Trump deals with Saudis may be worth much less than $110 billion

Trump deals with Saudis may be worth much less than $110 billion

Democrats and experts alike are questioning whether the Trump administration is over-stating the value of pending Saudi Arabia arms deals, which the president has said are worth $110 billion and would create a million jobs.

Trump has emphasized the importance of keeping the military deals in place, insisting that the U.S. not abandon the potential dollars even as his administration deals with the fallout from the Oct. 2 killing of journalist Jamal Khashoggi at the Saudi consulate in Istanbul.

While Trump has said it is possible that the Saudis will face sanctions, he has made clear he will oppose undoing deals to provide the country with arms. 

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Yet some defense experts say the value of those deals — announced in May 2017 with only a broad description of the armaments that would be sold — aren’t really worth $110 billion.

Bruce Riedel, a senior fellow with Brookings, said the deal is merely “fake news” from the Trump administration.

“The Saudis have not concluded a single major arms deal with Washington on Trump’s watch,” he argued.

The Defense and State Department have offered few details to help clear up the confusion, and there is no public breakdown of pending foreign military sales (FMS). 

“The U.S. Government does not provide a country-by-country breakdown in open FMS cases due to requests from our partners to not disclose the information,” Pentagon spokesman Johnny Michael said in a statement to The Hill.

Michael said that the U.S. signed a Memorandum of Intent with the Saudis in 2017 to jointly pursue “approximately $110 billion in Foreign Military Sales procurements over the next 10 years.” 

But Saudi Arabia so far has only signed “Letters of Offer and Acceptance” (LOAs) for $14.5 billion in sales of “helicopters, tanks, ships, weapons, and training,” according to Michael.

LOAs are generally not made public, with the exception of those signed with NATO partners that the U.S. and other nation want to trumpet. The letters specify the terms of an agreement and are considered a final step before weapons are delivered to a nation.

In a report released in September, the Congressional Research Service (CRS) said the Saudis have signed LOAs for four Littoral Combat Ships, or frigats and 115 M1A2S tanks made by General Dynamics Corp. They also signed LOAs for deliveries of PAC-3 Patriot missiles, UH-60 helicopters and CH-47 Chinook helicopters.

Sales still to be finalized include an $18 billion “upgrade” of “Saudi Arabia’s military command-and-control and defense communications infrastructure,” according to CRS.

Also in limbo is a $15 billion deal for the missile defense system Terminal High Altitude Air Defense (THAAD), which the Saudis have expressed interest in for years with no solid agreement yet in place.

The THAAD deal included a September deadline with maker Lockheed Martin. The Saudi Defense Ministry let the deadline expire and the sale remains up in the air.

Riedel said the Saudis and the administration merely “put together a notional package of the Saudi wish list of possible deals and portray that as a deal,” to get to the $110 billion trumpeted by Trump.

The CRS report backs that description, noting that the Trump administration’s deals include a package of sales that President Obama had previously discussed and developed and newly proposed defense sales under Trump. 

Riedel added that none of the deals identified at the May 2017 announcement were new and all began under the Obama administration. The previous administration closed on arms sale agreements worth more than $60 billion between 2009 and 2016 with Saudi Arabia.

One such example was the sale of four frigates for the Royal Saudi navy, a proposal that was first reported by the State Department in 2015. 

Obama also approved the THAAD sale in 2015.

Trump — who told reporters on Monday that he was “not satisfied” with the Saudi’s account of Khashoggi’s death — has also raised the number of jobs he projects would be created through the Saudi deals.

When he announced the package last May, Trump said the sales would potentially create “tens of thousands of new jobs in the United States.” 

Earlier this month the number significantly jumped. 

“I do think this: That I worked very hard to get the order for the military. It's $110 billion. I believe it's the largest order ever made. It's 450,000 jobs. It's the best equipment in the world,” Trump said at the White House on Oct. 13.

On Monday, the number jumped to one million.

“I don’t want to lose a million jobs. I don’t want to lose a $110 billion in terms of investment. But it’s really $450 billion if you include other than military. So that’s very important,” Trump told reporters Monday.

Defense experts agree that there’s no publicly available data to back up those claims.

