The US-Israel MOU: Obama’s Legacy?

by Zaha Hassan

President Obama recently pushed through a measure to advance the cause of Israel-Palestine peace. It will likely be his most enduring legacy. And virtually everyone missed it.

Hidden between the dollar signs of the record-breaking memorandum of understanding (MOU) that gifted Israel a whopping $38 billion dollars in foreign military financing and missile defense over 10 years are terms that will greatly neutralize the power of the lobbyists that have controlled the conversation in Washington on Israel-Palestine to the detriment of a just peace. And the president did it in such a way that prevented those lobbyists and its beneficiary, Israel—as well as the campaigns of Donald Trump and Hillary Clinton—from complaining about it.

The move was easy to miss given how the MOU appears to reward Israel for its bad acts. Let’s not forget all that has happened since Obama’s election. Three Israeli military bombardments against the captive population in Gaza killed thousands of civilians. Settlement-building in the occupied West Bank accelerated with announcements of new construction coming as US officials landed in the region for talks. In cahoots with the Republican leadership, Israeli Prime Minister Benjamin Netanyahu snubbed protocol and audaciously delivered an address to Congress in an attempt to bury the president’s nuclear deal with Iran. And Israeli forces used US weapons to extra-judicially kill unarmed Palestinian youth, including 16-year-old Palestinian-American Mahmud Shalan.

A Military Downgrade?

But one must take a deeper look at the MOU’s essential terms to understand its effect. It will start in 2019 and extend to 2028 (beginning the last two years of the next administration and continuing into the next two administrations. The aid will be frozen at $3.8 billion per year for those 10 years ($3.3 billion per year for Foreign Military Financing and $500 million per year for missile defense). Israel must return any additional funding Congress provides it in funding unless the supplemental funding is for “emergency” situations. And the 26% allowance historically provided to Israel to purchase its own weapons systems will be eliminated over the course of the MOU.

As a result, for the next two presidential elections, candidates will not be consumed with trying to outdo each other on their unconditional support for Israel because no new MOU will be negotiated. Also, since the aid is both capped (because of the limitation on supplemental funding) and frozen over the 10-year term, the grant constitutes a reduction in Israel’s weapons buying power. With inflation and the more expensive US weapons Israel will have to use the money for, the aid may even constitute a reduction.

Moreover, the phase out over the ten-year period of the 26% allowance for purchases of Israeli-made weapons will negatively impact the Israeli weapons industry and the Israeli economy. It will also prevent Israel from misdirecting fungible US dollars, which are transferred to Israel as a lump sum at the beginning of each fiscal year. Though Israel will be able to continue to benefit from the accrual of interest on the funds, the funds cannot be used to underwrite other purposes, such as settlement construction in the occupied West Bank.

Finally, because Israel is prevented from lobbying for additional assistance and must return any funds Congress may attempt to grant it, AIPAC’s death grip on Congress and congressional elections will be loosened. That is likely why a number of congresspersons including Senator Lindsey Graham, chair of the Senate Appropriations Committee, reacted strongly against the terms of the MOU.

Though theoretically AIPAC could still exert its influence to affect appropriations to the Palestinian Authority (PA), that aid has already been subjected to conditions, reductions, holds, and other sanctions. So, there is little more that can be done to affect PA action. Because any further actions against the PA would have serious implications for Israeli security and for humanitarian relief in the West Bank and Gaza, AIPAC may feel constrained in this regard. In any case, the State Department has final authority over whether to certify funds to the PA, lift any congressional holds, or waive sanctions. To the extent that AIPAC may want to undermine PA/PLO advocacy in the US, AIPAC would be more likely to focus its efforts on legislation to close the PLO’s DC office. But this is also subject to a waiver.

Redirection of Lobbying

If the size of the aid package to Israel is outside of the authority of Congress, AIPAC’s donors will likely make other decisions about how to use their dollars. They may be more inclined to increase contributions to think-tanks linked to AIPAC that influence State Department action and the White House. Donors may also decide to redirect their funds to undermining the Boycott-Divest-Sanction movement in the US.

If AIPAC isn’t dedicating so much of its funds to congressional campaigns, members of Congress may be freed up to listen to alternative viewpoints on Israel/Palestine peace. They may be more inclined toward projects in Palestine that will stave off crisis and encourage economic development. Members may also have less of an incentive to pressure the incoming administration to pursue an Israel-Palestine peace that’s inconsistent with international norms and consensus.

