Palestinian Corruption

For decades, to divert the attention of the media,
the international community and their people,
all they had to do was accuse Israel of all their ills.

PIERRE REHOV MAY 6, 2019
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Much has been said about the sums that the Palestinian Authority spends on salaries of terrorists imprisoned in Israel and the families of “martyrs” – in other words, suicide-terrorists and those killed during their murderous operation. But when you talk to Palestinians about the misappropriation of funds allocated by the international community, the first term they use is “corruption.”

Indeed, a study by AMAN – a chapter of Transparency International co-founded by Jordan – shows that, according to several surveys of the Palestinian population, the corruption of their leaders is the second most popular cause of their misery. According to the same surveys, the first cause would be the inability of these same leaders to create a strong economy. The Israeli occupation comes in third place.

The equation between PA President Mahmoud Abbas and his entourage on the one hand, and Hamas leaders on the other, is easy to understand. For decades, to divert the attention of the media, the international community and their people, all they had to do was accuse Israel of all their ills.

This is an exercise that has also been carried out by many Arab-Muslim countries. Whatever the excesses of the dictatorships in place, it has long been enough to accuse Israel – and sometimes the West – to keep their populations calm, while diverting and reaping billions of dollars that could have improved their living conditions or infrastructure.

But times are changing, global information is now easily accessible and people are no longer fooled.

This is what emerges from the short documentary we made that involved two film crews: one in Gaza and the other in Judea-Samaria.

Overwhelmed by their situation and on the verge of despair, many Palestinians no longer hesitate to blame their leaders for their miserable living conditions. In Gaza, the money diverted from international aid and resulting from various rackets is not only used to make the rockets that regularly rain down on Israel and the tunnels of attack.

Luxury villas and 5-stars hotels flourish by the sea, dealerships offer the latest Mercedes and BMW models, and if the population continues to suffer, it is much more the result of the perpetual embezzlement by a minority protected by the leaders, than by the security blockhouse set up by Israel and Egypt.

As one Palestinian interviewed said: “It is good to live in Gaza, but only for a small minority.” Another complains that hospitals and clinics never have drugs available. “They tell you to come back at the beginning of the month. You return on the second day of the month and there’s already nothing left. All the drugs have disappeared in 24 hours?

IN RAMALLAH and Hebron, other interviewees noted that they often hear about international aid through the media and on the Internet, but that they themselves never benefit from it. The infrastructure, they say, is deplorable and no effort is ever made to fix it. But the palaces that appear in the documentary are spectacular and would make Hollywood stars dream.

The Palestinian Authority complains that it does not have sufficient funds. But that didn’t stop Abbas from having a house built for $32 million and buying a private jet that would have cost nearly $50 million. At the same time, the salaries of 190 employees of a fictitious airline “Palestine Airlines” were included in the Palestinian Authority’s budget until 2017.

Among the Palestinians interviewed, the most outspoken is certainly Ashraf Jabari, a businessman who recently founded the Reform and Development Party, a political organization focused on the economic situation in the West Bank. He accuses not only Abbas and his sons of getting rich on the backs of the population, but also AMAN for acting as a smokescreen to satisfy the European Union.

He alerts the international community to the intolerable corruption at all levels of the Palestinian leadership and proposes that the EU should request an audit of the funds that have been allocated to the Palestinian Authority since 1994. “Everyone knows,” he says, “but nobody does anything.”

If for decades the Palestinian leaders have been able to exploit the misery of their people to enrich their families and loved ones – and to perpetuate a conflict that suits their interests – it seems that the Palestinian on the street is no longer fooled. Some have even noticed that life in the territories is ten times more expensive since Israel is no longer in charge.

These people do not want a country where corruption is the rule. Nationalism, they say, does not nourish their children.

The author has just completed a short documentary about the corruption of Palestinian leaders. It features never before seen images of luxury in Gaza and the West Bank, and exclusive interviews with Palestinians – among them Ashraf Jabari, who recently made headlines for founding a new political party challenging PA President Abbas.

YASSER ARAFAT, A FAKE HERO, A LORD OF CORRUPTION
Times of Israel, Noor Dahri is (a director of Pakistan Israel Alliance (PIA) and Editor in Chief of the Newspaper Pak Israel News) April 1, 2017

The Palestinian Authority (PA) was once called the Palestinian Liberation Organisation (the PLO). It was chaired by Yasser Arafat, a hero of Palestinian resistance movement, a godfather of the Palestinian struggle for liberation and an ideological figure for almost every young Palestinian. Very few people knew that Yasser Arafat was a fake hero, a lord of corruption and a true godfather of Palestinian terrorism.

Palestinian leadership under Yasser Arafat received millions and millions of dollars every year from Western countries and the Muslim world. The Muslim world considered Arafat to be a hero of Jerusalem and even they considered him as a second Saladin who would finally liberate their land from the Jewish occupation. The Muslim world knew very little or nothing about Yasser’s double faced status. Leaders like him have two faces, two languages, and two sets of promises. When they communicate with the international community, they use one set of languages and values, and make statements and commitments relating to a desire for peace and co-existence. When they turn their faces towards their own nations, they show a monstrous face. When they address their people, they never talk about peace, instead inciting their people towards terrorism. And they are even better at enriching themselves at the expense of the well-being of their people.

Yasser Arafat was one of the best of them. He always used his people to conduct terrorist activities and in return he and his organisation received billions of dollars from countries that included Qatar, Iran, Syria, Russia and other Arab countries

Yasser Arafat also never disclosed his actual wealth even to his party and family. He was one of the most greedy and cruel persons of in the short history of the Palestinians. A friend who worked with Israeli intelligence disclosed that Arafat died along with the knowledge regarding 75% of his secret foreign accounts and no one supposedly knows where they are and how to access them. This is the wealth stolen from Palestinian aid received as donations to change Palestinian lives. The remaining 25% of Arafat’s personal accounts were openly transferred to his family. His wife and his daughter live in a most luxurious palace in the Parisian suburbs. Their wealthy life style can be compared to European royalty. According to my Israeli friend, together the two of them spend approximately $50,000 daily maintaining this luxurious and fashionable life style. They even do not bother to live among their own people, people this father and husband supposedly fought a war for during much of his adult life. They care nothing about these people who live in intense poverty, their only concern is maintaining their life style.

In 2003, The International Monetary Fund (IMF) began to carry out an audit and found at least two billion dollars of Palestinian Authority Fund monies that were missing. It is now believed most probably that these funds were transferred to Arafat’s family in Paris. While Yasser Arafat was in a Paris hospital, his wife Soha Arafat agreed to disclose Arafat’s medical record on the condition of stopping the ongoing investigation into the missing funds. The PA was very frustrated not to be able to officially locate and recover the missing money which they were assured to have been transferred to Soha Arafat’s Swiss bank accounts. Finally, they agreed to pay her $2 million dollars a year for the rest of her life. Whether this means she secretly returned the money or not is speculation.

Israel’s Mossad not only believed but provided enough proofs to the government of Israel that Yasser Arafat controlled a personal financial portfolio estimated to be in the region of $6.5 billion.

The Arab media including the Syrian, Jordanian and Lebanese newspapers received a top-secret report regarding the financial status of the PLO, disclosing that for years the PLO had a deficit of over $95 million a month. The report became even more explosive in the Arab world when the IMF revealed that Arafat had diverted a billion dollars or more of PLO funds to his and his and Soha’s personal Swiss bank accounts from1995 to 2000. A Palestinian lawyer who has investigated PLO corruption said,

… [I] knew of four Arafat loyalists who held secret Swiss bank accounts

The deals frequently involved the cement and building industries of the Palestinian territories. The corruption ran into millions of dollars, which Arafat covered up in return for the profiteers giving him a portion. It was often said Arafat was the godfather of all the godfathers. The secret investments of Yasser Arafat were disclosed by an American financial investigation team and the report stated that Arafat invested his secret money after it was transferred from PLO funds to his personal Swiss account. Some of those investments included the Coca Cola bottling plant in Ramallah, a Tunisian cell phone company, and many venture capital funds in the US and the Cayman Islands. The money for a large part of his investments came from public funds like Palestinian taxes. Virtually none of it was used for the welfare of Palestinian people and it was fully controlled by Arafat and his family. Arafat travelled almost all of the rich Western and Arab countries around the word and crying to everyone that, “We (Palestinians) are devastated and our economy is going to collapse and we cannot pay salaries to Palestinian employees and it is because of Israel’s occupation and blockade”. He convinced those countries and the IMF that the words of his mouth were true and if they were not going to fund PLO, the Palestinian economy would be damaged and would collapse completely. They did not yet suspect that Yasser Arafat was draining a huge amount of that money into his personal bank accounts and his people were really still being deprived through high unemployment and poor economy which those funds were supposed to be relieving.

Under the Oslo Accords signed in 1993 and 1995, it was agreed that Israel would collect sales tax on goods purchased by Palestinians living in Israel under Green Card status and transfer that money to Palestinian treasury but instead transferred immediately transferred it into his private accounts. From the outset of the Oslo Accords until 2000, Israel put the tax revenue into Arafat’s accounts at Bank Leumi in downtown Tel Aviv. Israel’s intent was that Arafat would use it to clean the area of terrorists and for the Palestinians’ welfare.

