173. Memorandum From Nicholas Murphy and Jesse Lewis of the Political/Military Affairs Section, Embassy in Saudi Arabia, to the Ambassador to Saudi Arabia (Porter)1
SUBJECT
- Hawk Missiles for Jordan
Not completely surprisingly the question of the Saudi financing of the Hawk missiles has built into a bit of a problem.
February 29—the last date on which the letters of offer for the Hawks could be kept open—passed without a Saudi deposit of the required $74 million down payment. Rather than cancel the LOA’s [Page 582] which would require reopening the whole question with the Congress, they have been put in a hold status.
The Saudi position is that they agreed to pay $300 million for a 14 battery air defense system. They are still willing to give the Jordanians $300 million for an air defense system but they will not pay more. They have in effect suggested to the Jordanians that they scale down the program.
The Jordanian response so far has been that they need the coverage that the presently planned 14 batteries would provide—with a price tag of $720 million (or about $600 million without the Vulcan guns)—and that if the Saudis won’t pay for it they will go to the Russians who are eager to provide a full-coverage system for a low price. They might go to the Russians even if the Saudis will not give them the $300 million to buy from that source. The implications of turning to the Russians are obvious.
On instructions from the Department to explore Saudi intentions Hume raised the matter with Prince Saud (Fahd was unavailable) who said that the Saudis would be unhappy about the Jordanians going to the Russians but he was equivocal about whether the Saudis would be willing to pay the promised $300 million under those circumstances; he said he thought they probably would. Prince Fahd, [less than 1 line not declassified] stated flatly “no.” The Saudis would not pay. He said he had also told the Jordanians that turning to the Russians would cause the SAG to rethink its present policy of regarding Jordan as its “first line of defense.”
The matter is now in limbo.
King Hussain is now in Australia on the first leg of a three-week world tour at the end of which he will also visit the U.S. The subject will obviously be discussed with him then. He will probably attempt to put the blame for the current state of affairs on the Saudis. It seems to us that the real blame belongs with the Jordanians’ failure to keep the Saudis informed. The Saudis have reacted in strong negative fashion to being suddenly handed a bill for twice the already enormous amount they were prepared to pay.
Most important recent telegrams attached.
Summary: Murphy and Lewis informed Porter of the developing dispute between Riyadh and Amman over the amount of money Saudi Arabia was to contribute toward Jordan’s new air defense system.
Source: National Archives, RG 84, Jidda Embassy Files: Lot 79F80, DEF 12–5 Jordan January–April. Secret; Exdis. Sent through Horan. “Seen” is written at the top of the memorandum, initialed by Porter. Attached but not published were telegrams 1023 and 1047 from Amman, February 25, reporting that King Hussein would seek a Soviet system rather than accept a $300 million system, and telegram 1063 from Amman, February 26, in which Pickering argued that Hussein was serious and recommended soliciting the Saudi view. The contract for a $300 million U.S. system was due to expire on February 29; on January 20, the DOD informed Lt. Gen. Sharif Zeid Bin Shaker, Commander of the Jordanian Armed Forces, by letter that the costs of the program through 1979 would increase from $350 million to approximately $713 million. (Ibid.) In telegram 48170 to USCINCEUR, March 2, the Department directed Horan to meet with Saudi officials on the subject of the increased costs and Hussein’s threat to seek Soviet aid. (National Archives, RG 59, Central Foreign Policy File, D760078–0443).
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