At the Grass Roots, Westerners Say, "Rein in Israel"

By Eugene Bird

The Oregon wheat farmer at first was just questioning what he had been hearing. Then he turned incredulous, and finally angry.

"I heard from someone that Israel was receiving $750 per capita each year from the U.S. Treasury," he said. "Is that really true?"

" No, " I said, standing in the July rain in my native Willamette Valley. "It's at least $1,250 per capita. Some say more, depending on how you allot it, since the Israeli Arabs claim they get practically none of the aid from the United States."

The well-educated farmer thanked me and walked away mumbling angrily about Israel's indefatigable senatorial gofer, Oregon Republican Bob Packwood. And, as he had made clear earlier in our conversation, up to then the farmer had been a Republican supporter of the embattled senator.

Pacific Coast Activists

All along the Pacific Coast this July, we found small clumps of people questioning the size of the U. S. aid package to Israel in this deficit reduction year one of the Clinton administration. They also asked what this aid was being used for, and whether maintaining Israeli military occupation forces in the West Bank, Gaza, Syria's Golan Heights and south Lebanon was really in the American interest.

At Berkeley, the hot topic was a bill in the California state legislature to permit state employees' and state teachers' pension funds to invest in Israeli bonds guaranteed by the U.S. government. At that point the bill had been passed by the California State Assembly, and the Senate was expected to take up the issue sometime in September. It is only one part of an effort by the government of Israel's lobby in the United States to move some of the ever-increasing aid to Israel out of the federal budget, where it is becoming a real issue, into investments in Israel bonds by the huge state government pension funds. By turning such funds, from many different U.S. states and cities, into a major source of aid to Israel, its U. S. Lobby hopes to defuse a potentially explosive issue.

Whether or not this effort will succeed will depend on the amount the American public learns about the purchase of Israeli bonds by the widely scattered pension funds. Already, some 12 states have authorized this new means of financing Israeli deficits, which are mounting and are no more likely to be repaid than Israel's direct debts to the U.S. government. (Israel has never repaid a loan from the U.S. government. All, eventually, have been forgiven by the U.S. Congress.)

Since in the end these bonds issued by Israel will be the responsibility of the American government if Israel is unable to repay them, it makes little difference whether the aid to Israel is voted by Congress or authorized by the state legislatures, which control state pension funds. Either way, U.S. taxpayers ultimately will foot the bill. By raising its money in many states, however, the Israeli government spreads the political risk and makes it harder to identify the total amount of aid flowing from so many U. S. sources to Israel. Now it will be necessary to survey the current exposure of each of dozens and perhaps hundreds of state pension funds to identify the total amounts they have invested in U.S. government-guaranteed loans to Israel.

No other country has such access to U.S. pension funds, and Israel is hardly the best risk. Japanese, German or other bonds from industrialized nations have had far better in vestment ratings. But the key to Israeli access to the funds has been that these formerly extremely risky Israeli bonds now are guaranteed by the U.S. government. No U.S. state or municipal bonds carry such U.S. government guarantees, of course.

"Hot Button" Issues Among Pacific Coast Activists

The "Hot Button" priority list of what makes people on the West Coast angry might read something like the following:

1. Unmonitored U.S. aid to Israel with no oversight. (There are only two U.S. aid officials in Israel, neither one responsible for monitoring the $3.2 billion program of direct, bilateral U.S. military and economic aid to Israel. They instead monitor the $25 million U.S. program for the West Bank and Gaza).

2. Unlawful use of U.S. military equipment supplied to Israel for "defensive purposes" by Israel across international borders in Lebanon or for putting down the Palestinian insurrection. Some 37 Palestinian children have been killed this year, with U.S. equipment figuring in their deaths. In south Lebanon, 130 people, some of them children, were killed in one week in direct violation of terms of transfer of U.S. weaponry to Israel Defense Forces. But no protests were made by the Clinton administration.

3. Continued refusal of Israel to trade land for peace, either with the Palestinians or the Syrians. Despite murky Israeli pronouncements on the peace talks, Rabin's government continues to assure settlers on the West Bank that they will not be moved. The largest settlement, Maale Adumin, just outside East Jerusalem, is to be expanded by as much as 40 square miles, according to its mayor. This is a clear violation of the terms of the U.S. Loan guarantees extended to Israel, yet the Clinton administration obviously has no intention of protesting or halting next year's guarantees.

However, Americans who are paying the ever-escalating cost of the building of a Greater Israel increasingly are speaking out about the misuse of their money, and congressional refusal to solicit or listen to constituent opinions on the subject. As one activist in San Francisco asked before departing to a protest against the Israeli ethnic cleansing of south Lebanon using U.S. made long-range artillery: "Any other country doing this, regardless of the provocation, would be cut off from aid immediately. When are we going to wake up?"

Eugene Bird is the executive director of the Council for the National Interest.