YASIR ARAFAT'S SWISS BANK ACCOUNT:
By Issam Abu Issa
CORRUPTION & DICTATORSHIP IN THE PALESTINIAN AUTHORITY
In 1996, I founded the Palestine International Bank (PIB). Thousands of Palestinians, many living in the jurisdictional areas of the Palestinian Authority (PA) and many others living in the diaspora, supported me financially or morally. My investors and I 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, we expanded our customer base to more than 15,500. Among those licensed by the newly established Palestine Monetary Authority (PMA), we were the largest bank in the Palestinian territories.
I 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. I thought things would go 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 us 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 after I refused to cede power to Muhammad Rashid. 
Over the course of fifteen meetings, I 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, and many were of the PA officials 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 areas 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, papers 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 U.S. 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 like me.
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 against 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 hires 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. I myself heard his entourage and close associates refer to him as al-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. 
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."  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 does 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:
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. 
. 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 my part 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, which has remained interested in the case because of my Qatari citizenship, rejected the PWC Report. 
As they seized the bank, Arafat's security services harassed me. I fled to the Qatari mission in Gaza. Arafat's staff confiscated my private belongings, including my car, which Arafat took for himself.  My brother Issa accompanied a Qatari Foreign Ministry delegation to Gaza in order to resolve the stalemate. But, upon his arrival, Palestinian police, acting on orders from Arafat, arrested him. The PA said they would trade his freedom for mine. Only after the State of Qatar threatened Arafat with financial sanctions and severing of diplomatic ties, did the PA give us free passage to leave Gaza for Qatar.
In recent months, there has been some movement on my case. 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."  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."  By "enemies," he was referring to, among others, myself 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. 
I have very little faith in the Palestinian judicial system, which is fully under Arafat's thumb. 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 against me in absentia. Taweel has been implicated in criminal cases.  Likewise, the PLC's Human Rights Committee condemned Sourani's illegal actions. Earlier, while an attorney general, Sourani issued an arrest warrant against me, but failed to produce any legal basis before the PLC; he merely acted on Arafat's verbal instruction.  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.
And, just recently, 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.
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.
But, this trip was different. Instead of breezing through customs as I had in the past, agents from the U.S. Department of Homeland Security's Bureau of Immigration and Customs Enforcement kept me in custody for seventeen hours. At some point, I was cuffed at the wrists and ankles and repeatedly interrogated by agents who accused me of laundering $6 million from the PIB on behalf of the Palestinian Islamic Jihad. They let me go, but I now cannot gain entry to the United States. While dozens of academics signed petitions in support of a visa for Tariq Ramadan, the grandson of the founder of the Muslim Brotherhood, my case generated only silence in American universities. 
Why the change? PA officials passed the charge to the U.S. 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, and I was allowed to reapply for a new visa; the case is still pending. But 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 under anyone trying to make a change. Recent chaos in Gaza reinforces the contention 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 the key.
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 Bill Clinton feted Arafat at the White House as a peace partner, many of us who worked with or lived under Arafat disagreed, seeing him instead as a man exclusively concerned with power, money, and personal gratification. He heads a dictatorial regime staffed by gangsters.  I 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 instigates violence to deflect blame for his own corruption. No amount of dialogue or diplomatic dinners will change this fact.
On the positive side, there are still persons who can move the peace-building process ahead. Many Palestinians seek change and welcome democratization and good governance. The Palestinians have the wealth, talent, and skills to carry out major functions for the needed transformation. Young economic leaders could spearhead the process, since economic growth and development are fruits of peace. The Palestinian private sector and civil society organizations can be mobilized and empowered in order to foster the democratization process.
With the right support, the Palestinians are capable of leading a real transformation towards a constitutional democratic state, one characterized by a separation of powers, the rule of law, a free market economy, and a strong civil society.
America should not be discouraged by what is going on in the Middle East today. Signs of freedom and reform abound. But, Washington must look forward and not revert to the formulas of the past. Palestinians want not only to be freed from Israeli control but also, as importantly, to end the occupation by Arafat and his cronies.
The Israeli-Arab Conflict
The Middle East & the Arabs
Radical Islam & Islamic Terrorism
War & Peace in the Real World
Islamist Terrorist Attacks on the U.S.A.
Osama bin Laden & the Islamist Declaration of War
Against the U.S.A. & Western Civilization
Islamist International Terrorism &
U.S. Intelligence Agencies
U.S. National Security Strategy
Issam Abu Issa, former Chairman of the Palestine International Bank, currently resides in Qatar. He is Founder of the Palestinian National Coalition for Democracy and Independence, a Palestinian constitutional democratic reform movement.
The foregoing article by Issam Abu Issa was originally published in the Middle East Quarterly, Fall, 2004, and can be found on the Internet website maintained by the Middle East Forum.
Africa: Black Africa *
Africa: North Africa *
American Government 1
LINKS TO PARTICULAR ISSUES & SUBJECT MATTER CATEGORIES
TREATED IN THE PROGRESSIVE CONSERVATIVE, U.S.A.:
American Government 2 * American Government 3 * American Government 4
American Government 5 * American Politics * Anglosphere * Arabs
Arms Control & WMD * Aztlan Separatists * Big Government
Black Africa * Bureaucracy * Canada * China * Civil Liberties * Communism
Congress, U.S. * Conservative Groups * Conservative vs. Liberal
Constitutional Law Counterterrorism * Criminal Justice * Disloyalty * Economy
Education * Elections, U.S. * Eminent Domain * Energy & Environment
English-Speaking World * Ethnicity & Race * Europe * Europe: Jews
Family Values * Far East * Fiscal Policy, U.S. * Foreign Aid, U.S. * France
Hispanic Separatism * Hispanic Treason * Human Health * Immigration
Infrastructure, U.S. * Intelligence, U.S. * Iran * Iraq * Islamic North Africa
Islamic Threat * Islamism * Israeli vs. Arabs * Jews & Anti-Semitism
Jihad & Jihadism * Jihad Manifesto I * Jihad Manifesto II * Judges, U.S. Federal
Judicial Appointments * Judiciary, American * Latin America * Latino Separatism
Latino Treason * Lebanon * Leftists/Liberals * Legal Issues
Local Government, U.S. * Marriage & Family * Media Political Bias
Middle East: Arabs * Middle East: Iran * Middle East: Iraq * Middle East: Israel
Middle East: Lebanon * Middle East: Syria * Middle East: Tunisia
Middle East: Turkey * Militant Islam * Military Defense * Military Justice
Military Weaponry * Modern Welfare State * Morality & Decency
National Identity * National Security * Natural Resources * News Media Bias
North Africa * Patriot Act, USA * Patriotism * Political Culture * Political Ideologies
Political Parties * Political Philosophy * Politics, American * Presidency, U.S.
Private Property * Property Rights * Public Assistance * Radical Islam
Religion & America * Rogue States & WMD * Russia * Science & Ethics
Sedition & Treason * Senate, U.S. * Social Welfare Policy * South Africa
State Government, U.S. * Subsaharan Africa * Subversion * Syria * Terrorism 1
Terrorism 2 * Treason & Sedition * Tunisia * Turkey * Ukraine
UnAmerican Activity * UN & Its Agencies * USA Patriot Act * U.S. Foreign Aid
U.S. Infrastructure * U.S. Intelligence * U.S. Senate * War & Peace
Welfare Policy * WMD & Arms Control
Africa: Black Africa *
Africa: North Africa *
American Government 1