- Associated Press - Wednesday, May 16, 2012

RAMALLAH, West Bank — The shadowy financial adviser of the late Yasser Arafat is being sought on suspicion he stole millions of dollars in public funds, the top Palestinian anti-corruption campaigner said Wednesday.

It is the highest profile investigation since President Mahmoud Abbas‘ Palestinian Authority established an Anti-Corruption Commission and a special court two years ago to deal with such cases, the panel’s chief, Rafik Natche, told the Associated Press.

The former financial adviser, Mohammed Rashid, is suspected of transferring millions of dollars out of the Palestinian Investment Fund and setting up fake companies, Natche said.

Rashid has in the past denied wrongdoing.

In comments posted on the website Inlightpress, which is linked to him, Rashid said he would not respond to the allegations, but also seemed to be threatening to disclose purported secrets about Abbas.

The Palestinian leader “made a huge mistake and must suffer the consequences,” Rashid wrote Tuesday, without elaborating. In a separate section, the website announced it would soon run a series of articles by Rashid about the circumstances of Abbas‘ rise to power.

Rashid left the Palestinian territories after Arafat’s death in 2004 and is moving between countries, Natche said. The Palestinian foreign and justice ministries have asked several countries to extradite Rashid and freeze his assets, Natche added, but declined to say which countries are involved.

Earlier, he told the Palestinian news agency Wafa that Interpol is also being asked for help.

Rashid’s current whereabouts are unclear, though the Arab satellite TV station al-Arabiya has been broadcasting a series of interviews with him since last week. A producer of the station said the interviews were conducted in Dubai, while Rashid’s comments on the website were datelined Paris.

In a segment last week, Rashid denied he was formally asked to appear before a Palestinian court. Rashid said he was asked in 2008 to provide documents about the investment fund, and that he told Palestinian officials that the documents were at the fund’s office. He said he was not contacted since then.

Rashid, who is of Kurdish ancestry and also goes by the name Khaled Salam, told al-Arabiya he is an Iraqi citizen and is married to a Palestinian woman.

He befriended top PLO officials, including the group’s military chief, Khalil al-Wazir, in the 1980s. He became Arafat’s top financial adviser when the Palestinian Authority was established in 1994, following interim peace deals with Israel.

The first decade of the Palestinian self-rule government in parts of the West Bank and Gaza was tainted by rampant corruption and mismanagement. Arafat himself was known for a relatively frugal lifestyle, but spent money without supervision and permitted corruption around him as a way of ensuring loyalty.

In 2003, the international community, concerned about millions in foreign aid going to waste, asked respected Palestinian economist Salam Fayyad to supervise Palestinian Authority spending. Fayyad, now the West Bank-based prime minister, is credited with providing greater transparency.

However, little was done over the past decade to go after those suspected of stealing public funds, despite anger among ordinary Palestinians over alleged embezzlers not being held accountable.

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