U.S. Foreign Aid to Lebanon: Issues for Congress

U.S. Foreign Aid to Lebanon: Issues for Congress

Order Code RL33933
U.S. Foreign Aid to Lebanon:
Issues for Congress
March 21, 2007
Jeremy M. Sharp
Middle East Policy Analyst
Foreign Affairs, Defense, and Trade Division

U.S. Foreign Aid to Lebanon:
Issues for Congress
Summary
In Lebanon today, there is a battle for political primacy between the anti-Syrian,
pro-Western government of Prime Minister Fouad Siniora and the opposition, led by
the Hezbollah and former General Michel Aoun. Each camp has its external patrons;
the United States, France, and Saudi Arabia support Siniora, while Syria and Iran
back the opposition. The 2006 Israel-Hezbollah war and Hezbollah’s subsequent
campaign to obstruct the government through street protests and general strikes have
placed enormous strains on the Siniora-led government. In order to prevent
Lebanon’s fragile sectarian political system from imploding and to strengthen pro-
Western and anti-Syrian elements, the United States has pledged to significantly
increase its assistance to Lebanon. For FY2007, the Administration is requesting an
estimated $770 million in supplemental aid from Congress. This report analyzes this
request, highlighting potential issues of concern for Members. This report will be
updated as events warrant. For more information on Lebanon, see CRS Report
RL33509, Lebanon, by Alfred Prados.
H.R. 1591, the House Appropriation Committee’s FY2007 Emergency
Supplemental Appropriations bill, would fully fund the Administration’s request for
aid to Lebanon; however, it would require the Administration to certify to Congress
that before assistance is disbursed, the Lebanese government and Administration
have fulfilled certain conditions placed on the assistance.

Contents
Overview of U.S. Policy Toward Lebanon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Strengthening the Lebanese Armed Forces (LAF) . . . . . . . . . . . . . . . . . . . . . . . . . 2
U.S. Military Assistance to Lebanon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
U.S. Reconstruction and Economic Assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Issues for Congress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Lebanese Political Will . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Israeli-Lebanese Skirmishes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Potential Misuse of U.S. Aid? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Congressional Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
List of Tables
Recent U.S. Assistance to Lebanon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

U.S. Foreign Aid to Lebanon:
Issues for Congress
Overview of U.S. Policy Toward Lebanon
As a result of conflicts in Iraq, Lebanon, and the Palestinian territories, the
current state of the Middle East has been frequently described in terms of a growing
Sunni-Shiite rivalry in which Sunni Arab and Western governments aim to contain
Iran’s pan-Shiite foreign policy. When applied to Lebanon, this narrative is becoming
an increasing reality. Many U.S. policy makers fear that without significant outside
support, the March 14 Movement ( an anti-Syrian coalition of some Sunni, Druze,
and Christian Lebanese that came together after the February 2005 assassination of
former Prime Minister Rafik Hariri) will not be able to withstand Syrian and Iranian
meddling through their Shiite proxy, Hezbollah. Since 2005, the Administration has
pursued a policy of strengthening the pro-Western elements of the Lebanese
government. Critics charge that the United States may be fueling civil strife in
Lebanon by taking sides in Lebanon’s complex political mosaic. Others assert that
U.S. policy exaggerates Iranian influence over Hezbollah, claiming that Hezbollah
has evolved over time into a more independent political actor in Lebanon.
In order to support the Lebanese government, the United States has pledged to
devote more financial resources to reconstruction and military assistance. The
summer 2006 war between Hezbollah and Israel heightened the need for additional
economic aid, as the Lebanese government and its international and Arab partners
vied with Iran and Hezbollah to win the “hearts and minds” of many Lebanese
citizens who lost homes and businesses as a result of the conflict. Iran channeled
millions of dollars in cash assistance through Hezbollah to southern Lebanon, while
the international community raised several billion dollars at an emergency donor
conference in Stockholm, Sweden. Nevertheless, Lebanon remains in need of aid
from abroad. From a military standpoint, the war also highlighted the urgent need for
a more robust Lebanese military to adequately patrol Lebanon’s porous borders with
Syria and to prevent Hezbollah’s re-armament.
As part of an overall FY2007 supplemental funding request, the Bush
Administration seeks an estimated $770 million in foreign aid for Lebanon, a country
that has received an estimated $35 million to $40 million per year in U.S. assistance
since the late 1990s.

