Palestinians Make Arrests in Corruption Scandal

The Palestinian attorney general says $700 million in Palestinian Authority funds were squandered or stolen by officials in recent years. He announced 25 arrests and promised more to come. Dismay at public corruption was seen as a key factor in Hamas' election success.

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Over the past few years, some $700 million belonging to the Palestinian Authority has been squandered or stolen. That assessment came this week from the Palestinian attorney general. He says that 25 government officials are in jail waiting for trial on corruption charges. At least six others have fled, taking millions of dollars with them.

This is the most widespread corruption investigation the Palestinian Authority has ever conducted, and, as NPR's Linda Gradstein reports, many Palestinians say it is long overdue.

LINDA GRADSTEIN reporting:

Palestinian leader Mahmoud Abbas ordered the investigations shortly after he was elected a year ago, and Attorney General Ahmed Al-Meghani said his office is now investigating more than 50 cases involving alleged financial corruption. Among the 25 officials already in jail is Harbi Sarsour, the former head of the Palestinian Petroleum Authority, which has a monopoly over all the gasoline and fuel oil products in the West Bank and Gaza.

Other high profile suspects include former Gaza police chief, Ghazi Al-Jabali, and the former Director General of the Finance Ministry, Sami Al-Ramlawi. Both men are believed to have fled to Jordan.

Mazen Sinokrot, the Palestinian Minister of Economy, says the investigation has uncovered widespread corruption in almost every branch of the Palestinian Authority.

Mr. MAZEN SINOKROT (Palestinian Minister of Economy): By not giving licenses unless you pay. They're not doing this, revenues have to come to certain pocket, not to the budget of the Minister of Finance, to be regulated and to be supervised and to be monitored. And to be, at least, you know, transparent what comes to the official budget. So the system was absent.

GRADSTEIN: Former Palestinian Finance Minister, Salam Fayad, who resigned last year, partly in frustration with the widespread corruption, says the Attorney General must continue with the investigations and bring the accused to trial as quickly as possible.

Mr. SALAM FAYAD (Former Palestinian Finance Minister): You know, there's no question that things did not happen the way they should have. There's no question there was abuse, there was fraud, there was corruption. I mean that, the extent of which cannot be ascertained definitively until, as a matter of fact, most cases are taken up by the courts and decided by the courts, in accordance with the law.

GRADSTEIN: Fayad, a former Director of the International Monetary Fund, says he instituted a series of reforms three years ago to fight corruption. For example, he brought the petroleum authority under the control of his finance ministry.

Mr. FAYAD: What I can tell you is, now the system is subject to all kinds of checks, controls, and others. And, in terms of the gaping holes that exist within the public finance system before reform, none of those exist anymore. I think this will absolute and I'm full of confidence.

GRADSTEIN: The Attorney General's announcement came just ten days after the Islamist Hamas movement won Palestinian parliament elections. Hamas made corruption the centerpiece of its campaign, and most analysts believe it was the reason for the Hamas victory.

Farhad Assad (ph) is a Hamas spokesman.

Mr. FARHAD ASSAD (Hamas): (Through translator) We believe that the Attorney General would not have been able to open these files, in spite of the president's support, had Hamas not been at the forefront of the political decision making process, had Hamas not won in these latest elections.

GRADSTEIN: Other Palestinian analysts say the investigation has been going on for months and is not directly related to the Hamas victory. But Samir Barghouti (ph), a Palestinian economist, says the reason it became public now is that Abbas, also known as Abu Mazen, wants the credit for the investigation.

Mr. SAMIR BARGHOUTI (Economist): Abu Mazen does not want Hamas to announce to be considered as victory for Hamas, or advance for Hamas. And he want to show that the President, he opened this file and he ordered to go ahead with this file.

GRADSTEIN: Barghouti says the amount of embezzled funds is probably higher than the $700 million figure cited by the Attorney General. The Attorney General says he expects to issue more indictments soon.

Linda Gradstein, NPR News.

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