WHERE IS ALL THE MONEY GIVEN TO THE PALESTINIAN AUTHORITY?
“Malnutrition in the Gaza Strip and West Bank is as bad as in sub-Saharan Africa because the Palestinian economy has all but collapsed under Israeli restrictions.” (Irish Times February 6, 2004)
“The Palestinian leader, Yasser Arafat, received the strongest challenge yet from a protege when Mohammad Dahlan, a former interior minister, accused him of squandering $5bn (£2.74) and "sitting on the corpses" of Palestinians.
He said that if Mr Arafat did not begin to reform the Palestinian Authority there would be massive demonstrations on August 10 in Gaza City.
In an interview with the Kuwaiti newspaper Al Watan he said: "Arafat is sitting on the corpses and destruction of the Palestinians at a time when they're desperately in need of a new mentality."
All of the funds which foreign countries had donated to the Palestinian Authority, a total of $5bn "have gone down the drain, and we don't know to where," he added.
Conal Urquhart of the Guardian in Tel Aviv, Monday August 2, 2004
Communique: 9 September 2
UNDERSTANDING PALESTINIAN POVERTY
Dear HonestReporting Subscriber,
On Sept. 7, Agence France-Presse released an article entitled 'Most Palestinians live in poverty, on two dollars a day.' Why are most Palestinians so tragically poor? The AFP reporter turns to a U.N. representative who blames Palestinian poverty on four sources:
Israel's blockade of the territories, destruction of assets [in Palestinian areas], expansion of Jewish settlements and the separation barrier.
Israel is thereby accused of complete responsibility for the unfortunate state of the Palestinian economy. The AFP report provides no dissenting voices, and Israel is not granted the right of response to any one of these serious allegations.
This article is not merely anti-Israel ― it's sloppy journalism at its worst.
AFP fails to acknowledge the mounds of evidence that while Israeli anti-terror policies have created some hardships, the primary reason for Palestinian poverty is irresponsible Palestinian leadership, whose embezzlement, diversion of funds to terror, and failure to invest in infrastructure have left the average Palestinian destitute.
HonestReporting encourages subscribers to write to AFP (email@example.com), using the documentation below.
MASSIVE AID DIVERTED TO TERRORISTS
Since the signing of the Oslo Accords in 1993, the international community has shown unprecedented generosity toward Palestinians, donating approximately $5 billion to the Palestinian Authority. The World Bank noted recently that 'donor disbursements to the Palestinians currently amount to approximately $1 billion per year or $310 per person ― one of the highest per capita rates in the history of foreign assistance.'
(By comparison, the Marshall Plan to rebuild Europe after World War II provided $68 per year, in today's dollars, to Europeans.)
So where's all the money going? A recent, in-depth study from the independent Funding for Peace Coalition (FPC) found overwhelming evidence that 'European aid has not reached its intended target ― the Palestinian people. It has been diverted towards graft, terrorism and incitement to hatred.'
While direct PA payments to terror gangs (with Yassir Arafat's own signature as authorization) have been documented since 2002, the FPC continues to find a 'compelling connection' between EU aid and funding of Palestinian terror. Just one point of evidence cited by the FPC: An interview with PA officials and Fatah leaders on the BBC in November 2003 revealed that the PA had reimbursed $50,000 of monthly expenses to one of the deadliest terror groups, the Al-Aksa Martyrs' Brigades.
So the EU, now the single largest donor to the PA, literally contributes to keeping bands of terrorists on the PA payroll. Precious funds intended to ease Palestinian poverty are used instead for suicide bombs targeting Israeli civilians.
But checks to terrorists are small change compared to Yassir Arafat's record of personal theft. Over the course of his 'revolutionary' career, Arafat has siphoned off hundreds of millions of dollars of international aid money intended to reach the Palestinian people.
Estimates of the degree of Arafat's wealth differ, but are all staggering. Last year, Forbes magazine listed Arafat in its annual list of the wealthiest 'Kings, Queens and Despots,' with an fortune of 'at least $300 million.' Israeli and US officials estimate Arafat's personal holdings at between $1-3 billion. Rachel Ehrenfeld, Director of the American Center for Democracy, arrives at a figure of $1.3 billion and laments:
This money is enough to a) feed 3 million Palestinians for 1 year, b) buy 1,000 mobile intensive care units, c) fund 10 hospitals for a decade, and d) would still leave $585 million to fund other social projects.
And while the average Palestinian barely subsists, Arafat's wife Suha in Paris receives $100,000 a month from PA sources, as reported on CBS' 60 Minutes. That CBS report also noted that Arafat maintains secret investments in a Ramallah-based Coca Cola plant, a Tunisian cellphone company, and venture capital funds in the U.S. and the Cayman Islands.
Arafat also uses foreign aid funds to pay off cronies who bolster his autocracy: A recent International Monetary Fund report indicates that upwards to 8% ($135 million) of the PA's annual budget is handed out by Arafat 'at his sole discretion.' The 2003 budget for Arafat's office, which totaled $734 million, was missing $34 million that Arafat had transferred to pay unidentified 'organizations' and 'individuals.' And Ehrenfeld notes that this IMF report 'did not take into account Arafat's control of 60 percent of the security apparatus budget, which leaves him with at least an additional $360 million per year to spend as he chooses.'
FAILURE TO INVEST IN INFRASTRUCTURE
Bringing the Palestinian people out of poverty would require building an infrastructure that is no longer utterly dependent on foreign aid and jobs in Israel. But almost none of the PA budget has been directed to this end.
The situation is best summarized by Mohammad Dahlan, former PA Interior Minister, who recently told The Guardian that of all the funds donated to the Palestinian Authority, a total of $5 billion 'have gone down the drain, and we don't know to where.'
Education is one key to building a sustainable Palestinian economy. But Palestinian schools and universities are infested with terrorist ideology and incitement. This was the scene (at right) at back-to-school day at a West Bank university earlier this week ― huge portraits of terrorist 'heros' hovering over students perusing new schoolbooks.
Why doesn't the PA allow foreign aid to promote a sustainable Palestinian future by removing such incitement and educating toward peace?
Other highly symbolic episodes: When an American convoy traveled to Gaza last year to interview potential Palestinian Fulbright scholars, it was blown up by local terrorists. And as documented by Palestinian Media Watch, $500,000 of US Aid funds was used recently to build 'Martyr Salakh Khalaf Stadium.' Salakh Khalaf, better known as Abu Iyad, was head of the Black September terrorist organization, and was responsible for the murder of two American diplomats in Sudan in 1973, and the murder of 11 Israeli athletes at the Munich Olympics in 1972.
* * *
Yet Agence France-Presse ignores all of these points, relying instead on one dubious source to blame Palestinian poverty solely upon Israeli strictures. In truth, the primary reason for Palestinian poverty is the criminal failure of the Palestinian leadership to serve its own constituency ― despite massive international aid intended to promote precisely that goal.
Comments to AFP: firstname.lastname@example.org
WHAT DOES THE PALESTINIAN AUTHORITY DO WITH EUROPEAN MONEY?
by Rachel Ehrenfeld
NATIONAL REVIEW ONLINE
December 11, 2003
When the international donors' conference convenes in Rome next week to consider a new contribution of $1 billion to the Palestinian Authority, it is likely to continue to ignore the PA's ongoing funding of terrorist activities.
According to Hannes Swoboda, a member of the European parliament's ad hoc working group on aid to the PA, "No wrongdoing or misuse of funds by the Palestinian Authority, no instances of funds being used for terrorist activities instead of infrastructure development, have been proved."
His denial followed that of the European Union's external-relations commissioner, Christopher Patten, who on July 17 wrote in the Financial Times that "[t]he EU has worked throughout the bloodstained months of the Intifada to keep a Palestinian administration alive and to drive a process of reform within it....At every step, the EU's help was made conditional on reforms that would make a viable Palestinian state a reality one day and in the short term make the Palestinian territories a better, safer neighbor for Israel."
By the time Patten and the members of the European parliament (MEPs) had made these statements, the Israeli government had already given them volumes of captured Palestinian documents providing evidence that the PA was using EU funds to pay for homicide bombings, the upkeep of terrorists, weapons, and bomb-manufacturing plants; vacations, travel, scholarships and medical treatments for members of the Palestinian leadership and their families; and — not least — Chairman Arafat's personal bank accounts.
How is it possible that the International Monetary Fund, CBS, the BBC, and even the PA itself were all able to document the PA's misuse of funds while Commissioner Patten failed to acknowledge it?
Despite thousands of the PA's own documents — some signed by Yasser Arafat himself — Patten, Swoboda, and many other MEPs not only continue to deny that European tax money has funded Palestinian terrorism, but also claim that the PA documents, authenticated by American, German, and Israeli experts — and even by the Palestinians themselves — are "forgeries produced by Israel."
The IMF report "Economic Performance and Reforms under Conflict Conditions," released last September in Abu Dhabi, was based on the same PA documents that the Israeli government had earlier provided to Patten and the European Parliament. The report concludes that at least 8 percent ($135 million) of the PA's annual budget of $1.08 billion is being spent by Arafat at his sole discretion — and does not even take into account Arafat's control of 60 percent of the security-apparatus budget, which leaves him with at least $360 million per year to spend as he chooses. In addition, the report states that $900 million in PA revenues "disappeared" between 1995 and 2000, and that the 2003 budget for Arafat's office, which totaled $74 million, was missing $34 million that Arafat had transferred to pay unidentified "organizations" and "individuals."
Patten and many of the MEPs constantly deny that EU funds have been misused. They refuse to acknowledge that the PA leadership is corrupt and uses its aid money to fund terror, choosing instead to grant the PA ever more aid. According to the IMF report, much of this money continued to be misappropriated even under the PA's reform-oriented finance minister, Salem Fayyad.
The EU's moral standing and fiscal accountability are also questionable. For the ninth year running, the EU Court of Auditors refused to approve the EU's €100 billion annual budget because the auditors could not account for 90 percent of the funds to the PA. The MEPs claimed that it was not the EU but the IMF and the CIA that supervised the PA budget. But the IMF has publicly denied this responsibility many times, and there is no evidence that the CIA has had anything to do with EU funds to the PA.
As for evidence that aid money was used to pay homicide bombers, Swoboda insisted that "there is no proof that any terrorist acts they committed were ordered by the PA — they may have been acting alone. Only if the DNA of the suicide bombers will match the DNA of those who received euros will we accept it as evidence."
Swoboda's comments did not come as a complete surprise. A week earlier, in an interview with Palestinian journalist Kawther Salam, Swoboda had said, "There was recently an opinion poll in Europe which places Israel among the top rank of the countries seen as creating dangers for peace. I think that we should take the results of this poll seriously."
In the meantime, the Belgian police announced that the European Anti-Fraud Office (OLAF), together with Belgian and German police, began investigating the payment of EU aid money to the Al Aqsa Martyrs Brigades — one of Yasser Arafat's Fatah terrorist groups, listed by the EU as a terrorist organization.
It seems that the stronger the evidence of EU complicity in funding Palestinian terrorism, the stronger is the MEPs' refusal to acknowledge their role. Their anti-American and anti-Israeli attitudes explain their willingness to give ever more funds to Arafat while pressuring Israel to compromise its national security. Moreover, the EU continues to support other Islamist terror organizations dressed as NGOs, such as Hamas, that operate throughout Europe.
Further aid payments should cease until the PA explains how it spent more than $6 billion in aid during the last decade, and returns the missing funds to the Palestinian people. But, incredibly, the World Bank last week gave an additional $15 million in aid to the PA, and, over the weekend, the EU awarded the PA $40 million for "reforms and emergency economic aid."
History gives us little reason to think the PA will stop funding terrorism. Maybe it's time to hold European donors legally accountable for the return on their investment.
1.Rachel Ehrenfeld, author of Funding Evil; How Terrorism is Financed — and How to Stop It, is director of the New York-based American Center for Democracy.
Arafat's Billions (10.11.03) CBS News
Yasser Arafat diverted nearly $1 billion in public funds to insure his political survival, but a lot more is unaccounted for.
Jim Prince and a team of American accountants - hired by Arafat's own finance ministry - are combing through Arafat's books. Given what they've already uncovered, Arafat may be rethinking the decision.
Lesley Stahl reports.
"What is Mr. Arafat and the Palestinian Authority worth today?" asks accountant Jim Prince. "Who is controlling that money? Where is that money? How do we get it back?"
So far, Prince's team has determined that part of the Palestinian leader's wealth was in a secret portfolio worth close to $1 billion -- with investments in companies like a Coca-Cola bottling plant in Ramallah, a Tunisian cell phone company and venture capital funds in the U.S. and the Cayman Islands.
Although the money for the portfolio came from public funds like Palestinian taxes, virtually none of it was used for the Palestinian people; it was all controlled by Arafat. And, Prince says, none of these dealings were made public.
"Our whole point is to bring it out of control of any one person," Prince says.
That's what happened with the portfolio money, which is now under the control of Salam Fayyad, a former World Bank official who Arafat was forced to appoint finance minister last year after crowds began protesting his corrupt regime.
According to Fayyad, "There is corruption out there. There is abuse. There is impropriety, and that's what had to be fixed."
Statements like that have earned Fayyad, a bookish technocrat who spent 20 years in the U.S., a reputation for courage - which was enhanced when he immediately posted the details of Arafat's secret portfolio on the Internet.
Fayyad's investigators are treading softly, well aware that their probe may become too embarrassing for Arafat.
Has he tried to stop them? "We run into obstacles in a number of places, particularly among the old PLO types," Prince says, adding one might draw their own conclusions as to whether his statement includes Arafat himself.
Martin Indyk, a top adviser on the Middle East in the Clinton administration and now head of the Saban Center, a Washington think-tank, says Arafat was always traveling the world, looking for handouts. Money, he says, is "essential" to Arafat's survival.
"Arafat for years would cry poor, saying, 'I can't pay the salaries, we're gonna have a disaster here, the Palestinian economy is going to collapse,'" says Indyk. "And we would all mouth those words: 'The Palestinian economy is going to collapse if we don't do something about this.' But at the same time, he's accumulating hundreds of millions of dollars."
The stockpile went well beyond the portfolio. Arafat accumulated another $1 billion with the help of -- of all people -- the Israelis. Under the Oslo Accords, it was agreed that Israel would collect sales taxes on goods purchased by Palestinians and transfer those funds to the Palestinian treasury. But instead, Indyk says, "that money is transferred to Yasser Arafat to, amongst other places, bank accounts which he maintains off-line in Israel."
Until three years ago, Israel put the tax revenues into Arafat's account at Bank Leumi in downtown Tel Aviv, no questions asked. But why?
According to Indyk, "The Israelis came to us and said, basically, 'Arafat's job is to clean up Gaza. It's going to be a difficult job. He needs walking-around money,' because the assumption was that he would use it to get control of all of these terrorists who'd been operating in these areas for decades."
Obviously, that hasn't happened. No one knows this better than Dennis Ross, who was Middle East negotiator for the first President Bush and President Clinton, and now heads the Washington Institute for Near East Policy. He says Arafat's "walking-around money" financed a vast patronage system.
"I used to see that people came in, you know, with their requests," Ross says. "'I need a phone. I need an operation. I need a job.' Arafat had money to dispense."
Like a Chicago ward boss, he still doles out oodles of money; Fayyad says he pays his security forces alone $20 million a month, all of it in cash.
All told, U.S. officials estimate Arafat's personal nest egg at between $1 billion and $3 billion.
Arafat may have $1 billion, but he sure isn't spending it to live well. He's holed up in his Ramallah compound, which the Israelis all but reduced to rubble a year-and-a-half ago. Arafat has always lived modestly, which you can't say about his wife, Suha. According to Israeli officials, she gets $100,000 a month from Arafat out of the Palestinian budget, and lives lavishly in Paris on this allowance.
He also uses the money to bolster his own standing. Both Israeli and U.S. sources say those recent outpourings of support at Arafat's compound were "rent-a-rallies," and that Arafat has spent millions to support terrorists and purchase weapons.
Did he steal from his own people?
"He defines himself as being the embodiment of the Palestinian people," Ross answers. "So what's good for him is good for them. Did they benefit? The answer is no. Did they lose? The answer is yes."
Palestinians certainly paid dearly for something else Fayyad uncovered: a system of monopolies in commodities -- like flour and cement -- that Arafat handed out to his cronies, who then turned around and fleeced the public.
Fayyad says it could accurately be seen as gouging his own people. "And especially in Gaza which is poorer, which is something that is totally unacceptable and immoral, actually."
Of all the monopolies, none was as lucrative or as corrupt as the General Petroleum Corporation, the one for gasoline. The corporation took the fuel it purchased from an Israeli company and watered it down with kerosene, not only defrauding the Palestinian drivers, but wrecking their car engines.
Fayyad says the Petroleum Corporation charged exorbitant prices, and Arafat got a hefty kickback. "To the president, I can tell you, if there was not money in the treasury, he went to the Petroleum Corporation."
When Fayyad dismantled the corporation, the man who had run it fled to California. Ever since, with the monopoly broken up, Palestinian drivers have paid 20 percent less for gas and 80 percent less for diesel fuel. Gas stations now advertise 100 percent pure products.
