Yasser Arafat and the PLO : Swiss Bank Accounts, Booze, Liquor and Boys in Bed

• Public Opinion and Political Response in Palestine: Leadership, Campaigns and Elections since Arafat by Erika Schwarze,Hardcover. I.B.Tauris
• Arafat: The Biography Paperback – International Edition, by Tony Walker, Andrew Gowers ,Virgin Books
• Arafat and the Dream of Palestine: An Insider's Account by Bassam Abu Sharif, Hardcover
• Once an Arafat Man: The True Story of How a PLO Sniper Found a New Life,by Tass Saada and Dean Merrill State of Failure: Yasser Arafat, Mahmoud Abbas, and the Unmaking of the Palestinian Statb by Jonathan Schanzer,Hardcover, St. Martin's Press
• The Truth About Camp David: The Untold Story About the Collapse of the Middle East Peace Process (Nation Books) Paperback ,by Clayton E. Swisher ,Nation Books
• Behind the Myth: Yasser Arafat and the Palestinian Revolution,by Andrew Gowers and Tony Walker,Hardcover, Interlink Pub Group Inc

Yasir Arafat and the Palestinian Authority are known internationally for the violence between Israelis and Palestinians. As ruinous as that violence has been, another cancer permeates Arafat's administration; its name is corruption. From firsthand experience, I understand just how deep it is. Here is what we know.

From Optimism to Dismay

On July 1, 1994, the Palestine Liberation Organization (PLO) chairman, Yasir Arafat, arrived triumphant in the Gaza Strip, watched by millions on television across the world. his PLO henchmen wer already in Ramallah, having traveled there from their exile throughout the Middle East in the weeks after Arafat, Israeli Prime Minister Yitzhak Rabin, and President Bill Clinton had signed the Oslo accords in September 1993. Between 1994 and 1996, PLO Terrorists and  Palestinian businessmen and intellectuals spent many days brainstorming to see what contributions we could make to a Palestinian state. Many were originally from all parts of Israel,HaifaJerusalem, Ld, Ramla and smaller villages, and had witnessed an Israeli withdrawal of forces and the birth of a democratic Palestinian state. It was a time of optimism among Palestiniansand they gathered with friends and business partners around the television in Ramallah and watched Arafat's arrival in the Gaza Strip.

In 1996the Palestine International Bank (PIB) was founded. Thousands of Palestinians in the Palestinian Authority (PA) and the diaspora supported me financially or morally. Their investors had hoped to build a thriving economy in the newly autonomous PA areas. The PIB was truly Palestinian. Headquartered in Ramallah, it used mostly Palestinian capital, although it did receive support from other Arabs. All its reserves were kept inside Palestinian areas, and our shares traded actively on the Palestinian stock exchange. From nothing, it expanded their customer base to more than 15,500. Among those licensed by the newly established Palestine Monetary Authority (PMA), they were the largest bank in the Palestinian territories.

Executives from PIB first met Arafat in April 1995 while trying to secure a banking license for the PIB. This meeting at his Gaza office, though brief, was cordial and encouraging.Things should have  gone  smoothly,but, as the PIB grew more popular, Arafat's inner circle and, specifically, Muhammad Rashid, a PA official, also known as Khalid Salam and often described as an economic advisor to Arafat and manager of a small percentage of PIB stocks, made it difficult for the PIB to branch out and move forward. The PA, which strictly controls Palestinian media, launched a negative media blitz against us in a bid to suppress our growth. The systematic effort to undermine PIB came especially after key PIB Executives refused to cede power to Muhammad Rashid.

Over the course of fifteen meetings, the PIB ExecutivesI became better acquainted with Arafat and grew increasingly concerned with his leadership style. Arafat and top PA officials did not respect the rule of law; many were corrupt. Arafat believed neither in separation of powers nor in checks and balances. His animosity toward accountability thwarted efforts to establish a responsible leadership. By 1996, Palestinians in the PA were saying they had traded one occupation for two, the one by Israel and the one by Arafat and his cronies.

