August 2, 1976
Page 24974
Mr. HATHAWAY. Mr. President, I have discussed this amendment with the manager of the bill. This offers some protection on the specialty metal waiver provision so that any action taken along that line would have to comply with section 36 of the Arms Export Control Act and with section 814 of the Defense Department Appropriation Authorization Act.
Mr. President, I believe this amendment is necessary for a number of reasons. It is prompted by my concern over an ongoing dispute now before both the General Accounting Office and the U.S. District Court for the District of Columbia involving the events which led up to the Army's decision in March of this year to proceed to procure an armor tank machine gun, the MAG 58, from Fabrique Nationale, a Belgian firm, instead of a weapon manufactured by Maremont Corp., a U.S. manufacturer whose plant is located in Saco, Maine, the M-60E2.
My concern is directly related to this one example, but it goes beyond this particular instance in that I believe the policy issues raised by the machine gun situation go to the heart of the conduct of our defense and foreign policy.
I think that this amendment is particularly appropriate to be offered today, when press accounts which appeared this morning indicate that former President Nixon apparently entered into a secret deal with Iran by which Iran was given unlimited right to purchase U.S. armaments. This deal created a bonanza for U.S. armaments manufacturers, but avoided scrutiny by the American people, by Congress, or even by the Defense Department or the State Department. Now it appears our foreign policy with relation to Iran is hopelessly entangled. All this is the result of a secret deal.
Section 723 as reported by the Committee on Appropriations contains a provision included as a result of a communication from the President dated June 22, 1976 (Senate Document 94-221). The intention behind and the goals of this amendment raised serious questions in my mind. As a result, I, along with Senator MUSKIE, sent a letter to the President on July 23, the day following the day the committee's report was filed, asking that these questions be resolved prior to the Senate's consideration of this measure. Mr. President, I ask unanimous consent, for the benefit of my colleagues, that this letter be printed in the RECORD at this point:
There being no objection, the letter was ordered to be printed in the RECORD, as follows:
U.S. SENATE, Washington, D.C.,
July 23, 1976.
Hon. GERALD R. FORD,
The President,
The White House,
Washington, D.C.
DEAR Mr. PRESIDENT: We have a number of questions regarding your June 22, 1976,
Communication transmitting proposed amended appropriation language for fiscal year 1977 for ... the Department of Defense (Senate Document 94–221), a copy of which we have enclosed.
We are particularly concerned with the need for and intention of the proposed amendment to the 1977 Defense Appropriation legislation contained therein:
"... nothing herein shall preclude the procurement of specialty metals produced outside the United States or its possessions when such procurement is necessary to comply with agreements with foreign governments requiring the United States to purchase supplies from foreign sources for the purpose of offsetting sales made by the U.S. Government or U.S. firms under approved programs serving defense requirements or where such procurement is necessary in furtherance of the standardization and interoperability of equipment requirements within NATO ..."
We are also puzzled by the reasons cited for such an amendment as contained in that same document:
"It is ... necessary to enable the Department of Defense to purchase supplies from foreign sources for the purpose of offsetting sales made by the U.S. Government or U.S. firms under approved programs serving defense requirements or where such procurement is necessary in furtherance of the standardization and interoperability of equipment requirements within NATO."
We would like to know specifically what "approved programs" make this amendment necessary, and what "agreements" are to be covered by the proposed new statutory language.
Our request for this information is based further upon Section 814(a) (1) of the Department of Defense Appropriation Authorization Act, 1976, as amended by Section 802 of the Department of Defense Appropriation Act, 1977, Public Law 94-361, which you signed into law on July 14, 1976. That provision requires the Secretary of Defense to "report to Congress the full details of the nature and substance of any and all agreements entered into by the United States with any other member or members of the North Atlantic Treaty Organization providing for the acquisition of equipment manufactured outside the United States in exchange for, or as a part of, any other agreement by such member or members to acquire equipment manufactured in the United States. Such report shall be made by the Secretary within 30 days of the date of enactment of this Act."
