And while most of the violence was directed at Israel, internecine violence became all too common, particularly in the form of attacks against suspected Palestinian collaborators.44 The Israeli human rights group B’Tselem noted 121 cases in which Palestinian factions carried out punitive actions against fellow Palestinians for collaboration.45 One historian observed that much of this often had “nothing to do with collaborators and much to do with local feuds and blood debts.”46 The Palestinians used the uprising as a pretext to settle scores with personal enemies or to attack foes in rival clans and families. In the end, Palestinians in the West Bank and Gaza Strip killed at least 800 of their own for allegedly supplying Israel with intelligence.47
The devastating effects of the intifada would become evident only years later, after the establishment of the PA in 1994. For one, the uprising left in its wake a culture of violence that did little to encourage successful state building. One could also argue that the economy took such a hard hit that Palestinians were simply unprepared for the massive investment from the international community that would soon come their way.
While these issues bubbled beneath the surface and would require years to be viewed in their proper perspective, Palestinians rightly viewed the intifada as a significant moment for their nationalist cause. This was the first time since the 1948 war that Palestinians had gathered in significant numbers in the name of independence.
Meanwhile, from its headquarters in exile in Tunis, the PLO was disconnected from the uprising. Arafat and his inner circle attempted to assert leadership, but it was difficult to do so from a distance. Various grassroots factions took control on the ground, representing a broad array of political factions. Among those to emerge, in 1987, was the violent Islamist group Harakat al-Muqawamma al-Islamiyya, which means the “Islamic Resistance Movement,” whose acronym HAMAS means “zeal” in Arabic. Through leaflets and grassroots organizing,48 this splinter group of the Muslim Brotherhood49 immediately sought to establish itself as a leader of the intifada. In doing so, Hamas posed a direct challenge to the PLO as the voice of the Palestinian people.
The PLO leadership quickly recognized that because it was in exile and not directly part of the uprising against Israel, it was ceding leadership to Hamas and other factions. Arafat scrambled to regain leverage. Ironically, he did so by positioning himself as the man who could bring an end to this Palestinian nationalist awakening.
With Washington and other Western capitals in dire need of a way to contain this destabilizing uprising, Arafat indicated that he would tacitly recognize Israel by accepting the November 1947 UN General Assembly Resolution 181 that called for a partition of Palestine into a Jewish and an Arab state. In doing so, he pried open a window of opportunity for the United States to broker a long-needed peace agreement between Israel and the Palestinians. All the while, the notorious guerrilla leader positioned himself as the rightful heir to the leadership of the new Palestinian government in waiting.
Troublingly, while Arafat began to rebrand himself and the PLO as bedrocks of good governance, Hamas continued to foment unrest in the West Bank and Gaza, where many Palestinians began to lose faith in Arafat as their leader. Some Palestinians interpreted Arafat’s recognition of Israel as a sign of weakness or even an unwillingness to fight. Some questioned why Fatah and the PLO had not succeeded in ousting Israel from the territories, particularly if Fatah and the PLO had been leading the charge during the uprising as it had claimed. While the PLO slowly relinquished its traditional role of guerrilla fighters, Hamas eagerly filled the vacuum.
Finally, in November 1988, Arafat called for a peace conference based on the PLO’s acceptance of UN resolutions 242 and 338, which for the first time in the group’s history tacitly accepted the existence of the state of Israel. This laid the foundation for diplomacy and also elicited strong reactions from the international community in favor of Palestinian autonomy. Within two weeks, at least 55 nations recognized Palestine’s independence,50 transforming the PLO almost overnight into a quasi government.
From there, a whirlwind of diplomacy and statecraft ensued. Led by Washington, the international community courted the Palestinians and facilitated back-channel discussions with the Israelis to iron out a series of understandings that laid the foundation for a diplomatic process. That process culminated in a celebrated photo opportunity on the White House lawn on September 13, 1993, when Israeli prime minister Yitzhak Rabin and Arafat agreed on the basis of Palestinian autonomy in the West Bank and Gaza Strip. The Declaration of Principles51 led to the creation in 1994 of the PA (Sulta al-Wataniyya al-Filastiniyya), an interim administrative organization staffed primarily by Fatah and the PLO, to govern parts of the West Bank and Gaza Strip.
Lost in all of the fanfare was the question of who could run the PA’s institutions with competence. Indeed, while the PLO had no shortage of ambitious figures fit for politics, it was not brimming with seasoned bureaucrats with extensive experience in state building. Unfortunately, it would take the better part of a decade for the international donor community to understand this.
