Column One - The Peres Center scandal

Caroline B. Glick Jerusalem Post, 26 April 2002

First came Foreign Minister Shimon Peres's lone defense of Terje
Roed-Larsen, the UN special coordinator for the Middle East peace process
who last week insinuated that Israel committed war crimes in the UN-managed
Jenin refugee camp. He stated, among other things, that "Israel has lost all
moral ground in this conflict." Then came the Makor Rishon newspaper's
revelation that, in 1999, the Shimon Peres Center for Peace gave Larsen and
his wife, Norwegian Ambassador Mona Juul, an unprecedented cash payment of
$100,000.

Larsen sits on the board of governors of the Peres Center. Then, too, the
Norwegian government is one of the chief contributors to the multimillion
dollar enterprise.

Peres strenuously denied charges whispered by high-ranking members of his
own Labor Party, and made public by investigative journalist Yoav Yitzhak on
Channel 1 on Tuesday, that the payment to Larsen and Juul was a kickback for
their intervention on his behalf with the Nobel Committee in 1994. In this,
he must be given the benefit of the doubt.

But it strains the imagination that the fact that Larsen sits on his
center's board of governors and his wife represents one of the center's main
donors had no impact whatsoever in Peres's unabashed defense of Larsen after
he libeled Israel in front of the international community, and did so hours
before the UN Security Council passed a resolution calling for the
establishment of a fact-finding mission about the battle in Jenin.

Just hours after the cabinet meeting at which Attorney-General Elyakim
Rubinstein said Larsen's mendacious remarks were cause for declaring him
persona non grata, Peres released a statement rejecting the "horrible calls
to declare Larsen persona non grata."

"A procedure like this," he added, "would do injustice to a man who has made
a special contribution toward peace in our region for years."

Looking over the Peres Center's Web site, one is hard-pressed to understand
what the center, whose 1998 budget was almost NIS 30 million, actually does.
Its project descriptions, which mainly describe actions the center
"promotes" or intends to carry out, have not been updated since the Oslo
process disintegrated at Camp David and the Palestinian terrorist war
against Israel began.

According to an independent audit conducted for the registrar of non-profit
organizations by accountant Boaz Gazit in March 2001, the center's largest
outlay is salaries, of which the directors receive a disproportionately
large share.

The auditor's report pointed out that in 1997, the center's 35 employees
received a total of NIS 2,312,688 in salary payments and that five of the
employees received 78 percent of the total amount. In 1998, the center
expanded its workforce to 63 and paid close to NIS 5 million in salaries, of
which the top eight salaries constituted 54 percent of the total.

In addition to payment of employees, the Peres Center apparently also knows
how to throw a good party. A three-day meeting of its full board of
governors in 1999 cost NIS 2,328,990. Outlays included footing the bill for
the travel and lodging expenses of all board members.

One of the members of the board is Andrei Azulay, president of the Marc Rich
Foundation in Israel. The auditor's reports states that "one of the most
prominent contributors to the center since its inception is Marc Rich."
According to press reports at the time, Andrei Azulay was the main lobbying
force for then US president Bill Clinton's 11th-hour pardon of Rich, a
fugitive from justice. Peres was one of many Israeli personalities who sent
letters to Clinton beseeching him to pardon Rich in the closing months of
his presidency.

One cannot help but notice the strong stench of influence-peddling that
rises from Peres's defense of both Larsen and Rich, given their intimate
connections with his center. But these examples are not isolated. According
to the Peres Center's Web site, among the many projects it promotes, one
that actually received funding ($63 million) was the "Peace Technology
Fund."

The fund's aim, according to the site, is "making equity investments in
Palestinian companies and joint ventures." The two Palestinian companies
that were invested in by the fund, are "Paltel - the Palestinian telephone
operating company - and the Palestinian Mortgage Housing Corporation." Both
of these concerns are infected root and branch by Palestinian Authority
corruption.

Muhammad Rashid, Arafat's economic adviser, is vice president and one of the
principle stockholders in Paltel.

In an investigative report from December 1998, The Financial Times reported
that Rashid and Paltel were deeply involved in stealing the $160 million
Gaza Employees Pension Fund, which was transferred to the PA by Israel in
1994 and emptied of its funds by Rashid between early 1996 and late 1997.
Freih Abu Medein, the PA's justice minister told the paper at the time the
money had been invested in telecommunications projects.

The Palestinian Mortgage Housing Corporation was involved in scandal in
1998, when the EU discovered that $20 million it had donated for the
construction of low-cost housing in Gaza had been used instead to build
luxury apartments for wealthy supporters of Palestinian Authority Chairman
Yasser Arafat.

So not only does the Peres Center reward its managers and European friends,
it also serves to legitimate PA corruption committed by Arafat's men, who
steal money from their own impoverished people. But this should come as no
surprise.

Former Shin Bet officer Yossi Ginossar, Rashid's partner in his various
business dealings and behind-the-scenes go-between with Arafat for Labor
prime ministers, also sits on the board of directors of the Peres Center.

Ginossar is himself so intimately involved in the business end of the PA
that when Ehud Barak brought him in as a pinch hitter at the Camp David
summit, press reports at the time described the participants joking that
they didn't know whether he was there to represent Israel or Arafat.

The single largest contributor to Arafat's PA since its inception is the EU.
Still today, as the evidence has become overwhelming that the PA is a
terrorist entity from head to toe, the EU insists on continuing its
financial support. Just last month the EU announced it was donating another
340 million euros to the PA. This week, the Ad-Hoc Liaison Committee, the
body responsible for coordinating aid to the PA is meeting in Oslo to put
together a new financing package.

The EU also is a major financial backer of Yossi Beilin's Economic
Cooperation Foundation. In addition, it funds organizations like Rabbis for
Human Rights, which recently participated in organizing delegations of
foreign activists who were brought here to stand in front of IDF tanks and
attempt to force their way through IDF roadblocks.

Aside from the realpolitik justification for such meddling in Israel's
internal politics - that such organizations, through their work provide a
source of influence and a launching pad for increased EU power in the
Levant - the revelation that the Peres Center paid Larsen and Juul $100,000
provides a fiduciary interest as well.

Simply put, keeping Oslo alive is good business.

The victims of all of this inbreeding are, of course, the Israeli and
Palestinian peoples. On the Israeli side, having Shimon Peres wearing the
twin hats of life force behind the Peres Center enterprise and foreign
minister represents an inherent conflict of interest with potentially
serious repercussions for the conduct of foreign policy.

On the Palestinian side, the continuation of Arafat's mafia-style reign
suffocates any prospect for economic growth and development and, of course,
destroys any possibility of political settlement.

A few months ago, a senior governmental source said to me, "If you want to
understand why Israel isn't fighting Arafat, follow the money." Well here
you have it.