The Riddle of Arafat’s Missing Millions

This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.

The New York Sun

PARIS – Yasser Arafat’s death will bring renewed pressure for answers to the riddle of the “missing millions,” funds intended for the Palestinian Arab people that were allegedly diverted overseas.


An International Monetary Fund report found last year that some $1 million was transferred from the Palestinian Authority budget into a Swiss account opened in the name of a company registered in the British Virgin Islands.


But the IMF said the account had since been closed and the whereabouts of the money, which it said was the subject of a series of transfers between 1995 and 2000, were unclear. The IMF estimate is dwarfed by figures cited by American and Israeli intelligence, which allege that secret Arafat assets could be as high as $5.98 billion.


Arafat never pursued a lavish way of life and is considered to have been a chaotically bad manager of money rather than dishonest. However, his Palestinian Arab opponents suspect widespread corruption within his administration.


His widow, Suha, has drawn fierce attacks from Palestinian Arabs who criticize her life of luxury in Paris, far from the West Bank and Gaza.


The French authorities opened a judicial investigation this year into the transfer of more than $11 million into bank accounts in France under her control.


Questions have also been raised about the allowance, reportedly $101,000 a month, paid by Arafat to his wife.


Mrs. Arafat denies any wrongdoing. She asked a London-based Arabic newspaper: “What is so strange about the Palestinian president sending any amount of money to his family and his wife, who is protecting Palestinian interests abroad? All this money has come and is coming in a legal way and the way it is spent is legal.”


Mohammed Rashid, Mr. Arafat’s leading financial adviser, insisted this week that his leader had not concealed a personal fortune abroad. His comments followed Israeli speculation that a struggle for access to such funds explained the bitter row between Mrs. Arafat and the four-man Palestinian Arab delegation that traveled to Paris to be at his bedside.


Mr. Rashid said: “He’s been watched carefully by the United States and Israel, and if there had been any assets, these countries would have uncovered it and published it to embarrass him.”


But his assertions are complicated by suggestions that Mr. Rashid manages some of the money in a network of bank accounts, stocks, and holding companies.


Sources quoted by the New York Times say that, as well as using funds to finance the Palestinian Arab movement and pay salaries, Arafat created embassies, bought arms, made gifts and loyalty payments, and donated money to groups ranging from charities to the terrorist Al Aqsa Martyrs Brigade.


Salam Fayyad, a former IMF official appointed under international pressure by the Palestinian Authority to impose some belated financial discipline, located more than $552 million in investments around the world but admitted that he knew only part of the picture.


“Some of it will be buried with Arafat,” an Israeli official told the paper. “He had many special sources and no one knows the full sum of money. Even Suha doesn’t know.”


The New York Sun

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