US defence giants sponsor Egypt arms show as military aid is blocked
Egypt’s annual arms fair is drawing in US defence companies despite millions of dollars in military aid to Egypt being blocked after Senator Robert Menendez was indicted over a corrupt scheme to influence that aid.
US defence industry titans including Boeing, Northrop Grumman and Lockheed Martin are slated to attend Edex, Egypt’s flagship defence exposition taking place on 4-7 December, which is supported by Egypt’s Ministry of Defence and Armed forces, Middle East Eye can report.
The Cairo arms fair usually flies under the radar compared to the glitzier Dubai Air show and Abu Dhabi arms fair, where billion-dollar weapons deals are cut and a catwalk of Middle Eastern generals peruse flashy new pieces of firepower in the presence of international media.
But this year, the comparatively humble Edex is being watched as an indicator of US defence companies’ sensitivity to an explosive corruption case against the former Democratic chairman of the Senate Foreign Relations Committee, which allegedly involved Egyptian officials, defence industry insiders tell MEE.
US prosecutors have charged Senator Robert Menendez with taking hundreds of thousands of dollars in cash, gold bars and other items in exchange for funnelling contentious military aid and US government secrets to Egypt.
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While no Egyptian officials have been charged in the case, the FBI is reportedly conducting a counter-intelligence investigation into the role Egypt’s intelligence services may have played, in a scheme that former US officials previously told MEE sounded like a bare-knuckled intelligence operation.
“US defence companies care about the Menendez case. They are watching how this plays out,” a defence industry insider told MEE. “This thing could drag out for months and more allegations could come out. Why would you want to touch Egypt until then?”
Menendez and four other codefendants have pleaded not guilty to charges.
Some US military aid to Egypt has already emerged as a casualty of the scandal. On Tuesday, the new chair of the Senate Foreign Relations Committee, Democratic Senator Ben Cardin, blocked $235m in aid to Egypt, citing human rights concerns.
For now, US defence giants appear to be shrugging off concerns that a visible footprint in Egypt could be bad for their brand. Lockheed Martin and Northrop Grumman are advertised as gold sponsors of the arms fair and Boeing is a silver sponsor.
The companies have chalked up billions of dollars in profits from Egypt over the years, thanks to the roughly $1.3bn in military aid Cairo receives annually from the US.
Just this January, Boeing was awarded a contract to produce $426m worth of CH-47F Chinook Helicopters for Egypt, part of a larger $2.6bn sale.
Late to Egypt's party
Edex is symbolic of the drama that increasingly typifies the defence relationship between the US and its historic ally.
Egyptian President Abdel Fattah el-Sisi inaugurated the first Edex show in 2018. A cornucopia of weapons systems was displayed at the event, from French Rafale fighter jets to US armoured cars and gold-plated machine guns made in Pakistan.
“It’s another of Sisi’s ego projects, but it's not a business opportunity for US defence firms,” a former senior US official told MEE, speaking on condition of anonymity. “The US defence industry doesn’t plan their schedule around Edex, like they do the Dubai airshow. Nothing happens there.”
In fact, Egypt, the world’s sixth largest arms importer, struggled to get the event off the ground, sources with direct knowledge of the matter told MEE. Egypt’s defence ministry had to turn to the US embassy in Cairo for help.
“They didn’t even know how to invite defence companies who they were buying from,” the source told MEE.
Yezid Sayigh, a political-military expert at the Malcolm H Kerr Carnegie Middle East Center in Beirut told MEE that Sisi’s government sees Edex as its chance to “hobnob in the defence world”.
“The Egyptians want to show that they are peers and not backward clients of the global defence industry,” he told MEE.
Like any industry, it's natural for Egypt's officer class to want to see the latest trends and technologies shaping their work. Big-name corporate sponsors like Lockheed Martin help give Edex some recognition, as Cairo tries to compete with Qatar, Saudi Arabia and the UAE.
“Cairo has a near obsession with striving to show they can compete with the big boys. They want to look sleek and state of the art,” he said. "The government is so sensitive about being viewed as a junior partner to Gulf powers."
Egypt’s embassy in Washington DC did not respond to MEE’s request for comment.
'Nuts and bolts US military'
Since coming to power in a 2013 coup, Sisi has spent big on mega-projects like a new administrative capital. A former defence chief and general, he put the military at the centre of his government, expanding its historic hold over the economy, building bases, and stocking up armaments.
