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Business Side of Egypt’s Army Blurs Lines of Aid From U.S.
By ARAM ROSTON and DAVID ROHDE -
Nhật báo The New York Times ngày 20110305
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In the late 1990s, the Pentagon announced that it would contribute tens of millions of dollars to a 650-bed International Medical Center that the Egyptian military was building in the desert outside Cairo. The money, for medical equipment, training and logistical support, would help improve health care for Egyptian soldiers.
Within a few years, though, an American training team realized that the Egyptian military was benefiting in a different way. The medical center was, as one Pentagon official called it, “a commercial enterprise,” and many of its patients were civilians, not Egyptian soldiers. The hospital was even venturing into medical tourism; its Web site promotes “a lavishly furnished Royal Suite” for international patients.
An American doctor who has worked there, Wayne F. Yakes, recalls what his hosts told him about the hospital: “It was built with U.S. tax dollars under President Bill Clinton.” Put simply, he said, “We bought it for them.”
Eventually, the United States moved to cut off financing and even recoup some of the money, said several former American military officials. The Pentagon, after all, is supposed to pay only for projects with a military purpose.
Yet with Washington giving Cairo $1.3 billion a year in military aid, the hospital episode shows that Egypt’s for-profit military has sometimes found ways to use that aid to further its economic interests. A review of the aid program raises questions about a variety of ventures - from the acquisition of a fleet of luxury Gulfstream jets to a company making Jeeps for commercial sale as well as for the army.
Now, as the generals steer Egypt toward a new civilian government after the fall of President Hosni Mubarak, those questions about the aid program echo a broader uneasiness, especially in the pro-democracy movement: will a military so deeply invested in a system that conferred great economic and political power be willing to let go?
“It will be a very sore point in the near future, I’m sure, that the generals, the Supreme military council, is a de facto, separate government with an economy in its own right,” said Christopher Davidson, an expert on Egypt and a professor at Durham University in England.
Some experts and former American military officials say the aid from Washington - roughly $40 billion since the program’s inception as part of the 1979 Camp David peace accord signed by Israel and Egypt - has served to shore up a military bureaucracy prone to insider dealing and corruption.
Robert Springborg, a professor at the Naval Postgraduate School who studies Egypt’s military, said that by paying for expensive weapons systems, the aid program “has enabled the Egyptian military then to use resources it has for other purposes.”
In part because of concerns about diversion of funds, only a sliver of the money from the American aid program actually goes to the Egyptian military. Instead, the Pentagon directly pays American companies that it has chosen to manufacture and ship the tanks, planes, guns and ammunition to Egypt.
Egyptian opposition groups have said that Mr. Mubarak and senior generals were nonetheless able to divert money. But American officials insist that the design of the program - known as Foreign Military Sales - ensures that money cannot be stolen.
Edward W. Ross, a former official at the Defense Security Cooperation Agency, which oversees the sales, said he was irked by allegations that Egyptians could have pocketed money. “That money goes to the Federal Reserve,” he said, “and then it is only released to a U.S. contractor.”
Keeping Aid Flowing
Even so, the United States has considerably less control over how goods are used once they arrive in Egypt. In interviews, several former American military officials said that keeping the aid flowing often seemed to trump questions of how effective it was. Some of them asked to remain anonymous because they did not want to alienate the Egyptian military. The yearly $1.3 billion, one retired colonel explained, is viewed as “an entitlement.”
At times, American officials have argued with Egyptian generals over whether certain equipment was actually for military use. That was the case with the Gulfstream jets.
The retired colonel, who worked at the American Embassy’s Office of Military Cooperation in Cairo, said that the Egyptians assured him the planes would be used for “mapping,” but that he was skeptical. “It was obvious to us that these were going to be used at least in part for V.I.P. travel,” the colonel said.
Officers tried to block the deal, he recalled, but “our contacts at the Ministry of Defense were applying pressure” to make sure the sale went through.
A former high-ranking Pentagon official said he also protested. “I remember that it was made very clear to the Egyptians that ‘You use this for military purposes and not for a luxury airline for V.I.P.’s,’ ” he said.
But the Egyptian military did indeed use the Gulfstreams for the V.I.P.’s, and the luxury jets became a popular symbol of the Mubarak government’s excess.
Egyptian military officials declined to comment for this article.
