As Ma’an News Agency reported, the PA “carried out an unprecedented campaign of censorship and intimidation against West Bank and Gaza Strip journalists” in 2008. One of the primary targets was the Gaza-based Donia al-Watan News Agency. Users in the West Bank were blocked from accessing the agency’s website. According to the editor in chief of Donia al-Watan, Abdulla Issa, “The block was aimed at pressuring us to stop publishing articles on corruption, which we were forced to do, following further threats at taking us to court, accusing us of ‘defaming the (Palestinian) Authority.’” Issa further charged that the office of Abbas was “fighting any independent nonpartisan media outlets. The case is it’s either you are affiliated (with them) and enjoy the protection and funds, in one way or another, or you are engaged in an increasingly dangerous and escalating media war.” Issa lamented, “Abbas doesn’t want to fight corruption or bring the corrupt into account.”22
Salam Fayyad, meanwhile, was lured back into government service following the 2007 Hamas coup in Gaza. Fayyad was appointed as prime minister of the emergency government of the West Bank PA, but no longer held the finance portfolio. In this new role, he no longer served in a position to oversee the Palestine Investment Fund (PIF).
In the aftermath of Hamas’s election victory, in an effort to avoid sanctions against PA assets, Abbas issued a presidential decree that gave the PIF a new board. A State Department cable, released by Wikileaks, observed that the move ensured that the PIF was “now more securely in the hands of President Abbas with a board that is of his choosing.”23
According to the PIF, Abbas undertook this measure “to ensure that Hamas would not gain control of PIF’s investments, to insulate PIF from political influence, and to secure PIF’s independence.”24
Jim Prince, one of the original accountants who helped create the PIF, contests this. He counters that, even if the intentions were pure, the move violated the primary purpose of the PIF, which was to establish a firewall between the president’s office and commercial investments of the PA.25
Under the new regime, Mohammad Mustafa, now chairman and CEO of the PIF, was also Abbas’s economic adviser. This raised additional questions about the firewall.
A PIF representative asserts that the “practice of the PIF CEO acting as an economic advisor to the President of the PA has a long history. Mohammed Rachid, who was the CEO of PIF under Salam Fayyad, served as an economic advisor to then President Arafat.” PIF further “disputes that Dr. Mustafa’s role as an economic advisor to the president compromises the independence of PIF or Dr. Mustafa.”26
Prince challenges this assertion. “When the PIF was established and Mohammed Rachid was named the original CEO, he resigned his position as economic adviser to Arafat,” he says, adding that when the fund was created, “this was deemed by [Pricewaterhouse Coopers] as a clear conflict of interest.”27 PIF had no record of Rachid’s resignation.
Reuters reported in 2009 that the PIF board was “dominated by prominent businessmen, some of whose companies have taken part in ventures in which the fund has important asset stakes.”28 The PIF noted it “maintains an independent board of advisors comprised of members of the Palestinian business community, academia, the civil sector, and regulatory officials.”29 But again, Prince contests the assertions of the sovereign wealth fund, noting “an independent board cannot be chosen by someone. If they are chosen, not elected, they cannot be independent.”30
Other issues surrounding the PIF surfaced over the years. In 2009, the full breakdown of the PIF’s assets was not publicly published.31 According to Reuters, the PIF reportedly withheld these data “to limit the risk of holdings being seized in suits against the PA.”32 To its credit, the PIF released its financial statements after the suits were settled.
Regardless of the specific questions raised, the concern with the PIF among Palestinians was that the fund had made it harder, not easier, to grow small- and medium-size businesses in the PA.33
The issue of most concern to the West was that the Palestinian security program put in place by Fayyad began to wobble. Reports emerged that the PA used Dayton’s forces to suppress dissent.34 As the head of one Palestinian human rights group noted, the PA had emerged from “a state of lawlessness [and] shifted to a sort of a security state, a police state.”35 There were even questions about whether the security forces were receiving funds from the single treasury account that Fayyad had helped to establish.
Washington, however, continued to push for peace with Israel over reform. With no reason to alter his course, Abbas embarked on a bold, new policy that included the crushing of political challengers and the systematic repression of dissent.
