Palestinian Affairs

EU Investigators: Corruption Behind “Significant Shortcomings” in Allocating Billions In Palestinian Aid

Endemic Palestinian Authority (PA) corruption long ago reached the point where top PA figures were suing each other over the issue. Literally dozens of top officials were investigated last April for corruption, nepotism, and mismanagement.

European auditors have gotten around to putting a price tag on the misuse, misallocation, and sometimes disappearance of funds. Eye-popping:

Roughly €2.3 Billion ($3.1 Billion) made its way from Europe to the Palestinian territories between 2008 and 2012, but much of it is unaccounted for, the report said. According to The Sunday Times, which got an early glimpse of the report, “EU investigators who visited sites in Jerusalem, Gaza and the West Bank noted ‘significant shortcomings’ in the management of funds sent to Gaza and the West Bank.

“The auditors complained about the lack of measures to ‘mitigate’ high-level’ risks, such as ‘corruption or of funds not being used for their intended purpose,’” The Times said.

This is not the first time that European auditors have identified significant corruption in the PA. In 2003, the European Union’s anti-fraud unit, OLAF, looked into claims of fraud in the Palestinian Authority. The report brushed aside accusations that assistance was being used for terrorism, but gently noted that “the possibility of misuse of the Palestinian Authority’s budget and other resources, cannot be excluded, due to the fact that the internal and external audit capacity in the Palestinian Authority is still underdeveloped.”

Five years earlier the Sunday Times had already reported that funds allocated to build housing for the poor were being used to “to build luxury flats for Arafat’s military and bureaucratic elite.” Kelly also noted that “[t]he Palestinian Authority’s own auditors reported last year that nearly 40 percent of the annual budget – $323 million – was wasted, looted, or misused.”

That corruption – at the highest levels of the PA – extended beyond Arafat’s death. More recently Jonathan Schanzer, president of research at the Foundation for Defense of Democracies, reported on how the sons of Arafat’s successor, PA President Mahmoud Abbas, have managed to amass large fortunes.

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