Over the years, the Gulfstream fleet - which now totals nine jets - has cost American taxpayers $333 million,
government officials said. The most recent purchase was in 2002, but the Pentagon continues to pay $10 million a year to service the planes.
The Pentagon referred questions about military aid for Egypt to the State Department, which has formal jurisdiction. In an e-mail response to questions, a State Department spokesman said the aid “assists Egypt in maintaining a strong and disciplined defense force, which is imperative at this time, and critical to ensuring Egypt’s continued role as a regional leader able to act as a moderating influence.”
Few Americans worked more closely with Egypt’s military than Maj. Gen. Michael A. Collings, a retired Air Force officer who was the top-ranking United States military representative in Egypt from 2006 to 2008. He served as the American Embassy’s senior defense representative and chief of the Office of Military Cooperation.
Corruption Concerns
General Collings said the Americans were not able to track the for-profit arm of the Egyptian military - a conglomerate that runs factories, farms and high-tech corporations. “How much goes back from the actual sale to the military so they can buy other equipment? I don’t know,” he said. “I do know that a fair amount goes back to the senior officers that are in charge of these particular factories.”
While insisting that there was “no way, shape or form” that American aid money had been stolen, General Collings said he was disturbed by what he described as endemic corruption in the upper ranks of the Egyptian military. “My concern is for the Egyptian people who have suffered enough,” he said. “They deserve better.”
While he was posted in Egypt, he said, senior Egyptian military officials told him of a corruption scheme in which Mr. Mubarak handed out cash to the generals leading each branch of the armed forces - army, navy, air force and air defense force. “There was a systematic process by which money was given and distributed through the top ranks of the regime,” General Collings said.
A former high-ranking Egyptian officer confirmed General Collings’s account. He spoke on the condition of anonymity because of concerns for his safety.
The two former American military officials who spoke on the condition of anonymity said they had not heard those allegations.
On top of the $1.3 billion in annual military aid, the Egyptian armed forces collect millions more from a joint military exercise, called Bright Stars, held in Egypt every two years. General Collings said the United States paid dearly to local companies chosen by the Egyptian military to provide equipment.
In what he called an unusual arrangement, every item is rented. “Fifty cents a chair” per day, he recalled. “A buck fifty for a table. It varied.”
The retired colonel who served in Egypt recalled similar concerns. “We felt some of the charges were very high,” he said.
Even with the built-in safeguards, some of the Egyptian military’s for-profit ventures have created quandaries for administrators of the Foreign Military Sales program, according to experts. In some cases, military products and for-profit goods sold to civilians are manufactured inside a single armed forces-owned complex.
The Egyptian military has a joint venture with Chrysler to make Jeeps, which are common on Egypt’s desert roads and in the army. The joint venture manufactures the civilian Jeep Wrangler, for sale in Egyptian car dealerships and across the Middle East, as well as a Jeep Wrangler used by the Egyptian Army.
Last year, the American military awarded two Foreign Military Sales contracts to Chrysler in Detroit. One, for $26 million, was for 750 unassembled Jeeps. The other, announced in November, was for $7 million to ship tools and spare parts for Jeep Wranglers to the Egyptian Ministry of Defense.
Mr. Springborg, the expert on the Egyptian military, said he was skeptical that, in cases like this, the Egyptians could maintain a firewall between production of civilian and military items.
“Who is drawing these lines?” he said, emphasizing that he was expressing his personal views, not those of the American government. “That is the great difficulty of drawing a line in a military that has emphasized so much of its economic function.”
The company that manufactures Jeeps in Egypt is a joint venture between Chrysler and a subsidiary of the Egyptian military. A Chrysler spokesman denied that there was any diversion and said the model of Jeep used by the Egyptian Army was different from the commercial vehicle.
“All components imported for assembly of military vehicles are strictly for use in the military vehicles and under no circumstances are they used for nonmilitary assembly,” he said in an e-mail. He said no American military funds “are used to support the production of the civilian/retail sales.”
Another area to look at, Mr. Springborg said, is the production of the well-known M1A1 Abrams tank, which the Egyptian military builds under license with American-made parts. The Pentagon pays General Dynamics to ship tank kits to Egypt, where military workers assemble them.
Former American officers consider the tank manufacturing plant a giant jobs program. “It’s as much about providing jobs as it is buying military hardware,” General Collings said.
In 2007, the Defense Department announced the sale of 125 more unassembled tanks to Egypt, at an estimated cost of $890 million. So far, Egypt has more than 800 of the tanks.
