In the wake of Wednesday’s massacre of hundreds of Islamist supporters of ousted president Mohamed Morsi, the average American citizen may be scratching their heads at the pusillanimity of the Obama administration for not threatening to cut off military aid to Egypt. How could it be, we might say, that the State Department is still feeling conflicted about the prognosis for Egyptian democracy? How many images of mutilated protesters and children do the wire services need to post before Mr. Kerry is given the direction to withhold American munitions and machinery from their ravaging military?
As it turns out, the United States government cannot cease our largesse to Egypt without incurring billions of dollars in liability, payable to the most influential actors in the American Military-Industrial Complex. Unfortunately, this fiscal prudence of Obama’s ensures that American guns and tanks will continue to ship into the hands of the ruthless security forces that we saw Wednesday. And will see again.
This is the arrangement.
In the late 1970s, Egypt needed a new state sponsor. “They were disillusioned with the Russians and kicked them out and turned to the West. We embraced that,” said Rep. Gerald E. Connolly (D-Va.), to the Washington Post. Like a sports agent signing a star player, the United States offered Egypt a generous deal toward its upbuilding in 1979: Under an arrangement called cash flow financing, the United States would backstop a credit line of billions of dollars against which Egypt would order military equipment from American companies like Lockheed Martin and General Dynamics. The terms of that deal were only ever extended to two countries, Egypt and Israel, who coincidentally signed a historic peace treaty that year.
In addition to the peace that this transaction purchased (including Nobel Peace Prizes all around) the United States had also gotten a sweet deal. Not only was a former Soviet proxy now a reliable customer, but the Pentagon enjoyed “expedited access to the Suez Canal for Navy ships, overflight rights for military aircraft and plenty of face time with Egypt’s generals.”
Hosni Mubarak became president after Anwar Sadat’s assassination shortly thereafter, and his calculation to honor the peace with Israel in exchange for the uninterrupted supply of foreign military financing (FMF) earned him a 30-year reign over a historic military buildup. With an authoritarian government addicted to American weaponry, orders were regular and sailing was smooth.
The risk in the arrangement was borne by the U.S. government. Though the object of the negotiation was the purchase of the Egyptian proxy, the only real contracts were, and still are, between the Pentagon and American companies. Instead of giving money to Egypt and expecting them to repatriate it, the Pentagon cuts out the middleman (and ensures the public-to-private wealth transfer) and pays money directly to the American manufacturers of the Egypt-bound materiel. Moreover, since Egypt’s only means of “affording” these weapons is our FMF money — and this is the important part — the Pentagon will be liable to the American weapons manufacturers for the lost revenue if military aid is ever cut off.
According to the Washington Post, only $4.7 billion of $8.5 billion in weapons orders Egypt has placed since 2008 has been delivered. This means that if military aid to Egypt is ceased, they will be unable to pay and the U.S. government will be liable for $3.8 billion in lost revenue to the defense contractors. Including contractual penalties and all the fine print, very few people in this country know how much that settlement would be.
The program has run into at least two legal problems amid the political upheaval in Egypt. Section 508 of 1961’s Foreign Assistance Act states that the United States cannot give financial “assistance to any country whose duly elected head of government is deposed by military coup or decree.” Understanding the fiscal consequences of Congress failing to authorize the money, the Obama administration has contorted themselves since the Arab Spring’s outset to refrain from calling either of the two violent transfers of power in Egypt a “coup.”
Sure enough, President Obama’s remarks Thursday continued to characterize the military takeover in Egypt as anything but. “While Mohamed Morsi was elected president in a democratic election, his government was not inclusive and did not respect the views of all Egyptians.” A republican would be hard-pressed to think of a more gut-wrenching endorsement of a military seizure of power from a democratic representative — and the violence that has ensued.
In 2012, then-Secretary of State Hillary Clinton was faced with an entirely different legal dilemma: Congress passed a resolution declaring military aid to Egypt contingent upon a demonstrable improvement in human rights. At the time, Egypt’s Supreme Council of the Armed Forces was in a bad habit of raiding NGOs and generally suppressing the pro-democracy movement. Rather than risk defaulting on the aid contracts and drawing the Pentagon’s ire, Clinton signed a “national security waiver,” a move that effectively made it a matter of national security that the unaccountable, marauding Egyptian military be granted its usual apportionment of $1.3 billion. Or rather, that it be delivered to Lockheed and General Dynamics.
Such is the relationship between the current state of Egypt, whatever that is, and the United States government. The arrangement that holds us hostage to our finances instead of our ethics exposes the worst qualities of government: an irresponsible mortgage of values and funds by short-sighted, corporatist cronies in the first world, and a cruel, bloodthirsty power grab in the less-developed world. More specifically, it dictates that the only Egyptian apparatus that the U.S. government cares about is, indeed, its military.
Our government may not take any kind of stand against the murder that we are bankrolling and are too cheap to stop bankrolling, but don’t worry. With so many American munitions in country, both sides of the conflict have gotten their hands on our weapons. No end is in sight to the death in Egypt, but that’s great news for a lot of people. Well, the ones who matter at least.