Fayyad became a hero, like the Robin Hood of the Palestinians. Millions of people were affected by this one move. He says he was just doing his job. "A lot of this is about, you know, distinguishing between right and wrong. And that's a straightforward proposition."
Mohammed Rachid, Arafat's economic adviser who set up his tangled web of investments and monopolies, says he's cooperating with Fayyad's investigators. Rachid left the Palestinian territories about a year ago under a cloud. He asked CBS News not to reveal where we met him for his first television interview.
"I'm proud of what I did till now," Rachid says. "I think I showed a good performance."
He's referring to the investment portfolio he managed for Arafat. He also opened that account at the Leumi Bank in Tel Aviv. According to a recent report by the International Monetary Fund, that secret account was: "Under the control of President Arafat and his financial adviser Mohammed Rachid" -- and no one else.
"If we are having a secret account, we should have it in Israel? You think this is logical?" Rachid asks.
But that's what the Israelis, and the people working for Fayyad, say it was.
Rachid says that "transfers to Leumi Bank account never stayed. It was receiving the revenues and transferring the revenues to the Palestinian Authority's account in the Arab bank in Gaza."
He's saying the Leumi money was sent to the Palestinian Authority. But, in fact, much of it was sent to Switzerland, to the prestigious Lombard Odier Bank, for yet another secret investment account that held over $300 million. In a letter obtained by CBS News, Rachid tells the bank that the funds will come from Palestinian "taxes" and "customs revenues."
"It was all under the name of the Palestinian authorities," Rachid says. Doesn't he mean Arafat? "No, Palestinian Authorities, Palestinian Authorities."
Actually, it was under a code name, "Ledbury" -- not the Palestinian Authority -- and Minister Fayyad says that this pot of money, too, was available only to Arafat. The Swiss account was closed out in 2001.
No one really knows where that money is today.
Does Rachid think that it should have gone, in some way, back to help the Palestinian people?
"Of course," he says. But, "I don't, I don't decide what we do with the money."
Those who want to know why Arafat didn't bring the money back, he says, should ask him. But Arafat didn't want to talk.
There's yet another stash of money Arafat might be asked about: the funds he collected when he was chairman of the PLO in exile. The PLO's former treasurer told us he saw Saddam Hussein hand Arafat a $50 million check for supporting him during the first Gulf War. And there were other large gifts from the KGB and the Saudis.
Ross says, "Arafat used to say to me, 'Where's my money? You need to go to the Saudis and get my money.' It was never the Palestinians' money."
Fayyad is trying to make sure it's the people's money, but many say his one-man reform effort is having only limited success. Arafat recently sent armed men to prevent Fayyad from replacing the head of the civil service, who runs Arafat's patronage apparatus. That has lead some to think Fayyad himself could be in danger.
"He cannot know, and we cannot know at what point he crosses the red line," says Indyk.
Other people who have dared to call for transparency of all these finances have been beaten up, shot, and silenced. Why is Fayyad surviving? Indyk says, "We should not take it for granted."
He has upset so many powerful people, and his offices have already been ransacked more than once. But Fayyad says he does not feel threatened.
"It's a dangerous neighborhood," he admits. "But you know this is about, you know, doing the right thing for the people."
BBC: Palestinian Authority Funds go to Militants
Likud Nederland November 2003
BBC News, November 7, 2003. Description of the program 'Correspondent: Arafat Investigated' broadcasted in the UK on BBC Two at 1915 GMT on Sunday, 9 November 2003.
Note of Likud of Holland: There was even more in this program then noted below what is normally not shown on European television, for instance how Arafat in Arabic praises suicide bombers (while condemning them in English).
The Palestinian Authority, headed by Yasser Arafat, is paying members of a Palestinian militant organisation which has been responsible for carrying out suicide attacks against Israeli soldiers and civilians, a BBC investigation has found.
A total of up to $50,000 a month is being sent to members of the al-Aqsa Martyrs' Brigades, an armed group that emerged shortly after the outbreak of the current Palestinian intifada, a BBC Correspondent programme reveals.
A former minister in the government led by ex-Prime Minister Mahmoud Abbas (Abu Mazen) says that the money is an attempt to wean the gunmen away from suicide bombings. He says the policy of paying the money was not instigated by Mr Arafat but has been carried out with his knowledge and agreement.
Despite the payments, the al-Aqsa group has not declared a formal ceasefire and Mr Arafat has not asked the group to stop the suicide bombings, according to an al-Aqsa leader interviewed by the programme. The Palestinian leader has publicly condemned recent Palestinian suicide bombings.
Abdel Fattah Hamayel, the minister for sports and youth until Abu Mazen resigned in September implemented the policy of paying what he describes as living expenses to the gunmen. He told Correspondent:
"Originally, some people in these groups had been chosen to work for the security services, so they were getting salaries and still are doing so."
He says this summer a decision was taken by the Palestinian Cabinet to pay living expenses to those al-Aqsa members not getting these salaries to help support their families. He says the money is intended to ensure that al-Aqsa members were not influenced by outside organisations to carry out further suicide bombings. Al-Aqsa has not claimed to have carried out any suicide bombings since May.
Asked how the Palestinian Authority could be sure that the money was not spent on weapons, Mr Hamayel replied: "The amount sent to them is very small. At most, it's not more than $250 per person. How can anyone buy weapons with this amount of money?"
In April 2002, Israeli troops stormed Mr Arafat's compound in Ramallah as part of a widespread incursion into the West Bank in response to a number of suicide attacks. Israeli officials claim that they found documents proving that the Palestinian leader was funding Palestinian suicide bombers.
They used this as part of their argument, supported by US President George W Bush, that Mr Arafat could not be trusted and that rather than opposing terrorism, he was, in fact, encouraging it.
Close links between Mr Arafat's political faction Fatah and al-Aqsa are also discovered by the programme. One local Fatah leader in the West Bank town of Jenin says that the al-Aqsa group is the military wing of his organisation and that Mr Arafat is the overall leader of both the political and military arms.
"Fatah has two sections: a military wing, led by the military and a political wing, led by politicians. But there is no difference between Fatah and the al-Aqsa Martyrs' Brigades," a leader of Fatah in the Jenin refugee camp tells Correspondent.
Asked if al-Aqsa would formally end hostilities with Israeli if asked to by Mr Arafat, Zakaria Zubaydi, the leader of the group in Jenin says:
"Of course. But he won't order us to do this until Israel stops the assassinations."
He adds: "When Arafat calls for a ceasefire, we will respect his decision and stop."
Confidential Report Confirms that PA Diverted European Funds to Terror Attacks Against Israelis
An, as of yet, unreleased report prepared by the European Commission's Anti-Fraud Office (OLAF) has concluded that tens of millions of dollars in humanitarian aid, donated by the European Union (EU) to the Palestinian Authority (PA) has been utilized for terrorist operations against Israel.
Earlier this week, the German daily newspaper "Die Welt" reported that OLAF had finally confirmed Israeli allegations that Palestinian leader Yasser Arafat had diverted millions of dollars in EU funding to the Fatah Tanzim and Hamas terrorist organizations. The OLAF findings are based upon documents recovered from the PA headquarters by Israeli military forces during the course of Operation Defensive Shield. OLAF agents recently visited Jerusalem to be briefed by Israeli security officials and to ascertain the authenticity of the documents.
The OLAF investigators have accepted that the captured documents are genuine and evidence Arafat's wide-spread diversion of the EU's humanitarian aid to Palestinian terrorist operations which targeted Israeli civilians.
The Israeli documents had been presented to the EU's Commissioner for External Affairs Chris Patten last year. Patten, however, refused to recognize their authenticity and denied they established that Arafat was using EU funds for terror attacks. Under increasing pressure from European parliament members, Patten was forced to order an OLAF investigation into the Israeli allegations.
The documents include letters signed by Arafat ordering payments to eleven terrorist leaders for guerilla operations. In addition, there are receipts for the payments of the mortgages of the families of Hamas suicide bombers, as well as a cash awards of several thousand dollars to the family members. Other documents detail how European funds were used by the PA's Preventative Security Forces to stage "spontaneous" demonstrations in support of imprisoned Fatah Tanzim Marwan Barghouti, who was placed on trial in Israel for masterminding terror attacks that killed 26 Israelis.
In May 2002, Shurat HaDin - Israel Law Center filed a N.I.S. 100,000,000 civil action against the EU on behalf of a family of terror victims in the Tel Aviv District Court. The law suit arises from a August 5, 2001, Palestinian terror attack which left the mother of the British born family, Techiya Blumberg, dead and her husband Steven, and young daughter, Tziporah, seriously injured. The Blumbergs were traveling in their car near Kalkliya when Palestinian police officers, members of the Fatah Tanzim, opened fire from another vehicle. Techiya Blumberg, 35, was the mother of five children and five months pregnant at the time of her murder.
The Blumberg law suit, which is brought by attorney Nitsana Darshan-Leitner, alleges that the EU recklessly provided the PA with massive sums of financial aid, while knowing that the money was being diverted from its intended civilian purposes to Palestinian terrorist groups. The court papers assert that the EU was repeatedly warned by Israel that its aid was financing Palestinian attacks on Israelis.
Following the signing of the Oslo Accords, the EU pledged to provide funding to the PA for civilian projects, primarily to pay the salaries of the PA's municipal workers. The EU donates approximately $10 million a month and more than $1.5 billion to the PA since 1994. The plaintiffs allege that the EU failed to undertake any steps to monitor or scrutinize how the PA was utilizing the donated money.
"The OLAF report should be immediately released to the public and the EU's aid to the PA suspended for good," said Shurat HaDin Director Darshan-Leitner, "Without the EU's reckless provision of financing to the Palestinians, hundreds of Israeli terror victims would still be alive and thousands of others would never have had to suffer their tragic injuries. The European taxpayers must now acknowledge that they are the ones who have been financing the Palestinian terror attacks and accept that they must pay compensation to the families of the victims."
In a press release issued this week in response to the "Die Welt" news story, OLAF insisted that it had not completed its investigation yet. It also complained that information discussed in the newspaper was based upon confidential,"in camera" briefings which had been now leaked.
OLAF, however, did not deny the accuracy of the news report.
Audit: Arafat diverted millions in public money
$900 million moved to special account controlled by leader
Sam F. Ghattas,
Charlotte Observer and the Associated Press,
DUBAI, United Arab Emirates - An audit of the Palestinian Authority revealed that President Yasser Arafat diverted $900 million in public money in 1999 to a special bank account he controlled, an International Monetary Fund official said Saturday.
Most of the cash, which came from revenue in the budget, went into some 69 commercial activities in Palestinian areas and abroad, said Karim Nashashibi, IMF resident representative in the West Bank and Gaza.
The disclosure came while Arafat celebrated a U.N. vote Friday condemning an Israeli decision to remove him. Arafat told hundreds of supporters in the West Bank that the U.N. General Assembly decision, which passed 133-4 with 15 abstentions, is a sign of international support for the Palestinians.
A Palestinian lawmaker and onetime Arafat spokeswoman, Hanan Ashwari, said Saturday the release of information about Palestinian Authority use of money was an attempt to discredit Arafat.
"There is nothing innocent about the timing," she said. "This is a campaign against the president and the (Palestinian) Authority."
Nashashibi did not elaborate on the types of businesses the Palestinian Authority was involved in, but Palestinian Finance Minister Salam Fayad has said its interests range from cement to telecommunications holdings in Algeria and Jordan.
Nashashibi disclosed the Arafat account and figures to reporters at a news conference on the economic situation in the West Bank and Gaza.
He said the information provided by the Palestinians was an example of the openness and transparency in Palestinian finances under Fayad.
However, Nashashibi did not rule out the possibility that a portion of the money was misused. He said he believes an accounting of the rest of the money will be conducted "at some point, but we're taking it all a step at a time."
"What we're trying to do is have a level of disclosure and transparency so that future or present misuse does not happen ... At least there is a follow-up, there is disclosure," Nashashibi said
There have been charges of corruption and money-skimming in the Palestinian Authority, including some complaints from ordinary Palestinians, which officials have denied.
In a special annual issue of Forbes Magazine earlier this year, Arafat was reported to control $300 million.
U.S. and European governments have complained for years that the Palestinian financial structure is not transparent and does not allow donors to follow their money to projects for the benefit of the people.
Official Palestinian figures show that investment in the Palestinian private sector amounts to about $300 million. The money was funneled in the past through a fund operated by Arafat's financial adviser, Khaled Salam.
Nashashibi said the Palestinian Authority was involved in commercial activities, at home and abroad, worth an estimated $700 million in today's market prices, "which probably in '99 were $900 million."
Meanwhile, the Israeli government dismissed the U.N. General Assembly resolution. The Israeli government said Saturday the Palestinians should focus their energy on fighting terrorism. Israel also insisted a new government being formed by incoming Palestinian Prime Minister Ahmed Qureia must cut links to Arafat.
But in the West Bank town of Hebron, about 2,000 people marched in support of Arafat. They carried Palestinian flags and banners that read "Arafat is our hero" and "Arafat is our leader."
Rivers of Money Still Flow (26.5.03)
By Amos Harel, Ha'aretz
About three months ago, Defense Minister Shaul Mofaz convened a series of meetings on a sensitive subject - how to stop the flow of money from abroad to terrorist organizations in the territories. Mofaz heard reports from the legal establishment, the counter-terrorism agency, the Shin Bet security service and the Mossad. But the minister was unimpressed.
There is still a great deal to do in this area, he concluded - we have not managed to stop the flow, and tens of millions of dollars are continuing to reach the West Bank and Gaza. Yesterday's arrests of the leaders of the Israeli Islamic Movement is far less an actual success than a source of hope for future successes. The biggest achievements in this area over the last few months came not from anything Israel did, but from the actions of other countries.
Since the start of the year, there has been a sharp decline in the amount of money sent from overseas to Islamic charities associated with Hamas. This was due mainly to restrictions the U.S. and German authorities imposed on such charities in their countries, helped by Britain and France considering similar restrictions.
America's decision to declare the Holy Land Foundation, a Hamas affiliate, illegal was an outgrowth of the September 11, 2001 terror attacks. It was only after 9/11 that Israel's repeated complaints about this organization received attention. America's overthrow of Saddam Hussein's regime in Iraq is also expected to help, since Saddam was perhaps the largest financial backer of suicide bombers' families.
But Israel itself, defense sources told Haaretz yesterday, is still far from capable of blocking terrorist financing in a systematic and comprehensive fashion. The arrests of the Islamic Movement leaders are meant to "dry up" the channel that leads from overseas through Israeli Arabs to the territories, but there are still plenty of other ways for money to reach the territories from abroad, including via Israeli banks.
Experts in law enforcement and defense are divided over the efficacy of the tool employed yesterday - arrest for the purpose of criminal prosecution. Some of these experts say that administrative measures are more effective. It is very difficult to prove in a criminal trial that funds were knowingly transferred to a terrorist organization. If the state had administrative powers to seize funds suspected of being used to finance terrorism, this would probably be much more effective.
This is what Britain did recently in connection with the two British citizens who committed the bombing at Mike's Place in Tel Aviv: Two days after the authorities arrested several of the terrorists' relatives, they had already impounded the bank accounts, assets and apartments of those they decided to indict for alleged complicity in the terrorists' activities.
The power to impound assets is included in a bill drafted by the Justice Ministry and the National Authority for the Prevention of Money Laundering, but the passage of this bill - which defense sources define as "critical" to the war on terror - has been held up for more than half a year. The bill would also enable the state to declare individuals to be terrorists without having to prove their membership in a terrorist organization and then to impound their assets on the basis of this declaration.
One of the biggest holes in Israeli law enforcement relates to banks. A brief prepared by the Judge Advocate General's international law division, which was published in Haaretz last December, revealed that Israeli banks serve as a "blind conduit" via which terrorist financiers abroad can send money to the territories. The Israeli banks' practices, the brief said, are contrary to accepted international practices aimed at preventing money from reaching terrorist organizations. The Israeli banks serves as "correspondent banks" that provide services to Palestinian banks, but do not trouble to investigate where the money they send on ends up. Defense sources believe tens of millions of dollars reach terrorist organizations in this fashion.
Another serious problem relates to the Palestinian Authority's financial system. Defense sources say this system still lacks the necessary transparency and appropriate controls. Only the money that Israel transfers to the PA is subject, by agreement, to audits by an American accounting firm.
Finally, despite the great efforts that have been made in this area, defense officials admit that intelligence about terrorist financing is scant. It is much easier for the Shin Bet to determine who built which bomb and when and how the bomb was matched up with a bomber than to figure out by what tortuous routes money from abroad reached the territories. The growing cooperation with foreign security services in this field is only now beginning to bear fruit.
Despite the clear dangers, it seems this problem is still not at the top of the Israeli leadership agenda. "If anyone thinks it is now possible to sleep quietly because the arrest of the Islamic Movement members stopped the flow of money for terrorism, he is simply wrong," one defense official said.
