November 11, 2004
During Yasser Arafat’s final illness, questions were raised about what would happen to the millions of dollars of funds controlled by the Palestinian leader, following his death. During his years as head of the Palestinian Liberation Organisation, experts say, large amounts of money donated, or raised through business and taxes, were paid directly into accounts in Mr Arafat’s own name.
The International Monetary Fund says international aid to the Palestinian Authority has been running at more than $1bn a year since 2000.
In 2003, Forbes magazine estimated Mr Arafat was worth $300m.
While there has been plenty of speculation, the boundary between his personal wealth and Palestinian public funds is unclear.
The only man who may really know is now dead.
“Very few people have the actual facts,” says Dr Gershon Baskin, director of the Israel/Palestine Center for Research and Information.
But he believes the delegation of senior Palestinian ministers that went to Paris will have made it their business to find out more.
Mr Arafat’s wife Suha said she did not want the Palestinians, who include Prime Minister Ahmed Qurei and ex-Prime Minister Mahmoud Abbas, to visit her husband’s bedside in hospital in Paris.
There has been speculation that the rift between Mrs Arafat and her husband’s colleagues may be partly to do with control of the accounts.
But Mr Baskin believes reports that Mrs Arafat might have access to Palestinian funds are misguided.
“In my estimation Suha has no control over either Palestinian finances or Yasser Arafat’s finances,” he said.
So how much money are we talking about, and how did it come to be in Mr Arafat’s hands?
Jaweed al-Ghussein, a former PLO finance minister, has told the AP news agency that during the 1980s the Arab world was donating about $200m a year to the Palestinian National Fund, from which Mr Arafat would receive a $10m cheque every month.
Mushtaq Khan, a senior lecturer at the School of Oriental and African Studies at the University of London, says an unusual arrangement was reached after Mr Arafat signed the Oslo peace accords with Israel in 1994.
Mrs Arafat was opposed to the visit
“Israel set up a system where taxes collected from Palestinians were handed over to personal accounts of Mr Arafat, controlled by Arafat and his close advisers,” he told the BBC.
“This was done quite deliberately and with the full knowledge of the international community and the sponsors of the peace process.”
“This was because what Arafat was doing at that time was deeply unpopular with his own Palestinian constituency and he needed to have the discretion to use political funds to buy political opposition off and to use money in a discretionary way.”
There was no proper accounting of the funds.
Mr Khan says a period of increasing Palestinian investment and improving infrastructure showed the system worked to some degree.
But investigations by the IMF and European Union into what happened to their millions of dollars of aid donations put pressure on the Palestinians to open up their accounts.
A reformist finance minister, Salam Fayyad, was appointed and embarked on an audit of Palestinian cash flows. He came up with the startling revelation that $900m was missing.
Mr Fayyad later said most of it had been invested in infrastructure and business interests and had been accounted for. But there may be still more elsewhere.
“It is assumed this probably still exists, and is being held in different accounts,” says Mr Baskin.
“Probably no-one knows about it all except Arafat himself. I don’t know if anyone in the PA knows about all of it. Probably some people know about some of it.”
He says the one other man who may have keys to Mr Arafat’s accounts is his financial adviser, Mohammed Rashid, who was part of the delegation in Paris.
“I can’t imagine [the Palestinian delegation] will leave without getting Rashid to transfer the right of signature to them,” Mr Baskin said.
He believes an investigation into the funds will be held now that Mr Arafat has died, and that most of them will be tracked down.