Palestinian Legislative Council reveals widespread corruption

Issue 

By Adam Hanieh

While most international media have focused on the aftermath of the July suicide bombings and the effects on Palestinian/Israeli negotiations, a damning report by the Palestinian Legislative Council has escaped the attention of many observers.

The report was prepared by the council following the release of the auditor's report into the Palestinian Authority, which found that widespread corruption existed in Palestinian ministries and that $326 million had been wasted in the last financial year.

Following the release of the auditor's report in April, 18 out of 21 ministers offered their resignation to President Yasser Arafat.

However, this report, which was prepared by a cousin of Arafat from his offices, was criticised for its failure to investigate the practices of companies under the control of Arafat, in particular the Al Bahr company, which is the largest employer in the Gaza Strip. Some observers believed that it was used to deflect popular anger from Arafat onto other ministers.

The subsequent Legislative Council report contained a much more detailed and damning indictment of many ministers. All ministries were found to contain some level of corruption, but top of the list were Civil Affairs and International Planning, headed by Jamil Atarifi and Nabil Sha'th respectively.

The Ministry of Civil Affairs was found to have granted customs exemptions for goods at border crossings despite the fact this was not its responsibility. Many customs-exempted cars, for example, had been transferred for personal use to people working in the ministry. Some of these cars were sold at cheap prices to security service personnel or given to relatives of the minister.

In one incident, a container of medical supplies was exempted and supposedly donated to the Ministry of Health. However, investigations by the Legislative Council committee discovered the medicine was resold by the ministry to a private company.

In another incident, Atarifi ordered the halt of merchandise transfer across the border for all cement companies except his own. Atarifi is cynically known as "minister of settlements" amongst Palestinians because some of his business interests are linked to settlement construction.

The Ministry of Planning came under heavy criticism for its method of granting tenders and its dealings with international aid projects. Aid donors have criticised the ministry for a lack of accountability.

In a recent case, the Spanish government agreed to finance a development project. A special account was opened by the deputy minister, the director general and an official from the Spanish consulate. Many employees were then underpaid and the difference channelled into this clandestine account, which came to be known as the "cash black box".

The Legislative Council also discovered cases of tenders preferentially granted to the Team and Palco companies. Team is an Egyptian computer company owned by Sha'th. Palco is owned by a high-ranking official in the ministry.

Like the auditor's report, the Legislative Council report failed to investigate the practices of the Al Bahr company. Indeed, the committee expressed confidence in Arafat to quickly resolve the situation. It also called for the indictment of all ministers guilty of criminal offences and the election of a new cabinet.

The findings reveal much more than just widespread corruption. At the heart is the question of the model of capitalist development envisaged by the Palestinian elite.

Some advocate a more open system of "free competition" which would allow all companies to compete "equally". They are annoyed by the blatant profiteering of cabinet ministers at the expense of capital owners not represented in the PNA. Some Israeli companies have complained about the difficulty of negotiating contracts with the Palestinian Authority because other Israeli companies are given monopoly rights.

Many of those accused of corruption, such as Sha'th and Atarifi, were well known for shady business deals before their election as ministers. Responding to criticisms about the make-up of his cabinet, Arafat once claimed it was necessary to have people of this ilk in power in the initial stages of Palestinian self-rule with the comment, "When you walk over mud, you need to wear dirty boots".

The question remains whether it is wise to wear those dirty boots inside your own house.