In a Ruined Country
Must-read article by David Samuels. Arafat’s corruption was vast,

He then forwarded it as usual to the Ministry of Finance, which served through most of his reign as the Palestinian leader’s personal cashbox.

For those at the top of the heap the rewards were much larger and more systematic. The amounts of money stolen from the Palestinian Authority and the Palestinian people through the corrupt practices of Arafat’s inner circle are so staggeringly large that they may exceed one half of the total of $7 billion in foreign aid contributed to the Palestinian Authority. The biggest thief was Arafat himself. The International Monetary Fund has conservatively estimated that from 1995 to 2000 Arafat diverted $900 million from Palestinian Authority coffers, an amount that did not include the money that he and his family siphoned off through such secondary means as no-bid contracts, kickbacks, and rake-offs. A secret report prepared by an official Palestinian Authority committee headed by Arafat’s cousin concluded that in 1996 alone, $326 million, or 43 percent of the state budget, had been embezzled, and that another $94 million, or 12.5 percent of the budget, went to the president’s office, where it was spent at Arafat’s personal discretion. An additional 35 percent of the budget went to pay for the security services, leaving a total of $73 million, or 9.5 percent of the budget, to be spent on the needs of the population of the West Bank and Gaza. The financial resources of the PLO, which may have amounted to somewhere between one and two billion dollars, were never included in the PA budget. Arafat hid his personal stash, estimated at $1 billion to $3 billion, in more than 200 separate bank accounts around the world, the majority of which have been uncovered since his death.

Contrary to the comic-book habits of some Third World leaders, such as President Mobutu Sese Seko, of Zaire, and Saddam Hussein, Arafat eschewed lurid displays of wealth. His corruption was of a more sober-minded type. He was a connoisseur of power, who used the money that he stole to buy influence, to provoke or defuse conspiracies, to pay gunmen, and to collect hangers-on the way other men collect stamps or butterflies. Arafat had several advisers who oversaw the system of patronage and theft, which was convincingly outlined in a series of investigative articles by Ronen Bergman that appeared during the late 1990s in the Israeli newspaper Ha’aretz. The PLO treasurer, Nizar Abu Ghazaleh, ran the company al-Bahr (“the Sea”) for a small number of wealthy shareholders, including Arafat’s wife, Suha. Al-Bahr set the price of a ton of cement in Gaza at $74, of which $17 went into Arafat’s private bank account.
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In their cities and villages Palestinians were subject to the extortion and violence of Arafat’s overlapping security services, which competed among themselves for payoffs, arbitrarily arrested people and seized their land, and forced citizens to pay double or triple the price for everything from flour and gasoline to cigarettes, razor blades, and sheep feed. The fact that nearly everyone in Palestinian political life had taken something directly from Arafat’s hand made it hard to criticize him; it was easier to go along.

The saddest thing of all is, as the article puts it, “In less than a decade Yasir Arafat and his clique managed to squander not only the economic well-being but also the considerable moral capital amassed by the Palestinian people during two and a half decades of Israeli military rule.”

Read it all.