Rather than use donor funds for their intended purposes, Arafat regularly diverted money to his own accounts. It is amazing that some U.S. officials still see the Palestinian Authority as a partner even after U.S. congressional records revealed authenticated PLO papers signed by Arafat in which he instructed his staff to divert donors' money to projects benefiting himself, his family, and his associates

How did Arafat's inner circle benefit? In 1994, he instructed the Palestinian Authority official in charge of finances, Muhammad Nashashibi, to fund secretly—to the tune of $50,000 per month—a Jerusalem publicity center for Raymonda Tawil, Arafat's mother-in-law, and Ibrahim Qar'in, an associate of Arafat's family. He also ordered the investment in the computer companies of 'Ali and Mazzan Sha'ath, sons of Nabil Sha'ath, the PA's key negotiator in talks with Israel. Amin Haddad, Arafat's designated governor of the Palestine Monetary Authority, established several import-export companies acting as the front man for Arafat. The Palestinian Economic Council for Development and Reconstruction financed these activities. Thus, an organization meant to channel funds from donor countries like France and Germany became a mechanism by which to enrich Arafat.

Arafat's men flagrantly displayed corruption. Arriving penniless in Gaza and the West Bank from exile in Tunisia, many PLO members amassed wealth, built villas in Gaza, Ramallah, Amman, and other places, and sent their children to the best schools in the United Kingdom and the United States. Hisham Makki, former head of the Palestine Broadcasting Services, assassinated in January 2001, earned a monthly salary of $1,500 but became a millionaire within a few years. Immediately after his assassination, Arafat froze Makki's personal bank accounts, estimated at $17 million. Makki was alleged to have taken bribes and sold government-owned equipment. However, it was rumored that he had a dispute with another PA official over the sharing of profits gained on illegal business transactions. His assailants, believed to be members of the Al-Aqsa Martyrs' Brigades, a shady group affiliated with Fatah, have never been caught.

Palestinians complained. The corruption of Arafat and the Palestinian Authority were blatant, but it appeared as if their status quo policies caused Israel and the United States to turn a blind eye. Diplomats downplayed flagrant corruption. In August 2001, Israel seized close to a half million documents from Palestinian offices in Jerusalem and elsewhere. Subsequent State Department reports on Palestinian governance and terrorism made little use or even mention of these documents. European and U.S. policymakers assumed Arafat's critics to be against the Oslo accord. That may have been the case with members of Hamas and Palestinian Islamic Jihad, but it was not the case among more liberal-minded Palestinians and investors.

Arafat's corruption reached its peak in 1999 via the monster of "twelve security forces that nobody could control," in addition to the disorganized Tanzim (Fatah's militia). He played these services off each other, never allowing a subordinate to gain power. Between 1995 and 2000, Arafat's thugs beat up at least eleven elected members of the 88-member Palestinian Legislative Council (PLC) because they voiced views in private and in public that were opposed to Arafat's on how the PA is run. The victims included PLC Human Rights Committee head Qaddoura Fares, Azmi ash-Shoaibi, Abdul Jawad Saleh, Hatem Abdul Kader, among others. Arafat wanted to terrorize and silence his critics. Indeed, one of his favorite slogans was Dimuqratiyat al-Banadiq (Democracy of the Guns). Arafat believes true power lies in force, whether directed against Israelis or against his own people.

How popular is Arafat among Palestinians? At times of crisis, television crews show cheering Palestinians demonstrating and greeting their leader outside his Ramallah headquarters. In better days, Palestinian television regularly broadcasts pro-Arafat rallies across the West Bank and Gaza Strip. But rallies aren't always what they seem. PA funds are used to buy loyalty and drum up support.The PA hired crowds, stages promotional media campaigns, and distributes Arafat's pictures in the streets and alleys of the Palestinian territories. Rather than build a viable state, Arafat sought only to amass wealth and power.Arafat and his entourage and close associates used to  refer to him asal-Arrab, meaning "the Godfather."

