Is the PA deceiving Israel in order to receive a $227 million loan?

• While the PA is begging for financial aid, PMW found that in the first quarter of 2020 the PA’s revenues increased by approximately $355 million compared to the same period in 2019, constituting an increase of 47%.

Would Israel have agreed to loan the Palestinian Authority $227 million (800 million shekels) if the PA had revealed to Israel that in the first quarter of the year its revenues increased by more than $355 million (1.2 billion shekels) compared to the same period in the previous year, and increased by approximately $45 million (160 million shekels) compared to the same period in 2018?

Probably not.

But that is the reality, according to the PA’s official financial reports published by the PA Ministry of Finance.

From the outset of the Coronavirus crisis, senior PA officials warned of a PA financial crisis due to a supposed drop in its revenues and fears about the financial effects of a large number of Palestinians being infected with the virus. It is likely that these claims spurred the Israeli government to approve giving the PA the $227 million loan. But Palestinian Media Watch has now discovered that the claims about a drop in the PA’s revenues were false as were the gloomy estimates regarding mass infection.

Just two weeks after the virus reached Israel, PA Prime Minister Muhammad Shtayyeh was already complaining about lost revenues:

“This epidemic and dealing with it, and the continued deduction of the Martyrs and prisoners' money, the reduction in the rate of production, and the reduction in income… will be expressed in local income, taxes, and international aid, and therefore will affect the 2020 budget.”

[Official PA daily Al-Hayat Al-Jadida, March 15, 2020]

Towards the end of March, Shtayyeh added:

“The [PA] government’s revenues will drop by more than 50%, and the international aid will decrease.”

[WAFA, official PA news agency, March 29, 2020]

However, PMW examined the financial reports published by the PA Ministry of Finance, and found that not only was there no drop in the PA’s revenues in the first quarter of 2020, but it was higher than revenues in the previous two years, and an increase of 47% – $355 million more than the same period last year.

The absence of a drop in the PA’s revenues in the first quarter of 2020 is what enabled the PA to pay the salaries of the PA employees for March in full, and even to continue paying – with high priority – the financial rewards it pays each month to terrorist prisoners and the families of dead terrorists. As PM Shtayyeh explained at the end of March:

“We will pay the salaries for this month in full and over the course of several days in order to prevent gatherings in front of the banks, and this [will be] in the following manner:

• On Sunday the salaries of the medical and supporting personnel will be paid.
• On Monday to the [PA] Security Forces members.
• On Tuesday to the prisoners and [the families of] the Martyrs.
• On Wednesday to welfare cases and the poor.
• On Thursday to the teachers.
• On Friday to the rest of the [PA] public employees.
• The last payment, on Saturday, will be to senior officials, to high level state employees, and to the ministers.”

[WAFA, official PA news agency, March 29, 2020]

In addition, despite the warnings and fears of an extensive Coronavirus outbreak among Palestinians, in reality out of the tens of thousands of tests that were conducted, the number of Palestinians who were diagnosed with the virus stands at just 570 (as of May 20, 2020), of whom 464 have already recovered and 4 have died:

 [WAFA, official PA news agency, May 20, 2020]

Moreover, the very fear of extensive infection among the Palestinians drove donors to transfer large amounts of money and medical equipment to the PA, so that it is unclear how much of their own money it needed to spend.

The European Union decided to expedite 71 million euros in aid, while placing an emphasis on medical equipment and equipment for the weaker populations:

“Despite the pain and losses that are being borne by the continent of Europe due to the epidemic, the European Union (EU) decided to stand by Palestine in fighting the severe crisis, and it will fulfill the role of the Palestinian people’s close and constant friend.
In the midst of the fateful moments in the fight against the virus, the EU decided to expedite the payment of the aid package worth 71 million euros to the Palestinians in order to deal with the epidemic… The hospitals in East Jerusalem had a large part in the aid, because priority was given to the medical sector. The EU allocated a sum of 9.5 million euros to support the six hospitals of East Jerusalem. This was in addition to the existing annual support that is estimated at more than 13 million euros. Since the needy families are the ones most harmed by the situation, an additional 5 million euros were provided to support them through social allowance payments. In order to support the teachers, doctors, and every civil clerk in the PA, the package includes cover for their salaries through the expedited payment of 40 million euros to support the PA budget in this field.”

[Official PA TV, April 24, 2020]

Additional aid arrived from China, Turkey, and the World Health Organization, among others.