The legislative intent behind this provision was that Congress be fully and currently informed of any agreements prior to its consideration of appropriations legislation in order that it might vote on such legislation with full knowledge.
As you know, we are particularly concerned with any such agreements which may have been entered into in connection with the F–16 fighter which a number of NATO nations agreed to purchase approximately one year ago. We have reason to believe that a number of "quid pro quo" agreements involving subsystems of that aircraft and other unrelated weapons were entered into at that time.
Furthermore, we call your attention to the requirements of Section 36 of the Foreign Military Sales Act as amended by Section 211 of the International Security Assistance and Arms Export Control Act of 1976, Public Law 94–329, which you signed into law on June 30, 1976. Section 86(b) of the Foreign Military Sales Act requires that the President, prior to issuing any letter of offer to sell any defense articles or services for $25,000,000 or more or major defense equipment for $7,000,000 or more, shall submit to the Speaker of the House and to the Chairman of the Committee on Foreign Relations of the Senate a numbered certification containing a variety of types of information about the proposed sale. Upon receipt of such a certification, the Senate and House Committees are authorized to request further, more detailed information. We would call your attention particularly to Section 36(b) (1) (M) which authorizes the Committees to
request:
"... a detailed description of any agreement to be entered into by the United States for the purchase or acquisition by the United States of defense articles, services, or equipment, or other articles, services, or equipment of the foreign country or international organization in connection with, or as consideration for, such letter of offer, including an analysis of the impact of such proposed agreement upon United States business concerns which might otherwise have provided such articles, services, or equipment to the United States, an estimate of the costs to be incurred by the United States in connection with such agreement compared with costs which would otherwise have been incurred, an estimate of the economic impact and unemployment which would result from entering into such proposed agreement, and an analysis of whether such costs and such domestic economic impact justify entering into such proposed agreement."
Subsequent to the receipt of such certification and supplementing information, Congress may in effect veto the proposed sale by adopting a concurrent resolution to that effect.
Despite the clear applicability of these requirements to the F–l6, it is our understanding that as of July 22, no numbered certification had been transmitted with respect to this weapon. Given this fact, we, would question the reference in Senate Document 94–221 to "approved agreements", and would appreciate being informed of the current status of the F–16 sale, one year after it was reported in the press that an agreement with member nations of NATO had been reached. We would point out that while the current version of Section 36 was only recently enacted, there were similar requirements in prior existing law to inform Congress of large weapons sales and that any "approved agreement" with respect to the F–16 lacks the critical element of informing Congress and allowing it to reach a determination, after securing all relevant information, of whether or not to veto the proposal.
We would appreciate a detailed response to the questions we have raised on an expedited basis. The full Senate shall soon be considering H.R. 14262 which includes funds for the F–16, and in order that it might be able to vote with full knowledge on this matter, that it might better understand the need for and reasons behind the amendment you propose in your June 22 communication, and that the requirements of existing law might be met, we would appreciate the answers to our questions prior to the Senate's consideration.
Sincerely,
EDMUND S. MUSKIE, U.S. Senator
WILLIAM D. HATHAWAY, U.S. Senator.
Mr. HATHAWAY. Mr. President, subsequent to sending these letters, I sent two additional letters to the President which clarified and elaborated on my concerns. I have received interim responses on the July 23 and 30 letters, and I again ask unanimous consent that all of this correspondence be printed in the RECORD at this point:
There being no objection, the letters were ordered to be printed in the RECORD, as follows:
U.S. SENATE, Washington, D.C.,
July 30, 1976.
Hon. GERALD R. FORD,
The President,
The White House,
Washington, D.C.
DEAR Mr. PRESIDENT: I would like to clarify one matter contained in the letter sent to you on July 23 by Senator Muskie and myself with respect to the requirements of Section 36(b) of the Foreign Military Sales Act as applicable to the F–16.
