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After EU Audit, Corruption Could Become an Expensive Problem for Ramallah

Mahmoud Abbas

Mahmoud Abbas
Photo Credit: Ahmad Khateib/ Flash 90

(JTA) — When Israeli police found thousands of contraband cell phones in the car of senior Palestinian Authority (PA) official Rawhi Fattouh, he was promptly removed from office — for about two months.

A consultant to Palestinian Authority President Mahmoud Abbas, Fattouh was reinstated in May 2008 after his driver, a state employee, confessed to the smuggling, which Israeli border police discovered when searching Fattouh’s car at a border crossing between Jordan and the West Bank.

The scandal drew international media attention, but by 2011, the case had been closed. PA prosecutor Ahmed al-Moghani said his office had no information implicating Fattouh.

Still, critics say, the scandal and others like it are part of a lingering corruption problem that has plagued the Palestinian Authority since it was formed under Yasser Arafat following the signing of the 1993 Oslo Accords.

Long ignored internationally in favor of more urgent business, the problem is now prompting an unprecedented degree of scrutiny from the European Union, the largest donor to the Palestinian Authority. Since 1994, $7.7 billion in EU funds have been transferred to Ramallah.

In December, the European Court of Auditors reported that the Palestinian Authority had been using European money for years to pay Gaza workers, some of whom had not actually worked in seven years. PA Labor Minister Ahmed Majdalani defended the payments, saying the employees had families to support and couldn’t just be cut off, but the European Parliament took a less sanguine view.

Last month, it adopted a nonbinding resolution saying that payroll problems raise concerns about money laundering and terrorist financing.

It noted the Palestinian Authority’s controversial salary payments to the families of terrorists serving time in Israeli jails. In an unprecedented move, the parliament also called for future EU funding to be conditioned on Palestinian compliance with reform recommendations.

“Until now, EU aid was unconditional,” said Guy Bechor, an Israeli expert on the Arab world and a former lecturer at the Interdisciplinary Center in Herzliya. “Now, for the first time, we are seeing serious moves for conditionality and transparency.”

Some analysts connect Europe’s sudden vigilance to anger over the recent collapse of peace talks between Israel and the Palestinian Authority. The EU’s ambassador to Israel, Lars Faaborg-Andersen, warned in January there would be “a price to pay” by both sides if the talks failed.

Others trace it to frustration over Ramallah’s spending habits and a general donor fatigue in Europe, where high unemployment rates and sluggish economic growth have led to belt-tightening across the continent.

“How can the European Union preserve its credibility back home when it pays salaries to people who don’t work, while millions of European citizens are unemployed?” Michael Theurer, chairman of the European Parliament’s Committee on Budgetary Control, wrote in The Wall Street Journal on April 9.

In his op-ed, Theurer linked the Palestinian Authority’s accountability problems to success of Hamas, the governing power in Gaza regarded as a terrorist group by the United States and Europe.

“The more the Palestinian Authority is perceived as corrupt by the Palestinian people, the greater their support will be for Hamas,” he wrote. “Thus, to promote peace and stability, Brussels must help the Palestinian Authority build strong and transparent institutions.” The reference to Hamas touches on yet another potential complication for EU funding. Last month, Hamas signed a reconciliation agreement with the Fatah movement of Palestinian Authority President Mahmoud Abbas.

An EU-funded Palestinian Authority government with Hamas aboard “would not only mean EU funds for terrorists but would conflict with the two-state solution, which is the very declared goal of the funding in the first place,” said Arie Zuckerman of the European Jewish Congress.

About the Author: Cnaan Liphshiz is JTA's news and features correspondent in Europe. Based in the Netherlands, he covers the mosaic of cultures, languages and traditions that is European Jewry. Born in Israel, he used to work as foreign news editor for Ma'ariv and as a reporter for Haaretz.


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One Response to “After EU Audit, Corruption Could Become an Expensive Problem for Ramallah”

  1. Guy Peters says:

    Have EUrotrash finally begun to concerned about their €€€s ? Or just who & what they are funding ?

Comments are closed.

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