World

Corrupting the dream

Palestinians say the peace process enriches a clique around Arafat

STEPHANIE NOLEN March 30 1998
World

Corrupting the dream

Palestinians say the peace process enriches a clique around Arafat

STEPHANIE NOLEN March 30 1998

Corrupting the dream

WEST BANK AND GAZA STRIP

Palestinians say the peace process enriches a clique around Arafat

STEPHANIE NOLEN

When Israeli army jeeps drove away from the heart of Ramallah for the last time on a chilly night just over two years ago, old women led the jubilant crowd who ripped down the barbed wire around the town’s grim prison and proudly hoisted the Palestinian flag on its roof. Busloads of grinning Palestinian police rolled into the West Bank town, wearing uniforms still creased from their packages. ‘Welcome, welcome home,” called the white-veiled women who lined up to greet them. Those police were the symbol of freedom, and of the autonomous state Palestinians had dreamed of, and fought for, during 30 years of Israeli occupation. But today in Ramallah and other Palestinian towns in the West Bank and Gaza Strip, many people avoid meeting the gaze of Yasser Arafat’s law enforcers, who have become a symbol of a corrupt and sometimes brutal Palestinian regime. “Instead of being the law, they see themselves above it,” says Bassem Eid, who heads the Jerusalem-based Palestinian Human Rights Monitoring Group.

Even worse, Palestinians accuse their own police of doing Israel’s dirty work, most recently in quelling a wave of protests across the West Bank, sparked when Israeli soldiers killed three laborers at a checkpoint on March 10. More than 100 protesters were wounded and three killed in the clashes, prompting bitter Palestinians to renew demands that their leaders abandon the 1993 Oslo Accords, which set out a plan for selfrule in the territories. More than three years into the now-stalled peace process, Israel has withdrawn its troops from less than six per cent of the West Bank and has offered to pull back from only a further 13 per cent— far short of the original promise.

Last week, Britain’s foreign secretary, Robin Cook, led an international push to restart talks. On a swing through the region, Cook annoyed Israeli Prime Minister Binyamin Netanyahu by singling out continuing Israeli construction in disputed territory as an impediment to peace. Frustrated Palestinians, meanwhile, have all but lost faith in the ability of their leadership to deliver the peace and prosperity that was supposed to come with the Oslo process. But among

themselves, they say darkly that Arafat and the clique who now rule from Gaza have far too large a personal stake in the accords to abandon them now. Those critics accuse the Palestinian leaders of using the power and legitimacy they get from the agreement to enrich themselves—often at the expense of their own people—through complex economic and security arrangements with Israel.

“Almost the whole leadership of the Palestinian Authority is making money working with Israel,” says a prominent member of the elected legislative council, who, like dozens of other Palestinians who spoke with Maclean’s, asked that his name not be published for fear of arrest. “And these are the men negotiating for us. It’s a disaster for our people.” While Arafat’s non-elected cabinet members zip in and out of Gaza flashing Israeli VJP cards from their sleek luxury cars, the legislator

notes that their people are rapidly getting poorer. A recent United Nations survey found living standards in the West Bank and Gaza have dropped by 35 per cent since the peace agreement was signed.

Critics have learned better than to complain publicly. To date, 13 prisoners have died from torture in Palestinian Authority custody, according to local human rights groups. At least 750 more, most of them members of the militant Islamist group Hamas, languish without charge in PA jails. After a series of suicide bombings by Hamas and other Islamic extremists helped derail the peace process starting in 1996, Arafat faced heavy pressure from the United States and Israel to crack down on his opponents. “The population of the West Bank and Gaza is increasingly desperate, but totally disheartened,” says Palestinian political analyst Ghassan Khatib, who heads a Jerusalem think-tank. “They don’t have the heart to fight any more, and they don’t know who to fight.”

At the same time, Israel has frequently sealed its borders with the West Bank and Gaza, ostensibly on security grounds, crippling the Palestinian economy by freezing trade and keeping workers from jobs in Israel and Israeli-occupied East Jerusalem. The World Bank estimates that each day of closure costs the Palestinian economy about $7 million, half its daily GNP. Unemployment hovers at 35 per cent in the West Bank and 50 per cent in the Gaza Strip.