According to US officials,

Arafat had nearly $3 billion in his personal financial portfolio of the known 25%

But, again, this part of his portfolio was already known to the Intelligence departments and the Western financial powers. At that time nobody was aware of the absconded 75% of the monies, the part only he-and likely his wife and daughter- knew about.

According to an Israeli official, when Yasser Arafat was alive he paid $100,000 per month out of the Palestinian budget to his wife Soha who remained in Paris where she lived lavishly on this allowance. Arafat had an additional account in the Swiss bank for the PA but the code name of the account was one only he knew. There had to have been more than $300 million in his other Swiss account at Bank Lombard Odier, as this is where all the money was transferred to from the Israel’s Bank Leumi. As was noted earlier, Arafat’s secret Swiss accounts were closed around the time he died and no one will say where that money went.

No one even knows about how high the salary amount was that Arafat collected as a Chairman of PLO when he was in exile. Arafat received hundreds of millions of dollars from the KGB (the USSR’s intelligence agency) and the Saudis.

The now-deceased Saddam Hussein reportedly handed Arafat a $50,000,000 check for supporting him during the first Gulf war.

Where that money gone, I believe Soha Arafat knows. Further scandals where Arafat was directly involved in kickbacks, such as that of the Gas and Petrol’s pipeline in to Palestinian areas and Arafat’s investment in world’s stock markets will be addressed in other article at some point.

Many Palestinian people had and have little money, adequately paying jobs, and own decent homes and businesses. The Arafats of the Palestinian people have all money to dispense and have everything to fulfill Palestinian dreams. If he could have used that money to push up the Palestinians’ economy instead of diverting this money to pay terrorists’ salaries, those whose only job is to commit terrorism against the state of Israel, think of what might exist today. He could have built schools and universities that sent Palestinian youngsters, making them an educated people who design new technologies, create medicines, and make the whole world a better place. Instead he sent them in to the training centers in order to create terrorists. Palestinian children should be looking at long, health, prosperous lives in their own country instead of seeing their only purpose in life as being one to die young.

Yasser Arafat was not a hero of the Palestinians but a mafia lord in a corrupt network. He, his wife and daughter chose to be greedy money mongers who destroyed their people’s chance at a real nation and left a dark and hopeless future for the new generation of Palestinian people. Now, Gaza under Hamas and the PA under Mahmood Abbas continue running under Yasser Arafat’s steps to total corruption. In future articles I shall address their dirty politics of corruption and human rights abuses within the Muslim world.

HOW DID SUHA ARAFAT AMASS ALL THESE MILLIONS?
Al Arabiya News By Khalid Amayreh, 22 August 2007 (MA'AN NEWS AGENCY, August 18, 2007.
Khalid Amayreh is a Palestinian journalist living in East Jerusalem.

There have been consistent reports that Suha Arafat, widow of the late Palestinian leader Yasser Arafat, has withdrawn tens of millions of dollars’ worth of investment from Tunis, prompting the Tunisian authorities to strip her of the Tunisian citizenship.

Some news agencies reported this week that Suha’s investments in Tunisia were estimated to be in the vicinity of $40 million.

Well-connected sources in Ramallah have intimated that Suha Arafat “inherited” hundreds of millions of dollars registered under her deceased husband’s name in several European banks. The vast bulk of the money is believed to have belonged to Palestine Liberation Organization (PLO).

This writer sought to raise this subject with several Palestinian officials in Ramallah.

The officials agreed to speak rather reluctantly and only on condition of “anonymity” citing the “sensitivity of the subject.”

I spoke to one veteran official in Ramallah, who I was told is responsible for dealing with “the issues of administrative and financial corruption.”

The man didn’t ask for anonymity, but I have opted to not mention his name lest he be physically harmed by the gurus of corruption or fired from his job.

M.A. (his initials) said he was well aware of the “subject” and would love to see “real journalists dig for the truth.”

“You know and I know that this is the Palestinian people’s money. These millions didn’t belong to Yasser Arafat, they belong to the Palestinian people. Besides, the fact that these millions were embezzled or arrogated four or five years ago doesn’t mean that it is hopeless or too late to set the record straight.

“On the other hand, we can’t just indict Suha Arafat or anybody else based on rumors and unsubstantiated reports.”

M.A. said the first culprit in this issue is the Palestinian Legislative Council, which he said should have placed the subject on the top of its agenda from the very inception.

“I don’t know why they didn’t discuss the subject. I think the failure to discuss this paramount matter amounted to a breach of trust and betrayal of the people.”

I confronted Hasan Khreishe, deputy-speaker of the Palestinian Legislative Council, with these serious accusations and asked him what he knew about Suha Arafat’s alleged millions.

Khreishe, speaking cautiously and circumspectly, said the legislative council didn’t start an investigation into Suha Arafat’s wealth because “we didn’t have credible evidence warranting launching an investigation.”

I asked the veteran MP, who in 2003 headed the investigation of so-called cement scandal, if he knew the fate of PLO secret accounts and investment schemes in Palestine and abroad, Khreishe said he didn’t know much and the little he knew came from the media.

Asked if he thought the Palestinian government should seek to obtain information from foreign governments, including the Tunisian government, as to details of bank accounts belonging to Arafat’s widow, Khreishe said “this the government’s business, not ours.”

When further asked if he would press the Palestinian government to ask foreign governments for information on Suha Arafat’s financial details, Khreishe sought to evade the question, saying that “this matter is more judicial than legislative", and that the ball was in the media’s court to produce concrete evidence incriminating Suha Arafat.

“Two hundred million of dollars”

Very few people were aware of Yasser Arafat’s financial assets during his lifetime. One of these was Muhammed Rashid, the late Palestinian leader’s economic advisor, who is now living in Cairo.

Rashid has consistently refused to give details of Arafat’s secret bank accounts and other assets, saying he would report only to the Palestinian Authority.

According to an al Jazeera report a few years ago, Arafat had written a will leaving some of his fortune to his wife and their daughter, Zahwa. However, other reports said Arafat left no will, leaving most of his fortune in the hands of Rashid and Suha. However, it is uncertain if Rashid behaved single-mindedly with Arafat’s financial empire, or if he “settled things” quietly with Suha following Arafat’s death.

At the time of his death, Arafat’s assets were estimated at $200 million by the Forbes magazine. Forbes listed him ninth in its ranking of the world’s wealthiest heads of state, even though he was a ruler without a country and many of his people were (are) suffering from abject poverty. Other sources, including the American Central Intelligence Agency (CIA), put Arafat’s fortune at $6 billion dollars, a figure exaggerated according to several PLO figures I have talked to.

Suha Tawil, 30 years younger than Arafat, married the PLO leader in 1992 in Tunisia where she worked for the PLO headquarters in Tunis. Suha returned with Arafat to Gaza where the couple lived alternately in Gaza and Ramallah. However, in 2001, she took their child, Zahwa, to Paris, where they continued to live until the late 2005, when they moved to Tunis.

Suha lived a lavish and luxurious life in the French capital where it was rumored that the money she spent per month would cover the basic needs of five thousand Palestinian refugees in a place like Jabalya in the Gaza Strip.

In 2004, the French authorities began investigating the transfer of $11.5 million from Swiss bank accounts to accounts in France controlled by Suha Arafat.

Then Suha reportedly lambasted the French authorities for ordering the investigation.

“What is so strange for the Palestinian president to send any amount of money to his family and his wife, who is protecting the Palestinian interests abroad, and the money came and will come legally,” Suha was quoted as saying during an interview with the London-based Saudi-financed al Hayat Arabic newspaper.

Following Arafat’s death in November 2004, and wishing to settle “the problem” with Suha quietly, Palestinian Authority leaders, e.g. Fatah leaders, reportedly struck a deal with Suha whereby she agreed to receive a large amount of Arafat’s fortune as well as a monthly stipend of tens of thousands of dollars for the rest of her life, all in return for shutting her mouth.

While the exact details of Suha’s present fortune are still not known, it is very likely that the bulk of her assets have been arrogated from monies that belonged to the Palestinian people. Suha was not known as a businesswoman and she didn’t hail from a particularly rich family. Her mother, Rimonda Tawil published a weekly magazine in East Jerusalem, called al Awda, which was financed by the PLO. And she inherited very few assets from her father.

So, how did she amass all this wealth, all these hundreds of millions of dollars?

In simple English, it seems we are talking about a huge theft by every conceivable standard of logic. I know that a suspect is innocent until proven guilty. However, it this case, the guilt screams to the seventh haven. People don’t just make hundreds of millions that easily and in such a short period of time.

Besides Yasser Arafat’s bank accounts, secret or otherwise, didn’t belong to him personally but to the Palestinian people.

More to the point, the late Palestinian leader, with all due respect to his struggle for freedom and statehood, had no right to leave hundreds of millions or tens of millions of dollars to his wife and daughter. These millions were not his. They belonged to the people.

Hence, it is imperative that the Palestinian society raise the issue and exert meaningful pressure on government officials so that they immediately order a full and comprehensive investigation into Suha Arafat’s finances.

The people of Palestine have every right to know where every cent of Suha’s millions came from, and if a genuine investigation is carried out and incriminating evidence is obtained, then the PA will have to seek her extradition so that she will stand trial for corruption and embezzlement of the Palestinian people’s money.

