U.S. acknowledges rampant Palestinian Authority corruption

Wednesday, November 12, 2003

The United States has acknowledged that the Palestinian Authority has failed to end corruption and graft.

U.S. officials said PA Chairman Yasser Arafat continues to control all finances coming in to the PA. They said that despite efforts at reform, Arafat has managed to shuffle a range of funds so he can ensure the loyalty of Palestinian insurgents and his ruling Fatah movement.

The State Department appeared embarrassed by reports over the weekend that Arafat has embezzled huge amounts of money. This includes the transfer of $100,000 per month to Arafat's wife, Suha, who lives in Paris with her daughter.

For the last three years, the United States and European Union have tightened controls over the relay of funds to the PA, Middle East Newsline reported. Brussels and Washington have insisted on transparency in the way donor funds have been spent.

"The history of financial improprieties in the Palestinian Authority, I think, is well known and longstanding, and, in fact, has been a major concern of ours," State Department spokesman Richard Boucher said on Monday. "I think the financial systems that have been established are still in their infancy."

Boucher said the money being funneled to Arafat's wife does not include U.S. funds relayed to the PA. He did not elaborate.

A Finance Minister Salam Fayyad has made progress in supervising the flow of donor funds. But they acknowledge that Arafat and his aides have not cooperated.

"Not all Palestinian officials have fully cooperated with this effort," Boucher said. "So we have urged and we continue to urge that the sphere of accountability be further widened and bring in all the finance of the Palestinian Authority."

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