However, the impending war in Iraq may enable Israel to pull out of its economic doldrums: Claiming the looming Iraq war has sapped its defense budget, Israel is asking the United States for billions of dollars in direct military aid and loan guarantees to help buttress its faltering economy.

Dov Weisglass, a senior adviser to Israeli Prime Minister Ariel Sharon, made the request for more American money last week while on a three-day visit to Washington. Weisglass seeks congressional approval of about $12 billion in aid, in addition to the $3 billion given to Israel each year.

According to State Department sources, Israel seeks a minimum of $4 billion in direct aid — mostly for its military — and $8 billion in loan guarantees. The boost in aid represents an increase of 400 percent.

Insiders on Capitol Hill predict Israel will likely get all it asks. The aid to Israel comes on the heels of a request by Turkey of more than $6 billion in direct aid and $20 billion in loans as US forces prepare to use bases in that country as a staging area for any attack on Iraq.

One of the strongest congressional supporters for increased funding for Israel is Congresswoman Ileana Ros-Lehtinen (R-Florida), who last week led a delegation to Israel to talk with government officials about more American aid.

“All the officials with whom we met are hopeful that they can get this economic package,” says Ros-Lehtinen, who sits on the House International Relations Committee. “Israel is not economically self-sufficient and depends on borrowing to maintain its economy.”

Ros-Lehtinen predicts Israel’s aid request will be granted, but it could hardly come at a worse time.

“It comes at a difficult time for (the United States) because we are in a deficit and have spent a lot on our own security,” Ros-Lehtinen says. “But it’s important for us to come forth with this aid package because Israel could bear the brunt” of a war with Iraq.

America’s generous partnership with Israel has been consistently marred by problems, including kickback scandals, graft, overpricing, and other forms of financial abuse.

The most infamous scandal — the diversion of $12.5 million of foreign military assistance by Israeli Air Force Brig. Gen. Rami Dotan — prompted Congress to investigate how the Israeli Ministry of Defense (MOD) and government handled American grant money.

In preparation for the hearings, the General Accounting Office (GAO) — the auditing arm of Congress — prepared a comprehensive report entitled, “Foreign Military Aid to Aid: Diversion of US Funds and Circumvention of US Program Restrictions.” The GAO study determined that the partnership is rife with bribery, mismanagement and embezzlement.

“We learned that the Israeli government had an indication of problems in the US-financed program,” write the authors of the study. “(Yet when) we requested to meet with government of Israel officials to discuss information they have regarding the diversion of US funds and other abuses of the assistance program, (they) declined to discuss the issues or allow our investigators to question Israeli personnel.”

A GAO auditor who spoke to Strategic Policy is “not encouraged that Israel’s corrupt financial practices will likely change....The influx of Russians to Israel make this country only more corrupt, not less.

“Plus, it is not in anyone’s interest in Israel to tell us honestly what they do with our money... And there are very few people in Washington — particularly this administration — who really care.”