This is test case not only for the Palestinian resolve to fight corruption, but also for the seriousness of our quest for independence and statehood.

After all, corrupt politicians who cover up corruption and protect the grand thieves can’t be entrusted with the fate of the people and the country.

MAHMOUD ABBAS
2003, Arafat
appointed Abbas Prime Minister of the Palestinian National Authority.
Corruption allegations,
2005 became President - (still in office in 2020
Wikipedia

There are frequent allegations that officials of the Palestinian Authority, including Abbas, have systematically embezzled public funds.

Abbas's mentor and predecessor, Yasser Arafat, was accused of embezzling billions of dollars of Palestinian money.] This perceived corruption of the Fatah leadership is believed to have contributed to a convincing win by Hamas in the January 2006 parliamentary election. Fatah leaders were accused of siphoning funds from ministry budgets, passing out patronage jobs, accepting favors and gifts from suppliers and contractors.

The source for specific allegations against Abbas was one of Arafat's most trusted aides, Mohammed Rashid, accused by the PA of embezzling hundreds of millions of dollars, who threatened to expose corruption scandals in the Palestinian Authority. For many years, Rashid served as Arafat's financial advisor and was given a free hand to handle hundreds of millions of dollars that were poured on the Palestinian Authority and the PLO by US, EU and Arab donors. According to Rashid, Abbas's net worth was $US100 million

On 10 July 2012, Abbas and his sons were attacked, in the US Congress, for their alleged corruption. The debate was entitled Chronic Kleptocracy: Corruption Within the Palestinian Political Establishment In his testimony before the House Committee on Foreign Affairs, Subcommittee on Middle East and South Asia, Elliott Abrams stated that "Corruption is an insidious destroyer not only of Palestinian public finance but of faith in the entire political system. And it has certainly had an impact on potential donors. I can tell you from my own experience, as an American official seeking financial assistance for the PA from Gulf Arab governments, that I was often told "why should we give them money when their officials will just steal it?""

The conspicuous wealth of Abbas's own sons, Yasser and Tarek, has been noted in Palestinian society since at least 2009, when Reuters first published a series of articles tying the sons to several business deals, including a few that had U.S. taxpayer support. In a Foreign Policy article, author Jonathan Schanzer suggested four ways in which the Abbas family has become rich. They include monopolies on American made cigarettes sold in the territories; USAid funding; public works projects, such as road and school construction, on behalf of the Palestinian Authority and special preferences for retail enterprises. It was strongly implied that the sons lineage was the main credential in receiving these contracts.

One of his sons, Yasser Abbas, (but not brother Tarek or father Mahmoud) filed a $10 million libel lawsuit in the United States District Court, District of Columbia, in September 2012 against Foreign Policy Group LLC and Schanzer alleging "false and defamatory statements. It seems every statement will be challenged, in a jury trial, if the court accepts jurisdiction." Abbas also accused Schanzer of not contacting him for comment and of relying on untrustworthy sources of information. Abbas accused Schanzer of acting with malice and pursuing an agenda against the brothers, even though he also contended that he's a private citizen and not a public figure, so we wouldn't need to prove actual malice to win. In reply, the magazine has argued that Abbas's suit is aimed at intimidating his critics and stopping debate. "In the final analysis, the commentary falls well within the protections of both the First Amendment and the common law," lawyers for the magazine assert.

Some analysts believed the Abbas family would not proceed with the case as it would allow Foreign Policy and Schanzer to dig in too deep into the PA's secret finances and records. However, the case proceeded.

In September, 2013, U.S. District Judge Emmet Sullivan dismissed the suit using D.C.'s anti-SLAPP measure. Sullivan determined the lawsuit intended to censor, intimidate, and silence critics by burdening them with the cost of a legal defense until they abandoned their criticisms or opposition. The decision has been appealed. (Editor’s Note: Appeal lost https://www.lexology.com/library/detail.aspx?g=b9b05b17-9d8d-4d78-a57b-4d7df09ce781)

As part of the 2016 Panama Papers data leak, it was revealed that Abbas's son Tareq Abbas holds $1 million in shares of an offshore company associated with the Palestinian Authority.

CORRUPTION IN THE PALESTINIAN AUTHORITY
Council on Foreign Relations, Blog Post by Elliott Abrams, April 5, 2018

Civil Society does exist in the Palestinian territories, and one of the strongest organizations is the one that fights corruption: The Coalition for Accountability and Integrity. It was established in 2000 and is linked to Transparency International.

Its tenth annual report is out, covering 2017 and entitled “Integrity and Combating Corruption.” More on: Palestinian Territories

Needless to say, no government is entirely without corruption and the Palestinian Authority suffers from unique disadvantages: it is not a state, it does not have control over the territory it supposedly governs (the Israeli military is the ultimate authority in the West Bank), it must deal with Hamas in Gaza, and so on.

Nevertheless the findings show disappointment with the situation, and here are some examples.

he rule of law is weak both because the parliament never meets to pass laws and due to executive interference: “the judiciary and the prosecution in the West Bank and Gaza Strip continue to lack independence.”

Government jobs, which are prized due to the weak private economy, are awarded on the basis of cronyism rather than merit: “Appointments at higher posts continued without transparency or fair competition, in disregard for the principle of equal opportunity. No job announcements were published in the newspapers, nor were there any competitions over appointments.”

While there is a high import duty on automobiles, it is often escaped by big shots: “non-payment of customs and taxes for purchase of private vehicles…is a waste of public funds…. Influential persons in senior positions were granted tax and customs exemptions without legal basis for approval. The amount of wasted funds is enormous, as the investigative report documented eight cases concerning influential officials where the amount wasted reached 357,600 dollars, which should have gone to the public treasury.”

The security services continue to be bloated at the top, as under Arafat: “the total annual amount for salaries…for the ranks of Major General, brigadier General, Colonel, and Lieutenant colonel, in 2016, reached the amount of 238.7 million NIS per year, equivalent to the yearly salary of 13000 soldiers. Although the total number of the officers of the ranks mentioned is 5672. This translates into: for each officer assigned to lieutenant colonel or above there are two soldiers, despite the fact that the global experience shows differently. For example, in Israel, the ratio is 9 soldiers to one officer, and in the U.S. it is 5 to one.”

Moneys are spent on non-existent entities, and here’s the best example: “salaries and raises were paid to employees of an airline company that no longer exists on the ground.” That is Palestine Airlines, about which the report says this: “The Palestinian treasury paid salaries to hundreds of employees in the ‘Palestinian Airlines’, which is a governmental company that has a board of directors, headed by the Minister of Transportation. This ‘company’ is not registered as a company in accordance with the law, nor does it have a governing law of its own, although the decree by which it was established goes back to 1994….The budget for this ‘company’ is included in the budget of the Ministry of Transport and Transportation with no details.” A non-existent airline—whose employees were not only paid salaries but given raises.

Finally, there is the case of the Presidential Palace (pictured above). This giant edifice—50,000 square feet for the Palace itself plus another 40,000 in other buildings—cost the bankrupt Palestinian Authority $17.5 million. The public uproar forced President Mahmoud Abbas to convert the edifice into a public library. As the report states, “Honorable as it may sound to convert the presidential palace into a public library, it remains to be the epitome of misuse of public funds as well as a bad example of lack of prioritization.”

e report also covers Gaza, where there is plenty of Hamas corruption (though opinion polls included in the text suggest that corruption is perceived to be lower by residents of Gaza than by those in the West Bank).

The report is a tribute to the Coalition for Accountability and Integrity, because the text is long and detailed. Its very existence is a reminder that Palestinian civil society remains strong and continues to struggle with the political parties, movements, and leaders that dominate political life-- and have so often been a curse to Palestinians.

"AMONG THE PALESTINIANS,
THEY TELL YOU STRAIGHT OUT, 'I WANT TO GET RICH.'"
Globes [online], Israel business news, Ella Levy-Weinrib, July 28, 2014

In recent days, various media have been publishing photographs of Hamas leaders in luxurious homes with fitness equipment, at luxury hotels around the world, etc. On the other hand, distressing pictures are being shown of the suffering of the Palestinian people in their rundown houses, whom Hamas says it represents.

One of the big mysteries is how much the Hamas leaders, the Arab world's new tycoons, are worth, and how they, born and raised in refugee camps, who raise aloft the cause of their people's welfare, have become so wealthy and reclusive.

Col. (res.) Dr. Moshe Elad, a lecturer in the Middle East Department of the Western Galilee Academic College, who served in senior positions in the territories for 30 years, is attempting to answer these questions.

"The vast majority of Hamas founders and leaders were refugees or second generation refugees, and some of them were the product of marriages between Egyptians and Palestinians. They had no money at all. When they and Hamas were just starting out, the organization (not in its own name) was nurtured by the Israeli military government, which fostered the Islamic associations working in the Gaza Strip as a counterweight to the Palestine Liberation Organization (PLO). Their phenomenal wealth started accumulating when they decided to disassociate themselves from Israel and search for alternative financing sources."

