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The Teflon Terrorists By: Dr. Rachel Ehrenfeld
FrontPageMagazine.com | Tuesday, May 11, 2004


Never mind that Yasser Arafat has siphoned off billions in international aid funds from the Palestinian National Fund, and the Palestinian Authority's budget at the expense of every man woman and child living in what might someday be a Palestinian State. The UN Quartet including the United States, the European Union, Russia and the United Nations have decided - yet again -- to white-wash the dark image of the Palestinian Authority's chairman. The US National Security Adviser Condoleezza Rice, meanwhile, continues to raise funds from Arab countries to fill the coffers of the PA, despite the evidence that Arafat and the PA are using aid money to fund their terror activities against Israel and the US.

It boggles the mind that "the Quartet" joined by the White House is so intent on propping up Arafat when the IMF, the State Department and every major newspaper report on how the rot and the corruption of the Palestinian Authority, led by Arafat, as well as Arafat's personal corruption is at the heart of the Palestinian problem.

Jawad Ghussein, who was the secretary-general of the Palestinian National Fund until 1996, told the Haaretz newspaper that Arafat, "took aid money and contributions that were earmarked for the Palestinian people, to his own account." Ghussein was in a position to know: for twelve years, he had deposited $7.5 to $8 million each month into Arafat's personal bank account.

The IMF report "Economic Performance and Reforms under Conflict Conditions," released in September 2003 in Abu Dhabi, was based on the same PA documents that the Israeli government had earlier provided to the European Parliament. The report concluded that $900 million in PA revenues from 69 commercial enterprises belonging to the PA in the West Bank, Gaza and abroad, "disappeared" between 1995 and 2000. The report also found that the 2003 budget for Arafat's office, which totaled $74 million, was missing $34 million that Arafat had transferred to pay unidentified "organizations" and "individuals." Furthermore, the report revealed that at least 8 percent ($135 million) of the PA's annual budget of $1.08 billion is being spent by Arafat at his sole discretion - and does not even take into account Arafat's control of 60 percent of the security-apparatus budget, which leaves him with at least $360 million per year to spend as he chooses.

This report was followed by news that in the period between July 2002 and September 2003, Arafat transferred $11.4 million to his wife, Suha's French bank accounts. Arafat's wife is reported to have said "What's strange about the Palestinian President sending any amount of money to his family and his wife?" Indeed, nothing would be wrong if Arafat had an apparent income that could justify such transfers.

Yasser Arafat wears 3 hats: he is the President of the Palestinian Authority, Chairman of the PLO, and head of the Fatah terrorist organization, as such he controls the funds of all terrorist organizations under the PA umbrella. As of August 2002, Arafat's personal holdings also included $500 million of the PLO's money; in all his holdings were believed at that time, to total $1.3 billion. This money is enough to a) feed 3 million Palestinians for 1 year, b) by 1,000 mobile intensive care units, c) fund 10 hospitals for a decade, and d) would still leave $585 million to fund other social projects. The $1.3 billion figure does not include either the $900 million that were found to be missing by the IMF, or the $11.4 million that Arafat transferred to his wife's bank accounts in Paris.

Arafat continued to steal funds given as aid to the Palestinian people. For example, in June 2002, the Kuwaiti newspaper, al-Watan reported that Arafat had diverted funds that were donated by Arab countries as aid to the Palestinians, depositing $5.1 million into his personal account. Muhammad Rasheed, his trusted advisor, invested some of these siphoned funds in the Jordan Cement Company on behalf of the Palestinian Commercial Services Company, in order to profit from a rise in cement prices - ironically, due to the increased demand for building materials because of the war that Arafat had created.

After al-Watan exposed Arafat's theft, a member of the Palestinian Legislative Council from Nablus, Muawiya al-Masri was interviewed by the Jordanian publication, al-Sabil. He criticized Arafat's regime, and not for the first time; in 1999, al-Masri went public about the PA's corruption and was nearly killed in retaliation. Undeterred, in July 2002 he spoke at length to al-Sabil about the endemic corruption of the PA and Arafat in particular: "No minister can appoint a driver or a delivery boy in his ministry without the President's consent.there is no institutional process. There is only one institution - the Presidency, which has no law and order and is based on bribing top officials."

The situation had gotten so bad that by June 2002, President George W. Bush finally acknowledged the PA's corruption, and called on the Palestinians to change their leadership and bring reform, accountability and transparency to the PA. US National Security Advisor Condoleezza Rice stated already two years ago, "Frankly, the PA, which is corrupt and cavorts with terror is not a basis for a Palestinian state moving forward."

The full extent of Arafat's corruption is impossible to determine because he has held the control of first the PLO funds and then the PA's budget, for decades. Last February, a serious attempt by Congress to expose Arafat's corruption was averted by the Administration.

When the Oslo Accord was signed and the PA came into being, according to the UK's National Criminal Intelligence Service, the PLO was then the richest terrorist organization, with at least $10 billion in assets controlled by Arafat. Add to this over $5 billion that the PA had received in
international aid since then, and you have to wonder, where did all this money go and why, according to the World Bank, are more than 60 percent of the Palestinian people living under $2 per day? If you consider the evidence, the answer is very clear: it is largely due to Yasser Arafat's personal corruption. But in an apparent attempt to appease the Arab world, mainly the Saudis - the Quartet, and now the Bush Administration wants to, yet again, negotiate with Arafat. As long as the terrorist remains in place, however, the US Administration's doctrine of "regime change" in an attempt to bring democracy to the Middle East is doomed to fail.

Rachel Ehrenfeld, author of Funding Evil; How Terrorism is Financed - and How to Stop It, is director of the New York-based American Center for Democracy.

Dr. Rachel Ehrenfeld is director of the American Center for Democracy and author of Funding Evil: How Terrorism is Financed and How to Stop It and a member of The Committee on the Present Danger.


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