11
Crushing Political Challengers
In the spring of 2013, the Palestinian media was abuzz over a new reality TV show. The President, launched by two non-profits, allowed young Palestinians to “campaign” for the position of the presidency.1 The very existence of the show was controversial. One might say that it was an outlet for Palestinians who felt stifled by the current political climate. The political reality in the West Bank was such that nobody could run for president. While Abbas had been advocating for Palestinian independence on the world stage, he took steps domestically to neutralize his political adversaries and potential challengers. Increasingly, the Palestinian president dispatched those who dared to disagree with him publicly in a ruthless manner.
Young and charismatic, former Fatah strongman Mohammed Dahlan likely had the most promise as a potential challenger to Abbas. It was undoubtedly for this reason that Abbas moved against him.
The feud between Dahlan and the Palestinian leader dates back to the mid-1990s, when Dahlan, a young PLO member, was named the head of preventive security in Gaza, making him one of the more powerful figures in Arafat’s PA. Abbas, whose loyalty to the cause dated back to the origins of the Fatah faction in Kuwait in the 1950s, reportedly felt that someone of higher pedigree would have been better for the position.
Of course, under Arafat’s “divide and rule” neopatriarchy, such spats were par for the course. As was common during the Arafat era, the two men ultimately reached a modus vivendi that endured until Arafat’s death in November 2004.
After becoming president in 2005, Abbas reportedly viewed Dahlan as a political threat but kept him on as national security adviser. Like many other senior officials, Dahlan knew too many of the PA’s secrets, so it was safer to keep him on the inside. Dahlan gave his own political survival a boost when he was elected to the Palestinian Legislative Council (PLC) in 2006.2
After the Hamas electoral victory in 2006, Dahlan was instrumental in the PA’s attempts to mitigate the power of the Islamist faction in Gaza. Unsurprisingly, Hamas reviled Dahlan for speaking out against the faction3 and for his oversight of the Fatah raids on businesses and charities.4 Hamas official Yehya Mussa went as far as to identify Dahlan as one of three people “responsible for the continued tensions between Fatah and Hamas.”5
Dahlan, however, took more heat in the summer of 2007, when Hamas overran the Gaza Strip. With the West Bank and Gaza now divided and the Palestinian cause in crisis, Dahlan was the fall guy. Although he had been abroad at the time for medical treatment, Fatah officials began calling for Dahlan’s removal as national security adviser.6 Dahlan tried to defend himself, stating that his apparatus was “never prepared for internal fighting,” and he attempted to point the finger at Iran and Qatar for their sponsorship of Hamas.7 In the end, his pleas fell on deaf ears. The Gaza strongman resigned but affirmed to Abbas, “I will always remain a loyal soldier behind you.”8
At the time, amid fears of a similar Hamas takeover in the West Bank, the PA was in panic mode. Bush administration officials moved quickly to stabilize the West Bank and sought out people they could trust in Ramallah. By October, Washington was actively pushing Dahlan, who maintained strong ties with US intelligence and the Israeli
defense establishment, to serve as Abbas’s deputy in the newly formed emergency government. Abbas rejected this suggestion, and the feud went public.9
By 2008, Dahlan was effectively in exile, spending most of his time in Cairo.10 However, his popularity had apparently not waned within the Fatah party. In 2009, the party named him to its Central Committee, a group responsible for many key Palestinian decisions.11 Emboldened, Dahlan began brazenly challenging Abbas over the Palestinian leader’s lack of transparency and increasingly tight grip on power.