Elad explains that the money came from two directions: "Legacies from the deceased; money from charity funds; a donation called zaka, one of the six pillars of Islam; and donations from various countries. It started with Syria and Saudi Arabia, with Iran added later and becoming one of Hamas's biggest supporters, and ended with Qatar, which has now taken Iran's place."

Together with the donations from various countries, fundraisers began operating in the US to collect money for Hamas. Here, the Hamas leaders began to get their hands on some really big money. "One of those fundraisers was Dr. Musa Abu Marzook, the number 2 man in Hamas," Elad says. "At the beginning of the 1990s, he began a fundraising campaign in the US among wealthy Muslims, while at the same time founding several banking enterprises. He himself became a conglomerate of 10 financial enterprises giving loans and making financial investments. He's an amazing financier."

The US administration ordered Marzook's arrest in 1995 on charges of supporting terrorism. After he spent two years in a US prison, it was decided to expel him without trial. He kept the money. "When he was expelled from the US in 1997, he was already worth several million dollars," Elad says, adding, "Somehow he evaded the clutches of the US Internal Revenue Service and was not charged with financing terrorism. People in the know say he probably became connected to the administration and cooperated with it. There is no proof, but it's hard to think of any other reason why he escaped punishment for such serious offenses. In 2001, in the investigation of the September 11 events, it turned out that he had extensive financial connections with Al Qaeda, including the transfer of funds to the 21 Al Qaeda operatives accused of the attacks."

Today, Marzook is considered one of Hamas's wealthiest billionaires. "Arab sources estimate his wealth at $2-3 billion," Elad says.

Another Hamas leader-turned-tycoon is Khaled Mashaal. "Estimates around the world are that Mashaal is currently worth $2.6 billion, but the numbers mentioned by the Arab commentators (based on their many sources) are much higher, varying from $2-5 billion invested in Egyptian and Persian Gulf banks, and some in real estate projects in the Persian Gulf countries," Elad adds.

The next tycoon on the list is Hamas Prime Minister Ismail Haniyeh. "He is a scion of a family from the Al-Shati refugee camp, and his capital is estimated at $4 million," Elad says, adding, "He registered most of his assets in the Gaza Strip in the name of his son-in-law, Nabil, and in the name of a dozen of his sons and daughters and a few less well known Hamas leaders. They all have homes in good neighborhoods in the Gaza Strip, where the value of every home is at least $1 million."

Another wealthy Hamas official - Iman Taha - is not on the organization's highest levels, but he, too, (and other junior managers) is feeding from the trough. According to Elad, "He was a poor rebellious kid from the al-Borg refugee camp, but he recently built a home in central Gaza worth at least $1 million. He's responsible for coordination between oversea Hamas and Hamas in the Gaza Strip, and he's not even a leading figure, but he's already among the millionaires."

The question of where these officials got their money exposes the corrupt system used by Hamas through its control of the money pipelines in the Gaza Strip. They treated the money as their own personal possession. "Most of the money that went into the pockets of people in the Gaza Strip was obtained through tunnel deals and the creation of a flourishing smuggling market, which it is believed has created several hundred millionaires in the Gaza Strip, although most of the people there don't live like that. The man pulling the strings from Egypt with the tunnels is none other than the number two man in the Muslim Brotherhood, Khairat el-Shater. His connection with Hamas was ostensibly for Islamic religious purposes, but they actually built a prosperous business, which earned phenomenal profits," Elad says.

The Asharq Al-Awsat (Middle East) newspaper, one of the most prestigious in the Arab world, recently reported that at least 600 millionaires were living in the Gaza Strip - the same people sitting on the money pipelines there.

Elad describes how the system worked and to how much money (huge amounts) Hamas leaders were exposed: "Senior Hamas leaders charged a 25% 'tax' and $2,000 on every disassembled vehicle coming through the tunnels. There are hundreds of smuggling tunnels from Egypt to Gaza, and these are the types of tunnel Israel has been less busy in destroying, because Egypt has destroyed many of them. From June 2007 until 2010, $800 million in cash was transferred in tunnel deals (according to information from Hamas money traders). Hamas also taxes Gaza merchants on everything traded, from boxes of vegetables to luxury cars, and the leaders scoop the money into their pockets."

Another source of wealth for Hamas leaders was taking over land. "They took over land mainly near the sea in good areas, such as the former Gush Katif, then sold it. In effect, they are the cat guarding the cream - the land - so they were able to take over land and loot it for themselves," Elad explains.

In addition, there is a system in the Gaza Strip of fictitious recruitment of workers for Hamas for the purpose of obtaining pay slips from people overseas paying for it. "They get the payments from overseas according to the workers' names. It has recently been discovered that there are hundreds of fictitious names of soldiers and officials supposedly in Hamas. Actually, the leaders and officials put the money in their own pockets," Elad asserts.

According to various sources, some of Mashaal's money came from the "Syrian fund." Elad explains: "According to these accusations, following an investigation by the US federal authorities, Mashaal was accused of embezzling the entire Syrian fund. There was a separate fund in Syria for Hamas; Mashaal controlled all the movements in the fund when he lived there. As soon as he left Damascus, he took the Syrian fund, which was worth several billion dollars, and distributed it to himself and others. It is believed that Hamas had $1.5-2.5 billion in assets in Syria, which Mashaal took."

In summary, Elad says, "This is corruption at the highest level… What has united the Palestinian leaders all throughout the years is the saying, 'We have to get rich quick.' This is how the regime sees it. Their leaders have no shame. Shortly after they got power, they took control of fuel, communications, and any other profitable sectors in the country. There are get-rich-quick schemes and corruption in Western society, too, but there it's done sophisticatedly with envelopes of money and complex structures of bribery and the like. Among the Palestinians, they tell you straight out, 'I want to get rich.'"

TERRORISTS & KLEPTOCRATS:
HOW CORRUPTION IS EATING THE PALESTINIANS ALIVE
Across the world we have seen how kleptocratic governments
destroy the chances of ordinary people to make a living.
A first-hand account of how the Palestinian Authority has followed the pattern, with devastating consequences.
The Tower, Aaron Menenberg, June 2014
Aaron Menenberg is the Executive Director of the Public Interest Fellowship.

In 2010-2011 I worked with the Israeli Ministry of Defense’s Civil Administration, which administers non-security policy in the West Bank. This unique experience has informed my thinking about Israelis, Palestinians, and the Israeli-Palestinian conflict to a great extent. Among the many lessons I learned was that the Palestinian Authority does little to help the Palestinian people. One of my responsibilities as an Israel Government Fellow was to work with the Civil Administration’s agriculture team to ensure aid projects funded by foreign governments in the West Bank were executed successfully and lawfully. Much of this work involved significant interaction with individual Palestinians, most of whom were hard working, entrepreneurial-minded people focused on societal and self-improvement. In fact, many of them inspired me. I also worked intensively with the Palestinian Authority. Unfortunately, many of those experiences were deeply troubling, as I came to learn that the Palestinian Authority’s priorities and goals were often in conflict with those of its people, and held them back. This piece offers insight into the relationship between the PA and the Palestinian people.

Middle East scholar Jonathan Schanzer explains in his recent book State of Failure that the American approach to the Palestinian Authority has failed because it revolves around “getting to yes” in the peace process without transforming the PA into a responsible and trustworthy government. The right approach, he says, would involve fiscal reform and institution-building, while simultaneously negotiating the thorny issues with Israel. By myopically focusing on “yes,” the U.S. is ensuring the Palestinian Authority will remain corrupt and therefore illegitimate in the eyes of the Palestinian people. My experience confirms Schanzer’s argument. The PA is an incredibly corrupt organization. So is its dominant party, Fatah. Together they form a motley crew of elites seeking to maintain power and the attenuating trappings, willing to do whatever it takes to ensure their power and position are not lost.

This issue has now become too important to ignore because the most recent round of ill-conceived Israeli-Palestinian negotiations have, unsurprisingly, failed the Israeli and Palestinian people yet again and have resulted in the victory of the status quo. This outcome leads down a dark tunnel because we have failed to understand a basic fundamental: the Palestinian Authority as it exists is not a force for good. I returned to the U.S. in the summer of 2011, and although I have told the following stories anecdotally in private, I have resisted making them public because I wanted to give the PA the benefit of the doubt, hoping that in the end their role would be a positive one. I am not the only one who has held this hope. It is a hope that drives much of the support given by the US and Europe to the PA. But this hope has not been fulfilled, and it is now a barrier to better outcomes.

Nothing I experienced dashed my hope more than the story of Sammy Khalidi.

It began with a phone call. It was Sammy. He and I had just seen each other the day before at his farm in the central Jordan Valley in the West Bank. Sammy had a medium-sized farm growing tomatoes, bell peppers, cucumbers, and herbs. He was participating in a development project run by an American consulting firm on behalf of the United States Agency for International Development (USAID) that aimed to enable Palestinian agricultural producers to export their products to foreign markets.

“Hello,” I said, “this is Aaron.”

“Aaron, it’s Sammy Khalidi. I have a problem, and I do not know what to do.”

“What’s the problem?”

“I got called from someone in the office of Fayyad. He said I have two days to switch packing houses. They do not want me using the Jewish pack house. They want me to use the Palestinian one. I cannot do that. It is too far away and too expensive. It would not work, I would go out of business. They said if I do not obey, they will take away my export license.”

