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http://www3.haaretz.co.il/eng/scripts/article.asp?id=60664&mador=1&datee=11/5/99

Friday, November 5, 1999

Fury over Wye funds concession

By Nitzan Horowitz, Ha'aretz Correspondent

WASHINGTON - Senior Israeli defense officials were sharply critical yesterday of a compromise reached over funding for the Wye agreement under which Israel will forgo early disbursements of its regular military aid from the United States so that Washington can use the interest earned on holding up the payment to fund Wye.

Until now, Israel has been the only country receiving military aid from the United States to receive its funding at the beginning of the budget year, allowing it to invest the money and earn interest on it. Washington suggested that Israel this year agree to get the military aid in the course of the year, as it is needed to fund various projects, and the interest collected will be used to fund Wye.

Israel's forgoing of early release of military aid will save the United States some $550 million.

But a spokesman for the pro-Israel lobby AIPAC explained that from Israel's point of view, it is only forgoing $60 million that it would have earned in interest. AIPAC also noted that the arrangement to hold back the payment was only meant to last a year.

Defense officials say that Israel's willingness to go along with this arrangement is a big mistake, stressing that it sets a dangerous precedent of forgoing an important political and economic gift.

They add that many countries, first and foremost Egypt, are keenly interested in having a similar early disbursement of military aid from the United States and will exploit the situation to press harder for such a concession. Under such circumstances, Israel should not have agreed to any change in existing procedures, not even for one year.

Furthermore, they note that Israel has already made commitments based on the assumption that it would get the early military aid.

Leading congressmen and the White House held marathon talks yesterday to hammer out a compromise agreement that would allow the passing of a foreign aid bill, including funding for implementation of the Wye agreement.

Jewish groups lobbied hard behind the scenes to try and assure the funding, which was initially promised by the Clinton administration as part of a pact at a Wye Plantation summit a year ago between Israel and the Palestinians.

Clinton two weeks ago vetoed a foreign aid bill passed by Congress, in part on grounds that it did not include funding for the Wye agreement. As a result of the veto, the bill was returned to Congress, which needs a two-thirds majority to override the veto. In discussions since the veto, agreement has been reached to fund Wye, but other foreign aid funding remains in dispute.

(c) copyright 1999 Ha'aretz. All Rights Reserved


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