Report: Billions of Dollars of Aid to Palestinian Authority Lost to Corruption

Billions of dollars in international aid granted to the Palestinian Authority (PA/PLO) may have been squandered, lost to corruption, or misspent, a new report by the European Court of Auditors, the Luxembourg-based watchdog, revealed, The Sunday Times reported.

Roughly €2.3 billion ($3 billion) made its way from Europe to the Arab-occupied territories between 2008 and 2012, but much of it is unaccounted for the report said. It's important to realize that this report only focuses on the money which came from European nations. It does not take into account the $3.5 billion given to the PA/PLO by the United States between 2008 and 2012 or other the billions given by other nations. More than 60% of the Palestinian Authority's Gross National Product comes from the United States, European Union, United Nations, World Bank, and others countries, according to a 2011 study conducted by economic analyst Eyal Ofer in cooperation with President of Financial Immunities consulting firm Adam Roiter. That study also revealed that while the PA/PLO prime minister brags in front of foreign institutions over the scope of tax collection in the PA/PLO, he forgets to mention that 77% of all taxes are collected by the Israeli Finance Ministry as part of a joint agreement between Israel and the PA/PLO. The former then transfers the latter more than NIS 5 billion (about $1.4 billion) per year, which amounts to approximately a third of the PA/PLO's annual budget.

According to The Sunday Times, which obtained an early glimpse of the EU report, "EU investigators who visited sites in Jerusalem, Gaza and the West Bank [sic] noted 'significant shortcomings' in the management of funds sent to Gaza and the West Bank."

"The auditors complained about the lack of measures to 'mitigate' high-level' risks, such as 'corruption or of funds not being used for their intended purpose,'" The Times said.

PA/PLO President Mahmoud Abbas at the United Nations PA/PLO President Mahmoud Abbas at the United Nations. Photo: UN

An Arab opinion poll conducted in July 2012 found that 71% of respondents believed that corruption existed in PA/PLO institutions under the control of President Mahmoud Abbas, yet only 57% of respondents said the same of Hamas-controlled institutions in the Gaza Strip.

A hearing held at the US House of Representative's Committee on Foreign Affairs in July 2012 accused the PA/PLO political establishment of "chronic kleptocracy," pointing the finger directly at Mahmoud Abbas and members of his family (the Committee, however, did nothing about the stolen funds and failed to withhold future funds).

Transparency International, a Berlin-based watchdog monitoring corporate and political corruption, claimed that the state of paralysis afflicting the PA/PLO parliament since 2007 has "given the executive unlimited management over public funds." Nepotism is also commonplace in the Arab public and private sectors, the organization claimed. The corruption, however, goes back much further than 2007. Former PA/PLO leader and master terrorist Yasser Arafat amassed a personal wealth estimated to be $1.3 billion by 2002, most of which came from PA/PLO coffers made up of donations from many different nations. Upon his death it was inherited by his wife and daughter. PA/PLO officials, as well as several Arab nations, had investigated the possibility of getting the money back but nothing was ever done.

Azmi Shuaibi, head of Transparency Palestine, the local chapter of Transparency International, said in April that his organization was investigating 29 Arab officials on counts of fraud and money laundering.

In 2010 the Arab Anti-Corruption Commission was established to hold corrupt individuals to account. The Commission was allocated necessary human and financial resources, as well as the Palestinian president's political support to carry out their work.

"The goal of the court is to combat corruption, bribery, and nepotism," Fares Saba'neh of the Palestinian Judicial Media Center told The Media Line in 2010. "Every country in the world has civil servants responsible for public funds. Sometimes these clerks are weak-minded and they receive bribes."

It would seem, however, that the Commission has not done its job.


[ The Algemeiner, Money Jihad, YnetNews ]


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