Salam Fayyad was then the prime minister of the Palestinian Authority and an international darling. More technocrat than politician, Fayyad was credited with establishing rule of law and building political and social institutions in the West Bank that were creating better economic outcomes. I was a fan of Fayyad myself, but I was about to learn that even an internationally loved American-educated technocrat (or at least someone working in his office) could, and would, prioritize politics and the politically connected over the future success of the Palestinian people.

“Why not?” I asked.

“The Sinokrot pack house is south of me. My product must go north. This means my product will go bad before it gets to market. And they are more expensive.”

Sinokrot is a well-known Palestinian name. Sinokrot Global Group Ltd. is owned by Mazen T. Sinokrot. Sinokrot, also Western-educated (in Britain), has been instrumental in the development of the agriculture sector in the West Bank, and one of its greatest advocates in export markets. He also founded and chairs Al-Quds Holdings, which invests in education, real estate, tourism, information technology, and health care in Jerusalem.

Corruption and self-interest at the highest levels of the Palestinian Authority have prevented ordinary Palestinians from achieving economic prosperity.

He has excellent political connections, having served as the PA’s Minister of Economy in 2005 and 2006. He remains influential, and is a prominent board member of the Palestinian Investment Fund (PIF), which was created by a transfer of assets previously managed by the Palestinian Authority. Though independent, it benefits from deep political connections. During my time with the Civil Administration, PIF was receiving hundreds of millions of dollars from the American government’s Overseas Private Investment Corporation (OPIC) and USAID. When Hamas took over Gaza in 2007, it also took over PIF’s Gaza operations. While not a member of Hamas, Sinokrot was arrested in 1998 by Israel for operating an investment company it believed was involved with Hamas. Three years later the U.S. Treasury designated the same company as a financer of terrorism associated with Hamas. A rumor in 2011 was that Hamas was hoping to name Sinokrot prime minister of a unity government with Fatah.

“You use a pack house in Argaman, right?”

“Yes.”

Argaman is a Jewish settlement about 26 miles north of Jericho. There are two produce-packing houses there, both owned by Jews. The problem quickly became clear: A Palestinian businessman participating in a U.S.-funded project was working with a Jewish company in a Jewish settlement when there was a Palestinian alternative. I doubt Fayyad was actively helping a Hamas affiliate, but he recognized a potential problem for his reputation and the PA’s political agenda. The instructions issued to Sammy were clearly politically motivated, even though they came at the cost of supporting a potential political rival and threatened the existence of a business that provided jobs to dozens of Palestinians.

“You know Sammy, there’s nothing I can do. We have a policy of not interfering in internal Palestinian decision-making. What are you going to do?”

“I do not know. I have told my employees, and asked them and their families to march in front of Fayyad’s office tomorrow.”

“How many people is that?”

“Maybe one thousand. My men have big families.”

“That’s a lot of people.”

“I am very worried.”

The USAID-funded program Sammy was participating in was a good one. As an American taxpayer I really liked the concept. It provided assistance to small- and medium-sized agrobusinesses in the West Bank to help them export their products to Europe and Russia, where profit margins were higher than the Palestinian, Israeli, and Jordanian markets where they normally were sold. The project provided affordable financing and, in partnership with Israel, access to materials and expertise to meet the required product standards of destination markets. Israel then, on its own dime, set up an Israel-West Bank border crossing dedicated to agricultural transport, and helped the participants partner with Israeli companies who could get their product to market via Israeli ports. I had met a number of participants, and all of them seemed pleased with the project. I could understand why Sammy was worried.

“Do you think it will work? Do you think Fayyad will back down?”

“No.”

I had a thought.

“Sammy, what time will your people show up tomorrow?”

“Lunch.”

“Okay, make sure they are there. I have an idea, but it is best you do not know what it is. I make no promises, but I will try to help. Make sure you tell no one we spoke tonight, okay?”

“Okay.”

“Good luck.”

I felt for Sammy, and the families his business supported. My experience in Israel and the West Bank showed me something few witness: Israelis and Palestinians have rubbed off a lot more on each other than either is willing to admit. Palestinians have intimate experience with Israeli culture and business, and the innovative entrepreneurial spirit and capitalism that has catapulted Israel into the first-world Organization for Economic and Co-operation and Development club has rubbed off on many Palestinians. Sammy wanted to run a successful business free from crippling government bureaucracy, and was willing to work with Jews if it meant greater profits for himself and higher pay for his workers. I wanted to support him.

I called some journalists I knew in Jerusalem, several from global news agencies and several from local outlets, and told them Sammy’s story as an anonymous source. I also told them when and where the demonstration was taking place. I suggested they cover the story, and emphasized the power of the camera and what it could do for Sammy’s cause.

The story was not a sexy one. People did not die, and the oppression of the Palestinians involved came at the hands of the Palestinian Authority, not Israel. I never did see it on the news and that did not surprise me. But Sammy did not lose his export license. The next time he saw me, he thanked me for the “friends” I had sent. If I had to guess, I would say at least one reporter with a camera showed up and asked a government official to comment. This led to a reversal of policy, and thus a non-story for the media.

Yet behind the specific story of Sammy Khalidi is a more general one, and it is not a non-story at all. It is hugely important, and it is high time it was reported, because there are a thousand Sammy Khalidis in the West Bank whose problems with the corruption and cronyism of the Palestinian Authority are ours as well as theirs.

The cost of PA corruption is monumental. More than anything else, it makes Palestinian political and economic progress all but impossible. The poor quality of governance and the resulting lack of political inclusiveness and economic opportunities in the Palestinian territories are a surefire model for the kind of economic and political repression that typifies underperforming societies. You will not find a single example of a people governed by such a regime that has achieved long-term success. The inevitable result is social stagnation and the kind of discontent that can lead to violence and even war.

In one of my favorite examples of how Palestinian governance is subservient to political power, the PA still pays its Gaza-based employees even though they are unable to perform their duties due to the Hamas takeover. In other words, the PA—using donor funds—is paying people not to work. There is only one reason for this: It allows PA President Mahmoud Abbas to maintain his political base in Gaza.

Perhaps more infuriating, however, is the fact that an enormous amount of PA money—foreign and domestic—goes to line the pockets of the Palestinian political elite. About two years ago, Hasan Khreishah, the deputy speaker of the Palestinian Legislative Council, spoke out on the issue. “Since the signing of the Oslo Accords,” he said, “we have had 12 Palestinian governments…. Each government [has]… at least 24 ministers. This means we have had 228 ministers, in addition to advisors. All receive high salaries and luxurious vehicles.” He went on to point out that the aforementioned PIF pays its chairman $35,000 per month, which is over 12 times the West Bank’s per capita gross domestic product in 2008—the most recent data available.

This is, unfortunately, the PA’s standard operating procedure. An EU audit of the years 2008-2012 found that around 2 billion Euros of its aid were lost to corruption. It has also been shown that Yasser Arafat and his advisors stole millions of dollars in foreign donations, turning them into billions as they moved the money around the world. According to several reports, this practice has continued—and may have gotten worse—under Abbas. And with the Palestinians’ acceptance into the United Nations Convention Against Corruption, the PA will now have a shield with which to protect itself from any real reform.

Many supporters of the PA tend to look for ways to explain away these problems. They have composed a popular narrative in which, despite the PA’s corruption—or perhaps regardless of it—the Palestinians’ problems are primarily Israel’s fault. Economic and political development in the Palestinian territories, it is claimed, can only move forward if Israel withdraws from the West Bank, voids its security requirements for border movement, and allows the free flow of people and goods.

I have witnessed something different. I have observed the West Bank economy and labor market from within, and have come to understand that the best opportunities for Palestinians are abroad. Not only do foreign markets offer larger consumer bases and greater profits for exporters, but most importantly they do not suffer from the corruption experienced under the Palestinian Authority that stifles prosperity well beyond any other factor. Even within the West Bank economy, many of the best opportunities come from Israeli and foreign assistance.

Given that the highest profit margins for Palestinian goods are found outside the territories, such assistance is essential. And given that Israel is the Palestinians’ main point of access to foreign markets, its help is equally important. Even though many opportunities for economic development are initiated by aid agencies and NGOs from the West and Asia—such as the project Sammy Khalidi participated in—they not only require Israel’s help, but also benefit from direct Israeli participation that mostly goes unreported. This is partly because Israel’s assistance can be politically unpopular domestically, but it also because, as in Sammy’s case, it does not fit the narrative people are comfortable with.

Sammy needed more than access to affordable financing and Israel’s ports to successfully and profitably export. He needed to produce products that met the higher standards of the export markets he was targeting. And he needed to reduce his costs through more advanced and efficient techniques. To do this, he needed help. Enter Israel.

Israel’s agricultural policy in the West Bank includes active facilitation of foreign-funded development projects. As previously stated, Israel has built, at its own expense, an agriculture-only border crossing to ensure timely transport and help connect Palestinian farmers with Israeli companies that can transport their products to market. But Israel’s support goes beyond this, and in many cases actively contributes to Palestinian economic success.

