-specific human rights review. (The State Department hasn’t yet responded to our request for comment on that point.)
Goodman is particularly concerned about Turkey, where in the last year authorities violently suppressed protests and “security forces committed unlawful killings,” according to the most recent State Department Human Rights report.
Under the new system, some military parts can now be sent license-free to any country besides China, Cuba, Iran, North Korea, Sudan or Syria. Other parts that are deemed not “specially designed” for military use, while also initially banned from those countries, have even fewer restrictions on re-exports.
Spare parts are in high demand from sanctioned countries and groups, which need them to keep old equipment up and running, according to arms control researchers. Indonesia scrambled to keep its C-130s in the air after the US blocked exports for human rights violations in the 1990s.
In a report on trade in arms parts, Oxfam noted that by the time of the 2011 NATO intervention in Libya, Muammar Qaddafi’s air combat fleet was in dire shape, referred to by one analyst as “the world’s largest military parking lot.” Goodman said Congolese militia members may be using aging arms that the US sold decades ago to the former Zaire.
Pelak says the changes will make enforcement harder by getting rid of part of the paper trail as parts and munitions exit the US: “When you take away that licensing record, you put the investigation overseas.”
His office handled dozens of cases each year in which military items had been diverted to prohibited countries. The Government Accountability Office raised concerns last year about Commerce’s enforcement abilities as it takes control of exports that once went through the State Department.
The president is authorized — in fact, required — to revise the list of items under State Department control. But the massive shift to Commerce means that laws and regulations that were designed with the longstanding State Department system in place may now be up to presidential prerogative.
Vetting for human rights compliance is one such requirement. The Commerce Department said it will also continue to publicly report the sales of so-called “major defense equipment.”
Other laws may not get carried over, however. For example, if firearms are moved to Commerce, manufacturers may no longer have to notify Congress of foreign sales.
Several organizations, including the Center for International Policy, the Open Society Policy Center, and the American Bar Association’s Center for Human Rights, have called on the administration to hold off moving some military items from the State Department, and have asked Congress to apply State’s reporting requirements and restrictions to more of the military items and parts soon to be under Commerce control.
In one area, the administration does appear to have temporarily backed off — firearms and ammunition. Any decision to loosen exports for firearms could have conflicted with the president’s call for enhanced domestic gun control.
According to a memo obtained by the Wall Street Journal last spring, the Departments of Justice and Homeland Security both opposed draft versions of revisions to the firearms category. (The Justice Department press office is out of operation due to the government shutdown, and the Department of Homeland Security did not respond to requests for comment.) Shifting firearms was also likely to be a lightning rod for arms control groups. As the New York Times‘ C.J. Chivers has documented, small arms trafficking has been the scourge of conflicts around the world.
Draft rules for firearms and ammunitions were ready in mid-2012, according to Lawrence Keane, general counsel for the National Shooting Sports Foundation, a trade group for gun manufacturers. The Commerce Department even sent representatives to an industry export conference to preview manufacturers on the new system they might fall under.
But since the school shooting in Newtown, Conn., last December, no proposed rule has been published.
Keane thinks the connection is irrelevant. “This has nothing to do with domestic gun control legislation. We’re talking about exports,” he said. “Our products have not moved forward, and we’re disappointed by that.”
The defense industry has long pushed for a loosening of the US export controls. Initial wish-lists were aimed at restructuring and speeding up the State Department system, where the wait for a license had sometimes stretched to months. The current focus on moving items to Commerce began under the Obama administration.
The aerospace industry has been particularly active, as new rules for aircraft are the first to take effect. Commercial satellites had been moved briefly to Commerce in the 1990s, but when US space companies were caught giving technical data to China in 1998, Congress returned them to State control. Last year, satellite makers successfully lobbied Congress to lift satellite-specific rules that had kept them from being eligible for the reforms.
Newer industries want to cash in, too. Virgin Galactic wrote in a comment on a proposed rule that the “nascent but growing” space tourism industry was hindered by current rules. At a conference in 2011, the chief executive of Northrup Grumman warned of “the US drone aircraft industry losing its dominance” if exports weren’t boosted. (Drones are regulated under missile technology controls, and are mostly unaffected by the current changes.)
Lauren Airey, of the National Association of Manufacturers, named two main objections to the current system. First off, fees: Any company that makes a product on the State Department list has to be registered whether or not they actually export, with yearly costs starting at $2,500. There’s no fee for the Commerce list.
Secondly, any equipment that contains a listed part gets “lifetime controls,” Airey said. If a buyer wants to resell something, even for scrap, they need US approval. (For example, the US is currently debating whether to let Turkey re-sell American attack helicopters to Pakistan.) Under Commerce, “there are still limitations, but they are more flexible,” Airey said.
