The Magazine

Arafat's Fat Wallet

As long as he holds the Palestinian purse strings, he still calls the shots.

Aug 25, 2003, Vol. 8, No. 47 • By RICHARD W. CARLSON
Widget tooltip
Single Page Print Larger Text Smaller Text Alerts

Withdrawals and transfers from accounts in Arafat's name are, according to the Wallachs, allowed only under his signature. The Arab Bank in Amman and Cairo, a couple of Swiss banks, and the Chase Bank and HSBC Bank in New York are Arafat's favorites, according to informed sources, though he personally has accounts totaling hundreds of millions of dollars in a dozen other banks around the world. Indeed, all this money protects him from attempts to undermine his leadership. As Arafat himself has said, "He who controls the money has the power."

In the summer of 1993, Yasser Arafat told Larry King, "I don't take a salary. I live off the money I made in Kuwait." Arafat has a reputation for lying, even among his friends, and this one's a whopper. He worked as a modestly paid engineer in Kuwait forty years ago, though he has often claimed it made him a millionaire. A more accurate representation of his personal finances can be gleaned from documents recently publicized by the Middle East Media Research Institute, showing that $5.1 million donated by Arab states to ease the suffering of ordinary Palestinians was diverted to one of Arafat's personal accounts to cover the living and shopping expenses of his wife Suha and his daughter, who live in Paris.

Arafat's ministers are also corrupt, using public funds to build huge houses for themselves, or buy fancy cars, or just to fatten their own bank accounts. In the cache of PA documents seized by Israel last year was evidence that the foreign minister had drawn funds from the Ministry of Finance to pay for the expensive air conditioning system installed in his luxurious Ramallah home. The ministers' names and the details of their corruption are known to the Palestinians sipping sweet coffee at Gaza cafés, and there is great cynicism about the PA among Palestinians because of it. "There's no question the PA is deep in thievery," says a retired CIA officer with experience in the Mideast, "and they are deeply resented by your average Palestinian."

The president spoke last week of establishing a joint U.S.-Palestinian economic effort, presumably to give Palestinians the promised $20 million. He said he will send Treasury secretary John Snow and Commerce secretary Don Evans to the Mideast early this fall to take a look at economic conditions. Both men are able, and Evans is one of Bush's closest friends. Perhaps they can help. They should look long and hard at the Palestinian Authority, but first they should send minions to talk to a few of those Palestinians sipping sweet coffee in the Gaza cafés and get the names of the PA bureaucrats who are using the money as if it were their own. Of course, the first name on the list will be Yasser Arafat.

Richard W. Carlson is vice chairman of the Foundation for the Defense of Democracies, a Washington think tank concerned with terrorism, and a columnist for The Hill newspaper.