Arafat’s Corruption Costing His People
While Western envoys are pressing Israel to help alleviate raging Palestinian poverty caused by their own violent uprising, Arab states are withholding the bulk of $1 billion pledged towards the renewed intifada because they do not trust PLO chief Yasser Arafat with their money.
Holdover US Ambassador to Israel Martin Indyk and special UN Mideast envoy Terje Larsen met with Prime Minister-elect Ariel Sharon on Friday and pressured him to respond to the economic hardship of the Palestinians. They urged Sharon to hand over to the Palestinian Authority taxes collected from Palestinian workers in Israel that have been frozen since the outbreak of the uprising in October.
This move comes just as the Arab League has suspended its transfer of hundreds of millions of dollars collected in recent months for the Palestinian people, since Arafat refuses to show complete transparency in the transfer and use of the funds.
But the PA has not been completely forgotten, as Iraqi dictator Saddam Hussein, in his great crusade to eliminate the Jewish state, has reportedly given the Palestinians close to one billion dollars in support of their uprising.
US and European Union officials are increasingly concerned that a continued deterioration of the Palestinian economic situation will lead to the disintegration of the PA and increased lawlessness in the disputed territories, a senior source in Sharon’s transition team said after Friday’s meetings. As a result, the US has taken the lead in urging Israel to relax its economic pressure on the PA.
This comes after reports that armed Palestinian cells and individuals are beginning to act on their own and to take the law into their own hands. The murders of suspected collaborators by Fatah activists and the assassination last month of Palestinian TV head Hisham Maki, a close associate of Arafat, are examples of this growing lawlessness. Maki was killed by a Fatah cell, which accused Arafat of doing too little against corruption.
After speaking with the US representatives, Sharon spoke with Arafat by telephone for 30 minutes, a large part of which dealt with economic hardships facing the Palestinians. Arafat complained to Sharon about the economic suffering. The VAT tax money that Israel transfers to the Palestinians has not been transferred for the last couple of months, making it difficult for Arafat to pay salaries, Sharon spokesman Ra’anan Gissin said.
The prime minister-elect, however, made it clear to Arafat that he would work forthwith to relieve the economic pressure on the Palestinians only if they take immediate action to stop the terrorist and political violence in the territories, Gissin said. “Everything is in your hands,†Gissin quoted Sharon as telling Arafat.
Gissin noted that the PA has still not acted against the terror infrastructure, and, in the most recent incident, the suspects arrested in last month’s killing of restaurateurs Motti Dayan and Etgar Zeitouny in Tulkarm were recently released in Ramallah.
In a new complication, even if Sharon wanted to hand over tax rebates due the PA under the Oslo accords, it could be blocked by legal action. The victims of the terrorist bus bombing at Kfar Darom in November are suing Arafat and the PA in an Israeli court for 100 million shekels ($24.5 million). The suit accuses Mohammed Dahlan, PA security chief in Gaza, of planning and facilitating the attack. The attorney for the Israeli victims said, “As Norway and the United States exert pressure on Israel to turn over to the Palestinians tax revenues that Israel is withholding, we are demanding that this money be used to first compensate the scores of terror victims who have been injured by Dahlan, Arafat and the PA.”
Palestinian security sources recently said that the economic hardship in PA areas may lead to the Authority’s collapse. PA employees have not been paid since the beginning of January, one official said. Another senior PA official reportedly said almost everything the PA has built up over the past years in Gaza and the “West Bank†is close to collapse.
But even the Arab states are wary of handing money over to Arafat. Israeli security sources told HA’ARETZ that Arab countries have suspended the transfer of hundreds of millions of dollars collected in recent months for the Palestinian people for fear that the money will end up in the wrong pockets – exacerbating the already rampant corruption in the PA.
This decision came after the Arab League decided at an emergency summit in Cairo last October to transfer some $1 billion to the PA to alleviate the suffering of the Palestinians, brought on by their violent uprising. However, not all the money was sent, and the PA has accused the Arab leaders of being indifferent to the Palestinians’ plight.
It now appears that a considerable sum was, in fact, raised but not sent to the PA. Sources told HA’ARETZ about $230 million was raised – a large proportion in Saudi Arabia and the Persian Gulf states. But the contributing Arab countries and the banks through which the money was to move demanded that Arafat show complete transparency in the funds transfers and give a detailed report on how it was spent.
Because the PA evaded these demands, the money – most of which is being held in the Islamic Bank in the Persian Gulf – has been frozen. Israeli officials do not expect the PA will accede to the Arab donor demands.
The Arab demand for accountability is a reflection of Arafat’s long record of financial impropriety. Nearly half the money sent to the PA, especially from Europe, the United States and Japan, did not reach its intended destination. Through the collection of arbitration fees, monopolies and numerous other schemes, a large proportion ended up in the bank accounts of PA officials, including Arafat, himself, and his economic advisor, Muhammad Rashid.
As a result of this funding freeze, Iraqi President Saddam Hussein is now the chief financial supporter and strategic ally of Arafat. Bonded by the common goal of embroiling the wider Arab world into an expanded conflict with Israel, Saddam and Arafat have allied themselves politically and economically once again.
In the four and half months since the uprising started in late September, Saddam has taken advantage of Iraq’s recovering oil exporting wealth to funnel almost a billion dollars into the Palestinian self-rule areas. Well-placed Middle East intelligence sources have told Western reporters that the total value of the aid already amounts to $980 million in just over one third of a year. And much of the aid has gone to reactivate the Arab Liberation Front, the traditional Iraq-backed Palestinian guerrilla movement, the sources said. Saddam has also been awarding the family of the “martyrs†of the uprising a cash payment of $12,000 each, a move meant to pacify and motivate the suffering Palestinian population in an effort to maintain support for Arafat’s regime.
Used with Permission from International Christian Embassy Jerusalem.