Report: The Palestinian Authority stole billions of aid from the EU from 2008-2012

Palestinian media are reporting on an apparent audit done on the Palestinian Authority budget by an anti-corruption commission.

It is unclear what the actual source of the findings are, it translates as the "Global Anti-Corruption Code" which doesn't sound like the official Palestinian body to investigate corruption, the "Palestine Anti-Corruption Commission."

Whoever they are, the findings are worth looking at. They are consistent with previously published information.

The commission said:

Corruption in the Palestinian Authority is deeply entrenched. Just to illustrate by a few examples: 

Between 2008 and 2012 alone, more than $2.3 billion in development aid funds provided by the European Union to the Palestinian Authority were misappropriated.

In 2017, the PA spent huge sums on shell companies and projects, including a non-existent airline, and instead of developing welfare programs to distribute social services or development aid funds to Palestinians, the PA allocates funds to pay salaries to security officers and government officials.

Senior PA officials establish foundations, non-governmental bodies, and shell companies to attract additional funds from aid programs, yet donors have mostly turned a blind eye to the PA's blatant corruption and mismanagement of development funds.

For example, even when investigators reported that PA officials embezzled EU aid funds, the EU did not stop providing assistance. Thus, despite providing more than $15 billion in development aid to the Palestinians over the past 30 years, nothing has changed on the issue of reducing poverty or delivering sustainable improvements in the quality of life for Palestinians.

It is not just that PA corruption undermines aid effectiveness. Perhaps the biggest problem is that the flow of development aid contributes to and supports the PA's culture of widespread corruption. And the more funding the PA can receive, the more powerful it becomes. It has increased its capacity to embezzle funds, extortion and bribery, and worse, the consequences of corruption are not just economic: in Palestine, corruption contributes to violence against Palestinians.

The only way out of this cycle is for donors to call for the cessation of unrestricted development aid to Palestinian government institutions, which have proven time and time again to be too weak and who treat aid as an opportunity for corruption.

Donors, including the United States and the European Union, should set a timetable for the expiry of existing aid packages and should make clear that no further aid will be provided until the Palestinian Authority provides strong evidence of a reduction in corruption and assurances that the development aid funds they have received is used in development projects and its objectives.

Some may be concerned that cutting direct development aid to the Palestinian Authority will lead to its collapse, and thus create a vacuum that Hamas may exploit, but whoever claims this ignores the bigger picture, that the corruption rooted in the Authority is what enabled Hamas from gaining power in the first place.

More than empowering corrupt institutions, the continued flow of unrestricted funds to the PA will do more than support and perpetuate the PA’s systemic corruption.

Arab nations have curtailed their monetary support of the PA partially because of corruption. Sweden, one of the most staunch national supporters of the Palestinian Authority, has warned that they might do the same. 

---

---