“There are two assembly lines where they make that tank,” a former senior American military official said. “They are all in the same huge building.”
Next to the tank production line that receives the American aid, he said, workers are assembling an Egyptian construction vehicle for commercial sale. He said American auditors visited the plant often to ensure that aid was not diverted from the tank-production side of the building.
A Desert Oasis
As for the International Medical Center, repeated telephone calls to the public relations department failed to win permission for a visit, and two reporters who showed up at the front gate were turned away for lack of a permit from military security.
From that distance, the six-story hospital, on a desert road about 45 minutes east of Cairo, appears to be an oasis in a mostly barren landscape. Three wings jut out from the main building, all with white walls and green glass. The glass, including large bubbles framing the end of each wing, shimmers in the bright winter sunshine as window washers - a novelty in Egypt - inch down the walls.
Towering palms line the entrance drive, while inside, sprinklers shoot water across carefully trimmed trees, lawns and flower beds. Security cameras survey the outside walls.
According to the State Department, the Egyptian government built the medical center with its own funds, while the American military aid program contributed $162.8 million for equipment, operations and maintenance.
The former American military officials involved in Egypt said they believed that the financing was cut off five years ago.
But the spigot, it turns out, has not been turned all the way off. Last summer, the Pentagon gave a sole-source, $4.6 million contract to a Florida company called TeKontrol to train hospital staff members for 13 months. Halting the financing, a contract document explained, “could potentially impact the desires of the Egyptian Ministry of Defense” to win international accreditation for the hospital.
Neil MacFarquhar contributed reporting from Cairo.
Business Side of Egypt’s Army Blurs Lines of Aid From U.S.
By ARAM ROSTON and DAVID ROHDE -
Nhật báo The New York Times ngày 20110305
Người viết thường có thói nói ngược. Khi biến động Ai Cập xảy ra thì cũng đã đi ngược trào lưu hớn hở của nhiều người mà cảnh báo rằng đây là một vụ Quân đội đảo chánh Tổng thống nhờ sự tiếp sức của quần chúng biểu tình để bảo vệ chế độ cũ - và những quyền lợi của mình trong hệ thống "quân doanh". Xin đọc lại " Khi máu chảy đầy đường" và mấy bài kế tiếp trên Dainamax... Sau đó lại còn giới thiệu một bài báo của tờ Bloomberg về cánh tay kinh tế nối dài của các tướng lãnh. Bây giờ, tờ New York Times còn khui thêm chuyện Mỹ quốc viện trợ từ gần hai chục năm trước... Xin được miễn dịch bài này mà chỉ giới thiệu với quý vị, để giải ảo. Điều an ủi là nước Mỹ có tự do thông tin nên báo chí có quyền phanh phui, chứ Bắc Kinh làm những gì cho chế độ quân phiệt ở Ngưỡng Quang tại Miến Điện thì thiên hạ bù trất. Bây giờ, xin quý vị tham khảo bài viết trên tờ NYT:
In the late 1990s, the Pentagon announced that it would contribute tens of millions of dollars to a 650-bed International Medical Center that the Egyptian military was building in the desert outside Cairo. The money, for medical equipment, training and logistical support, would help improve health care for Egyptian soldiers.
Within a few years, though, an American training team realized that the Egyptian military was benefiting in a different way. The medical center was, as one Pentagon official called it, “a commercial enterprise,” and many of its patients were civilians, not Egyptian soldiers. The hospital was even venturing into medical tourism; its Web site promotes “a lavishly furnished Royal Suite” for international patients.
An American doctor who has worked there, Wayne F. Yakes, recalls what his hosts told him about the hospital: “It was built with U.S. tax dollars under President Bill Clinton.” Put simply, he said, “We bought it for them.”
Eventually, the United States moved to cut off financing and even recoup some of the money, said several former American military officials. The Pentagon, after all, is supposed to pay only for projects with a military purpose.
Yet with Washington giving Cairo $1.3 billion a year in military aid, the hospital episode shows that Egypt’s for-profit military has sometimes found ways to use that aid to further its economic interests. A review of the aid program raises questions about a variety of ventures - from the acquisition of a fleet of luxury Gulfstream jets to a company making Jeeps for commercial sale as well as for the army.
Now, as the generals steer Egypt toward a new civilian government after the fall of President Hosni Mubarak, those questions about the aid program echo a broader uneasiness, especially in the pro-democracy movement: will a military so deeply invested in a system that conferred great economic and political power be willing to let go?
