State of Failure
Page 9
In 2004, Mohammad Shtayyeh, managing director of the West Bank–based Palestinian Economic Council for Development and Reconstruction, announced that “[a]ll the Palestinian money [$799 million] has been consolidated in the Palestine Investment Fund.”28 By the following year, the IMF valued PIF assets at $1.3 billion.29
Fayyad’s work did not end with the PIF, however. He continued to crusade for transparency.
“This will no longer be a guessing game. No more rumors and innuendo about where the money is and where the money went,”30 he promised in early 2003. With the help of foreign diplomats, Fayyad struggled to gain a handle on the international donations as well as the money flowing through PA businesses.31
The reasons for his efforts were clear, and Fayyad continued to speak publicly about the need for them. “The systems were not mature or sufficiently developed in the management of public funds,” he said. “[T]here is an ‘anything goes’ type of environment. . . . When you have that environment, it would be naive to assert there was no corruption. Of course there was. You have a system that’s totally loose. No controls. No audit. Extra-budgetary spending taking place all over the place. It’s wrong and it needs to be fixed.”32
But, while Fayyad was busily working to reconstruct the Palestinian economy, political turmoil had enveloped the PA. The violence of the intifada had not receded, and relations with the United States were at an all-time low. Arafat, now viewed as an obstruction to peace by Bush, faced pressure to appoint a new prime minister. According to reports, the decision came down to a number of figures, one of whom was Fayyad. Fayyad, however, rejected the idea. “I’m a newcomer to the Palestinian Authority. There’s no doubt in my mind there are others who have been there in public service who are more suitable for the job,”33 he said.
Fayyad removed himself from the running and stepped aside for Mahmoud Abbas in order to continue to pursue economic reform and capacity building for the PA. This only added to his credibility.
In May 2003, the New York Times noted that Fayyad was making new strides: “Acting through the Palestinians’ monetary authority, [Fayyad] ordered all banks in the West Bank and Gaza to block checks written on those funds by other ministries. And he told the banks to transfer the money to the treasury.”34
But it didn’t end there. As the New York Times noted, “Fayyad stripped authority over the civilian payroll from the Palestinian civil service bureau and brought it to his own ministry; this meant that the bureau in charge of hiring no longer also distributed checks, and it enabled Fayyad to obstruct a patronage system that was annually adding 10,000 to 15,000 people—many with less than sterling résumés—to the payroll.”35
In a move that was unheard of in the Arab world, Fayyad also “issued the first detailed, public Palestinian budget, of $1.28 billion, and he posted it on the web (www.mof.gov.ps).”36
But perhaps the most brazen of Fayyad’s initiatives was simply “ignoring many of the slips that arrived bearing Arafat’s signature, the ones requesting a job for someone or help with bills or students’ fees. Fayyad now had an all-purpose answer for requests he deemed unworthy: there was no allocation in the budget for them, so he was powerless to act.”37 By December 2003, the Associated Press reported that “Palestinian corruption and mismanagement, initially a major donor complaint, have become less of an issue.”38
This is not to say that Fayyad had finished cleaning up the PA. An April 2003 poll by the Palestinian Center for Policy and Survey Research found that 81 percent of Palestinians believed corruption still existed within PA institutions.39 In some ways, Fayyad’s good work exacerbated their concerns because it shed light on the problem.40 In a general investigation of the Petroleum Authority in 2003, for example, Fayyad discovered many inconsistencies in the paperwork. He declared, according to a December 2003 report, “the documents related to the revenues from oil products—
or how the money was used—can’t be found. They have disappeared from the ministry.”41
In September 2003, the IMF issued a damning report that cast light on the problem of nepotism within the PA, with a focus on Arafat’s budget. Among other things, the report noted, “The [Palestinian] President assumes the prerogative of providing aid to various organizations and individuals . . . other claimants and organizations are part of politically favored networks who should not be getting such grants. . . . This inevitably raises questions and suspicions which are inconsistent with accountable and transparent public finance systems.”
