Yasser Arafat - Financial Dealings

Financial Dealings

In August 2002, the Israeli Military Intelligence Chief alleged that Arafat's personal wealth was in the range of USD $1.3 billion. In 2003 the International Monetary Fund (IMF) conducted an audit of the PNA and stated that Arafat diverted $900 million in public funds to a special bank account controlled by Arafat and the PNA Chief Economic Financial adviser. However, the IMF did not claim that there were any improprieties, and it specifically stated that most of the funds had been used to invest in Palestinian assets, both internally and abroad.

However in 2003, a team of American accountants–hired by Arafat's own finance ministry–began examining Arafat's finances; this team reached a different conclusion. The team claimed that part of the Palestinian leader's wealth was in a secret portfolio worth close to $1 billion, with investments in companies like a Coca-Cola bottling plant in Ramallah, a Tunisian cell phone company and venture capital funds in the US and the Cayman Islands. The head of the investigation stated that "although the money for the portfolio came from public funds like Palestinian taxes, virtually none of it was used for the Palestinian people; it was all controlled by Arafat. And none of these dealings were made public."

An investigation conducted by the General Accounting Office reported that Arafat and the PLO held over $10 billion in assets even at the time when he was publicly claiming bankruptcy.

Although Arafat lived a modest lifestyle, Dennis Ross, former Middle East negotiator for Presidents George H.W. Bush and Bill Clinton, stated that Arafat's "walking-around money" financed a vast patronage system known as neopatrimonialism. According to Salam Fayyad—a former World Bank official whom Arafat appointed Finance Minister of the PNA in 2002—Arafat's commodity monopolies could accurately be seen as gouging his own people, "especially in Gaza which is poorer, which is something that is totally unacceptable and immoral." Fayyad claims that Arafat used $20 million from public funds to pay the leadership of the PNA security forces (the Preventive Security Service) alone.

Fuad Shubaki, former financial aide to Arafat, told the Israeli security service Shin Bet that Arafat used several million dollars of aid money to buy weapons and support militant groups. During Israel's Operation Defensive Shield, the Israel army recovered counterfeit money and documents from Arafat's Ramallah headquarters. The documents showed that, in 2001, Arafat personally approved payments to Tanzim terrorists. The Palestinians claimed that the counterfeit money was confiscated from criminal elements.