In 1990, the U.S. government sold Pakistan 28 F-16 fighter/bomber jets for $658 million. Pakistan paid---in part with U.S. military aid---but America never delivered the aircraft because of a U.S. law barring arms transfers to Pakistan if Pakistan was attempting to build a nuclear weapon. In 1991, the Bush Administration determined that Pakistan was, in fact, building a nuclear weapon. Meanwhile, General Dynamics built the F-16s.

   Pakistan became restive about the issue in 1995 and has been more forceful about trying to get its money back. Rather than simply buying the planes for the U.S. Air Force, and paying Pakistan back, the Clinton Administration proposed to sell the F-16s to another country in order to refund Pakistan. The administration marketed the jets to Indonesia, the Philippines, and others.

   There is currently no law or policy barring the sale of jet fighters to Indonesia, although the State Dept. has implemented a policy barring small arms and crowd control equipment. The State Department claims that, " the sale to Indonesia would not conflict with U.S. policies on human rights because it is unlikely that Indonesia would be able to use the aircraft to suppress legitimate dissent, as it might with small arms." Why a government that can’t be trusted with small arms can be trusted with major weapons systems is unclear.
Nevertheless, a deal was struck in principle in June 1996 for the sale of nine of the aircraft to Indonesia, with a few wrinkles to work out on price and financing. The Indonesian government was proposing to buy the aircraft for $9 million a piece, instead $12 million per plane as the U.S. was hoping.

   In early August, though, riots erupted in Jakarta when police raided the headquarters of the Indonesian Democratic party, the main pro-democracy opposition. At least five people died and scores of buildings and vehicles were set on fire. The Clinton Administration decided to put the F-16 sale on hold until later in the year, but then reversed itself the next month and went ahead with the deal. The State Department said: "A regionally respected [Indonesian] armed forces with credible defence capabilities that trains and operates in a non-threatening manner is an important contributor to the regional stability." (Washington Post, 19 September 1996)

   The next couple of months the F-16 sale seemed relatively certain. However, this all changed after the 1996 U.S. elections when allegations arose concerning inappropriate campaign contributions by Indonesian nationals to the Democratic party. Congress began looking at the relationship between the sale of these planes and the campaign contributions. It upon the Administration to delay the sale until after such an investigation could be competed. The Administration nonetheless, continued to support the sale which was to be competed in later part 1997. Congressional criticism strengthened with the recent crack down on the pre-election riots. In response to those elections, Sen. Feingold stated: "We cannot mistake this process for a real election. Rather, it was a pitiful example of a brutal authoritarian Government attempting to masquerade as a democracy" (Congressional Record, 4 June 1997, S5280). Yet the Administration continued to support the transfer.

   However, in early June, Indonesia cancelled the order for the F-16s. In a letter sent to President Clinton, they cited that the "wholly unjustified criticisms in the United States Congress against Indonesia, which are linked to its participation in the IMET program and the planned purchase of the F-16 planes" was not worth the making the deal.

   The State department regretted the decision (see transcripts below) but said it would continue to look for a suitable buyer for the planes, since Pakistan still has not been paid.

The following exchange is taken verbatim from the State Department Briefing on 6 June, 1997.

QUESTION: Indonesia, apparently, says they don't want the F-16s after all. Do you have any comment on that?

MR. BURNS: Yes, I understand that we have been informed by the government of Indonesia that it has withdrawn its offer to
purchase nine F-16 aircraft. It has also decided to forego its participation in the IMET program -- the International Military and Education Training Program -- which is a very successful program world-wide. The United States regrets this decision by Indonesia. It is, of course, a decision that Indonesia had to make on its own. The United States and Indonesia have co-operated closely on a variety of issues throughout the years -regional issues, global issues - and we intend to do that. We intend to continue working with Indonesia and we will just have to move on.
Now, these F-16s, as you remember, are the F-16s that have been promised to the government of Pakistan and so we will continue our efforts to look for countries that wish to purchase these F-16s.

QUESTION: Nick, so far you haven't found anybody else who is interested. I mean, what expectation do you have that you will do better now?

MR. BURNS: We are going to keep trying. We have felt for a number of years that Indonesia was the right answer to this problem because, as the President said, I think two years ago, when former Prime Minister Benazir Bhutto visited here, the United States does want to put its best foot forward to try to resolve this problem so that there is some measure of fair play for Pakistan. That is only fair. We are trying, Carol. But with this latest decision just taken today and just given to us today by the Indonesian Government, we will have to redouble our efforts to look for other countries. This is an excellent aircraft. It is the best American aircraft or the best in the world. You other countries?
We had started to talk to other countries, all know that, and we think there will be no shortage of potential buyers. We are talking to some countries, but I can't talk about those negotiations until they move further along.

QUESTION: So you have already started talking to actually, before this formal announcement was made, anticipating that the government of Indonesia might get cold feet.
Any report on which countries?

MR. BURNS: I don't want to speculate publicly as to which countries we are talking about. But you can be assured that the Department of State and Department of Defence are both working very hard on this issue.

QUESTION: Has the Administration come to a decision yet on whether it would allow the sale of advance jets to Latin America?

MR. BURNS: I don't believe the President has made a decision. As you know, we have had a review underway for the past 12 months or so of United States arms sales to Latin America. The State Department, the Defence Department, the National Security Council and other agencies have all been involved in that. We have had a policy of restraint in place. We have not had a policy of a ban on arms sales but of restraint, and the President will have to make the ultimate decision here.

QUESTION: How can you make a clear sales pitch while this review is going on?

MR. BURNS: Are you referring to Chile?

QUESTION: Yes.

MR. BURNS: Well, I think I told you - that was six to eight weeks ago - that while the President had not made a final decision, we did not want U.S. companies to be at a competitive disadvantage at the initial stages of Chile's decision-making process, as to which advance fighter aircraft it would purchase. Therefore, we did allow American companies to make available to the government of Chile, to the ministry of defence there, technical information that describes the characteristics of American jet fighter aircraft. That does not mean that the United States Government has made a decision to give approval to any American company should the Chileans wish to purchase an American aircraft, but it does mean that we want our aircraft to be considered in this competition. We are confident that the United States American companies make the best fighter aircraft in the world. All you have to do is look at the performance of those aircraft all around the world to know that.

QUESTION: Won't the process then drive the decision though?

MR. BURNS: Well, no, I don't think it does, Judd, because, as I said, the review was really begun on behalf of the President by Secretary Christopher and Secretary Perry. Both of them have stepped down. We have two new secretaries in place and I am sure that the President will make a decision when it is necessary to make a decision, when the time is right. I am not aware that the Chileans have come forward with a decision on which aircraft -- that Chile has made a decision on which aircraft it wishes to purchase. So there is no pressure on us. We just wanted our companies to be in the right position here. That is consistent with the Clinton Administration's strong desire to support American exports around the world.

QUESTION: Well, exactly, but that is the point of my question. I mean, Chile -- we're getting into the realm of hypotheticals here, but if Chile comes back and says, yes, we want to buy X number of these planes

MR. BURNS: Then we'll have to say to ourselves, well, should we finally make a decision here? Should we make a decision in this government, finally, about our arms sales policies to Latin America? I expect that might be a consideration, but we don't feel under pressure and these decisions often take quite a long time, these competitions.

Yes, sir.