Transcript: Lieutenant General Charles Hooper, Director of the Defense Security Cooperation Agency
Washington, Sept. 5, 2018
Q: We were told in the pre-briefings that the arms trade with India has gone from, like, $0 in 2008 to 20 -- to $15 billion this year, and it could bump up to three billion -- another $3 billion by next year.
Broadly, what are some of the categories that would bump up the $3 billion?
LT. GEN. CHARLES HOOPER: Well first of all, my name is Lieutenant General Charlie Hooper and I'm the director of the Defense Security Cooperation Agency.
And as you know, my agency's responsible for a number of things: foreign military sales, defense institution building, excess defense articles among those.
There are four values that govern our relationship with -- with India, and our relationship with all our partners. And those four values are transparency, responsiveness, integrity and commitment.
And what I mean by those four values are -- transparency means that we share all the information that we have with our partners to allow them to make an informed decision on the types of capabilities that they would want.
And we're very confident that, when given all of the information that they need, they'll choose American systems and American services.
The second is responsiveness. We believe in being very responsive. As the secretary said, he's in constant contact with his counterpart and I'm in constant contact with my India counterpart, the director general for Acquisition.
Every time I see him, I provide him with a spreadsheet that updates all of our -- the status of all of our systems. And we have discussions on how we can better strengthen the partnership.
Integrity is a very important one. And I think integrity is a value that separates the U.S. approach to security cooperation, perhaps from some of the other approaches from some of our partners.
And that integrity means, quite simply, our books are always open. We don't charge one penny more than we have to for the finest systems and the finest services in the world. The books are always open, and we can account for every penny that our partners spend.
And the last value is commitment. Commitment not only to provide goods and services at the point of sale, but commitment to strengthen a long-term relationship over time.
And we found that when we follow those four values with our Indian partners, it helps to support, to strengthen -- strengthen that relationship.
So, Tony, back to your question again.
Q: The -- going from $15 billion to potentially $18 billion over the next year or two, what are some of those lingering sales that may bump it up $3 billion?
GEN. HOOPER: Well as -- as you know, Tony, we don't -- we don't talk about future sales or sales that have not been notified to Congress.
But I'm quite confident that the -- the platforms, the capabilities and the services that the United States has to offer India -- and as you know, India is a large importer of defense equipment and services -- are competitive with any systems in the world.
So whether it's the aerospace domain, land systems or maritime systems, all of our systems are extraordinarily competitive, and I'm sure. will suit India's needs now and into the future.
Q: One follow-up on the F-16 coproduction issue that's been lingering for a couple years, can you bring us up to speed on where that stands?
GEN. HOOPER: Well that's probably a question better -- better directed towards our Under Secretary for Acquisition and Sustainment, Ms. Lord. She has responsibility for those types of issues. And they could probably answer that question much better than I could.
Q: One other thing. Is there any -- are there any potential sales you're going to be discussing on this trip? Even though you can't tell us which ones. Will that -- is that part of the menu?
GEN. HOOPER: As a -- as a practice, Tony, as you know, we don't discuss future events and future operations. The boss just talked about that. We don't discuss what's going to happen in the future.
What I can say is, I expect some very fruitful discussions. And that all of our systems are the best in the world, and I'm sure are very competitive to suit and meet the requirements of our Indian partners.
Q: General, what specific system? Have you talked about the armed Guardian drones for India? Is that something that's come up in conversations?
Because if the COMCASA is signed, that would open the door for that potentially being sold.
GEN. HOOPER: We're discussing many, many systems that I think will suit the needs. State-of-the-art systems that we have and we can provide our Indian partners, that no one else can.
Q: Any specific one, though?
GEN. HOOPER: As I said, we're going to discuss many things. And I -- I wouldn't want to anticipate or pre-stage what might be a subject of attention. We'll discuss many things and many systems.
Q: OK. Can I also ask about the process of selling to India? Because their bureaucracy is legendary, and it does take sometimes decades.
