Details of Fatah Corruption

February 10, 2006

The Funding for Peace Coalition has already noted that Palestinian attorney general, Ahmed Al-Meghani, announced how senior officials of the Palestinian Authority (PA) have stolen at least $700 million of public funds.

The PA's official web site, Palestine Media Center, has now provided details as to the extent of the problem.

Once again, it is evident that corruption is deeply entrenched within the establishment of the PA. Untraceable expenditures, illegal land sales, investments in factories which were never built, and far more. Most of the instances are linked to Fatah officials, who have enjoyed the support of Chairman Arafat and now President Abbas. One has to wonder if it is coincidence that since October 2005, the PA has ceased to publish its financial records on the Internet.

And again, we remind our members that around 25% of the PA budget relies on external donations, of which the EU and its member states are amongst the biggest contributors.

Nothing changes; The World Bank is correct. The Palestinians are losing out as their leadership profited and continues to benefit from the deep pockets of the international community.

What follows is the version of Al-Meghani's announcements, as they appear on the PA web site.

Interpol Hunting Ten Palestinians Accused of Corruption

Influential People in Senior PNA Positions Involved in 50 Corruption Cases


Palestine Media Center - PMC

Palestinian attorney general Ahmed Al-Meghani told reporters on Sunday that a corruption investigation involving a multi-million dollar scandal has concluded that senior officials of the Palestinian National Authority (PNA) may have stolen $700 million of public funds, adding he has made 25 arrests so far and issued international warrants for 10 other people, whom the PNA is seeking their extradition by the INTERPOL.

Some of the fugitives were arrested and now in his custody in Palestinian prisons, said Al-Meghani. "We are proceeding with other procedures in this regard in accordance with the Riyadh Arab agreement for judicial cooperation in 1983," he added.

"There are 50 cases of financial and administrative corruption. The amount of money that was squandered and stolen is more than $700 million," he told a press conference in Gaza City, adding: "Some of these millions were transferred into personal accounts here and abroad."

However he hinted the amount of stolen money could be much higher: "I cannot count the numbers because I'm not an accountant. It might be billions of dollars. When I end my investigation, I'm going to put out in detail all the numbers."

Investigation into 27 files was completed and "procedures will be taken before the courts in the coming days," he said.

The defendants are "influential people in senior positions, but law will apply to all without exception," he confirmed, adding that they are innocents until proved otherwise.

He said the inquiry included the state-owned oil, tobacco and broadcasting corporations as well as publicly owned land.

He cited land bought by the PNA in the northern West Bank in which the purchased land only existed on paper.

Among the corruption files under investigation Al-Meghani said that some defendants are accused of selling land to foreign countries, meaning Israel, the Occupying Power of the West Bank and Gaza Strip since 1967.

An ex-police chief is also being investigated with regard to licensing of vehicles and house protection.

Investigation involves why the archives of passports were destroyed.

The Ministry of Social Affairs is being probed for administrative and financial violations, the customs for exempting the "retunees" from duties, and the Ministry of Health for purhases funded by the World Bank.

There is a file also involving the London-based Arabic daily newspaper "Al-Quds Al-Arabi," which is owned by the Palestine Liberation Organization (PLO).

The corruption probe also involved a charity for supporting Palestinian students and a children theatre.

The Investigation involves also a center of human and development research as well as "public institutions" in the Gaza Strip.

The cases also include payments of $4m of PNA funds and $2m of Italian aid money to a fictitious pipe factory. "The factory existed only on paper and the investigation is under way to find out where the money went," the attorney general said.

The attorney general added there is a file on Al-Zir Contracting company.

As for the widely-publicized scandal of the cement that was used in the construction of the Apartheid Wall Israel is building on occupied Palestinian land in the West Bank, Ahmed Al-Meghani said it is still confidential and under investigation.

The Palestinian Legislative Council (PLC) had referred the cement file to the attorney general.

Palestinian President Mahmoud Abbas had previously transferred 32 cases of abuse to the attorney general for review.

"We have the support from the president to open all the files and strict instructions that everyone must be under the law," Al-Meghani said.

Al-Meghani assumed his duties on September 18 last year.

He said he was scheduled to hold a press conference on December 20 to make a public announcement about the investigation, but President Abbas instructed him to postpone it so as not to be interpreted as an electoral propaganda for this or that party during the campaign for the legislative elections on January 25, the attorney general told reporters.

The announcement on Sunday came less than a fortnight after Hamas's sweeping victory in the parliamentary elections that is mostly attributed to widespread unhappiness at graft among some Palestinian leaders.

Corruption and economic mismanagement have also contributed to a PNA financial crisis.

Welcoming the investigation, a spokesman for Hamas said those responsible should be brought to justice.

"One of Hamas' top priorities for the coming stage in the Parliament and in the government is to open this file and to chase and bring to justice all the corrupt officials who stole public money and made huge wealth," Mushir Al-Masri, the Hamas spokesman, said.

The World Bank said in a report Wednesday that the PNA's fiscal position had become increasingly unsustainable because of "uncontained" government spending on sharp increases in salaries and hiring.

Nigel Roberts, the World Bank's former representative in the Palestinian territories, said in a recent interview with Israel's Haaretz daily that the PNA received more than $5 billion of aid over a five-year period but was on the verge of being bankrupt.

The Al Quds index on the screen-based exchange in the West Bank city of Nablus has fallen 7.2 per cent since the victory of Hamas in parliamentary elections.

But the Governor of the Palestinian Monetary Authority (PMA), George Abed, said that the PNA banking system was sound, with $4.7bn in deposits, the Financial Times reported on Wednesday.

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