Updates from AIJAC

Palestinian Corruption, Democracy and Peace

July 11, 2001
Number 07/01 #05

Below are a series of recent pieces dealing with the problems of the corruption and lack of democracy and human rights in Palestinian society under Arafat. Moreover, these problems clearly impact on the prospects for Israeli-Palestinian peacemaking.

The first is by Jerusalem Post columnist Saul Singer, urging, on the basis of his own relationship with Palestinians, a need for Israeli peace policies that also take account of the need for Palestinian democracy and human rights to create a stable peace.

The second, by American columnist Richard Chesnoff, sets out some of the evidence of the extent of the corruption in the PA under Arafat.

Finally, a Wall Street Journal article by Robert Pollack sets out Arafat's past history of creating corrupt, authoritarian mini-states in Jordan and Lebanon before arriving in Gaza as part of the Oslo process.

By Saul Singer

(July 9) - Musa and I live in the same city, but in different worlds. I do not see him very often, in fact I had not seen him since the current fighting began about nine months ago. But I consider Musa (not his real name) a friend because he does not feel the need to spout the Palestinian line with me, nor I the Israeli line with him.

Musa does not demonize Israel. In fact, his solution to the conflict is for all of Judea and Samaria to become part of Israel, and for the Palestinians there to become full Israeli citizens. Unlike Edward Said and others who propose such a bi-national state as a clever way of eliminating Israel, I do not think that is Musa's goal. On the contrary, Musa's ideal would be for Palestinians to become full participants in Israeli freedom and prosperity, not creating another Arab state.

Musa, of course, sees no problem in transforming Israel from a Jewish state to "a state of all its citizens." He is not sensitive to what is obvious to almost every Israeli - that without a Jewish majority there is no Israel, just another Arab state with a Jewish minority. What pains him is Palestinians suffering under the triple burden of the current conflict, Israeli rule and Yasser Arafat.

Talking to Musa, it is not clear what is regarded as a greater yoke on the shoulders of the Palestinians: Israel or Arafat. In the minds of many Palestinians, it seems, the two are actually combined. To the world, Arafat may be a Palestinian George Washington, but to the Palestinians who must live under him he is another reason to hate Israel.

Musa is quite bitter about how little Israel cares about the lack of democracy, human rights and the rule of law among its Palestinian neighbours. He said that Shimon Peres made two big mistakes as foreign minister as Oslo was getting off the ground in 1994-95. First, he got Israel to agree to Arafat's request to double the Palestinian police from 9,000 to 18,000, while paying each half as much. The result was more corruption and less rule of law.

Second, according to Musa, Peres convinced European governments to ease up on their accountability requirements and let the money flow to the Palestinian Authority despite concerns about corruption. In addition, Israel turned over large sums of tax revenues it collected from Palestinians to Arafat directly, showing little interest where the money went.

The Israeli mentality, it seems, tracked the stereotype held by Arafat's internal opponents: Israel was paying Arafat to deliver security and did not care how Arafat ruled over the Palestinians in the process. The Israeli indifference to the nature of Arafat's regime crossed ideological lines - the Right saw no reason to expect anything better and the Left did not want to add to Arafat's burdens. In prime minister Yitzhak Rabin, these two streams met, producing his famous line that Arafat would be able to crack down on terror without the Supreme Court or human rights groups looking over his shoulder.

Now Prime Minister Ariel Sharon is talking about a "long-term interim arrangement" that would produce quiet while laying the groundwork for a permanent peace. When asked what's in it for the Palestinians, given that he is only talking about some 50 or 60 percent of Judea and Samaria, Sharon's answer is "continuity" - freedom from the closures and checkpoints Israel has imposed between Palestinian areas.

What Sharon and most Israelis don't seem to appreciate is that freedom from Israeli security measures is not the only freedom that Palestinians want.

According to Musa, the current violence is partly a means for Arafat to channel opposition to his corruption and multiple security forces against Israel. Therefore, if Sharon wants to offer something attractive to Palestinians, he should not just speak of continuity, but democracy and human rights.

Without being sure that I believed it myself, I suggested to Musa that Sharon might be different from other Israeli leaders in this respect. Sharon prides himself on the respect he has for aspects of Arab culture.

The disdain that Israelis have for the possibility of Arab freedom is ultimately a form of paternalism. Unfortunately, whenever Israelis, such as former prime minister Binyamin Netanyahu and Housing Minister Natan Sharansky, speak of the importance of democracy in the Arab world, they are accused of creating excuses not to engage in the peace process.

We are going to have to live with our Palestinian neighbours long after Arafat disappears from the scene. So far, we have acted as if what matters is Israel relinquishing control, not what sort of tyranny takes our place.

If we continue to act this way, we should not be surprised when the Palestinians act as if they have nothing to lose, or that they lack gratitude for their newfound "freedom."

New York Daily News (July 9).

PALESTINIAN leader Yasser Arafat constantly moans that Israel's war against terrorism is "starving our children." Truth is, it's his own hypercorrupt administration that's bleeding the Palestinian economy dry.