“It will be a very sore point in the near future, I’m sure, that the generals, the Supreme military council, is a de facto, separate government with an economy in its own right,” said Christopher Davidson, an expert on Egypt and a professor at Durham University in England.
Some experts and former American military officials say the aid from Washington - roughly $40 billion since the program’s inception as part of the 1979 Camp David peace accord signed by Israel and Egypt - has served to shore up a military bureaucracy prone to insider dealing and corruption.
Robert Springborg, a professor at the Naval Postgraduate School who studies Egypt’s military, said that by paying for expensive weapons systems, the aid program “has enabled the Egyptian military then to use resources it has for other purposes.”
In part because of concerns about diversion of funds, only a sliver of the money from the American aid program actually goes to the Egyptian military. Instead, the Pentagon directly pays American companies that it has chosen to manufacture and ship the tanks, planes, guns and ammunition to Egypt.
Egyptian opposition groups have said that Mr. Mubarak and senior generals were nonetheless able to divert money. But American officials insist that the design of the program - known as Foreign Military Sales - ensures that money cannot be stolen.
Edward W. Ross, a former official at the Defense Security Cooperation Agency, which oversees the sales, said he was irked by allegations that Egyptians could have pocketed money. “That money goes to the Federal Reserve,” he said, “and then it is only released to a U.S. contractor.”
Keeping Aid Flowing
Even so, the United States has considerably less control over how goods are used once they arrive in Egypt. In interviews, several former American military officials said that keeping the aid flowing often seemed to trump questions of how effective it was. Some of them asked to remain anonymous because they did not want to alienate the Egyptian military. The yearly $1.3 billion, one retired colonel explained, is viewed as “an entitlement.”
At times, American officials have argued with Egyptian generals over whether certain equipment was actually for military use. That was the case with the Gulfstream jets.
The retired colonel, who worked at the American Embassy’s Office of Military Cooperation in Cairo, said that the Egyptians assured him the planes would be used for “mapping,” but that he was skeptical. “It was obvious to us that these were going to be used at least in part for V.I.P. travel,” the colonel said.
Officers tried to block the deal, he recalled, but “our contacts at the Ministry of Defense were applying pressure” to make sure the sale went through.
A former high-ranking Pentagon official said he also protested. “I remember that it was made very clear to the Egyptians that ‘You use this for military purposes and not for a luxury airline for V.I.P.’s,’ ” he said.
But the Egyptian military did indeed use the Gulfstreams for the V.I.P.’s, and the luxury jets became a popular symbol of the Mubarak government’s excess.
Egyptian military officials declined to comment for this article.
Over the years, the Gulfstream fleet - which now totals nine jets - has cost American taxpayers $333 million,
government officials said. The most recent purchase was in 2002, but the Pentagon continues to pay $10 million a year to service the planes.
The Pentagon referred questions about military aid for Egypt to the State Department, which has formal jurisdiction. In an e-mail response to questions, a State Department spokesman said the aid “assists Egypt in maintaining a strong and disciplined defense force, which is imperative at this time, and critical to ensuring Egypt’s continued role as a regional leader able to act as a moderating influence.”
Few Americans worked more closely with Egypt’s military than Maj. Gen. Michael A. Collings, a retired Air Force officer who was the top-ranking United States military representative in Egypt from 2006 to 2008. He served as the American Embassy’s senior defense representative and chief of the Office of Military Cooperation.
Corruption Concerns
General Collings said the Americans were not able to track the for-profit arm of the Egyptian military - a conglomerate that runs factories, farms and high-tech corporations. “How much goes back from the actual sale to the military so they can buy other equipment? I don’t know,” he said. “I do know that a fair amount goes back to the senior officers that are in charge of these particular factories.”
While insisting that there was “no way, shape or form” that American aid money had been stolen, General Collings said he was disturbed by what he described as endemic corruption in the upper ranks of the Egyptian military. “My concern is for the Egyptian people who have suffered enough,” he said. “They deserve better.”
While he was posted in Egypt, he said, senior Egyptian military officials told him of a corruption scheme in which Mr. Mubarak handed out cash to the generals leading each branch of the armed forces - army, navy, air force and air defense force. “There was a systematic process by which money was given and distributed through the top ranks of the regime,” General Collings said.