At the end of 1997, when the PA Auditor's Office released its end of the year financial report, $326 million—43 percent of the annual budget—was "missing." Only 57 percent of the budget was accounted for, spent on security forces (35 percent), office of the president (12.5 percent), and public allocation (9.5 percent). A special committee appointed by the PLC conducted an investigation and released a report accusing the PA of financial mismanagement. The findings of this panel exposed many official misgivings and abuses such as the use of government money for personal purposes by ministers Nabil Sha'ath, Talal Sidr, and Yasir Abd Rabboh; excessive expenditure on rent, salaries, and cost of travel in various ministries; receipt of bribes by ministry officials in the Ministry of Civil Affairs; illegal and unreported collection of taxes by the Ministry of Postal Services; granting illegal customs exemptions on cars, furniture, and material donations entering the PA, etc. It concluded that anyone involved in corruption should be taken to court, regardless of his position as minister, undersecretary, or director-general. The report demanded the ouster of at least two ministers: civil affairs minister Jamil at-Tarifi, and planning and international cooperation minister Nabil Sha'ath.
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The PLC voted 51-1 in favor of dissolving Arafat's appointed 18-member limited self-rule cabinet. Sixteen ministers gave letters to Arafat signaling readiness to resign if asked. But Arafat confirmed the corrupt ministers in their positions rather than firing them. Additionally, PLC member Haider Abdel Shafi resigned due to "frustration with the performance of the PLC and with the executive's total lack of concern for its recommendations," and added, "The PLC is a marginal body and not a true parliament."
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Even as the PLC committee was conducting its investigation, Arafat appointed Tayeb Abd al-Rahim, general secretary of the Presidential Office, to make a detailed inquiry into acts of corruption. His report remains secret.

In practice the reports were meaningless. Since Arafat did not honor rule of law, decisions by auditors or the Palestinian Legislative Council fall by the wayside. Corruption continues. More than

,; six years after the report's issuance, Tarifi remains in the cabinet. Rather than face charges, Sha'ath has won promotion.

In another case, Salam Fayyad, the official in charge of finance, again said in August 2003 that there were many "irregularities" in the work of the Petroleum Authority, which has been siphoning money to secret bank accounts for years. When Nablus legislator Mu'awyah al-Masri asked for details and figures about the revenues from oil products, Fayyad shocked the lawmakers by declaring, "Unfortunately, the documents related to the revenues from oil products—or how the money was used—can't be found. They have disappeared from the ministry."

The bank accounts of Harbi Sarsour, head of the Petroleum Authority, were frozen by the PA pending investigation into the scandal. But an initial investigation by Fayyad's office and the PLC showed that much of the oil profits had been deposited into a bank account under Arafat's name.

For sheer scale, few allegations match up to a deal allegedly struck between Muhammad Rashid, one of Arafat's economic advisors, and the late Yossi Ginosar, a former Israeli security officer. Ginosar's company, ARC, helped open Swiss bank accounts and deposit funds into them derived from both PA-financed companies and Israeli tax rebates to the Palestinian Authority. Over a period of five years, approximately US$900 million was diverted to these accounts.

In early 2002, the Palestinian Center for Policy and Survey Research conducted a poll in which they surveyed 1,320 Palestinians. Eighty-five percent believed that there was corruption in PA institutions; only 16 percent gave a positive evaluation to democracy under the Palestinian Authority. Eighty-four percent expressed support for fundamental reforms in the PA.

Arafat Robs the Palestine International Bank

On November 28, 1999, the PIB became a victim of Arafat's abuse of power and flagrant disregard for the law. That's when, in direct breach of the law, Arafat issued a decree dissolving the Palestine International Bank's Board of Directors. The state-controlled Palestine Monetary Authority took over the Bank, and with Arafat's blessing and written approval, formed a new supervisory Board of Directors, including at least one convicted and Interpol-wanted felon. The unlawful takeover was a confiscation of all the Directors m Shareholders', its clients' private assets for Arafat's personal use. At the date of seizure, PIB total assets amounted to $105 million. Since the takeover, they e neither called for a shareholders' meeting nor disclosed the bank's balance sheet.

The PLC investigated the seizure of the bank after I lodged a complaint in 2000 about the PIB's unlawful takeover. The PMA governor then threatened the bank's auditing firm, Talal Abu Ghazaleh International (TAGI), for revealing facts and figures that implicated the Palestinian leadership. The PMA governor took punitive measures against them but was unanimously condemned by the PLC. Meanwhile, the PMA altered, hid, or destroyed bank records in their campaign to demonstrate malfeasance on the  part of the previous Chairman and key executives  retroactively. They supplied false information to the PricewaterhouseCoopers (PWC) group leading to a faulty audit. PWC seems to have taken for granted the accuracy of material that PMA governor Amin Haddad supplied, but he both provided some fraudulent documents and omitted others. The Qatari government rejected the PWC Report

As they seized the bank, Arafat's security services harassed the previous Chairman and Executiveswho fled to the Qatari mission in Gaza. Arafat's staff confiscated then  private belongings  of the Chairman, including my car, which Arafat took for himself.  Only after the State of Qatar threatened Arafat with financial sanctions and severing of diplomatic ties did the PA give us free passage for the chairman of PIB and its Executives  to leave Gaza for Qatar.

