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One Man Bank By: Asaf Romirowsky
FrontPageMagazine.com | Friday, November 28, 2003

Since the establishment of the PLO in 1964, Yasir Arafat has managed to establish himself as the only accepted leader of the Palestinian people. Although Arafat portrays himself as a military general and as the rightful leader of the Palestinian cause whose charisma makes the people want to follow him, his absolute financial control within the PLO and today the Palestinian Authority (PA) is the primary technique he uses to maintain what amounts to dictatorial power.  Recently, 60 Minutes ran an investigative report on Arafat showing that he has diverted nearly $1 billion in public funds to insure his political survival.  As Lesley Stahl reports, “Although the money for the portfolio came from public funds like Palestinian taxes, virtually none of it was used for the Palestinian people; it was all controlled by Arafat. [i]

In their latest publication Yasir Arafat: A Political Biography, Barry Rubin and Judith Colp Rubin highlight Arafat’s rise and role as the sole controller of the (PA) – financially, politically, and psychologically. “With the establishment of the PA, Arafat was now more than ever, an undisputed, unconstrained leader. A Palestinian magazine explained: ‘He holds all the reins, he controls all the money, he takes all the decisions…and he, by and large is the only law whose authority is respected, established and enforced.’[ii] 

In reality, 60 Minutes’s “discovery”, though very important for Western audiences to see was not actually news to the Palestinian people; they have been living with the visible manifestations of Arafat’s double standards of living for a very long time. They have seen the extravagant houses their “elected officials” own and the fancy cars they drive. During the “euphoric age of Oslo”, when Arafat’s wife, Suha, graced the Palestinian people with her presence, she would often drive her newly purchased BMW through the streets of Gaza while most of Gaza’s residents could barely feed their families. With the collapse of Oslo, Suha relocated to Paris where she regularly shops at designers’ stores as she subsists on a generous stipend of $100,000 a month that comes directly from Palestinian Authority funds.[iii]

But more deeply, Suha represents the exact opposite of the proletarian public image Arafat strives to project. As Rubin articulates, “Suha was an embarrassment on two counts. First, she was clearly a member of the Westernized Arab elite, which Arafat had supposedly been fighting all of his life. Her expensive Western clothes, dyed blonde hair, and Parisian shopping sprees undercut Arafat’s Spartan image as an incorruptible man of the people and pious Muslim.[iv]

Controlling the PA’s money is critical both to Arafat’s ability to lead and also to maintain his position as titular head of the PA. As Danny Rubinstein – an authority on Arafat writes “Arafat has continued in the new [Palestinian] Authority, as in the old PLO days, to see money as the source of power, signing checks alone and keeping the secrets of the budget to himself.[v]” One of the more famous stories illustrating Arafat’s efforts to maintain complete financial control of Palestinian affairs centers around his “black book of bank accounts.” While flying to Tripoli, his plane flew into a desert sandstorm and was going to crash.  All of Arafat’s men hovered over him in order to protect him. During the crash, Arafat lost his account book, which was found after several hours. It was the fear of losing the valuable financial information that made his men protective rather than their sense of loyalty to Arafat personally.  This is only one example of how long the corruption has existed, how deeply it runs, and how the fate of the entire Palestinian people has been in one man’s hands to the detriment of the larger group’s needs.

The demise of Oslo is now raising questions from all sides about the whereabouts of all the funds provided to Arafat to assist in the creation of a Palestinian State. Not only has Arafat not used these funds to improve his peoples’ standards of living, but has actually devoted considerable amounts towards financing terrorist activities. Rachel Ehrenfeld author of Funding Evil; How Terrorism is Financed — and How to Stop it statesa total of $250 million allocated annually to the PLO, $10 million was designated for the ‘families of the martyrs’.[vi]

Arafat wants his people to believe that creating a Palestinian state is costlier than they realize and that he should not have to publicly clarify the many expenses involved in creating the new state. According to Mohammed Rachid, Arafat's former economic adviser, it is estimated that Arafat had over $300 million dollars in his possession in order to create jobs, improve the medical facilities and help put food on people’s tables.  One need only view the poverty and lack of services in the West Bank and especially Gaza in order to see that funds were not allocated towards these ends. This raises the big question – why did Arafat not use the PA’s revenue in a way that would benefit all Palestinians?

The answer is quite simple. If the socio-economic conditions improved in Gaza and the West Bank Arafat would have a very difficult time maintaining the idea that Israel is “oppressing” the Palestinian people. Improving economic conditions in the disputed territories would possibly lead to a lessening of Arafat’s control over Palestinian affairs, and as his self-preservation at all costs attitude demonstrates, Yasir Arafat is more interested in maintaining control than improving the Palestinians’ situation. Moreover, the rise of hope produced by improved conditions in the territories would cause an immediate drop in the rational for terrorist activities against Israeli civilians. As long as the Palestinian people view peace as something prevented by Israel Arafat can continue cultivating the hatred needed to perpetuate the Palestinian/Israeli conflict. 

Yasir Arafat decided, long ago, that the Palestinian struggle could only end with a military victory. Peace with a living, breathing Israeli state was not considered a real victory. Arafat came home from Camp David II appearing publicly as a gun-toting war leader; he has both founded and funded terrorist organizations with PA funds. Arafat is the only Palestinian leader who could have authorized these expenditures. Not one dollar has been spent without his authority.

In the early months of the current intifada – before they were suppressed through Arafat and Islamist groups’ intimidation – Arab-Israelis in the north protested against Arafat and the PA, and openly declared that they had no interest in becoming Palestinian citizens. Even with ever rising tension between Arabs and Israelis, life within the democratic Israeli state appears far superior than the oppressive life under Arafat’s dictatorial style leadership in the post-Oslo territories.

In the final analysis, the PA’s centralized banking institution is not necessarily a bad thing – it is common in small states and especially new ones struggling with complex issues each day. The problem is that the bank manager, Arafat, has had no real interest in his clients’ well being. His efforts to personally profit from and rid the Middle East of the Israeli state were essentially his goals. An independent, but dictatorial Palestine was to be the aftermath of this type of victory.

All the things that would have transformed Palestinian society and truly help eliminate the suffering of the Palestinian people – schools, infrastructure, roads, jobs, investments, small business loans – Arafat sacrificed for a mythological struggle to destroy Israel.

The central authority that allows Arafat to maintain his position as the leader of the Palestinian people perpetuates a cyclical dependency that will not be broken until a Palestinian leader emerges who is more interested in building a successful Palestinian state side by side with Israel than destroying the Jewish state.


[ii] Ibid P. 163.

[iv] Rubin, Barry. and Rubin Judith Colp. Yasir Arafat A Political Biography, New York: Oxford University Press, 2003, P. 130.

[v] Rubinstein, Danny. The Mystery of Arafat, Vermont: Steerforth Press, 1995, P. 125.

[vi] http://www.nationalreview.com/comment/comment-ehrenfeld091903.asp 

Asaf Romirowsky is a research associate at The Middle East Forum.

Asaf Romirowsky is the manager of Israel and Middle East Affairs for the Jewish Federation of Greater Philadelphia.

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