- The Washington Times - Monday, January 10, 2000

When Palestinian dissidents issued a manifesto decrying corruption in the Palestinian Authority in late November, it was a call to arms. The document, endorsed by members of the Palestinian intellectual community and even ministers within the Authority's own Legislative Council, charged Palestinian Authority Chairman Yasser Arafat and his Cabinet with corruption and brutality. Though the charges were met with a massive crackdown by the Palestinian government with ministers denouncing the claims as "incitement and malicious" and the Palestinian Legislative Council voting to censure the dissidents the exchange highlighted a sore spot that threatens to jeopardize Mr. Arafat's hold on power and perhaps even the peace process itself: the striking absence of the rule of law within the Palestinian Authority.

Since its establishment in 1994, the Palestinian Authority has become a hotbed of graft and corruption. Estimates indicate that hundreds of millions of dollars most from foreign aid and development assistance have been lost to date due to corrupt governmental practices. In 1997 alone, $323 million dollars, or more that one-third of the Authority's operating budget for that year, disappeared from PA coffers. But efforts at reform within the Authority have been lackluster. In response to a 1997 internal audit that found "dangerous financial and administrative negligence," several restructuring efforts have taken place, but the changes in the Palestinian Legislative Council have been superficial at best, with ministers accused of impropriety remaining in positions of power, often at the bidding of the chairman himself. Ongoing corruption has also been perpetuated by current Palestinian law, which provides members of the legislature with immunity from arrest, making them unaccountable to their own government for corrupt practices. As a result, Islamic groups such as Hamas and the Palestinian Islamic Jihad have begun to fill the void, providing grassroots social services to the Palestinian population and gaining support in the Palestinian community.

The Palestinian economy is also in dire straits. Growth and development in the West Bank and Gaza Strip have been stifled by a monopoly system headed by the Palestinian Development and Investment Company (PADICO). With strong ties to Mr. Arafat and his Cabinet, this monopoly structure has reinforced corruption within the government and its ministries, contributed to stagnation and unemployment and discouraged foreign investment. But since Mr. Arafat has yet to sign the 1996 Basic Law, which establishes a separation of powers within the Authority, the legislature is currently unable to adequately check the power of the executive, allowing corrupt practices to abound.

Over the past several years, the PA has also come under repeated criticism for widespread abuses of human rights, ranging from false imprisonment to torture. Conducted overwhelmingly by the Palestinian Authority's police forces, these violations outline a broad pattern of governmental repression and authoritarian rule. A perfect example was the Dec. 1 attack on Mouawiyah al-Masri, a vocal opponent of governmental corruption, in a thinly disguised response to his participation in the recent protests by multiple assailants at least one of whom has already been linked to the Palestinian Security Services. Mr. Arafat, however, seems unresponsive to these criticisms, recently appointing Latif Abdel-Fattah, a Palestinian intelligence officer previously convicted for the torture and inhumane treatment of prisoners by a Palestinian military court, as a general prosecutor in the attorney general's office. Similarly, the chairman seems uninterested in creating a truly independent judiciary. Offenses committed by the Palestinian Police and Security Services go largely unpunished, and victims of abuse can often find no remedy from the courts, since the 1996 Basic Law, which provides for guaranteed personal freedoms, is not in force.

As Israel and the Palestinians hunker down for final status negotiations, strengthening the rule of law within the Palestinian Authority should be a top priority for Washington. With graft, corruption and monopolization crippling the Palestinian economy while dishonesty and repression increasingly galvanize opposition to Mr. Arafat and his Cabinet, prospects may look bleak. But with approximately $500 million invested in the Palestinian Authority so far, the United States currently possesses considerable leverage within the Palestinian government. The administration should use this window of opportunity to push for major reform and restructuring within the Palestinian Authority. Possible steps could include American insistence on the enactment of the Basic Law and a call for reform of the Palestinian police forces.

The administration should also explicitly earmark a percentage of future U.S. aid for medicine, education and other currently neglected social services and actively enforce its distribution, a move that may offset the significant inroads already made by Palestinian Islamic organizations. At the very least, however, the United States should make transparency in Palestinian accounting a quid pro quo for future aid, to ensure that no more American dollars disappear into the black hole of Palestinian corruption. Left unaddressed, the internal malaise that has impeded Palestinian rule of law may threaten the future of the Palestinian Authority, with serious repercussions for both Israel and the United States.

Ilan Berman is a research associate at the Jewish Institute for National Security Affairs in Washington.

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