And a Thief, Too - Yasser Arafat takes what he likes.
By Rachel Ehrenfeld NATIONAL REVIEW
July 19, 2002.
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).
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