The Pentagon's Merchants of Death

...By a single vote the Senate in August voted to revoke the Pentagon's arms-sales credit fund and return its funds to the Treasury by December 31...

...26,845 artillery pieces and recoil-less guns of all types...

...That does not get to the heart of the matter at all...

...Many long-term intangibles are offered as a powerful lure to buy American...

...three aircraft carriers...

...The overall Pentagon sales operation has been so successful—accounting for fifteen to twenty per cent of all defense exports within the free world—that in June, 1965, British Prime Minister Harold Wilson was moved to complain at a NATO foreign ministers meeting in London that "high pressure salesmanship of the Americans" had "unbalanced the situation" in the Atlantic Alliance...

...But one gnawing problem now being pondered is what happens to all these weapons after they are sold, when they become obsolete and our industrialized allies come under heavy pressure to sell them in order to buy still more modern weapons...

...These staggering statistics reflect the degree to which Government has replaced private concerns as "merchants of death...

...In 1966 the Pentagon sold $80 million in these services throughout the world...

...arms purchased by the developing countries, mainly those in the Middle East and Pakistan and India, increased thirteen times over the five years from mid-1961 to June 20, 1966—from $34 million in fiscal year 1962 to $444 million in the 1966 fiscal year...

...He has sponsored a Defense-Industry Advisory Council Committee on Military Exports to keep private business abreast of opportunities...

...Each of the three services also maintain central arms-sales offices in the Pentagon to backstop the Kuss operation...

...A favorite Pentagon example of this is a jetfighter sale to Argentina...

...In this case, the State Department queried the Canadians, who confronted the Germans about the violation of the contract...

...Administration testimony on Capitol Hill has confirmed disturbing lapses in controlling the spread of surplus American-supplied equipment piling up abroad...

...The credit sales program has been converted into a kind of military [program] for the surplus disposal by the Pentagon and the American armaments industry...

...But the myth which has taken the biggest pounding on Capitol Hill is that the United States, by carefully escalating and orchestrating arms shipments abroad against competition from the Soviet bloc, can maintain a peaceful balance of power in unstable regions of the world...

...Arms bureaucrats live with the nightmare of preventing these weapons systems from filtering through to the underdeveloped world...

...Because of the demands of the Vietnam war, the Pentagon had no A-4B's left to sell Chile as an "equalizer" with Argentina...

...The Indian protests set off a diplomatic scramble...

...Regretfully, he lamented, only twenty major American companies were competing...

...Kuss insists that control machinery Justus in The Minneapolis Star Global Vendor in the U.S...

...The Senate also voted to put a new ceiling of $25 million a year on total grants and sales to all of Africa, and lowered from $85 million to $50 million an identical ceiling for Latin America...

...19,827 tanks and 3,055 other armored assault vehicles...

...Between 1952 and 1962 the United States gave away $17 billion in military aid, and sold $5 billion in arms...

...Under the licensing agreement between Canada and North American Aircraft Corporation in 1949, the U.S...

...The loans usually bear 3/2 per cent interest (compared to 5/2 per cent on conventional loans) and permit ten years to repay (compared to three years...

...71,174 machine guns and 30,668 mortars...

...The recent disclosure of this Export-Import Bank role resulted in Congressional clamor to stop the bank from turning into an "arms bank" and to get the Pentagon out of the "banking business...

...To be sure, the individual entrepreneurs still exist—for example, the Merex Corporation in Bonn, Germany, Levy Brothers Auto Parts Company in Canada, and International Armament Corporation of London and Alexandria, Virginia...

...On a table in his junior executive office at the Pentagon stands a set of gold scales—the heavy weight of the American balance of payments on one side, the lighter weight of "worldwide offset sales" on the other...

...Government severely limits the number of requests he can fill world-wide...

...So today, only a year after Argentina "saved" on the subsonic bargain, Peru is facing the Pentagon with the same expensive escalation to the supersonic jet-round of the arms race in Latin America...

...The main channel for modern heavy equipment abroad flows directly through the Defense Department...

...arms...

...Here was a major embarrassment to the United States, as Kuss admitted before Senator Stuart Symington's subcommittee the following March...

...In 1957 the Defense Department requested and received from Congress the authority to set up a revolving credit fund to provide direct loans or to guarantee bank loans to deserving customers...

...His pride in the success of his salesmanship often takes precedence over the limited aims it serves...

