The long Palestinian money trail

Boker Tov Boulder (as noted by Jewish Current Issues, Noah Pollak at the Corner, Mere Rhetoric and Daled Amos) collected a series of news items documenting what has been pledged to the PA over the past 3 years.

It’s quite an extensive list that Pollak observes:

While I freely admit to being terrible at math, by my estimation the total runs easily into the many billions of dollars.

To which Mere Rhetoric adds(sardonically):

Apparently electing an intransigent genocidal regime openly committed to the destruction of Western ally – pretty good way to get aid.

There have been a number of articles over the years that have looked at the bigger issue of Palestinian aid and finances.

In September 2004, Honest Reporting issued Understanding Palestinian Poverty that reported

Since the signing of the slo Accords in 1993, the international community has shown unprecedented generosity toward Palestinians, donating approximately $5 billion to the Palestinian Authority. The World Bank noted recently that ‘donor disbursements to the Palestinians currently amount to approximately $1 billion per year or $310 per person ― one of the highest per capita rates in the history of foreign assistance.’ (By comparison, the Marshall Plan to rebuild Europe after World War II provided $68 per year, in today’s dollars, to Europeans.)

Among other things, all this aid made Yasser Arafat a very wealthy man.

Rachel Ehrenfield provided a somewhat more exhaustive accounting of Arafat’s personal wealth.

Nor was Yasser Arafat the only official to benefit from international generosity as the late Michael Kelly wrote back in 1998 in Investing in Yasser Arafat.

THERE WAS A WONDERFUL MOMENT in the annals of diplomacy this week. Yasser Arafat, the president of the Palestinian Authority, had come to town to attend an international conference convened by the White House to raise a new pile of money to give to President Arafat. And the conference had gone splendidly.Everyone had behaved perfectly fine; no one had so much as mentioned the inconvenient London Sunday Times story the day before, which said that the Palestinian Authority had swiped $20 million in British aid intended to build housing for the poor of Gaza, using the money instead to build luxury flats for Arafat’s military and bureaucratic elite. After a day of pleasantries, representatives of 43 nations had pledged $3 billion in new aid to the Palestinian Authority, including an extra $400 million from the U.S. president. Arafat saw that it was good. “I am satisfied with the reality of this conference,” he pronounced.

(Daniel Doron wrote of another, perverse, way well connected Palestinians benefited from “foreign aid.”)

But the top functionaries of the Palestinian Authority didn’t just accumulate their wealth through the generosity of foreign aid. The also earned their money the old fashioned way through monopolies. Ronen Bergman and David Ratner write in The Man who swallowed Gaza.

Rashid means monopolies. Simultaneously with the establishment of the Authority, its leaders decided to control several essential economic sectors through monopolies; and the rights to operate the monopolies were given to several of the Authority’s senior officials foremost among them Rashid. The owner of the monopoly buys the product over which he has control from the Israeli manufacturer or importer, and sells it in the territories for a much higher price. The profits finance Authority operations that the contributing nations refuse to fund, or they disappear that is to say, make their way into private pockets, as representatives of the contributing nations and members of the Palestinian parliament allege.

The leaders of the security services could also use their positions to augment their income.

Another way in which the security apparatuses finance their augmented activity is through the collection of unloading taxes. Rajoub and Dahlan control, in effect, all the discharging platforms at the transit points to the Palestinian Authority. Dahlan is also the owner of the loading pitchforks at the Erez checkpoint. Every merchant and truck owner must pay the preventive security apparatus a tithe in order to proceed. Sometimes, its done in a simpler fashion. An Israeli importer of cleaning products, who opened a branch in Gaza, was asked to pay $2,000, a “donation” to Force 17. A year ago,a rich Arab from East Jerusalem was asked to purchase 14 new jeeps, out of his own money, for Rajoub’s organization’s use.

What’s worth noting is that none of this behavior is new. Back in 1983, Daniel Pipes wrote “How important is the PLO?”