Arafat Knew: Charity Money Forwarded to Terror Infrastructure (23.1.03)
Documents seized from Gaza deal with reports sent to Yasser Arafat concerning the activities of the Charity Coalition - the umbrella organization of Islamic charity funds which solicits contributions from Arabic countries and the West, then transfers them to charity associations in the West Bank, most of which are identified with the terror organization - Hamas. In these reports Arafat was informed of meetings held in Yemen between senior coalition members and Hamas terrorists and of contributions collected from the West Bank and Israel. The collection of incriminating documents discovered in the PA Preventive Security compound in Gaza were addressed to Arafat and describe the principal activities of the Charity Coalition (Aathlaf al Hir).
These documents reveal that on 2 September 2002, the head of the Palestinian Preventive Security Service in the Gaza Strip, Rashid abu Shoubak, sent a memorandum to Arafat wherein he reported the visit of a contingent of Charity Coalition senior managers and members of the Coalition's Jordanian branch with Islamic associations in Yemen. Abu Shoubak, who maintains the collection infrastructure in Yemen, listed in the memorandum the names of the people the contingent members met in Yemen, many of whom are known Hamas terrorists, and stressed at the end of the memorandum that the Charity Coalition financially supports Hamas' terror infrastructure.
The Coalition was founded to carry out fund raising for the Palestinians
The Charity Coalition was founded under the name "101 days" during a worldwide Islamic fund-raising campaign for the benefit of Palestinians in the West Bank and Gaza. A short while after the Al-Aqsa Intifada began in the West Bank, its name was changed to "the Charity Coalition"(Aathlaf al Hir) - the umbrella organization that encompasses Islamic organizations in the Arabic and Western worlds.
The Charitable Coalition gathers contributions from dozens of Islamic charity funds, particularly in the West and the Gulf States and transfers them to the West Bank. Among the more prominent units of the Coalition are three funds belonging to Hamas in Europe: "the al-Aqsa Fund" (located in Germany, Belgium and the Netherlands), "the Palestinian Relief and Development Fund" - Interpal (located in Great Britain), and "the Committee for Assistance and Solidarity with Palestine" (located in France). In should be noted that all three were legally outlawed by Israel in May 1997 due to their association with Hamas.
Pocket Money for Suicide Terrorists
Money solicited by the Charity Coalition is not transferred to the Palestinian Authority nor to neutral civilian bodies in the West Bank, instead it is transferred directly to charity associations in the West Bank identified with Hamas.
Many of the Charity Coalition's activists and management council members are Islamic terrorists and some of them are even Hamas activists: the Qatari Islamic spiritual leader, Sheikh Yussuf al-Kardawi, chairman of the fund-raising organization which stood for the principle of founding the Coalition; Azzam Mustafa Yusuf, the acting director of the Coalition ( in the past stood at the head of the British Hamas fund "Interpal", and still serves a senior role in the fund); Azzam Na'aman Salheb, member of the Coalition's management council (Hamas activist and member of the Coalition's regional conflict council in Hebron); Bassam Nahad Jarrar, member of management council (senior member of the religious wing of Hamas in Ramallah); another member of the Association is Raad Salakh, among the senior members of the Islamic Movement in Israel.
Money for Humanitarian Purposes Finances Terrorist Activities
Rashib abu Shabah attached a batch of Charity Coalition documents to the memorandum that had been sent by fax in August 2002. He claimed that one of the documents details the results of the three "fund drives" carried out by the Charity Coalition in the West Bank and among Israeli Arabs. These documents, and another seized document dealing with transfer of money contributed from Bosnia-Herzegovina to a charity association in the West Bank identified with Hamas, indicates the Authority's concern over large sums of money channeled from abroad to bodies identified with Hamas. These funds maintain Hamas' civilian infrastructure and arrangements among the Palestinian populace. And Hamas' circle of supporters in the West Bank continues to expand, providing for ever widening brainwashing and encouragement for the terrorist organization's activities.
Moreover, money earmarked for humanitarian purposes also flows into Hamas' military-operation infrastructure and serves to underwrite terror activities. Attached to Rashid abu Shoubak's memorandum were several Charity Coalition documents. Due to their illegibility they were not translated, except for a single document, which was translated in its entirety. The memorandum clearly lists charity associations that are complicitous with the Charity Coalition. It mentions charity associations from Saudi Arabia, Kuwait, Qatar, Bahrain, Great Britain and the Netherlands.
Iraq continues to award funds to families of Palestinian terrorists (25.12.02)
The Iraqi government has transferred funds over the past week (18 and 22 Dec. 2002), through Palestinian satellite parties, acting on its behalf, from the president of Iraq, Saddam Hussein, to families of Palestinian terrorists- including suicide attackers.
Representatives of the Iraqi Ba'ath party and the Arab Liberation Front, held ceremonies in Gaza, in which they gave awards to families of terrorists. Families of suicide attackers received an award of $25,000, while families of terrorists who were killed received a $10,000 reward.
In a ceremony that was held 18 Dec. 2002, Iraq distributed awards totaling $280,000.
The continued Iraqi support of families of suicide bombers displays Iraq's persistent support of Palestinian terrorism, and its encouragement of suicide attacks as the preferred path in the armed struggle against Israel.
Source: The official newspaper of the Palestinian Authority, Al-Hayat Al-Jadida (19 Dec. 2002 and 23 Dec. 2002)
What is known about the PLO's finances?
In the 1970-1982 period, the PLO ran its own state within the southern zone of Lebanon. The weak Lebanese government did not exercise sovereignty over the area, the PLO did. As a result, the PLO was able to put together legal and illegal commercial activities that produced an enormous income for the organization and the start of an asset base that soared into the billions of dollars. Their ventures covered a broad spectrum from legal manufacturing to drug trafficking, protection rackets, robberies, hijackings, and the training of foreign terrorists. Revenues from drugs, the most lucrative source, are estimated at more than $300 million annually.
The traffic in arms and drugs was assisted by airport investments. The PLO owned duty-free stores at the Jomo Kenyatta Airport in Nairobi and the infamous Murtala Mohammad International Airport in Lagos, Nigeria. It purchased interests in airlines from the Maldives to Nicaragua. These holdings gave it a base for forged travel documents and airline tickets [documented in the Task Force and Unconventional Warfare, US House of Representatives' Republican Resource Committee (October 4, 1991)].
Arab states, for varied reasons, provided Yasser Arafat with considerable funding, particularly after the expulsion of the PLO from Lebanon in 1982 cut off many of the activities there. The PLO steadily received at least $100 million a year from the Arab states since 1973, but the amount has edged toward $250-300 million a year by the early 1990s. According to PLO records made public in 1988, the Saudi authorities over the previous decade had donated $855 million. Kuwait, announced that the Kuwaitis had provided Arafat's organization with $2 billion over 26 years, probably a low-ball figure.
Iraq's invasion of Kuwait was a financial disaster for the PLO. Arafat's support of Saddam Hussein caused the loss of support from Saudi Arabia and other Arab states. The revenue from Kuwait was cut off and Iraq did not make up the shortfall. After Iraq's defeat and expulsion from Kuwait, the PLO, in exile in Tunisia, was left far short of its prior levels of funding.
But Arafat and the PLO were bailed out by the peace process. Between the signing of the Oslo Accords in August 1993 and July 2000, the US Congress appropriated $900 million in foreign aid to the PLO/PA, with the aim of moderating the PLO, distancing it from Hamas and inducing compliance with commitments made in the peace process. In fact, foreign aid to the PLO - lacking accountability and transparency - achieved a perverse outcome, exacerbating PLO/PA corruption and undermining US interests in the Mideast. The embezzlement of US taxpayer funding, on a vast scale, by Yasser Arafat and other members of the Palestinian Authority is detailed in the report "Corruption within the Palestinian Authority", referenced below.
Intelligence agencies have tried to track and account for the vast cash flow of the PLO. In 1990, the CIA estimated that the PLO had between eight and fourteen billion dollars worth of assets. In 2000, the British National Criminal Intelligence Service (NCIS) reported that the PLO had world-wide assets approaching $10 billion and an additional annual income of about $1.5 to 2 billion, generated from illegal activities.
PLO money overseas (28.1.02)
WHO, TODAY, CONTROLS THE ECONOMIC EMPIRE WHICH THE PLO CREATED OVERSEAS? WE WANT TO KNOW! IT WOULD BE VERY INTERESTING TOPIC FEATURE IF YOU RAN AN EXPOSE UNCOVERING FRAUD AND CRIME.
Where is the money? This question disturbed many people last week, following the publication regarding Yasser Arafat's secret account. "Where is the money?" asked the residents of the Palestinian Authority as they sought to clarify what exactly is being done with the taxes collected by the monopoly owners and those who control the crossings and loading zones. "Where is the money?" the Knesset Finance Committee sought to clarify, on Tuesday, in a special discussion, which was convened following the findings of the Ha'aretz "Weekend Supplement" (4.4.97), to which senior Israeli Finance Ministry officials were summoned. "Where is the money" asks Palestinian Legislative Council member Khosam Hadad, this time meaning the PLO's overseas assets.
The size and worth of these assets -- which the Palestine Liberation Organization has accumulated in the 33 years of its existence -- are still a mystery. "Nobody knows the truth about the PLO's assets abroad," says former minister Moshe Shahal. "In the peace talks, we did not dare to raise the issue." Who controls these assets today?
The PLO was a very powerful economic organization, that has received billions of dollars from Saudi Arabia and the Gulf states since 1967. A large part of the assets come from taxes levied by the Arab countries: approximately 5% of the salary of every Palestinian who worked in their areas was deducted at the source and transferred to the organization's accounts in Switzerland and Spain. This collection alone brought in approximately $50 million annually.
"In total, the PLO made profits of something like $50 million a day," said Eli Halachmi, who was head of the economic branch in the research arm of IDF Military Intelligence at the end of the 1970s. "The organization had astounding properties. They had many straw companies which aided their penetration of the European market. The Kuwaitis helped them buy shares of companies such as Mercedes. They exercised great economic influence in France, Switzerland, Italy, Holland and Scandinavia."
In order to rule over its economic operations, in 1970 the PLO established the organization "Samed", or by its full name "The Organization of the Sons of Palestinian Martyrs", which has been headed since then by Ahmed Kari'a (Abu-Allah). Samed conducted many investments in the name of the PLO and its management was highly secretive and directly reported to Yasser Arafat, who also personally signed its cheques. Part of Samed's activities the PLO was interested in revealing, from a public relations standpoint. The organization published a magazine, "Samed al-Iktzadi" (The Economic Samed), with many pictures of Palestinian women working at sewing and weaving and Palestinian men sowing fields in agricultural farms in Africa and Lebanon. According to the statistics given in Guy Bechor's "PLO Lexicon", Samed employed several thousand workers in Lebanon until Israel expelled them in 1982. They were considered Fatah activists in every way, including in the compensation tables, for example.
Under the umbrella of Samed a number of associations operate including the Manufacturer's Association, the Trade and Marketing Association, the Agriculture and Agricultural Produce Association, the Research and Publications Department, and the Department for Disseminating Films and Propaganda. The latter initiated and distributed a number of propaganda films and films pertaining to the Palestinian struggle. At the end of the 1980s, it initiated the production of a full length film and invested millions of dollars, including the drafting of foreign actors and cameramen. The raw material was sent for editing in a laboratory in Rome. One night in July 1989, the laboratory was broken into and not a trace of the Palestinian's film was left.
The Samed magazine identifies its' branches economic activities and in general, reports on the organization's participation in a large number of economic exhibitions and its joint activities with the countries of the Eastern Bloc (until it fell apart) and with black Africa. Samed opened 20 Chambers of Commerce in various countries, such as Japan, Thailand and China in Asia, Guinea and Mali in Africa, Hungary and Poland in Eastern Europe, and France and Italy in the West. In its record years, Samed had 26 set exhibitions. The reports of Samed acknowledge its participation in weapons factories. The organization noted that it has a weapons factory in South Yemen and in Princedom of Brunei. Guy Bechor shows that at the end of the Iran-Iraq War in 1988, Arafat presented a gift of an RPG launcher manufactured by Samed to Iraqi President Saddam Hussein.
It is a little difficult because of this to take at face value the words of Dr Maher al-Kurd, the Palestinian Authority's Deputy Minister of Economics and Commerce. Dr al-Kurd absolutely and categorically denies everything. According to him, Samed's assets consisted of farms, for the most part farms in Lebanon which were destroyed by the IDF invasion in 1982. "After the war", adds al-Kurd, "they were left with a few projects in Africa, mainly in Somalia and Sudan. The civil wars and drought in those countries destroyed the farms. Samed had no property other than farms. No shares, no Swiss bank accounts. If only all the rumors were true."
It is difficult to estimate how much the PLO's assets are really worth. In an article published by Eric Lurun in "Le Figaro" he claims that hundreds of millions of dollars of PLO money was transferred from Lebanon to Switzerland at the beginning of the IDF siege of Beirut in 1982. Already in the 1970s, with the help of the Soviet Union, and in particular the "Moscow Narodny" Bank, Arafat and a number of his aides arranged investments on Wall Street, in the City of London, and in a number of Arab banks. The PLO also invested in large industrial concerns that were floated on the Frankfurt, Tokyo and Paris stock exchanges, as well as in real estate in the Mayfair area of London. Until the Gulf War in 1991, writes "Le Figaro", the cash reserves of the PLO came to $7 million. Arafat divided this mighty sum between a number of accounts in Zurich and Geneva, in such banks as Union of Suisse Bank, and Chemical Bank of New York. In Israel, the figures cited in "Le Figaro" are considered exaggerated, but the assertion that the PLO was in the 1970s and 1980s a very strong economic force is accepted. Its bank accounts were spread across the globe, including in eastern Jerusalem, and were registered in the names of various private individuals, [never in the name of the PLO] including that of Ahmed Kari'a (Abu Alla). If one considers the sums received by the PLO in the form of taxes and contributions, and subtracts from this its various outlays -- on strengthening its structure, on propaganda and on operations, the differential is hugely on the side of the earnings.
If Yasser Arafat ever sits down to write his economic memoirs, he will also be able to solve the question of the disappearance of Samir Najem A-Din. This mysterious man, a Palestinian resident in Saudi Arabia, is today in the seventh decade of his life, if he is still alive. A-Din has been portrayed in the Western press as one of the leading PLO money men, as the head of a secret arm concerned with the transfer of funds for confidential purposes. He led the "SAS" whose name came from the first initials of the names of its three managers: Samir Najem A-Din, Adnan Al-Kilani and Sakir Farhan. This triumvirate managed business interests straddling the world, via BCCI, the same institution at the center of scandal five years ago. It was founded by a group of Sheikhs from the United Arab Emirates, and was closed in 1992 in a joint operation of Interpol and the World Bank. The western media reported then that the bank was a giant launderer of illegal funds, including the funds of many underground and terror organizations. Its management sat in Pakistan, but the orders came out of Abu Dhabi.
Legal officers managed to confiscate 20 billion dollars, 75% of the assets of the Bank in 69 states. The closure of the bank also led to the discovery of account number 80820577, in the name of Samir Najem A-Din, from which money was taken for a variety of purposes. On 13th of March, 1984, for example, the owner of the account instructed the bank to transfer $17,000 to the Dafex arms factory in Portugal. Two weeks later he ordered the transfer of $100,000 to the account of Munzer Al-Kazar in Banco De Bilbao in Spain. Al-Kazar is a Syrian citizen close to the regime in Damascus, whose name has been linked in recent years to a number of illegal actions taken on behalf of Palestinian terror organizations, among them the bombing of the Pan-Am plane over Lockerbie.
In an interview with the BBC after the liquidation of the bank, Rasan Ahmed Kassem, manager of the branch in Sloane Street in London, related that A- Din opened the account with a deposit of $50 million, and that most of that money was used for arms purchases in Britain. The true role of Najem a-Din is made yet more elusive by the claim that he was the money man for the Abu Nidal organization, which split off from the PLO already at the beginning of the 1970s, in which case he could not be connected to the secret accounts of Arafat. A directive given by Najem A-din to the bank, in which he orders the monthly transfer of 10,000 pounds to the account of Amin al- Banna, apparently the cousin of Abu Nidal, is used as a basis for this claim. Al-Banna is suspected of involvement in the murder of Issam Sartawi, Arafat's political adviser.
According to various sources of information, the PLO participated in the establishment of the airline of the Maldive Islands, and afterwards was one of the owners of the airline of Guinea-Bissau. An Israeli official says that Fayez Zaidan -- head of the Palestinian Aviation Authority today -- managed this company in the past. Samed also acquired a duty-free shop at Tanzania's international airport in Dar e-Salaam. In 1986, the PLO representative in Zimbabwe, Ali Khalima, said that, "this is merely an investment," and that in the same period, Samed also dealt in purchasing additional shops in Zimbabwe and Mozambique. Last week, a western diplomatic official -- who requested that his name not be mentioned -- said that various Palestinian Authority officials have confirmed the existence of airlines and duty-free shops in Africa which belong to the PLO. Even so, the same Palestinians have claimed that many of these assets -- over the years -- suffered heavy losses for the PLO, with some of them in a state of bankruptcy.
