September 15, 2011 | Quote

Who Owns the Palestine Investment Fund?

Yesterday the House Foreign Affairs Committee held a hearing to re-examine U.S. aid to the Palestinian Authority in light of its plan to go to the UN rather than negotiate with Israel. In his testimony, Jonathan Schanzer of the Foundation for Defense of Democracies cited the PIF as an “egregious example” of the abuse of power by PA President Mahmoud Abbas — currently in the 81st month of his 48-month term, ruling by decree since the PA has no functioning legislature:

The PIF’s operating procedures call for the Fund to operate as an independent vehicle for economic stimulus for the benefit of the Palestinian people. In recent years, however, Abbas changed the charter, installed his own choices for board members, placed the PIF under his full control, and neglected to have the PIF audited by outsiders. Today, Prime Minister Fayyad has zero oversight of the PIF, despite his celebrated mandate for transparency.

Schanzer reported Abbas has been borrowing money from the PIF for PA salaries, “repaying the PIF with land that will be used for additional businesses that enrich his inner circle.” A former PA official told Schanzer that if Congress demanded an accounting of the PIF, it would cause an “explosion” — showing corruption at the highest levels of the PA. Schanzer told the Committee that Hamas has taken control of the PIF’s assets and offices in Gaza, and he described how the PA secretly funds Hamas through an electricity scam:

Electricity in Gaza is produced by a power plant that is guaranteed by the Palestinian Authority, but the bills are collected by Hamas. As one former advisor to the PA confides, “the Hamas authorities collect their bills from customers in Gaza, but never send the funds back to the West Bank. And the PA continues to foot the bill.”


Palestinian Politics