Under-writing murder and mayhem
The European Commission delights in the winding alleyways of the Middle East political bazaar. But now OLAF – its anti-fraud unit – finds its officers scrubbing the blood off the steps of their Rue Joseph headquarters.
Under-writing murder and mayhem
DAVID FRANKFURTER | The Sprout, March/April 2006
Past visits to Syria, Afghanistan and Iraq have yielded many trinkets and trophies, which often look a little forlorn once brought home and displayed on the mantelpiece of world opinion. And the search in Teheran for a magic carpet embroidered with intricate commercial contracts was rewarded with a parade of the mullahs' newest missiles, capable of landing 4,000 kilometers away – on the shores of Europe.
However, the most expensive delicacies can be found in the hidden bank accounts of Gaza and Ramallah, where the EU and member states have devoted over €4.5 billion since 1993. The urge to outflank Washington, hopes of multiple peace junkets and claims of institution building within the Palestinian Authority - all spin, which seduced the Europeans into extensively and repeatedly opening their cheque books.
25% of the Palestinian Authority’s (PA) budget is drawn from international donations. Europe's contribution to the ballast has topped the €2 billion mark. And a similar amount has been poured into UNRWA, NGOs, specific projects and technical support.
Sadly, despite what the World Bank described as the highest per capita aid transfer in the history of foreign aid anywhere”, there is almost nothing to be seen from this huge investment. The average Palestinian is still reported to be living in poverty, struggling to get by on a mere €1.70 a day. No new schools or hospitals have been built. And not a single Palestinian has been resettled from the refugee camp-cities.
Flagrant contradiction of EU laws
And the reason for this failure has been well documented. The European funding has been diverted from official Palestinian causes towards corruption, violence and illegal political activity, often in flagrant contradiction of EU policy and laws.
After his death, Al-Jazeera estimated Chairman Arafat’s private fortune at around $4 billion. Former Interior Minister Dahlan is known to have used his position to run an extortion racket at border checkpoints. Former Prime Minister Ahmed Querie is accused of profiteering from internationally subsidised cement, selling it to the Israelis for their hated security barrier and settlements. Sami Ramlawi, former director-general of the PA's Finance Ministry, is said to have fled to Jordan with a suitcase containing $20 million. To name just a few.
The official PA budget has also been used to finance the salaries of a long list of employees involved in terror activity. An International Monetary Fund (IMF) report from December 2005 identified nearly ten thousand “non-performing” security personnel on the PA payroll. This is really a neat euphemism for the so-called militants from the Al-Aksa Brigades, a proscribed terrorist organisation, and other hangers-on.
Never fear, we were told. Remember Christopher Francis Patten, former EU Commisioner for External Affairs, and now The Right Honourable, Baron Patten of Barnes? Oh, how he implored Europe to pay up and fund Palestinian democracy. Under his guidance, the European Commission response to an investigative report by German Newspaper “Die Zeit” of 2002 was, and remains today, a disgrace and an embarrassment. "If any evidence comes to light that the PA is knowingly employing members of terrorist organisations, the PA will need to act immediately to take these people off the payroll and bring them to justice."
Oh? Perhaps Patten’s former poodles, Udwin, Seatter et al, would care to take us through that one again? The evidence of financial abuse and lack of transparency is so over-whelming that even the Palestinian Authority’s Attorney General, Ahmed al-Meghami, was forced to admit two months ago that at least $700 million has disappeared from the PA’s kitty. This is in addition to the $800m of "diverted" assets recovered by the IMF in 2003. Over 50 separate cases of fraud were disclosed, including an ex-police chief and other pillars of Palestinian society.
So where, in all this mess, is OLAF, the diligent and fearless crusader in the defense of European taxpayers' money?
No Longer a hypothesis
Europe's anti-fraud squad initially lowered its profile when MEPs first suggested that European generosity was being abused. But in 2003, when the tide of evidence just couldn't be stopped, the Commission called in OLAF, gave it a limited mandate, and an unlimited timetable. For over two years, OLAF investigated, and investigated and investigated.
And then finally, in March 2005, OLAF announced that its opus was completed. No doubt it would make fascinating (and incriminating) reading. That is, of course, if we were allowed to see it. It is unclear who is being protected, but the report has been suppressed. There we have it. A public body, charged with unveiling corruption, has had its report withheld from public view. Even members of the relevant Parliamentary committees have not had access to its content. How weak can this body become?
From a press release, we do know that strong recommendations for improved control were made because "…the possibility of misuse of the Palestinian Authority's budget and other resources, cannot be excluded, due to the fact that the internal and external audit capacity in the Palestinian Authority is still underdeveloped…There are consistent indications to support the hypothesis that it cannot be excluded that some of the assets of the PA may have been used by some individuals for other than the intended purposes."
Hypothesis? Every month brings new evidence. In October 2005, the Palestinian Legislative Assembly adopted a report recommending the ouster of the Querei government because of a "clear failure in implementing the reform and development plan, as well as in the war against corruption."
And as for underwriting violence, if OLAF had simply read the PA accounts on the internet it would have noticed that, since 2003, the PA has paid out $100m in terrorist insurance. Salaries, scholarships, healthcare and other "Prisoner Affairs" social benefits are generously provided from European funded budgets, to every terrorist captured and held in Israeli jails.
And what did OLAF’s report achieve? In September 2005, without even a hint of lip-service to the recommendations mentioned in the press release, the Commission announced a €280 million package for the Palestinians. Other contributions have followed since, particularly after success of Hamas. In February, the Commission announced a new €120 million 'emergency' aid package to the Palestinians.
As these words are written, the outlawed Hamas is being sworn in to government. Its fundamentalist platform of erasing Israel – the EU's €20 billion trading partner – would wipe out approximately 1% of Europe's external commerce. And with it, the jobs and economic welfare of many within the EU.
So long OLAF. Two years of work on the Middle East sleaze simply blown away. Apparently, our fearless leaders in Brussels want at least one last shopping trip at the bazaar, before they finally accept the moral and financial cost of their actions.
The author lives in Israel and is a respected commentator on the Middle East