Security and Defense: Taking a little off the top

Security and Defense Ta

October 22, 2009 20:30
4 minute read.

New York - new York is a plum assignment for diplomats, so Israelis dispatched to the Defense Ministry's purchasing mission in the city must be seething right about now. On the heels of Defense Minister Ehud Barak's lavish trip to France for the Paris Air Show, the ministry announced plans to cut the New York budget by 30 percent, hoping to save some $30 billion over the next 10 years. To some, the announcement begs whether the cut is an unfair reprisal or the long-overdue curtailing of a cushy diplomatic post. But consider this: Just as government officials are grappling with these (embarrassing) lavish expenditures, Israel is trying to close a deal on the Joint Strike Fighter, a plane also known as the F-35, which is currently under development by Lockheed Martin. Last year, the Pentagon approved Israel's intent to buy up to 75 aircraft in a deal that could cost $20 billion. Israel is spending a pretty penny to buy the plane, and in return, was promised industrial participation by Israeli companies. Still, as one observer noted, "The question is, is there going to be enough industrial work to make the expense worth it?" Knesset members looking to tighten Defense Ministry purse strings would have a hard time overlooking the New York purchasing office, by far its largest international mission. Other international missions include the five-member teams in France and India and one-person offices in Germany, Thailand and Australia. The smaller missions focus on selling Israeli defense products, but New York's main objective is to buy, defense sources said. The New York office employs some 200 locals, mostly Israeli expatriates. Another 35 to 40 appointees from Israel serve as higher-ups. Those appointed by the Defense Ministry enjoy perks similar to other diplomats: Health and dental insurance, tuition for their children and housing. The head of the purchasing mission is said to live in a luxurious Upper East Side home. Sources said the mission's staff members frequently receive cars for personal use, and the staff enjoys catered lunches frequently - some said nearly every day - at the mission's main office. As a whole, the ministry has a large budget and loose purse strings - a combination that earned the post a reputation for being a plum assignment given to political favorites. "The number of employees they have there, I envy them," one source said. "Seriously, secretaries and you name it." "You hear people saying that the delegation of the Defense Ministry, they get better conditions," added the source, citing a large defense budget, "and it's true." A SIZABLE New York delegation made sense more than three decades ago when the US-based purchasing office was established. New York is home to a large Israeli consulate, a UN mission and Wall Street. US-Israel military cooperation stipulated that the US would accept Israeli repayment for aid through Israeli sales of military components and technology. Israeli military purchases also were paid through offsets. "It was important to sell to the American market," said Gerald Steinberg, a professor of political science at Bar-Ilan University. Currently, Israel receives US aid for security purposes to the tune of $2 billion a year, money that must be spent in the US. But 30 years later, technology has drastically altered the need for face-to-face purchasing. In recent years, the costs of maintaining the once lean and efficient mission went up as benefits dropped. In the 1990s, the State Comptroller's Office conducted studies showing that disconnect. Efforts to close the mission were floated, though never successfully. "Like many other bureaucratic frameworks, the budget expanded; it became a plum position for some Defense Ministry personnel," Steinberg said. "The costs went up and the benefits were reduced. It's much cheaper to go there, even five or six times a year than it is to maintain the salaries, physical facility, security, of the office." One government official stressed the need to maintain the office, but put it this way: "You need them, but they can sit in Israel, as well." With added budgetary pressure related to the F-35, government officials are looking to streamline expenses wherever they can. Israel wants the deal to go through, both to preserve its industrial base and because of the positive impact on bilateral relations with the US. "Industrial cooperation and participation between the two countries is of primary importance and should not in any way be sacrificed," an observer said. The announcement to curtail the New York office, though, coincides with a changing of the guard here, including the replacement of former mission head Brig.-Gen. Yekutiel Mor. Some sources described a desire to bring in new faces, "younger people, new thinking, new approaches." Not that Mor has faded quietly into the sunset. Following the Paris Air Show debacle - in which Barak and entourage reportedly paid a total of NIS 994,000 for hotel rooms in June - Mor was asked to head up an investigation into the misguided expenditures. However, critics have questioned the decision, citing the cushy environment in New York under Mor's watch. Meanwhile, as the delegation adapts to the changes, Israeli defense and military companies have changed the way they do business in the US. Several have formed US affiliates or subsidiaries - including Rafael, Israel Aerospace Industries and, most successfully, Elbit Systems. Based in places like Alabama and Texas, the companies employ Americans and can take part in bidding processes for US deals. Though the shift does not impact the mission directly, the peripheral effect is unclear. Certainly, sources indicated, while the mission is mired in its bureaucracy du jour, Israeli companies have made strategic advances.

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