The opposition to Arafat inside the PLO, and the various factions which quit the organization, such as that led by Abu Zaim (Attalah Attalah) in 1986, have uncovered a long series of financial transfers benefitting senior PLO officials and secret bank accounts under the Rais' direct supervision. In his book, Inside the PLO, journalist David Halevy describes a complex network of such secret accounts, which were designed for financing exceptional actions and special operations. According to Halevy, the PLO treasury disburses approximately $150 million annually to the chairman's network of private accounts. He points out that Arafat had so much money that he was able to lend money to countries such as [the former] North Yemen and Congo, [the former] Lebanese President Amin Gemayel and others.
Many Palestinians are sure that Arafat is not tainted by personal corruption, but nobody is sure that the many funds under his control are being utilized for goals known to, and accepted by, a majority of the Palestinian people. The policy of the PLO and its leader have also directly influenced both his economic and his political situation. His support for Saddam Hussein after his invasion of Kuwait brought about a cessation in the Gulf states' support for the PLO and the expulsion of hundreds of thousands of Palestinian workers. The organization almost went bankrupt. It is known that part of Samed's assets were sold during that period in order to finance the PLO's regular activity; it is not clear what part. Approximately one year ago, the American Congress' oversight committee held a secret investigation into the subject and even collected testimony from private and official Israeli experts. The investigation's report was not published. Even so, it is known that the examiners did not succeed in unequivocally determining the worth of the PLO's overseas assets.
Khosam Hadad, a Palestinian Legislative Council member from Nablus, says: "One of the greatest disasters of our economy is that Arafat and his friends are not transferring the PLO's overseas assets to the ownership of the [Palestinian] Authority, a step which could greatly aid economic development here." After his expulsion from the territories in 1988, for Fatah activity, Hadad filled various posts at PLO headquarters in Tunis. "The PLO still has a great many assets in various countries," testifies Hadad. "We have companies, we have real estate, and we have investments in a range of areas. Over the years, the problem has been that the lack of a framework to supervise these assets. Private elements have exploited this for their [own] needs. The [Palestinian] Authority -- instead of becoming a proper body -- is continuing Arafat's own way and lacks supervision over everything related to money."
Abu-Allah, the head of Samed and Chairman of the Palestinian Parliament was not happy to cooperate. "I know nothing about the income of the PLO abroad," he said.
Q: Can we talk about Samed?
A: "I know nothing about Samed."
Q: But you are the organization's chairman?
A: "I know nothing about Samed. If you want to talk about the peace process which is going mad right in front of your eyes, please. Do you want to talk about the Palestinian legislative branch -- no problem. But about the PLO abroad or Samed, I know nothing, really nothing. Thank you and goodbye."
Arafat Gave 12G in Gems to Clintons (4.4.01)
Brian Blomquist, New York Post
WASHINGTON - In a new gifts twist, Palestinian leader Yasser Arafat reportedly showered Bill and Hillary Clinton in gold and diamond necklaces, bracelets and earrings - $12,000 in gifts in all.
In addition, Arafat gave former Secretary of State Madeleine Albright jewelry worth $17,400, according to this week's New York Observer, which also reports the gifts to the Clintons. The Clintons didn't take the gifts with them, so they were sent to the National Archives with other offerings from world leaders, said aides to the former president and Sen. Clinton (D-N.Y.). State Department spokesman Nick Griffith said he didn't know what happened to Arafat's gifts to Albright.
The Clintons were required to disclose all the gifts they kept when they left the White House - and the revelation that they tried to walk off with some gifts that were meant for the White House, not them personally, sparked a gifts-grab controversy that prompted them to return some gifts.
On their disclosure forms, there weren't any gifts listed as having come from Arafat, the Palestinian leader who has been strongly criticized - nearly to the point of being ostracized - by President Bush for Mideast violence.
Arafat's Bank Robbery
Manfred and Anne Lehmann Foundation
The head of the International Christian Embassy in Jerusalem has publicized the details of the Arafat's gold heist, which was mentioned in an earlier column. He quotes from the book Inside the PLO (New York 1990) on how it took place: "Perhaps the PLO's biggest heist was the robbery, in early 1976, of the British Bank of the Middle East, which had its worldwide headquarters in Beirut.
On January 20 members of Force 17, under the command of Ali Hassan Salameh, occupied the bank by blasting through an exterior wall it shared with the Catholic Capuchin Church. Two days later a team of Corsican locksmiths and safecrackers hired by the PLO arrived in Beirut and were taken immediately to the bank, where they began work to crack the main vault. On January 24 they accomplished their mission and for the next two days looted all the money and valuables in the vault and the safe-deposit boxes. The main vault contained thousands of gold bars and millions of dollars in Lebanese and foreign currencies, as well as stock certificates and other valuables. The safe-deposit boxes were also loaded with currency, gold, jewelry, and stock certificates. So great was the volume of material carried out of the bank that it had to be hauled away in trucks. The loot was divided up, with the PLO keeping two-thirds and the Corsicans receiving one-third.
Once the job was completed, a chartered DC-3 landed at Beirut International Airport, and the Corsicans flew away with $200 million in gold, jewelry, and currency. Sometime in mid-March another chartered aircraft, a Bristol Britannia Series 300 four-engine turboprop, arrived in Beirut and was met by gunmen from Force 17. Under their watchful eyes, three truckloads of loot, worth close to $400 million, were loaded aboard the Britannia. In the early-morning hours, after all the loot had been loaded on board. Arafat, Abu Iyad, and Salameh arrived, and the plane departed for Geneva. The three men returned two days later on the same aircraft, after presumably depositing their loot in numbered Swiss bank accounts. Other secret accounts were maintained in Lebanon (Beirut), Cyprus (Nicosia), Greece (Athens), and West Germany (Dusseldorf).
In the following months the PLO sold many of the stocks and bonds found in the bank vault back in their original owners for 20 or 30 cents on the dollar. In many cases Arab governments and top officials were only too eager to buy back their assets since they had been illegally obtained in the first place, and disclosure of the fact that they possessed such large sums of money or owned companies doing business with their own governments would have been very embarrassing. So successful was the "fire sale" that in October 1976 a second shipment of funds and other valuables, worth an estimated $250 million, was sent to Switzerland. Once again Abu Iyad and Salameh were on board the chartered aircraft."
This report documents the initial source of Arafat's huge Swiss gold holdings. Those in Congress looking into whether to hand Arafat tax payers' money should be interested in this account.
Arafat's Book-Keeping Department Yields Bill Linking Him to Terrorists
Arafat, PLO and the Palestinian Authority's Money - Israel's War Against Terror - The Palestinian Side_files/money1.jpeg
Arafat, PLO and the Palestinian Authority's Money - Israel's War Against Terror - The Palestinian Side_files/money1.jpeg
This piece of correspondence was discovered by Israeli troops who went through the files in Yasser Arafat's personal accounting department in Ramallah. It is an itemized bill signed by the Al Aqsa Martyrs Brigades - Palestine, and dated September 16, 2001, exactly five days after the September 11 suicide attacks in the United States.
The document is a routine request for Arafat to approve the daily outlay for the arming of suicides with explosives and ammo, their memorial ceremonies and funeral posters.
It is part of the body of evidence Israeli troops gleaned at Arafat's headquarters in Ramallah and demonstrates that Arafat supervised every last detail of the Palestinian suicide offensive.
Translation into English:
Arafat, PLO and the Palestinian Authority's Money - Israel's War Against Terror - The Palestinian Side_files/money2.jpeg
Arafat, PLO and the Palestinian Authority's Money - Israel's War Against Terror - The Palestinian Side_files/money2.jpeg
Cost of posters for Martyrs of the al Aqsa Martyrs Brigades: Azam Mazhar, Osama Juabra, Shadi Afouri, Yasser Badawi, Ahad Fares (inserted by hand: NIS2,000).
Cost of printed notices, invitations and mourners' tents (inserted by hand: NIS1,250.
Cost of attaching personal photos of these martyrs to wooden panels, plus those of Tabeth Tabeth and Mahmoud al Jamil (inserted by hand: NIS1,000).
Cost of memorial ceremonies for martyrs. Memorial ceremonies held for Martyr Azam, Martyr Osama (inserted by hand: NIS6,000)
Cost of electrical goods and miscellaneous chemical substances (for manufacturing explosives and bombs - the largest item. (One prepared explosive device - NIS700 at least) We need 5-9 devices per week for the squads in the different regions (inserted by hand: NIS x 4 = NIS20,000 per month)
Cost of bullets (cost of Kalashnikov ammo is NIS -8 per bullet; M-16 bullets cost NIS2-2.5 each) We need bullets supplied on a daily basis.
Note: Available are 3,000 Kalashnikov bullets @ NIS2 each. We need a sum of money at once to buy them (inserted by hand: NIS22,500 for Kalashnikov bullets - NIS60,000 for M-16 bullets)
In conclusion, glory and pride to those who support our brave resistance against the occupation. Revolution until victory.
Cause to spurn PA money pleas (22.2.2001)
Kenneth R. Timmerman,The Washington Times
In October 1999, I had the opportunity to return to Gaza and the West Bank for Reader's Digest, to research a story on how the Palestinian Authority under Yasser Arafat was spending U.S. taxpayer dollars it received in aid.
After scores of interviews with PA officials, legislators, international aid workers and diplomats, as well as with past and present Israeli officials immersed in the day-to-day financial exchanges with the PA, the story that emerged with stunning clarity was one of monumental corruption.
Mr. Arafat, his wife and a coterie of close advisors, were personally pocketing hundreds of millions of dollars each year in tax transfers and kickbacks from state-controlled monopoly import contracts on virtually every basic commodity needed in Gaza and the West Bank.
Customs revenues booked by Israel on foreign goods transiting through Israel to the PA were transferred to a private bank account at the Bank Leumi in Tel Aviv that was opened in Mr. Arafat's name and controlled by his personal financial adviser, Mohammad Rashid.
Israeli officials knew Mr. Arafat was transferring funds from this and other accounts under his personal control to terrorist training camps in Lebanon - not to starving children in Gaza, or to building schools and roads in the West Bank. And yet, Prime Minister Ehud Barak and his government did nothing to prevent the money transfers, considering them to be the price of "peace" with Mr. Arafat. On Feb. 6, Israeli voters tossed Mr. Barak out of office by a landslide.
United Nations Middle East envoy Terje Roed Larsen will be in Washington this week, to plead with the Bush administration to pour more U.S. taxpayer dollars into the leaking boat of Mr. Arafat's Palestinian Authority.
"The Palestinian Authority in just a few weeks will not be able to pay its salaries, which as an effect may lead to the collapse of key Palestinian institutions, which might lead to chaos and anarchy in Palestinian areas," Mr. Larsen told reporters in New York last Friday.
Until now, many wealthy Palestinian investors have shunned putting their money into Gaza or the West Bank, for fear of Mr. Arafat's corrupt ways. Those who have come - such as the family of U.S.-based Palestinian businessman Hani al-Masri - have cushioned their investments with hefty doses of political protection, by putting family members in Mr. Arafat's Cabinet and arranging for U.S. taxpayer-funded guarantees through the Overseas Private Investment Corp.
In October 1999, a $10 million contract to rebuild the central bus station in the West Bank city of Al Bira was awarded to an al-Masri family business without competing bids or an outside evaluation of what the project should cost. An investigation by the Palestinian Legislative Council into alleged corruption was shut down on Mr. Arafat's orders last year. Legislators who complained of Mr. Arafat's actions were thrown in jail.
And that is just a trifling example of what goes on. Al-Masri's corporate empire, known as the Palestine Development and Investment Ltd., PADICO, owns a controlling interest in the fledging Palestinian stock exchange, the country's telephone company, the electric company, and two tourism companies. It is also the only company licensed by Mr. Arafat's regime to build projects financed by World Bank, USAID and European Union loans.
Mr. Larsen hopes to meet with Deputy Secretary of State Richard Armitage this week in Washington. While Mr. Larsen has a great deal of credibility with journalists and has spent years on the ground, Mr. Armitage should listen politely to his pleas, then show him the door.
Before the United States dips into the taxpayer's purse to bail out the Palestinian Authority, Mr. Arafat should take out his own purse. And before he cries poor mouth to the bleeding hearts in Europe again, he might dip into the billions of dollars he has salted away in Swiss bank accounts over the years and use them for the benefit of his people, instead of building new palaces for himself and his family.
Kenneth R. Timmerman is a senior writer for Insight magazine and a specialist on the Middle East.
And a Thief, Too- Yasser Arafat takes what he likes (27.7.02)
By Rachel Ehrenfeld,
President Bush's call to change the Palestinian leadership and to bring reform, accountability, and transparency to the Palestinian Authority should focus attention on the financial corruption of Arafat's regime. Before Bush's speech, Condoleezza Rice, the national security adviser, accurately summed up the situation in the San Jose Mercury News: "Frankly, the Palestinian Authority, which is corrupt and cavorts with terror, ... is not the basis for a Palestinian state moving forward." Judging by the response of Yasser Arafat and his lieutenants, however, no such change is likely anytime soon.
How corrupt is the PA? How much money have Arafat et al. stashed away? Where did the money come from? How long have we known about it?
The first public evidence that Arafat's Palestine Liberation Organization had at least $10 billion came to light when the Pakistani-owned rogue Bank of Credit and Commerce International was shut down by the Bank of England on July 5, 1991. Britain's National Criminal Intelligence Service (NCIS) published its own estimate of the PLO's loot in a 1993 briefing paper on organizations threatening the UK, calling it "the richest of all terrorist organizations." NCIS estimated the PLO's ill-gotten gains at $8-10 billion. In addition, the PLO enjoyed an annual income of about $1.5-2 billion from "do nations, extortion, payoffs, illegal arms dealing, drug trafficking, money laundering, fraud, etc."
In the U.S., the General Accounting Office investigation of Arafat and the PA's wealth in November 1995 was kept secret because the CIA insisted that the publicity would hurt the "national security interest." This despite the CIA's own report in 1990 that the PLO had $8-14 billion.
Then came the Oslo accords. Following the 1993 ceremony on the White House lawn, Arafat pleaded poverty and set out, hat in hand, on a world aid tour, claiming that the peace process would collapse without financial support from the international community.
Exactly how much money Arafat and his gang have pocketed is hard to ascertain. But the conspicuous consumption of Arafat and his inner circle - rows of ostentatious villas, shopping sprees in Paris, and late-model Mercedes-Benzes - has not gone unnoticed by ordinary Palestinians, who live in dismal conditions.
When $326 million disappeared from PA coffers in 1996, the Palestinian Legislative Council established a special commission to investigate corruption within the PA. The ensuing report found that nearly 40 percent of the PA's $800 million annual budget (coming mostly from foreign aid) had been lost through corruption and mismanagement. The PA's comptroller wrote: "The overall picture is one of a Mafia-style government, where the main point of being in public office is to get rich quick." Arafat suppressed the report but promised reform.
In October 1999, Azmi Shuaibi, chairman of the PLC's Budget Committee, had harsh words for the PA at the 9th International Anti-Corruption Conference in Durban, South Africa: "The recent corruption found in the PA is similar to the corruption that exists in the rest of the Arab countries' governments."
Soon after, the London Daily Telegraph revealed that computer hackers had broken the security code of the PLO's computer system, uncovering records of about $8 billion the PLO held in numbered bank accounts in New York, Geneva, and Zurich, and smaller secret accounts in North Africa, Europe, and Asia. The newspaper also unearthed further secret holdings of the PLO - including front companies, European real estate, and shares in Mercedes-Benz and the national airlines of the Maldives and Guinea-Bissau - totaling about $50 billion for the year 2000 (up from $32 billion recorded in 1998). Naturally, Arafat and his men denied the report.
Ongoing demonstrations by disgruntled Palestinians frustrated with this corruption convinced Arafat that his rule was becoming shaky. It was in large measure to deflect internal turmoil that he launched the intifada.
In 2000, Arab countries pledged $1 billion to the PA to ease the economic hardship of the Palestinians. Past dealings with Arafat, however, prompted them to demand that "Chairman Arafat show complete transparency in the funds" and provide a detailed report on how the money would be spent. Arafat refused to comply, and the Arab leaders suspended transfer of the money, telling the PLO chairman that they were doing so "for fear that the money will end up in the wrong pockets."
By April 2001, however, things had changed: Arab donor countries, recognizing in Arafat's intifada a convenient distraction from their own countries' problems, began pumping money again into the PA. At least $45 million per month was transferred directly to Arafat, most notably from the Saudis and Saddam Hussein. This money was not given to alleviate the suffering of the Palestinian people, but to fund PLO terrorist training and organizations, such as Islamic Jihad and the al Aqsa Martyrs Brigades. Recently, the monthly donations from Arab nations were increased to $55 million, in addition to the hundreds of millions of dollars raised in special events to fund the escalating intifada, such as the now infamous Saudi telethon to raise money for the families of Palestinian homicide bombers.