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Recent U.S. Assistance to Lebanon
Account
FY2005
FY2006
FY2007
FY2007
FY2008
Estimate
Supplemental
Request
Request
Economic
35.2
15.07 35.5
300.0
42.1
Support Fund
(ESF)
Foreign Military
—
3.7
4.8
220.0
9.6
Financing
(FMF)
Section 1206
—
10.63
—
—
—
Authoritya
Peacekeeping
—
—
26.3
184.0
—
(CIPA)
Otherb
.7
152.54
2.94
65.5
8.0
Total
35.9
181.94c
69.54d 769.5
59.7
Source: U.S. State Department.
a. Section 1206 Authority is a Department of Defense account designed to provide equipment,
supplies, or training to foreign national military forces engaged in counter-terrorist operations.
According to the Pentagon, FY2006 funds will be used to help the Lebanese Armed Forces
bolster the government of Lebanon’s ability to exert control over its territory and reduce the
operational space of militias such as Hezbollah.
b. Includes funds from aid accounts such as International Narcotics Control and Law Enforcement
(INCLE) and Non-proliferation, Anti-terrorism, De-mining, and Related programs (NADR).
These accounts provide funding for the clearance of unexploded ordnance (from Israeli cluster
munitions) and de-mining program in southern Lebanon. H.R. 1591 provides $5.5 million from
this account to support a “terrorist interdiction program in Lebanon.”
c. In FY2006, Congress appropriated approximately $43.3 million for Lebanon, but the
Administration re-programmed funds from other accounts to provide $181 million in emergency
aid following the 2006 summer war.
d. Country allocations based on the FY2007 Continuing Resolution (P.L. 110-5) have not yet been
made.
Strengthening the Lebanese Armed Forces (LAF)
The Bush Administration, which has sought to pull Lebanon away from Syria’s
orbit, has pledged to strengthen the LAF as a military counterweight to Hezbollah,
Syria’s and Iran’s primary interlocutor in Lebanon. U.S. efforts to boost Lebanese
sovereignty and independence have evolved over time, beginning with increased U.S.
pressure on Syria in the months prior to the U.S. invasion of Iraq in March 2003. U.S.
efforts gained traction after the assassination of former Lebanese Prime Minister
Rafik Hariri and the subsequent withdrawal of Syrian troops from Lebanon in 2005.
The impetus for new U.S. military assistance to Lebanon reached its apex after the
2006 Israel-Hezbollah war that again exposed the LAF’s overall impotence and its
inability to secure Lebanon’s borders to prevent destabilizing Hezbollah operations
against Israel. The deployment of 12,000 U.N. peacekeepers to southern Lebanon
under the auspices of U.N.-brokered cease-fire resolution (UNSCR)1701 reinforced
the need for a more robust LAF. International peacekeepers take their lead from the

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government and require the LAF’s permission before acting against suspected
weapons smuggling and border violations. According to U.S. Secretary of State
Condoleezza Rice, “Ultimately ... one of the most important things that you can do
is to strengthen the Lebanese armed forces not — I think probably not to replace the
United Nations forces for some time, but to be more capable themselves of defending
the country and providing a stable platform.”1
The LAF remains capable of internal security only; it is too understaffed and
under-equipped to serve as a deterrent against the armed forces of its neighbors, Syria
and Israel. The LAF’s active force is 65,000 to 70,000 personnel. According to
Anthony Cordesman, a military expert at the Center for Strategic and International
Studies (CSIS), “Lebanese forces are lightly armed, poorly organized for maneuver
warfare, and lack both a meaningful air force and modern land-based air defense
assets.”2
Aside from manpower and equipment shortages, the LAF has historically
suffered from factionalism. During Lebanon’s 15-year civil war, sectarian politics
fractured the LAF along sectarian lines. In the 1990s, it was eventually reformed and
restructured by General Emile Lahoud, the current pro-Syrian President of Lebanon.
In 1997, Christian and Muslim brigades were integrated, and military units were
regularly rotated between regions to shield soldiers from political influences. Lahoud
also instituted national conscription, although that policy ended in early 2007.
U.S. Military Assistance to Lebanon
The Bush Administration’s recent request for increased U.S. military assistance
to Lebanon marks the third time in the last 25 years that the United States has sought
to expand military cooperation with Lebanese forces. In the early 1980s, the United
States provided between $145 and $190 million in grants and loans to the LAF,
primarily for training and equipment. In the early 1990s, with the end of civil war,
the United States again provided military aid, primarily in the form of non-lethal
equipment (such as armored personnel carriers and transport helicopters) through the
U.S. Army’s sale of Excess Defense Articles (EDA).
For the first time since 1984, the Administration requested Foreign Military
Financing (FMF) grants to Lebanon in the FY2006 foreign affairs budget. Originally,
it sought approximately $1.0 million in FMF for FY2006 and $4.8 million for
FY2007 to help modernize the small and poorly equipped LAF following Syria’s
withdrawal of its 15,000-man occupation force in 2005. However, the summer 2006
Israel-Hezbollah war spurred Western donors to increase their assistance to the LAF.
Drawing from multiple budget accounts, the Administration ultimately
reprogrammed an estimated $42 million to provide spare parts, technical training,
1 “U.S. Readies Security Aid Package To Help Lebanon Counter Hezbollah,” Washington
Post, Dec. 22, 2006.
2 Anthony H. Cordesman, “Lebanese Security and the Hezbollah,” (working draft), Center
for Strategic and International Studies (CSIS), July 14, 2006.