4
The Oslo Years
Reveling in his new position as the unquestioned ruler of the Palestinian people, on July 1, 1994, Arafat made his official return as ra’is (president) by motorcade via Egypt’s Sinai Peninsula into Gaza, where throngs of celebrating Palestinians greeted him.1 Concurrently, some 1,500 members of the Palestinian Liberation Army, a paramilitary force cultivated jointly by the PLO and the Arab states, crossed the bridges linking Jordan and the West Bank, forming the backbone of the PA’s security apparatus. Their ranks would balloon to 17,000 by 1995.2
The creation of the Palestinian security forces was a relatively easy task. What proved more difficult was the establishment of the other key institutions of a Palestinian state while Israel was still in control. As former peace negotiator Aaron David Miller recalls, “The real challenge, which is unique in modern history, was to end the [Israeli] occupation through negotiation, but at the same time build institutions of governments within the limits defined by [the Oslo] agreement.”3
In addition, it became clear that, despite decades of insisting on the need for Palestinian independence, the Palestinian leadership was unprepared for the task of governance. Nathan Brown notes that, among other things, the Palestinians were charged with the daunting task of stitching together “a disparate set of institutions that had grown up in different settings”4—meaning the institutions created in the West Bank (both under Jordan and Israel); in the Gaza Strip (both under Egypt and Israel); in pre-Mandatory Palestine under the Turks; in Mandatory Palestine under the British; not to mention those in Jordan, Lebanon, and Tunisia, where the PLO had created ministate infrastructures after the creation of Israel.
But this problem likely paled in comparison with the troubling Palestinian political culture that had evolved as a result of the mainstream Palestinian faction’s long-standing involvement in both clandestine and violent activity. As Rashid Khalidi observed, “The deviousness and subterfuge that were indispensable for a weak PLO in dealing with the predatory mores of the states that dominated Arab politics . . . were much less well adapted to, or completely unsuitable for, other arenas,” such as running a government. He further asserted that, “given the backgrounds of most of [the PLO] in clandestine, underground, and military activity, few had the requisite training, experience or disposition for the routine tasks of governance and administration that awaited them.” As a result, “most of the leaders of the PLO, from Arafat on down . . . proved to be poorly suited for the task of state building, for transparent governance, or for a stable structure of governance based on law.”5
Not surprisingly, the PA ran its governing operation the way it had run Fatah and the PLO—as a politically centralized system with Arafat sitting at the top. Most of the Palestinian officials were also members of Fatah, which meant that they were loyal to Arafat. P
olitical opponents were not tolerated; they were subjected to scare tactics or even arrests.
But the concerns didn’t end with politics. The lack of
transparency—particularly financial transparency—was an early concern for the nascent PA. While the PA was created virtually overnight, its many assets were not brought out into the light of day. To be sure, a budget was made public. But the subterranean financial sources—the funds not provided by the international community to assist in state building—remained opaque.
As noted in the previous chapter, analysts had long observed that Palestinian finances were a black box. Arafat biographers Janet and John Wallach commented that “Fatah’s secret assets are known only to three or four people, and Arafat’s signature must appear on all of Fatah’s checks.”6 Authors Neil Livingstone and David Halevy noted in 1990 that it was “difficult to put together a balance sheet for the PLO since it does not make any of its finances public.”7 A 1993 U.S. News & World Report article quoted a Palestinian official as saying, “The day Arafat dies, may God forbid, it will take the organization at least 50 years to get its act together. . . . Only Arafat knows all the exact details concerning the finances.” The same report stated that “much of the PLO’s financial picture, particularly Mr. Arafat’s management of the organization’s secret Fatah budget, remains murky.”8
Concerns also emerged about the way in which this new government was run. In the summer 1994 issue of Foreign Affairs, Israeli analyst Amos Perlmutter warned that a Palestinian state ruled by Arafat “will likely be authoritarian, non-inclusive, and undemocratic. Such a state will be controlled by Arafat’s security services, which will do all that is necessary to keep themselves in power. . . . It does not augur well for political pluralism, participation, and, above all, institutionalization, that is, the creation of a democratic and stable Palestinian state.”9
According to Dennis Ross, Middle East envoy during the Clinton years, there was always “tension between peace building and what would be the state building.” As Ross noted, “We were dealing in a world where in the Middle East, leaders make peace, publics don’t. The irony, of course, is publics make real peace.”10
To be fair, the PA did not look much different from the other patriarchal states in the region, such as Egypt or Tunisia, which maintained reasonably good ties with Washington. But, as Khalidi stresses, the PA’s political structures “also closely reflected his [Arafat’s] personal characteristics, notably in terms of his indomitable desire to be in charge. As the preeminent founding leader . . . Arafat left his mark on styles of authority, forms of organization, and structures that have endured.”11 In other words, he was no Hosni Mubarak, and he was no Zine al-Abedine Ben Ali, who both helped create lasting institutions despite their autocratic regimes.
