The missing billions of the Palestinian Authority

Maurice Hirsch, Adv.  | Nov 4, 2019

The missing billions of the Palestinian Authority: 

Funding for terror organizations and funding for institutions 

that have not functioned for over a decade

• Since 2011, the PA has given the PLO over 7,000,000,000 (7 billion) shekels ($1.99 billion/€1.78 billion). Some of that money went directly to PLO member organizations, such as the PFLP, that the US, the EU, and Israel have designated as terrorist organizations

• Even though the PA has not held elections for 15 years, from 2011 to 2018 the PA spent 104,566,000 shekels ($29.7 million/€26.6 million) on its “Central Election Committee”
   
• While the PA’s “Legislative Council” - the PA Parliament - has not functioned since 2006, from 2011 to 2018 the PA spent no less than 336,746,000 shekels ($95.5 million/€85.5 million) on the “Legislative Council” 
   
• In total, these activities have cost the PA over 7,440,000,000 (7.44 billion) shekels ($2.12 billion/€1.89 billion) 

Since its creation, the Palestinian Authority has received tens of billions of dollars of international aid. Just since 2011, the European Union, the United States, and other countries have provided the PA with hundreds of millions of dollars and euros of aid.

While the PA has constantly complained about its financial difficulties, scrutiny of the PA’s own financial records for the years 2011 - 2018, shows that the PA transferred from its coffers over 7 billion shekels to the Palestine Liberation Organization (PLO), some of which was then given to terrorist organizations. In that same period, the PA also spent over 440 million shekels to fund its non-functioning institutions.

Funding to the PLO and internationally designated terrorist organizations

The PLO, which is also headed by PA Chairman Mahmoud Abbas, is an umbrella organization for several Palestinian groups. The largest and most dominant member is Abbas’ Fatah party. Other members include groups designated as terror organizations by the US and the EU such as the Popular Front for the Liberation of Palestine (PFLP) and the Palestinian Liberation Front. PLO members are entitled to and receive funding from the PLO.

 

While international donors have demanded that the PA show financial transparency, the PLO is not subject to any financial regulation or demands of transparency. Accordingly, it is impossible to know what happens with billions of dollars of donor money the PA has given and continues to give today to the PLO.

Only on sporadic occasions are the financial workings of the PLO exposed. In June 2018, a senior PFLP official, Maher Mazhar, complained that the PFLP was not getting its monthly allocations from the PLO.

Denying the claim of the PFLP, PLO Executive Committee member and Fatah Central Committee member Azzam Al-Ahmad confirmed that Abbas and the Palestinian National Fund - the financial branch of the PLO - are responsible for funding the PFLP, and stressed that the allocations had not been stopped:

“PLO Executive Committee member [and Fatah Central Committee member] Azzam Al-Ahmad denied that the allocation from the Palestinian National Fund to any Palestinian organization, including the Popular Front [for the Liberation of Palestine] (PFLP), has been stopped. In a telephone conversation with Al-Ahmad from Amman, he said: ‘There is no truth to the rumors that [PA] President Abbas or any other party has stopped the allocation to the PFLP.”

[Ma’an, (Independent Palestinian news agency), June 17, 2018]

While Al-Ahmad denied the claims of the PFLP in 2018, Palestinian media reports show that when he chose to, Abbas did withhold PLO funding from the PFLP. In 2016, Abbas withheld the group’s funding, not because he considered the PFLP a terrorist organization, but rather because the PFLP criticized him:

“The Ma’an News agency was informed that [PA] President Mahmoud Abbas has terminated the budgeting of the Popular Front for the Liberation of Palestine (PFLP) following the demand of some of the Front’s leaders for Mahmoud Abbas’ resignation.
Regarding the termination of the budgeting, PFLP leadership member Kayed Al-Ghoul stated yesterday morning, Monday [April 10, 2016], that President Abbas has stopped budgeting of the PFLP for February and March.”

[Ma’an, (Independent Palestinian news agency), April 11, 2016]

Since the subject of the funding of the PFLP resurfaced in 2018, it is clear that Abbas did not suspend the PLO’s funding of the PFLP in 2016 for long, and resumed it at some point.