Money flows in from the European Union, too. Despite voluminous evidence of use of aid money to fund terrorism collected by the Israeli Defense Forces at Arafat's compound in Ramallah - including handwritten instructions from Arafat himself - millions of dollars continue to pour in from the EU. Why? Chris Patten, the EU commissioner, wrote on May 7 that "the EU had not seen any hard evidence that the EU funds have been misused to finance terrorism or for any other purpose."
"Arafat Bombs, Europe Pays" was the headline of the German newspaper Die Zeit on June 7. The newspaper's special investigation into EU funding revealed that at least 4.1 billion euros have flowed from the EU to the PA since the autumn of 1993, in addition to hundreds of millions of euros in grants contributed by individual European countries. When the Israelis stopped transferring the PA's share of revenues from import duties after realizing where the money was going, the EU stepped in to replace those funds. Each month since June 2001, 10 million euros have been paid directly to Arafat.
Die Zeit reported that a few European legislators called for an end to the funding for fear that the money was being used to fund terrorism. But Chris Patten dismissed these concerns, praising "Europe's especially strict mechanisms for ex-ante and ex-post controls." Not even the interception of the illegal arms shipment from Iran on the Karine-A fazed EU bureaucrats. So, the financial umbilical cord from Europe to the PA remains, and the IMF representative charged with monitoring how the funds are used admits that "we do not oversee how every euro is spent, because we are not auditors."
On June 19, following a slew of homicide bombings by Arafat's al Aqsa Martyrs Brigades, the EU parliament voted to give an additional $17.7 million to the PA. According to the Associated Press, "Patten conceded that corruption in Yasser Arafat's Palestinian Authority and other problems made it impossible to know where every euro finally ended up [because] 'it's an impossible question to ask in the real world.'"
But perhaps some in the Arab world have had enough. On June 5, the Kuwaiti daily Al-Watan published documents it received from a Cairo branch of a Middle Eastern bank showing that Arafat had deposited $5.1 million into his personal account - to support his wife and daughter, who live in Paris and Switzerland. According to the same report, the money came from Arab aid funds that had been allocated for the Palestinian people.
By now, EU aid to Arafat and the PA has reached at least $4.5-5 billion. U.S. aid to the PA runs about $75 million annually, not including the millions of dollars sent each year from private sources. Corruption is rife, and today the Palestinians are further away from democracy than ever before. As long as Arafat controls the PA's funds and he and his gang remain in power, no real reform is possible.
Dr. Rachel Ehrenfeld is the Director of the Manhattan based Center for the Study of Corruption & the Rule of Law, and the author of the forthcoming book: "Funding Evil; Follow the Money Trail" (Bonus Books).
Shameless in Gaza (27.4.97)
By David Hirst, The Guardian Weekly
Gaza is the most conservative of Palestinian communities; its Islamist militants once set fire to a sea-front hotel, a restaurant and other such dens of iniquity.
So imagine the pious horror at the opening of Gaza's first and only nightclub.
On a Thursday evening of the Muslim weekend, I found the Zahra al-Mada'in, the Flower of the Cities, packed almost to capacity,not just with lonely young men come to admire Gaza's first belly dancers and songstresses -- locally recruited gypsies -- but with entire families, women, children and even a babe-in-arms.
In other smart or risque places, you can add illicit liquor to yourCoca-Cola, but here -- in another Gazan first -- you can order your scotch or your Israeli Maccabee beer on the very premises. However the oddest thing is not so much the place, but the clientele: they are mainly "Tunisians", not Gazans at all.
Tunis was Yasser Arafat's last headquarters in exile, and "the Tunisians" is a nickname which Gazans gave to those, officially known as "returnees", who came with him when, following the Oslo accord he established himself here instead. There are about 10,000 of them, bureaucrats who run his Palestinian Authority, former guerrillas who dominate his enormous security apparatus."
"The Tunisians" have " come home" to the soil of Palestine itself. But the terrible irony is that they are not merely strangers in their own land, they are for the most part disliked, despised, even hated. It is they who introduced such abominations as Zahra al-Mada'in.
But it is not just Hamas and Islamic Jihad, or bigots in general, who feel the shock. Liberals who welcome any challenge to the dour local mores feel it too. For almost everyone, "the Tunisians" are as alien, as unfit to rule, as those-- Turks, British, Egyptians, Israelis -- who came before them. And because they are actually Palestinians, and came as "liberators", the shock is even worse. Arafat's Palestine Revolution never made itself very popular, among governments, elites or even ordinary people of the territories it passed through.
But at least in Jordan, in the sixties, its men truly fought and died. So --though with less purpose or conviction -- did they in Lebanon in the seventies and eighties. Obviously, during the eighties and nineties, they could not fight from Tunis, and other far-flung Arab countries in which they fetched up, but at least, as members of the world's richest liberation movement, they continued to pump money into local economies.
Here, in the homeland itself, far from fighting the former Zionist foe, they lead the collaboration with it. They may attract money -- in the form of international aid -- to this poorest of Palestinian communities, but they take at least as much away from it. They are oppressive -- and immeasurably corrupt."
We live in amazing, shameful times," said one of Gaza's merchant princes, and a former Fatah fighter himself, "but you should know that every revolution has its fighters, thinkers and profiteers. Our fighters have been killed, our thinkers assassinated, and all we have left are the profiteers. These don't think even primarily of the cause, they don't think about it at all. They know that they are just transients here, as they were in Tunis, and, as with any regime whose end is near, they think only of profiting from it while they can."
This is a damning indictment, but if any system can be measured by the conduct of its bureaucrats it is a fair one. In fact, the justice of it hits even a casual visitor in the eye. Just go to the district of Rimal. Rimal means "sand", and on this former wasteland there is now arising, at incredible speed, the most up-market neighbourhood of "liberated" Gaza.
You might not think it at first sight; a sand-smothered, refuse-strewn mess of empty lots amid shacks that are disappearing and half-finished concrete monsters that are taking their place, it differs little in spirit from the rest of this desolate, infinitely decrepit and unsightly city.
But it is mainly here that "the Tunisians" have taken root, with their amazing array of "ministries", "authorities" and special "agencies", police stations and sentry posts, choice rooftop apartments, villas and places of entertainment. Here is Arafat's own sea-front bureau -- al-Muntada, The Club -- with all the "presidential" trappings he so adores, and here in the very next building, is the Zahra al-Mada'in cabaret.
Here you will sooner or later run into Suha, his young wife, out for lunch at Le Mirage, an exclusive sea-front restaurant, with her infant daughter and a posse of Force-17 bodyguards. You will run into her, at least, when she is not in Paris, where she does her shopping and can find a decent hairdresser, unlike the first, disastrous Gazan one, who reportedly turned her blondelocks almost orange.
And you are bound to come across Susie, her ample British nanny who affects leopard-skin tights and often has too much to drink, a condition in which she is apt to dispense indiscretions about the presidential household, threatening, some fear, another Middle Eastern nanny scandal of Netanyahu's proportions.
Among the fancy new villas, fanciest is that of Abu Mazen, key negotiator of the ill-fated Oslo accord. It is not clear who paid for this $2 million-plus affair, all balconies and balustrades in gothic profusion, but the graffiti which some irreverent scoundrel scrawled on its wall proclaimed that "this is your reward for selling Palestine".
Lifestyles match. Nabil Shaath, the highly articulate minister of planning much seen on Western TV screens, recently took a wife young enough to be his daughter. He required four receptions to celebrate this event, in Cairo, Gaza -- and two in Jerusalem. Because his Israeli friends could not go to the one in East Jerusalem's Orient House, that "illegal" outpost of the Palestinian Authority, he had another in the Ambassador Hotel.
For salutary contrast with Rimal, just stroll up the coast where, just beyond Le Mirage, you will come upon the awful squalor and open sewers of the Shati' refugee camp, conditions resembling those n which most Gazans live.
There, in a windowless concrete block they call "the cafe", I asked some day labourers, idled by yet another Israeli border closure, whether they thought that Gaza's per capita income, far from rising, had actually fallen by as much as 39 per cent since the Oslo accord. For that is what a recent UN survey says. "More like 75 per cent," one replied. "some no longer think it a shame to send their children out to beg." That also seems to be borne out by the UN report, which records an "alarming" increase in "child labour".
More shocking, really, than the contrast itself is what lies behind it. When he first came here, Arafat said he would turn Gaza into a "new Singapore". Palestinian businessmen, who made their fortunes building the Arab oil states, would help him build his.
But, three years on, it is clear that none will seriously touch it. Not just the Israelis deter them, with their repeated frontier closures that bedevil businessmen as well as workers In truth, Arafat does not want them either. For they would undermine his control, achieved through a combination of police surveillance and money power. So instead of any kind of independent, creative, wealth-producing capitalism, he and his coterie of unofficial economic "advisers" have thrown up a ramshackle, nepotistic edifice of monopoly, racketeering and naked extortion that enriches them as it further impoverishes society at large.
Two years ago, the al-Bahr company barely existed. Al-Bahr means "sea". But Gazans now dub it "the ocean", because, they say, "it is swallowing Gaza whole". Legally speaking, not being officially registered, it should not be operating at all. Yet it is so brazen about its powerful connections that -- to the impotent indignation of the Palestinian "parliament" -- it even uses the Authority's letter heads. It belongs to Arafat, or, more precisely, to his wife Suha and the other "shareholders" who handle his private finances. Al-Bahr -- who else? -- runs the Zahra al-Mada'in nightclub. The premises were supposed to go by open tender to the most qualified bidder. But Arafat just signed a decree placing it in his protege's hands. It is never by fair, and often by quite foul, means that Arafat incorporated moves into real estate, entertainment, computers, advertising, medicine, insurance. Only the most powerful Gazan businessmen can resist its encroachments. It goes chiefly after small and medium fry. These are pressed into "partnership" with al-Bahr.
Al-Bahr is the new, strictly domestic instrument of Arafat's takeover of the Gazan economy. It complements already existing monopolies, for the import of such basic commodities as cement, petrol or flour, which he operates in complicity with the Israelis. For example, out of the $74 for which a ton of cement is sold in Gaza, $17 goes to the Authority, and $17 into his own account in a Tel Aviv bank.
It is no secret what Arafat uses this money for. "I shall give you all you want if you obey and protect me -- and give me all I want." That has always been his message to his nomenklatura, and it has been amazingly successful. For what resistance can be expected from an apparatus whose minister of civil affairs, Jamil Tarifi, a big contractor, goes on building Israeli settlements even as the Palestinian people threaten a new intifada over Har Homa? Or whose high officials use their VIP cars to sail through Israeli checkpoints on their way to the fleshpots of Tel Aviv even as Israel!i border closures rob day labourers of their menial wage?
Rarely can a revolution have degenerated like Arafat's -- and yet survived. It only survives because, in robbing his people to bribe his buraucrats, he has proved so great a commitment to the peace process that the parties on which he now completely depends -- Israelis, Americans, the international community at large -- are willing to ignore, even encourage, his manifest corruptions. The Israelis may be embarrassed by the latest, scandalous revelations of their leading newspaper, Ha'aretz, about the Arafat slush fund that the great peace-maker, Yitzhak Rabin, authorised. But so long as Arafat goes on bending to their conception of the peace, they will go on letting him draw on it.
European governments would be far more embarrassed if it were established that Arafat really does earn far more from al-Bahr and his illicit monopolies than from all their aid combined. But unless the scandal becomes too great, they will go on paying too. But they delude themselves if they think that they can go on propping him up forever. And in this regard, it seems, Arafat and his "Tunisians" are more clear-headed than they are. They know that there is a point beyond which even he cannot go without risking his people's wrath.
Small wonder then that, according to Ha'aretz, a part of Arafat's secret fund is earmarked for "emergency situations", such as a coup or a civil war, in which he, his family and immediate entourage could be forced to flee into exile once more, and re-establish the leadership from there. They know, better than anyone, that the peace process, and all they get out of it, is built, like the Zahra a M ada'in, on nothing more solid than the fine white, powdery sands of Rimal.
Arafat 'Diverted $300m of Public Money to Swiss Bank Account'
By Inigo Gilmore
November 9, 2003
More than $300 million (£176 million) of Palestinian Authority funds were diverted by Yasser Arafat into a previously undisclosed Swiss bank account and the money can no longer be traced, according to a damning American television report to be broadcast today. The CBS network's 60 Minutes, a respected investigative programme, claims that missing Palestinian funds were held in Switzerland in an account set up in the name of a British Virgin Island company. The account has since been closed.
The revelation follows the disclosure by the International Monetary Fund in September that Mr Arafat had diverted more than £560 million of Palestinian Authority funds from 1995 to 2000. The new report coincides with a BBC documentary, also to be screened tonight, which claims the Palestinian Authority is paying members of the al-Aqsa Martyrs' Brigades, an armed militia responsible for carrying out suicide attacks against Israelis, up to $50,000 (£29,000) a month.
The BBC will quote a former Palestinian cabinet minister claiming that the money was intended to wean the gunmen away from suicide bombings. But an al-Aqsa leader interviewed by the BBC said that despite the payments, the group had not declared a formal ceasefire and Mr Arafat had not asked it to stop the suicide bombings. Details about the two potentially damaging reports emerged yesterday as the Palestinian prime minister, Ahmed Qureia, announced that Mr Arafat had agreed to divide responsibility for security between the interior ministry and the national security council. The deal clears the way for the formation of a new Palestinian government.
The CBS programme reports that $300 million of Palestinian money was channelled into a private account at the Lombard Odier Bank in Geneva. The account was closed in 2001, and the report says that it is unclear where the funds are now. Some of the money was tax refunds from the Israeli government to the Palestinian Authority for duty levied on imports destined for the Palestinian-run areas - all of which must enter through Israeli ports. Mr Arafat's "economics adviser" Mohammed Rashid asked Israel to pay fuel taxes to a secret account opened in 1994 at Bank Leumi in Tel Aviv, over which he and Mr Arafat had sole signing authority.
Investigators believe that some funds from this account were channelled into the Swiss account. A letter written by Mr Rashid and obtained by CBS states that the Swiss account would draw on revenue from Palestinian "taxes" and "customs" levies. CBS claims that $300 million was in fact sent to the Swiss bank. With the help of an Israeli businessman, Mr Rashid apparently opened the account at Lombard Odier in Geneva in the name of a UK-registered company.
In the programme Mr Rashid tells Lesley Stahl, the 60 Minutes reporter: "I don't decide what we do with the money." Ms Stahl asks him "why Arafat did not bring the money back" to help benefit the Palestinian people. Mr Rashid replies: "Why don't you ask him?" There is no suggestion that either Mr Arafat or Mr Rashid has personally benefited from Palestinian Authority funds.
The IMF issued a report in September which said Mr Arafat, in a five-year period between 1995 and 2000, diverted £560 million from the Palestinian Authority budget into the special bank account at Bank Leumi. Mr Arafat's chaotic handling of Palestinian finances has long been condemned and he was forced to agree to more rigorous auditing after foreign donors threatened to withhold promised funds.
The IMF statement followed the first authoritative investigation of the Palestinian body's finances. Salam Fayad, the new finance minister and a former World Bank official, is working with a team of American accountants to unravel the finances. Of the money sent to accounts controlled by Mr Arafat and Mr Rashid, the IMF said $700 million had been accounted for and was in investments held by the Authority. Officials admitted that there was a gap of at least $200 million which they suggested may represent a decline in investment value, rather than a further diversion of money by Mr Arafat.
In the programme Mr Fayad sheds light on Mr Arafat's extensive system of patronage, claiming that the Palestinian leader hands out $20 million a month to his security forces in cash. However, Mr Fayad says: "There is corruption out there. There is impropriety, and that's what had to be fixed." A senior Palestinian official refused to comment on the claims but said: "It is a shame that CBS focused on allegations of corruption rather than Israel's ongoing military occupation of Palestinian lands."
Where Does the Money Go? A Study of the Palestinian Authority, October 2002
Dr. Rachel Ehrenfeld, American Center for Democracy, New York City
Commissioned by B’nai B’rith Europe
The Palestinian Authority: Where Does the Money Go?. 3
The PLO.. 3
The PA. 4
Funding to the PA from International Donors. 5
Funding to the PA from Crime and corruption. 6
Major Sources of the PA’s Illegal Revenues. 7
International Aid Directed to Terror 11
Arafat’s Personal Involvement in Funding Terrorism.. 14
Additional Unacceptable Activities Funded by the PA. 14
Fostering Hate in Schools. 14
Examples from Palestinian Textbooks. 14
Hate Propaganda. 15
The study reported in this document was commissioned by B’nai B’rith Europe.
The author, Rachel Ehrenfeld, PhD, is director of the American Center for Democracy (ACD) (previously the Center for the Study of Corruption and the Rule of Law). She is an acknowledged expert on corruption, money laundering, transnational organized crime, international terrorism, drug trafficking, and substance abuse. Dr Ehrenfeld is the author of Evil Money (HarperCollins, 1992; SPI paperback edition, 1994) and Narco-Terrorism (Basic Books, 1990; reissued in paperback in 1992). Her forthcoming book, Funding Evil, will be published in 2003.
This report could not have been written without the help of Mr Ilan Weinglass.
