Forging a New Defense Relationship With Egypt

ID-82-15: Published: Feb 5, 1982. Publicly Released: Feb 12, 1982.

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GAO reported on U.S. military relations with Egypt. After three decades of cool relations, the United States and Egypt entered the 1980's with a new and expanding relationship. Egypt has established itself as a valuable strategic asset to the United States in seeking Middle East peace and in protecting U.S. interests in the Persian Gulf region. Egypt is the second-largest recipient of U.S. military aid and is slated for Foreign Military Sales (FMS) financing in fiscal year 1982 totaling $900 million. Besides this security assistance, the United States has established numerous other ties with Egypt. These new developments in the U.S.-Egyptian relationship and the attendant congressional interest that surrounds them led GAO to review progress in military cooperation and areas in which the relationship can be enhanced.

Although the FMS program has gone a long way toward assisting Egypt, GAO found that some of the equipment acquired with U.S. credit has served more of a political purpose than a military one. In some cases, Egypt is having technical difficulty operating some of the more sophisticated aircraft and is able to keep only some of them flying. However, Egypt sought the aircraft as a symbol of U.S.-Egyptian relations. GAO also found that the executive branch has authorized Egypt to purchase equipment costing more than the allocated loan guarantees. The additional purchases have been made under a so-called "cash flow" system, whereby Egypt depends on future U.S. authorizations to pay bills that come due in future years. GAO stated that this type of financing limits the prerogatives of Congress in authorizing the U.S. security assistance program.

Matter for Congressional Consideration

  1. Status: Closed - Not Implemented

    Comments: Congress has not taken any action on the recommendation and it is indeterminable when such actions will be taken.

    Matter: Congress should enact legislation requiring the executive branch to provide advance notification for "cash flow" financing commitments to be given to allied countries. This would help ensure adequate oversight and control.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: Please call 202/512-6100 for information.

    Recommendation: The Secretaries of State and Defense should establish a joint consultative group with Egypt to study procurement priorities and help ensure that Egypt has the capability and resources to effectively use and maintain the equipment.

    Agency Affected: Department of Defense

  2. Status: Closed - Implemented

    Comments: Please call 202/512-6100 for information.

    Recommendation: The Secretaries of State and Defense should establish a joint consultative group with Egypt to study procurement priorities and help ensure that Egypt has the capability and resources to effectively use and maintain the equipment.

    Agency Affected: Department of State

  3. Status: Closed - Not Implemented

    Comments: The State Department believes that information it provided in 1980 is sufficient for Congress. The House Foreign Affairs Committee, Subcommittee on Europe and the Middle East, questioned the State Department and DOD extensively in hearings in 1982 on "cash flow" in Egypt. This, in effect, achieved the goals of the recommendations.

    Recommendation: The Secretaries of State and Defense should fully disclose to Congress the details of the "cash flow" financing authorization given to Egypt and Israel so it can assess the desirability of continuing such a commitment.

    Agency Affected: Department of Defense

  4. Status: Closed - Not Implemented

    Comments: The State Department believes that information it provided in 1980 is sufficient for Congress. The House Foreign Affairs Committee, Subcommittee on Europe and the Middle East, questioned the State Department and DOD extensively in hearings in 1982 on "cash flow" in Egypt. This, in effect, achieved the goals of the recommendations.

    Recommendation: The Secretaries of State and Defense should fully disclose to Congress the details of the "cash flow" financing authorization given to Egypt and Israel so it can assess the desirability of continuing such a commitment.

    Agency Affected: Department of State

 

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