IMF: Arafat diverted $900M of public funds to special account (at the same time hundred of thousand of arabs live below poverty - and no one cares of the misalocations)
By The Associated Press
DUBAI - An audit of the Palestinian Authority
revealed that PA Chairman Yasser Arafat had
diverted $900 million in public funds to a special
bank account he controlled and most of the money
was later invested in Palestinian assets, an
International Monetary Fund official said
The large majority of the money was invested in
Palestinian assets at home and abroad,
Nashashibi said. A Palestinian Investment Fund
was established to manage those assets and
privatize them, he added.
But the IMF official did not rule out the
possibility of the remaining funds being
misused, saying he believes an audit of the
remaining funds will be conducted later.
"In any system you can always have a possibility
of misuse of funds," Nashashibi said. "But what
we're trying to do is have a level of
disclosure and transparency so that future or
present misuse does not happen... At least
there is a followup, there is disclosure."
There have been charges of corruption and
mismanagement in the Palestinian Authority. In
a special annual issue of Forbes Magazine,
Arafat was reported to control US$300 million,
making him among one of the richest in its
category of "Kings, Queens and Despots."
Nashashibi said the revenues were diverted from
the budget to a special account controlled by
Arafat and his chief economic adviser.
"We estimated that amount to be around US$900
million over a period of five years," the IMF
official said.
He said that the Palestinian Authority was
involved in 69 commercial activities, both at
home and abroad, worth an estimated $700
million in today's market prices, "which
probably in '99 were US$900 million."
Nashashibi said Fayad, the Palestinian finance
minister who was the resident representative of
the IMF in the Palestinian territories in 2000,
told Arafat that the account must be
disclosed.
The disclosure came as Fayad won a promise of
additional financial assistance at a meeting
Saturday with the Group of Seven major
industrialized nations in Dubai.
The Palestinian economy has contracted by 30
percent because of the Palestinian-Israeli
violence over the last three years and IMF
officials said it needs an injection of about
$1.2 billion in assistance.
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