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What does the Palestinian Authority do with European money?


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When the international donors’ conference convenes in Rome next week to consider a new contribution of $1 billion to the Palestinian Authority, it is likely to continue to ignore the PA’s ongoing funding of terrorist activities.

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According to Hannes Swoboda, a member of the European parliament’s ad hoc working group on aid to the PA, “No wrongdoing or misuse of funds by the Palestinian Authority, no instances of funds being used for terrorist activities instead of infrastructure development, have been proved.”

His denial followed that of the European Union’s external-relations commissioner, Christopher Patten, who on July 17 wrote in the Financial Times that “[t]he EU has worked throughout the bloodstained months of the Intifada to keep a Palestinian administration alive and to drive a process of reform within it….At every step, the EU’s help was made conditional on reforms that would make a viable Palestinian state a reality one day and in the short term make the Palestinian territories a better, safer neighbor for Israel.”

By the time Patten and the members of the European parliament (MEPs) had made these statements, the Israeli government had already given them volumes of captured Palestinian documents providing evidence that the PA was using EU funds to pay for homicide bombings, the upkeep of terrorists, weapons, and bomb-manufacturing plants; vacations, travel, scholarships and medical treatments for members of the Palestinian leadership and their families; and–not least–Chairman Arafat’s personal bank accounts.

How is it possible that the International Monetary Fund, CBS, the BBC, and even the PA itself were all able to document the PA’s misuse of funds while Commissioner Patten failed to acknowledge it?

Despite thousands of the PA’s own documents–some signed by Yasser Arafat himself–Patten, Swoboda, and many other MEPs not only continue to deny that European tax money has funded Palestinian terrorism, but also claim that the PA documents, authenticated by American, German, and Israeli experts–and even by the Palestinians themselves–are “forgeries produced by Israel.”

The IMF report “Economic Performance and Reforms under Conflict Conditions,” released last September in Abu Dhabi, was based on the same PA documents that the Israeli government had earlier provided to Patten and the European Parliament. The report concludes that at least 8 percent ($135 million) of the PA’s annual budget of $1.08 billion is being spent by Arafat at his sole discretion–and does not even take into account Arafat’s control of 60 percent of the security-apparatus budget, which leaves him with at least $360 million per year to spend as he chooses. In addition, the report states that $900 million in PA revenues “disappeared” between 1995 and 2000, and that the 2003 budget for Arafat’s office, which totaled $74 million, was missing $34 million that Arafat had transferred to pay unidentified “organizations” and “individuals.”

Patten and many of the MEPs constantly deny that EU funds have been misused. They refuse to acknowledge that the PA leadership is corrupt and uses its aid money to fund terror, choosing instead to grant the PA ever more aid. According to the IMF report, much of this money continued to be misappropriated even under the PA’s reform-oriented finance minister, Salem Fayyad.

The EU’s moral standing and fiscal accountability are also questionable. For the ninth year running, the EU Court of Auditors refused to approve the EU’s €100 billion annual budget because the auditors could not account for 90 percent of the funds to the PA. The MEPs claimed that it was not the EU but the IMF and the CIA that supervised the PA budget. But the IMF has publicly denied this responsibility many times, and there is no evidence that the CIA has had anything to do with EU funds to the PA.

As for evidence that aid money was used to pay homicide bombers, Swoboda insisted that “there is no proof that any terrorist acts they committed were ordered by the PA–they may have been acting alone. Only if the DNA of the suicide bombers will match the DNA of those who received euros will we accept it as evidence.”

Swoboda’s comments did not come as a complete surprise. A week earlier, in an interview with Palestinian journalist Kawther Salam, Swoboda had said, “There was recently an opinion poll in Europe which places Israel among the top rank of the countries seen as creating dangers for peace. I think that we should take the results of this poll seriously.”

In the meantime, the Belgian police announced that the European Anti-Fraud Office (OLAF), together with Belgian and German police, began investigating the payment of EU aid money to the Al Aqsa Martyrs Brigades–one of Yasser Arafat’s Fatah terrorist groups, listed by the EU as a terrorist organization.

It seems that the stronger the evidence of EU complicity in funding Palestinian terrorism, the stronger is the MEPs’ refusal to acknowledge their role. Their anti-American and anti-Israeli attitudes explain their willingness to give ever more funds to Arafat while pressuring Israel to compromise its national security. Moreover, the EU continues to support other Islamist terror organizations dressed as NGOs, such as Hamas, that operate throughout Europe.

Further aid payments should cease until the PA explains how it spent more than $6 billion in aid during the last decade, and returns the missing funds to the Palestinian people. But, incredibly, the World Bank last week gave an additional $15 million in aid to the PA, and, over the weekend, the EU awarded the PA $40 million for “reforms and emergency economic aid.”

History gives us little reason to think the PA will stop funding terrorism. Maybe it’s time to hold European donors legally accountable for the return on their investment.

Rachel Ehrenfeld, author of Funding Evil; How Terrorism is Financed–and How to Stop It, is director of the New York-based American Center for Democracy.



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