We indicated therein on page 3: "It is our understanding that as of July 22, no numbered certification had been transmitted with respect to this weapon."
I have subsequently learned from reviewing a transcript of a March 12, 1976 hearing before the Subcommittee on Foreign Assistance of the Senate Committee on Foreign Relations that some sort of Congressional notification concerning the proposed F–16 sale occurred on April 22, 1975. (p. 30)
Nevertheless, it remains my understanding that no Letter of Offer has yet been issued on the F–16. Fulfilling all of the requirements of Section 36(b) of the Foreign Military Sales Act stands as a condition precedent to the issuing of any Letter of Offer. Because that section was substantially amended by Public Law 94-329 signed into law on June 30, 1976, and the reporting requirements were thereby increased, particularly with regard to the additional information which may be requested by the House and Senate Committees, it seems clear that prior to issuing of this Letter of Offer, Congressional notification would again be required to determine whether approval was forthcoming under the new criteria.
I would therefore reiterate all of the questions contained in our July 23 letter. Since the DOD Appropriation will be considered by the full Senate beginning Monday August 2, look forward to your timely response.
Sincerely,
WILLIAM D. HATHAWAY,
U.S. Senator.
U.S. SENATE, Washington, D.C.,
July 30, 1976.
Hon. GERALD R. FORD,
The President,
White House,
Washington, D.C.
DEAR MR. PRESIDENT: I would like to clarify further one of the concerns raised in the letter sent by Senator Muskie and myself on July 23 and supplemented by my letter sent earlier today.
My concern over your intent behind proposing an amendment to the provision of Section 723 of the DOD Appropriations bill is based, in addition to the policy questions raised in the earlier letter, on my interest in any possible connection between this amendment and the Army's decision to award the contract for an Armor Machine Gun to a Belgian firm. The Maremont Corporation and the Maine Congressional Delegation have challenged that decision on a number of grounds: the Buy American Act, the Armed Services Procurement Regulations, other procurement statutes, and the prohibition on the purchase of foreign made specialty metals as contained in Section 723 of the 1976 DOD Appropriations Act.
Consequently, any attempt by you and the Defense Department to obtain a blanket waiver of this latter provision seems to me to be directly related to justiciable issues now before the GAO and the United States District Court for the District of Columbia. Much of my concern over your intention in submitting your amendment proposal could be alleviated if you could assure me that this amendment would not apply to the Belgian machine gun and would not form a basis for disposing of the issue now before the Court and the GAO as to whether there are specialty metals in the MAG-58 and whether such metals are to be foreign made, in contravention of existing law.
If I am not able to receive such an assurance, I would feel bound to attempt to amend this legislation to eliminate this blanket waiver.
I would still have remaining concerns over the status of the F–16 sale and whether full disclosure of all offset agreements has been made to Congress as required under existing law, as outlined in my earlier two letters which I intend to bring to the attention of the Senate.
Sincerely,
WII.LIAM D. HATHAWAY,
U.S. Senator.
THE WHITE HOUSE, Washington; D.C.,
July 27, 1976.
Hon. WILLIAM D. HATHAWAY,
U.S. Senate,
Washington, D.C.
DEAR SENATOR: This will acknowledge receipt of the July 23 letter to the President in which you joined with Senator Muskie in requesting further information regarding his June 22 proposed amended appropriation language for the Department of Defense.
Please be assured your letter was called promptly to the attention of the President. You will hear further as soon as possible.
With kind regards,
Sincerely,
WILLIAM T. KENDALL, Deputy Assistant to the President.
THE WHITE HOUSE, Washington, D.C.,
July 30, 1976.
Hon. WILLIAM D. HATHAWAY,
U.S. Senate,
Washington, D.C.
DEAR SENATOR: This will acknowledge receipt of your letters to the President of today's date in further reference to the DOD Appropriations bill.
Please be assured your further comments will be given prompt attention.
With kind regards,
Sincerely,
WILLIAM T. KENDALL, Deputy Assistant to the President.