How the unelected tyrants of the Palestinian Authority and Hamas amass fortunes from foreign aid money.
In 2003, a year before his death, Forbes Magazine placed Yasser Arafat on their list of the world’s wealthiest kings and despots with a net worth of 300 million dollars. This number was on the low end of the estimates that had been made of the fortune of the leader of the Palestine Liberation Organization. Israeli intelligence had estimated Arafat’s net worth at 1.3 billion dollars and an audit conducted by American accountants, authorized by the Palestinian Authority, turned up 1 billion dollars in investments. While an exact number may never be arrived at, Time Magazine’s report that Arafat’s wife had received a 200,000-dollar-a-month allowance, gave one small glimpse into the lifestyles of the rich and infamous of the Palestinian Authority.
The Palestinian Authority books were a black hole with billions of dollars from Western and Muslim countries, bribes and foreign aid, going to a network of secret bank accounts and investment portfolios that not only financed terrorism, but also the lifestyles of the men at the top. The audits of the PA in the twilight days of Arafat and afterward were meant to reestablish the credibility of the Authority with foreign donors, while seizing control of the assets stockpiled by Arafat for the benefit of the new bosses.
Mahmoud Abbas, Arafat’s successor, has been accused of hoarding a fortune of 100 million dollars and of owning palaces and property across the Middle East. Those accusations come from Mohammed Rashid, Arafat’s former financial advisor, who knows the ins and outs of Palestinian Authority finances like no one else, and whose own net worth is estimated at being around half a billion dollars.
Abbas has accused Rashid of stealing 33.5 million dollars from the Palestinian Investment Fund, a fund which collected Arafat’s known slush funds together to replace the PA’s old ad hoc finances. Rashid responded by revealing the ruling Fatah Party’s secret slush fund in Jordan worth 39 million dollars and mentioned that an additional 5 million dollars had been spent on a Fatah convention in 2009, even though there hasn’t been a single election since 2006. And that 13 million dollars of that money had come from the United States.
Rashid and Abbas are probably both telling the truth … about each other. While the Palestinian Authority is constantly warning its foreign donors that it is deep in debt and on the verge of complete default, its upper echelons live in mansions, drive expensive cars and enjoy the better things in life. The Palestinian Authority is always bankrupt because its leaders always need more money and there are always suckers in Washington D.C. and Brussels willing to give it to them.
The Palestine Investment Fund is as much Abbas’ playground, as PA finances before it were for Arafat. Mohammed Dahlan, the former Security Minister, had claimed that 1.3 billion dollars had vanished from the Fund since it was turned over to Abbas’ control. Dahlan charged that the PIF should have held 2 billion dollars, instead of only 700 million.
But Dahlan, who ran on an anti-corruption ticket, would also know something about embezzlement, as his own net worth is estimated at 120 million dollars. Abbas’ people have accused Dahlan of corruption and of everything from plotting a coup to poisoning Arafat. More seriously he has been accused of helping fund Al-Qaeda in Gaza as a lever against Hamas. That would mean that American aid to the Palestinian Authority went to Al-Qaeda.
Much of Dahlan’s fortune came from his security forces which ran a racketeering network that controlled fuel and cigarettes. The cigarette monopoly currently belongs to Yasser Abbas, the son of the PA leader, though in Gaza, it was seized by Hamas, and Yasser Abbas has bitterly accused Hamas of stealing and reselling his cigarettes.
Dahlan is closely tied to Mohammed Rashid, Arafat’s former financial advisor. Abbas’ own financial advisor, Mohammad Mustafa, also doubles as Chairman and CEO of the Palestine Investment Fund. That is another way of saying that there is no real difference between the PA, the PIF and Abbas’ assets, just as there was no difference between the assets of Arafat and the Palestinian Authority.
Mohammed Mustafa is apparently an incredibly talented fellow because he earns over 400,000 dollars a year from his position at PIF. Mustafa is also Chairman of the Board at Wataniya Mobile, the Amaar Real Estate Group, which is actually a subsidiary that oversees PIF’s real estate holdings, and the Palestine Commercial Services Company. The PCSC, the economic arm of the PA, formerly run by Mohammed Rashid, is part of the ring of monopolies on basic services that fuels the Authority’s cash machine.
Hamas, supposedly elected as a response to Palestinian Authority corruption, is no different than its Fatah counterparts. A Palestinian Authority Minister accused it of stealing 800 million dollars and creating an electricity crisis by charging Gazan Arabs for electricity, but not paying the suppliers, while pocketing the money. Such crises manufactured by malfeasance and corruption are blamed on Israel, with extensive media coverage of Muslims in Gaza sitting in the dark. This leads to more humanitarian assistance, which leads to more corruption, and the cycle goes on.
The nation building aid is the source of much of the corruption. American and European efforts to build up local companies end up financing the empires of well-connected Palestinian Authority officials and their kin. Companies like Falcon Holding Group and Sky Advertising, run by Abbas’ sons, pick up USAID contracts and turn a profit. Yasser Mahmoud Abbas, Abbas’ older son, who has a number of profitable businesses, is also his chosen successor.
Studying the ideological differences among Islamic terrorist groups like Fatah and Hamas often blinds us to the more prosaic realities of their operations. Fatah and Hamas are a lot like the Mafia. They seize control of a territory through violence and then dole out profitable business monopolies to major families. These businesses are either completely controlled by family members and organization members, or pay kickbacks to them in exchange for being allowed to do business.
These families form a loose confederation with their own complicated network of alliances, whose members often fight among themselves over business monopolies and control of certain territories. Rashid and Dahlan fighting with Abbas and Mustafa is no different than Fatah and Hamas fighting each other. Behind all the rhetoric, they want control of revenues from businesses and territories.
The business of the Palestinian Authority is foreign aid. America and Europe send the Palestinian Authority money so that it will make peace with Israel. The Muslim world sends it money to make war on Israel. And Arafat and Abbas have done their best to give Westerners and Muslims what they want, occasionally showing up for negotiations, while continuing to engage in terrorism.
The thieves and criminals of the Palestinian Authority cannot make peace or total war, because that would alienate one set of donors. To keep the money coming in, the dollars, euros, dirhams and riyals that fund their companies, allowing them to maintain their monopolies and pay their militias, they have to maintain a balance between war and peace, without completely foreclosing either option. The Palestinian Authority has been playing this game for almost twenty years now, and its leaders have gotten very rich doing it.
In the big picture, the only thing that the Palestine Liberation Organization ever liberated is billions of dollars of aid money into its own pockets.
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