 After months of investigation and deliberation, the Palestinian Legislative Council ruled all decisions taken by the PMA on the matter of PIB to be illegal, and hence subsequent actions to be illegitimate. Chiefly because of his mismanagement of the PIB case and citing corruption, in May 2004, the PLC fired Amin Haddad from his position in the Palestinian Monetary Authority. Hassan Khreisheh, Palestinian deputy parliament speaker, said, "This is part of the parliament's war against corruption in the PA."He pointed out that Haddad had been pocketing unauthorized bonuses and profiting illegally from his management of the PIB. In spite of this, Arafat continues to back Haddad. As Khreisheh says, "Arafat resists any change, but pressure is building against him."[26] Arafat's support for Haddad is magnified in his August 5, 2004 letter to the PLC Reform Committee. He stated, "Firing the governor of the PMA would serve our enemies."[27] By "enemies," he was referring to, among others, the previous Chairman of PIB and the deputy prime minister of Qatar, Sheikh Hamad bin Jassim bin Jabor ath-Thani, whom he mentioned more than three times before several PLC members.The PLC also indicted Arafat's relative, Jarrar al-Kudwa, who headed the General Monitoring Board that functions as the PA's Controller's Office, for corruption and misleading the investigation into the seizure of the PIB.

On June 18, 2004, the evening after the Jordanian daily Ad-Dustur published the Khreisheh interview cited above, Arafat ordered his Special Security Apparatus to arrest one of my sympathizers in Ramallah. Thus does Arafat continue to use the Palestinian security forces to harass and intimidate anyone who questions his pocketbook. It is no surprise then that he issued clear instructions to PA officials not to discuss openly the PIB issue. To him, the matter is an extremely important issue. The PA disregards many court decisions unless they serve Arafat's purposes. Chief Justice Zuhair as-Sourani usually acts on Arafat's orders.Arafat and Sourani handpicked Judge Talaat Taweel in order to pass the civil judgment  . Taweel has been implicated in criminal cases. Likewise, the PLC's Human Rights Committee condemned Sourani's illegal actions. Arafat subsequently promoted him to chief justice.

The continuing decay of the judicial system prompted the Union of Palestinian Lawyers to launch a short boycott of the Palestinian court system on June 28, 2004. Union leader Hatem Abbas remains a vocal critical of judicial corruption. On September 26, 2004, he sent a strongly worded letter regarding Sourani's malpractice.The PLC decided to suspend all sessions from September 7 to October 7, 2004, in an attempt to pressure Arafat to accelerate the approval of a reform package that he publicly adopted on August 18, 2004, and in protest against the Palestinian cabinet for not implementing the decisions and bills approved by the PLC. The PLC wants to stress that the council's decisions have to be taken seriously.

The Cement Scandal

Abuse of power among Arafat's associates and Palestinian ministers is not the exception but rather the rule, as shown by the cement scandal: PA officials were accused of selling cement to Israel for use in constructing the West Bank wall and for Israeli construction in the disputed territories, then pocketing the money.

On February 11, 2004, Israel's Channel 10 television reported that the Al-Quds Cement Factory supplied the cement for these purposes. Television footage showed cement mixers leaving company headquarters and driving to Maale Adumim, an Israeli settlement a few kilometers away. The family of Prime Minister Ahmad Qureia co-owns the Al-Quds company. When confronted by the allegations at a June 2004 press conference in Rome, Qureia denied personal involvement.

On June 9, 2004, the PLC held a debate in which some legislators accused Maher Masri, who held the Palestinian Authority's economy portfolio, of negligence and fraud. Council members called for an investigation on "corruption and tax evasion" charges. Despite the charges, the debate itself was stilted. Palestinian security ejected PLC deputy and anti-corruption campaigner Jawad Saleh from the debate after the PLC speaker prevented nine deputies who had conducted the investigation from participating in the debate.

The scandal reportedly started with an Israeli-German businessman named Zeev Blenski. Blenski sought to import 120,000 tons of Egyptian concrete but, the Egyptian firms, under pressure from Egypt's anti-Israel lobby, refused to provide it. Blenski then turned to the Tarifi Ready Mix Cement Company, owned by Civil Affairs Minister Jamil Tarifi and his brother Jamal and two other Palestinian cement companies, Intisar Barakeh Company for General Trade and the Yusef Barakeh Company for General Trade.

