Timmerman for U.S. Senate 2000

A new vision for America.

Conditional funding for Wye?

by Kenneth R. Timmerman

Nov. 11, 1999

Click here for a scanned version of this piece.

Kenneth Timmerman, a contributing Editor for Reader's Digest, has just returned from a 10 visit to the West Bank and Gaza

As Congress prepares to vote on spending an additional $400 million of U.S. taxpayer money to support Yasser Arafat's Palestinian Authority, they should listen to what Palestinians themselves are saying, not just to the Israeli government or to the White House.

Having just returned from ten days of interviews in Gaza, the West Bank and Jerusalem with Palestinians from all walks of life, including PA officials and top legislators, I was impressed by the depth of the desire of most Palestinians for a just compromise with Israel that would bring about peace and prosperity.

But I was equally impressed by the dramatic failure of Yasser Arafat's Palestinian Authority to fulfill the aspirations of ordinary Palestinians, despite the buckets of foreign aid that have poured into Gaza and the West Bank since the PA was established in May 1994.

Since 1994, the international donor community has committed $4.2 billion to aid the PA and jump start the Palestinian economy. In an average year, that has amounted to a whopping 15% of GNP. By comparison, international aid to India averages 0.6% of GNP.

But instead of creating a dependable partner for Middle East peace, that money has helped create yet another Arab dictatorship, where the law is dispensed at the end of a gun, and where ordinary citizens and foreign investors are regularly extorted by Palestinian government officials.

In a recent public opinion poll conducted by the Center for Palestine Research & Studies, 63% of the 1,316 adults surveyed said they believed that corruption exists in PA institutions, while 56% of those polled believed they cannot criticize the PA without fear.

My own, less scientific sampling of the Palestinian street, bore out those results in spades.

Arafat has established a rule of crony capitalism, where government ministers grant lucrative construction and supply contracts to companies owned by their own family members.

Arafat's economic advisor, an Iraqi Kurd known variously as Mohammad Rashid or Khaled Salam, runs lucrative import monopolies that earn an estimated $350 million per year - almost as much as the proposed US aid. Instead of turning the profits over to the State Treasury, he invests the proceeds in private business deals on Arafat's behalf.

Since 1996, Arafat has promised the international donor community to end the sweetheart deals and import monopolies. So far, he has not even taken the first step toward that end.

Khalil Shiqaqi, an independent researcher who serves as a consultant to the Palestinian Legislative Council (PLC), recently completed an 8 month study for the Council on Foreign Relations on Arafat's mode of government. "What we found was a lack of any institutional framework whatsoever," he said in an interview. "The concentration of power in the President's office and the marginalization of the legislature is leading to an authoritarian system."

Judges who disagree with Arafat are summarily fired. Business owners are shaken down by the security forces. Ordinary citizens are jailed and tortured by the authorities, and only released after they make large cash payments to their jailers.

"If you are lucky enough to be in the police," an opposition member of parliament, Hussam Khader, told me, "in six months you'll be able to buy a building - not an apartment, but a whole building" with money taken through bribes and extortion.

The United States has been sensitive to these problems, and has been careful not to steer U.S. taxpayer dollars directly into Arafat's accounts. But by funding economic development projects, which frequently enrich Arafat cronies, and by failing to insist on democratic reforms and budget transparency, the U.S. is perpetuating the corrupt system Arafat has built.

Dr. Hazmi Shaibi heads the Budget committee of the Palestinian Legislative Council (PLC). In theory, his committee is required to review and approve the PA annual budget. But they never even saw a budget for 1999 until August, and did not approve it until mid-October - less than three months before the end of the year.

Dr. Shaibi told me that he was just informed last week by the Ministry of Higher Education that the PA has not spent a penny on the four Palestinian universities under Arafat's control this year, outside of salary payments. "And that was supposed to be a priority sector," he said.

His investigators also found recently a $126 million hole in the PA's 1998 accounts. "This was money that the Finance minister said he had allocated to the ministries of Health, Social Affairs, and Education," Dr. Shaibi said, "but which those ministries never received." No one knows where the money actually went.

The United States should continue to provide aid to the PA, especially for projects aimed at building democratic institutions and transparency. But, says Dr. Shaibi, the U.S. "should impose strict conditions on aid, to ensure greater accountability and transparency, as well as parliamentary oversight."

Why should the United States be helping Yasser Arafat to line his own pockets and those of his friends? We should listen to Palestinian democrats such as Dr. Shaibi and help them to build democracy and a free enterprise system that will encourage individuals to invest in peace.