October 5, 2011 | The Hill
Congress Needs to Investigate a Corrupt Palestine Investment Fund
In a twist that almost certainly violates U.S. law, American taxpayers are unwittingly contributing to a Palestinian sovereign wealth fund controlled in part by the terrorist group Hamas.
The entity in question — crying for a congressional inquiry — is the Palestine Investment Fund (PIF), which the Palestinian Authority created in 2002 to manage and distribute its money and commercial interests. Nearly a decade later, officials say Hamas has gained control over some of the fund’s key assets.
From Washington’s perspective, the conflict of interest is clear. Several U.S. organizations contribute to the PIF, including the Overseas Private Investment Corporation (OPIC), which provided 50 percent of the funding for the PIF’s Affordable Mortgage and Loan Program (AMAL), a total of $241 million. The Washington-based Middle East Investment Initiative (MEII), a non-profit where former secretary of state Madeleine Albright sits on the board, owns 15 percent of AMAL.
OPIC and MEII also support the fund’s Loan Guarantee Program, as does the U.S. Agency for Internal Development, which provided $2 million for technical assistance, according to the fund’s annual report.
In early March, Hamas took control of the PIF offices by force in Gaza, where the terrorist group acts as the de facto government. Hamas now control’s PIF bank accounts, the luxury Hanadi Tower office building, a juice factory, cars, and other assets.
PIF officers in the West Bank cede that these assets are lost. They sent out an email noting that Hamas had “confiscated some of its assets and properties,” condemning the action as illegal. The fund declared that it “won’t be responsible for any future measures, deals or agreements” associated with those holdings, and that whatever Hamas may do with them “doesn’t represent the PIF or its companies and properties.”
But Hamas does represent the PIF in Gaza. How else would those assets still be considered part of the PIF portfolio?
Hamas may control the PIF in other ways, too.
One of the PIF’s most prominent board members is Mazen Sinokrot, a Palestinian businessman and former minister of economy arrested by Israeli authorities in 1998 for operating Beit al-Mal, an investment company that reportedly financed Hamas. In December 2001, the U.S. Treasury designated Beit al-Mal for terrorist financing activities associated with Hamas.
While some might note that the U.S. has never designated Sinokrot himself, and that he is not an official member of Hamas, the terrorist group nonetheless hopes to name him prime minister in a Hamas-Fatah unity government.
At the very least, Sinokrot’s affiliations with Hamas deserve scrutiny, since he is a PIF board member.
Congress should now take a close look at the PIF and its ties to Hamas. This should all be part of the legislative calculus as members debate America’s financial relationship with the Palestinian Authority.
Jonathan Schanzer is vice president of research at the Foundation for Defense of Democracies and author of Hamas vs. Fatah: The Struggle for Palestine (Palgrave Macmillan 2008).