Have you see that change over the past few months or years? In terms of the expectations, do you see that changing? Because at times, it's been quite a long struggle to sell weapons to India just because of the bureaucracy that they have.
GEN. HOOPER: Well, as I mentioned before, those -- those two first values that I mentioned, we found that transparency and responsiveness helps a great deal towards raising the level of awareness on both sides, exchanging information.
And we find that exchanging information and being responsive -- reciprocally responsive -- helps to speed up the process. Because we've discovered that if everybody has all the information that they need, and if we're responsive in providing that information, it helps to better inform their internal processes and our internal processes as well.
And that's merely one factor that can help to accelerate the process of working together.
Q: This question is not specifically to India, but it relates to India. Are you putting extra effort into developing alternatives for Russian legacy systems, given the CAATSA sanctions? Is there a new urgency to kind of come up with alternative packages for a lot of these allies that continue to purchase Russian legacy systems?
GEN. HOOPER: Well I will tell you that we have a full range of capabilities and systems that we think suits need -- suit the needs of our Indian partners and all of our partners.
Once again, by providing all of the information available, we hope to help them to make decisions that American systems would be, perhaps, the best systems that they'd be looking for.
All countries have the opportunity to make their own sovereign decisions, but I would tell you we place extraordinary effort in meeting the needs of all of our partners.
Q: Like any commander, any agency, your resources are constrained. Are you reallocating additional resources to developing alternatives to Russian legacy systems for a variety of countries?
GEN. HOOPER: Well as you know, the president in April approved a conventional arms transfer -- a change to our conventional arms transfer policy. We're in the process now of working to implement that.
And the main objective behind that is to make U.S. goods and services more readily available to all of our partners.
We're confident that when our partners take a look at the capabilities that we're offering as opposed to whatever capabilities they previously been committed to, that our capabilities will stand head and shoulders -- U.S. capabilities -- will stand head and shoulders above all of them and will become the selection of choice, and we will become their partner of choice.
So, I think the answer to your question is, as a part of our entire approach to conventional arms transfer -- which is where our focus is right now, in implementing our new policy, we are focused on making sure that U.S. systems are more competitive than any systems available, and are compelling enough, perhaps, to make some countries change their focus from their previous and legacy partner of choice to the United States.
Q: What, in your opinion, is some of the benefits of the (inaudible) agreement? If it, how does it affect your job?
GEN. HOOPER: Well, the secretary just -- just talked about that and answered that same question. What I will tell you is, as -- as we all know, in an information-based age of warfare, our center of gravity for systems is moving from kinetics and mechanics to technology.
These types of agreements allow us to secure that technology, and to put into place provisions that will protect the technology while simultaneously allowing us to share our state-of-the-art capabilities with our partners.
Q: I don’t think you can answer this, but I thought I’d ask anyway. U.S. officials have talked about, you know, if – if India moves ahead with the purchase of the S-400, that would limit future cooperation and interoperability, things like that. Could you expound on that at all? I mean, what are, in general, what are some of the limitations?
GEN. HOOPER: Well, the secretary's already answered that question. We can't possibly speculate on what might or might not happen. I'll leave those deliberations to our State Department colleagues and others. Our focus and my focus continues to be to support the number two priority in our National Defense Strategy, which is strengthening our alliances and attracting new partners.
Q: On India, do you have a rapid acquisition cell set up to work with their request? We had heard that it was the only one -- the only country in -- in our alliances that your organization has a rapid acquisition cell to process requests.
GEN. HOOPER: We work comprehensively to improve the flash-to-bang time. That is the time between the identification of a requirement and a fulfillment of a capability to -- to a country. When you talk about priorities and -- and -- and allocating resources, we're focused on making our process writ large more efficient and effective, so that it meets all the needs of our partners, our major partners and all of our partners.
Q: For these --- sorry -- for these sales announced so far to India, since you've been in, can you tell us a little bit about what that appetite has shown India has to buy from the U.S., and you know, why you've been particularly pleased about these new sales?
