It is hard to exaggerate the effect the failure of the F-16 sale would have on U.S. relations with Pakistan and on our allies in the Pakistani military.

122429 9/17/2007 12:09:00 PM 07ISLAMABAD4008 Embassy Islamabad SECRET 07ISLAMABAD3168 | 07ISLAMABAD3526 | 07ISLAMABAD3658 VZCZCXRO9273OO RUEHLH RUEHPWDE RUEHIL #4008/01 2601209ZNY SSSSS ZZHO 171209Z SEP 07FM AMEMBASSY ISLAMABADTO RUEHC/SECSTATE WASHDC IMMEDIATE 1759INFO RUEHKP/AMCONSUL KARACHI PRIORITY 7363RUEHLH/AMCONSUL LAHORE PRIORITY 3427RUEHPW/AMCONSUL PESHAWAR PRIORITY 1881RUEKJCS/SECDEF WASHINGTON DC PRIORITYRUMICEA/USCENTCOM INTEL CEN MACDILL AFB FL PRIORITYRHWSMRC/USCINCCENT MACDILL AFB FL PRIORITYRUEAIIA/CIA WASHDC PRIORITYRUEKJCS/JOINT STAFF WASHINGTON DC PRIORITYRUETIAA/NSACSS FT GEORGE G MEADE MD PRIORITY S E C R E T SECTION 01 OF 03 ISLAMABAD 004008 SIPDIS

SIPDIS

E.O. 12958: DECL: 09/17/2017 TAGS: PREL, MARR, PGOV, PK

SUBJECT: REASSURING PAKISTAN ON THE F-16 SALE

REF: A. ISLAMABAD 3658 B. ISLAMABAD 3526 C. ISLAMABAD 3168

Classified By: Anne W. Patterson, for reasons 1.4 (b)(d)

1. (C) Summary. In meetings with the Deputy Secretary last week, President Musharraf, Prime Minister Aziz and Foreign Secretary Khan told us the U.S. had violated the F-16 SIPDIS agreement with Pakistan. A series of misunderstandings and delays, including important ones on our part, has prompted Pakistan to cease payment, at least until these issues can be resolved. We know many in Washington are dismayed by what they consider a juvenile reaction on Pakistan's part. But it is hard to exaggerate the effect the failure of the F-16 sale would have on U.S. relations with Pakistan and on our allies in the Pakistani military. While many of the issues are technical, they have now crossed into the political realm. Musharraf himself appears to be increasingly concerned about political fallout from unresolved issues with the sale. The upcoming visit of Air Chief Tanvir will offer a chance to address these topics. In our view, the outstanding F-16 related issues would more usefully be addressed as a package and not as discrete (and often confusing) technical and legal issues. We recommend the U.S. Government offer Pakistan assurances that the United States is committed to this sale, while reassuring the Air Chief that a number of the restrictions are not unique to Pakistan. End summary.

2. (C) During meetings last week with the Deputy Secretary (septels), President Musharraf, Prime Minister Aziz and Foreign Secretary Khan all raised concern about problems relating to the F-16 sale. Musharraf said that the Air Force believed the U.S. had "violated" the agreement intentionally and he urged that we resolve this problem before it undermined bilateral relations. Musharraf was particularly agitated about the F-16 sale during his September 16 meeting with CODEL Boehner, as he emphasized that the "man in the street" (i.e. voter) was aware of the previously failed F-16 sale, and now it looked as if "history was repeating itself."

3. (C) The Prime Minister characterized the U.S. as "moving the goalposts" and confirmed what Defense Production Additional Secretary MG Tariq Salim Malik wrote in a September 1 letter to DSCA Director Admiral Wieringa, namely that Pakistan would cease making payments on this case until problems are resolved. Air Chief Marshal Tanvir Mehmood Ahmed reiterated his concerns to Office of Defense Representative MG Helmly on September 14. We understand the next payment was due September 15. (We also understand that, as a practical matter, there is a grace period of several weeks.)

Need for Reassurance

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4. (C) The decision to pursue this $3 billion deal was difficult for Pakistan. Air Chief Marshal Tanvir overcame the Finance Minister's concerns about the cost of the planes and the diversion of spending from social programs. Tanvir's military colleagues warned him the U.S. would repeat the Pressler Amendment sanctions experience of the l990s when the Pakistanis paid for F-16s that were never delivered. Now, the Air Chief, who is pro-American, is embarrassed and weakened by the perception among his colleagues that the sale

-- for whatever reason -- will not be successful. Much of his aggressive demeanor relates to his weakened standing. Moreover, President Musharraf views this sale as a symbol of a long-term U.S. commitment to Pakistan and a singular benefit of his alliance with us.

