Stealing Success Tel Aviv Style

by , January 28, 2010

A curious op-ed "The Tel Aviv Cluster" by the reliably neoconnish David Brooks appeared in the New York Times on January 12th.  Brooks enthused over the prowess of Israel’s high tech businesses, attributing their success in large part to Jewish exceptionalism and genius, which must have provided the ultimate feel good moment for Brooks, who is himself Jewish.  That Israel has a booming technology sector is undeniably true, but Brooks failed to mention other contributing factors such as the $101 billion dollars in US economic and military aid over the course of more than four decades, which does not include the additional $30 billion recently approved by President Barack Obama.  American assistance has financed and fueled Israel’s business growth while the open access and even "preferential treatment" afforded to Israeli exporters through the Israel Free Trade Implementation Act of 1985 has provided Israelis with the enormous US market to sell their products and services.  By act of Congress, Israeli businesses can even bid on most American Federal and State government contracts just as if they were US companies.

Brooks was characteristically undisturbed by the fact that American taxpayer subsidized development of Israeli enterprises combined with the free access to the US economy and government contracts eliminates jobs and damages competing companies on this side of the Atlantic. And there is another aspect of Israel’s growing high tech sector that he understandably chose to ignore because it is extremely sleazy.  That is the significant advantage that Israel has gained by systematically stealing American technology with both military and civilian applications.  The US developed technology is then reverse engineered and used by the Israelis to support their own exports with considerably reduced research and development costs, giving them a huge advantage against American companies.  Sometimes, when the technology is military in nature and winds up in the hands of a US adversary, the consequences can be serious.  Israel has sold advanced weapons systems to China that are believed to incorporate technology developed by American companies, including the Python-3 air-to-air missile and the Delilah cruise missile.  There is evidence that Israel has also stolen Patriot missile avionics to incorporate into its own Arrow system and that it used US technology obtained in its Lavi fighter development program, which was funded by the US taxpayer to the tune of $1.5 billion, to help the Chinese develop their own J-10 fighter.

The reality of Israeli spying is indisputable.  Israel always features prominently in the annual FBI report called "Foreign Economic Collection and Industrial Espionage." The 2005 report states, "Israel has an active program to gather proprietary information within the United States. These collection activities are primarily directed at obtaining information on military systems and advanced computing applications that can be used in Israel’s sizable armaments industry." It adds that Israel recruits spies, uses electronic methods, and carries out computer intrusion to gain the information. The 2005 report concluded that the thefts eroded US military advantage, enabling foreign powers to obtain expensive technologies that had taken years to develop.

A 1996 Defense Investigative Service report noted that Israel has great success stealing technology by exploiting the numerous co-production projects that it has with the Pentagon. "Placing Israeli nationals in key industries …is a technique utilized with great success." A General Accounting Office (GAO) examination of espionage directed against American defense and security industries described how Israeli citizens residing in the US had stolen sensitive technology to manufacture artillery gun tubes, obtained classified plans for a reconnaissance system, and passed sensitive aerospace designs to unauthorized users. An Israeli company was caught monitoring a Department of Defense telecommunications system to obtain classified information, while other Israeli entities targeted avionics, missile telemetry, aircraft communications, software systems, and advanced materials and coatings used in missile re-entry. The GAO concluded that Israel "conducts the most aggressive espionage operation against the United States of any US ally." In June 2006, a Pentagon administrative judge overruled an appeal by an Israeli who had been denied a security clearance, stating, "The Israeli government is actively engaged in military and industrial espionage in the United States. An Israeli citizen working in the US who has access to proprietary information is likely to be a target of such espionage."  More recently, FBI counter intelligence officer John Cole has reported how many cases of Israeli espionage are dropped under orders from the Justice Department.  He provides a "conservative estimate" of 125 worthwhile investigations into Israeli espionage involving both American citizens and Israelis that were stopped due to political pressure from above.

Two recent stories that have been reported in the Israeli media but are strangely absent from the news on this side of the Atlantic demonstrate exactly what is going on and what is at stake. The first story confirms that Israeli efforts to obtain US technology are ongoing.  Stewart David Nozette, a US government scientist who was arrested on October 19, 2009 in an FBI sting operation after offering to spy for Israel has been waiting in jail to go to trial on espionage charges.  New documents in the case were presented in the Federal court in Washington last week.  The documents confirm that Nozette was a paid consultant for Israeli Aerospace Industries (IAI) and it is believed that he passed to them classified material in return for an estimated $225,000 in consulting fees.  Examination of his computer by the FBI revealed that he was planning a "penetration of NASA" the US space agency and that he was also trying to crack into other scientists’ computers to obtain additional classified material.  Other documents demonstrate that he was cooperating with two Israeli scientists who were administrators with IAI, Yossi Weiss and Yossi Fishman.  Nozette made several trips to Israel without reporting them, which he was required to do because of his high security clearance.  The FBI reportedly also has incriminating letters and other documents that were obtained from the computer.

The second story relates to the pending sale of twenty-five F-35 fighter planes to Israel.  The F-35 is one of the most advanced fighter planes in the world.  The $130 million planes would be purchased with US military assistance money, which means they would effectively be a gift from the US taxpayer.  But Israel is balking at the sale reportedly because it wants to install some of its own local content in the aircraft.  The Pentagon has already made some concessions but is disinclined to grant approval for all the changes because to do so would require giving the Israelis full access to the plane’s advanced avionics and computer systems.  Israel also wants to independently maintain the aircraft, which would also require access to all systems.  It would be nice to think that the Pentagon wants to keep the maintenance in American hands to preserve jobs, but the Defense Department has never cared about US workers before when the issue is Israel, and the real reason for the standoff is that Lockheed-Martin and the Pentagon both know that Israel will steal whatever it can if it gains access.  It would then use the technology to market its own products at a price below that of US defense contractors. The result would be a triple whammy for Uncle Sam:  the expensive planes are given to Israel free, the technology is then stolen, and future sales vanish as our Israeli friends market their knock down versions of weapons systems reliant on the stolen technology.

So to David Brooks I would say that there is most definitely an economic surge taking place in high tech Israel, but it is less a miracle than the fruit of a long series of thefts and manipulations fueled by American tax money and the connivance of a Congress that is always willing to do favors for the country that it appears to love beyond all others.  I’m sure most Americans would wish the Israelis well and would applaud the prosperity that derives from their own industry and inventiveness but it is also time to put the brakes on business as usual and to take the Israeli hand out of our pocket.  I’m sure Brooks’ job is pretty secure and well paid, but many Americans are out of work and suffering, so let’s take some steps to protect our economy from the information thieves from Tel Aviv and keep our money and jobs over here.

Read more by Philip Giraldi