MISSILE DEFENSE:PATRIOT/PAC III STILL AT CENTER

C O N F I D E N T I A L STATE 102240 SIPDIS SECDEF FOR DASD FATA EUCOM FOR EC-J5 E.O. 12958: DECL: 09/24/2018 TAGS: MARR MCAP PL PREL MASS SUBJECT: MISSILE DEFENSE:PATRIOT/PAC III STILL AT CENTER OF MODERNIZATION DIALOGUE Classified By: PM/RSAT Director David Bame for reasons 1.4(b) and (d) ¶1. (C) SUMMARY: After agreeing to submit the PAC-III (Patriots) issue to a subgroup for further study, A/S Mull's delegation and their Polish counterparts agreed July 23 to begin looking at the transition of some work on Poland's military modernization from the bilateral Security Cooperation Consultative Group (SCCG) to a bilateral High Level Defense Group (HLDG). The SCCG agreed that Poland's highest defense modernization priority should be establishing an integrated C4ISR system which would serve as a platform for all future modernization efforts, to be implemented by the HLDG. To reach this agreement, the teams worked through threat perceptions, modernization needs, and budgetary issues, before outlining general finance and trade plans. The SCCG has made substantial progress in talks that parallel negotiations on a Missile Defense basing agreement. However, Defense Ministry experts continue to be constrained by political level stipulations that both defense modernization and an MD agreement require basing Patriot Missiles in Poland. END SUMMARY Fast Forward: The Poles Want Patriots ¶2. (C) Deputy Defense Minister Stanislaw Komorowski succinctly summarized Poland's core aspiration for the talks. He said Poland expects to have a temporary battery of Patriot missiles, to build up a garrison, train people, and gradually obtain more Patriots. Four batteries is "the minimum for a beginning." In response, A/S Mull offered a separate, Integrated Air and Missile Defense Working Group (IAMDWG) under the SCCG to address the Patriot offer already on the table, including an evolution from temporary basing to a more permanent base with a larger number of batteries. Komorowski agreed to a separate working group; he stressed that one temporary Patriot battery should be in place before the Missile Defense base is operable, and should eventually convert to a permanent presence. He said the Patriot subgroup could also look at future Polish procurements. Komorowski asked that the sides not reopen what was discussed earlier in FM Sikorski's earlier pull-aside with A/S Mull and DASD Fata. Back to the Beginning ¶3. (C) Early in the meeting, A/S Mull said Poland's current strategic situation is the best it has been in centuries, but Russia's resurgence and the challenge of international terrorism both require significant attention. Therefore, Poland and the U.S. should be working together more, not less, in expeditionary missions. A/S Mull outlined the U.S. hope for progress in the financing and defense trade working groups to facilitate the purchase and transfer to Poland of the equipment it needs. However, he reiterated that Poland would be responsible for the vast majority of defense modernization costs. Although we were not successful in getting President Bush's requested $20 million in additional Foreign Military Financing (FMF) into this year's budget, we will try again next year. Mull stressed that we continue to study Foreign Minister Sikorski's proposal regarding Patriot missiles. The Threat Perception: Intel WG Product ¶4. (C) Russia remains Poland's number one security concern, according to Deputy Defense Minister Komorowski. He agreed with the U.S. that the threat of an immediate attack was very low; however, he cautioned that we could not predict what it will be in ten years. Although Poles are very happy with Article V guarantees, Poland would still have to hold off an attack on its own until NATO mobilized its forces. Poland's history and past security guarantees are fresh in the Polish consciousness. Therefore, Komorowski underscored, Polish self-reliance is key for Poland's politicians. Expeditionary capabilities are important, but Poles need a guarantee of domestic security above all else; protecting Poland's own territory is the first priority. ¶5. (C) In his summary of the Intelligence Working Group (IWG),Colonel Wasilewski cited a broad U.S.-Polish consensus and reiterated Polish concern about Russia's quest to restore its great power status. Although he thought Russia would not seek military conflict with NATO over Missile Defense, he did not rule out that it might pursue an asymmetric conflict that could escalate further. Wasilewski described the U.S.