The lack of transparency makes it difficult to pinpoint the exact number of jobs the deals would create, said Melissa Dalton, a senior fellow with the Center for Strategic and International Studies.

“It’s hard to break down because we’re talking about often times several different contractors, several different companies involved in these complex deals,” she told The Hill.

“We just don’t have the level of transparency to know and therefore calculate out the jobs it will touch.” 

Michael O’Hanlon, a foreign policy expert at Brookings, estimates the deal would only create “several tens of thousands of jobs, for a year, based on basic defense economics, and certainly no more than 100,000.”

There has been no supporting data released to back up Trump’s insistence that there is $450 billion in total investments with the Saudis.

New York Times reporter Maggie Haberman said Tuesday that the pumped-up numbers are likely the result of White House staffers becoming “numb” to what happens in the Trump administration.

And two CNN “New Day” hosts both accused Trump of lying over the figures.

Alisyn Camerota called it the “anatomy of fabrication,” while John Berman called it a “flat-out lie.”

The Saudi government acknowledged Khashoggi's death for the first time on Friday night after claiming for weeks that he left the consulate alive. They said the U.S.-based Washington Post contributor, who lived in Virginia and was critical of the government, died in a “fight” during an unapproved operation to return him to Saudi Arabia.

Khashoggi went missing after he entered the consulate to get paperwork needed for his marriage to his Turkish fiancée.

Lawmakers are skeptical any operation would have been carried out without the approval of Saudi Arabia’s day-to-day leader Crown Prince Mohammed bin Salman.

Congress is considering several legislative options in response to the killing, including blocking arms sales to Riyadh.

A bipartisan group of 20 House lawmakers on Tuesday introduced a bill that would immediately stop all military sales and aid to Saudi Arabia.

The legislation, introduced by Rep. Jim McGovern (D-Mass.), is co-sponsored by Republican Reps. Thomas MassieThomas Harold MassieGOP lawmaker doubles down on criticizing Kerry's political science degree as not 'science' John Kerry fires back at GOP congressman questioning his 'pseudoscience' degree Overnight Energy: John Kerry hits Trump over climate change at hearing | Defends Ocasio-Cortez from GOP attacks | Dems grill EPA chief over auto emissions rollback plan MORE (Ky.), Walter JonesWalter Beaman JonesEx-Greenville mayor wins Dem primary in North Carolina, GOP candidates head to runoff North Carolina reporter says there could be 'new crop' of GOP candidates in 9th Congressional District race House pays tribute to Walter Jones MORE (N.C.), and Justin AmashJustin AmashTlaib calls on Amash to join impeachment resolution GOP lawmaker: Trump has engaged in multiple actions that 'meet the threshold for impeachment' Have conservatives already lost the 2020 election? MORE (Mich.).

The Senate, meanwhile, has previously tried but failed to block arms sales to Riyadh, falling four votes short if advancing a 2017 resolution that would stop part of Trump’s claimed $110 billion deal.

Lawmakers who voted against the resolution but now seek to block arms sales to the Middle East nation include Sens. Ben Sasse (R-Neb.) and Lindsey Graham (R-S.C.).

In all major foreign sales of U.S. defense articles — a minimum of $14 million for major defense articles and $1 million for ammunitions — the State Department first notifies the House Foreign Affairs and Senate Foreign Relations committees to smooth out any issues.

If the executive branch decides to move forward on the sale, the State Department formally notifies it to Congress.

Lawmakers then have 30 days to review a sale to non-NATO countries and allies and can choose to oppose the sale via a joint resolution of disapproval. While sales on several occasions have been kicked back and modified, an all-out opposition is rare.

After an LOA is signed, Congress does not have the ability to put a hold on or modify the deal, unless it passes new legislation allowing it to do so.

All FMS contracts do include language that allows the U.S. government to outright cancel a sale in the interest of national security and foreign policy, but such a decision would have to come from Trump or Pompeo.

That in itself is rare.

Since the 1980s, there have only been a handful of sales that have been canceled or greatly revised, including a plan to sell Saudi Arabia 1,400 Stinger antiaircraft missiles in 1984 during the Reagan administration.

Lawmakers objected to the sale at the time because they said that missiles might fall into the hands of extremists who could then use them in terrorist attacks.