Arafat was a force to be reckoned with. As Khalidi notes, in the early 1990s, “there remained virtually no one within the Palestinian leadership who could stand up to al-khityar, the ‘old man.’” To maintain his power, Arafat emphasized the “personal over the organizational, his notorious tendency to create duplicate lines of authority . . . his systematic undermining of administrative routine, and his general preference for controlled chaos over order.” In addition, Arafat “worked tirelessly to keep all the strings controlling Palestinian politics, particularly the financial ones, in his hands alone.”12
As scholar Hillel Frisch notes, “The omnipotence of one leader and the absence of any role for the most important collective bodies in the PLO [was] exacerbated by the way PA officials [were] chosen.” Fatah leader Marwan Barghouti, now imprisoned for his role in killing Israelis during the second intifada, complained in 1995 that officials were chosen “based on the desire to co-opt families and extend clans and strengthen their roles.”13 Frisch contends that Arafat engineered a “neopatriarchy” in which one man provides stability and security through control of virtually every aspect of the political system, but at the cost of that system’s “long-term decline in the capacity to govern due in part to the increasingly stringent control and co-optation of the civil society.”14
With most of the levers of power at his fingertips, it should come as no surprise that Arafat easily captured an electoral majority in 1996 and became the first elected leader of the PA.15 It should also come as little surprise that the problems associated with transparency and governance continued. Part of the problem with Arafat arose because one never knew which hat he was wearing: Was he the chairman of the PLO, the president of the PA, or the leader of Fatah? These varying roles made it difficult to firmly establish his accountability. And as long as the peace process continued, Washington was generally not interested in pressing the issue. Neither were the Israelis, as long as Arafat kept a lid on violence in the West Bank and Gaza.
Ross recalled, “Every time we pushed forward issues related to rule of law, we would get pushback from the Israelis, saying ‘Don’t apply those kinds of standards to [Arafat]. We want him to be able to arrest people.’”16
Aaron David Miller adds, “State security courts and human rights abuses? Terrible. But you’ve got to keep the peace process alive. Corruption? Terrible. But you’ve got to keep the peace process alive.” The hope was that if Washington could “get to an agreement, which was a transactional act, that would produce transformation.”17
There was a price to pay for turning that blind eye, however. The PA’s finances were beset with corruption and unaccountability. In 1997, a Palestinian report found that “$326 million of the Palestinian autonomy government’s $800 million annual budget had been squandered through corruption or mismanagement.”18 Additional findings revealed that “serious financial and administrative violations were committed by most of the Palestinian Authority’s ministries and other institutions.” At least $223 million had been lost.19 As Brown observes, most of the infractions were “personal use of ministry cars, unaccounted international long distance calls, padded expense accounts. A few were more significant, such as use of border controls to divert business to relatives of senior officials.”20
Brown, however, felt that the corruption was not the real story. Rather, he wrote that the exposure of the story was “far more remarkable” because it was “unprecedented in Arab politics.”21 Among other things, the Palestinian report prompted calls for dismissing members of the Palestinian cabinet, including Minister of Planning and International Cooperation Nabil Sha’ath and Minister of Civil Affairs Jamil al-Tarifi. Both ministers, however, kept their positions.22 Moreover, once the furor died down, “Arafat ordered future audits to be kept secret.”23
But if Arafat’s aim was to shroud illicit finances from the public eye, he was unsuccessful. In April 1997, Israeli journalists Ronen Bergman and David Ratner exposed Arafat’s secret bank account in Tel Aviv. The account, believed to be accessible to Arafat and his financial adviser Mohammed Rachid, was said to have received at least 500 million shekels [$1.25 million] and was not under the supervision of the PA. Rachid insisted that the account was not secret, and it was one in which “Israel deposits money in it, and a day later it is transferred to Gaza.”24
Additional questions about monopolies also dogged Arafat’s political elite. According to the US State Department, there were at least 27 monopolies in the PA’s territories. Reportedly, at the time the PA was created, the leadership “decided to control several essential economic sectors through monopolies; and the rights to operate the monopolies were given to several of the Authority’s senior officials.” According to Bergman and Ratner, the Palestinian monopolists bought products from Israelis and sold them in the Palestinian territories at a higher price. The profits reportedly lined the pockets of high-level Palestinian figures.
The revelations prompted Palestinian outrage. Hussam Khader, a Fatah official, charged that “every honcho got himself a fat slice of the imports into the Authority. One got the fuel, another got the cigarettes, yet another the lottery, and his crony the flour.
Gravel is a monopoly belonging directly to the security apparatuses, and they earn a fortune from it that finances their operations.” Khader called these crony capitalists a “mafia” that undermined the Palestinian Legislative Council. “These men will do everything they can to continue their activities unsupervised and unmonitored,” he said. Haider Abd a-Shafi, a principal figure in the early diplomatic exchanges with Israel, charged that, “without the monopolies, the economy could be in much better shape.”25
Dr. Hisham Awartani, a Palestinian academic, lamented the sorry state of the PA’s nascent market economy. He stated,
We, the Palestinians, have a tendency to blame Israel for all our economic problems. That is a major mistake. We have to blame ourselves as well. First of all, I think we have to get rid of the Authority’s entire economic leadership. . . . They have all failed. They must all go home.26
In February 1997, Edward Abington, a former American consul general in Jerusalem who was often viewed as an unwavering ally of the PLO, surprisingly voiced his displeasure with the PA’s record on human rights. “Security is important, but it cannot come at the cost of human rights,” he said. “Too many Palestinians have died while in PA custody, but Palestinians must not suffer at the hands of other Palestinians. . . . All of these problems may be part of the growing pains of a new democracy, but left untreated they represent a serious threat to the eventual establishment of truly representational government for the Palestinians.”27
State of Failure Page 6