Although the principal recipients of U.S. arms aid in the 1950s were the NATO countries and other friendly powers on the periphery of the Soviet Union, in the early 1960s, Washington began to direct considerable attention to Southeast Asia, where communist insurgents had become increasingly active. In line with the Truman Doctrine and NSC 68—which viewed a gain by communist forces in any part of the world as a strategic defeat for the West—the Kennedy administration established major military aid programs in Cambodia, South Vietnam, and Thailand. By 1975 U.S. military aid to these countries came to an estimated $18 billion.
As the fighting between insurgents and government forces in South Vietnam intensified, the United States sent ever-increasing quantities of military equipment to the South Vietnamese army, along with large numbers of U.S. military advisers. By doing so, Washington hoped to avert direct U.S. military involvement in the conflict. As the insurgents—backed by increasingly powerful forces sent from North Vietnam—gained in strength, however, U.S. leaders determined that it would be necessary to deploy American combat forces to prevent the collapse of the South Vietnamese government. At the peak of the conflict in the late 1960s, some 550,000 U.S. soldiers were serving in Vietnam. But when U.S. intervention failed to produce a quick and decisive victory, the American public turned against the war and U.S. forces were eventually withdrawn.
The American failure in Vietnam had a profound impact on U.S. foreign and military policy. Probably its longest-lasting consequence was to engender a deep-seated antipathy on the part of the American people to the long-term commitment of U.S. ground troops to ambiguous conflicts in the developing world—a reluctance that shaped U.S. strategy in the Gulf War of 1990–1991 and the Kosovo conflict of 1999. Congress also grew leery of major arms-supply arrangements with unpopular Third World regimes. In 1968, for example, the Foreign Assistance Act was amended to require a reduction inU.S. military aid to any underdeveloped country that diverted excessive funds to the acquisition of sophisticated military hardware. Subsequent amendments also prohibited the provision of military assistance to governments cited for egregious human rights violations.
But while Congress was reluctant to approve any increase in U.S. military assistance to repressive Third World countries, it also sought to prevent the deployment of U.S. combat forces in these areas—and so could be persuaded in some cases to sacrifice one goal for the other. This was the genesis of the Nixon Doctrine, which called for the substitution of U.S. arms aid for American troops in unstable areas deemed essential to U.S. security.
As articulated by President Richard Nixon in 1970, this policy held that the United States "shall furnish military and economic assistance when requested and as appropriate" to friendly nations that come under attack in remote areas of the world. But, at the same time, the United States would "look to the nation directly threatened to assume the primary responsibility of providing the manpower for its defense."
Initially, the Nixon Doctrine was said to apply to the nations of Southeast Asia and the surrounding region. Before long, however, the main focus of this policy was shifted to the Persian Gulf, where Great Britain had long served as the regional hegemon. When Prime Minister Harold Wilson announced that London would withdraw its forces from the Gulf by the end of 1971, the Nixon administration undertook an immediate review of American strategy in the area. Believing that the U.S. public—still in the throes of the Vietnam debate—would not tolerate the deployment of American forces in the Persian Gulf, the White House concluded that U.S. strategy would have to rest on the supply of weapons to friendly powers.
The administration's new policy toward the Gulf was spelled out in National Security Council Decision Memorandum number 92 (NSDM-92). Although the text of this document was never made public, its basic thrust was later articulated in congressional testimony by Undersecretary of State Joseph J. Sisco. "What we decided," Sisco told the House Committee on Foreign Affairs in 1973, "is that we would try to stimulate and be helpful to the two key countries in this area— namely, Iran and Saudi Arabia—that, to the degree to which we could stimulate cooperation between these two countries, they could become the major elements of stability as the British were getting out."
As suggested by Sisco, this policy was aimed at both Iran and Saudi Arabia. In practice, however, the greater emphasis was placed on Iran. This was so because Iran's armed forces were considered far more capable than those of Saudi Arabia, and because its leader, Shah Mohammad Reza Pahlavi, was more attuned to U.S. policy objectives. Eager to enhance his nation's status as a regional power and to attract the support of Washington, the shah ordered $20 billion worth of American arms between 1970 and 1978—at that time a record for weapons acquisitions by a developing country. Indeed, Representative GerryE. Studds of Massachusetts went so far as to state that these transfers constituted "the most rapid buildup of military power under peacetime conditions of any nation in the history of the world."
Although U.S. sales to Iran were motivated primarily by national security considerations, as spelled out in NSDM-92, the Nixon administration was not unmindful of the economic dimensions of arms exports. Facing a significant balance-of-payments crisis as a result of Vietnam War expenditures and the OPEC oil price increase of 1973, the White House saw in military sales a practical means for recouping some of the massive dollar outflows. Accordingly, U.S. arms firms were given a green light by Nixon to provide the shah with some of America's most advanced and sophisticated weapons, including F-4, F-5, and F-14 aircraft.
So massive were U.S. arms transfers to Iran at this time that many members of Congress became alarmed at the scale of the sales program and its potential for abuse. These concerns were increased by reports that U.S. weapons firms had employed bribery to solicit major orders from Iran—recalling the sort of charges made by Engelbrecht and Hanighen in 1934—and that U.S. officials had failed to impose any limits on the sophistication of the arms that could be supplied to that country. After investigating these charges, the Senate Foreign Relations Committee concluded in 1976 thatU.S. arms sales to Iran were "out of control."
This report, and others like it, led Congress—for the first time since the 1930s—to adopt significant legislative restraints on U.S. military sales abroad. Under the Arms Export Control Act (AECA) of 1976, Congress gave itself veto power over all individual arms transfers worth $14 million or more and over all munitions packages worth $50 million or more. The AECA also required the White House to provide Congress with advance notice of pending arms agreements, and placed restrictions on the "re-transfer" of U.S. arms from their intended recipient to another country.