Dahlan created an anti-Abbas TV station, Falastin al-Ghad (Palestine Tomorrow), in the West Bank in 2010. Abbas quickly shut it down.12 Amid reports that Dahlan was maneuvering to succeed him, Abbas ordered a probe into allegations that Dahlan had embezzled public funds.13 PA security forces also questioned Fatah members over reports that Dahlan was forming a militia.14 In addition, Abbas accused Dahlan of speaking badly of his sons.15 By December 2010, Abbas had Dahlan’s membership in Fatah’s Central Committee permanently revoked.16
In January 2011, Dahlan bravely traveled to Ramallah to answer the charges against him of embezzlement and planning a coup. Predictably, Dahlan denied all the claims against him. But as one Abbas aide observed, the spat could be distilled down to “a personal or business dispute . . . many of the reports that talked about a coup are exaggerated.”17
But the probe did not end. In April 2011, Fatah announced a new investigation alleging that Dahlan had provided Libyan leader Muammar Qaddafi with weapons to repel the uprising that soon spiraled into the Libyan civil war.18 By June 2011, Abbas had shuttered a number of Dahlan’s political websites that were critical of him19 and officially expelled Dahlan from Fatah.20 In response, Dahlan boldly stated on al-Hayat TV, “Abu Mazen [Mahmoud Abbas] can shove it.”21
The following month, Palestinian security forces arrested 15 of Dahlan’s supporters22 and raided Dahlan’s villa in Ramallah, arresting more than 20 security guards and confiscating two cars and more than a dozen weapons.23 This raid was widely viewed as illegal because it ignored Dahlan’s immunity as a member of the PLC. Irate, Dahlan fired back, alleging that Abbas had stolen more than $1 billion from the Palestine Investment Fund (PIF).24 The Abbas camp upped the ante with a 118-page report alleging that Dahlan had stolen $300 million in aid from the United States and poisoned Arafat.25 None of these charges or countercharges have been substantiated.
Samir Mashharawi, a Fatah member and Dahlan ally, confirmed what was already known: The dispute between Dahlan and Abbas was “personal.” Mashharawi went further, adding, “Abbas wants to run away from five years of failure in running the Palestinian Authority and the political portfolio.”26 But while Dahlan retained the sympathies of Mashharawi and other Fatah members, it was clear that Abbas had gained the upper hand. In August 2011, an official proclaimed that Dahlan’s expulsion from Fatah “is now final. It can’t be appealed or canceled.”27
But Abbas was not done. In early 2012, he issued a presidential decree to lift Dahlan’s parliamentary immunity.28 In response, Dahlan quipped, “If the war being fought by Abu Mazen against me was against the occupation, Palestine would have been liberated twice and all the prisoners would have been released and the refugees would have returned.”29
On January 9, 2012, acting on Abbas’s direct orders, Jordan’s Central Bank reportedly seized Dahlan’s assets. The report came just days after PA anticorruption commission head Rafiq al-Natsheh announced he would pursue corruption suspects living abroad.30 Reports suggested that Dahlan’s assets in Jordan amounted to 10 million Jordanian dinars ($14.1 million) or even more.31
Dahlan, however, was not alone. Abbas also began to pursue Arafat’s former economic adviser, Mohammed Rachid. In fact, on January 9, 2012, the day that Jordanian authorities seized Dahlan’s assets, they were also looking for Rachid’s.
Rachid, also known as Khaled Salaam, is an Iraqi Kurd who was the subject of considerable controversy. A former journalist,32 Rachid became an integral part of the PLO as a trusted confidant of Arafat’s. He began working for Arafat in Beirut in the 1970s.33
Rachid’s role was an enduring one. When the Israelis forced the PLO out of Lebanon, Rachid accompanied Arafat to Tunis, where he acted as the PLO chief’s media adviser.34 In the mid- to late 1980s, he was believed to have assumed the role of financial adviser. In 1994, after the signing of the Oslo Accords, Rachid returned to Gaza with Arafat.35 For the decade of problematic state building and poor governance that followed in the West Bank and Gaza, Rachid remained Arafat’s right-hand man on financial matters. Some observers have suggested that his non-Palestinian background made it easier for Arafat to trust him on a number of issues, as he was less of a political threat.
But not all of the PLO appreciated Rachid’s presence. Abbas, in particular, reportedly resented Rachid because he was an Iraqi Kurd—not even a Palestinian—who had gained Arafat’s trust and was part of his inner circle, whereas Abbas was often on the outside looking in. “There was a huge amount of jealousy,”36 a former adviser said. Nevertheless, under Arafat’s neopatriarchy, there was little recourse for Abbas. The two men learned to get along.