GEN. HOOPER: Well I can talk about one sale that we're already very well aware of. As you know, India acquired the C-17 transport aircraft. India has one of the largest fleets of C-17s, second only to the United States.
The Indian Air Force seems very pleased with the capability that the C-17 provides, and if we use that as a data point of -- of how readily acceptable U.S. systems are for the Indian Air Force, I think it portends very well for a very positive trajectory as we move forward.
STAFF: We also have the Abraham missile. We -- we sold that a number of years ago.
GEN. HOOPER: Well, well a number -- there are a number of systems that we sold our Indian counterparts that they're very pleased with. And so as I said, I see that -- that satisfaction with America as a partner of choice portending well for a continued strengthening of the relationship.
Q: Does it allow the Indian aircraft such as the C-17's, C-130Js to better interface with American aircraft, because now it will have encrypted technology?
GEN. HOOPER: Well not to talk about one particular platform, but as the secretary said,these types of agreements will allow communication between our systems and their systems internally within the Indian Air Force. It will allow a level of communication that will allow us to be both interoperable, allow them to fight better as a joint force and allow them to work better with us as an interoperable force.
Q: And if I could ask, I'm not an acquisitions guy, but it seems that the Syrian civil war has been an advertising campaign for Russian hardware. And their message seems to be “Don't go with American technology, it's expensive, it's fragile, the maintenance costs will kill you.
Russian technology is good enough, buy some Kalibr cruise missiles.” How do you counter that message in the developing world, in -- in countries that are buying military hardware like Algeria, India and -- and elsewhere?
GEN. HOOPER: I'll go back to those four values that I articulated earlier in my statement that separate us from our counterparts. First of all, the transparency piece, the fact that all of the information that you need to know about the U.S. foreign military sales system is online.
You can go to dsca.mil right now and find out anything you want to know about our system. Number two is the responsiveness, OK? We're going to be there not only to service the equipment, but we're going to be there past the point of sale in a communication to build a relationship.
Because fundamentally the systems that we're providing, while the best in the world, are the basis for a relationship, an alliance, a partnership in this particular case. The third is integrity. Our system is deliberate and it's incorruptible, OK?
And when you're trying to justify to your civilian leadership, your legislators, your peoples these expenditures are funds, the ability to open the books and account for every penny becomes important. I think that's a distinction between us and others.
Finally is commitment. We're going to be with you past the point of sale because we're not interested in merely selling things, and I -- I would bring your attention to the fact that that number two priority in the NDS is not “sell stuff.”
That number two priority is -- is strengthen alliances and attract new partners, and that's what we're in the business of doing. So those four values separate us from all of our other potential competitors and I think make us the -- will make us and do make us the partner of choice for security cooperation worldwide, OK?
Q: Can I ask you about the F-35 and potential new partnerships around the F-35 beyond the -- beyond the legacy partners and then the Israel, Japan, Korea? What -- was it -- as you look over the waterfront, many horizons, what is the F-35's future in terms of gaining attention from new partners that haven't been previously interested?
GEN. HOOPER: Well certainly the F-35 represents and is an example of our state of the art capability. I would tell you that it's always difficult to speak to the future, and I don't want to speak to the future and speculate.
But certainly there's an understanding that this is the state of our -- state of the art capability, and we'll just have to see how deliberations go with respect to its availability worldwide.
Q: But specifically, are you getting price and availability requests from members -- from other nations who hadn’t previously been interested.
GEN. HOOPER: Once again, there are a lot of people -- there are a lot of nations that show interest in all of our state of the art capabilities.
Q: Fair enough.
Q: Obviously there's a lot of attention on Turkey and the F-35 program and S400. The Secretary's been tasked by Congress with kind of doing an assessment of the U.S. relationship with Turkey and looking at this and other issues.
Are you playing a role in that assessment? Are you kind of providing information is -- about the relationship with Turkey and the effects it could have on the F-35 program if they're -- if they're rejected from it?