-Polish consensus that Russia could react to the stationing of Missile Defense interceptors in Poland in several ways: upgrade its SRB brigade in Kaliningrad with SS-26 Iskander missiles, increase ground forces readiness in Kaliningrad, integrate Russian and Belarusian forces, or re-target tactical long range missiles at the Missile Defense site. In the most extreme case, Russia could deploy 20 divisions, but with ample warning given the 60-90 day mobilization period. The Poles noted that, in the unlikely event of a Russian attack, they would have to hold the Russians off until NATO reinforcements arrived. ¶6. (C) RAND's Steven Larrabee, summarizing the RAND report to the GOP on Poland's military modernization, noted that the IWG report had not cited any immediate threat from Russia. Referring to the independent RAND report, he emphasized the relative modesty of the Russian threat at present. Russia faced manpower problems exacerbated by population decline and lower conscription levels. Any Russian attack against Poland would be considered an attack against NATO and therefore extremely risky, especially taking into consideration the degradation of Russia's armed forces. DASD Fata called the RAND report a useful tool in what is an ongoing, dynamic strategic dialog. ¶7. (C) The Poles expressed some disagreement, arguing that the RAND report "reflects US perspectives" and that its methodology prioritized budgets over needs. In the GOP view, the priorities should be: threat assessment, strategies and weapons systems to meet those threats, and only then budgetary issues and capabilities. Moreover, the Poles expressed a preference for the threat assessment jointly agreed to in the IWG, which emphasized the threat from the East. In their view, the RAND threat assessment was weakened by its reliance on open rather than classified sources. Larrabee defended the report's methodology, stressing that RAND did not start with budgets. The threat assessment was equally, if not more important than cost, but cost was one of the factors. "One has to match resources with capabilities and threats, and you have to take into account the constraints that the Russians also face." Budget Battles ¶8. (C) Larrabee said the RAND report made clear that the acquisition of Patriot missile batteries was a non-starter for Poland. The report costed out two acquisition options: 4 batteries and one HQ at $4.5-5 billion, or 12 batteries and 3 HQs at $13.5 billion. An "enhanced configuration" for the batteries (as originally requested in the Poles' "Annex 1") would raise cost by 50-60%. Option two could cost as much as $22.4 billion. In short, the costs would exceed Poland's military procurement budget for the next 8-10 years and preclude modernization in any other areas. There are also enormous technical challenges involving complex infrastructure, communication and control, and Poland has no experience with American air defense systems. Larrabee concluded that budgetary constraints were real. Poland will spend about $2.2 billion per year 2009-18 on defense, while annual U.S. FMF is unlikely to grown beyond the current $27 million figure. ¶9. (C) EUCOM BG Mayville asked for a realistic approach to budgeting. He noted that since 90% of our FMF to Poland is spent on the F-16s, there are no discretionary funds for new efforts. Even if it were approved, the 20% supplemental would not pay for very much in the short term. Therefore, Mayville asked that in the near term we focus on already identified, affordable priorities such as the Link 16 Joint Study. He also urged creation and training for a new acquisition corps. He noted that since Poland already has a capable arms industry, "we're not starting at ground zero." In the mid-term, he called for exercises and exchanges along with procurement of precision-guided munitions. Lower tier air defense was a long term objective, according to Mayville. ¶10. (C) Komorowski claimed that U.S. suggestions valued budget over requirements and called for the reverse. Rather than asking what the Poles can buy with a limited amount of money, he called for an assessment of what Polish security requires before deciding what items are affordable or not. He agreed that Patriot purchases would appear to take up most of the procurement budget, but argued that if Poland had focused exclusively on the cost of the F-16s, they would never have purchased them. Modernization Recommendations: DMWG product ¶11. (C) BG Mayville summed up the work of the defense modernization working group as based on a shared threat assessment. According to Mayville, the report reflected a common understanding of current defense challenges, but it also documented different national interests. In general, it called for a comprehensive approach to C4ISR, secure voice and data systems, identify friend/foe systems, network-centric capabilities, and products that would enhance planning and decision aids along with analytical capabilities. He pointed out that if Poland could integrate its Link 16 program with maritime and land-based forces, it will have upgraded home defense systems at low cost. Mayville also noted that the F-16 and C-130 programs had taught us how important it was to consider downstream costs of maintenance, fueling and training. Therefore, precision-guided weapons and UAVs were a better idea than Excalibur. ¶12. (C) Mayville described the different perspectives of the Polish and U.S. teams. While the Poles focused on speed, lethality, and range, the U.S. and NATO emphasized information domination: perception, precision and intelligence. We are concerned that Poland will become "strategically fixed" -- if the Poles cannot give priority to addressing the most probable threats, they will underfund the capabilities most needed in