Nov. 14, 2004
Originally published in the Daily Telegraph.
An unseemly battle is beginning for the many millions - some even say billions - stashed in Yasser Arafat's network of bank accounts. The problem will be finding them, report Inigo Gilmore and Julian Coman.
Jaweed al-Ghussein sat in his London apartment watching the televised tributes to his former boss, this weekend, in a mood of sadness, frustration and disillusionment. For 12 years, until 1996, Mr al-Ghussein was the treasurer for the Palestine Liberation Organisation. It was his duty to keep track of the billions of pounds that were donated to Yasser Arafat, the PLO leader, by sympathetic organisations, such as the European Union.
Eventually, Mr al-Ghussein realised that he had been handed an impossible task - tracing Arafat's billions required a detective, not an accountant. "I just hope he has left some sort of a will," he told The Sunday Telegraph, on the eve of Arafat's death on Thursday. "Or at least some detailed information about all the accounts and the assets, because that money belongs to the Palestinian people, not to him."
An unseemly battle is now beginning for access to those accounts. According to friends of Arafat's combative wife, Suha, a will has indeed been left, handing the control of assets to members of her family. Israeli intelligence officials are suggesting, perhaps fantastically, that a deal has already been struck between the Palestinian Authority and Mrs Arafat guaranteeing a pension of $22 million per year for the rest of her life. The pension would supposedly be paid for by the Palestinian Authority, in exchange for total control of President Arafat's assets.
As such outlandish speculation mounts, the new interim leader of the Palestinian Authority, Mahmoud Abbas, has stated angrily that Arafat's fortune is the property of the Palestinian people. But, given the corrupt and surreptitious manner in which the wealth was accumulated, the problem will be finding it.
Estimates of Arafat's worth vary wildly. The money is in a labyrinthine network of accounts, held under different names in different countries. Two years ago, the American Forbes magazine suggested a figure of $300 million. Israeli intelligence officials have suggested that the true total may be closer to $6 billion. But it is beyond dispute that vast sums have been diverted from the coffers of the Palestinian Authority into bank accounts in Switzerland, Austria, Luxembourg and the Cayman Islands.
In the understated language of the International Monetary Fund, the Palestinian Authority under Arafat was "plagued by the diversion of tax revenue to special accounts; excessive hiring in the civil service and security apparatus and PA commercial operations with no transparency or accountability".
As the economy in the Occupied Territories splutters almost to a halt after four years of intifada, the diverted funds have been used to finance personal extravagance, terrorism against Israel and a variety of private business ventures. More than $10 million was allegedly paid by associates of Arafat in exchange for a 50-ton shipment of weapons from Iran in 2002.
Meanwhile, Mrs Arafat and the Arafats' daughter, Zahwa, allegedly spent an entire year living on a floor of the Hotel Bristol in Paris, at a cost of £8,700 per night, before buying an expensive flat in the shadow of the Arc de Triomphe. French authorities have discovered that Mrs Arafat, who moved to Paris in 2000 to avoid the second intifada, received $11.4 million in money transfers from Switzerland, between 2002 and 2003.
In the towns of the Gaza Strip, splendid villas have been built to house senior members of the PLO, incongruously close to squalid refugee camps.
Although his own livingc onditions were spartan, Arafat, through the Palestinian Investment Fund, is believed to have bought stakes in a number of hotels in Spain, Italy, France, Switzerland and Austria. He also became the main shareholder in two cellular telephone companies in Tunisia and Algeria.
Rachel Ehrenfeld, an Arafat scholar and the director of the New York-based American Centre for Democracy, said: "The story of Yasser Arafat and the Palestinian Authority should serve as a lesson in how terrorist entities are created and funded. The idea of the PA as a precursor to a Palestinian state became a huge money-spinner."
Arafat opened his first secret bank account in 1965, after a $50,000 donation from the Emir of Kuwait. Over the next 40 years, as the cause of Palestinian statehood received financial support from the Middle East and Europe in particular, the profits to be garnered from leading the resistance to Israeli occupation grew exponentially. Following Arafat's support for the invasion of Kuwait by Saddam Hussein in 1990, there was even a $150 million donation from Baghdad.
Since 1993, after the Oslo Peace Accords held out the promise of Palestinian statehood, the EU's Europe-Aid co-operation office has contributed a total of €1.5 billion to the fledgling Palestinian Authority. Last week, Dennis Ross, the Middle East envoy for the Clinton White House, recalled Arafat's fund-raising zeal: "He used to say to me whenever he wanted money that he thought he was owed: 'Where's my money?' Everything was seen as his."
It was only in 2003, when the lack of economic progress in the Occupied Territories could no longer be ignored, that an inquiry was launched into possible misuse of EU funds. Even that degree of scrutiny was initially opposed by Chris Patten, the EU Commissioner for External Relations.
For more than a decade, Arafat presided over an administration that became almost comically corrupt. Relatives or trusted colleagues were placed in key positions in monopoly industries, such as oil and construction. Evidence of corruption, nepotism and illicit patronage was plentiful. Authenticated PLO documents were leaked, instructing staff to use donor money for projects benefiting Arafat, his family and associates. One Jerusalem-based business project involving Mr Arafat's mother-in-law soon received $50,000 per month. In 1996, more than $500 million in tax revenues from oil sales were paid by Israeli authorities into a Tel Aviv bank account held in Arafat's name.
The IMF estimated that, in 1999, $897.6 million of revenue earned by the state-run Palestinian Commercial Services Company vanished. In 2002, Ozrad Lev, an Israeli accountant, admitted that $300 million worth of revenue due to the Palestinian Authority had been diverted to a secret Swiss account controlled by Arafat. From the Palestinian Authority's budget for 2003, $34 million of the $74 million dedicated to President Arafat's own office "disappeared", transferred to unidentified organisations and individuals.
Miss Ehrenfeld said: "We'll never find out the true size of Arafat's wealth. The money given by donors was subject to no accountability or transparency. And what government is going to devote any effort to finding out that its aid was used to augment private wealth and fund terrorism? There are too many vested interests in not finding where the money has gone."
On Friday, as Arafat's funeral took place amid chaotic scenes of mourning, Marwan Ahlan, a graphic designer from Jericho, was waving a banner angrily. It said simply: "Bring the thieves to trial."