- The Washington Times - Wednesday, May 10, 2006

The State Department said yesterday that a fund to pay Palestinian public workers will not become another Iraqi “oil-for-food” scandal because Western donors have learned from experience and the United Nations will not be in charge.

Israel, meanwhile, said it may release customs revenues collected on behalf of the Palestinians, which have been withheld since the militant group Hamas took over the Palestinian government, provided the money is used for humanitarian needs.

The United States and Europe have cut off all funding to the Hamas-led Palestinian Authority and have used banking rules to block other countries from making up the shortfall.

But U.S. and European officials agreed at a meeting in New York on Tuesday to set up a “temporary mechanism” under which Palestinian Authority employees could be paid directly without the involvement of Hamas officials. Some Palestinians expressed doubt yesterday that that could be achieved.

The so-called Quartet for Middle East peace announced the policy shift following reports in The Washington Times and elsewhere that Palestinians were dying in hospitals because basic medicine and supplies had been depleted.

State Department spokesman Sean McCormack yesterday discouraged any comparisons with the oil-for-food scheme, in which Iraqi dictator Saddam Hussein pocketed billions of dollars through kickbacks and bribes.

“The international community has learned quite a bit from how that operation was, in fact, implemented,” Mr. McCormack said. “So people will take away those lessons, and, as you see in the Quartet statement, transparency and accountability are two of the most important priorities.”

The new funding scheme was proposed by the European Union during Tuesday’s meeting of the Middle East Quartet, comprising the United States, the European Union, Russia and the United Nations.

The program would operate for a three-month trial period that could funnel hundreds of millions of dollars to the Palestinians through aid groups or third parties. How the program would work is expected to be decided in the next couple of weeks.

“As for the specifics — how you do the monitoring, how you ensure that the aid really gets to the Palestinian people, gets to those affected by it, and that the use of the aid is effective — those are all questions that need to be answered,” Mr. McCormack said.

The Palestinian Authority’s monthly budget is about $180 million. More than 165,000 public workers have not been paid since March.

Israeli Foreign Minister Tzipi Livni said yesterday in Jerusalem that she had told Quartet members that Israel could free some of the frozen Palestinian taxes, but only if the money reaches needy Palestinians and not their government.

“Israel will not use this money for salaries, but is certainly willing to make additional use of it, above what it has been used for until now, for humanitarian ends,” she said.

Mr. McCormack said the intention of the European Union, which will administer the fund, “is that this aid would be delivered directly to those in need, using a mechanism that would bypass the Hamas-led government.”

Nasser Taboub, general manager of Al Aqsa Islamic Bank in the West Bank city of Ramallah, said many options are open for a creative solution, but all will require the cooperation of at least two offices under control of Hamas.

The personnel bureau under the prime minister’s office has information on which civil servants are eligible to receive payment and how much they are owed.

All of the details related to the bank accounts and transfers are located in the Palestinian Finance Ministry.

“If the international community can reconcile this, and develop the vehicle and institutions — like a virtual ministry of finance — then it can work. It’s only a political gimmick. It’s not recognizing reality and trying to ignore the existence of somebody,” Mr. Taboub said.

• Joshua Mitnick reported from Jerusalem and the West Bank.

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