The report further noted that “lucrative monopolies on cement and petroleum . . . started generating substantial profits which were also being diverted away from the budget.” The exact numbers were difficult to tally, but the authors estimated that there was “about US$300 million in profits channeled outside the budget” between 1995 and 2000, whereas “tax revenue and profits from commercial activities diverted away from the budget may have exceeded US$898 million.”42
Two months later, in November 2003, CBS News’s 60 Minutes ran an investigative piece on Arafat’s wealth. The findings were nothing short of sensational. According to the report, “Yasser Arafat diverted nearly $1 billion in public funds to insure his political survival, but a lot more is unaccounted for.” In addition, “U.S. officials estimate Arafat’s personal nest egg at between $1 billion and $3 billion.” The CBS report also noted that funds from a Swiss bank account (likely the one mentioned by Uzrad Lew) closed in 2001 could not be found.43
Fayyad came under fire in 2004 when Lew claimed that money the PA invested in Switzerland was used to finance attacks carried out by violent factions associated with Fatah, and that the funds were right under Fayyad’s nose. “I can prove that money from the Swiss accounts of the PA is financing terror and that Salam Fayyad is not doing anything to prevent it,”44 Lew charged. The funds, which Lew estimates totaled in the “hundreds of thousands,” were channeled to the Tanzim, which was one of the primary violent groups under Arafat’s control at the height of the intifada. Lew later added, “There were hundreds of checks given to Marwan Barghouti, Hussein al-Sheikh, and Zacharia Zubeidi, all Tanzim commanders, from the Palestinian Treasury. There is no way Fayyad did not know.”45 In his defense, Fayyad, who became finance minister in June 2002, did not control all of the accounts until 2003, and it would be nearly a year before Fayyad was able to establish a single treasury account under his control.
But such criticisms of Fayyad were not common. The unassuming economist was generally viewed as a bright spot amid a seemingly endless stream of bad news coming out of the PA.
And the bad news kept coming. For example, in July 2004, amid an investigation into corruption allegations surrounding the cement industry, Palestinian legislators alleged that “wealthy associates of Mr. Arafat . . . facilitated the sale of cheap Egyptian cement to Israeli contractors building the hated security wall in the West Bank.”46
The following month Arafat ceded, “Some mistakes have been made by our institutions and some have abused their positions and violated the trust placed in them.”47 A September 2004 poll by the Palestinian Center for Policy and Survey Research found that 88 percent of Palestinians believed corruption existed within the PA.48
Poor governance was the least of Arafat’s problems, however. The Israelis, who still held him responsible for launching the intifada, had surrounded his presidential compound in Ramallah with tanks and troops. The Palestinian leader was physically pinned down, and his political infrastructure was eroding beneath his feet. He remained in his compound until shortly before his death on November 11, 2004.
But even after he died, the financial accusations continued to fly. Bloomberg reported that “Citigroup Inc., the world’s biggest financial services company, invested $6.8 million for Yasser Arafat,” through managers “who set up accounts under other names.”49 Additionally, Time raised questions about whether his wife received large sums from the PA and further reported th
at auditors of PA finances claimed “Arafat was guilty of skimming $2 million a month from the gasoline trade in the territories.”50
Elliott Abrams recalls, “When Arafat died, we undertook an effort to find his money. We did it in conjunction with a couple of other European governments, much in the way you do when any dictator dies in Africa, Asia, or Latin America. My memory is that we found hundreds of millions of dollars.”51
While Arafat was revered by his people for almost single-handedly focusing the world’s attention on the Palestinian cause from the 1960s until his death, the problem of corruption would, to some extent, define his legacy. As a result, Palestinians were hungry for new leadership.
