A Leadership That Steals Money

Brad Nielson

6 July 2004

"Instead of weakening Arafat, the Europeans are strengthening him," said a Palestinian human rights activist. "The French Foreign Minister thinks that the biggest problem is the conditions in which Arafat lives in the Mukata, and he's obviously mistaken. The biggest problem the Palestinians are facing today is the fact that they have a leadership that is continuing to steal their money."

These words of a Palestinian activist undermine the thrust of recent European diplomacy for Palestinian territories.

The meeting of Michel Barnier, the French Foreign Minister, with Chairman Arafat is consistent with other European discussions with the PA and Fatah leader. Europe still sees Chairman Arafat as a partner in the peace process. The logic is that this will help to encourage the Palestinians towards reform. And in return, the Europeans will continue to direct hundreds of millions of Euros from Brussels (and from the treasuries of member states) towards the PA. Simple enough, surely?

It is not just the present Israeli government, which rejects this strategy. (It is convinced that Arafat sabotaged the Camp David negotiations of July 2000, because he could not and will not accept a state of Israel. Since then, he has continued to siphon off millions of dollars in aid to finance his campaign of violence and the avarice of his entourage.)

In the Autumn of 2003, the IMF confirmed that hundreds of millions of dollars had gone missing from the Palestinian coffers. A few days later, in his resignation speech, the outgoing Palestinian Prime Minister, Abu Mazen, referred to Palestinian Authority activities as "a cover for theft". And in recent weeks, the Jordanian and Egyptian leaders have shown their frustration with the corruption of the Palestinian elite.

Now, it is the turn of the "Palestinian man on the street". "Help us!" is the cry, but it also says: "Don't just allocate your aid. Make sure it reaches us…and not those leaders who you continue to parlez with in Ramallah".

Will the new and enlarged European Parliament listen?

What follows is the full article from which the opening quote was taken. The footnotes and commentary were added by a team from the Funding for Peace Coalition. They are designed to illuminate the relevance to European funding provided to the Palestinians.

Article source: Access|Middle East.

Palestinians demand an inquiry into the 'cement scandal'

Khaled Abu Toameh

Hundreds of Palestinians signed a petition on Sunday calling on the Palestinian Authority to launch an inquiry into the "cement scandal." The scandal erupted a few weeks ago when a Palestinian parliamentary committee announced that top Palestinian officials had been importing cement from Egypt on behalf of Israeli companies.[1]

The story, first reported on Access|Middle East, took a political and national dimension when it transpired that the cement was being used for the construction of the West Bank security fence and new homes in the settlements.

Meanwhile, the Al-Aqsa Martyrs Brigade[2], the armed wing of Fatah, published threats against one of the whistleblowers who uncovered the scandal, Palestinian Legislative Council member Hassan Khraisheh. PA legislators investigating the case have named two ministers in the affair: Civilian Affairs Minister Jamil Tarifi and Economy and Trade Minster Maher al-Masri. The PA, promising to launch a criminal investigation, has taken no action as yet.[3]

Palestinian Authority Chairman Yasser is under unprecedented pressure to put an end to corruption and implement major reforms in the PA. Until recently, most of the pressure came from the international community, with many foreign donors refusing to go through Arafat's institutions to finance projects in the West Bank and Gaza Strip.

In the past few weeks, however, the pressure has also been coming from an increasing number of Palestinians, much to Arafat's dismay. Hardly a day passes without a new corruption scandal being exposed in the Palestinian Authority. For the first time since Arafat arrived in triumph from Tunisia 10 years ago on July 1, 1994, Palestinians are no longer afraid to criticize him and his senior officials.

The Palestinian Legislative Council has called for a criminal investigation, implicating the two ministers in the scandal. Arafat had promised a full inquiry into the case, saying he has instructed his attorney general to look into the allegations. But the attorney general last week surprised the Palestinian legislators when he told them that the case was never referred to him.[4]

The two legislators who dared to demand an investigation are now under attack. One of them, Abdel Jawad Saleh, a former minister, was ejected from the PLC chamber for insisting on tabling a no-confidence motion against the cabinet over the cement scandal. Khraisheh, on the receiving end of death threats from Arafat's Aqsa Martyrs Brigades, had demanded that ministers al-Masri and Tarifi be brought to trial.

Now a growing number of Palestinians are convinced that Arafat and some of his top aides are trying to bury the cement case. Commentators in the local media have openly warned against attempts to cover up the scandal and are demanding that an independent body launch an investigation. The general belief in the West Bank and Gaza Strip is that Arafat has decided to block the investigation because many of his senior aides are directly involved in the case.[5]

Various Palestinian factions and organizations have also joined the anti-corruption campaign by issuing daily statements and organizing street protests. In a unique move, scores of Palestinians have staged demonstrations outside Palestinian Authority offices in different places to demand an end to corruption and misuse of public funds.