...His person is as imposing as his tongue-twisting title—Deputy Assistant Secretary of Defense for International Logistic Negotiations...

...The House of Representatives followed suit with an amendment to the foreign aid authorization bill ending Pentagon rights to give easy credit...

...This Kuss "helping mechanism" is a study in informal efficiency...

...The Indian press loudly claimed violation of the total American arms embargo imposed on both India and Pakistan after the 1965 war...

...Pakistan pitted American jet fighters and tanks, part of $1.5 billion military aid supplied Pakistan to contain Communist China, against American equipment sent India for the same purpose after the Chinese invasion in 1962...

...But the end of the story is still not in sight...

...Furthermore, in 1961 Congress approved a change whereby each dollar of the fund can underwrite four dollars in loan guarantees so that the $384 million in fact can support purchases of up to $1,536,000,000 in arms...

...twenty-four submarines...

...The most powerful nation has an obligation to take the risk in the first place...

...On March 31 he told a luncheon of the Aerospace Industries Association's International Committee that American arms sales meet only one-third of demand...

...He often sounds like a baseball coach delivering pep talks to his lagging team...

...Out in the field these teams draw on Military Assistance Groups (MAG's) for information gained in daily contacts with foreign military establishments...

...Five are in Latin America: Brazil, Argentina, Peru, Chile, and Venezuela...

...Four are countries in the Middle East tinder-box: Iran, Saudi Arabia, Jordan, and Israel...

...Such is the case with 5,000 M-47 tanks in Germany, which will be obsolete by 1972, and about 1,000 fighter-bombers in Europe...

...They conclude that the time has come to put a brake on the all-out arms exports program, whether or not Soviet competitors follow suit...

...That makes a cumulative total of $1.11 billion in arm sales to poorer countries, based again on the Pentagon estimate that they bought ten per cent of the overall $11.1 billion in worldwide American arms sales during these five years...

...To the dismay of the Pentagon, Peru—which has a bitter territorial dispute with Chile—subsequently turned down an American offer of fifteen subsonic F-86 Saberjets...

...Kuss defended the policy in a letter replying to sharp editorial criticism in the St...

...This $46.3 billion amounts, over the same period, to $4 billion more than all the economic grants and loans provided to other countries by the United States since the middle of 1948, including the spectacularly successful Marshall Plan...

...But these old-style jets were neither sold nor manufactured by the United States...

...The result that followed the Mideast conflict has been a searching examination in Congress of American arms policy abroad...

...The present whereabouts of all the Saberjets is still a mystery...

...But the greatest lure of all to the underdeveloped world, the one which Congress is now attacking, is easy credit...

...Its annual report carries many words and pictures that tell a glowing story of its significant aid in the building of the economies of recipient countries—but not a word about its quiet assistance in helping poor countries build military establishments...

...They know they can get major weapon systems at least thirty per cent cheaper here than if they produced them at home...

...At the same time neighboring Chile—not always on friendly terms with Argentina—was negotiating with the British for supersonic Lightning fighters, at $2 million each...

...The architect of the astounding growth of the arms sales program is Henry J. Kuss, Jr...

...The scenario ran about the same as that between Pakistan and India in 1965...

...Representative Henry Reuss of Wisconsin reflected the concern of many of his colleagues when he noted that as a result of the growing export business in arms, "we're supporting both sides of practically every arms race on the globe...

...Our Atlantic allies come to us, not vice versa," he said during an interview...

...The statistics turned up by his Committee tell the tale...

...The remaining ninety per cent went to industrialized allies— NATO partners and Japan, Australia and New Zealand...

...Pentagon statistics—quoted in The New York Times July 19—disclosed that in the past eighteen years Government exports of military goods included 16,630 aircraft, among them 8,300 jet fighter-bombers...

...German Luftwaffe pilots had flown the planes in lots of six to Iran...

...The idea soon became too attractive not to apply world-wide...

...It is a reminder of the reason for Kuss's swift rise in the hierarchy...

...James Reston, associate editor and Washington columnist of The New York Times, recently surveyed a longer period of U.S...

...He lives with symbols of the material gains he has brought the country in general and big industry in particular...

...The Pentagon has sold <5r plans to sell at least $15 billion in arms and p give away $7 billion...

...At least two subcommittees of the Senate Foreign Relations Committee and the House Banking and Currency Committee have revealed for the first time the export face of that military-industrial complex which President Eisenhower warned against in his celebrated farewell radio-television address to the nation in January 1961...