Airey’s association (and other trade groups) makes the case that foreign competitors are “taking advantage of perceived and real issues in US export controls to promote foreign parts and components — advertising themselves as State-Department-free.” Airey demurred when asked for an estimate on the amount of business lost: “It’s hard to put a number directly on how much export controls cause US companies to be avoided.”
An Aerospace Industries Association executive noted at a panel this spring, “We really did not move the needle at all by complaining about the fact that we weren’t making as much money as we wanted to.”
But at a recent hearing of the House Committee on Foreign Affairs, members of Congress highlighted economic impact.
“In my district in Rhode Island,” said David Cicilline, D-R.I., “as many of our defense companies are looking to expand their business, really, to respond to declines in defense domestic spending, international sales are becoming even more important and really critical…to the job growth in my state.”
William Keating, D-Mass., said that “with declining defense budgets, arms sales are even more critical to the defense industry in my state to maintain production lines and keep jobs.”
“That would not have been the response a decade ago,” said one staffer who works on the issue. “National security hawks would have been worried about defense items moving to the Commerce list. The environment on the Hill has dramatically changed.”
One concern came from the International Association of Machinists and Aerospace Workers, which believes that easing controls on military technology and software could actually lead to more outsourcing of production.
William Lowell, who spent a decade of his 30 years at the State Department directing defense trade controls, told ProPublica that the move represents a major shift in the US attitude towards international arms trade.
US policy has long been aimed at “denying the entry of US military articles of any type into the international gray arms market — for which small arms and military parts are the lifeblood,” Lowell wrote in comments opposing the new rules. “Commercial arms exports have never been considered normal commercial trade.”
US Military Aid to Egypt: Business as Usual
Anjali Kamat and Nicole Salazar / Al Jazeera America
(October 11, 2013) — In the months between Egypt’s July 3 military coup and the Obama administration’s announcement on Wednesday that it would suspend some military assistance to Egypt, nearly 2,000 tons of critical US military equipment continued to flow to Egyptian ports, according to shipping data obtained by “Fault Lines.”
The data, commissioned by Al Jazeera from TransArms, a Chicago-based research center that tracks arms shipments, show that, aside from a delay in one comparatively small delivery of four F-16 fighter jets, the shipping of crucial equipment to Egypt — including vehicles used for crowd control — never ceased.
From July 3 to Sept. 24, the last date for which data were available, eight ships left New York, Baltimore and Norfolk, Va., bound for the Egyptian cities of Damietta and Alexandria, where they unloaded defense equipment covered by laws that require State Department approval.
The cargo included combat vehicles, various missile systems, and spare parts and support equipment for F-16s, AH-64 Apache helicopters, C-130 transport planes, M109 howitzers, M1A1 Abrams tanks and other items.
Humvees and heavy earth-moving equipment made by Caterpillar also sailed during this time. Both these kinds of vehicles were among those used by Egyptian security forces when they violently dispersed supporters of ousted President Mohamed Morsi from Cairo’s Rabaa al-Adawiya and Nahda squares on Aug. 14.
Hundreds were killed in what Human Rights Watch described as the “most serious incident of mass unlawful killings in Egypt’s modern history.” Though the type of equipment is the same, it is difficult to confirm whether the vehicles used against protesters in August were shipped after the coup, because Egypt has been receiving such vehicles for years.
“The US law says it in plain language. When there’s a military coup, aid should be suspended. Instead, what we have here is a signal to the Egyptian military that says, ‘Full speed ahead,'” said Frank Jannuzi, deputy executive director of Amnesty International USA.
Washington had appeared to be fumbling for the right response to Morsi’s removal and the subsequent violent crackdown on the Muslim Brotherhood and other supporters.
The administration declined to call his ouster a military coup, saying such a determination would not be in the interests of the United States. Doing so would have triggered a law forbidding military assistance to governments installed by coups.
In July the administration announced that it would delay the delivery of four F-16s, which Jannuzi called a “minuscule slap on the wrist,” and a day after the Aug. 14 mass killings, President Barack Obama called off the biennial US-Egyptian military exercise known as Bright Star.
On Wednesday the Obama administration announced it would hold back on delivering certain big-ticket items: M1A1 tanks, F-16s, Apache helicopters and Harpoon missile systems. Equipment used for counterterrorism and security in the Sinai would continue to flow to Egypt, as would spare parts and funds for military training. A majority of Americans support cutting off the aid on account of the violence, according to a poll by the Pew Research Center.
Joel Johnson, an aerospace industry analyst with the Teal Group and a defense trade expert, said he approved of the administration’s approach.