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and new equipment to the LAF, including 25 5-ton trucks and 285 Humvees to
enhance the LAF’s border patrol operations.3
The Administration’s FY2007 emergency supplemental request includes $220
million in FMF for Lebanon, a significant increase from previous levels. U.S.
military assistance may be used for expanded personnel training by private U.S.
contractors or the provision of spare parts and ammunition for Lebanese forces.
According to the U.S. State Department, U.S. security assistance would “promote
Lebanese control over southern Lebanon and Palestinian refugee camps to prevent
them from being used as bases to attack Israel. The U.S. government’s active
military-to-military programs enhance the professionalism of the Lebanese Armed
Forces, reinforcing the concept of Lebanese civilian control. To foster peace and
security, the United States intends to build upon welcome and unprecedented
Lebanese calls to control the influx of weapons.”4 The Administration also has
requested $60 million in NADR funds primarily to train and equip Lebanon’s Internal
Security Forces (ISF).5
U.S. Reconstruction and Economic Assistance
The battle for political primacy in Lebanon waged by Prime Minister Fouad
Siniora’s March 14 government coalition and its U.S., European, and Saudi
supporters against Hezbollah, Michel Aoun, and their foreign patrons in Syria and
Iran is being fought on a number of different fronts, including in the economic arena.
The summer 2006 war and the opposition’s campaign to obstruct the government
have placed enormous financial strains on the Lebanese economy, and Prime
Minister Siniora has called on the international community to provide financial
backing to his fragile government.
The United States has committed several hundred million dollars to Lebanon’s
rebuilding efforts. President Bush announced on August 21, 2006, that the United
States would provide an immediate $230 million to Lebanon (an additional $175
million on top of an earlier pledge of $55 million) during a conference in Stockholm
designed to raise funds for Lebanese reconstruction. At a January 2007 donors’
conference in France, dubbed “Paris III,” Secretary of State Rice pledged an
additional $250 million in cash transfers directly to the Lebanese government. This
3 According to the U.S. State Department, the $42 million in FY2006 military assistance to
Lebanon was re-programmed from several accounts, including $10 million from Department
of Defense Section 1206 funds, $2.7 million from FMF, $28 million from the Peacekeeping
Operations (PKO) account, and $1.2 million from ESF and INCLE.
4 See, FY2008 International Affairs (Function 150) Congressional Budget Justification, U.S.
Department of State, Feb. 16, 2007.
5 According to H.R. 1591, the House Appropriations Committee’s FY2007 Emergency
Supplemental Appropriations bill, the $60 million in NADR funds is to be used for
“non-lethal assistance” for Lebanon, of which $36,500,000 is for training of the Internal
Security Forces; $19,500,000 is for equipment including individual supplies for 9,000 new
recruits, 300 unarmored SUVs, computers, and radio gear; and $4,000,000 is to refurbish
35 police stations, 4 police academies and a command and control center.

