THE ISRAEL LOBBY ENTERS STATE GOVERNMENT

RISE OF THE VIRGINIA ISRAEL ADVISORY BOARD

By Grant F. Smith

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5

U.S. Aid to Israel and Subsidies for Israeli Military Contractors

I’m very familiar with the Israeli military. And I can go anywhere I wanted. But had I not represented a government, they would [have] said, ‘Great strategy. You want to help us execute it.’ But they would not have come here. . . Dov Hoch, Executive Director of the Virginia Israel Advisory Board[1]

Israel has long been the leading recipient of U.S. foreign assistance. It is impossible to say precisely how much Israel receives. The Congressional Research Service publishes an annual report with top line numbers and significant details about U.S. aid. By 2020, cumulative inflation adjusted aid will reach $282.4 billion.

   

 

Cumulative inflation adjusted unclassified U.S. foreign aid to Israel ($ billion)[2]

Excluded from that figure is any hard or estimated figure for U.S. intelligence aid to Israel, from the so-called “black budget.” But such aid exists, as verified by President Barack Obama in a speech at American University on August 5, 2015. He said:

...But the fact is, partly due to American military and intelligence assistance, which my administration has provided at unprecedented levels, Israel can defend itself against any conventional danger—whether from Iran directly or from its proxies.[3]

The CRS report, which is meant to inform Congress and not the public, used to report that Americans were broadly supportive of such aid. For example, in 2011, report author Jeremy Sharp wrote that:

Though aid to Israel has both supporters and detractors, overall U.S. public support for Israel remains strong. According to a February 2011 Gallup poll that measured Americans’ sympathies toward the disputants in the Israeli-Palestinian conflict, a near record-high 63% said their sympathies lie more with the Israelis.[4]

Using Gallup results as a proxy was necessary, explained the CRS report author because, "There is less specific public polling data on support for aid to Israel."

However, there were two major problems with Sharp’s claims. The first was that Gallup’s polls were so flawed that it was forced to admit in 2019 that the way it asked questions “primed” respondents to give artificially high “sympathy for Israel” responses.[5] Jeffrey M. Jones at Gallup even wrote in “Survey Context Effects on Middle East Sympathies” that:

…the priming effect of asking country favorability appears to push people toward sympathizing with Israel rather than expressing no opinion (or not taking a side). The theory is that after respondents answer some questions on international affairs, they may become more focused on the topic and more comfortable expressing opinions (including weakly held ones) in response to subsequent questions on that same topic.

Gallup’s admission meant, given its use of the same methodologies and questions year after year, that three decades of sympathy polls overstated popular sympathy for Israel. Israel affinity organizations, which invariably amplified Gallup’s survey releases every year, have been slow to remove such data from their websites.

The other claims, that there is so little public opinion polling about U.S. support for aid to Israel as to be not worth reporting is also false. Since U.S. aid to Israel is such a large percentage of the aid budget, it is worth specifically polling year after year. Representative polls conducted for more than a half decade through Google Consumer Surveys reveal strong and growing popular opposition to U.S. aid for Israel.[6]

Another problem with U.S. aid to Israel is that it is made on the premise that it helps maintain Israel’s “qualitative military edge,” defined as the technological, tactical, and other advantages that allow it to deter numerically superior adversaries. Absent from that discussion is any realistic factoring in of Israel’s nuclear weapons arsenal. Since Israel has nuclear weapons, why should the U.S. continually deliver massive supplies of conventional use weapons and duel use platforms, such as jet fighters, that Israel can use to deliver nuclear weapons? This question has never satisfactorily been answered by Israel’s supporters or U.S. officials.

A final issue is the legal ban on U.S. foreign aid to clandestine nuclear weapons states. Under the Symington and Glenn amendments now incorporated into the Arms Export Control Act, no U.S. president knowing about Israel’s nukes is supposed to approve aid transfers, absent specifically issued waivers. Rather than comply with the law, presidents pretend they don’t know Israel has nukes and issue agency wide gag orders threatening any government employee who talks about it.

Memorandum of Understanding

With U.S. military spending surging from $686 billion in 2019 to over $710 billion in 2020, Israeli companies are eager to participate in the windfall. As part of that strategy, they may also be attempting to skirt Obama-era “buy American” restrictions on U.S. foreign aid to Israel by establishing subsidiaries in Virginia or partnering with major U.S. arms manufacturers and military service providers.

On September 14, 2016, the United States and Israel signed a "memorandum of understanding" (MOU) pledging $38 billion in "security assistance" to Israel over ten years. The agreement replaced a similar $31 billion ten year MOU signed by the George W. Bush administration. “Buy American” provisions in the ten-year allotment required most of the foreign aid to Israel must be spent on U.S. military contractors rather than within Israel on Israeli military contractors. In an official statement, the Obama White House claimed:

Off shore Procurement (the arrangement under the current MOU through which Israel has been uniquely permitted to spend 26.3 percent of its annual FMF package within Israel on non-U.S. products) and Israel’s use of FMF funds to purchase fuel – means that Israel will spend more funding, as much as $1.2 billion per year, on the advanced military capabilities that only the United States can provide. The acquisition of additional U.S.-produced capabilities and technology provide the best means to ensure Israel preserves its Qualitative Military Edge (QME).