Arafat, ever the lone patriarch, had been loath to appoint a successor. Against his wishes, Bush had succeeded in promoting Mahmoud Abbas as a leader in waiting.52 Thus, when Arafat died, Abbas’s ascension was virtually guaranteed. On January 9, 2005, Abbas was elected ra’is of the PA.53
7
The Rise of Abu Mazen
For a world leader, Mahmoud Abbas is little known outside of his public persona. An authoritative English-language biography has never been published about him. This fact is, to say the least, remarkable particularly because he has been in power since 2005. Of course, journalists and policy analysts have written much about him since he ascended to power—and even before he became a public figure. But even then, none of what has been written could be considered an insightful narrative history of the man’s life.
Abbas has contributed to this blind spot. He has not gone to great lengths to share much about his life with the public. He has written several books—the most famous was his memoir Through Secret Channels, about the process leading up to the signing of the Oslo Accords1—but they reveal little to nothing about him. His presidential website offers up a short biography, but it reveals very little about him that was not previously known.2
This dearth of information is not cause for alarm, but it is curious. Given the centrality of the Palestinian–Israeli conflict to the security of the rest of the Middle East, why don’t we know more about the man who speaks on the Palestinians’ behalf?
According to some Palestinian insiders, Abbas never saw himself as a leader. He was apparently quite happy acting as a mid-level functionary within the PLO. As such, he rarely took risks and rarely stood out among the hundreds of other cadres from the PLO bureaucracy. Thus, for years, observers may not have seen Abbas’s life as particularly worthy of documenting.
“He was never even second or third tier,” one Palestinian activist recalls. “He became the leader of the Palestinians by the process of elimination—literally. He was not considered worthy of being shot by the Israelis.”3
To say the least, Abbas’s road to leadership was a surprising one. And when he finally reached the top political spot in the Palestinian hierarchy, he appeared entirely unprepared. Still, he approached the job earnestly; for the first few years, he appeared to be genuinely committed to regional peace. However, a half-decade of political blood sport seemed to take its toll. Having learned the limitations of his position, Abbas appeared to be more interested in holding on to power than in leading. The result was a decline in Palestinian governance and a resurgence of the problems that Palestinians endured during the Arafat years.
Mahmoud Abbas was born in the town of Safed on March 26, 1935.4 He was born at a particularly tumultuous time in
Palestinian–Israeli history. It was at this point that both the Palestinian Arabs and the Jews began to engage in discernible campaigns of violence on behalf of their respective nascent nationalist movements. Abbas was born between bouts of violence in Mandatory Palestine—the Palestinian riots of 1929 and the Arab revolts of 1936–1939.
According to Abbas, until 1948, he lived in Safed with his parents and six siblings. His father worked in trade with the Bedouin tribes.5 At the start of the 1948 Arab war against Israel, when Abbas was 13, the family fled to Syria.6
Whether the Abbas family was forced out of Safed or whether they left in fear of the growing violence is a matter of debate. In 2011, in an op-ed in the New York Times, Abbas claimed he “was forced to leave his home.”7 But in 2009, he provided another account in which fear of “Zionist terrorist organizations” was the motivating factor for his family’s departure. He claimed that the Arabs of Safed “could feel that there was [Jewish] vengeance for the 1929 uprising. . . . When they felt that the balance [of power] had shifted, they decided to leave. The city in its entirety left, in order to protect their lives and their women’s honor.”8
Abbas contradicts himself yet again on his own website, noting that
there was no worry in our minds at all that we would emigrate from our country, until the village Ain al-Zaitoun near our city fell to the Haganah gangs. They closed the western gates to the city, and there was not another way out, so the people of our city began considering taking out the children and women out of fear that they would be subjected to massacres. So my father decided to remove the children of the family, and I was the eldest of them. My two eldest brothers stayed with weapons, and my mother refused to leave them, so she decided to stay.9