5. (C) From our standpoint, the sale was a strategic decision to rebuild relations with a nation critical to the war on terror, despite Congressional and technology transfer concerns. The notification that the MLU upgrade could not be performed in Pakistan was made just as the press reported the findings of the NIE and the passage of 9/11 Commission recommendations with its Pakistan-related provisions. Our notification to the Pakistanis of this decision a year after it was resolved in Washington has further clouded the picture. Much of the Pakistani mistrust is based on incomplete understanding of our security assistance process, and an assumption they are being singled out for specific

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conditions on the F-16 sale. We can effectively address these concerns and should do so quickly.

Problems & Recommendations

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6. (C) In September 2006, Pakistan signed an LOA to purchase 18 new F-16 fighter aircraft; it also agreed to purchase 34 MLU kits, with the option of buying an additional 26 to support the used Excess Defense Articles (EDA) USAF planes being provided to them. Four EDA F-16s have been delivered; delivery of the new planes is scheduled to begin in January 2010.

Mid-Life Upgrades

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7. (C) In August 2007 (ref C), Ambassador advised the Air Chief Marshal of a letter signed by the Secretary in July 2006 assuring the HIRC (now HFAC) and SFRC Chairmen that the MLUs would not be performed in Pakistan. At the time the LOA was signed on September 30, 2006, neither post nor Pakistan was aware of the Secretary's letter. The LOA does not state that the MLUs can be performed in Pakistan, but Pakistan inferred that the clause relating to U.S. training of Pakistani technicians meant that the MLUs would occur in Pakistan.

8. (C) The Deputy Secretary in his meetings made it clear that the Secretary's decision was final. But we need to provide the background of our decision and smooth the way for helping Pakistan perform the MLUs in a third country. Pakistan cannot carry out the upgrades elsewhere without our help.

9. (C) Recommendation: (1) As a follow-up to their meeting, a message from the Deputy Secretary to President Musharraf reassuring him of our commitment to this sale and pledging to work together to resolve outstanding concerns. This should be delivered before the September visit to Washington of Air Chief Marshal Tanvir. (2) We thank DSCA Director Admiral Wieringa for his offer to meet with Tanvir and recommend he explain our decision and offer specific DCSA assistance in helping the Pakistan Air Force (PAF) evaluate its options and implement its decision on where to perform the MLUs.

Basing

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10. (C) Reftels explain in detail the problems of the proposed security plan for basing the new F-16s in Pakistan. Simply put, the requirement to base separately the F-16s and foreign-origin SAR and support aircraft is impractical and will undermine the safety and effectiveness of air operations.

11. (C) Recommendation: Use Air Chief Marshal Tanvir's visit to brief key Congressional interlocutors and build support for Congressional approval of alternative basing proposals that both protect U.S. technology and allow the PAF reasonable air operations.

Encrypted Software

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12. (S) Additional Secretary MG Malik in his letter to DSCA cites as additional evidence of our lack of transparency the fact that the LOA did not contain provisions explaining the need for encrypted devices. He fears the U.S. will be able to limit the capability of the F-16s by withholding access to the cryptokeys.

13. (S) Recommendation: We need to explain to the Pakistanis that the provision was in the LOA and many countries are subject to the same restrictions. The Pakistanis do not fully understand our requirements for sharing encrypted devices and need to be reassured that the aircraft will still fly without the cryptokeys. A briefing for Air Marshal Tanvir and/or his staff could resolve this misunderstanding.

Link-16

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14. (S) When Pakistan signed the LOA, they were aware that ISLAMABAD 00004008 003 OF 003 the Link-16 command and control technology had not yet been approved for release to Pakistan but assumed it would occur in a timely fashion. The delay in approval concerns them.

15. (S) Recommendation: The Joint Chiefs of Staff has approved the release; the decision now rests with the National Security Agency. We understand that the Defense Intelligence Agency has some concerns about potential technology transfer, and CENTCOM is working to address those concerns. This issue needs to be resolved quickly.

Digital Radio Frequency Memory (DRFM)

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16. (S) Pakistan was previously cleared for separate elements of DRFM; now they need approval for the whole package. USAF supports immediate release, but the Defense Technology Security Administration appears to have concerns. SAF/IA is meeting this week with DTSA to review the issue.

17. (C) Recommendation: This decision process needs to be accelerated.

18. (C) The National Disclosure Policy Committee will return to Pakistan in December to perform a security survey to confirm adequate Pakistani protection of U.S. classified information. Tanvir is eager to participate in this survey and is working to meet the security restrictions as stated in the LOA. We should make it clear to Tanvir that we can speed up the approval process of Link-16 and DRFM with enhanced cooperation on this survey.

19. (C) We suggest Washington agencies address these issues as a package with Tanvir. Of particular concern to the Pakistanis is the completion of the mid-life upgrades in a third country. This can be resolved by U.S. engagement that reduces Pakistan's costs and involves Pakistani technicians in the third-country effort.

PATTERSON