Perhaps the point of sharpest disagreement between Rachid and Abbas during the Arafat era came during the Camp David negotiations of 2000. Both men attended the talks, but they found themselves to be in opposite camps. During that intense period, Rachid was an advocate of working with Israel to find a solution. As the New York Times noted, Rachid was “the most pragmatic and least ideological of the delegation,” and he repeatedly tried to “steer Mr. Arafat toward the practical if he could.”37 Meanwhile, Abbas called diplomacy a “trap that was laid for us.”38 One former Palestinian negotiator even suggested that Abbas staked out this position because it was the opposite of what Rachid wanted. The rivalry between the two men was that great.39
In the end, Arafat rejected President Clinton’s offers at the 2000 peace summit, plunging the Palestinians and their nascent protostate into chaos. Although the PLO leader had rejected his counsel, Rachid remained loyal to Arafat as he struggled to maintain control of the West Bank and Gaza Strip. But his role as the gatekeeper of Arafat’s secret finances and other political dealings reportedly became a liability as the violence raged.
As journalist Daoud Kuttab noted, “The escalation of the violence in Palestine and the key role that community activists had in it caused a major setback to war rich individuals like Mr. Rachid. Not only were they affected by the collapse of the Palestinian economy, but direct calls against Rachid and others like him became louder and louder, at times repeated publicly in official forums like the Palestinian Legislative Council.”40
Rachid was at the center of controversy when new information about the PLO’s finances was revealed as an unintended result of the creation of the PIF, an endeavor he actually endorsed. But Kuttab observed that the calls for Rachid’s departure became particularly strong after he worked behind the scenes with the Israelis to help resolve the crisis surrounding the Israeli siege of the Church of Nativity in April 2002: “As a result of the agreement brokered by Rachid, 13 Palestinians who were inside the church were forcibly deported to a host of European countries. Another group of Palestinians who were under siege in the church were forcibly deported to the Gaza Strip. Many Palestinians felt this was a bad deal, which legitimized deportation, even though international treaties make it a war crime.” Kuttab observed that “no one was hurt but the message was clear, Palestinians had seen enough . . . after consultation with Arafat, Rachid left Palestine for Cairo where he [was] reported to be carrying out odd jobs for the Palestinian leadership.”41
Rachid’s departure from the scene was rapid. Although he was instrumental in the creation of the PIF and the concurrent effort to bring all of Arafat’s accounts into the light of day, his alleged role in the creation of those assets was clearly a liability. Rachid still had the ear of Arafat, however. During the long standoff with
the Israeli military that kept Arafat holed up in his Ramallah Muqata compound, Rachid reportedly took care of Arafat’s finances from afar. When the longtime leader of the Palestinians was rushed to Paris for treatment, Rachid made preparations for him.42 Rachid was also reportedly on hand when Arafat died.
With Abbas’s rise to the presidency in 2005, Rachid was instantly marginalized. The new president reportedly “stopped dealing” with Rachid entirely.43 There was a brief moment when rapprochement between the two men seemed possible. In January 2007, amid the Hamas–Fatah standoff stemming from the 2006 elections, Abbas sent Rachid to engage in a secret dialogue with Hamas’s Khaled Meshal.44 Rachid returned to Ramallah after that and began to officially advise Abbas on the ongoing reconciliation process with Hamas.45
But this cooperation was short-lived. Abbas continued to marginalize the former adviser, who was now vulnerable without the protection of Arafat. In March 2008, the PA’s attorney general began an investigation into Rachid’s finances.46 In February 2011, one official called on “the PA [to] seek Interpol’s help in locating Mohammad Rachid . . . and seize his assets.”47 These calls intensified in April 2011, when Fatah announced plans to investigate allegations that Dahlan and Rachid were supplying Libyan strongman Muammar Qaddafi with Israeli weapons originally given to the PA.48
In May 2012, Palestinian authorities officially announced they were targeting Rachid in a corruption and embezzlement case. According to Rafiq al-Natsheh, head of the Palestinian anti-corruption commission, Rachid had business interests in Jordan, Egypt, Montenegro, Iraq, and the United Arab Emirates (UAE). The corruption czar further said that the PA had requested that those countries freeze Rachid’s assets.49
Here again, the PA was stalking a figure that had long left the PA and arguably posed little threat to the financial well-being of the PA. Azmi Shuaibi, a leading anticorruption campaigner in the West Bank, observed that the “priorities (for investigations) are being set on a personal basis . . . we have concerns that the issue is being handled in a way of settling personal scores.” The Associated Press further observed that “the probe . . . appeared to be tinged with political intrigue.”50
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