20 January 2003
One consistent accusation levelled against the PA and its President Yasser Arafat, is that PA funds are being used to support the work of Palestinian groups who perpetrate suicide bombings inside Israel. Linked to this claim are accusations that the EU, who is the major financial aid donor to the PA is therefore tacitly funding terrorism. Israel, and its lobbyists in European capitals, has consistently called on the EU to cut all its funding to the PA.
The EU has donated more than $1.5 billion to the PA since 1994. Israel claims, in the words of Minister without Portfolio Naveh that the "The EU's money was being used by Arafat to indirectly finance terror activities" (a). Most claims are based on the fact that Arafat pays his police force. An Israeli document that claimed that the "PA "by integrating them [terrorists] in the list of national security employees, despite the fact that in practice they operated in the framework of local branches of the Tanzim and the Al Aksa military Brigades." () The allegations further came to head when in May 2002 with a $20.7 million civil action suit filed against the EU by a victim of Palestinian violence, Steven Blumberg.
Whilst there has been financial corruption within the PA, Israel's claims that it funded terrorism have been fully investigated and both the EC and the IMF have found no evidence at all to support these claims. It is in Israel's vested political interest to make such claims against the PA. Sharon's declared aim has been to destroy the international credibility and legitimacy of Yasser Arafat and the PA. He clearly wants to render a two-state solution impossible and destroy the Oslo peace agreements.
The controversy reached its peak on 5th May 2002, when Israel openly accused the PA of using EU funds to support terrorist activities and the EU froze €18.7million pending its own investigation. The European Commission found that there was no evidence at all in Israels claims and the aid was subsequently unblocked on 22nd June 2002. Chris Patten, EC High Comissioner for External Relations, said that there was "not a single piece of evidence" to corroborate Israeli claims ©. Patten declared before the Foreign Affairs Committee of the European Parliament that " After scrupulous examination of all the allegations that have been made, I can report to you today that there is no evidence for EU funds used for other purposes than those agreed. There is no reason to state that EU money has financed terrorism or bought weapons".(d) And in a speech that day he stated that "The documents presented to us by Israel do not prove that EU funds have been misused… there is no evidence that the PA budget as a whole provides funds for terror activities." (e)
The EU, and Chris Patten in particular, have always denied Israel's claims in the strongest possible terms. An official statement reads "EC support to the PA takes various forms (support to UNRWA, humanitarian assistance, development projects, budgetary assistance), each with its own monitoring mechanisms. All budgetary assistance is strictly vetted. The payments (€10m per month) are only transferred after the IMF has verified that the money has been properly spent according to the agreed purpose". (f )
The International Monetray Fund (IMF), who have overseen and audited the PA's account on behalf of the EU, also dismissed Israel's alligations. IMF officials called it "the most transparent budget in the world".(g) In a press briefing in January '03, the IMF stated that "The Palestinian Authority has been making efforts to reform its financial management, and we think good progress has been made…The [PA] budget is based on a tight expenditure stance and supported by strong reform measures." (h) The PA's Finance Minister Salam Fayyad is touted by both Washington and Israel as a "Good Apple" (i) after having centralised all the funds and brought in PricewaterhouseCoopers and Standard & Poors to "evaluate all assets with a view to publishing them on a website next month and, "ultimately", privatisation". (i)
Therefore, all official investigations into claims of misuse of funds have not been proved and all the latest evidence points to a highly accountable and transparent PA.
Not part of this conflict, eh?
Edited by Erikl, 30 August 2004 - 02:28 PM.