Thus, while on the one hand, tax revenues in Israel have dropped to a low point, the number of those receiving unemployment benefits has jumped to over a million, and Israel must spend hundreds of millions of shekels to stimulate the economy and find budgetary sources to compensate thousands of self-employed workers who have yet to receive an answer; on the other hand, the PA’s revenues actually increased by approximately $355 million in the first quarter of 2020 and it had no special medical expenditures connected to the Coronavirus pandemic. Under these circumstances, Israel’s willingness to $227 million to the PA is surprising, and it can only be assumed that the approval was given based on the PA’s false claims regarding its weak financial situation.

And if Israel decides to continue with the loan, what will the Israeli taxpayers’ money be used for?

Here are a few options:

1)    The PA will use the money to continue rewarding imprisoned terrorists, released terrorists, and the families of dead terrorists with salaries. In 2019, the PA spent no less than 669 million shekels on these rewards. Now, it will be the Israeli taxpayers who are funding the PA rewards to Palestinian terrorists who murdered Israelis.
2)    The PA will use the money to promote investigations against senior Israeli officials and Israeli army soldiers and officers at the International Criminal Court (ICC). Just recently the ICC prosecutor announced that in her opinion a sufficient evidentiary basis has been established to launch an investigation against Israel for committing war crimes.
3)    The PA will transfer the money to the PLO. In complete contradiction of the PA’s claims about a drop in its revenues, from the beginning of 2020 the PA began to transfer huge sums to the PLO. The PLO’s expenditures are not transparent and therefore it is impossible to know for what purpose these sums were transferred to the organization. The PLO allocates budgets for all the factions that are PLO members, which include terror organizations such as the Popular Front for the Liberation of Palestine (PFLP).

It should be noted that the drop in the PA’s revenues in 2019 stemmed from its refusal to receive tax money from Israel given the implementation of the anti-Pay for Slay law by the government of Israel, and despite this the PA did not collapse. What is more, even in 2018 before the implementation of the law, the PA’s revenues were low compared to the current year. Therefore the PA’s claims, already back in March, about a drop in revenues were false.

Under these circumstances Israel should consider cancelling the approval to grant the PA a$227 million loan. Should Israel go ahead with the loan, Israel should demand assurances from the PA that it has stopped rewarding terrorist prisoners; withdrawn its complaints against Israel, its leaders, and its soldiers at the ICC; and also stopped transferring money to the PLO.

The following are longer excerpt of the aforementioned articles:

Headline: “The [PA] government held an emergency meeting to discuss the budget and determine economic plans to deal with the state of emergency – Shtayyeh: We will not hesitate to make any decision or implement any measure that will guarantee the wellbeing of our people"
“[PA Prime Minister Muhammad] Shtayyeh said: 'A week has passed since we began to implement measures, and these were done in time and reduced the extent of the harm and prevented the spread of the Coronavirus…
He again called on the citizens to hold prayers at home and refrain from being in crowded places, and thanked all of our people for their understanding and cooperation in dealing with the epidemic, and also thanked all of the teams that are working day and night to protect our people.
The prime minister demanded that the occupation authorities release all of the prisoners, and particularly the sick among them, those sick with chronic illnesses, and the children, in order to protect their lives given the spread of Coronavirus (COVID-19) in Israel. He held the occupation authorities responsible for any harming of a prisoner by the illness. He called on the international authorities, the Red Cross, and the humanitarian organizations to visit the prisons and work for their release and to guarantee their wellbeing…
The prime minister said: 'This epidemic and dealing with it, and the continued deduction of the Martyrs and prisoners' money (refers to Israel's Anti "Pay-for-Slay" Law; see note below –Ed.), the reduction in the rate of production, and the reduction in income… will be expressed in local income, taxes, and international aid, and therefore will affect the 2020 budget.'"

[Official PA daily Al-Hayat Al-Jadida, March 15, 2020]

Headline: “Shtayyeh: We will work according to an emergency austerity budget, the [PA] government’s revenues will drop by more than 50%”
“[PA] Prime Minister Muhammad Shtayyeh announced that the [PA] government will work according to an emergency austerity budget in light of the developments on everything concerning the COVID-19 Coronavirus.
Shtayyeh announced during a press conference that he held today (Sunday) [March 29, 2020]… that two new cases [of people infected with the virus] were registered in Hebron and in a small town northwest of Jerusalem, and thus the number of sick rises to 106…
He added that the government’s revenues will drop by more than 50%, and that the international aid will decrease…
Shtayyeh added that the payment of half salaries was agreed upon with the Palestine Workers’ Union for the unemployed workers for the months of March and April. He again called not to work in the Israeli settlements, given that they are illegal and infected with the disease…
(The following is an excerpt of Shtayyeh’s statement –Ed.)
‘Since the wheels of production, import, and consumption have stopped, there will be a large drop of more than 50% in the PA’s revenues… The international aid will decrease because the entire world is in crisis, and therefore we will work according to an emergency austerity budget by reducing the expenses as much as possible. However, we will pay the salaries for this month [March] in full and over the course of several days in order to prevent gatherings in front of the banks, and this [will be] in the following manner:

• On Sunday the salaries of the medical and supporting personnel will be paid.
• On Monday to the [PA] Security Forces members.
• On Tuesday to the prisoners and [the families of] the Martyrs.
• On Wednesday to welfare cases and the poor.
• On Thursday to the teachers.
• On Friday to the rest of the [PA] public employees.
• The last payment, on Saturday, will be to senior officials, to high level state employees, and to the ministers.

I hope that you will [carefully] consider your expenses. We do not know what the situation will be next month.’”

[Official PA daily Al-Hayat Al-Jadida, March 29, 2020]

Official PA TV program European Stories, on cooperation between Europe and the PA regarding the Coronavirus pandemic

Official PA TV host: “Like most of the world’s states, Palestine is also fighting the Coronavirus… We cannot deny that the financial losses and the severe lack of necessary preparations caused many problems for the PA, and therefore for every Palestinian in the West Bank, East Jerusalem, and the Gaza Strip.
Despite the pain and losses that are being borne by the continent of Europe due to the epidemic, the European Union (EU) decided to stand by Palestine in fighting the severe crisis, and it will fulfill the role of the Palestinian people’s close and constant friend.
In the midst of the fateful moments in the fight against the virus, the EU decided to expedite the payment of the aid package worth 71 million euros to the Palestinians in order to deal with the epidemic… The hospitals in East Jerusalem had a large part in the aid, because priority was given to the medical sector. The EU allocated a sum of 9.5 million euros to support the six hospitals of East Jerusalem. This was in addition to the existing annual support that is estimated at more than 13 million euros. Since the needy families are the ones most harmed by the situation, an additional 5 million euros were provided to support them through social allowance (mukhassasat) payments. In order to support the teachers, doctors, and every civil clerk in the PA, the package includes cover for their salaries through the expedited payment of 40 million euros to support the PA budget in this field. Since the small and medium-sized businesses are the backbone of the Palestinian economy, the support for them was increased to a sum of 5.5 million euros – especially the projects that are producing medical equipment. The package also included humanitarian aid for non-governmental organizations and UN organizations that exist and are active in the West Bank and the Gaza Strip worth 6.9 million euros, in order to ease their activity and support their presence in the fight against the epidemic’s effects.
As usual, the EU paid attention to supporting the Palestinian refugees, and it will supply support of approximately 4 million euros to UNRWA (UN Relief and Works Agency for Palestine Refugees in the Near East) in order to help it provide humanitarian aid, especially in the refugee camps in the West Bank and the Gaza Strip. Other than the package, the EU is providing aid through projects that it supports and civil society organizations are carrying out. For example, more than 500 food and medical packages were distributed to families that were harmed in the refugee camps of Bethlehem through the organization Karameh, which is in the Deheisheh refugee camp. More than 700 packages also [were distributed] to families in the villages of northern Jerusalem, such as Qatanna, Biddu, and [towns] that were harmed and had many cases [of the Coronavirus]. During the [Muslim fasting] month of Ramadan, more than 1,000 food packages will be distributed to poor families in cooperation with the [PA] Ministry of Social Affairs.”

[Official PA TV, European Stories, April 24, 2020]

Israel's Anti "Pay-for-Slay" Law - Israeli law stating that the PA payments to terrorists and the families of dead terrorists is a financial incentive to terror. The law instructs the state to deduct and freeze the amount of money the PA pays in salaries to imprisoned terrorists and families of "Martyrs" from the tax money Israel collects for the PA. Should the PA stop these payments for a full year, the Israeli government would have the option of giving all or part of the frozen money to the PA. The law was enacted by the Israeli Parliament on July 2, 2018. During the parliamentary vote, the law's sponsor Avi Dichter said: “The Foreign Affairs and Defense Committee received much help in its deliberations... from Palestinian Media Watch who provided us with authentic data that enabled productive and professional deliberations, nuances that are very difficult to achieve without precise data.” [Israeli Parliament website, July 2, 2018] In accordance with the law, as of September 2021 Israel’s Security Cabinet had ordered the freeze of 1.857 billion shekels ($580.15 million) - the sum equivalent to the PA payments to terrorists in 2018, 2019, and 2020.