GEN. HOOPER: Once again I could not possibly amplify what the secretary's already said about our relationship with Turkey. Turkey is a NATO ally, they've been a consortium partner in the F-35 and I'll leave it to others to determine how the course of our relationship will go.
As the secretary said, we'll just have to see how that goes.
STAFF: We’ve got one more question.
Q: So the Kingdom of Saudi Arabia has their interest in the THAAD batteries. I'm wondering, can you give us an update as to where that is and have they signed any paperwork to accept the batteries or where is that at?
GEN. HOOPER: That's a very good question. We continue to work every day with our Saudi colleagues to help them to work towards finalizing this issue. Our Saudi colleagues are -- are -- are very good to work with.
We're working through them, this is a very large case, very important for the United States and Saudi Arabia and I'm very optimistic that we're going to move forward very positively to make sure that we can provide them with this very important capability.
Q: Can you elaborate on the costs and the breadth of what they're interested in for that?
GEN. HOOPER: I'll tell you what, I don't have those figures right in my head and I don't want to speak incorrectly ...
GEN. HOOPER: ... yeah, and so I'll be more than happy to provide that to Ms. White and get you an answer on that.
Q: Can I ask you one other -- there’s a (inaudible) question on Congress and the waivers that your agency has given over the years to some of the richest and national -- Middle East countries. You know the issue. GAO came out with a report, billions of dollars of discounts basically to Saudi Arabia and others.
And there's legislation now that even -- bipartisan legislation to tighten the process. Can you give us a sense of what you're doing to review your process for granting waivers to reimbursing the United States Treasury for sunk R&D that the customers should be give -- paying for?
GEN. HOOPER: A couple of things. What Tony's referring to is something we call non-recurring costs, and these are -- what non-recurring costs are, there's two categories. This is money that was invested in order to prepare for the production of a weapons system or money that was invested in order to prepare for the production of a weapons system, or money that was invested in the research and development.
There are three conditions under which we can refund a portion of that money. The first one is if the economies of scale are advantageous to the United States. So let me give you an example.
A few months back in -- in the fall, there was an issue where we were negotiating with several countries, several of our partners, about the refurbishment of M-1 Abrams tanks. Included in this was the refurbishment of U.S. M-1 A-1 tanks. And so in order to provide an incentive for those countries to agree in a timely fashion, which lowered the cost of refurbishment of our own U.S. Army tanks, we were able to provide an incentive that was able to close the deal, which lowered the cost of refurbishment for our tanks. So that's the first one.
The second exception is in the interest of NATO or major -- of non-NATO ally or partner interoperability, OK? So the fundamental basis of our strengthening alliances and partnerships is, we believe, is having U.S. equipment at the core of that. Why? Because U.S. equipment serves as the basis for a common view of the world and an opportunity to break bread together, to educate our officers together, in addition to using the best equipment in the world. So if we can offer an incentive to make U.S. equipment the strong foundation for our alliances and partnerships in a very competitive world, then certainly, we should take advantage of every opportunity we have.
The third issue where we can provide these waiver is -- is in the potential loss of a sale. Ladies and gentlemen, we're in a very, very competitive market here, and while we provide a total-package approach -- we talked about commitment, the transparency, the integrity -- there are partners for whom price point is very important. So the extent to which we can provide some type of incentive to ensure that we grasp a sale, OK, that's -- might have gone to somebody else, we will do that. Now, why are these sales important? The administration has clearly stated, and I think you would all agree that strengthening our defense industrial base is important. Economic security is security.
So if we can secure a sale, create those jobs back home and get another close partner, an alliance partner by providing this incentive, then perhaps we should do so. The process is -- is very thorough. It's not only the Department of Defense or DSCA. The State Department, as well). And as you know about that GAO study, Tony, the only -- one of the only recommendations they made, they said that we were fully within the law. One of the only recommendations they made is that we find ways to streamline the process. So we review them very carefully, each and every one very carefully.
But anything that provides us with an edge and allows us to achieve our goals in a very competitive market is something that we think is worthy of pursuing, and worthy of studying. OK?
Thank you all.