Arafat's Pilfered Profits
By Rachel Ehrenfeld FrontPageMagazine.com July 22, 2004
www.frontpagemag.com/Articles/Printable.asp?ID=14339

The news about Arafat's demise proved yet again to be premature. He is
continuing to demonstrate that despite tottering under the failure of the
Intifada against the Israelis, the Bush Administration's disgust, the UN
envoy Terje Roed-Larsen's reprimand, and even the growing resentment of a
large portion of the Palestinian population, he is still the boss and no
changes or agreements regarding the Palestinians can be made without him. He
is determined to maintain control over the situation, because he can - he
holds the keys to the vault.

Never mind the protests against his and his cronies' corruption, nepotism
and the growing violence and chaos in the territories. And never mind the
concession Arafat had to make in removing his cousin, Musa Arafat, whom he
just appointed to head the Gaza Security Forces. Arafat's control of the
stolen wealth of the PLO and the Palestinian Authority enables him to
continue to call the shots and shoot down, yet again, the prospect of a
viable Palestinian State.

Jawad Ghussein, who was the secretary-general of the Palestinian National
Fund until 1996, remarked yesterday on the phone from London, "the billions
Arafat has stolen over the years from the Palestinian people facilitated the
corruption of the Palestinian leadership, and is the source of his power
over them." He went on to say 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 International Monetary Fund report "Economic Performance and Reforms
under Conflict Conditions," released in September 2003 in Abu Dhabi,
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. However, the IMF report did not take into account Arafat's
control of 60 percent of the security-apparatus budget, which leaves him
with at least an additional $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. But recent information reveals that in 1996, Suha Arafat
arrived in Buenos Aires with $30 million in cash that she invested in a
business with other Palestinians.

As of August 2002, Arafat's personal holdings also included $500 million of
the PLO's money; in all, his holdings were reported at that time, to total
$1.3 billion. This money is enough to a) feed 3 million Palestinians for 1
year, b) buy 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.

Where does the money that Arafat steals originate from? At least 60 percent
of the PA's budget comes from international aid contributions, of which the
EU is the largest donor. According to Palestinian Ministry of Planning and
International Corporation, individual EU member states have donated at least
$1.3 billion to the Palestinian Authority. Altogether, aid from Europe -
including EU donations - from 1998 to 2001, has totaled at least $4 billion.
Ten percent of the EU's overseas aid has been donated to the Palestinians
alone. In addition, on May 27, 2004, the English announced a £26.5 million
aid package, to be transferred directly to the Palestinian Authority.

Saudi contributions, until 2003, amounted to $15.4 million every two months.
Last December, while attacks against Israel continued, the United States,
Japan, European Union and Norway, joined by the Arab League countries and
the International Monetary Fund approved another $1.2 billion to the
Palestinian Authority for the 2004 budget. At the same time, the World Bank
granted it $15 million, and the European Union gave $40 million more in
assistance to the PA for "reforms and emergency economic aid." Also, the
U.S. annual gift to the Palestinians increased from $100-million to
$213-million. An additional $223 million was returned recently by Israel to
the PA in sales taxes for the year 2003.

Last February, Congress was supposed to hold hearings about Arafat's and the
PA's corruption, but at the last minute the hearings were canceled. Had
these hearings been held, the Palestinian people and the world could have
learned about the extent of Arafat's corruption of the political leadership
as well as that of the Palestinian society. It is conceivable that a few
courageous reform-seeking Palestinians would have found the justification to
finally overthrow Arafat and his corrupt regime.
The demonstrations in Gaza and the West Bank may be signaling that Arafat's
days are numbered. But since he still holds the purse strings, it is
unlikely that he will be overthrown anytime soon. Instead, his Fatah
movement, assisted by Hezbollah, is busy planning large homicide bombings in
Israel - one was foiled earlier this week.

In reaction to what seems like a timely opportunity for finally removing Mr.
Arafat, Secretary Powell said, "We believe the correct path forward involves
Mr. Arafat yielding power, real executive power, to a prime minister, and
for that prime minister to do what is needed for the Palestinian community."
Does this sound like a suggestions for a regime change?

*Rachel Ehrenfeld is the author of Funding Evil: How Terrorism is Financed
and How to Stop It and is the Director of the American Center for Democracy.