786A.5 MSP/11–2552: Telegram
The Ambassador in Saudi Arabia
(Hare) to the
Department of State
406. While in Riyadh to present Adm Wright, Yusuf Yassin and Khalid Gargoni approached me in considerable perturbation re certain aspects mil asst program which they said had become subj criticism among King’s councillors and which were putting them (Yusuf and Khalid) on spot as persons responsible for negots mil assist agrmt.
- First problem was payment for students studying US where fees of $35,000 per year were being charged. Not only was this exorbitant but it was not in accord mil assist agrmt under which tuition shld be free.
- Second problem was excessive prices being charged for US planes. It had been found for example Brit jets cld be purchased for 1/7 price US jets.
I replied did not have documentation available for ref but believed student training question had been fully discussed by head of MAAG with Prince Mishaal and that, as far as liability to pay in [Page 2427] principle concerned, never had been any question in my mind but that wld be on reimbursable basis. Both Yusuf and Khalid challenged this vigorously and said they wld never have recommended signature of mil assist agrmt if they had understood training Saudi students in US wld be at cost of SAG. They said this was not matter for discussion by head MAAG and Prince Mishaal but for polit negots. They hoped question cld be settled without difficulty but cld foresee necessity renegots if such not case. Saudis had not asked for rent for DAF because they expected receive other benefits. If such benefits being withheld, whole picture changed.
I reiterated that no question my mind re principle payment but was unfamiliar with details re actual sending students to US. I wld endeavor clarify this.
Re cost of planes, this was frankly not matter for discussion, surely not for bargaining. Prices charged SAG were same as paid by USG and it was merely question if SAG wanted specific items at current prices or not. If SAG desired purchase cheaper equipment elsewhere, that was its privilege but one usually gets just about what one pays for, and there cld also be maintenance and training difficulties if SAG resorted to bargain hunting.
Yusuf and Khalid agreed price US equipment cld be left for Prince Mishaal discuss with Gen Grover but requested question cost trainees be reviewed subj further discussion.
Foregoing discussed with Gen Grover who found correspondence going back to Aug this year in which head of MAAG had made clear to Prince Mishaal that SAG liable payment for student training. However he agreed with me that there may have been misunderstanding this regard by Yusuf and Khalid who may have assumed that, in lack of specification to contrary, mil training under Art 5 of mil assist agrmt to be accorded same treatment as prescribed DAF trainees in annex to DAF agrmt. We also agreed matter wld probably not have been raised if it had not been for $35,000 tuition fee for pilot students which, with fees other students, brings amount SAG requested pay to $252,000,2 rather staggering sum.
In circumstances, fol courses action possible:
- To furnish full clarification but hold our ground and face possible consequences.
- To expedite grant aid and include student training therein.
- To renegot Art 5 of mil assist agrmt to cover question costs.
- To return Saudi students without training and abandon idea future training in US.
Of these I feel that (4) wld be disastrous to training program, that (3) shld be avoided if at all possible that (2) wld be satisfactory solution if at all possible but, if impossible, no recourse except adhere to (1) unless prepared consider possible compensation in form payment rent.
Before replying to Saudis, wld appreciate any thoughts Dept may have for our guidance since, although this may turn out be only tempest in teapot, there is also possibility of serious complications.
Gen Grover also advising Defense.