The PA's Billion Dollar Fraud
PMW Special Report
The PA's billion dollar fraud
The Palestinian Authority is deceiving Western donor countries,
falsely claiming to have stopped paying salaries to terrorist prisoners,
and reaping more than a billion dollars/year in return
by Itamar Marcus
This special report by Palestinian Media Watch reveals a major fraud by the Palestinian Authority, through which it is reaping more than a billion dollars in foreign aid yearly.
In 2014, the PA announced that in order to continue receiving more than a billion dollars in financial support annually, it was acceding to US and European donor countries' demands that the PA stop paying salaries to terrorist prisoners. The PA claimed the money for prisoners salaries would no longer be paid by the PA but instead by the PLO.
Even though PMW warned at the time that this was a "ploy," the US and EU countries accepted the PA's assurance, and continue to give the PA over a billion dollars in financial aid every year.
This PMW special report cites numerous official PA sources and statements by officials, showing that the PA is violating the trust of the US and EU donor countries. According to all these sources, the PA Ministry of Finance continues to make the decisions and remains the source of the money for paying salaries to terrorist prisoners.
In addition, PMW has studied records of the PA Ministry of Finance that show money transfers the PA made to the PLO in the years 2012 - 2015. These transfers show a noteworthy money trail used to transfer money that is needed for terrorist salaries from the PA to the PLO. In 2015, after the PA had assured Western donors it was no longer paying the salaries, and after it had closed the Ministry of Prisoners' Affairs, it suddenly transferred more than double what it had transferred to the PLO in previous years. The additional amount transferred by the PA to the PLO in 2015 was almost identical to the budget the PA Ministry of Prisoners' Affairs used to have. This extra money the PLO received from the PA in 2015 matches the amount the PLO now needed to pay the salaries of terrorist prisoners.
The payments may be made by the PLO, but the money is still PA money.
Since it continues to fund salaries to terrorists, thereby clearly violating its promise to donors, the PA should be ineligible to receive Western donor money. However, through this deception the PA is still reaping over a billion dollars in foreign aid.
Continue reading the executive summary here:
The PA's billion dollar fraud
The PA's claim that it no longer pays
salaries to terrorist prisoners is false
- Claiming to have complied with demands of international donors, the PA announced in August 2014 that it had stopped funding salaries to terrorist prisoners, and that the PLO would fund those salaries instead
- This PMW report documents that the PA's claim to have stopped funding terrorist prisoners' salaries is false. The PA Ministry of Finance continues to make the decisions and allocate the money for salaries.
- The PA's pledge that it fulfilled donor countries' demands is false. Therefore, the PA today is fraudulently receiving the $1 billion/year it receives in foreign donor money
by Itamar Marcus and PMW staff
Overview:
2011: PMW exposes that the PA pays high salaries to terrorist prisoners jailed in Israel, among them murderers serving many life sentences.
2012-2014: Western donor countries condemn these payments and threaten to cut off funding unless the PA meets their demand and stop paying salaries to imprisoned terrorists.
August 2014: PA claims to acquiesce to international pressure, announces that it has closed the PA Ministry of Prisoners' Affairs, and that salaries to prisoners will no longer be paid by the PA but by a newly formed PLO Commission of Prisoners' Affairs.
The new PLO Commission is identical to the old PA Ministry of Prisoners' Affairs in everything but name. The Commission and the salary payments to prisoners remain under the "supervision" of the "Palestinian presidency," i.e., Mahmoud Abbas. The PA Minister of Prisoners' Affairs became the director of the PLO Commission of Prisoners' Affairs.
2014-2016: Western donors accept PA assurances that the PA has stopped paying salaries to terrorist prisoners and the PA continues to receive foreign aid.
April 2016: This PMW report shows that the PA has misled donor countries and in fact continues to fund salaries to terrorists. The PA today is fraudulently receiving aid from Western donor countries of approximately $1 billion/year.
- The PA Ministry of Finance is identified by official PA sources as the body responsible for paying salaries to terrorist prisoners.
- The PA Ministry of Finance continues to be responsible for policies regarding salaries to terrorists.
- PA officials openly talk about the PA's continued payment of salaries to prisoners based on current PA law that mandates that the PA pay them salaries.
- When the PA was short on cash, it announced that it cut salaries to terrorist prisoners (and civil servants) by 60%.
- In 2014, the last year the PA Ministry of Prisoners' Affairs operated, its budget was 442 million shekels. The year after the "closure" of the PA Ministry of Prisoners' Affairs, the PA raised the amount it transfers to the PLO by 481 million shekels: from 294 million (2014), to 775 million (2015). The additional 481 million shekels ($128 million) the PA gave to the PLO in 2015 is the amount the PLO Commission of Prisoners' Affairs needed to take on the responsibilities of the PA Ministry of Prisoners' Affairs, which is primarily paying terrorists salaries. The previous year's amount, 442 million shekels, plus approximately 10% yearly rise matches the additional 481 million shekels the PA gave the PLO in 2015.
- The source of the money for salaries to terrorist prisoners thus continues to be the PA.
Conclusion
- Western donors are being intentionally misled by the PA, which continues to fund the salaries to imprisoned terrorists.
- By creating the PLO Commission of Prisoners' Affairs in order to hide that it continues to fund salaries to terrorists, the PA has succeeded to fraudulently receive $1 billion/year in foreign aid from the donor countries.