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U.S. economic aid would reportedly be requested in the FY2007 supplemental
request under ESF assistance and may be tied to certain benchmarks that the Siniora
government would be required to meet. To assuage donors’ fears that foreign
assistance would be mismanaged, Prime Minister Siniora has developed an economic
reform plan designed to lower Lebanon’s crippling $41 billion public debt (which
costs nearly $3 billion a year in interest payments or nearly 40% of the national
budget), decrease public subsidies, privatize the electricity and telecommunications
sectors, and increase the Value Added Tax (VAT) from 10% to 12%. The opposition
has countered with a populist campaign to thwart these reforms, accusing Siniora of
adopting Western-backed liberalization schemes that hurt Lebanese workers. One
opposition slogan found in Beirut reads “‘No to the government of VAT’ and ‘No to
the government of seafront properties.’”6
Issues for Congress7
Lebanese Political Will
Some analysts believe that despite U.S. efforts to increase military aid to the
LAF, Lebanese politicians lack the political will, or cohesion, to take on Hezbollah
and its allies. In a recent interview with Time Magazine, Prime Minister Siniora
blamed Israel’s occupation of the disputed Shib’a Farms area for justifying
Hezbollah’s continued armament — an excuse that many observers believe masks
the internal weakness and fear of anti-Syrian forces inside Lebanon. According to
Siniora,
For the state to be in full control, we have to take away the reasons or the excuses
that are being put forward for the continuation of [Hezbollah’s] weapons.... The
withdrawal of the arms of Hezbollah is something that has to be done through
negotiation and not through force. These are our countrymen. These people at
one time were fighting for the liberation of the occupied territory. They fought
bravely defending Lebanon last July and August. I bow my head for their
sacrifices. We have to arrange for the liberation [of Shib’a Farms].8
6 “People’s Revolt in Lebanon,” The Nation, Jan. 8, 2007.
7 Section 1224 of P.L. 107-228, the FY2003 Foreign Relations Authorization Act stated
that $10 million of the funds available for Lebanon in FY2003 and subsequent years could
not be obligated until the President certified to Congress that Lebanese Armed Forces had
deployed to the internationally recognized Lebanon-Israel border and that Lebanon was
asserting its authority over the border area. The amendment was added to compel Lebanon
to exercise control over the border area, following Israel’s withdrawal from southern
Lebanon in 2000. Lebanon refused to move to the border until Israel evacuated the disputed
Shib’a Farms area. The $10 million was held in an escrow account pending negotiations
among the United States, Israel, Lebanon, and Members of Congress. The funds were
eventually released in March 2004 after the Administration certified to Members of
Congress that appropriate action had been taken.
8 “Lebanon’s Siniora: ‘We Don’t Want to Be a Battlefield,’” Time, Mar. 1, 2007.