Eventually, the whole family arrived in Syria, where, according to Abbas, they “took up shelter in a canvas tent provided to all the arriving refugees.”10 Abbas’s website claims that they arrived in the “Syrian village of al-Batiha” in the Golan Heights but then traveled onward to Damascus where the family “did not know anyone.” From there, they moved on to Irbid, Jordan, where a relative on his father’s side hosted the family for one month. The family soon returned to Syria and lived briefly in the village of al-Tell near Damascus, “where the people donated housing, schools, and mosques to us.” When the family ran out of money, they moved back to Damascus and rented a two-room house in a poor Kurdish neighborhood in northern Damascus. “We lived in one room with our parents, and my oldest brother, who was married, lived in the other with his children.”11
Young Mahmoud Abbas joined the workforce to support his family—“all of us, without exception, because if we didn’t work, we would not eat and we would not live.”12 He found a job laying floor tiles,13 which included “carrying tiles and mixing cement and sand, and doing everything necessary to make one Syrian lira per day.” He later found employment as a waiter.14
In 1954, at the age of 19, Abbas claims he helped found Syria’s first Palestinian organization. According to Abbas, “We began working in the shadows, starting from the basic principle that the Arabs were talking about liberating Palestine, and this work could not be done without the participation of the Palestinians themselves.” Abbas and his cohorts began to seek military training for Palestinians. In 1956, Abbas joined a Syrian military academy near Homs but apparently only stayed there for one month.16
In 1958, he earned a BA in law at Damascus University.17 He also married his wife, Amina, that year.18 Abbas then went “to work at an oil company” in the Persian Gulf (exactly where is not clear). Here, his life intersected with that of a young revolutionary named Yasser Arafat.
In 1959, Abbas joined Fatah, only one year after the group’s founding in Kuwait. In the early years, Arafat and his cohorts created secret cells to carry out attacks against Israel. By 1965, Fatah began to carry out attacks. From a military standpoint, most of Fatah’s early attacks were unimpressive.19 Nevertheless, the guerrilla group continued to organize and was soon able to launch operations from every state bordering Israel. By the end of 1966, Arafat’s faction claimed to have carried out 41 raids into Israeli territories.20 A small war was under way.21
What role did Mahmoud Abbas play in these attacks? The long-standing narrative is that he did not take part in terrorist activities against Israel. But it must be noted that Fatah existed for one reason in the late 1950s and early 1960s: to carry out attacks against Israel.
Abbas’s exact role within the Fatah faction remains somet
hing of a mystery, but there can be little doubt about the role that Fatah played in the Middle East. By 1967, the guerrilla group had carried out dozens of attacks against Israel. These attacks exacerbated regional tensions, as Egypt and Syria taunted the Israelis and threatened to invade Israel.
Seeking to gain an edge in what seemed to be an inevitable clash, the Israelis launched a preemptive attack on June 5, 1967, that both surprised and decimated the Egyptian, Jordanian, and Syrian militaries. In six days, Israel took control of East Jerusalem, the West Bank, the Gaza Strip, the Sinai Peninsula, and the Golan Heights. For the Arab world, Egypt’s defeat was devastating. Egyptian president Gamal Abdel Nasser had been a heroic figure. His brash challenges to Israel were an inspiration to the region. But after Egypt’s colossal failure on the battlefield, the Arab world began looking for new inspiration. The Palestinians, in particular, began to look to their own fedayeen (freedom fighters). Specifically, they began to look to Fatah.
In 1968, Arafat gained control of the PLO, a group that had been created by the Arab League in 1964. The PLO became an umbrella organization for a number of Palestinian guerrilla groups that rose from the ashes of the Arab defeat in 1967. The global Palestinian violence that followed, directed primarily by the PLO, was unprecedented.
Amid these significant regional changes, Abbas decided to make “resistance” a full-time profession. He recalls, “In 1969 I resigned from my job in Qatar and joined the brothers in Amman [Jordan], where my family and I lived, and assumed the tasks of mobilizing and organizing.”22 Little is known about him during this time. According to a brief biography published by the BBC, Abbas was known for his “clean and simple living.”23