In March of 1992 US State Department inspector general Sherman Funk
issued a classified report about illegal Israeli transfers of US
military technology. The report finds Israel "is systematically
violating U.S. arms control laws." The "Blue Lantern" system used
in-country checks conducted by Customs officials or other qualified US
embassy personnel to verify that "sensitive U.S. Munitions List items
and technology are used only for authorized purposes."
The audit uncovered a breakdown in US inspection regimes. The State
Department relied on "government to government" assurances that items
were not "retransferred" or "used for unauthorized purposes." Shipments
to non-government entities could only be checked if Israeli government
officials granted permission.
The auditor found "After reviewing the end use procedures, we stated to
post officials that relying entirely on government-to-government
assurances is an inadequate verification procedure. This is especially
true for a country which, according to numerous intelligence reports, is
systematically violating U.S. arms control laws." But the US State
Department's own Bureau of Politico-Military Affairs (PM) reined in Blue
Lantern investigators stating "investigations were generally not to be
conducted unless authorized." One Blue Lantern audit found US telemetry
equipment being put to prohibited uses. When notified, the State
Department's Directorate of Defense Trade Control refused to take action
and closed the Blue Lantern case.
At the time, the executive and some members of the legislative branch
were deeply concerned about the ongoing Israeli diversion to China of
military technology from the controversial American-funded Lavi jet
fighter project. Secretary of State James A. Baker Baker was also
holding up an Israeli request for $10 billion in loan guarantees to
pressure the Israelis to halt construction of illegal settlements on the
West Bank. Report of Audit reveals a highly dysfunctional inspection
regime dominated by political infighting. An attached memo from the
Bureau of Politico-Military Affairs (PM) challenged the inspector
general's premises. "There are two glaring deficiencies in this
section. First, the report is premised on two notions; that if a story
appears in an intelligence publication, it must be true; that if some
agency not charged with responsibility for a program (in this case low
level officials in ACDA) [U.S. Arms Control and Disarmament Agency],
they must be correct. As is indicated below, these assumptions do not
always pertain. It is not PM's job to react in a knee-jerk fashion to
intelligence reports, but to analyze and investigate."
Release notes. On
August 14, 2009
the US State Department "denied in full" IRmep's February 14, 2009
Freedom of Information Act request for the Funk audit. IRmep appealed
twice to the US Department of State Appeals Review Panel, winning a
redacted release
on August 1, 2011. IRmep then appealed that Israel, the subject of the
entire report, be restored to all areas of the document where State
Department censors redacted the country reference. On
September 28, 2011
the State Department refused, responding that "the decision of the
Appeals Review Panel is the final decision for the Department of State.
Your only available option is litigation." The Wall Street Journal
allegedly
obtained the report in 1992, but never made it available to the public.