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Without clear direction from the central government, the Lebanese military has
pursued a policy of deliberate ambiguity, claiming that it officially remains neutral
while taking periodic action to curb Hezbollah’s re-armament. According to
Lebanese Defense Minister Elias Murr, the military must stay neutral and restrained,
and the army cannot “open fire on its citizens.”9 After the summer 2006 war in
Lebanon, the LAF deployed 16,000 troops to southern Lebanon to accompany 12,000
U.N. peacekeepers. It also deployed another 8,000 troops along the Lebanese-Syrian
border to combat arms smuggling. In February 2007, Lebanese customs police
confiscated a truck carrying mortars and rockets (60 Grad rockets and another 240
Katyusha rockets) destined for Hezbollah’s militia. Defense Minister Elias Murr
refused to return the arms to Hezbollah, saying they would be handed over to the
Lebanese Army.10 Israeli officials continue to insist that Lebanese forces are not
cracking down on Hezbollah and that Syrian and that Iranian efforts to re-stock
Hezbollah’s arsenal are succeeding.
Israeli-Lebanese Skirmishes
Some observers caution that the potential for conflict between the Lebanese and
Israeli militaries, both of which receive substantial U.S. assistance, remains high
given the tense atmosphere resulting from the 2006 war. Since the U.N.-brokered
cease-fire in August 2006, Israeli and Lebanese forces have periodically exchanged
fire. Lebanon accuses the Israeli military of violating its air space, while Israel
accuses the LAF of turning a blind eye to weapons smuggling. On February 7, 2007,
Lebanese troops fired at an IDF bulldozer attempting to dismantle explosives after
it crossed a border fence. The IDF fired back.11 A UNIFIL spokesman stated that the
exchange was initiated by the Lebanese Army and that UNIFIL was assessing
whether Israeli troops had crossed the Blue Line. Technically, Lebanon and Israel are
still in a state of war. The Lebanese government claims that the LAF’s deployment
to the south is to protect Lebanon from an Israeli invasion, not to disarm Hezbollah.
According to Lebanese Army Commander Michel Sulayman, “The army went to the
south to protect Lebanon from Israeli attacks.... Lebanon fell first in the south and I
will not allow it to fall again.”12
9 The Lebanese Army’s ability to maintain internal order was severely strained during a
January 2007 confrontation between pro-government supporters and opponents allied with
Hezbollah and General Aoun. The opposition had called for a general strike, which soon
became violent after brawling Sunni and Shiite students at Beirut University sparked a wider
confrontation in downtown Beirut. Army commanders ordered soldiers not to disrupt the
protests despite the resulting four deaths and several hundred wounded in street clashes.
10 Hezbollah leader Shaykh Hassan Nasrallah responded to the weapons seizure saying that
“We will not forgive anyone who confiscates a bullet.” But he added that “[t]he Resistance
will always stand by the Lebanese army, with our weapons, men and blood ... to defend
Lebanon.” “Hezbollah Will Not Forgive Lebanon Arms Seizure,” Agence France-Presse,
Feb. 16, 2007.
11 “Ashkenazi: IDF May Have to Stop Hezbollah Rearming. Lebanese Army Fires on IAF
Planes,” Jerusalem Post, Feb. 22, 2007.
12 “Lebanese Army Commander Defends Performance of Military,” Al-Nahar (Arabic), Feb.
20, 2007, translated by the BBC Monitoring Middle East.

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Potential Misuse of U.S. Aid?
One perennial concern for lawmakers regarding U.S. economic aid to Lebanon
is the risk of assistance inadvertently falling into the hands of Hezbollah, a U.S. State
Department-designated Foreign Terrorist Organization (FTO). USAID, which
operates programs in southern Lebanon (a Hezbollah stronghold) claims that it
screens its Lebanese partner organizations and subcontractors to ensure that aid is
used properly and effectively. Other lawmakers may be concerned over the ability of
the Lebanese government to follow through on its reform commitments. Since the
end of the Lebanese civil war in 1990, the government has relied on external support
and generous credit terms from the international community to fund reconstruction.
Congress may examine tying new U.S. assistance to Lebanon to specific
implementation of economic reforms, versus tying it to promises by Lebanese
officials.
Congressional Action
H.R. 1591, the House Appropriations Committee’s FY2007 Emergency
Supplemental Appropriations bill, would fully fund the Administration’s request for
aid to Lebanon; however, it would require the Administration to certify to Congress
that before assistance is disbursed, the Lebanese government and Administration
have fulfilled certain conditions placed on the assistance. Section 1802 of H.R. 1591
outlines the following requirements tied to the disbursement of FY2007 supplemental
assistance to Lebanon:
! “No funds provided in this Act for cash transfer assistance to
Lebanon be made available for obligation until the Secretary of State
reports to the Committees on Appropriations on the Memorandum
of Agreement between the United States and the Government of
Lebanon on Lebanon’s economic reform plan and the benchmarks
upon which cash transfer assistance will be conditioned. The
Committee further directs the Secretary to report on the procedures
in place to ensure that no funds are provided to any individuals or
organizations that have any known links to terrorist organizations
including Hezbollah, and mechanisms to monitor the use of the
appropriated funds.”
! “No military assistance or international narcotics control and law
enforcement assistance be made available for obligation until the
Secretary of State reports to the Committees on Appropriations on
the vetting procedures in place to determine eligibility to participate
in U.S. training and assistance programs funded under these
accounts.”
! “The Committee is concerned that the government of Lebanon has
not fully implemented Section 14 of U.N. Security Council
Resolution 1701 and is concerned about reports of continuing arms
shipments from Syria into Lebanon. Therefore, the Committee

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requests a report from the Secretary of State no later than 45 days
after enactment of this Act detailing what steps the Government of
Lebanon and UNIFIL have taken to implement the actions outlined
in the resolution.”
H.R. 1591 also specifies that no less than $10 million in FY2007 ESF funds be
made available for scholarships and direct support of American educational
institutions in Lebanon.