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Dear Editors,

Thank you for  “Donors waver amid funds probe” (SF Chronicle, 11.13.03, A-3), an excellent summary of the crisis brewing in the Palestinian Authority. But this is nothing new.  Arafat’s depredacious thievery was brought to the attention of congress as early as the summer of 1995; and was ignored.

In 1997, Congressman Jim Saxton (R-3rd/NJ) reported on Arafat’s misuse of American funds (“Corruption within the Palestinian Authority” 10.30.97) in violation of fiscal responsibilities required by the Middle East Peace Facilitation Act (MEPFA).   Per Saxton, early in 1997 the GAO (US Government Accounting Office) documented both Arafat’s refusal to cooperate with US representatives in accounting for money received, and stone-walling by USAID (an American agency managing funds from the USA to the Palestinian Authority); but the CIA classified his study and removed it from public scrutiny (3.3.97).

Saxton’s report also caught USAID in a lie, when its denial of funding to the vitriolic anti-Israel and pro-terrorist Voice of Palestine (VOP) was proven false by informants from within the Palestinian Authority.

In 1998 an EU report disclosed that $20 million from Egyptian funds meant for low-cost housing for impoverished Palestinians was used for luxury apartments gifted to Arafat acolytes.

In 2002 a former PA treasurer accused Arafat of embezzling half-a-billion dollars of EU aid (NY Post, 10.2.03 and AP, Dubai News, 9.20.03). Chris Patton of the EU continued to deny any knowledge of Arafat’s misuse of EU funds until the recent IMF disclosures of between $750 and $900 million embezzled by Arafat.  When the EU’s belated audit was done, it revealed that half of all EU foreign aid went to the PA; and that EU officials knew of its misuse, but chose to ignore the scandal because they “…did not want to
interfere with the peace process”  (Die Zeit, 6.7.02).

Some embezzled funds came from Israeli taxes levied on Israeli businesses that employed West Bank and Gaza Strip Arabs in Israel.  Israel transferred these tax revenues to the PA until it discovered their misuse (UK Telegraph, 9.25.03).

While most American and EU leaders have been kept in the dark, or chose to remain silent, a few courageous members of Arafat’s own cabinet have spoken out.  Abdul Jawad Saleh (of the PA legislative council) and Salam Fayad (the new PA finance minister) have publicly expressed their fury at Arafat’s graft. Fayad began a crusade for accountability. Under international pressure, Arafat has made some concessions (NY Times, 1.1.03).

· Police salaries are still paid in cash (great for graft and sub rosa financing of terrorists)
· Procurement for security services is controlled by Arafat (great for funding purchase of terrorist weapons)
· Official monopolies on ALL imports for Palestinian industries (27 in all, inter alia: crude oil, tobacco, cement) are still under Arafat’s control (generating billions that can be diverted to terrorism or personal accounts, per UK Telegraph, 9.25.03)
· Much of the c. $5.5 billion of aid reaching the PA since 1993 is still unaccounted for, while Arafat continues to fund Hamas, Islamic Jihad and the el-Aqsa martyrs’ brigade to the tune of $500,000 per month on terrorists’ salaries (New York Sun, 7.31.03).
· After Salam Fayad began his crusade for financial transparency, crimping
Arafat’s ability to embezzle freely, Arafat turned to Libya and received $2.5 million to finance the El-Aqsa Martyrs Brigade. Brigade members later confirmed this arrangement. This deal was negotiated by Arafat’s agent, Farouk Kaddoumi, who earlier had served as the go-between for the secret deal between Libya and Iraq to provide a safe haven for Sadaam Hussein (SF Chronicle, 6.23.03).
· The Libyan money permitted the Brigade’s continued terrorism even as Mahmoud Abbas was negotiating a cease-fire as the first step to implementation of the “Road Map”.
· The Libyan funds may have come in handy again when Mahmoud Abbas’ brother, Ahmad, was tried in absentia (hiding in Qatar) for fraud by Jordan. On 7.27.03, Ahmad was found guilty of masterminding a $485 million swindle of Jordanian and Palestinian business owners.  He faced up to 15 years in prison. Mysteriously, Jordan’s State Security Court later requested that the charges against Ahmad be dropped.  They were. The following day, Mahmoud
resigned as Prime Minister of the Palestinian Authority. Sources in Amman suggest that to get these charges dropped, Mahmoud agreed to resign if Arafat paid the $485 million (WorldNetDaily.com, 9.15.03).  Arafat agreed because Mahmoud’s resignation left him again in full control of all security and financial resources.

Arafat’s personal fortune is estimated at between $1.3 billion and $3 billion.  Quite a nice haul for a self-proclaimed Marxist revolutionary who has committed his whole life to a spartan warrior’s existence to achieve the freedom of his people. In reality a depredatious vulture, Arafat greedily feeds off of his own people for obscene personal gain and to maintain his reins of power.

The total GDP of the Palestinian Authority in 2002 was slightly under $2 billion.  Some commentators have estimated that in 2003 the Palestinian economy will contract by c. 30%, or c. $675,000: slightly less than what Arafat is estimated to have embezzled in 2002.  Arafat’s galactic avarice and psychotic commitment to terrorism, murder and hatred are the true causes of his people’s current misery and grinding poverty.