“I would do roughly what they are doing, a few gestures that can be reversed very easily,” he said. “They have not critically impeded Egypt’s military capability. They have not denied Egypt operational capabilities.”
Egypt has received over $70 billion in aid from the United States since 1948, of which the bulk has come since the 1980s in the form of an annual $1.3 billion appropriation for military assistance, an incentive tied to Egypt’s 1979 peace treaty with Israel. That assistance led Egypt to phase out its Soviet-made arsenal, replacing most of its military equipment with higher-end US products.
But American influence over the Egyptian military does not lie principally in the high-value war machines, Johnson said. The Egyptian military already has more than 200 F-16s, the fourth-largest fleet in the world.
“The leverage isn’t the money,” he said. “It’s down the food chain, the stuff the Air Force or the Army is providing to keep the equipment going. Even in training, you train on equipment as if you are fighting a war, so stuff breaks. It wears out much faster than in the commercial world. So you need a constant supply of parts.”
To a certain extent, because the military aid to Egypt is mostly used by the generals in Cairo to buy weapons systems manufactured across the United States, the assistance program has strong support in Congress.
“This is really one sector where the US still has a meaningful export market, so there’s a lot of pressure on Congress to maintain those production lines in their own districts,” said Shana Marshall, associate director of the Institute for Middle East Studies at George Washington University. “The defense industry executives understand that, so they try to spread out those production lines and plants across as many congressional districts as possible so that they have a base of support when it comes time to make US military policy.”
Rep. Kay Granger, R-Texas, who chairs the House appropriations subcommittee on state and foreign operations, said in a statement that she was “very concerned” by the aid cutoff.
“Pulling away now may undermine the ability of the United States to work with a critical partner,” she said. “Egypt is going through a difficult transition, and while it does, the United States must preserve this partnership that has been so important to our national security, Israel’s security and the stability of the entire Middle East.”
Granger represents Fort Worth, home of Lockheed Martin, which manufactures the F-16. Lockheed Martin was the largest contributor to her re-election campaign in 2012. She declined interview requests from “Fault Lines.”
In September, shortly before the end of the 2013 fiscal year, the United States transferred $584 million in unallocated Egyptian military aid into one of its own accounts. After Wednesday’s announcement to delay the delivery of hundreds of millions of dollars’ worth of large military systems, it’s unclear how that money will be spent.
State Department deputy spokeswoman Marie Harf told “Fault Lines” that “some of the money, if possible, will be repurposed for other programs in Egypt, and some of it may need to be used to cover costs of not delivering certain military systems.” She added that this was “by no means a withdrawal from our relationship or a severing of our commitment to Egypt.”
On Aug. 28, the European Union suspended export licenses to Egypt for equipment used for “internal repression,” and Amnesty International has called on the Obama administration and other governments to suspend licenses for the kinds of military hardware used by Egyptian security forces in Cairo this August, including American-made tear gas and Caterpillar bulldozers.
The last shipment of smoke-grenade cartridges from the United States was delivered to the Ministry of Interior under the Morsi presidency this spring. The shipment left Wilmington, N.C., on March 14 and arrived in Suez on April 9 on a special-purpose ship. TransArms director Sergio Finardi said the value of this shipment was more than $40 million.
Since January, more than 11,000 tons of military equipment and hardware have been shipped to Egypt. This likely includes military sales between the Defense Department and Egypt as well as a small amount of direct commercial sales between defense contractors and the Egyptian government. The amount of military hardware shipped to Egypt during the first nine months of 2013 was almost double the 6,500 tons delivered in all of 2012.
While the data from TransArms, which come from commercial bills of lading, provide an important window into US arms sales to Egypt, the full picture remains incomplete. Specifics of the deliveries that travel on American military ships or planes or through diplomatic cargo are not made public and are much more difficult to track.
Since 2011, nearly 4,000 tons of diplomatic cargo has been shipped to Egypt through the Egyptian Procurement Office, an arm of the Defense Ministry, and the Despatch Agencies, an arm of the US State Department that consolidates overseas shipments to embassies. Finardi said that he could only speculate on the content but that the large volumes were “suspicious.”
The ongoing shipments have been interpreted by some human rights observers as a signal of tacit US support for acts of repression. The tension between preserving strategic American security interests in the region and defending human rights hasn’t been lost on the administration.
Speaking at the United Nations General Assembly last month, Obama said his approach to Egypt “reflects a larger point: The United States will at times work with governments that do not meet, at least in our view, the highest international expectations but who work with us on our core interests.”
Marshall of George Washington University said the United States would not have exported weapons for decades “if the concern about Egypt had always been human rights.” Throughout, abuses by the internal security forces were prevalent and unchecked.
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