Earlier this week the 1,500 Palestinian lawyers in the West Bank and Gaza Strip launched their own campaign to demand reforms in the judiciary system. The lawyers went on a one-day strike to protest against nepotism and intervention in the work of the courts by senior officials.

And in a letter to the embattled Arafat, several hundred Fatah militants last month urged him to get rid of all the corrupt officials in the Palestinian Authority. The gunmen warned that they would revolt against the Palestinian leadership and take the law into their hands if Arafat did not meet their demands.

Stories about corruption in the Palestinian Authority have been circulating for many years. But these reports have often been dismissed by Arafat and his entourage as "Jewish propaganda." Today, however, it seems that many Palestinians are no longer prepared to swallow this story.

Muhammed Dahlan, the former Palestinian security chief, recently raised eyebrows when he purchased one of the biggest and most expensive villas in Gaza City.[6] A human rights activist from Gaza City this week revealed that a Palestinian minister had ran a monthly phone bill of $22,000. These stories are being published against a backdrop of reports about growing poverty and economic hardships in the West Bank and Gaza Strip.

According to a Palestinian legislator from Ramallah, "Arafat is beginning to feel the heat under his feet." He said the Palestinians were now beginning to ask the difficult questions, "and they are not getting satisfactory answers from their leadership."

Another legislator predicted that unless there is real change in the near future, "we could witness a new intifada -- this time against Arafat and the Palestinian leadership."

The anti-corruption camp last week suffered a setback with the visit to Ramallah by French Foreign Minister Michel Barnier. Palestinian reformists say such visits serve to strengthen Arafat's position and undermine those Palestinians who are fighting for transparency and democracy.[7]

"Instead of weakening Arafat, the Europeans are strengthening him," said a Palestinian human rights activist. "The French Foreign Minister thinks that the biggest problem is the conditions in which Arafat lives in the mukata, and he's obviously mistaken. The biggest problem the Palestinians are facing today is the fact that they have a leadership that is continuing to steal their money."


1. See the 2 articles from the "Electronic Intifada" following this one. They even implicate the current Palestinian Prime Minister. [back]

2. The EU has blacklisted Al-Aqsa as a terrorist group, but have refused to acknowledge its links to Fatah, which is led by Chairman Arafat. A few weeks ago, Fatah confirmed that the two are part of the same team. The EU has yet to comment on this admission. See Fatah committed to Aksa Martyrs, Jerusalem Post, 20 June 2004. If link is invalid, click here for article. [back]

3. The European Commission has consistently argued that that aid from Brussels is encouraging the Palestinians to reform. Apart from the Palestinian Finance Minister, Fayyad, no other minister has dared to challenge the power of the ruling elite. [back]

4. After numerous terrorist incidents, including the bombing of a discotheque in Tel Aviv, Chairman Arafat announced that a commission of inquiry was to be set up. The world is still waiting for members to be appointed to the investigating teams. [back]

5. The articles below clearly show that this is not the first time that senior Palestinians have been involved in corruption. See also [back]

6. Dahlan, the Minister for Security in the previous government, and Rashid Abu Shabakh, head of the preventive security, and Salim Abu Zefia, who is responsible for the border crossings in the Gaza Strip on behalf of the "Preventive Security Apparatus", have a monopoly over hatcheries and chicken farms in the Gaza Strip. [back]

7. It is now common to claim that the average Palestinian lives off $2 per day. While these figures are based on a dubious interpretation of World Bank statistics, the report that they are based on went on to say that donor aid could not solve poverty in the West Bank and Gaza. The World Bank claimed that protracted conflict and political crisis were the prime causes of poverty, and went on to say that reform of the PA is essential. "There is now no way back - having acknowledged the need to combat corruption and to transform itself into a democratic, modern and accountable instrument of statehood, the PA must deliver a successful reform program or lose its legitimacy." Subsequent audits by the International Monetary Fund recovered $900m in Palestinian Arab public assets from private accounts of Palestinian leaders. They also identified additional control weaknesses in other unaudited budgets controlled by these same leaders. [back]

The following two articles from Palestinian sources reveal the depth of internal financial corruption.

It is evident that in such an atmosphere, large amounts of European aid to the Palestinians will "evaporate".

Cement and Corruption

Deep-rooted corruption in Palestine

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