Copyright © Rachel Ehrenfeld 2002. All rights reserved.
The Palestinian Authority: Where Does the Money Go?
The following is an examination of how the PA, led by Yasser Arafat, has systemically and systematically used corruption and crime, and diverted funds donated for the development of the Palestinian state, to fund terrorism and to enrich its leadership.
In the efforts to stop terrorist financing, the US and international law enforcement agencies might do well to examine how it evolved. The model is hardly new. In fact it dates back more than three decades, and is the prototype for many of today's terrorist organizations: the Palestine Liberation Organization (PLO).
The PLO was classified as a terrorist organization from its inception in 1964 until the Oslo Accords in 1993. Yet, throughout this entire time, it continued to receive financial and political support from the Soviet Union and its satellites in Europe, Latin America and Africa, and from members of the Arab League, as well as other Third World countries. This legitimization, and the accompanying financial backing, allowed the PLO not only to continue its terrorism and criminal activities with impunity, but also allowed the organization to fund a world-wide propaganda campaign, win great popularity and increase its influence.
The PLO used drug trafficking, arms smuggling, money laundering and counterfeiting to amass a fortune estimated by the British National Criminal Intelligence Services (in 1993 & 1994) at about $10 billion. Its connections with international criminal organizations, drug cartels, other terrorists groups and every rogue state, from Libya, Iran and Iraq, to North Korea and the Sudan, set the pattern for others to follow. The PLO's transformation into the Palestinian Authority (PA) in 1993, as a result of the Oslo Accords, did not impede the organization's illegal activities. On the contrary, it enhanced them. As the whole world gave the PA legitimacy, it abused this status to expand its illegal activities.
With the current intifada, the PA has undergone another change, incorporating religion into its political rhetoric and adding jihad to its agenda. As a result, the PA gained even more support financially and politically within the Arab/Muslim world, much as al Qaeda did later. According to a soon to be published report, in 2001, the first year of the current intifada, the amount of money officially donated to the PA jumped 80%, from US $555 million to US $1.002 billion. Gil Feiler, forthcoming report, Info-Prod Research.
Often “political priorities”, along with corruption and hypocrisy all over the world, have made illicit funds easy to launder and to hide. Such had been the case with funds for terrorism. Off- shore banking centers from Monaco, Nauru and Cyprus to Hong Kong and the Bahamas, as well as major international financial organizations, were used not only to launder the money, but also to invest it. At the forefront of the money laundering activities was the PLO.
Historically, the PLO has had nine principal sources of income:
- Official contributions from Arab states.
- The Palestinian Liberation Tax Fund, a 5% tax of every Palestinian’s income.
- Income from legitimate and illegitimate investments.
- Donations from wealthy Palestinians and international organizations such as the UN and the EU.
- Extortion of "protection" charges from companies and states to not use terrorist activities against them.
- Charitable organizations, such as are now used by al-Qaeda, Hamas, and Hizballah.
- Illegal arms deals.
- Fraud, money laundering, counterfeiting, and other criminal activities.
- Drug trafficking.
The use of drug trafficking as a tool to fund terrorism was developed by the former Soviet Union as part of its unconventional warfare doctrine. The PLO simply adopted this use of drug trafficking as an excellent source of funding. Other terrorist organizations, such as the IRA, the Basque ETA, the Colombian FARC, and radical Muslim organizations like Hamas, Hizballah and al-Qaeda, have understandably followed suit.
The official decision to use the drug trade for funding was made under the chairmanship of Yasser Arafat in 1983, six months after the PLO was expelled from Lebanon, at a secret emergency session of the Finance Committee in Algiers. As stated by Sallah Dabbagh, then PLO treasury chief, “...the entire future of the PLO operation for liberation may hinge on our exporting more drugs throughout the world”.
For decades, the West has turned a blind eye to the PLO’s fundraising endeavors, allowing the PLO to continue operating both legitimate and illegitimate businesses. These ventures, in turn, laundered money for the organization, which used the revenues to further the PLO's terrorist agenda. This established a precedent that surely did not escape bin Laden when he set out to create the financial infrastructure of al Qaeda. Indeed, U.S. and British law enforcement agencies have detailed by now how the al Qaeda organization has also been reaping huge profits from the illicit drug trade and other criminal activities. Just last month, U.S. authorities presented evidence that illegal drugs operations within the U.S. were funding a host of Middle East terror organizations linked to Palestinian groups and al Qaeda.
Clearly, the PLO and its successor, the PA, have played an indispensable role in creating the financial model for today's terrorist organizations. Close examination of the methods and institutions that account for the PLO’s success can help us to better track how al Qaeda and other terrorist organizations operate financially. More importantly, it can ensure that history will not repeat itself - unless we let it.
The Palestinian Authority’s leadership and its chairman Yasser Arafat sponsor terrorism. It uses funds from its salary budget, EUR 10 million each month, to do it.
- The PA has deliberately sent money (from its EU-aided salary account, among other sources) to individuals and groups involved in terrorism;
- The EU’s denials of this do not stand up to scrutiny;
- According to the EU’s own statements, it should cease aiding the PA.
The corruption of the PA was known for a long time. In October 1999, Azmi Shuaibi, chairman of the Palestinian Legislative Council Budget Committee, had harsh words for the PA at the 9th International Anti-Corruption Conference in Durban, South Africa: “The recent corruption found in the PA is similar to the corruption that exists in the rest of the Arab countries’ governments.” Azmi Shaibi, “Elements of Corruption in the Middle East and North Africa, the Palestinian Case,” the 9th International Anti-Corruption Conference, Durban, South Africa, October 1999.
This was finally acknowledged by President Bush when he called to change the Palestinian leadership and to bring reform, accountability, and transparency to the Palestinian Authority.
] Condoleezza Rice, the national security adviser, accurately summed up the situation in the San Jose Mercury News: “Frankly, the Palestinian Authority, which is corrupt and cavorts with terror... is not the basis for a Palestinian state moving forward.”
The funding of the PA is based on two sources:
- International donors
- Crime and corruption
Funding to the PA from International Donors
The Palestinian Ministry of Planning and International Cooperation (MOPIC) 2001 1st and 2nd Quarterly Monitoring Report of Donor’s Assistance, which is current as of June 30, 2001, cites receipts to date from donors of $3,392,634,000. That is 66% of the $6.1B promised. (Palestinian Ministry of Planning and International Cooperation, Aid Coordination Department, MOPIC’s 2001 First and Second Quarterly Monitoring Report of Donors’ Assistance, 2001)
The Arab States donated $45 million per month from April 2001- April 2002 and $55 million per month since then. Further documents show that the EU has donated EUR 10 million a month since June 2001, (IDF Document: International Financial Aid to the Palestinian Authority Redirected to Terrorist Elements, 10 May 2002, page 2.)
…which together add $806 million, for a total of $4,198,634,000. This figure is the absolute minimum that can be documented according to the most recently available public sources. This amount does not take into account the amount of international aid from sources besides the EU and Arab States subsequent to -June 30, 2001. There is no readily available data on the scope of this aid. However, it is estimated to be in the $400 – 500 million range, consistent with the yearly average and range given in the Palestinian Ministry of Planning and International Cooperation report.
Based on all available documents, a very low estimate of $4.5B was donated to the PA since the Oslo Accords. (IDF Document: International Financial Aid to the Palestinian Authority Redirected to Terrorist Elements, 10 May 2002, page 2.)
This figure does not include aid to UNRWA (United Nations Relief and Work Agency), examined below.
Table 1 Year-by-Year Data, According to the Palestinian Ministry of Planning and International Cooperation (Since 1998) [Thousands of US Dollars]
However, there are independent sources, such as Info-Prod, an economic research center, that provide a different account, maintaining that the PA has received a much larger sum.
Info-Prod’s figures are as follows (in thousands of dollars): (“Donor Funding for the Palestinian Authorities, 1998-2001, Info-Prod document.)
Table 2 Year-by-Year Data, According to Info-Prod [Thousands of US Dollars]
The 2001 figure is an 80% increase over 2000. These sums do not include UNRWA figures.
A partial breakdown for 2001 is:
- US: $114 million
- EU: $250 million
- Arab States: $400 million
Info-Prod’s figures detail $4,466,868,000 through the end of 2001. Based on these figures, and taking into account the known scope of EU and Arab Aid to the PA (EUR 10 million per month from the EU, and 45 million per month until April 2002 then 55 million per month from the Arab states), a minimum of $4,938,868,000 was given to the PA by the end of August 2002.
Following the Oslo Accords, donations from the EU included demands for accountability. Similar demands were attached to the EU’s direct budgetary assistance following the intifada. However, despite ostensible EU claims to the contrary, no real efforts to monitor how the money was spent has ever taken place. “”Everybody has known for quite some time that money ended up in the wrong hands”[8  “Diplomats Say EU knew Palestinians Misappropriated Cash to Finance Terrorism,” (Rotterdam NRC Handelsblad (In Dutch), May 8, 2002 #2005)
Noted an EU diplomat. The EU claims that the IMF ostensibly monitors the PA budget. This claim, however, is contradicted by the IMF statement that “the Fund has not been monitoring spending under individual budget lines nor can it ascertain whether a particular spending commitment has been actually disbursed for the reported purpose. This is an auditing function that goes beyond the fund’s present mandate.” (International Monetary Fund, “The Palestinian Authority’s Fiscal Situation, Policies, and Prospects,” Statement by Fund Staff Representative to the Ad Hoc Liaison Committee Committee Meeting, April 25, 2002, p. 8.)
Nor was there ever any reason to expect that the PA would meet any demands for accountability, in light of the fact that Yasser Arafat declared as early as July 1994:
“I refused and I will never accept!” Arafat said of the conditions imposed for economic aid. “I completely refuse any controls by anybody on Palestinian Autonomy, except the Palestinians themselves. We didn’t finish military occupation to get economic occupation” (David Hoffman, “Arafat Denounces Conditions Imposed on Foreign Aid”, Washington Post Foreign Serivice, July 2, 1994.)
Clearly, the international donor community did not take Arafat at his word. This follows the same school of thought that holds that he does not really mean it when he calls for suicide bombing and Jihad.
The US has given $548,766,000 in direct aid to the PA, according to Palestinian Ministry of Planning and International Cooperation figures (Palestinian Ministry of Planning and International Cooperation, Aid Coordination Department, MOPIC’s 2001 First and Second Quarterly Monitoring Report of Donors’ Assistance, 2001.)
…But the total sum, including the amount given through relief and development organizations, is $1.1B. (Vernon Silver, “Arafat’s new Finance Minister Hunts for His Boss’s Billions,” Bloomberg Markets, September.)
In addition, following the 1998 Wye River Memorandum, the CIA has been training the Palestinian Authority Security Services. (Douglas Waller, “Coming in from the Cold,” Time Magazine, November 2, 1998.)
The budget for this is unknown, though in September 2002, an additional $20 million has been allocated for an ostensible reform of the Palestinian security services. (Amira Hass, “CIA begins training Palestinian officers,” Haaretz, September 17, 2002.)
Clearly, previous attempts to create a law-abiding security force for the Palestinian people have utterly failed. One hopes that this time better selection methods are being implemented to exclude the terrorists from the ranks of the PA security forces.
2.The EU has donated EUR 1B in loans and grants to the PA. Its donations to UNRWA since 1994 total at least EUR 407 million. (Letter from Chris Patten to EU foreign ministers, May 7, 2002.)
In addition, EU member countries have donated at least $1,260,022,000, according to Palestinian Ministry of Planning and International Cooperation figures. All together, aid from Europe to the PA totals at least $2.52B. In addition to these amounts, the EU sends 2 – 5% of its donated sum for individual projects. ( “Donor Funding for the Palestinian Authorities, 1998-2001, Info-Prod document.)
The United Nations Relief and Work Agency (UNRWA): UNRWA is slated to have total disbursements of $521.7 million for 2002, ( http://www.un.org/unrwa/finances/index.html. The total amount of funds given to UNRWA since 1993 is not available on the UNRWA website.)
of which $110 million was to come from the US. The US has provided 30% of the UNRWA budget in recent years. (“AIPAC facts: UNWRA camps used as terrorist strongholds”
- The major increase by the Arab states followed a decision by the Arab League in October 2000. The money was sent through the Islamic Development Bank (IDB), and was transferred to the Palestinian Ministry of Finance.
Funding to the PA from Crime and Corruption
The total amount of money accumulated by the PLO from its inception has been estimated by several sources. A 1990 CIA report estimated that the PLO had between $8 – 14B in assets. (Rachel Ehrenfeld, “Down and out in Palestine,” Washington Times, March 15 2001.)
Two British National Criminal Intelligence Service (NCIS) reports, (1993 and 1994) estimated that “despite denials to the contrary, it is estimated that they [the PLO] have worldwide assets approaching $8-10 billion USD and an annual income of about $1.5-2 billion.” The report noted that the PLO was in fact the wealthiest of the world’s terrorist organizations. (1994 British National Criminal Intelligence Service Report, p. 28.)
The U.S. General Accounting Office performed an investigation into this matter in 1995, but its findings were kept secret, due to “national security reasons.” However, a source familiar with the investigation said that the report found that Arafat and the PLO indeed held “well over $10 billion is assets, even at a time when he was publicly claiming bankruptcy.” (Backgrounder: Corruption in the PLO’s Financial Empire, www.cdn-friends-icej.co/medigest/jul98/backgrnd.html.)
The assets the PLO held were an open secret. Yet, the PA was never asked to use the assets on behalf of the Palestinian people, and there was no demand to account for the whereabouts of these assets.
Major Sources of the PA’s Illegal Revenues
Since the PA has been engaging in criminal activities since its inception, the full extent of the organization and its leadership’s illegal income is impossible to determine. However, the following sources of revenue have been documented:
- Palestinian Martyrs’ Sons Enterprises (Samed)
- Monopolies and the Palestine Commercial Services Company (PCSC)
- Personal Corruption
· PALESTINIAN MARTYRS’ SONS ENTERPRISES (SAMED)
The PLO formed Samed in 1970, to control and operate its economic activities. Since then, Samed has been led by Ahmed Qurie, AKA Abu Ala, currently the speaker of the Palestinian Legislative Council. (David Bedein, editor, “PA Accountability”, http://israelbehindthenews.com/nov-22-99.htm )
He served directly under Yasser Arafat, who signed the checks for all of the transactions and was no doubt aware of virtually every detail. (Ronen Bergman, “How much is the PLO really worth?” Haaretz, November 28, 1999.
Samed had a flexible accounting system that included bank accounts not identified as belonging to the PLO but registered in the names of private individuals, including Abu Ala. The value of the PLO investments in farms, industry, weapons and clothing factories, real estate, newspapers, duty free shops, and airlines was estimated by the British National Criminal Intelligence Services (NCIS) in 1993 and 1994 at about $10 billion (1994 British National Criminal Intelligence Service Report, p. 28.)
According to the US House of Representatives Task Force on Terrorism and Unconventional Warfare (October 1991), Samed had a penchant for airport-related investments. These investments gave the PLO a base for the procurement of forged travel documents and airline tickets. (Task Force on Terrorism and Unconventional Warfare, October 28, 1991).
It owned duty-free stores at airports in Nairobi, Kenya and Lagos, Nigeria. [Ronen Bergman, David Ratner, “Flourishing business overseas” Haaretz]
Through Samed it also had interests in airlines from the Maldives to Nicaragua. Until 1993, Samed also received approximately $50 million a year from the “Palestine Liberation Fund Tax,” of 5%, of the income of all Palestinian worldwide. [Israel Government Press Office April 15, 1997: “Where is the money?”.]
Overall, in the 1970’s and 80’s, the PLO through Samed earned an estimated $5 million per day. [Ronen Bergman, David Ratner, “Flourishing business overseas” Haaretz.]
In December 1999, hackers that broke into the PA’s computer system discovered at least “five billion pounds in numbered bank accounts in Zurich, Geneva and New York,” as well as smaller sums in Europe, Asia, and North Africa. None of the accounts were registered in the PLO’s name. The PA records revealed that it owned shares “on the Frankfurt, Paris, and Tokyo stock exchanges,” including stocks in Mercedes-Benz. It also owned property in prime locations in such as Paris, London, Geneva and New York. [The Daily Telegraph, December 5, 1999.]
MONOPOLIES AND THE PALESTINE COMMERCIAL SERVICES COMPANY (PCSC)
The scope of revenues from the monopolies in the PA was estimated in 2000 at $300 million annually. [Dani Naveh et al, “The Involvement of Arafat, PA Senior Officials and Apparatuses in Terrorism against Israel, Corruption and Crime.”]
None of this amount is accounted for. The damage to the Palestinian economy goes beyond the loss in revenues, because it prevents competition and results in higher prices for fewer products. Coupled with the fact the monopolies are “on basic goods such as wheat, cement, petrol, wood, gravel, cigarettes and cars are in the hands of Arafat's aides and they exploit their positions to extract high profits,” [Tuvia Blumenthal, econ.bgu.ac.il/facultym/tuvia/news10e.pdf ]
The dead-weight loss must be staggering.