The agriculture department of the Civil Administration paid for and organized at least six seminars and conferences for Palestinians while I was there. At these events, experts gave lectures and demonstrations on agricultural practices. Each of them took place in Israel and were one to three days in length. Israel bused the participants to the events, paid for food, and—when necessary—overnight accommodations as well. Between 25 and 30 people usually attended.

I was lucky enough to be present at many of these conferences. One took participants to the Eshkol Forest in the Judean Hills, where experts from the Jewish National Fund explained the best methods for building sustainable forest roads, including drainage techniques that aid in substantial water reclamation. Among those present was the director of soil management for the Palestinian Authority’s Ministry of Agriculture. A three-day conference in Haifa covered the best ways to manage grazing land, which is a particularly important topic for a society of herders unaccustomed to the implications of private property. Private property is a relatively recent development in the Palestinian territories and has complicated grazing patterns that are often centuries old. Grazing lands, improperly managed, quickly lose their nutrients and become useless and result in underfed animals. Four experts from Israel’s Ministry of Agriculture taught the seminars, which were attended by 30 Palestinians.

My favorite trip was to a facility operated by Tnuva—Israel’s biggest dairy producing conglomerate. I love dairy, especially yogurt, which happens to be my favorite food. So I was ecstatic to find a conference table covered with Tnuva products for us to sample. And I was over the moon when we were all given a large, insulated picnic basket of Tnuva products on our way out. Between these two favorite memories of mine, Tnuva’s head scientist and dairy quality manager gave lectures and took the participants on a guided tour of the entire facility. After leaving, we visited a nearby dairy farm to receive an overview of sustainable practices. This event was not only for farmers, but also public health officials, veterinarians, and those involved in animal policy. Members of the PA’s central veterinary laboratory and a Hebron veterinary service attended, as did the PA’s directors of public and animal health.

Farming practices, the topic of most interest to Sammy, was a common theme. One event focused on product and safety standards. Another included irrigation techniques, at which Israel is particularly adept. The cost of a year’s worth of these events was in the hundreds of thousands of shekels, and it came directly out of Israel’s budget. Their sole aim, moreover, was to improve the performance and competitiveness of the Palestinian agricultural sector. This goal, if met, would come at a cost to the Israeli agricultural sector, which would face stronger competition domestically and internationally. This fact was not lost on many of the Palestinians who prized their spots on these trips.

The Palestinian Authority also recognized the benefits to Palestinians who attended the events, and therefore would sometimes deny a person’s attendance. If someone we expected for an event pulled out or did not show up, we knew they hadn’t paid their taxes or, just as likely, had done something to irk the PA—like fail to pay a bribe or seek a particularly robust business relationship with non-Palestinians.

The best part of these trips for me was that, from time to time, Palestinian attendees would feel safe enough to speak candidly about their lives and their thoughts on the Israeli-Palestinian conflict. I got to know several of them quite well, and they gave me a unique look at a cross-section of Palestinian society.

This was largely due to the unique position I held. I worked for the Israelis, but I was not—and am still not—Israeli. My fellowship was as much about learning as it was about participating, and it was for only a limited period of time. I was open about this with the Palestinians I came into contact with. As they came to know and trust me, they also came to understand that I was going to take my experiences back to the United States. As a result, they wanted to make sure I understood certain things.

Some who shared their “insights” and “reflections” with me were clearly trying to indoctrinate me. A farmer who lived near a settlement contacted us several times to complain that settlers were stealing from his water supply. I took him seriously until I made a surprise visit to his farm where I learned that the PA had coerced him into dismantling his well in order to influence an NGO conducting a research trip. Several very pleasant visits to the Sinokrot pack house had me believing that they could be a valued partner in the export development project Sammy was participating in. Then came Sammy’s phone call, and I realized Sinokrot had been using its political influence to send more business its way.

Other conversations and experiences were more helpful and more honest. Most of them came during agricultural field trips as the day was winding down. Those who opened up to me did not do so to the group. Once in a while, one of the senior advisors to the PA’s Minister of Agriculture attended. On those trips, no one felt like chatting over dessert or a beer. But when the advisor was not part of the trip, I could usually count on the opportunity to discuss things with one or two people. The trips always included private business owners and farmers, but also a substantial number of people from the Palestinian Authority. The middle-managers were usually the most interesting and informative to talk to. And as with Sammy’s story, I will never forget what Izzat Faruq told me.

Izzat worked for the Palestinian Authority and was a middle manager in one of the Agriculture Ministry’s departments. Smart and articulate, Izzat had worked his way up the bureaucracy through hard work. Sadly for him, however, he lacked the political connections to progress any further. He was aware of his station in life and stoic about it. We were on several trips together, and after dinner one night, he spoke openly to me.

“Izzat, why do you come on these trips?” I asked.

“It is a good chance to learn. The Israelis are very good at this work.”

“Do you enjoy coming to Israel?”

“Sometimes yes, but it is not home.”

“Would you like to live in Israel? Do you like the cities? Everything is available here, much more than in your town.”

“That is true, but it is not home. It does not feel like home. My family has lived in the Jordan Valley for a thousand years, that is my home.”

“Will that be your children’s’ home?”

“I hope not.”

Izzat was in his late 30s. He was married and had two sons and a daughter. I knew this because Izzat is one of those fathers who carries pictures of his kids in his wallet, and needs little if any prompting to display them. Clearly a proud father, I wanted to understand what a committed bread winner in the West Bank thought about what is, objectively, the more materially advanced society of Israel.

“I hope Palestine becomes like Israel, but does not become Israel.”

“What do you mean? Does that mean you support the two-state solution? Or do you mean you just want more McDonalds and some Gap stores? Or do you want a democratic government?”

“In Israel children will have a better life than their parents had. I want this for my children. I want them to grow up thinking that they can be more successful than me. But that is not the case, they do not think this, and I do not believe this.”

“Why?”

This is when Izzat paused to look around the dining room. He wanted to make sure there was not anyone around who, if they overheard him, would get him into trouble. A composed man, he took a deep breath before answering.

At its own expense, Israel trains Palestinian farmers and businessmen in modern practices, knowing that a strong Palestinian export economy will be mutually beneficial.

“Do not misunderstand me, Israel is at great fault. But Israel is not why my people have failed to be a nation. You know my job, you know what I do, and you know the people I work for. Their interests are not the same as mine.”

“They do not want what is best for your children?”

“No, they want what is best for their children. A father wants what is best for his kids.”

I did not need Izzat to finish the thought; I knew what he was implying. His bosses wanted what is best for their children, which is not the same as what is best for his children. His bosses are part of the elite class that derives its power and wealth from corruption. Izzat earned what little was left over through hard work and subservience to the dysfunctional system, and with his small salary had to support his family and likely some extended family as well, if not also his aging parents.

“If I could give you and your family Israeli citizenship, would you take it?”

“I do not know. I have friends in Israel, Palestinians and Jews, and I could maybe make more money in Israel. My kids might have a better life. It is a nice country, but it is not home.”

“Would a successful two-station solution make your life better? Would it help your kids have a better life than you have had?”

“I do not think about that, it is pointless. I want a better life for me, and for my family. I want economic opportunity. Would a two-state solution help that? If so, then yes, I want it. If not, then it is not the most important thing.”

Izzat’s comments haunted me on my way home the next day. I genuinely felt bad for him, and I still do. He is completely shut out of the political process and stuck in a position below his talents through no fault of his own. In my experience, Izzat’s story is as powerful as it is common. That is to say, very powerful and very common.

A few months earlier, I and those in my fellowship program had the opportunity to visit Kfar Vradim, an Israeli town nearly equidistant between Nahariya and Tzfat, and meet with its mayor, Sivan Yehieli. Yehieli is a charismatic and outspoken man. Our discussion with him was wide-ranging. He talked about his particular brand of Zionism, the existential importance of Israelis settling the north and south of the country, efforts he and other mayors were making to improve relations with Arab towns in the north, and his personal reflections on the Israeli-Palestinian conflict. During the discussion I had scribbled down some comments Yehieli had made, and one had come to strongly resonate with me as I spent more time in The West Bank:

“The Palestinians have the responsibility for themselves, but they have not taken that responsibility. They want a judiciary, where are their judges? They want schools, where are their teachers?”

What Izzat told me was that Yehieli oversimplified the situation. If the Palestinians were led by Izzat and Sammy and those who, like them, wanted to build a better society, things would be dramatically better. If Palestinian leaders reflected the common desire for an independent judiciary capable of enforcing the rule of law, there would be capable judges protecting businesses from government overreach. If Palestinian leaders recognized that schools capable of teaching all Palestinian children the skills and knowledge they need to achieve a better life than their parents are critical to the future of the Palestinian people, there would be more teachers interested in and capable of achieving these goals.

Unfortunately, the reality is just as Izzat implied. The elite class of politicians and businessmen that make up the Palestinian Authority have different interests and different responsibilities than the rest of Palestinian society. Put another way, the average Palestinian is not often the constituency the Palestinian Authority is serving. The PA Ministry of Agriculture did not have Sammy or his employees’ best interests in mind, and was clearly prioritizing its own needs; it was not responsible to the people it, as a government, has a duty to serve. And Izzat’s bosses in the same ministry did not care about the future of Izzat’s children, only the future of their own sons and daughters. Unfortunately for Sammy, Izzat, and a sizeable majority of Palestinians, the interests of the few in power are dramatically different than theirs.

