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WOLF BLITZER
Is Congress Punishing
Israel For Its Spying?
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32 Friday, April 3, 1987
THE DETROIT JEWISH NEWS
n a major setback for
Israel and Egypt, a key
Congressional subcommit-
tee has rejected the Reagan
Administration's proposals to
restructure those countries'
huge debts to the United
States.
Israel stands to lose $300
million next year alone and as
much as $2.5 billion over the
next decade unless the legis-
lation approved last week can
be reversed. Egypt, whose
overall debt to the U.S. is less
than Israel's, will lose slight-
ly less. Congressional obser-
vers agreed that the action
was designed in part to
punish Israel for the Jona-
than Jay Pollard spy scandal.
Democratic Representative
David Obey of Wisconsin,
Chairman of the House Ap-
propriations Subcommittee
on Foreign Operations, of-
fered an amendment to post-
pone any Administration
debt-relief action in advance
of full Congressional hear-
ings. The two main benefi-
ciaries of the debt relief are
Israel and Egypt.
Obey's panel quickly ap-
proved the measure as he and
other members charged that
the Administration was try-
ing to evade full Congres-
sional authority by unilateral-
ly advancing the proposals.
Late last year, the Reagan
Administration came up with
a scheme to help Israel and
Egypt in repaying the in-
terest on outstanding mili-
tary loans to the United
States.
The Administration's com-
plicated proposal, which did
not require any new legisla-
tion, would have allowed both
countries to reduce their an-
nual repayments to the U.S.
over the next 20 to 30 years
while accepting a lump-sum
"balloon" repayment at the
end of the overall period. But
that is now up in the air.
Neither Egypt nor Israel
had yet actually accepted the
Administration's two sepa-
rate options for such debt
relief but senior officials from
both countries believed that
the options still represented a
solid foundation from which
they could bargain for yet
more relief.
Israel, in fact, was quietly
letting Egyptian leaders take
the lead in pressing Washhig-
ton for better terms. Israeli
officials, however, made no
secret of their strong desire to
take advantage of the Ad-
ministration's willingness to
restructure Israel's debt to
the U.S., which this year will
come to just more than $1
billion in repayments of prin-
cipal and interest.
The debt-relief idea had
originally been raised in 1985
by Democratic Senator
Daniel Inouye of Hawaii and
Republican Senator Bob
Kasten of Wisconsin, the
chairman and ranking minori-
ty member of the Senate Ap-
propriations Subcommittee
on Foreign Operations. They
withdrew their legislation
shortly after Pollard, a U.S.
Naval Intelligence analyst,
was arrested on charges of
spying for Israel.
However, the Reagan Ad-
ministration itself effectively
revived the Inouye-Kasten
proposal. Under a compli-
cated accounting procedure
.
"We changed the
rules In the early
1980's. We recruited
an Israeli to spy
on Israel, and he got
caught. This Is not
a one-way street:'
developed by the Administra-
tion, no additional appropria-
tions would be required by
Congress. The federal budget
would not be affected.
But all of that is now up in
the air, according to pro-
Israeli observers in Washing-
ton who were clearly sur-
prised by Obey's amendment
and its speedy passage.
So far, the Administration's
proposed $3 billion economic
and military_ aid package for
Israel appears relatively safe.
Obey's amendment postpon-
ing any debt relief does not af-
fect that overall aid package.
Meanwhile, the U.S. Senate
has opened an investigation
into the accuracy and proprie-
ty of Republican Senator
David Durenberger's sugges-
tion that the U.S. had re-
cruited a_senior Israeli army
officer during the war in
Lebanon in 1982.
The Minnesota lawmaker,
the immediate past Chairman
of the Senate Intelligence
Committee, has been sharply
criticized by U.S. national
security officials for sup-
posedly releasing sensitive
and classified information.
Defense Secretary Caspar
Weinberger has publicly
denied Durenberger's allega-
tion, as have Israeli leaders.
But The Washington Post
and other U.S. sources in
Washington have confirmed
the thrust of his remarks,