...military hardware by foreign nations—shocked many members of Congress...

...arms sales and gifts and came up with this report: "The facts are startling...

...Big, genial, self-confident, Kuss is the image of an efficient executive exuding pride in his business operations...

...According to the Department of Defense itself, the annual rate of U.S...

...Though the Germans claimed ignorance of what Merex Corporation had done, and the U.S...

...Narcotics addicts unquestionably want drugs very badly, but this would hardly justify the U.S...

...Sales of just three supersonic planes—the F-4 Phantom, the F-104 Starfighter and F- 111—have brought the Treasury just under $3 billion...

...What this means in actual volume of arms exports is even more awe-inspiring...

...Administration witnesses have told Senate committees that since 1963 the Bank has lent $2.6 billion to developing foreign countries in this manner...

...Until Congressional investigators disclosed the identity of the recipient nations, the Export-Import Bank had not known—and said it did not wish to know—which foreign purchaser used which loan for what...

...program, much of it previously hidden from Congress, let alone the public, came as a shock to many of its members and to large segments of the American public...

...This "end use agreement" is the main legal tool for insuring that weapons do not fall into unfriendly hands...

...In just the past two years the $591-million the Pentagon obtained from the Bank through the "Country X-accounts" was lent to fourteen countries for purchase of U.S...

...The bank has been shy about showing its martial side...

...Much of it seems to rest on the proposition that the Pentagon does not sell arms unless the client proves that he really wants them...

...Despite vigorous lobbying by the Administration, all the way up to the Joint Chiefs of Staffs, and pleas to leave the President flexibility in arms competition with the Soviet bloc, there is mounting Congressional sentiment against direct or indirect military aid to poor nations...

...Today it stands at $384 million...

...And Senator Fulbright added: "I do not know what the answer is, but it seems to me the United States ought to be the one taking some initiative to try to stop the arms race...

...But in early 1961, under new Secretary of Defense Robert S. Mc-Namara, he sponsored and organized the first revolutionary agreement with West Germany to offset U.S...

...Despite the talk of European integration, Europeans still resist the idea of pooling their small defense industries into one big common defense market...

...The whole tone of this operation," said Senator J. William Fulbright, chairman of the Foreign Relations Committee, during the August debate, "has come to have a disturbing resemblance to a cheap easy credit jewelry store—fifty cents down and a dollar a week...

...1.4 million carbines...

...The last named is by far the largest...

...In these little gatherings Kuss is at his salesman's best...

...Besides the obvious saving in research-and-development, the foreign government receives a guarantee for maintenance and spare parts for each piece of equipment it buys...

...In a speech in Los Angeles in the spring of 1966 Kuss estimated that his sales had yielded $1 billion in profits for American industry so far and 1.2 million man-years of employment spread throughout the country...

...from 1949 to June 1966 the U.S...

...costs of keeping American troops in Germany through German purchase of American military equipment for the new Bun-deswehr...

...When both wars began the United States could do nothing but belatedly slap a temporary arms embargo on all belligerents and sort out ways to prevent a recurrence...

...So much so, that both houses of Congress have moved in this year's foreign aid bill to dismantle Pentagon machinery for easy long-term credit sales of arms abroad...

...Louis Post-Dispatch...

...They belonged to Iran, which had just bought them from West Germany for $22 million, which in turn had bought 225 of them from Canada in 1957, which had been manufacturing them—under American license— since 1949...

...In practice Kuss closely coordinates selling decisions with his opposite in the State Department, the Deputy Assistant Secretary of State for Politico-Military Affairs, and confers with a "Have You Ever Thought About Planting Fear in Your Neighbor...

...The revelations regarding U.S...

...The striking fact of the 1960's is the new concentration on arms sales, as opposed to arms give-aways...

...Government's setting itself up as a drug peddler...

...And many of the approved sales, he claimed, are so handled as to restrain rather than foster local arms races...

...Training of foreign personnel in the use of modern military equipment is another American sales asset...

...Last June American-supplied planes and tanks of Jordan fought American-supplied tanks and guns of Israel...

...He has been a civil servant for twenty-three years...

...In six years these agreements have brought the United States $3 billion in sales to West Germany...

...Instead he persuaded Argentina to take subsonic A-4B's—at a "bargain price" of $70,000 each...

...According to Senate testimony earlier this year by the late John T. McNaugh-ton, Assistant Secretary of Defense in overall charge of the program, the total military grants and sales program of the United States now averages $3 billion a year—making the United States the largest supplier of arms in the world...