And yet, on the Strip’s tiny patch of Mediterranean coast, there are a dozen new southernGothic mansions built by Arafat’s henchmen, looming in opulent contrast to the muddy refugee camps nearby. Gaza security chief Mohammed Dahlan, who grew up in one of those camps, built a pink stone palace last year. According to local merchants, importers and even officers who work under Dahlan—all talking strictly off the record for fear of his power—he financed it with kickbacks they say he gets on every business transaction in the Strip.

Then there is Khaled Salam, the shadowy economic adviser who is second in power only to Arafat. Salam, who comes from the Kurdish region of northern Iraq, hooked up with the Palestine Liberation Organization when it ruled much of Lebanon in the 1980s. Now, he heads the Palestinian Commercial Services Company, an import business through which he controls PA monopolies on designated commodities. Many independent observers, including political analyst Khatib, say Salam’s real task is building an unofficial second treasury—an emergency stash for Arafat. Israeli journalist Ronen Bergman, who co-authored an exhaustive study of Palestinian monopolies for the Tel Aviv-based newspaper Ha’aretz, says it is widely understood that unaudited profits from Salam-controlled monopolies, as well as some tax revenues, go directly into a bank account in Tel Aviv that, according to people with knowledge of the transactions, holds at least $425 million.

“Arafat needs money he’s not going to get from donor countries,” explains Khatib. The PLO chief needs cash to support families of “martyrs” from Lebanon, he says, and a slush fund to buy off or squeeze out opponents, and to make the great escape, should the Oslo experiment fail. “Khaled Salam believes he is doing what he does for the cause,” says Khatib. “That cannot be done cleanly and he is prepared to live with that.”

Salam denies any unethical dealings or the existence of a secret fund. In a rare interview, he defended monopolies on a few key commodities as necessary for an infant economy, insisting the PA has exclusive control over only gas and cement. But Bergman says the PA holds 27 trade monopolies, on everything from cigarettes to flour, “all under the control of senior officials of the Authority or their relatives.”

In the coffeehouses and shops of the territories, Salam is known as Mr. Ten Per Cent— a bitter reference to the cuts he reportedly takes. He has signed dozens of deals on behalf of the PA, many of them with companies headed by powerful Israelis, such as an exclusive contract for the import of fuel, with the Israeli firm Dor. Salam’s Israeli business partners are former top officials in the Israeli security services and administration in the occupied territories. Advisers to then-Prime Minister Yitzhak Rabin during the Oslo negotiations, they have since parlayed their contacts with key Palestinians into business deals.

Israeli insiders anxious to forge an economic foundation for the peace deal found willing partners in the men Arafat brought with him from his government-in-exile in Tunis. After decades on the run in the service of the “revolution,” theirs was a world of guns and Swiss bank accounts, not cabinet meetings and Question Periods. “Arafat has always ruled by surrounding himself by people he can control, usually with money,” explains a prominent member of the Palestinian Legislative Council who once worked for Arafat in Tunis. “That means they are used to bribes and taking a cut.”

It also means there is no likely successor for Arafat, who lives in a modest house in Gaza with his wife, Suha, and their threeyear-old daughter. In recent months, he has

looked increasingly worn and haggard, but people close to Arafat insist he is not sick, merely suffering under enormous strain. Meanwhile, by appointing his cronies to top positions, Arafat has also alienated the indigenous West Bank and Gaza leadership that had emerged during the intifadeh. “Returnee” was once the term of greatest respect in the Palestinian lexicon; now, the rich and powerful who came home with Arafat are jeeringly known as “falashaf Hebrew for “invader,” borrowed from the Israeli pejorative for Ethiopian immigrants.

The legislative council, which began its third session this month, has issued two courageous reports on corruption in the Authority. Arafat simply ignored those reports, although last year his office did issue an audit reporting some financial mismanagement and promising to address it. But there has been no further comment from the inner circle, and when the entire Palestinian Authority cabinet resigned last August in the face of a damning council indictment for mismanagement, Arafat ignored that too, until the issue blew over. “Arafat and the people around him are tied to this process—to getting rich and staying powerful,” says Haider Abdul Shafi, a Palestinian elder statesman who quit the council in disgust last fall. “They won’t pronounce Oslo dead. And so things continuously drift to the detriment of the Palestinian people.” □