Ariel Center for
Policy Research



NATIV  Volume Sixteen   Number 2 (91)  ■  March 2003 ■ Adar II 5763 ■ Ariel Center for Policy Research





The Palestinian Authority –
A Study in Corruption: Where’s the Money?

Rachel Ehrenfeld

The PLO was classified as a terrorist organization from its inception in 1964 until the Oslo Accords in 1993. Yet, throughout this entire time, it continued to receive financial and political support from the Soviet Union and its satellites in Europe, Latin America and Africa, and from members of the Arab League, as well as other Third World countries. This legitimization, and the accompanying financial backing, allowed the PLO not only to continue its terrorism and criminal activities with impunity, but also allowed the organization to fund a world-wide propaganda campaign, win great popularity and increase its influence.

The PLO used drug trafficking, arms smuggling, money laundering and counterfeiting to amass a fortune estimated by the British National Criminal Intelligence Services (in 1993 and 1994) at about $10 billion. Its connections with international criminal organizations, drug cartels, other terrorists groups and every rogue state, from Libya, Iran and Iraq, to North Korea and the Sudan, set the pattern for others to follow. The PLO’s transformation into the Palestinian Authority (PA) in 1993, as a result of the Oslo Accords, did not impede the organization’s illegal activities. On the contrary, it enhanced them. As the whole world gave the PA legitimacy, it abused this status to expand its illegal activities.

With the current intifada, the PA has undergone another change, incorporating religion into its political rhetoric and adding jihad to its agenda. As a result, the PA gained even more support financially and politically within the Arab/Muslim world, much as al Qa`idah did later. According to a soon to be published report, in 2001, the first year of the current intifada, the amount of money officially donated to the PA jumped 80%, from US $555 million to US $1,002 billion.

The following is an examination of how the PA, led by Yasser Arafat, has systemically and systematically used corruption and crime, and diverted funds donated for the development of the Palestinian state, to fund terrorism and to enrich its leadership.  


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