Disputes Lurk Behind Ukraine Aid Package : Arms: Washington has pledged more help for dismantling nuclear arsenal. But critics fear dangers may be ignored.

Diplomatic smiles and champagne toasts greeted the Clinton Administration’s decision to fatten this nation’s nuclear disarmament account by $100 million more, as announced during Defense Secretary William J. Perry’s visit here this week.

“This financial aid will undoubtedly ease the heavy burden of disarmament on the Ukrainian economy,” Defense Minister Vitaly Radetsky told reporters Tuesday after two days that took Perry from routine meetings in Kiev to unprecedented tours of missile bases and rocket factories in the Ukrainian heartland.

But lurking behind the official pleasantries are simmering disputes over how the American money should be spent.

Critics here say the aid threatens to become a bureaucratic boondoggle that could give Ukraine loads of expensive equipment it doesn’t need while ignoring the country’s concerns about some of the most dangerous aspects of dismantling the weapons.

Of the total $350-million disarmament aid that Washington has promised Ukraine, $185 million has been committed to dismantling the country’s Soviet “inheritance” of 176 intercontinental ballistic missiles, many of which are still aimed at American cities.

The rest is earmarked for safety and communications equipment, military housing and defense conversion.

Contrary to conventional wisdom, Ukraine won’t receive hundreds of millions of dollars to get rid of what is now the third-largest nuclear arsenal in the world (after those in America and Russia). Instead it will mostly get equipment and expertise to do the job.

The largess, courtesy of the American taxpayer, includes computers and cranes, tractors and tankers, bulldozers and dump trucks, plus sundry incinerators, rail cars and chemical plants.

Most of these goods will be made by American companies, and some Ukrainians accuse the United States of holding its own business interests above expediency, cost and safety.

The U.S. aid “will be spent on the needs of American industries,” said Tetiana Jakheeva, a member of the Ukrainian Parliament’s disarmament commission. Jakheeva said it would be cheaper and less wasteful to write out a check. “We can produce many of these things ourselves,” she said. “All we need is money.”

Ashton Carter, assistant defense secretary in charge of nuclear non-proliferation, told reporters here that some of the aid will be spent directly in Ukraine.

But another Pentagon official closely involved in the negotiations doubts that Ukraine will get a big share. “When we asked the (Ukrainians) what items they could produce themselves, it was a very small part,” the official said.

Vice Premier Valery Shmarov, Ukraine’s chief arms negotiator, diplomatically hesitates to look gift horses in the mouth. “This is American taxpayers’ money, and the U.S. decides how to spend it,” he conceded in an interview.

But he said he thinks that up to half the money could be spent on Ukrainian products that are cheaper than their American counterparts, while “the other half could be spent on U.S. technologies that we don’t have.”

There are technologies the Ukrainians desperately need but aren’t getting. Instead, Jakheeva charged, “The U.S. is choosing the worst alternative for Ukraine.”

She was talking about the American plan to dispose of about 2,000 tons of liquid rocket fuel, known as heptyl, from the 130 SS-19 ICBMs in Ukraine.

Heptyl is highly toxic, explosive, unstable and probably carcinogenic. At the height of the Cold War, the substance was simply poured out of old nuclear missiles and poured back into new ones. Now it is a horrific problem to get rid of. And Washington and Kiev are at loggerheads over what to do with it.

Washington wants Kiev to burn the fuel in customized new incinerators, paid for with U.S. aid to Ukraine. But Jakheeva charges that the burning technology is only experimental and has never been tested on a large scale. “Only a crazy person can propose such a catastrophic method,” she said.

American sources confirm that the experiment to burn heptyl was conducted only last December at an Environmental Protection Agency laboratory in Arkansas. The test reportedly produced huge amounts of toxic fumes and enough heat to melt the incinerator nozzles.

But Pentagon officials deny the dangers and insist that any incinerators sent to Ukraine will have the proper safety equipment.

Besides having fears about the experimental incinerators, Ukrainians argue that there are alternatives to burning. “We want to get something out of the heptyl,” said Shmarov, who is looking at proposals from American firms to reprocess the toxic liquid into benign products, such as an ingredient commonly used in shampoo.

Kiev wants the U.S. disarmament aid to Ukraine to cover the costs of reprocessing equipment. But Washington, so far, has refused, arguing that reprocessing techniques are also experimental and that its products will not be profitable enough to justify their cost.

Given a choice between the two experimental technologies, Jakheeva and other Ukrainian officials prefer reprocessing. And on this point, they are less likely to give in. “We will make the decision,” Shmarov insisted. “No one can pressure us.”

But as the negotiations drag on, time is running out. Now that Ukraine has begun retiring the oldest SS-19s and shipping warheads to Russia under the trilateral nuclear pact signed by the American, Ukrainian and Russian presidents in January, its stockpiles of heptyl are swelling. “I hope there’s a compromise,” said an American defense official. “This stuff is really bad, and it must be gotten rid of.”