The benefits to the PLO have been staggering. Financial statistics cannot be specified, for the PLO does not circulate its budget, but published reports indicate that in recent years the organization received about $250 million yearly from Saudi Arabia and smaller amounts from other oil states, including $60 million a year from Kuwait. At a summit conference in Baghdad in 1978, the Arab states promised another $100 million annually. Non-Arab governments (such as the Soviet bloc) also gave generously; and if these insisted on cash for arms, third parties might be induced to pick up the tab, as in April 1982 when the Saudis promised $250 million to pay for weapons from Bulgaria, Hungary, and East Germany. When the PLO requested help from the Arab states last summer, the Algerian foreign minister called in the Soviet ambassador in Algiers at four in the morning and gave him a check for $20 million; the weapons reportedly arrived in Beirut several days later by air.About 5 to 10 percent of the pay of the 300,000 Palestinians working in the Gulf states is withheld by the governments there and earmarked for the PLO; were all of this money to reach its stated destination (which is not the case), it would provide the PLO with about another $250 million a year. Aid also comes from the farther away, from radical and Islamic groups around the world: in January 1983, for instance, the Malaysian Islamic Youth Movement in Kuala Lumpur gave a check for $80,000 to the local PLO representative. Terrorist activities have also proved a source of funds; the PLO reportedly received $20 million in December 1975 for releasing the OPEC oil ministers it had helped take hostage.

With this capital, the PLO was able to start large-scale business enterprises. In Lebanon, it ran a conglomerate called Samad (“Steadfast”) whose 10,000 employees and estimated $40-million gross revenues in 1980 made it one of the country’s largest firms. The Popular Front for the Liberation of Palestine (PFLP), an organizational member of the PLO, achieved a near-monopoly over steel products in South Lebanon during the late 1970s by importing steel from the Soviet bloc at concessionary prices and paying no import duties (the PLO controlled the ports of Sidon and Tyre). Its factory, the Modern Mechanized Establishment near Sidon, undercut competitors and drove them out of business; then it raised prices and reaped huge profits. Many Lebanese believed that predatory pricing was integral to the PLO’s plans to retain control over South Lebanon. In addition to its local investments-a hotel in Lebanon, a chicken farm in Syria-the PLO owns a portfolio of investments in the industrial states, including a disco club in Italy and an airline in Belgium.

The PLO also controlled most of the approximately $30 million a year sent by the Arab governments to the West Bank and Gaza, though on some occasions Arab states themselves became directly involved. For example, Mayor Elias Freij of Bethlehem received $600,000 from Kuwait in 1977, reportedly in exchange for refraining from speaking of peaceful coexistence with Israel.

All in all, the PLO’s annual budget in recent years has been estimated at about $1 billion, prompting Time to call it “probably the richest, best-financed revolutionary-terrorist organization in history.” Its leaders could enjoy an unusually opulent style of life; on one occasion, three PLO directors lost $250,000 of the organization’s money at the gambling tables. If Yasir ‘Arafat maintained an abstemious way of life, other of the top PLO brass were notorious for high living; Zuhayr Muhsin, head of As-Sa’iqa, was assassinated while residing in a luxury hotel on the Riviera.

Perhaps at some point the Palestinian Authority’s donors ought to have looked at the history and stopped funding the PA so generously. Sure someone who was generous could have said once that past performance isn’t a guarantee of future results. But once it was established that in this case the corrupt nature of the PLO (and PA) was confirmed donor countries just kept on giving.

Rather the world heard Arafat and his cohorts say

You owe me. Pay up. Or else.

And world listened. And it still listens, continuing to pay tributes to this corrupt organization.Salam Fayyad the new Prime Minister of the PA was cited in the past as trying to straighten up the PA’s tangled finances. But as Barry Rubin points out in You owe us bigtime: the distortion of Palestinian aid politics

But the icing on the cake is the phrase “previous regimes” being responsible for corruption as if the current leadership has nothing to do with it. The current prime minister, a professional economist, may not be corrupt but the PA regime today is a continuation of all the ones before. Personnel have not changed very much.

All the aid that’s currently being arranged will go for naught. It will enrich the top layer of Palestinian leadership. It will finance terror operations. It will not be used to build infrastructure or create an economy.

Foreign aid to the Palestinians has created an entitlement society. No doubt it makes the West and others feel good because they’re “doing something to help,” but they’re only helping a small fraction of Palestinian society. And they’re doing it again and again.

Until the Palestinians are held accountable for their corruption and terror there will never be peace. The latest round of donor promises shows that nothing has been learned from the last quarter century of experience.

Crossposted on Soccer Dad.