Transparently Corrupt

Transparently Corrupt

The most transparent thing about the Palestinian Authority is its wastefulness. If the international community is serious about jump-starting the peace process, it can start by holding the PA accoutable.

Without transparency, how can a government properly represent its people, let alone function properly? Western democracies police their own governments rigorously, but, unfortunately, these same countries fail to hold the recipients of their aid to the same robust standards. The international community's support of the Palestinian Authority (PA) is a striking example of and a cautionary lesson in the perils of bankrolling a corrupt regime while turning a blind eye to its dysfunction. The PA's lack of transparency, democracy and civil society has exacerbated hostilities with Israel, resulted in internecine conflict and served as an incubator for Islamic fundamentalism and terrorism. But despite all this, $7.4 billion was pledged to the "Palestinian State" for 2008-2010 at the Paris Conference. The international community must cease paying endless lip service to the creation of a viable Palestinian state. Instead, it should force PA accountablility through international donations, making contributions contingent upon transparent governance and setting benchmarks for the establishment of a stable and democratic state infrastructure.

Corruption thrives in the PA, as those controlling the purse strings benefit from the absence of accountability and by embezzling funds earmarked for critical infrastructure projects. Far from attempting to generate a dynamic economy, the PA-first under Yasir Arafat and now under Mahmoud Abbas-perpetuates a system based on monopolies in various industries granted by PA officials in exchange for kickbacks. At times during Arafat's reign, a third of the PA's budget went for "expenses of the President's office," without further explanation, auditing or accounting. The international community, particularly European governments, disbursed funds, often in bags of cash delivered directly to Arafat, watching silently as billions of dollars of international aid disappeared into personal bank accounts. Officials throughout Europe ignored the evidence of this widescale corruption.

The PA's payroll is so bloated that the cost of wages alone exceeds all revenues. So despite ever-increasing amounts of Western aid, Palestinians sink deeper into poverty. Annual per-capita income has plunged from $2,000 in 1992 to $1,200 today; the poverty rate has jumped from 22 percent in 1998 to 35 percent in 2006. Yet the financial assistance continues unabated and unaccounted for. The EU funnelled nearly $2.5 billion to the Palestinians in 2007 without demanding political accountability or financial transparency. In October 2007, President Bush followed suit and requested a $410 million supplement beyond a $77 million donation earlier in the year.

Despite these generous donations, no evidence exists that unqualified financial aid leads to Palestinian enthusiasm for the peace process. In fact, the opposite seems to be true-the PA's opaque nature and corruption have led Palestinians into the arms of Hamas. The PA's failure to provide even minimal public services allowed the radical Jihadi group to fill the vacuum with a civil society that it would spearhead-hospitals, schools and grassroots organizations founded and maintained by Hamas' Islamic fundamentalist network. With the creation of institutions meeting their basic needs, Palestinians came to perceive Hamas as a functional and noncorrupt alternative to the Fatah-dominated PA. Unwittingly, the international community has acted as an enabler to the PA's abuses and essentially guaranteed the election of an Islamist terrorist organization in 2006.

In a futile attempt to mitigate the situation, the West refuses to engage Hamas while supplying billions of dollars in aid money, arms and training to Fatah on the condition that it act against Hamas and other Islamic terrorist groups. But once again, the international community has no means of ensuring accountability; it is demanding little and receiving even less for its substantial aid. The faith of donors partially lies in the view that Fatah is a moderate alternative to Hamas. Yet Fatah's textbooks continue to rival Hamas' in extremist rhetoric and 40 percent of the $7.7 billion pledged by donor countries has been promised to Hamas-controlled Gaza by the PA's labor and planning minister, Samir Abdullah. What's more, Fatah is seeking a formal alliance with Hamas. Even Abbas has used classic Jihadi slogans, has extended financial support to the families of suicide bombers and prays for the souls of "martyrs" like Marwan Zaloum, the Hebron al-Aqsa Martyrs Brigade leader. Aside from bankrolling an organization that seems at times no better than Hamas, the ramifications of Abbas' flirtation with extremism pose a threat to the creation of a functional Palestinian state living at peace with Israel and the West.

The PA's lack of transparency and poor human-rights record has also encouraged a significant number of Palestinians to support intercommunal strife and other conflictual activities in the Palestinian territories. This drives numerous Palestinians to embrace Jihadi organizations and has even led al-Qaeda to take root in Gaza. The effect of these changes is a shift in the Palestinian-Israeli conflict from having a purely territorial tone to one of ideological Jihadism. This does not bode well for the West. The lack of good governance within the Palestinian territories could very well provide a springboard for Jihadi terrorist organizations trying to establish a base to strike against the West. It is unclear whether Western governments consider their own security when providing unconditional financial aid to autocratic bodies with no transparency or human rights to speak of. Without intending it, donors to the PA have essentially encouranged the kinds of groups and activities that they are trying to combat.

Unqualified aid is often accompanied by the international community's propensity to project onto the Palestinian leadership its own standards of moderation, often when it is absent. Despite rhetoric supporting a Palestinian state, these actions prevent the emergence of a vibrant civil society that is the necessary foundation for a viable nation. It is essential that the international community attach conditions to financial aid and demand transparency and accountability from those administering the funds to the Palestinian citizenry. Furthermore, the bulk of aid should be directed to NGOs and civil-societal organizations-prerequisites for a viable democratic Palestinian state. It is in the West's interests to foster Palestinian trade unions, women's rights organizations and schools eschewing Jihadi extremism. If the international community is actually serious about creating a functional, terror-free Palestinian state, then it must demand the same high standard of governance that it expects from its own democratic governments. This will foster a moderate middle class so essential for building and sustaining the infrastructure that can lead to a thriving Palestinian state.


In a 1999 speech to the Chicago Economic Club, Tony Blair stressed the importance of good governance: "We have therefore proposed that we should make greater transparency the keystone of reform." The international community has yet to see the realization of this ideal.


Barak M. Seener is the Greater Middle East Section Director at the Henry Jackson Society.