“Lost” foreign aid money, this time in Palestine

(October 18, 2013) A European Union auditor says billions of dollars in foreign aid to the Palestinian government have been squandered or lost to corruption. 

By Brady Yauch for Probe International

The latest example of wasted foreign aid money comes from Palestine, where a leaked report from the European Court of Auditors (ECA) – a government body that audits the European Union’s spending – claims billions of dollars in aid to the Palestinian government have been misspent, squandered, or lost to corruption.

The unpublished report, which was seen by the UK’s Sunday Times, revealed that the EU sent $2.7 billion (US) between 2008 and 2012 to Palestine, but had little control over how the money was spent.

Investigators from the EU who visited sites in Jerusalem, Gaza and the West Bank said there were “significant shortcomings” in the management of funds sent to Gaza and the West Bank, according to the Sunday Times.

Auditors complained about the lack of controls to mitigate against the risk of “corruption or of funds not being used for their intended purpose,” the Sunday Times added.

A spokesperson from the ECA told the Sunday Times that the report has not been finalized yet, but should be made public by the end of the year.

This is not the first time that poor governance and corruption allegations against Palestine have surfaced. A report released earlier this year by the Coalition for Integrity and Accountability, Transparency International’s chapter in Palestine, said the most significant forms of corruption in Palestine are the embezzlement of public funds and the abuse of public positions for private purposes.

Indeed, four years ago, Transparency International warned that “PNA institutions were typically weak, particularly bodies responsible for internal and external oversight and control” and called for a review of the “mechanisms for handling foreign aid and grants.”

“The influx of international donor funds increased the potential for corruption,” it said.

And in 2012 the U.S. House of Representative’s Committee on Foreign Affairs held a hearing into “chronic kleptocracy” within the “Palestinian political establishment.”

“A lack of accountability and transparency undermines the trust of the Palestinian people in their political institutions and renders them ineffective,” Congressman Steve Chabot said in opening remarks at the meeting. “How can democratic institutions be established or the economic well-being of the Palestinian people be advanced if their own leadership is raiding the common coffers?”

Palestinians themselves are well aware of the corruption going on in their own backyard. A recent poll showed that 71 percent of Palestinians believe corruption exists in the highest ranks of the West Bank government.

The unpublished report from the European Court of Auditors is just the latest example of how foreign aid money is misspent and used to line the pockets of those that have direct access to that money. Most disturbing is that donors, well aware of the problem, don’t seem to care.

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