Why is US indirectly funding Hamas

New PLO account disbursing millions

Khaled abu Toameh and AP, THE JERUSALEM POST Jun. 3, 2007

Donor funds have begun flowing into an account controlled by Palestinian Authority Finance Minister Salam Fayyad, effectively ending the international boycott of the Hamas-led government. The funds will be used to pay partial salaries to tens of thousands of PA civil servants.

Fayyad said Sunday that the new account, which had been set up to bypass an international boycott of the Hamas-led government, is a key step toward restoring relations between the Palestinians and donor countries.

However, the end of the boycott, imposed when Hamas rose to power more than a year ago, is not yet in sight, Fayyad told The Associated Press.

“We have started using the PLO account,” PA Information Minister Mustafa Barghouthi confirmed. “This is an important step toward lifting the siege.”

A May 14 letter from the US to the European Union authorized the deposit of funds in Fayyad’s account.

While Arab countries and Norway have already put a total of $184 million into the new fund, the two biggest donors to the Palestinians – the US and EU – have not committed to it, he said.

The new fund was established last month. Donor countries can now send money to this account without concern that banks involved in the transfer will run afoul of US anti-terror regulations, Fayyad said.

“As a legal matter, there is now a full possibility of having money transferred directly to us without risk that the money might be intercepted [or] seized, or causing banks doing the transactions any trouble with the correspondent banks,” he said.

Fayyad said his ultimate goal was to restore the single Treasury account he had operated before Hamas came to power in March 2006. The account was dismantled under the previous Hamas-controlled government. Instead, donors then bypassed the Hamas-run Finance Ministry by parceling out aid directly to different recipients, such as subsidies to tens of thousands of unpaid civil service workers.

Fayyad said he has been in touch with EU officials about sending aid to the PLO account.

“There are obviously political considerations that have so far gotten in the way of that normalization,” he said. “Nevertheless, what we are seeking to accomplish is working closely with the EU, hopefully to get to that point in the not-too-distant future whereby they are able to
transfer money to us directly.”

Fayyad’s biggest challenge is to cover the bloated government payroll for 165,000 employees, half of them members of the security forces.

“We are trying to impart a little bit of order to that process, at least hoping that this would reduce the level of anxiety on the part of not only the government employees, but also other segments of the population that deal with the Palestinian Authority,” he said.

Over the weekend, the United Arab Emirates transferred $80 million to the PLO account. The money will also be used to pay salaries.

Fayyad said he hoped that with the new mechanism in place, more pledges would now come in. However, he said, the key to getting out of the crisis is a resumption of Israeli tax transfers.

With Hamas’s rise to power, Israel froze the transfer of some $55 million a month that it collects on behalf of the Palestinians, much of it from Palestinian workers in Israel.

That money amounts to about two-thirds of local Palestinian revenue, Fayyad said.

He added that the new account might give the Palestinians a stronger case to demand payment.

Fayyad said only a political solution to the conflict can help solve the Palestinians’ economic woes. He cited a recent World Bank report that said the Palestinian economy cannot recover unless Israel lifts its system of restrictions on Palestinian movement and trade.

“There has to be a better tomorrow for everybody, for both of us, Israelis and Palestinians,” he said. “Where we are in right now is an extremely difficult and dangerous situation.”

On Saturday, the Dutch Foreign Ministry announced that it would be dispatching a “special grant” of 6.3 million euros ($8.4 million) to the PA in the coming months. Foreign Minister Maxime Verhagen insisted that the funding is “also in Israel’s best interests,” as the money would improve the humanitarian situation for 17,000 policemen and their families.

“This allowance will not only help increase safety in the territories, but also will improve living conditions for police officers and their families,” the Dutch ministry stated in a press release.

“The Palestinian civilian police have played an important role in recent months in containing and calming disturbances among Palestinians, notably in the Gaza Strip; the police must be strengthened to maintain and enhance safety and public order in the Palestinian territories.”

In recent weeks, Qatar gave $44 million, Norway gave $10 million and Saudi Arabia donated $50 million to the PA.

Japan is also considering renewing direct funding to the PA. It has donated about $900 million to the PA since 1993.