A former high-ranking Egyptian officer confirmed General Collings’s account. He spoke on the condition of anonymity because of concerns for his safety.
The two former American military officials who spoke on the condition of anonymity said they had not heard those allegations.
On top of the $1.3 billion in annual military aid, the Egyptian armed forces collect millions more from a joint military exercise, called Bright Stars, held in Egypt every two years. General Collings said the United States paid dearly to local companies chosen by the Egyptian military to provide equipment.
In what he called an unusual arrangement, every item is rented. “Fifty cents a chair” per day, he recalled. “A buck fifty for a table. It varied.”
The retired colonel who served in Egypt recalled similar concerns. “We felt some of the charges were very high,” he said.
Even with the built-in safeguards, some of the Egyptian military’s for-profit ventures have created quandaries for administrators of the Foreign Military Sales program, according to experts. In some cases, military products and for-profit goods sold to civilians are manufactured inside a single armed forces-owned complex.
The Egyptian military has a joint venture with Chrysler to make Jeeps, which are common on Egypt’s desert roads and in the army. The joint venture manufactures the civilian Jeep Wrangler, for sale in Egyptian car dealerships and across the Middle East, as well as a Jeep Wrangler used by the Egyptian Army.
Last year, the American military awarded two Foreign Military Sales contracts to Chrysler in Detroit. One, for $26 million, was for 750 unassembled Jeeps. The other, announced in November, was for $7 million to ship tools and spare parts for Jeep Wranglers to the Egyptian Ministry of Defense.
Mr. Springborg, the expert on the Egyptian military, said he was skeptical that, in cases like this, the Egyptians could maintain a firewall between production of civilian and military items.
“Who is drawing these lines?” he said, emphasizing that he was expressing his personal views, not those of the American government. “That is the great difficulty of drawing a line in a military that has emphasized so much of its economic function.”
The company that manufactures Jeeps in Egypt is a joint venture between Chrysler and a subsidiary of the Egyptian military. A Chrysler spokesman denied that there was any diversion and said the model of Jeep used by the Egyptian Army was different from the commercial vehicle.
“All components imported for assembly of military vehicles are strictly for use in the military vehicles and under no circumstances are they used for nonmilitary assembly,” he said in an e-mail. He said no American military funds “are used to support the production of the civilian/retail sales.”
Another area to look at, Mr. Springborg said, is the production of the well-known M1A1 Abrams tank, which the Egyptian military builds under license with American-made parts. The Pentagon pays General Dynamics to ship tank kits to Egypt, where military workers assemble them.
Former American officers consider the tank manufacturing plant a giant jobs program. “It’s as much about providing jobs as it is buying military hardware,” General Collings said.
In 2007, the Defense Department announced the sale of 125 more unassembled tanks to Egypt, at an estimated cost of $890 million. So far, Egypt has more than 800 of the tanks.
“There are two assembly lines where they make that tank,” a former senior American military official said. “They are all in the same huge building.”
Next to the tank production line that receives the American aid, he said, workers are assembling an Egyptian construction vehicle for commercial sale. He said American auditors visited the plant often to ensure that aid was not diverted from the tank-production side of the building.
A Desert Oasis
As for the International Medical Center, repeated telephone calls to the public relations department failed to win permission for a visit, and two reporters who showed up at the front gate were turned away for lack of a permit from military security.
From that distance, the six-story hospital, on a desert road about 45 minutes east of Cairo, appears to be an oasis in a mostly barren landscape. Three wings jut out from the main building, all with white walls and green glass. The glass, including large bubbles framing the end of each wing, shimmers in the bright winter sunshine as window washers - a novelty in Egypt - inch down the walls.
Towering palms line the entrance drive, while inside, sprinklers shoot water across carefully trimmed trees, lawns and flower beds. Security cameras survey the outside walls.
According to the State Department, the Egyptian government built the medical center with its own funds, while the American military aid program contributed $162.8 million for equipment, operations and maintenance.
The former American military officials involved in Egypt said they believed that the financing was cut off five years ago.
But the spigot, it turns out, has not been turned all the way off. Last summer, the Pentagon gave a sole-source, $4.6 million contract to a Florida company called TeKontrol to train hospital staff members for 13 months. Halting the financing, a contract document explained, “could potentially impact the desires of the Egyptian Ministry of Defense” to win international accreditation for the hospital.
Neil MacFarquhar contributed reporting from Cairo.
