How Saudi Money Keeps Washington at War in Yemen
By Ben Freeman
In 2016, according to FARA records, they reported spending just under $10 million on lobbying firms; in 2017, that number had nearly tripled to $27.3 million. And that’s just a baseline figure for a far larger operation to buy influence in Washington, since it doesn’t include considerable sums given to elite universities or think tanks like the Arab Gulf States Institute, the Middle East Institute, and the Center for Strategic and International Studies (to mention just a few of them).
This meteoric rise in spending allowed the Saudis to dramatically increase the number of lobbyists representing their interests on both sides of the aisle. Before President Trump even took office, the Saudi government signed a deal with the McKeon Group, a lobbying firm headed by Howard “Buck” McKeon, the recently retired Republican chairman of the House Armed Services Committee. His firm also represents Lockheed Martin, one of the top providers of military equipment to the Kingdom.
On the Democratic side, the Saudis inked a $140,000-per-month deal with the Podesta Group, headed by Tony Podesta, whose brother John, a long-time Democratic Party operative, was the former chairman of Hillary Clinton’s presidential campaign. Tony Podesta later dissolved his firm and has allegedly been investigated by Special Counsel Robert Mueller for serving as an unregistered foreign agent.
And keep in mind that all this new firepower was added to an already formidable arsenal of lobbying outfits and influential power brokers, including former Republican Senate Majority Leader Trent Lott, who, according to Lee Fang of the Intercept, was “deeply involved in the [Trump] White House hiring process,” and former Senator Norm Coleman, chairman of the pro-Republican Super PAC American Action Network.
All told, during 2017, Saudi Arabia inked 45 different contracts with FARA-registered firms and more than 100 individuals registered as Saudi foreign agents in the U.S. They proved to be extremely busy. Such activity reveals a clear pattern: Saudi foreign agents are working tirelessly to shape perceptions of that country, its royals, its policies, and especially its grim war in Yemen, while simultaneously working to keep U.S. weapons and military support flowing into the Kingdom.
Big US military aid package to Israel has strings attached (Sept 2016)
[...] while the actual memorandum of understanding hasn't been officially released by either country, it has a number of conditions that are different from previous U.S.-Israel aid deals.
Most importantly, it's structured so that more Israeli defense spending goes to U.S. companies. Israel's long-standing special arrangement for funds from the United States previously allowed Israel to spend 26 percent of the money in Israel — on Israeli-made defense products. But that provision is being phased out over the first five years of the deal.
Sources on Capitol Hill with knowledge of the agreement said the deal states that Israel can't lobby Congress for more money unless a war breaks out. It says that funds for missile defense are included in the $38 billion — previously, that money was negotiated separately. And it states that Israel can't use any of the U.S.-provided funds for fuel, meaning more of the aid comes back to U.S. defense manufacturers.
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[...] Some of Israel's bigger contractors own smaller American companies, which would allow Israel to spend the money in the United States, as agreed upon in the deal, while still counting on the expertise and experience of Israeli firms. The country's defense giant, Elbit Systems, for example, has a wholly owned subsidiary based in Fort Worth, Texas.
Other Israeli defense companies may soon look to buy smaller American defense contractors as well. "The big contractors in Israel will follow Elbit's methods and establish U.S. subsidiaries to work through," said Liran Lublin, an analyst who covers Elbit for Israel Brokerage and Investments.
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[...] Israel also spends its own funds on its military. Its budget for the past year, not including U.S. aid, was approximately $16 billion , or 5.4 percent of Israel's gross domestic product. By comparison, the United States spends just more than 3 percent of its GDP on defense.
In addition, Israeli defense companies have opened markets for themselves all over the world. Israeli defense firm IMI announced this week that exports of bullets to the United States have increased tenfold over the last two years.
See also: Obama to Israel: Our Tax Dollars Won’t Go to Your Defense Contractors
Maximus Decimus Meridius: AFAIK American ‘aid’ to Israel is highly unusual because zero conditions are attached to how the money is used.
Under previous Memoranda of Understanding (MOUs) only 26.3% of military aid was allowed to be spent on Israeli-manufactured equipment, known as Off -Shore Procurement (OSP).
Under the most recent agreement all OSP will be phased out by 2028, which means 100% of military aid will have to be spent on U.S. goods and services at that point.
See: U.S. Foreign Aid to Israel Congressional Research Service April 10, 2018
Under the terms of the new MOU, OSP will remain until FY2024, but will then be gradually phased out, ending entirely in FY2028. The MOU calls on Israel to provide the United States with “detailed programmatic information related to the use of all U.S. funding, including funds used for OSP.”
In response to the planned phase-out of OSP, some Israeli defense contractors may be seeking to merge with U.S. companies or open U.S. subsidiaries in order to continue their eligibility for defense contracts financed through FMF.
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P.L. 115-141, the FY2018 Consolidated Appropriations Act, provides the following for Israel:
$3.1 billion in Foreign Military Financing, of which $815.3 million is for off-shore procurement;
$705.8 million for joint U.S.-Israeli missile defense projects, including $92 million for Iron Dome, $221.5 million for David's Sling, $310 million for Arrow 3, and $82.3 million for Arrow 2;
$47.5 million for the U.S.-Israeli anti-tunnel cooperation program;
$7.5 million in Migration and Refugee Assistance;
$4 million for the establishment of a U.S.-Israel Center of Excellence in energy and water technologies;
$2 million for the Israel-U.S. Binational Research & Development Foundation (BIRD) Energy program; and
The reauthorization of War Reserves Stock Allies-Israel (WRSA-I) program through fiscal year 2019.