According to Rachel Ehrenfeld, director of the New York- based Centre for the Study of Corruption and the Rule of Law, the Gaza Grabber has been systematically skimming the $75 million a year in U.S. funds he has received since 1994 — not to mention major portions of the aid from other countries and Palestinian tax revenues.

Tales of Arafat's wealth are hardly new. A 1994 British intelligence study estimated that he controlled assets of up to $10 billion and that as a result, the Palestine Liberation Organization enjoyed an annual income of as much as $2 billion.

Rep. Benjamin Gilman (D-N.Y.) asked the General Accounting Office to prepare its own detailed assessment of the PLO's assets. The report was completed in June 1995, but the Clinton administration — eager not to rock the peace-process boat — barred it from public view.

That hasn't prevented details of the PLO's ill-gotten fortune from coming to light. Last year, hackers — believed to be disgruntled Palestinians — broke into Arafat's computer system and found details of more than $5 billion in secret bank accounts in Switzerland, the U.S., Asia and North Africa. The accounts are not registered in the PLO's name, but in the names of private individuals who have Arafat's trust.

The hackers also discovered that Palestinians own shares on the Frankfurt, Paris and Tokyo stock exchanges, including stock in the German car giant Mercedes-Benz and real estate in some of Europe's most prestigious neighbourhoods.

And how's this for irony? Arafat, the one-time mastermind of aircraft hijackings, is part owner of several airlines, including the national carriers of the Maldives and Guinea-Bissau.

On the ground in Gaza, where more than 50% of the population is unemployed and barely any public housing has been built, Arafat & Co. erect one luxury villa after another, drive fancy cars and grow fatter on public funds.

Some of Arafat's closest pals control entire industries. Even Arafat's wife, Suha, is reportedly co-owner of a monopoly in the garment trade.

Arafat's gang isn't satisfied just with legal loot. According to intelligence sources, Arafat has launched an international counterfeiting scheme. The man behind the bogus bills: Fuad el-Shukabi, one of his senior financial advisers. El-Shukabi, say the sources, recently purchased two new printing presses. A trial run of some $150,000 in Kuwaiti dinars was successfully distributed in Beirut and the Persian Gulf States.

El-Shukabi then had the presses flown into Gaza aboard Arafat's own plane. The current plan: to run off large quantities of Jordanian 20 dinar notes and U.S. $50 bills, using paper purchased in South America.

The pro-Arafat propaganda machine recently launched a phoney campaign to have Israeli Prime Minister Ariel Sharon indicted for war crimes allegedly committed in Beirut 19 years ago. If anybody should be indicted, it's Arafat — for international fraud and corruption. Where's Interpol when you need it most?

Richard Z. Chesnoff is a senior correspondent at US News And World Report and a columnist at the NY Daily News. His latest book, recently updated, is Pack of Thieves: How Hitler & Europe Plundered the Jews and Committed the Greatest Theft in History.

ARAFAT ALWAYS GOES TOO FAR

Robert L. Pollack

Wall Street Journal, July 9, 2001

The crackdown was swift and brutal. Though the government was deeply divided between hardliners and those favouring more negotiation with the Palestinians, the hardliners won. Towns and refugee camps that had raised the flag of the Republic of Palestine were shelled, while Yasser Arafat proclaimed a "genocide" and urged his people to resist. There were numerous casualties on both sides.

The Arab League called for a ceasefire, and then for a meeting of its heads of state. But Mr. Arafat rejected their proposals. At a meeting with the government shortly thereafter, he accused his opponents of being imperialists in league with the U.S.

If this sounds familiar, it should--except that the start of this conflict was September 1970, not September 2000; it happened in Jordan, not Israel and the West Bank; and Mr. Arafat's nemesis was King Hussein, not Ehud Barak or Ariel Sharon.

In 1970, Palestinians, both citizens and refugees, were almost as numerous in Jordan as King Hussein's own Bedouins. Mr. Arafat used the estimated 20,000 Palestine Liberation Organization fighters in Jordan to exercise control over much of the Palestinian population. In many parts of the country, he was the de facto government. The king had grown increasingly worried that Mr. Arafat posed a threat to his regime, and cross-border attacks into Israel and other acts of PLO terror had put intolerable strains on his relations with the West.

The last straw came on Sept. 6, when the PLO hijacked four civilian airliners, flying three to Dawson's Field in PLO-controlled northern Jordan and one to Cairo. After European governments secured the release of the hostages by agreeing to release PLO terrorists from their prisons, the PLO blew up the planes. The Jordanian response, from which one of the PLO's most notorious brigades was to take its name, became known as Black September. An estimated 2,000 PLO fighters and several thousand more Palestinian civilians were killed. Mr. Arafat fled to Cairo, where an angry meeting with King Hussein nonetheless led to a ceasefire. But Mr. Arafat soon returned to join the rump of his forces, which had retreated to northern Jordan, close to their Syrian sponsors. Within 10 months they were driven out of the country.