According to a recent report by the United Nations Office for the Coordination of Humanitarian Affairs (OCHA), donations to the PA from foreign countries rose by almost 300 percent in 2006, totaling $900 million – as opposed to $349 million the previous year. The sharp increase came despite the international boycott.

According to the report, both Arab and Western countries have increased their donations, channeling them through an account known as the Temporary International Mechanism and the office of PA Chairman Mahmoud Abbas.

June 4, 2007 | 4 Comments »

Subscribe to Israpundit Daily Digest

4 Comments / 4 Comments

  1. H.R. 4681 was passed by the House and is currently in the Senate Foreign Relations Committee:


    `(a) Limitation- Except as provided in subsection (e), assistance may be provided under this Act to the Palestinian Authority only during a period for which a certification described in subsection (b) is in effect.

    `(b) Certification- A certification described in this subsection is a certification transmitted by the President to Congress that contains a determination of the President that–

    `(1) no ministry, agency, or instrumentality of the Palestinian Authority is controlled by a foreign terrorist organization and no member of a foreign terrorist organization serves in a senior policy making position in a ministry, agency, or instrumentality of the Palestinian Authority;

    `(2) the Palestinian Authority has–

    `(A) publicly acknowledged Israel’s right to exist as a Jewish state; and

    `(B) recommitted itself and is adhering to all previous agreements and understandings by the Palestine Liberation Organization and the Palestinian Authority with the Government of the United States, the Government of Israel, and the international community, including agreements and understandings pursuant to the Performance-Based Roadmap to a Permanent Two-State Solution to the Israeli-Palestinian Conflict (commonly referred to as the `Roadmap’); and

    `(3) the Palestinian Authority has taken effective steps and made demonstrable progress toward–

    `(A) completing the process of purging from its security services individuals with ties to terrorism;

    `(B) dismantling all terrorist infrastructure, confiscating unauthorized weapons, arresting and bringing terrorists to justice, destroying unauthorized arms factories, thwarting and preempting terrorist attacks, and fully cooperating with Israel’s security services;

    `(C) halting all anti-Israel incitement in Palestinian Authority-controlled electronic and print media and in schools, mosques, and other institutions it controls, and replacing these materials, including textbooks, with materials that promote tolerance, peace, and coexistence with Israel;

    `(D) ensuring democracy, the rule of law, and an independent judiciary, and adopting other reforms such as ensuring transparent and accountable governance; and

    `(E) ensuring the financial transparency and accountability of all government ministries and operations.

  2. They continue these policies because the Palestinian/Arabs and the issues, needs and rights they claim from their standpoint constitute an immutable square hole and the West which for all its talk about understanding and getting along with one’s neighbor and its malleability by the forces of multiculturalism still can only be an immutable round peg. The pices just do not fit no matter how much one tries to pound, twist or east that round peg into that square hole.

    There are only square pegs in the Muslim Middle East and round pegs in the West. Some of these Western round pegs believe they can square themselves and other Westerners off, but that is no more then delusion.

  3. One might rightly ask, “What is going on here?” Everyone knows that the “resistence” is made possible by the political and financial support the West gives to the Palestinians. So obviously one must conclude that the West supports the resistance. Surely no one believes that Fatah will fight Hamas. They are already pushed out of Gaza.

    Why do Palestinians need such large “security forces”. What good can come of it.

    The problem is that the aid allows the Palestinians to fight Israel. Why not give the money to Israel to provide humanitarian assistence only to the Palestinians, like welfare assistance. Let Israel be responsible for security in the Westbank. There is no need for Palestinian security forces. They are the problems.

    So, why does the West including the US continue this policy.

  4. This is absolutely sickening. Where are the pro-Israel members of Congress to call the Bush Administration on this bullshit (and probable violation of US law)?

    Please phone, write, or email your senator/representative or Ileana Ros-Lehtinen who is a strong supporter of Israel and Ranking Member on the House Committee on Foreign Affairs.

    Washington, DC Office
    2160 Rayburn H.O.B.
    Washington, DC 20515-0918
    Telephone: 202-225-3931
    Fax: 202-225-5620
    Miami, FL Office
    8660 West Flagler St., Suite 131
    Miami, Florida 33144
    Telephone: 305-220-3281
    Fax: 305-220-3291

Comments are closed.