Ha'aretz, October 8, 1999
Israel deposited NIS 1.5b in Arafat's personal account
By Ronen Bergman, Ha'aretz Correspondent
BARI, Italy - Israel has transferred slightly over NIS 1.5 billion [about $350 million]
in tax refunds to Palestinian Chair Yasser Arafat's personal bank account at a Tel Aviv
branch of Bank Leumi, since the signing of the economic agreements with the Palestinian
Authority in April 1994.
Senior sources among the donor states told Ha'aretz that this bank account is in their
view one of the most disturbing issues with regard to the proper financial management of
the Palestinian Authority.
The bank account at the Hashmonaim branch of Bank Leumi was first revealed by Ha'aretz
in April 1997. It is referred to by knowledgeable sources as "a-sunduk a-thani,"
the "second budget," on which only Arafat and his senior economic adviser,
Mohammed Rasheed, are authorized signatories.
The PA is required to give the donor states a detailed account of every penny it
spends. Through the Bank Leumi account, Arafat is able to keep huge sums of money for
himself without any supervision. At Rasheed's request, Israel transfers to this account
all the refunds for tax on fuel which the PA imports for itself through the Ashdod and
Haifa sea ports. The rest of the tax refunds are transferred directly to the PA's bank
accounts in Gaza.
Since the signing of the economic accords in 1994, Israel has transferred a total of
NIS 1.5 billion to the Tel Aviv account, and in the last two years the transfers have
settled on more or less NIS 35 million a month. The Palestinian treasury has been
complaining since the beginning that the funds deposited in the account do not reach its
coffers.
Joseph Saba, director of the World Bank's Middle East division, told Ha'aretz that
Israel, the PA and the donor states came to an agreement in 1996 (TAP) under which the
Palestinian Authority was to subject any such private bank accounts to the supervision of
the Palestinian treasury, but this was not done. According to Saba, the World Bank, like
the other donors, is displeased with the situation. But he stressed that he has no idea
what is going on in the account and refused to speculate on what might be happening with
the money. "I have no proof," Saba said.
(c) copyright 1999 Ha'aretz. All Rights Reserved
Source:
http://www3.haaretz.co.il/eng/scripts/article.asp?id=57929&mador=1&datee=10/8/99
