The Palestinian Authority has been a hotbed of corruption and financial mismanagement since its birth in 1993 under Yasser Arafat. This has been an impediment both to Palestinian self-rule and to peace with Israel.
Arafat’s successor, P.A. President Mahmoud Abbas—now serving the fifteenth year of his four-year term of office—has elevated the crookedness of P.A. finances to a level even Arafat might admire. The misappropriation of billions in Western by P.A. cronies—facilitated by a lack of financial transparency or any sort of accountability—makes the realization of Palestinian aspirations more unrealistic by the day.
Thankfully, America has discontinued direct aid to the P.A., due to the P.A.’s insistence on rewarding convicted terrorists under its repulsive “pay-for-slay” program. Israel has reduced its transfer of funds to the P.A. by the amount used to pay for that despicable program. In response, the P.A. has for months refused to accept any transfers from Israel less than the full amount it is due—and thus found itself in a financial crisis of its own making.
Moreover, since roughly 40 percent of the P.A.’s multi-billion dollar budget vanishes into private pockets in Ramallah and beyond, the P.A.’s financial crisis is also largely an illusion.
For example, over 100 P.A. employees work for the Central Elections Commission (CEC)—despite the fact that there have been no Palestinian elections since 2006. A few hundred more work for Palestine Airlines—which hasn’t had a flight since 2001, when Israel bombed Gaza International Airport at the height of the Second Intifada. Most of these “workers” are Abbas’s cronies’ clan members, and most never even have to show up to collect their paychecks; direct deposits save them the trouble.
The latest public opinion poll on the question, conducted by the respected Palestinian research group AMAN, shows that over 95 percent of Palestinians think the P.A. is utterly corrupt. This number hasn’t shifted much in recent years, which explains why, in the last Palestinian legislative election in 2006, Hamas—arch-rival of Abbas’s clique—received a majority in the Palestinian Legislative Council (PLC). Hamas was broadly perceived as less corrupt than Abbas’s group.
The result of that election was Abbas’s unilateral suspension of the PLC, which hasn’t met in over a decade. It also resulted in the ultra-violent Hamas coup in Gaza the following year. The dual—and duelling—Palestinian regimes in Ramallah and Gaza City have made any movement towards peace with Israel almost unimaginable. How does one achieve a “two-state solution” among three mutually hostile entities?
In his latest unilateral and unsanctioned gambit, Abbas has formally dissolved the inert PLC. The main reason is that the Hamas-affiliated speaker of the PLC was next in line for the presidency.
In fact, Abbas’s hold on power in the P.A. is predicated entirely on the systemic corruption over which he presides. He and his sons possess monopoly power over most economic sectors of the Palestinian economy—from cement to telecommunications and from gasoline to the Coca Cola bottler outside Ramallah. These P.A.-granted monopolies have a death-grip on the economy, skimming massive amounts of money from over-priced products and stifling the development of any semblance of real private enterprise.
The feather-bed jobs essentially cement personal loyalty to Abbas and his partners in crime. They also ensure an unending chain of kickbacks to Abbas personally and to his family and cronies. The Panama Papers—detailing offshore secret accounts in various offshore money havens—included most of the senior members of Abbas’s inner circle.
All of this helps to explain why there has been almost no political or economic progress in the territories in a quarter of a century of P.A. rule—let alone peace with Israel.
Then there are the P.A. security services, which consume more than 44 percent of the P.A. budget and are filled with cronies and Fatah terrorists who are effectively on state pensions. Despite this enormous police complement, crime is rampant in the P.A.
Even budgets that seem promising, like the $17.9 million quarterly budget for the Palestine Development Agency, are rerouted to the benefit of Abbas or simply disappear into unaudited “miscellaneous” accounts. Of that “development” budget, for instance, $9.4 million went for Abbas’s private airplane and $4.4 million vanished into an account labeled simply “other.”
The real problem is that ultimately, any peace agreement leading to greater Palestinian autonomy will have to include rigid provisos for accountability—far greater than the wispy promises of Oslo. That is the last thing Abbas and Co. want. Also, any elections for a permanent Palestinian government are almost certain to result in the trouncing of Abbas’s PLO and Fatah parties and the election of Hamas—which neither Israel nor the P.A. can accept. Forgetting about policy issues, such a loss of power would simply be too expensive for Abbas and his buddies.
Until the world donor community, including the European Union, Arab donors and numerous non-governmental agencies, force a major clean-up in Ramallah, efforts at a political settlement with Israel will be stillborn, or will result in the birth of a Palestinian civil war that may consume the entire region in terror, bloodshed and result in a mere redistribution of power and wealth in the vast kleptocracy that is the current Palestinian Authority.
Ken Cohen is editor of Facts and Logic About the Middle East (FLAME), which publishes educational messages to correct lies and misperceptions about Israel and its relationship to the United States.