Through the PA, a small group of elites has concentrated power and wealth, estranging the Palestinian people from its government and insulating the government from the people. Sadly, foreign attempts to aid the Palestinians are subject to the same regime, with devastating consequences. The attempt to use foreign aid to the PA as both a carrot and a stick has not closed the gap between the Palestinian people and their government. Rather, it has helped widen it.

American and European support for the Palestinian Authority now totals hundreds of billions of dollars—possibly trillions if non-governmental activities are included. With that money, we have helped build an elite-run system that bludgeons the entrepreneurial Sammys and marginalizes the pragmatic Izzats. Not a lot of Westerners get to see this dynamic from the inside, and that is a shame.

Much of the foreign support for the Palestinians is given with the best of intentions. This makes those who question it susceptible to all manner of criticism. That this questioning is often warranted, however, escapes many supporters and financiers of the Palestinian Authority, because it contradicts the comfortable mainstream narrative that reinforces their motivation. Meanwhile, the PA is as corrupt as ever, and uses our foreign aid to literally sell its people short.

The gap between the Palestinian people and their leadership is nothing less than catastrophic, and it will not be closed unless donors change the way they support the Palestinian Authority. A good first step would be to tie aid to greater PA transparency and responsibility to the Palestinian people. Donors should also insist on fiscal and legal reforms, as well as the establishment of robust and independent institutions—judiciary and education included. These are all necessary ingredients for economic growth and nation-building. Unfortunately, so long as we and other donors refuse to take these steps, we will remain part of the problem, not part of the solution.

HAMAS GOT RICH AS GAZA WAS PLUNGED INTO POVERTY
With multi-million-dollar land deals, luxury villas
and black market fuel from Egypt,
Gaza's rulers made billions while the rest of the population struggled
with 38-percent poverty and 40-percent unemployment.
Ynetnews.com Doron Peskin 15.07.14

While the fighting is only expected to worsen the distress of the residents of Gaza, the Strip's economic outlook for the Strip was never good. The unemployment rate in Gaza stood at approximately 40% before the latest conflict, with a similar proportion being classed as living under the poverty line.

But while most of the Gaza population tries to deal with the difficulties of daily life, it seems that one sector at least has had few worries about their livelihoods - Hamas leaders and their associates.

MULTI-MILLION-DOLLAR DEAL

Someone who has benefitted financially is the former Hamas prime minister in Gaza, Ismail Haniyeh. Before 2006 and Hamas' shocking electoral win and subsequent dominance of the Palestinian government , 51-year-old Haniyeh was not considered a senior figure in Hamas in the Gaza Strip. But according to reports in the past few years, Haniyeh's new-found senior status has allowed him to become a millionaire. This is an unusual feat, given that he was born to a refugee family in the al-Shati refugee camp in northern Gaza.

In 2010, Egyptian magazine Rose al-Yusuf reported that Haniyeh paid for $4 million for a 2,500msq parcel of land area in Rimal, a tony beachfront neighborhood of Gaza City. To avoid embarrassment, the land was registered in the name of the husband of Haniyeh's daughter. Since then, there have been reports that Haniyeh has purchased several homes in the Gaza Strip, registered in the names of his children - no hardship, as he has 13 of them.

At least with regards to his eldest son, it seems that the apple does not fall far from the tree, given his arrest on the Egyptian side of the Rafah border crossing with millions of dollars in cash in possession, which he intended to take into Gaza.

SUBSIDIZED FUEL SOLD FOR PROFIT

According to sources in Gaza, Haniyeh's wealth, like others high up in Hamas, came primarily from the flourishing tunnel industry. Senior Hamas figures, Haniyeh included, would levy 20 percent taxation on all of the trade passing through the tunnels.

Hamas's heyday came after the overthrow of former Egyptian president Hosni Mubarak, as its parent organization the Muslim Brotherhood was growing in popularity in Egypt.

In those days, Hamas leaders and their associates were not afraid to show off their ostentatious wealth. Gaza's market for luxury villas costing at least a million dollars was booming, most purchased by people associated with the establishment of Hamas. A Gazan familiar with the real estate market summed it up at the time with a quip about a Hamas crony who had recently acquired a luxury villa: "Two years ago, he couldn’t afford a packet of cigarettes."

At the same time, Khairat a-Shater, a senior member of the Muslim Brotherhood in Egypt who headed his own business empire, made sure to personally transfer tens of millions in cash to senior administration officials in Gaza as well as to commanders from the Hamas military wing.

There were senior Hamas members who preferred that the money be kept in a safer place than the Gaza Strip, and invested it in various Egyptian assets, often through business partnerships with Muslim Brotherhood officials. In some cases, the man conducting the deals on behalf of Hamas officials, who ensured that they received their dividends in cash, was Ayman Taha, a Hamas founder once considered one of its key spokesmen. In 2011, Taha himself paid $700,000 for a luxury three-floor villa in the central Gaza Strip; a year ago, he was charged with being an agent for Egypt.

The Egyptian street has become inflamed with anger directed against Hamas over the last three years, partly due to what appears to be its financial gains at the expense of the Egyptian people. The tunnels in Rafah, the town straddling the Gaza-Egypt border, for example, saw a flourishing fuel-smuggling industry from Sinai. The fuel subsidized by the Egyptian government was entering Gaza at a low price, but being sold for eight times that. Those who made the greatest profits from the sale of the fuel were Hamas members, even as Egypt often reported shortages for its own people.

Hamas, says Professor Ahmed Karima of Al-Azhar University in Egypt, has long become a movement of millionaires. According to Karima, the organization can count no less than 1,200 millionaires among its members. He did not, however, specify the source of this information.

MASHAL'S MALl

It was not only Hamas members in Gaza who became rich. It appears that political leader Khaled Mashal is another member of the organization who used Hamas funds to his own ends. In 2012, a Jordanian website reported that Mashal had control of a massive $2.6 billion, in large part deposited in Qatari and Egyptian banks. This is likely Hamas' accumulated assets from years through donations, as well as its investments in various projects in the Arab and Muslim world. It is also known that, among other things, Hamas has invested in real estate projects in Saudi Arabia, Syria and Dubai. And, according to reports, Mashal did not always separate Hamas money and his own.

Hamas' expulsion from Syria was a severe financial blow for the movement. In 2011, before the start of the Syrian conflict, Hamas's assets in the country had reached a value of $550 million. Apart from its real estate holdings, Hamas invested in various commercial companies, including a cargo company registered to a Syrian businessman close to Moussa Abu Marzook, Mashal's deputy.

As with other areas, in its financial dealings Hamas leaders keep their cards close to their chest and maintain a high level of secrecy. Investments are made through front companies, using family and associates. Companies linked to Mashal in Qatar are registered to his wife and daughter.

Once he was forced to close his office in Damascus (after falling out with the Assad regime over its oppressive response to the conflict), Mashal declared that his place was in Qatar. There, he claimed that $12 million he had stored in his safe in his Damascus office had been lost. Not many accepted this story, and to this day believe that Mashal kept the money, transferring it to his own personal accounts.

Reliable sources claim that a project by the Fadil real estate firm in Qatar is linked to Mashal, his son and his son's wife. The prestigious project in Doha, the Qatari capital, includes the construction of four towers of more than 27,000 square meters, including office and commercial space attached to a mall with an area of 10,000 square meters. The company has never disclosed the source of its funding.

According to a World Bank report released in November of last year, the Gaza Strip ranks third in the Arab region in terms of poverty, ranking above only Sudan and Yemen. The report stated that the poverty rate in Gaza stands at 38 percent. Furthermore, of the 144 countries included in the report, Gaza was the 44th poorest, with most of the countries with a higher poverty rate being located in Africa.

PALESTINE’S ANTI-CORRUPTION CRUSADER
Najat Abu Bakr has accused Palestinian Authority officials of rampant theft. Now they’re going after her.
Daily Beast, Jonathan Schanzer, Grant Rumley, 14 March 2016

The biggest political standoff in years just ended in the West Bank and barely anyone in Washington noticed.

A parliamentarian from Palestinian leader Mahmoud Abbas’ own party filed accusations of corruption against senior Palestinian Authority officials and then fled to the parliament building after the Palestinian Authority issued an arrest warrant for her. In the course of two weeks, Najat Abu Bakr’s sit-in protest sparked a political firestorm that drew crowds of Palestinians into the streets. It took weeks of tenacious negotiating, but she was finally able to secure safe passage back to her home district in Nablus last week.

The story began in February, when Abu Bakr accused PA minister of local governance Hussein al-Araj – a close Abbas associate – of pocketing roughly $200,000 in a water well deal. The Palestinian Authority leadership, widely recognized as a cesspool for corruption and for stifling criticism against the government, issued an arrest warrant shortly after her accusations. Abu Bakr then fled to the safety of the parliamentary building to avoid arrest. She has since turned over files documenting purported evidence of Araj’s case and other high-level corruption to the PA’s anti-corruption czar and the Fatah party head in parliament. It is still unclear whether the charges will ever be acknowledged or addressed.

