Arafat Authority Owns a Piece Of Bowlmor Lanes

Greenwich Village’s Bowlmor Lanes is widely known as a popular place for drinks, children’s parties, or bowling a few games at night or on the weekend. Less well known is that Yasser Arafat’s Palestinian Authority gets a cut of every beer bought and pair of shoes rented at Bowlmor, via the $799 million Palestinian Investment Fund.Indeed, according to an analysis of the fund’s investment activity from December 2002 to December 2003 done by Standard & Poor’s, the Palestinian people have about $40 million worth of American investments. These include California real-estate holdings, wireless technology stocks, and a piece of a well-known private equity fund.The majority of the fund’s investments were in the Middle East, including a $285 million stake in an Egyptian mobile-phone company, Orascam Holding SAE, and its affiliates, and a $71 million joint venture with England’s BG group, to explore for natural-gas deposits off the coast of the Gaza Strip.The investment fund’s chairman and CEO, Mohamed Rachid, did not reply to e-mail inquiries seeking comment.The S&P valuation of the fund’s assets was commissioned by the fund when executives of international donors requested an accounting of the fund’s assets.To invest in America, the S&P report shows, the fund set up holding companies in Delaware. Much of the legwork was done by a McLean, Va.-based private equity fund, SilverHaze Partners LLC, whose managing partner is Zeid Masri, an American citizen with two relatives on the fund board, according to Bloomberg News. Mr. Masri did not return several phone calls from The New York Sun. The fund’s 5.23% ownership stake in SilverHaze’s management company was valued at $260,000.In the case of Bowlmor, Mr. Masri set up a Delaware holding company, Onyx Funds LLC, to invest $1.3 million in the bowling alley’s parent company, Strike Holdings LLC. S&P valued the stake at $930,000, citing the illiquid nature of the investment. The valuation did not disclose whether the investment was profitable or whether dividends were paid on it.In a statement sent to the Sun by email, Strike Holdings’ CEO, Thomas Shannon, said he had taken steps to sever the relationship with SilverHaze immediately.“This information was never disclosed to us previously and had we known the source of these funds, which represents approximately 2% of our company’s equity, we would never have accepted them,” he said of the ties to the Palestinian Authority.Another New York company that received an investment from the Palestinian fund is Madison Avenue’s Delma Real Estate fund, according to the valuation documents. The fund owns two buildings in Woodland Hills and Sherman Oaks, Calif., the documents said. The Palestinian fund invested in Delma via a wholly-owned subsidiary, Darnel Limited, that was worth $6.6 million at the end of last year, S&P said. The CEO of Delma, Kevork Toroyan, did not return a reporter’s call. Mr. Toroyan is an Armenian, and according to the Web site of a charity with which he is affiliated, the Armenian Fund, he was a member of a group set up to support the 1993 Oslo Mideast accords.The Palestinian Investment Fund, whose chairman, Mr. Rachid, was installed by Arafat in June, did not have the Midas touch when it came to timing many of the investments, according to the valuation documents. For example, beginning in April 2000, SilverHaze’s Mr. Masri began investing $25 million in fund capital in Internet stocks. The vehicle Mr. Masri set up to make the investments, Chalcedony LLC, put only $9.9 million to work before the Internet bubble cracked, said the valuation report. The investment in Chalcedony – controlled entirely by Mr. Masri, according to S&P – declined in value to an estimated $4.4 million.The Palestinian fund was created on Arafat’s orders by “diverted” tax receipts Israel collected on goods shipped to the territories, according to a World Bank report released in June. The diverted funds – the exact amounts are not known – were supposed to be given to the Palestinian finance ministry, according to an article in Bloomberg News’s Markets magazine.The fund also took a stake in the Canaan Equity Offshore funds, two investment funds managed by Canaan Partners, a high-profile private-equity firm with $2 billion under management and offices in Menlo Park, Calif., and Rowayton, Conn. The Palestinian fund’s stakes in one of the funds, Canaan Equity Offshore II, was valued at $1.1 million, and its stake in the other, Canaan Equity Offshore III, was valued at $3.6 million. A call to the fund’s general partner, Eric Young, was not returned.One analyst of the finances of both Arafat and the PLO, Manhattan-based historian Rachel Ehrenfeld, said the “so-called donors” to the Palestinian Authority – including many member states of the European Union and the World Bank – who demanded the valuation would not have wanted to see a full accounting of the Palestinian Authority’s finances from its inception in 1994.“Arafat had $10 billion in assets in mid-1994, and this one-year snapshot contains less than $800 million,” she said. “They don’t want to know about the other $9 billion because they don’t want to know how rich Arafat was, or how much he paid to murder thousands of Israelis.”Ms. Ehrenfeld, who has written and lectured extensively on terrorism financing, was highly critical of the Palestinian fund’s rush to transparency.“It’s nearly useless,” she said of S&P’s valuation work. “It covers only one year, it’s already a year old, and doesn’t offer any comparison to the previous years.”

Arafat Authority Owns a Piece Of Bowlmor Lanes

Arafat Authority Owns a Piece Of Bowlmor Lanes

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