...The disclosure that the Export-Import Bank was so heavily involved in the arms traffic—more than one-third of its loan business goes for the purchase of U.S...

...thirty-eight destroyers...

...258 destroyer escorts...

...The sales program was a natural outgrowth of the multi-billion dollar military grants program of the 1950's and growing Congressional pressure in the 1960's to stop giveaways and the outflow of gold...

...45,360 missiles, including 14,251 of the air-to-air heat-seeking type in use in Vietnam...

...His own office staff of twenty-five civilians is divided into six teams which each cover separate foreign geographic areas...

...The third aim is naturally stressed more at home than abroad...

...2.1 million rifles...

...Between 1962 and 1972 the proportion is being reversed...

...The purchasing officer for the Iranian army had made the deal with the Merex Corporation in Bonn, agent for the German government...

...The others are Morocco and Taiwan...

...Kuss sharply denies suggestions that he is a "super-salesman" dedicated to foisting Pentagon surplus on European allies or underwriting arms races in the underdeveloped world...

...Embassy officials spoke to the Shah of Iran, the Senate testimony makes clear that Iran—with German knowledge—had acted on behalf of its Pakistani ally to circumvent the American arms embargo...

...The Pentagon's Merchants of Death by GEORGE SHERMAN The latest installment of the bloody Arab-Israeli struggle has exploded many myths about the balance of power in the Middle East...

...On his reckoning, seventy per cent of all ordnance companies were "Class C" leaguers waiting for the business to come to them rather than going out to find it...

...At the moment Kuss's office is trying to discover how to prevent the politically powerful Peruvian air force from purchasing new supersonic Mirage fighter-bombers from the French...

...The Argentine airforce wanted to buy supersonic fighters, at $1.5 million each —a request Kuss refused in line with U.S...

...28,496 submachine guns...

...He lists the objectives of his operation as (1) bolstering the defensive strength of American allies against the Communist military threat, (2) erecting common logistics systems for American alliances—the so-called "arms common market," (3) alleviating the American balance of payments problem...

...The device is the so-called "Country X" account, in which the Bank earmarks given amounts for Pentagon-arranged loans where repayment is guaranteed from the arms-sales credit account...

...Government financing of arms exports to the poorer nations also drew wide criticism in the press...

...In public Kuss is not always the prophet of restraint...

...Government alone (not counting the private arms salesmen) sold $16.1 billion in military arms to other countries and gave away a total of $30.2 billion...

...At a luncheon of the American Ordnance Association last year he held out the prospect of a $100 billion—"one hundred thousand million dollars," he underlined it—world arms market by 1971...

...The one big deal last year with Britain for the purchase of 50 F-Ill's, F-4's and C-130 Hercules Transports for $2.5 billion over twelve years netted remunerative contracts for General Dynamics, McDonnell, and Lockheed Aircraft —besides saving the British about $1 billion in research-and-development costs...

...It is time to stop it...

...Government had to approve all sales and re-sales of the Sa-berjets manufactured in Canada...

...policy toward all Latin America...

...So Kuss persuaded the British to sell Chile some Hawker Hunter fighters, the rough subsonic equivalent of the American A-4B's...

...During the past five years, for West Germany alone, the United States has trained 2,000 pilots, 16,000 technicians, and 3,000 Navy personnel...

...Three are in Asia: Pakistan, India, and Malaysia...

...Each year Congressional appropriations, plus repayments, expanded the fund...

...This year Congress wakened to the fact that the Pentagon is using the Export-Import Bank for many of these easy-credit loans to poorer nations...

...A case in point are the ninety Saber-jets which suddenly turned up on Pakistani airfields last October and November...

...Only ten per cent of eligible companies were in the "Class A League," taking advantage of Government expertise and credit systems to help them sell arms abroad...

...In its rejoinder to Kuss, the Post-Dispatch made this comment: "We do not find the defense convincing...

...number of second-echelon officials...

...The massiveness of the arms supply GEORGE SHERMAN is a staff writer for The Washington Star...

...The advantages to the American armaments industry are manifest...

...Critics conclude that the steady proliferation of generation upon generation of lethal weapons can only accelerate this illicit traffic—whatever the good intentions of the Government about skillfully managing "balancing sales" to the underdeveloped world...

...Kuss testified that they were then sent to Pakistan, "allegedly for repairs," and the Pentagon did not know how many were still there...