The Palestine Commercial Services Company is the economic arm of the Palestinian Authority. Yet it is not supervised by its legislature or Finance Ministry. [David Bedein, editor, “PA Accountability”, http://israelbehindthenews.com/nov-22-99.htm.]
It is run by Mohammed Rashid, Arafat’s economic advisor, and it controls most economic activities in the PA territories. The Palestine Commercial Services Company has “large minority stakes… in a Ramallah Coca-Cola bottler... and myriad other businesses, plus full ownership of a cement plant that had long enjoyed a government protected monopoly. The Palestine Commercial Services Company had the single biggest holding in the Jericho casino until it was shut down, with a $60 million stake. It has a 30% stake in the Palestinian Cellular Communications Company and an 8% stake in the Palestinian Telecommunications Company. It also has investments in the Palestine Development and Investment Company (PADICO). [FBIS-NES-2000-0706 “Report Cites Sha’ath, World Bank Official on PA Transparency”]
The company was also, until recently, the direct recipient of sales taxes – more than $500 million in the past two years alone, collected by Israel but owed to the PA under the 1993 Oslo peace accords.” [William Orme, Jr., “Palestinian Investment Fund, No Longer Secret, Will Close,” New York Times, July 7, 2000.]
The tax receipts were placed in a Tel Aviv account controlled by Arafat and Rashid. The latest estimate of the value of the Palestine Commercial Services Company’s holdings is at least $345 million in cash and equity. [“Palestinian Authority admits squirreling millions away in secret slush fund”, Agence France Presse, July 5, 2000.]
Researchers have noted that “since the establishment of the PA, scores of monopolies have been created by Arafat and are being operated by individuals and organizations close to Arafat. These monopolies control and subvert almost every potentially profitable aspect of daily Palestinian life.” [Stacy Lakind and Yigal Carmon, “The PA Economy – Free Market or Kleptocracy? Part I: Economic Policy”, MEMRI January 7, 1999.]
The Palestine Commercial Services Company has a 100% stake in the local cement monopoly that was worth $50million in 2000. [FBIS-NES-2000-0706 “Report Cites Sha’ath, World Bank Official on PA Transparency”.]
Other Palestine Commercial Services Company monopolies include flour, oil, cigarettes, iron, commercial sand, and the PA prohibits other companies from operating in these fields. [Stacy Lakind and Yigal Carmon, “The PA Economy – Free Market or Kleptocracy? Part I: Economic Policy”, MEMRI January 7, 1999.]
Media investigations and sources within the Palestinian territories revealed that Palestinian officials close to Arafat that control monopolies include: Arafat’s personal economic advisor Muhammad Rashid, who together with Suha Arafat (Yasser Arafat’s wife) and communications advisor Nabil Abu-Roudayna co-own pharmaceutical and apparel monopolies. [Should Congress Fund PLO Corruption and Violence?” The Jerusalem Cloakroom #95, http://www.acpr.org.il/.]
Rashid, together with another Arafat advisor, Hassan Asfour, co-own an oil monopoly; Nabil Shaath, the Minister of Planning and International Cooperation has a computer monopoly, [Shimon Shiffer, “Bashar Assad is Playing With Fire,” Yediot Ahronot, Sabbath Supplement, July 19, 2002.]
…and Ahmed Qurie, speaker of the Palestinian Legislative Council and founder of Samed, is co-owner of cigarettes, conserves, and dairy monopolies. [Should Congress Fund PLO Corruption and Violence?” The Jerusalem Cloakroom #95, www.acpr.org.il.]
The U.S. General Accounting Office’s (GAO) 1995 investigation into the PA’s finances received no cooperation from the PA. But by 1997, following local pressure, the Palestine Legislative Council (PLC) conducted an investigation into PA corruption. This report, was suppressed by Arafat, but leaked. Jarar Kidwa, head of the PA’s financial monitoring institution, disclosed that the PA had lost $326 million – 40% of its annual budget for 1996 – to corruption and mismanagement. The PLC report also implicated PA officials, some still serving in the cabinet. [Stacy Lakind and Yigal Carmon, “The PA Economy – Free Market or Kleptocracy? Part I: Economic Policy”, MEMRI January 7, 1999.]
The PA system of monopolies has a long-term effect that is not immediately quantifiable, because of lost economic opportunities.
· PERSONAL CORRUPTION
Recent reports by Israeli government officials put Arafat’s personal holdings at about $1.3 billion. This includes $500 million of the Palestine Liberation Organization’s money that Arafat also controls. Wearing three hats, Arafat is the president of the Palestinian Authority, chairman of the PLO, and is the head of the Fatah terrorist organization and its al Aqsa Martyrs Brigades and the Tanzim. [Vernon Silver, “Hunt is on for Arafat’s Money Pots,” Bloomberg news, August 24, 2002.]
. …As such, he controls the funds of all the terror organizations under the PA umbrella.
There has been a great deal written about Yasser Arafat’s secret bank account in Tel Aviv. Under the 1994 Paris Agreement, Israel is supposed to transfer the tax receipts it collects on imported gasoline for the PA territories directly to the PA. The account number they were asked to deposit the funds in is located in the Chashmonaim branch of Bank Leumi in Tel Aviv, and only Arafat and his trusted advisor Mohammed Rashid have the authority to access it, though some speculate that Treasury Minister Ahmed Zohari Nashashibi has access to it as well. The money collected by this procedure totaled around $400 million by November 2000. [Ronen Bergman, “The secret millions of senior PA officials,” Yediot Acharonot, Nov 13, 2000]
The rest of the taxes that Israel collects on imported goods goes into four accounts in the Bank of Palestine and the Arab Bank of Gaza. According to a leaked IMF internal report, “the account is not under the supervision of the PA Treasury Ministry.” [Ronen Bergman, David Ratner, “ Israel transferred since ’94 half a billion shekels to Arafat’s secret account in Tel Aviv,” Haaret,z 1997]
At least half the money was indeed put there to bypass the supervision demanded by international donors, to finance inflated security services and civil service payrolls, which were not approved by the donors [Ronen Bergman, David Ratner, “ Israel transferred since ’94 half a billion shekels to Arafat’s secret account in Tel Aviv,” Haaretz 1997].
A PA source had a different explanation, claiming that the money was there for emergency use.[Ronen Bergman, David Ratner, “ Israel transferred since ’94 half a billion shekels to Arafat’s secret account in Tel Aviv,” Haaretz, 1997.]
Throughout the years, the donor countries led by the US, demanded transparency and accountability from the Palestinian Authority. Clearly, they were not insistent enough.
Some of Arafat’s corruption is simply in the form of outright theft of aid funds. For example, the Kuwaiti newspaper Al-Watan reported on June 7, 2002 that Arafat had deposited $5.1 million into his personal account, siphoned from funds that were donated by Arab states as aid to the Palestinians. [Ronen Bergman, David Ratner, “ Israel transferred since ’94 half a billion shekels to Arafat’s secret account in Tel Aviv,” Haaretz, 1997.]
In a perverse case of profiteering from the war that the PA created, Mohammed Rashid invested some of the stolen funds in the Jordan Cement Company on behalf of the Palestine Commercial Services Company, in order to profit from the rise in cement prices due to the demand for building materials following Operation Defensive Shield. [Memri (www.memri.org): Kuwait daily: Arafat deposited $5.1 million from US Aid into personal account.]
Jawad Ghussein, until 1996 the Secretary General of the Palestinian National Fund, told the Haaretz newspaper in August 2002 that Arafat “took aid money and contributions that were earmarked for the Palestinian people to his own account.” Ghussein should know, since it was he who for years deposited $7.5-8 million each month into Arafat’s personal bank account. By 1993, these deposits had totaled $540 million. [Laurie Copans, “Ex-Aide Accuses Arafat of Corruption,” AP, August 18, 2002.]
A member of the Palestinian Legislative Council from Nablus, Muawiya Al-Masri, was interviewed on July 3, 2002 by the Jordanian publication Al-Sabil about Arafat's regime. When Al-Masri went public about PA corruption back in 1999 he was nearly killed in retaliation. Undeterred, he again spoke at length about the endemic corruption of the PA and Arafat. "No minister can appoint a driver or a delivery boy in his ministry without the president's consent," said Al-Masri. "There is no institutional process. There is only one institution — the presidency, which has no law and order and is based on bribing top officials."
Following the Oslo Accords, Arafat even took over PECDAR (the Palestinian Economic Council for Development and Reconstruction), that was founded under strict European conditions, as soon as it began operating. "His [Arafat's] became the authorized signature. Today, no amount, no matter how small, leaves the PECDAR funds without the president's signature." [Rachel Ehrenfeld, “Arafat’s Stash,” National Review, August 15, 2002.]
Siphoning off the Pension Fund: In compliance with the Oslo Accords, Israel transferred the pension funds of Palestinians who worked for the Israeli Civil Administration, to the PA. The Gaza employees’ fund alone was worth $160 million. [Stacy Lakind and Yigal Carmon, “The PA Economy – Free Market or Kleptocracy? Part II: Fiscal Policies,” MEMRI, January 8, 1999.]
The PA used part of these funds to pay the salaries of the bloated police force they created in violation of the accords. [“Palestinian Authority and P.L.O. Non-Compliance: A Record of Bad Faith,” Israeli Government Publication, p. 25, November 2000.]
Parts of the pension fund were used for an investment in telecommunications. These unauthorized expenditures amounted to $36 million. By September 1997 only $20 million remained in the fund; $104 million disappeared. [Stacy Lakind and Yigal Carmon, “The PA Economy – Free Market or Kleptocracy? Part II: Fiscal Policies,” MEMRI, January 8, 1999.]
3.Counterfeiting Merchandise: [Amir Bohbot, “This is how the counterfeiting industry finances terror,” Maariv Hayom, August 14, 2002.]
5.Under the PA’s control, massive merchandise counterfeiting enterprises flourish, “making millions of dollars a year,” with royalties going to “senior Palestinian Authority figures.” [Amir Bohbot, “This is how the counterfeiting industry finances terror,” Maariv Hayom, August 14, 2002.]
7.The merchandise includes CD’s, DVD’s, clothing, cosmetics, and schoolbooks. This is done in cooperation with Hamas and other Palestinian terrorist organizations.
8.Counterfeiting Money: According to media reports, [“The US funds the most corrupt/oppressive mideast regime!” The Jerusalem Cloakroom #108 http://www.acpr.org.il/.]
9.…counterfeiting of Israeli, Jordanian, and Kuwaiti currency, is an ongoing activity in the Palestinian territories. [“The US funds the most corrupt/oppressive mideast regime!” The Jerusalem Cloakroom #108 http://www.acpr.org.il/.]
10.In April 2002, the IDF found large quantities of counterfeit Israeli currency in 50, 100, and 200- Shekel denominations in Arafat’s compound in Ramallah. [Michael Widlanski, “BULLETIN: YASSER ARAFAT’S HEADQUARTERS WAS CENTER FOR COUNTERFEITING MONEY,” The Media Line, April 1, 2002.]
11.Shakedowns: According to confidential Palestinian sources, [Rachel Ehrenfeld, field research, June 2002.]
arbitrary charges of traffic violations, demands of large bribes, kidnapping for money, and extortion of 70 – 90% from the income of private businesses, are rampant in the PA. These methods are similar to those employed by PLO in Lebanon.
12.Car theft from Israel is rampant in the PA-controlled areas, frequently with the connivance of senior PA officials. Former PA Police commissioner Ghazi Jabali is accused of licensing thousands of cars stolen from Israel, charging $7000 for a permanent license. However, Jabali was fired only when charges of embezzlement of $20 million from the PA were made. Despite that, Arafat appointed him as advisor on police affairs. [“PA probing alleged theft of $20mm,” Jerusalem Post, Sept. 4, 2002.]
According to reports by the Israeli police and eyewitnesses, cars stolen from Israel have special identification on their PA-issued license plate.
- Faisal Husseini: Documents found in Orient House in August 2001 show that $1.8 million was funneled by Faisal Husseini’s into his private bank accounts in Switzerland and Austria. The money was donated by the Gulf Emirates for business development in the Palestinian territories. [“First Disclosures From The Orient House Archives Robin Hood – In Reverse,” Debkafile.com.]
- Mohammed Dahlan: According to Palestinian and Israeli sources, Mohammed Dahlan, head of the PA security services in the Gaza Strip, supplements his salary by collecting “more than 1 million Shekels per month in protection money (from suppliers of oil and cigarettes, etc.), kickbacks for issuing licenses…and (since 1997), border crossing fees. [Should Congress Fund PLO Corruption and Violence?” The Jerusalem Cloakroom #95, http://www.acpr.org.il/.]
13.Nabil Shaath and Yasser Abd Rabboh: The 1997 Palestine Legislative Council investigation into PA corruption implicated Minister of Planning and International Cooperation Nabil Shaath, and Minister of Information and Culture Yasser Abd Rabboh. The report claimed that both used government money for personal purposes. The report determined that Shaath had embezzled ministry funds, transferring them to accounts not subject to PA inspection. [Stacy Lakind and Yigal Carmon, “The PA Economy – Free Market or Kleptocracy? Part II: Fiscal Policies,” MEMRI, January 8, 1999.]
15.The report also demanded that Shaath be removed from his position. [Stacy Lakind and Yigal Carmon, “The PA Economy – Free Market or Kleptocracy? Part II: Fiscal Policies,” MEMRI, January 8, 1999.]
Yet, according to media reports, he has a monopoly on imported computer hardware into the PA [Shimon Shiffer, “Bashar Assad is Playing With Fire,” Yediot Ahronot, Sabbath Supplement, July 19, 2002.]
…and both he and Abd Rabboh still hold the same posts. Of special concern should be the implication of Shaath, who as minister for Planning and International Cooperation, coordinates international aid and the negotiations to reform the PA.
- Jibril Rajoub, Preventative Security Head in the West Bank, was widely reported in the media to extort protection money from oil distributors, to receive kickbacks from the Jericho casino until it closed, and to steal intellectual property, presumably in concert with the other counterfeiting rings operating in the PA territories. Jibril Rajoub and his men are also implicated in car theft networks. [“Operation Clean-up,” Deccan Herald, July 11, 2002, and “Should Congress Fund PLO Corruption and Violence?” The Jerusalem Cloakroom #95, http://www.acpr.org.il/.]
International Aid Directed to Terror
Recent statistics provided by the Israeli Foreign Ministry show that since the beginning of the intifada two years ago, one homicide bomber was sent to Israel every five days from the Palestinian territories.
Despite EU attempts to refute and downplay allegations that EU aid money was used to fund terrorism, PA documents found by the IDF clearly show that the PA diverted international aid to fund its terrorist activities. Since we already know that the EU did not closely monitor the use of the money, if even a single dollar went to finance terror, the donor countries are guilty of aiding terrorism.
In December 2000, Israel stopped transferring import tax revenue to the PA as required by the 1994 Paris Protocol. Since April 2001, the Arab states have been transferring $45 million a month, raising their contribution to $55 million per month in April 2002. The EU has been transferring EUR 10 million a month since June 2001, all explicitly to cover PA salary expenses.
The PA documents found in Ramallah and elsewhere in the West Bank demonstrate how the PA used international aid money to further its terror agenda. The following facts come to light:
- The PA maintains a double reporting system for its salaries.
- The PA performs exchange rate fraud and keeps the difference.
- The PA deducts a “Fatah membership fee” of 1.5 –2% of salaries paid to its security forces.
- The PA recruits and employs Fatah activists, including al Aqsa Martyrs Brigades and Tanzim members who are involved in terrorism.
The EU’s first response to these facts was to deny them. Yet, the Palestinian Authority’s own documents substantiate these facts.
· FACT: The Palestinian Authority keeps a double reporting system for its salaries.
It claims it needs around $60 million per month for salaries. But in fact, it needs only about $40.5 million. The balance is unaccounted for.
Figure 1 The EU Claims v. Reality
Unwilling to assume responsibility, the EU claims that the IMF monitors the Palestinian Authority budget. [“Answers to Questions by Die Zeit Received on 24 July 2002,” EU document posted on Die Zeit website, p. 1.]
The EU says, “ the IMF conducts a close review of monthly fiscal information covering the whole of the PA budget, including …the wage bill.” [“Answers to Questions by Die Zeit Received on 24 July 2002,” EU document posted on Die Zeit website, p.4.70]
In stark contrast, the IMF itself states that “the Fund has not been monitoring spending under individual budget lines nor can it ascertain whether a particular spending commitment has been actually disbursed for the reported purpose. This is an auditing function that goes beyond the fund’s present mandate.” [“The Palestinian Authority’s Fiscal Situation, Policies, and Prospects”, Statement by Fund Staff Representative to the Ad Hoc Liaison Committee Meeting, p. 8, April 25, 2002.]
· FACT: The Palestinian Authority was performing exchange rate fraud, paying salaries at an artificially low exchange rate (3.7 shekels/dollar vs. 4.4 at the end of 2001)
The following chart shows how $7.2 Million of the $40.5 Million used for salaries was available for other uses, due to exchange rate fraud:
EVIDENCE: Captured documents show the use of a 3.7 exchange rate. [“International Financial Aid to the Palestinian Authority Redirected to Terrorist Elements,” May 10, 2002, p. 23-30.]