In this manner, the PA has systematically used US and EU money to fund organizations that the donors themselves have designated as terrorist organizations. While the US has stopped its direct aid to the PA, and thus stopped the PA misuse of the money to fund designated terrorist organizations, the EU continues to provide the PA with aid. And the PA continues to provide funds to the PLO. Clearly, while it is impossible to prove that one specific dollar/euro donated to the PA found its way directly into the accounts of the PFLP/PLF, it is clear that donations to the PA to cover its legitimate expenses, allows the PA to divert its own resources for these illegitimate purposes.

Incredibly, the EU’s own "2017 - 2020 Joint Strategy Towards a democratic and accountable Palestinian State” declares that the strategy has certain foundation stones: “Democratic principles” and the “holding of elections” are “non-negotiable principles.” Further, the development partners committed to “support the PA in ensuring that it increases transparency on government budget and decision making.”

Since the PA has not held elections for the position of Chairman for 14 years (Abbas is in his 15th year of a four-year term) or elections for the PA Parliament in 13 years, it is apparent that the EU has already waived its “non-negotiable principle” of a democratic PA.

Now it would appear that the PA is also breaching the other EU “non-negotiable principle” of accountability.

Needless to say, Abbas’ own Fatah party was also the recipient of money donated to the PA for the needs of the Palestinian people.

At this stage, Hamas is refusing to join the PLO. Had it agreed to do so, the international donor aid would also have funded the internationally designated terrorist organization Hamas.

PA funding of non-functioning institutions

While the term of the PA Chairman is limited by PA law to four years with an option (subject to election) of one more four-year term, Mahmoud Abbas is now in his 15th year of his first four-year term as PA Chairman.

The term of the PA Parliament is similarly limited to a maximum period of four years. As a result of the internal conflict between Abbas’ Fatah party and the rival, the internationally designated terrorist organization Hamas, the last elections for the PA Parliament were held in 2006. While Hamas won 74 of the 132 PA Parliament seats, in practice, the PA Parliament has not met since shortly after the elections.

A few months after the convening of the parliament, Hamas terrorists crossed into Israel from Gaza, attacked an Israeli army unit killing 2 soldiers and kidnapping Israeli soldier Gilad Shalit. Israel responded to the kidnapping of Shalit and other Hamas terror attacks by arresting the Hamas members of the PA parliament resident in the PA-controlled areas in the West Bank and from Jerusalem, thereby disrupting the function of the parliament.

Simultaneously, the international community faced a dilemma how to continue funding the PA while it was controlled by an internationally designated terrorist organization. Abbas, whose Fatah party had lost control of the parliament in the elections, seized the opportunity and deposed the Hamas-led government. Hamas refused to accept Abbas’ actions, and in the summer of 2007 violently seized control of the Gaza Strip, in some instances, throwing members of Fatah from the roofs of buildings to their death.

While the Hamas members of parliament have already finished serving their sentences and have been released from the Israeli prisons, as a result of the rift between Abbas’ Fatah and Hamas, which continues to this day, the PA parliament has not returned to function and no new elections have been held.

Notwithstanding the absence of any elections in over a decade and the complete lack of parliamentary activity, PA financial records show that for the years 2011 - 2018 (inc.) the PA spent no less than 104,566,000 shekels on the PA’s “Central Election Committee.” Similarly, the PA spent no less than 336,746,000 shekels on the PA’s “Legislative Council” - i.e., the PA parliament. Notably, when Abbas decided, in December 2018, that the continued reference to those elected in 2006 as members of the “Legislative Council” no longer served his or his Fatah party’s purposes, he simply decided to dissolve the parliament.

Needless to say, all of the above figures are in addition to the hundreds of millions of shekels the PA has spent over the years funding its "Pay-for-Slay" terrorist reward policy.

Conclusion

The requirement that the PA adhere to even basic standards of financial transparency is only useful if something is actually done with that information. If the countries that donate considerable aid to the PA do not demand that the PA explain why it squandered billions of shekels of aid - including by providing funding to non-functioning bodies and terrorist organizations - as it cries poverty and begs for aid, then the PA will continue to use and abuse the goodwill of the donor countries.

Allowing the PA to continue these practices does nothing to achieve any peace related goal. The opposite is true. When the international donors turn a blind eye to the PA’s obvious abuses, they simply embolden and facilitate the PA to deepen the rifts.