(WASHINGTON, D.C.) – Congresswoman Jackie Speier (D-CA) was joined Thursday by Representatives Jamie Raskin (D-MD), John Duncan (R-TN), Jason Lewis (R-MN), Ted Lieu (D-CA) and Mark Meadows (R-NC) in introducing H.R. 6296, the Return Expenses Paid and Yielded (REPAY) Act. The REPAY Act seeks to close a loophole in the Foreign Military Sales (FMS) process that has allowed wealthy nations to avoid reimbursing taxpayers billions of dollars.
From Fiscal Year 2012 to 2017, the Defense Security Cooperation Agency (DSCA) waived $8.5 billion in reimbursements for non-recurring costs when selling military items to Saudi Arabia, Qatar, the United Arab Emirates, and Kuwait. Non-recurring costs are upfront research, development, and production expenses footed by taxpayers. The Arms Export Control Act (AECA) requires DSCA to collect a proportionate share of these costs for each unit of an item sold. While the AECA also gives DSCA the ability to issue loss of sale waivers to forgive these expenses when failing to do so would jeopardize a sale, the waiver approval process is inadequate to make such a determination.
“American taxpayers shouldn’t have to foot the bill for arms purchases by wealthy Gulf nations,” Rep. Speier said. “Our defense relationships with these countries are important, but these nations have the interest and ability to pay these small added costs. At the very least, our negotiators shouldn’t be giving away billions of dollars without asking hard questions.”
“American taxpayers shouldn’t have to add billions of dollars to weapons transfers to foreign countries. The REPAY Act will help close an absurd loophole and end a rip-off of our people,” said Rep. Jamie Raskin.
“The United States already provides more foreign aid than any other country,” Rep. John Duncan said. “We do not need to subsidize wealthy Middle-Eastern nations. This legislation will give more accountability to the American people who foot this bill.”
“Foreign countries, including wealthy nations with questionable associations, have unduly benefited from the military capabilities our taxpayers paid to research and develop,” Rep. Jason Lewis said. “Our current process for waiving payments these nations are statutorily required to pay lacks proper accountability. I appreciate Congresswomen’s Speier’s leadership with this bipartisan bill that will help increase long overdue oversight and transparency when our country sells military items to foreign nations with these special waivers.”
“I am pleased to partner with Rep. Speier and others on the REPAY Act, which will help us reform our military’s weapons sales process. We have to unlock smart, bipartisan solutions that save money, support good American jobs, and strengthen our national security at the same time,” Rep. Ted Lieu said. “Our bill does just that. It ensures that buyers of advanced U.S. weapons contribute to the research and development that goes into creating them. It also pushes the Pentagon to be smarter and more efficient when the U.S. sells weapons to our allies. This keeps more money available to support our troops and ensures we can best assist our allies during conflict. I’m proud to put my name on this bill.”
“One of Congress’ most crucial responsibilities is to be good stewards of taxpayer dollars,” Rep. Meadows said. “I’m proud to work with my colleague, Congresswoman Speier, on this important, bipartisan initiative to ensure that the Foreign Military Sales process operates as responsibly as possible and with the greatest respect for taxpayer funds. This bill addresses areas of reform identified by the non-partisan Government Accountability Office – reforms which will recoup considerable sums of taxpayer dollars. These funds support the vital research and development on which our nation’s world-class defense abilities depend. Military cooperation with our allies is vital to maintaining our security, and this bill does not jeopardize those ties. Instead, it ensures that allies – particularly allies who are among the richest in the world – undergo a thorough analysis of their ability to reimburse the taxpayer for defense development costs before receiving any waiver of their responsibility to pay.”
The act limits the disbursement of loss of sale waivers by instituting “speeding fines” on repeat, high value customers, requiring more scrutiny of loss of sale applications by DSCA, and increasing Congressional oversight of waiver issuance. Additionally, the REPAY Act addresses concerns raised by the Government Accountability Office regarding DSCA’s management of its administrative accounts and performance measures. In total, the act:
- Limits countries’ eligibility for loss of sale waivers when those countries demonstrate consistent or high-value purchasing patterns.
- Requires Congressional notification of any loss of sale or standardization non-recurring cost waivers approved as part of the sale of any major defense equipment to a foreign country, including the size of the waiver and a detailed justification for approval.
- Includes that information in quarterly Congressional reports on Foreign Military Sales (FMS), along with updates on the real values of previously approved waivers.
- Requires the Defense Security Cooperation Agency (DSCA) to write a report evaluating how it sets administrative fees charged to buyers and its management of related accounts.
- Tasks DSCA with setting an upper bound on its collected fee accounts, biannually review fees charged, and makes it possible for those fees to cover certain FMS personnel costs.
- Requires DSCA to develop better FMS program performance measures and tracking.
- Mandates a GAO report on DSCA’s management of its budget model.