This was not Abu Bakr’s first tangle with the Palestinian leadership over corruption. In 2013, she publicly sparred with former PA Prime Minister Salam Fayyad, a man—ironically—who was widely celebrated for his anti-corruption policies, over accusations that the technocratic leader was misusing funds for a personal security detail. In 2014, she blasted Fayyad’s successor, Rami Hamdallah, for clamping down on labor unions. She also accused PA Foreign Minister Riyad al-Maliki of nepotism in 2013 after al-Maliki elevated an official convicted of corruption to the post of ambassador.

However, her latest showdown with Abbas and company is unprecedented. Palestinian politicians typically invoke the cause of anti-corruption to score political points on the street. Few present documentation on alleged corruption, and the last time anyone sought refuge in a Palestinian Authority facility on this scale was when the late Palestinian president Yasser Arafat was cornered in the presidential Muqata compound by the Israelis in response to his stoking the violence of the second Intifada.

At the same time, it’s a surprise we have not seen more of this. Corruption allegations have dogged the Palestinian Authority since its inception in the early 1990s. For example, an International Monetary Fund audit found in 2003 that Arafat had funneled $900 million in public funds to a special bank account from 1995 to 2000. Another report found that Arafat and his cronies had transferred nearly $300 million to Swiss bank accounts between 1997 and 2000. When Abbas succeeded Arafat as president of the PA in 2005, the U.S. hoped the long-time negotiator—with the help of Fayyad—would be able to reform the corrupt Palestinian system.

But Abbas and Fayyad failed to reverse course, and in 2006 Palestinian voters punished them for it by rewarding their rivals in Hamas. The Islamist group’s surprise victory in the legislative elections that year was due in no small part to their successful efforts to brand themselves as a transparent alternative to Abbas’s corrupt Fatah party. As one Fatah member lamented, his party had “paid the price because of its corrupt administration and a bunch of corrupt leaders.”

Rather than addressing the problem, Abbas seemed to embrace his role of corrupt autocrat. In the wake of a brief but bloody civil war that separated the West Bank and Gaza in 2007, Abbas consolidated his control over Fatah and the PA in the West Bank, pushing transparency and good governance to the bottom of his list of priorities. He forced out Fayyad in 2013 to the great chagrin of Western champions that sought to build a credible government in Ramallah from the ground up. A European Union audit found later that year that they PA had “mismanaged” over three billion dollars from 2009 to 2013.

Abbas finally set up an anti-corruption commission in 2010, but his 81-year old anti-corruption czar recently announced he has only recovered $70 million in five years. And in a recent interview, he insisted that the problem of corruption is simply not as bad as the stream of media reports over two decades suggest.

International donors are not buying it. According to a Reuters report, aid from the EU and others to the PA has fallen from around $1.3 billion per year to $700 million. Prime Minister Rami Hamdallah released a statement in December declaring international aid had fallen 43% since 2011. And the financial crisis has had a real impact. After the government’s refusal to increase teacher salaries per a 2013 agreement, thousands of teachers have recently taken to protest in the streets.

These problems are not going to go away, either. Palestinian perception of corruption in the PA stood at 81% in 2014. Abbas’s rivals know this and continue to hammer home the problem as a means to score points on the Palestinian street. Mohammad Dahlan, an exiled senior Fatah official and rival of Abbas, regularly blasts Abbas as a “corrupt dictator” and even filed a lawsuit against Abbas in 2013 insisting “the Palestinian Authority and its leadership are tainted by corruption on a grand scale.” As does Jibril Rajoub, another senior Fatah official and aspiring successor to Abbas, who has called for a “balance of power through free democratic elections.”

Rajoub’s calls resonate on the Palestinian streets for a reason. Abbas is now eleven years into his four-year term. The corruption is as much political as it is financial. It was the toxic combination that ultimately prompted millions to take to the streets in of Arab capitals in the chaotic Arab Spring protests. The Palestinians have, until now, eluded such a crisis. But as Najat Abu Bakr’s sit-in demonstrated, the need for reform remains dire. What will it take for Washington to notice?

PALESTINIAN KLEPTOCRACY:
WEST ACCEPTS CORRUPTION,
PEOPLE SUFFER THE CONSEQUENCES
The Hill, Ziva Dahl, 11/15/16

The Abbas family’s corruption is a hot topic in the territories, but not here in the U.S. Tareq Abbas, son of the Palestinian Authority president, is a multi-millionaire owning villas in Amman, a Beirut rooftop pad and a luxury London flat. His older brother, Yasser, has made a fortune from, among other things, his monopoly sale of U.S.-made cigarettes in the Judea and Samaria a.k.a. the West Bank.

Leaked records from a Panamanian law firm show that PA President Mahmoud Abbas and his two sons used power and influence to control the two major Palestinian economic boards (Arab Palestinian Investment Company, Palestinian Investment Fund) and built a West Bank economic empire worth more than $300 million. Abbas’ authoritarian rule has allowed his family’s Falcon consortium to dominate the West Bank’s commerce and labor markets including owning shopping centers, media and insurance companies and distributing food, cigarettes, cosmetics and other consumer items. Falcon touches every aspect of Palestinian commercial life.

These documents, reports from senior Fatah officials and Palestinian social media reveal extensive corruption at the highest levels — the Abbas family and a Palestinian elite manipulating the political and financial systems to benefit themselves at the expense of the people.

The 1993 Oslo Accords established Palestinian self-rule over 98 percent of the Palestinian population in the West Bank and Gaza. Since then, the PA received an estimated $25 billion in financial aid from the U.S. and other Western countries, the highest per capita assistance in the world.

Instead of creating the independent and robust civil institutions necessary for good governance, promoting peace with Israel and improving the lives of its people, the billions of dollars of international aid were used to create a corrupt dictatorship focusing on enriching its elites, inciting its people against Israel, advocating terrorism and waging a massive international campaign to demonize, delegitimize and destroy the Jewish State. And the U.S. doesn’t seem to care, donating $442 million of taxpayer money in 2016.

Abbas is currently in the eleventh year of a four-year term. He rules by decree, and parliamentary and presidential elections are not on the horizon.

A May 2016 independent poll showed that 95.5 percent of Palestinians believe Abbas government is corrupt.

Public perceptions of widespread corruption are reinforced by the lavish lifestyles enjoyed by top PA officials, as well as the lack of transparency and accountability of the Palestinian government.

The Palestinian legislature, which previously had provided some measure of oversight, hasn’t convened since 2007, leaving Abbas free to rule by diktat and award family and cronies with exorbitant salaries and opulent villas in subsidized gated communities on the outskirts of Ramallah.

Hasan Khreishah, Palestinian Legislative Council member, remarked, “Since…the Oslo Accords we have had 228 ministers….All receive high salaries and luxurious vehicles.” The head of the Palestinian Investment Fund makes $420,000 per year while the average worker makes about $4,600 annually.

The PA fails to submit budgets for required audit, eliminating oversight of how over $4 billion is spent each year. As part of its “development budget” of $17.9 million for the first quarter of 2014, funds specifically designated for projects to benefit the Palestinian community, $9.4 million was budgeted for Abbas’ presidential plane and another $4.4 million was budgeted for “other” expenses.

Abbas recently established a new “constitutional” court to oversee lower courts and packed it with his Fatah political party accomplices to intentionally enhance his control of power and purse-strings.

The PA refuses to use its considerable international aid to relocate over 100,000 Palestinians from Palestinian-controlled refugee camps to residential locations in the territories, preferring to leave them confined under squalid conditions.

Muhammad Rashid, former Palestinian leader Yasser Arafat’s economic advisor, claims that Abbas misappropriated at least $100 million from Palestinian coffers. Abbas’ political rival Muhammad Dahlan accuses Abbas of stealing $600 million of the $1.4 billion that Arafat’s Prime Minister Salam Fayyad transferred to Abbas when Abbas assumed the Palestinian presidency.

An EU audit of the years 2008-2012 found that 2 billion Euros of its aid were lost to corruption and misappropriation by Palestinian leaders.

The refusal of the international community to hold Abbas and the PA accountable for nepotism and corruption drove Gazan Palestinians into the open arms of Hamas, the terrorist group which promised them reform.

Today, nothing has changed. The West is fixated on creating a Palestinian state no matter how corrupt. Given Abbas’ perfidious dictatorship, such a state is doomed to failure. All indications are that President Obama will reward this reprehensible behavior with a rapid path to statehood.

Why is the Abbas kleptocracy illegitimate in the eyes of the Palestinian people, but acceptable in the eyes of Obama and the West?

Ziva Dahl is a senior fellow with the Haym Salomon Center. She has a Master of Arts degree in public law and government from Columbia University and an A.B. in political science from Vassar College.

LINKS

Rampant Corruption in Arab States Transparency International, 21 February, 2018

Ramallah - In Tough Times, Most Palestinians View Government As Corrupt
Ynet news, Associated Press, 05/24/16

Palestinians: "The Mafia of Destruction", Gatestone Institute, by Khaled Abu Toameh, September 21, 2016 (Medical Corruption)

What Are Palestinians Doing With U.S. Money? Gatestone Institute Khaled Abu Toameh,
August 18, 2015

Videos - Palestinian Corruption

Reassessing UNRWA

The US and UNRWA

Corruption:
A Major Cause of Palestinian Suffering - Documentary

Yasser Arafat,
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Mahmoud
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