EU CLAIM: “The economic aggregates, which the IMF monitors, include: the total salary bill, the total number of employees, and the average salary. Any “leakage” would be seen in discrepancies in these aggregates. There is no evidence of this. On the contrary, the salary bill is consistent with expectations.” [“Answers to Questions by Die Zeit Received on 24 July 2002,” EU document posted on Die Zeit website, p.2.]
EVIDENCE: There is direct evidence contradicting this: PA documents from late 2001 clearly show that dollars for salaries were converted at a rate of 3.7. [“International Financial Aid to the Palestinian Authority Redirected to Terrorist Elements,” May 10, 2002, p. 23-30.]
The PA’s new Finance Minister, Salaam Fayed is reported to have ended this process recently. [“Answers to Questions by Die Zeit Received on 24 July 2002,” EU document posted on Die Zeit website, p.2.]
CONCLUSION: The EU’s claims are directly contradicted by documentary evidence. In addition, the IMF stated that it does not monitor the details.
FACT: The Palestinian Authority deducts a “Fatah Membership Fee” from all PA security personnel.
EVIDENCE: PA documents show that the PA deducts 1.5 – 2% from all PA security personnel salaries. The sum, which is equivalent to $260,000 – 345,000 per month, is sent to Fatah. [“International Financial Aid to the Palestinian Authority Redirected to Terrorist Elements,” May 10, 2002, p. 12.]
It is interesting to note that while not refuting this evidence, the EU tries to argue that Fatah, a terrorist organization, is comparable to European trade unions: “This system is not dissimilar to the mandatory deductions from salaries for trade union members’ fees in some EU countries.” [“Answers to Questions by Die Zeit Received on 24 July 2002,” EU document posted on Die Zeit website, p.3.]
As is evident in the PA documents, Fatah, the Tanzim, and the al Aqsa Martyrs Brigades are the same organization. Documents with letterheads carrying a joint al Aqsa Martyrs Brigades and Fatah logo attest to that. [“The ‘Al Aqsa Martyrs Brigades’ (on US State Department list of terror organizations) and the Fatah Organization are one and the same, and Yasser Arafat is their leader and commander]
The al Aqsa Martyrs Brigades is classified as a terrorist organization by both the US and EU. Further, the PA’s own documents contain, for example, a letter on Fatah letterhead requesting money for members that carried out terror attacks. [Dani Naveh et al, “The Involvement of Arafat, PA Senior Officials and Apparatuses in Terrorism against Israel, Corruption and Crime,” p. 22.]
There are many other documents listing grants to known Fatah terrorists. [Dani Naveh et al, “The Involvement of Arafat, PA Senior Officials and Apparatuses in Terrorism against Israel, Corruption and Crime,” p. 25.]
Yet other PA documents demonstrate cooperation between Fatah, Hamas, and the Palestinian Islamic Jihad. [Dani Naveh et al, “The Involvement of Arafat, PA Senior Officials and Apparatuses in Terrorism against Israel, Corruption and Crime,” p. 30-33.]
CONCLUSION: Fatah is a terrorist organization, and membership fees originating from salaries paid by the EU help fund it.
· FACT: The Palestinian Authority pays salaries to Fatah activists and has recruited Fatah members into its ranks [“International Financial Aid to the Palestinian Authority Redirected to Terrorist Elements,” May 10, 2002, p. 12.]
EVIDENCE: PA documents show that it pays the salaries of Fatah terrorists in the amount of $640,000 to $1 million per month. [“International Financial Aid to the Palestinian Authority Redirected to Terrorist Elements,” May 10, 2002, p. 14.]
There are letters of request to Arafat to approve putting Fatah activists and other persons known to be involved in terrorism onto the PA security apparatus payroll to pay for their terrorist activities. [Throughout “The Palestinian Authority Employs Fatah Activists Involved in Terrorism and Suicide Attacks.”]
The documents are addressed to Arafat, and frequently have his comments in own his handwriting on them. [For example, “The ‘Al Aqsa Martyrs Brigades’ (on US State Department list of terror organizations) and the Fatah Organization are one and the same, and Yasser Arafat is their leader and commander.”, p. 10.]
By claiming that there is no indication that any actual recruitment took place, and that effective approval would require some other notation from Arafat, [“Answers to Questions by Die Zeit Received on 24 July 2002,” EU document posted on Die Zeit website, p.3.]
…the EU is simply obfuscating the evidence. Even if Arafat did not literally sign off on the hiring of certain terrorists, he gave his tacit approval by forwarding the requests for their hiring.
The EU makes the claim that “there is no evidence that any person involved in terror attacks has actually been recruited into the PA security services.” [“Answers to Questions by Die Zeit Received on 24 July 2002,” EU document posted on Die Zeit website, p.3.]
This claim is demonstrably false. The PA’s own documents show that many PA-salaried people were engaged in terrorist activities.
Consider the following: [“The Palestinian Authority Employs Fatah Activists Involved in Terrorism and Suicide Attacks.” P. 8-9.]
16.Marwan Barghouti - Leader of the terrorist organization Fatah/Tanzim in the West Bank. Despite his arrest and indictment for the murder of 26 Israelis, he continues to receive a salary of $2500 per month from the PA. [IMRA September 10, 2002, www.imra.org.il]
18.In addition to his personal involvement in these murders, Barghouti allocated special funds for terrorists, and to carry out attacks against Israel, with Arafat’s full approval. [“International Financial Aid to the Palestinian Authority Redirected to Terrorist Elements,” May 10, 2002, p. 51.]
- Nasser Awis [“The Palestinian Authority Employs Fatah Activists Involved in Terrorism and Suicide Attacks.” p. 8.] - Was an officer in General intelligence and General Security apparatuses and received regular salaries from the PA. Head of al Aqsa Martyrs Brigades in Samaria, was captured by IDF on 13 April 2002. Awis was the link between Barghouti and the Fatah military arm in West Bank and Gaza. Awis was responsible for attacks since January 2002 that killed 20 Israelis and wounded 120, including the attack on the Bat Mitzvah in Hadera. The PA knew this. Not only was his name was on Israel’s most wanted list, but he was listed by the PA report as heading the al Aqsa Martyrs Brigades in Tulkarm. Awis was also engaged in smuggling, acquisition and production of heavy weapons systems.
- Zadki Zeru [“The Palestinian Authority Employs Fatah Activists Involved in Terrorism and Suicide Attacks.” p. 9.]- From Hebron, Tanzim activist involved in shooting attacks against the Jewish settlement in Hebron. He shot a baby girl on 26 March 2001 in Hebron.
- Marwan Zallum [“The Palestinian Authority Employs Fatah Activists Involved in Terrorism and Suicide Attacks.” p. 14.] also a senior Fatah activist involved in “many lethal shooting attacks,” [“The Palestinian Authority Employs Fatah Activists Involved in Terrorism and Suicide Attacks.” p. 14.] who was given an official position in the PA.
- Fuad Shubaki [“International Financial Aid to the Palestinian Authority Redirected to Terrorist Elements,” May 10, 2002, p.55.] - PA Chief Financial Officer, who was involved in the Karine-A arms purchasing and smuggling operation. [Dani Naveh et al, “The Involvement of Arafat, PA Senior Officials and Apparatuses in Terrorism against Israel, Corruption and Crime,” p. 50.]
He allocated $80,000 for a heavy arms factory on behalf of the al-Aqsa Martyrs Brigades. Several PA documents, on PA stationery, show PA officials requesting funding for known Fatah terrorists, while praising their “fighting abilities.” [“The Palestinian Authority Employs Fatah Activists Involved in Terrorism and Suicide Attacks.” pp. 15, 17.]
Palestinian Ministry of Finance official documents dating back to 1998/1999 explicitly state “payment to Fatah movement,” [“International Financial Aid to the Palestinian Authority Redirected to Terrorist Elements,” May 10, 2002, p. 40.]
Other documents from 2001, including documents with Arafat’s own approval, list payments to Fatah/Tanzim activists. Marwan Barghouti, head of Fatah/Tanzim in the West Bank, wrote the checks. [“International Financial Aid to the Palestinian Authority Redirected to Terrorist Elements,” May 10, 2002, pp. 51-54.]
CONCLUSION Despite all the evidence, the EU ignored even the PA’s own documents explicitly requesting and granting funds for members of Fatah/Tanzim and al Aqsa Martyrs Brigades terrorists. Instead, the EU claimed that it needed the actual checks as proof. [“Answers to Questions by Die Zeit Received on 24 July 2002,” EU document posted on Die Zeit website, p.4.]
Arafat’s Personal Involvement in Funding Terrorism
Palestinian Authority documents show that Arafat personally directed a transfer of $600 to known terrorists, such as Ziad Muhammad Da’as, who commanded the murder attack during the Bat-Mitzvah party in Hadera. [Dani Naveh et al, “The Involvement of Arafat, PA Senior Officials and Apparatuses in Terrorism against Israel, Corruption and Crime,” p.20.]
There are many other documents showing similar allocations by Arafat. [Dani Naveh et al, “The Involvement of Arafat, PA Senior Officials and Apparatuses in Terrorism against Israel, Corruption and Crime,” pp. 25 - 26.]
Another PA document shows that Arafat personally allocated $350 dollars each to 24 Fatah members, including Atef Abayat, who headed the main terrorist cell in the Bethlehem area, and who was involved in the murder of Israelis. [Dani Naveh et al, “The Involvement of Arafat, PA Senior Officials and Apparatuses in Terrorism against Israel, Corruption and Crime,” p.25.]
Not only did Arafat fund Abayat’s terrorism and send him to his death, but following his death, Arafat authorized a payment of $800 to his family. [Dani Naveh et al, “The Involvement of Arafat, PA Senior Officials and Apparatuses in Terrorism against Israel, Corruption and Crime,” p. 26.]
In the same documents, Arafat approved a total of $126,000 to fund terrorism. [Dani Naveh et al, “The Involvement of Arafat, PA Senior Officials and Apparatuses in Terrorism against Israel, Corruption and Crime,” pp. 25-26.]
By July 26, 2002, the al Aqsa Martyrs Brigades was heavily engaged in homicide bombing. Yet, in response to Die Zeit’s questioning if PA funds were going to this terrorist organization, the EU responded:
“The EU and the international community continually demand that the PA prevent terror attacks, dismantle terror groups and arrest terrorists. If any evidence comes to light that the PA is knowingly employing members of terrorist organizations, the PA will need to act immediately to take these people off the payroll and bring them to justice. The EU will not accept that funds fall into the hands of terrorist organizations.” [“Answers to Questions by Die Zeit Received on 24 July 2002,” EU document posted on Die Zeit website, p. 8.]
Despite all the evidence, the EU seems to argue that it will only accept that Euros fund terrorism if there were mechanisms to identify how each individual Euro is spent. But money is fungible, and since the EU gave direct funding towards the PA salaries, the EU is responsible for the money that the PA allocated to fund terrorism.
Additional Unacceptable Activities Funded by the PA
Fostering Hate in Schools
The international donor community funds the Palestinian education system through UNRWA (the United Nations Relief and Work Agency). UNWRA-paid teachers in UNRWA-built schools are teaching from textbooks with vicious anti-Semitic, anti-Israel, and anti-coexistence messages. Such incitement is against the Joint Declaration by the European Parliament, the Council and the Commission Against Racism and Xenophobia, 11 June 1986, which states:
“(4). Considers that incitement to racism, as well as the dissemination and promotion of any type of revisionist thesis concerning the Holocaust or denial that the Holocaust took place, should be considered a criminal offence at Union level and calls on all the Member States accordingly to adapt their legislation against the perpetrators of acts of racism.”
Significantly, the Palestinian Authority is obligated by treaty to end such messages, as stated in the preamble to the Oslo II Interim Accord:
The government of Israel and the PLO reaffirm “their mutual commitment to act, in accordance with this Agreement, immediately, efficiently and effectively against acts or threats of terrorism, violence or incitement, whether committed by Palestinians or Israelis.” [“Answers to Questions by Die Zeit Received on 24 July 2002,” EU document posted on Die Zeit website, p. 8.]
Examples from Palestinian Textbooks
A 7th grade textbook asks a question referring to the poem “The Shahid,” asks: which of the following is the meaning of the expression “honorable death”?
-Death from illness
-Martyrdom (shahada) while defending the homeland.
[Reuven Ehrlich, ed., “Incitement and Propaganda against Israel and Zionism in the educational system of the Palestinian Authority,” Center for Special Studies, June 2000, P. 12.]
From a 7th grade textbook “National Education”: “Question: how many of the Palestinian villages have been destroyed and replaced by imperialist settlements?” [Reuven Ehrlich, ed., “Incitement and Propaganda against Israel and Zionism in the educational system of the Palestinian Authority,” Center for Special Studies, June 2000, P. 16.]
Maps of Palestine do not include Israel at all. This is not unique to the school system; official maps of the PA do not include Israel either. This, in effect, denies the existence of Israel. [Reuven Ehrlich, ed., “Incitement and Propaganda against Israel and Zionism in the educational system of the Palestinian Authority,” Center for Special Studies, June 2000, P. 22.]
In the Alamari refugee camp in Ramallah, in an UNRWA-run school, “there were posters displayed prominently glorifying suicide attacks, armed struggle, and the leaders of the terrorist wing of Hamas” [www.idf.il/newsite/hebrew/010-4.jpg]
Fostering hate and encouraging homicide bombing is not limited to the Palestinian educational system. Chairman Arafat himself, on many public, well-documented occasions, has encouraged children to become shahidim (homicide bombers), and even as this report is being written, Arafat repeated his promise to continue the armed struggle against Israel. [Michael Widlanski, “DEFIANT ARAFAT, PALESTINIAN MEDIA REVVING UP ATTACKS ON ISRAEL, U.S.,”
http://www.themedialine.org/, September 30, 2002.]
Another example of the Palestinian Authority leadership’s mindset is best illustrated by Mahmud Abas, Arafat’s Deputy’s statement to the Kuwaiti newspaper Alzamin (Arabic) on June 20, 2002 that Palestinian Children are given 5 shekels (about $1 US) for each pipe bomb they throw.
On August 28, 2002, Julie Stahl of CNSNews.com reported that US aid money is funding a group that engages in pro-Palestinian propaganda in the US and Europe. Since 1997, the United States, through the US Agency for International Development (USAID), has given $1.2 million to the Palestinian Academic Society for the Study of International Affairs (PASSIA). The group, according to Stahl, “teaches Palestinians how to lobby, raise money for political causes and win favorable media coverage and support.” [Julie Stahl, “US Tax Money Funding Palestinian Propaganda,” CNSNews, August 28.]
Among the skills taught by PASSIA are fundraising, advocacy and lobbying. One assignment was to make a fundraising proposal for information booklets on the al Aqsa Intifada – in other words, armed struggle against Israel. There are other publications in which PASSIA advocates the right of return for Palestinian refugees to all of Israel – which is tantamount to the destruction of Israel. [Julie Stahl, “US Tax Money Funding Palestinian Propaganda,” CNSNews, August 28.]
In a speech given July 6, 2001, UNWRA representative Saheil Alhinadi praised suicide attacks. [www.pmo.gov.il/english/nave/violence-5.html.]
Following Alhinadi’s appeal, there are specific reports of UNRWA camps being used for terrorism. Former US ambassador to Morocco Marc Ginsburg explains: “the refugee camps indeed are not policed by anyone but the Palestinian Authority, with the UNRWA personnel administering the lion’s share of the programs. But other organizations, including extremist Islamic organization, operate freely in the camps.” [Fox News, May 1, 2002, quoted in AIPAC facts: “UNWRA camps used as terrorist strongholds”.]
“Israel, during recent searches of UNWRA camps, has uncovered illegal arms caches, bomb factories and a plant manufacturing the new Qassam-2 rocket, designed to reach Israeli population [sic].” [Wall St. Journal, April 18, 2002, quoted in AIPAC facts: “UNWRA camps used as terrorist strongholds”.]
In conclusion, the Palestinian Authority, led since its inception by Yasser Arafat, has been engaged in massive-scale corruption and terrorism. Yet, all this time, the international community has turned a blind eye and continued its support.
THE HAMAS CHARTER
Interviews with Hamas women
Hamas in its own words
A CRY FROM THE HEART
Has there ever been a peace process?
CAN ISLAM MAKE PEACE WITH ISRAEL?
WHY DID YASSER ARAFAT SIGN THE OSLO ACCORD?
The treaty of Hudabiyyah
The treaty between Saladin and Richard I
Peace? What peace?
Sermons in Palestinian mosques
The truth about Arafat and the Palestinians
Yasser Arafat over the years
Aid money used for weapons
Obituary of Yasser Arafat
Egyptian tributes to Arafat
Marwan Barghouti could succeed Arafat
Palestinian leadership should get real
Hamas on the 1967 borders
Arafat and the Viet Cong
The Hizbullah programme
The Gaza disengagement