Executive Summary
The Palestinian Authority receives over a billion dollars in international aid yearly. Several EU countries and the US threatened to stop funding the PA after Palestinian Media Watch exposed in 2011 that the PA pays high salaries to terrorist prisoners and released terrorists. Among the terrorist prisoners on the PA payroll are murderers who are serving many life sentences for killing Israeli civilians and orchestrating suicide bombing attacks, such as Abdallah Barghouti who is serving 54 life sentences for building bombs that murdered civilians in cafes, buses, and at the Hebrew University.
To counter the international condemnation and to continue receiving donor funding, the PA announced in August 2014 that it had closed the PA Ministry of Prisoners' Affairs and established a new institution, the PLO Commission of Prisoners' Affairs, which the PA claimed would instead fund the salaries from non-PA sources.
However, the PLO Commission of Prisoners' Affairs was new only in name. The PLO Commission has the same responsibilities and pays the exact same amount of salaries to prisoners. The payments are based on PA decisions and PA law. The former PA Minister of Prisoners' Affairs, Issa Karake, became the director of the new PLO Commission and PA Chairman Mahmoud Abbas retained overall supervision of the PLO Commission. (All sources appear below.)
In spite of these mere cosmetic changes, the international community accepted the PA's assurances that the PA was no longer paying the salaries to terrorist prisoners. One example is this statement issued by the Dutch Government:
"The responsibility for payments to prisoners was transferred to the PLO and will no longer be charged to the budget of the PA, and these [payments to prisoners] are not funded by PA tax revenues or donor funds. The PLO pays such costs from their own income, where the [Dutch] Cabinet has no access."
[Question and Answer session, Dutch Ministry of Foreign Affairs, April 22, 2015]
The United States apparently also accepted that this change was enough. When challenged by a member of Congress to cut funding to the PA because of the salaries the PA paid to terrorists, Assistant US Secretary of State Patterson, three months before the announced closing of the PA ministry, explained that the US was aware the PA would "phase that out" and therefore it was not necessary to cut US funding to the PA:
"I frankly know that they're going to try and phase that out and we should give them an opportunity to do so."
[House Committee on Foreign Affairs' website, April 29, 2014]
Palestinian Media Watch has uncovered extensive and definitive evidence from official PA sources, proving that the PA assurances to the Netherlands, the US and other donors are false (all sources in full below):
- In August 2014, the PA announced that salaries to prisoners would no longer be paid by the PA but by the PLO. Yet, in October 2014, two months later, the PA announced that there were more than 200,000 recipients of PA salaries, which "includes the families of the Martyrs (Shahids) and wounded, as well as the prisoners' and released [prisoners]."
- In January 2015, five months later, the PA Ministry of Finance announced that the PA budget for the Gaza Strip includes salaries to prisoners from there who are in Israeli jails.
- When Israel withheld PA tax money in early 2015, the PA announced that prisoners receiving more than 2,000 shekels/month would only receive 60% of their salary- the same reduction that was imposed the previous day on all PA civil servants. Were the PLO paying prisoners' salaries from non-PA sources, Israel's holding up tax money from the PA would have no impact prisoners' salaries. Clearly, PA money is still the source paying terrorist prisoners' salaries.
- In December 2015, an internal dispute started within the PA. The PA, not the PLO, had decided to stop salary payments to a small number of prisoners and released prisoners for various reasons. This is significant because the PLO Commissioner of Prisoners' Affairs and PA officials all criticized the PA Ministry of Finance for stopping the salaries. No one complained to the PLO, as they should have, were it the PLO that paid the salaries. Nearly a year and half after the PA claimed not be involved in salaries, the PA was still deciding and allocating the money for the terrorist prisoners' salaries. Significantly, the head of the PLO Commission of Prisoners' Affairs, Issa Karake, personally complained to the PA Ministry of Finance over the new PA policy regarding salaries to prisoners. Why would he complain to the PA if he himself and the PLO were in charge of the salaries?
- When released prisoners were protesting against new conditions to receive salary payments that had recently been imposed, they protested in the offices of the PA Ministry of Finance and not in the offices of the PLO Commission of Prisoners' Affairs.
- Finally, PMW has uncovered PA Ministry of Finance documents that indicate a money trail, showing the transfer of money from the PA to the Palestinian National Fund (PNF), the body that funds the PLO, in the amount needed to pay the salaries to terrorist prisoners:
A. In 2014, the budget of the PA Ministry of Prisoners' Affairs, which then paid the salaries to terrorist prisoners, was 442 million shekels.
B. In 2015, after the Ministry of Prisoners' Affairs was closed, the PA raised its annual transfer to the PLO via the Palestinian National Fund by 481 million shekels ($128 million):
2014 transfer - 294 million shekels
2015 transfer - 775 million shekels
C. The additional 481 million shekels the PLO received from the PA in 2015 was the amount it needed to fund the PLO Commission of Prisoners' Affairs, undertaking the responsibilities of the Ministry of Prisoners' Affairs. The transfer of 481 million is virtually identical to the budget of the Ministry of Prisoners' Affairs in 2014 (442 million), plus 10% yearly growth due to rising prisoners salaries. According to PA law, the salaries of terrorist prisoners rise the longer they are in prison.)
D. This route - money transfers from the PA to the PNF and then to the PLO - is the way the PA is transferring money to the PLO in order to continue funding salaries to terrorist prisoners, and to keep their payments hidden from donor countries.
All the above documentation shows that while the PA fraudulently claims to donor countries that the PLO is paying salaries to terrorist prisoners from non-PA sources, in fact the PA continues to be the source of the rewards to the terrorists.
Unaware that the PA continues to fund salaries to terrorists, the donor countries continue to contribute nearly one billion dollars a year to the PA.