the 21st century. Mayville underscored that while still necessary, territorial defense was no longer sufficient for NATO - expeditionary capabilities were key. He noted that such operations might deploy to Russia's "near abroad." ¶13. (C) The RAND report offered the following recommendations: (1) a C4ISR system to ensure NATO interoperability, expansion of the Link 16 program to include maritime and land forces, procurement of longer range UAVs, phase-out of Soviet-era systems; (2) the consolidation of land forces to match personnel levels, one headquarter with 3 divisions and 9-10 combat brigades; (3) combat support units, including for expeditionary forces; (4) replacement of obsolete systems; (5) consolidation of military infrastructure, especially the modernization and reduction of air bases; (6) strengthening capacity for multi-year budgeting in the MOD; (7) conducting campaigns to build confidence in NATO's commitment to Poland's security - perhaps in tandem with NATO contingency planning. Plans for The Trade and Finance WGS ¶14. (C) Although this plenary marked the end of the defense modernization and intelligence working groups, all participants agreed that work would continue for the defense trade and finance working groups. Ann Ganzer of PM/DTCP offered the U.S. perspective on defense trade controls. She urged both sides to work together to determine what could be transferred. She recalled our well-established policies for technology transfer that began with Letters of Request. She noted that DOD was already exploring the potential for a reciprocal defense procurement MOU with Poland. However, she highlighted the need to take into account private sector influence on releasibility, since sometimes it is the companies themselves that place barriers on technology transfer for business reasons, not the respective governments. ¶15. (C) Deputy DefMin Komorowski sought clarification on the nature of Letters of Request. The Defense Security Cooperation Agency's Sue McClure described LOR's as a request for "price and availability" rather than a "request for purchase" and noted they were not a "tender." In addition, she indicated that the development of the "price and availability" data, as well as the applicable disclosure reviews, will take time (months, not weeks). ¶16. (C) David Bame, head of the finance working group, outlined his scope of work. He started with three guiding principles: determine what will be financed; define what is too costly; and avoid surprises by anticipating future costs in both acquisition and other areas of military modernization, such as professionalization. He summarized the main three source options: commercial, direct government-to-government ("direct"),and FMF . Endorsing Mayville's comments and the defense modernization working group's report, Bame suggested that to improve C4ISR and expand Link 16, we need an expanded C4ISR study. Right now, however, neither side was at the point of being able to make informed decisions regarding financing options. Bame's GOP counterpart, MND budget chief COL Sodolski, agreed that more work was needed on Polish defense budget priorities as well as creative financing ideas and resources from the USG. The Next Big Step ¶17. (C) Seeking clarity from the Poles, the U.S. team returned to the threat assessment upon which procurement plans are based. General Mayville noted that the IWG report did not identify an immediate threat from Russia but Polish procurement proposals seemed based on perception of a near-term Russian threat. There was a discrepancy between the threat analysis and the needs identified (Patriots) to meet those threats. Mayville asked the Poles to define their priorities: "What is in your near-term basket?" He noted that there are continuing differences of opinion on how to manage the rise of Russia, and that this has led to differences over military procurement priorities. ¶18. (C) Proceedings closed with AA/S Mull, DAS/D Fata, and Komorowski agreeing on a way ahead. Mull stated that C4ISR will be the platform on which all future procurements are based. The finance group would continue its work, accelerating progress as GOP budget decisions were made. Both sides would draw up a list of defense systems for which the GOP could decide to submit Letters of Request. The SCCG and future HLDG will follow up on implementation. Komorowski endorsed Mull's vision with his own call for putting procurement items in their "baskets" (near-, medium- and long-term needs). Komorowski added that the HDLG should replace the SCCG and follow up on implementation of everything achieved by the SCCG. Making Missile Defense a Net Plus for Polish Security ¶19. (C) COMMENT: The well-defined effort to improve Polish C4ISR and thereby enhance operational effectiveness at home and abroad will bolster Polish security and can be achieved within the current FMF budget. However, there continues to be a tension between Defense Ministry assessments of Poland's immediate defense needs, and declarations by Poland's political leadership that success in the Missile Defense talks requires Polish acquisition of a PAC-III system. END COMMENT. QUANRUD RICE