Israel’s Use of U.S. Military Aid Under Fire
Israel has refused to cooperate with a Justice Department probe of whether $40 million to $70 million in U.S. military aid was improperly diverted by Israeli defense officials, congressional investigators charged Wednesday.
Rep. John Dingell (D-Mich.), whose House Energy and Commerce Committee has been investigating the funds diversion, said Israel’s failure to cooperate violates its aid agreement with the United States, and the Pentagon should consider cutting off the aid. His comments came in a letter to Defense Secretary Dick Cheney.
The Defense Department on Monday suspended General Electric’s jet engine unit from receiving future defense contracts because of its alleged involvement in helping Israel to divert as much as $40 million in military assistance funds. Israel annually receives about $1.8 billion in U.S. military aid money.
America’s third-largest defense contractor, GE has military jet-engine sales amounting to $2.5 billion, but the suspension is not expected to cause serious problems. Most such suspensions have been lifted soon after they were imposed and have done little lasting financial damage to the firms involved.
Investors had little reaction to the suspension, bidding GE shares down 25 cents Tuesday and up 50 cents Wednesday to $76 on the New York Stock Exchange.
The GE suspension follows a suit filed in U.S. District Court in Los Angeles against GE by the Justice Department and a private whistle-blower, who alleged that the firm participated in the diversion. GE and the government are discussing a settlement of that case.
The accusation is that Israel used U.S. military aid money to buy jet engines from GE, which allegedly kicked back a portion of the funds to Israelis. Much of what the Justice Department knows about the case was detailed by an internal GE investigation of the matter.
Justice Department investigators are trying to determine what Israel did with the money. It appears clear that much of it was used for purposes beyond the security aid agreement, congressional sources said.
