Arafat´s Stolen Riches

Yasser, Donnerstag, 25. September 2003, 20:49 (vor 7903 Tagen)

By Sam F. Ghattas
StarNewsOnline.com | September 23, 2003

An audit of the Palestinian Authority revealed
that President Yasser Arafat diverted $900 million
in public funds to a special bank account he
controlled, an International Monetary Fund
official said Saturday.

Most of the cash, which came from revenues in the
budget, went into some 69 commercial activities
located in Palestinian areas and abroad, said
Karim Nashashibi, IMF resident representative in
the West Bank and Gaza.

Hanan Ashwari, a Palestinian lawmaker and onetime
Arafat spokeswoman, acknowledged there had been
incidents of misuse of funds in the past but that
the release of the information was an attempt to
discredit the Palestinian leader.

"There is nothing innocent about the timing," she
said. "This is a campaign against the president
and the (Palestinian) Authority."

Nashashibi did not elaborate on the types of
businesses the Palestinian Authority was involved
in, but Palestinian Finance Minister Salam Fayad
has said its interests range from cement to
telecommunications holdings in Algeria and Jordan.

Nashashibi disclosed the Arafat account and
figures to reporters at a news conference on the
economic situation in the West Bank and Gaza. He
said the information provided by the Palestinians
were an example of the openness and transparency
in Palestinian finances under Fayad.

However, Nashashibi did not rule out the
possibility that a portion of the funds were
misused. He said he believes an accounting of the
rest of the money will be conducted "at some
point, but we´re taking it all a step at a time."

"What we´re trying to do is have a level of
disclosure and transparency so that future or
present misuse does not happen ... At least there
is a followup, there is disclosure," Nashashibi
said

Nashashibi did not say which public monies were
involved.

There have been charges of corruption and
mismanagement and money-skimming in the
Palestinian Authority, including some complaints
from ordinary Palestinians, which officials have
denied.

In a special annual issue of Forbes Magazine
earlier this year, Arafat was reported to control
$300 million.

U.S. and European governments have complained for
years that the Palestinian financial structure is
not transparent and does not allow donors to
follow their money to projects for the benefit of
the people.

Official Palestinian figures show that investment
in the Palestinian private sector amounts to about
$300 million. The money was funneled in the past
through a fund operated by Arafat´s financial
adviser, Khaled Salam.

Nashashibi said that authority was involved in
commercial activities, both at home and abroad,
worth an estimated $700 million in today´s market
prices, "which probably in ´99 were $900 million."

Nashashibi said Fayad, the Palestinian finance
minister who was the resident representative of
the IMF in the Palestinian territories in 2000,
told Arafat at that time that the account must be
disclosed.

Finance ministers from the wealthy industrialized
nations who met here Saturday and spoke with Fayad
also praised his efforts "to improve transparency
in the budget and the operations of the
Palestinian Authority," according to a statement
issued afterwards.

As part of restructuring the way the Palestinian
Authority deals with money, Fayad last year
announced the creation of the Palestinian
Investment Fund and said that all Palestinian
Authority funds would pass through the new holding
company.

Nashashibi said he thinks the authority wants to
"get out of all these commercial activities."

The Palestinian economy has contracted by 30
percent because of the Palestinian-Israeli
violence over the last three years and IMF
officials said it needs an injection of about $1.2
billion in assistance.

Meanwhile, the Palestinian finance minister won a
promise of additional assistance Saturday with the
finance ministers of major industrialized nations
as a World Bank official urged donors to help the
troubled Palestinian economy, according to a
statement issued by the group.

No figure of assistance was given, but an IMF
official said Saturday the Palestinians would need
"in the neighborhood" of $1.2 billion.