The MOU is silent on whether U.S. based wholly owned subsidiaries of Israeli military contractors, such as IAI North America and Elbit Systems of America, count as "Israeli" or "U.S." vendors. Israelis and their U.S. boosters such as VIAB presume that all they have to do to recapture “their share” of the spending is to set up shop in Virginia. Dov Hoch is on record telling audiences that U.S. taxpayer funded aid formerly spent on Israeli military contractors is essentially money “coming from Israel:”

Until now, a quarter of that was brought to Israel in the form of moneys that could be bought, used and applied in Israel in shekels, it didn't have to be, “buy America”, you know, buy a fighter jet. . . A billion dollars could be a good thing, used in Israel and by Israeli manufacturers. Obama terminated that. But we have a billion dollars in contracts, captive contracts, that Israeli companies are currently holding that need to be manufactured in US. This is what I do day and night, day and night. I said to the Israeli Army, the unit that does export and takes care of these things, I said, you come to Virginia, it's right near the ecosystem where everybody sells to the US Army. It’s got the manufacturing capacity. I don’t know if you know this, Lockheed Martin, they’re in Maryland. Northrop Grumman is in Virginia. General Dynamics is headquartered in Virginia. I told the Israeli army, if you come here, I will find you partners. I’m not going to build businesses. We’ll take those Israeli companies; we’ll bring them here; we’ll find them a Virginia manufacturing partner. I’ll tell the Virginians we have a captive contract up to a billion dollars coming from Israel.[7]

But what support does VIAB give to Israeli companies trying to get in on the bonanza? A great deal, it turns out. VIAB can either directly or indirectly compensate former high-ranking U.S. officers to work on creating opportunities for Israeli military contractors. Nathan Shor trumpeted this capability in the context of a spring 2019 matchmaking event hosted in Tysons Corner bringing together 70 businesspeople and government officials.[8]

This is an extraordinary event. Three days for naval related military technologies in the Hampton Roads footprint. We have three admirals in that area working with us and for us to do that project. We have a half time, third time employee down in that area who is like an assistant.[9]

VIAB’s biggest intellectual legacy on the military contracting front is clearly Mel Chaskin. Like Charles Lessin, his real bio and activities are infinitely more revealing than what appears on the VIAB website.

Mel Chaskin and Vanguard Research

Mel Chaskin was born in New York City and got his start as a software engineer with Grumman in the 1960’s when the company was flush with contracts for the Apollo moon landing program. He served as a system flight test pilot supporting the U.S. Air Force with military contractor Lear Siegler, Inc and entered government civil service in 1971. He managed U.S. Air Force long range navigation, space communications and experimental satellite programs, as well as command and control systems. Chaskin rose through the civilian ranks to a position supporting the Assistant Secretary of Defense.

In 1981 Chaskin left government service and in March of 1984 founded his own military contracting company Vanguard Research Incorporated. By August of that year, Vanguard signed its first contract for $34,000.

   

Vanguard Research U.S. government military contracts 1984-2019 ($ U.S. million)[10]

Business gathered steam as Vanguard contracted to perform special studies and analysis with the U.S. Army and Air Force. By the late 1980s, as the Reagan administration’s Strategic Defense Initiative “Star Wars” missile defense was launched, Vanguard’s contracts shifted into systems engineering and R&D on missile and space systems. By the end of the 1980’s Vanguard picked up work directly with the Missile Defense Agency, which had its origins in Star Wars.

Vanguard’s peak contracting year, by total awards, was the year 2001 when it won almost $16 million in contracts. The firm’s business in relatively small sequential contracts, averaging less than a quarter million dollars, was steady. What distinguished a good year from a bad one was the number of contracts. The late 1990s and early aughts were great because Vanguard was handling more than 50 contracts per year. Business began winding down as average contracts won by Vanguard dropped below 20 per year.

Through 2019, Vanguard Research was the recipient of just under $174 million in contracts. Mel Chaskin’s experience and insight into the world of military contracting and steady business in small contracts would serve VIAB well with the year 2006 Virginia debut of a bulletproof glass maker founded at an obscure Israeli kibbutz in 1979.

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[1] Dov, Hoch, “What VIAB Does and How it Benefits Virginia,” speech at the Weinstein Jewish Community Center, Richmond, VA, April 4, 2019. Introduction and remarks by former president of the Jewish Federation of Richmond Nathan Shor

[2] Sharp, Jeremy, “U.S. Foreign Aid to Israel,” Congressional Research Service series of reports, inflation adjusted by the author.

[3] Remarks by the President on the Iran Nuclear Deal, American University, August 5, 2015, Whitehouse.gov

[4] Sharp, Jeremy, “U.S. Foreign Aid to Israel,” Congressional Research Service series of reports, 2012 http://dev.journalistsresource.org/wp-content/uploads/2012/04/Military-Aid-to-Israel.pdf

[5] Jones, Jeffrey M., Gallup “Survey Context Effects on Middle East Sympathies” March 28, 2019 https://news.gallup.com/opinion/methodology/248078/survey-context-effects-middle-east-sympathies.aspx

[7] Hoch, Dov, “What VIAB Does and How it Benefits Virginia,” speech at the Weinstein Jewish Community Center, Richmond, VA, April 4, 2019. Introduction and remarks by former president of the Jewish Federation of Richmond Nathan Shor

[8] Virginia-Israel defense contractor event held in Tysons, April 5, 2019, The Fairfax County Times, http://www.fairfaxtimes.com/articles/virginia-israel-defense-contractor-event-held-in-tysons/article_750c5fdc-57eb-11e9-99e4-ebb69108b232.html

[9] Shore, Nathan, remarks by former president of the Jewish Federation of Richmond, “What VIAB Does and How it Benefits Virginia,” speech at the Weinstein Jewish Community Center, Richmond, VA, April 4, 2019. introducing Dov Hoch

[10] Federal Procurement Data System, consulted September 25, 2019 https://www.fpds.gov