Because the administration will have the final say on aid to Israel, primacy over foreign policy in Israel/Palestine will rest squarely with the executive branch. Rather than lobbying 535 members of Congress to support a just and durable peace for Palestine, Palestinian human rights advocates can direct limited resources to lobbying the president and the State Department. There is a danger with this new MOU, however, that may negatively impact Palestinians. It creates an incentive for Israel to manufacture an “emergency” to trigger the exception to requesting supplemental funding from Congress. This may take the form of instigating a conflict in Gaza which has suffered three Israeli military bombardments in seven years without such an incentive.

The timing of the signing of the MOU was as strategic as the terms themselves. It was concluded between the presidential primaries and the presidential election. Trump should have registered criticism for such US largess to Israel since he has been very critical of US aid to foreign governments and to international organizations such as NATO. However, he likely held his tongue because of the potential effect criticism would have in contentious states, like Florida, that he needed to win. Likewise, the democratic nominee, Hillary Clinton, was constrained from criticism. Though she might have been inclined to point out the negative implications of the MOU on Israel and how she would have done it differently to highlight her pro-Israel bona fides, to do so would have undermined her attempt to align herself with a popular president who has been actively campaigning for her since she won the primary.

Of course, the White House statements about the MOU don’t suggest that the terms were meant to do anything but show US support for Israel. Both the White House and State Department are quick to point out how much military aid to Israel has grown, especially under the Obama Administration. However, there is no doubt that the president and his negotiating team well understood how the terms of the MOU would affect the dynamic between Congress and the White House on Israel. Otherwise the president would not have made Netanyahu sign an agreement to not accept any additional funds from Congress.

The president also likely wanted the executive branch to firmly take hold of the purse strings so that the next president would be in a better position to compel Israel to negotiate in good faith and to deal with the Israel-Palestine conflict in its regional context, something the White House and the State Department are better positioned to do. Regardless of the president’s intentions, the incoming administration will have a freer hand in pursing peace talks between Israelis and Palestinians. And this may well be Obama’s enduring legacy.

Photo: Barack Obama in Israel in 2013.

Zaha Hassan is a New America Middle East Fellow. She is a human rights lawyer and former coordinator and senior legal advisor to the Palestinian negotiating team during Palestine’s bid for UN membership from 2010-2012.. She is completing a novel, Die Standing Like Trees. 

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  1. Thank you for this article; it is the ONLY example I have seen which puts this “generous offer” to Israel into context, showing that perhaps Obama is finally showing a bit of strength and intelligence after his caving in all these years; (remember, too, that the terrible “Cast Lead” conveniently began right on his election day in 2008 and he refused to criticise Israel all those weeks before his inauguration, while the destruction and murders continues).
    On the Real news network Shir Hever a few weeks ago had an excellent interview where he suggested the deal was not a favorable to israel as it seemed, but nobody else but Zaha Hassan has noticed.

  2. I am not convinced. Zionist parsing, wordfare, lawfare, manipulation et al within and around the MOU will contravene any supposed “balancing” perceived by an analyst such as Ms. Hassan. I’m particularly skeptical of the confusing wording of this section, despite some attempted insertion of context elsewhere:

    “The aid will be frozen at $3.8 billion per year for those 10 years ($3.3 billion per year for Foreign Military Financing and $500 million per year for missile defense). Israel must return any additional funding Congress provides it in funding unless the supplemental funding is for “emergency” situations.”

    Ah soo…forgive my cynicism.

  3. This is a very informative article, but I have two questions:
    1) Who gets to define what is an “emergency” situation?

    Because if the answer is “Congress” then this MoU is an exercise in pointlessness, and this author’s conclusions are in error.

    2) What sort of dispute-resolution process is in place should Israel renege on its obligation to return any additional funds voted to it by Congress?

    Because Netanyahu does not appear to be a man who holds much store on the concept of “my word is my bond”, and so he may be tempted to keep any such money and dare a future President to do anything about it.

    If there isn’t a pre-defined process in place then that President will have to expend diplomatic capital dragging Israel (and Congress) to heel, and if those two scoundrels pick the right time then that may be a fight that the Executive branch simply won’t have the stomach for.

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