Egypt tends to buy weapons that reflect its ambitions to be seen as a grand regional power, even if they are detached from the country's actual security needs, analysts say. Egypt boasts over 200 F-16 fighter jets and over 1,000 M1 Abrams tanks. The US defence department has been in a constant tussle with Egypt to convince it to right-size its arms purchases, former and current US officials tell MEE.
“Most of what they (the Egyptians) have they don’t need and much of the equipment is outdated,” Sayigh told MEE.
Cairo hoped Edex would be an opportunity to promote its own domestic defence industry, but analysts say it has little to offer.
Egypt co-produces M1 Abrams tanks with the US and has also started exporting some armoured vehicles, but its industry is “very modest and vintage, at best”, Sayigh says.
Sisi has had more success diversifying Egypt’s arms suppliers. After coming to power, he bought fighter jets from France and Russia. The US no longer makes it into the rank of the top three arms exporters to Egypt, with those spots reserved for Russia, Italy and France, respectively.
Unlike the arms purchased from Paris or Moscow, which Egypt's cash-strapped government uses its own funds for or takes on debt, the US taxpayer foots the bill for the $1.3bn in aid.
Egypt dipped into its own funds to purchase Apache attack helicopters in 2018 after Congress baulked at using aid to provide Cairo with helicopters it used when it accidentally attacked a US tourist.
The former senior US official with direct knowledge of Egypt’s armed forces told MEE that Egypt remains a “nuts and bolts US dependent military” despite the diversification.
“Egypt is dependent on the US to sustain and upgrade its armaments,” a fact that has been driven home by Russian supply and performance concerns amid the war in Ukraine, experts say.
Tuesday’s move by Senator Cardin to block $235m in military aid is the biggest test Cairo has faced since the Obama administration curtailed assistance after the 2013 coup that ousted Mohamed Morsi, Egypt’s first democratically elected president.
“It is unprecedented,” Sayigh said.
But in a potential harbinger of the future, Washington resumed aid in 2015, just as Russia started making inroads into Egypt's market. Around this time, Egypt also experienced a wave of bombings and struggled to cope with a raging civil war in neighbouring Libya.
US administrations see Egypt as a valuable, if difficult, partner. Perched on the Mediterranean, Egypt is home to the Arab world’s largest population and the Suez Canal, through which at least 12 percent of global trade passes. It also has a web of interests in several regional hotspots, including Libya, Sudan and the besieged Gaza Strip.
The Obama administration’s pivot underlines how successive administrations have at times cracked the whip on Egypt (the Trump administration also suspended a sizable chunk of aid in 2017) only to pivot back later on.
Of course, Washington's friends and foes often jump at the chance to step in when the US cuts aid. At Edex this year, French Rafale maker, Dassault, is listed as a platinum sponsor and China’s Huawei is a silver sponsor.
Biden administration snubs Sisi?
Sayigh said Egypt probably views the aid block as “something surmountable”, and would be reluctant to address the concerns Cardin raised, which specifically called for more pardons for some of the estimated tens of thousands of political prisoners in Egypt and providing more space for political opposition and civil society.
“I think the ruling elite will think it's better to incur this damage (the $235m aid blockage) than have to deal with what Congress wants,” he said.
On the other side, defence companies are accustomed to dealing with far more squeamish news stories than the Menendez indictment. And the cut in aid is also unlikely to be felt on their bottom line, experts say.
When the Biden administration withheld $85m in military aid to Egypt in September, citing human rights concerns, it diverted the funds to Taiwan and Lebanon.
“Egypt is a slow but steady market for the US defence industry because of the FMF (foreign military financing). Most of that remains, but Egypt is not super lucrative,” the defence industry official told MEE.
“If FMF is withheld from Egypt, companies will get the money anyway, and supporting Taiwan and Lebanon’s LAF (armed forces) is generally in vogue.”
But if Egypt is hoping for VIP appearances to boost Edex’s publicity, it's unlikely, the former US official told MEE.
Last year, the Biden administration downgraded the rank of defence attache at the Cairo embassy to colonel. And it has yet to fill the ambassador position.
The Menendez case isn’t going to help draw in VIPs, experts say.
“I don’t think corporate level executives will be attending the expo or senior US administration figures,” the former US official said.
A Lockheed Martin spokesperson didn't answer questions about the company's Edex sponsorship and referred MEE to the US government, saying, "The US government strictly regulates all international sales." Boeing and Northrop Grumman did not respond to MEE's request for comment.
A US State Department spokesperson said, “We have no travel to announce at this time," when asked if officials would be attending.
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