As the world waits to see whether the current, fragile ceasefire will put an end to nine months of low-level warfare between Israel and the Palestinian Authority, the past may prove instructive. For, in essence, we've been here before. And regardless of what one thinks of Mr. Arafat from a moral standpoint--is he simply a terrorist, or does he come, as he famously told the United Nations in 1974, "bearing an olive branch and a freedom fighter's gun"?--his history, wherever he has gained a territorial foothold, has not been that of a reliable or even rational partner, even with potential Arab allies. His history is one of pushing too far.

Is the Jordan example not convincing? Well, a replay wasn't too long in coming. Within months of their expulsion from Jordan, Mr. Arafat and the PLO were setting up shop in Lebanon and tearing at the fabric of that country too. Lebanese Christians, particularly, resented suffering the Israeli retaliations that the PLO's cross-border raids provoked. In April 1974, for example, the PLO killed 18 at Kiryat Shimona and 20, mostly schoolgirls, at Maalot, both in northern Israel.

The early '70s were also boom years for PLO terrorism on the international stage. The year 1972 alone saw PLO groups blow up a West German electricity plant, a Dutch gas plant and an oil refinery in Trieste, Italy; kill, in conjunction with the Japanese Red Army, 24 at Israel's Lod airport; and massacre 11 Israeli athletes at the Munich Olympics. In early 1973, Black September took the American ambassador and his deputy (along with one Belgian diplomat) hostage in Sudan's capital, Khartoum, and, after President Nixon refused to negotiate, murdered them.

Flush with money from his Arab and Soviet sponsors, as well as an income tax levied by the Gulf states on Palestinian workers, Mr. Arafat quickly built up a state--called the Fakhani Republic after the Beirut neighbourhood in which he operated--in much of Lebanon. By 1975, he had some 15,000 troops under his command, with many more associated paramilitaries, and was acquiring tanks and anti-aircraft guns.

PLO-affiliated conglomerates, including one controlled by Ahmed Qurei, who would later negotiate the Oslo Accords, monopolized everything from shoes to baby food. Billions of dollars flowed through the PLO, the only thorough record of which seemed to be a small notebook Mr. Arafat carried on his person. His underlings levied arbitrary taxes on the Lebanese, and practiced other forms of extortion, car theft and racketeering.

That year--1975--Christian rage boiled over, and Lebanon's long civil war began. By early 1976, the PLO and its allies controlled most of the country. But that summer Palestinian assassins murdered the U.S. ambassador to Lebanon, and the U.S., Israel and the Arab states tacitly supported a Syrian-led invasion of the country, which reversed many PLO gains. An October ceasefire stabilized the situation. But 40,000 had been killed. And in subsequent years, PLO attacks into Israel continued, provoking more Israeli retaliation.

The endgame began in June 1982, when renewed PLO attacks on Israel coincided with an assassination attempt on the Israeli ambassador in London. Prime Minister Menachem Begin ordered Defence Minister Ariel Sharon to send Israel's armed forces into Lebanon to drive out the PLO. Mr. Arafat's appeals to the Arab League and the U.N. went unheeded, while ordinary Lebanese took to crying "Enough!" whenever they spotted him. In August President Reagan convinced Israel to stop the fighting, but Mr. Arafat, whose forces had been routed, had already told the Lebanese government he would leave the country. On Aug. 30, he left for Tunis, while his forces dispersed to other Arab countries. The Lebanese would suffer eight more years of the civil war he provoked.

The extent of Mr. Arafat's personal involvement in the numerous terrorist acts that have left an indelible stain on the Palestinian cause has long been a matter of debate among knowledgeable observers. But there is no question that, if not outright front groups for Mr. Arafat's Fatah faction, the groups that claimed responsibility were most often fully paid up members of the PLO, and that Chairman Arafat did nothing to stop them.

Persistent rumours that the U.S. and Israel possess tapes of Mr. Arafat directing the 1973 Khartoum murders (confirmed to me by Ariel Sharon late last year) have gained further credence with the recent allegations of James J. Welsh, a former Navy and National Security Agency intelligence analyst. He says the NSA sent out a warning of a possible PLO attack, based on shortwave intercepts, that was inexplicably downgraded by the State Department. After the murders, it was covered up. His story deserves congressional attention. After all, there is no statute of limitations on murder.

But the more pressing question is what the future holds for the little war now going on in Israel, Gaza and the West Bank. Mr. Arafat's history in Jordan and Lebanon suggests this is headed for no good end. From internal corruption and abuse of power, to the repeated breach of agreements, to the apparent use of territory as a base for terrorism, the situation of today's Palestinian Authority is strikingly similar to those two prior episodes.

Perhaps such observations played a part in convincing former U.S. envoy Dennis Ross, who spent a decade trying to convince the world otherwise, to conclude this year that Mr. Arafat "is not capable of negotiating an end to the conflict." And if Prime Minister Sharon soon feels compelled to act decisively against Mr. Arafat, as he did in 1982, and as King Hussein did in 1970, it would behoove the world to think carefully about where blame for the continuing Palestinian tragedy really lies.