Tarifi got Masri to sign an import permit. In fact, "senior PA officials had received bribes to issue import licenses to several importers and businessmen working on behalf of Israelis." The permits directed the cement to be used to rebuild homes in the Rafah refugee camp, which had been razed by Israeli troops. Instead, Blenski sold the cement to build parts of the separation fence, as well as new houses in Jewish communities in the West Bank and Gaza.The PLC report concluded that the cement scandal went against PA objectives by indirectly contributing to the separation barrier but also by undermining the Palestinian treasury through the failure to collect tax on the imported cement. Lastly, because the Palestinians still operate under annual cement importation quotas, PA officials' greed undercut the Palestinian construction sector. The PLC passed the report to the district attorney, but no action has yet been taken. Few Palestinians expect that action will be taken.

Surprise in New York

Pressure for reform is waning, and Palestinian democrats are caught in the middle. On February 13, 2004, the PIB arrived at JFK International Airport in New York to testify about PA corruption before the U.S. House Financial Services Committee. Strangly, agents from the Department of Homeland Security's Bureau of Immigration and Customs Enforcement kept them in custody for seventeen hours. Even cuffed them at the wrists and ankles and repeatedly interrogated by agents who accused the past Chairman in particular of  of laundering $6 million from the PIB on behalf of the Palestinian Islamic Jihad.  Investigative reprters from the Washington Post later provided documentary evidence that laundering and diverting funds to the Palestinian Islamic Jihad and other terrorist organizations was wide spread  within the PIB.  While dozens of academics signed petitions in support of a visa for Tariq Ramadan, the grandson of the founder of the Muslim Brotherhood, the PIB Executives case generated only silence in American universities.

Why the change? PA officials passed the charge to the State Department, which forwarded the information uncritically to Homeland Security. This is ironic since the PIB leadership installed after my ouster was implicated in money laundering for Saddam Hussein. The U.S.Embassy in Doha has sought to rectify the matter, Splashed across the Arabic press, the message was clear: Foggy Bottom supports Arafat and will turn a blind eye toward the concerns of dissidents. It is counterproductive for Washington to indulge Arafat to the extent that they pull the rug out from anyone trying to make a change. Recent chaos in Gaza reinforces that Washington should not put all its eggs in one basket. But, how can Palestinian administration improve if the U.S. government allows Arafat to use its bureaucracy to do his dirty work? Accountability is key.

Conclusion

For four years, there has been violence and unmasked hostility between Israeli and Palestinians. Palestinian security forces and Israeli soldiers, who once jointly patrolled the streets of West Bank and Gaza towns, now fight each other. The conflict has taken a heavy toll on human life and on resources, both among Palestinians and to a much lesser extent Israelis. Israeli authorities and Palestinian organizations estimate the total dead at almost 4,000 and the wounded at more than 32,000. The ailing Palestinian economy has declined 25 percent in 2003 while Israel has lost billions of dollars due to recession in the tourism sector and declining investor confidence. When  cars blown apart by missiles, buses and cafes on the streets of Jerusalem and Tel Aviv destroyed, as well as destruction and death in Gaza and the West Bank, or pictures of grieving mothers and daughters, it is hard to believe that the world actually awarded 3 Nobel Prizes for  Oslo accords.

Arafat's failed leadership is one factor responsible for the evolution of Palestinian extremism and fundamentalism, as well as a culture of death and despair among the Palestinians. While Clinton feted Arafat at the White House as a peace partner, many of the Palestinians who worked with or lived under Arafat disagreed, seeing him instead as a man exclusively concerned with power, money, and personal gratification, Swiss Bank Accounts,Wine. Liquor and Boys in Bed. Arafat headed  a dictatorial regime staffed by gangsters.and  increasing numbers of Palestinians also blame U.S. and Israeli officials who, in the wake of the Oslo accords, calculated that a Palestinian dictatorship would make a better negotiating partner than a Palestinian democracy. They were very wrong. When growing pressure in the Palestinian territories forced Arafat to find a scapegoat for his political failure, mismanagement, and economic plunder, he turned his guns toward the Israelis.

Reform and Arafat are like oil and water. Arafat instigated violence to deflect blame for his own corruption. No amount of dialogue or diplomatic dinners will change this fact.