[Today's dispatch is divided into two emails for space reasons]
I attach the transcript of the CBS program below, and also two articles on it:
1. The Herald - Scotland: Yasser Arafat 'has £1.8bn fortune'
2. Arafat 'diverted $300m of public money to Swiss bank account' (London Sunday Telegraph, November 9, 2003)
This weekend the American network CBS broadcast an investigative program into Arafat's finances.
None of this is new information. For example, as reported on this email list, last March, Forbes magazine claimed Arafat had a personal fortune of over $300 million that was stashed away in secret Swiss bank accounts. What is new is that these reports are now, finally, being aired by major media outlets.
The full transcript of the program is attached below. It can also be found at
SUMMARY OF CBS PROGRAM
CBS's "60 Minutes" reported that "Arafat transfers $100,000 a month from funds directed to the Palestinian Authority to his wife Suha," who lives the good life in Paris.
According to the report, Arafat has accumulated in his private accounts more than $800 million from aid originally appropriated to the Palestinian authority.
The report says the money goes to support a luxurious life style for 40-year-old Suha and the couple's 8-year-old daughter Zahwa. According to calculations presented on "60 Minutes," Arafat has succeeded in transferring no less than $800 million of international aid money given to the Palestinian Authority to secret bank accounts over the past 10 years. The report also said that Arafat and his aides had gotten hold of Israeli bank accounts in which the government of Israel had deposited tax monies it owed the PA.
Accountant Jim Prince, who has been tracking Arafat's money, has so far determined that part of the Palestinian leader's wealth was in a secret portfolio worth close to $1 billion - with investments in companies like a Coca-Cola bottling plant in Ramallah, a Tunisian cell phone company and venture capital funds in the U.S. and the Cayman Islands.
YASSER ARAFAT 'HAS £1.8BN FORTUNE'
Yasser Arafat 'has £1.8bn fortune'
By William Tinning
The Herald - Scotland
A television documentary is to claim that Yasser Arafat, the Palestinian president, has amassed a personal fortune of up to £1.8bn and his wife is given tens of thousands of pounds each week to fund a lavish lifestyle in Paris.
The £1.8bn estimate of Arafat's personal fortune is almost six times higher than had been previously been touted.
According to a report in the New York Daily News, the CBS show 60 Minutes will claim on Sunday that he has amassed a personal fortune of between £602m and £1.8bn.
It will also claim that Arafat's wife, Suha, 40, who lives away from the struggles of her homeland, is given more than £60,000 a month from Palestinian Authority funds.
Lesley Stahl, a CBS correspondent, told the newspaper that Raymonda Tawil, Mrs Arafat's mother, is apparently enjoying life in Paris at the expense of the Palestinian taxpayers.
"I have visited Suha's mother, and she lives very well," Stahl said.
Mrs Arafat lives in Paris with Arafat's eight-year-old daughter, Zahwa. The daughter of a wealthy Christian family, Mrs Arafat converted to Islam after her secret marriage to Arafat in 1990.
While some Palestinians have criticised her decision to remain outside their homeland, Mrs Arafat told an Arabic magazine last year that she was "prepared to return any moment" if her husband so wished.
Despite efforts from within and outwith the Palestinian Authority to oust him, Arafat, 74, still controls the purse strings and the hearts and minds of the Palestinians.
He remains confined to two rooms in his demolished headquarters in Ramallah as his former negotiating partners, the United States and Israel, plead with other countries to isolate him.
Arafat has run the Palestinian Liberation Organisation since 1969.
Five years later the Arab League declared the PLO "the sole legitimate representative of the Palestinian people".
In 1996, Arafat was swept into office in elections monitored by western observers, including Jimmy Carter, the former US president.
It is claimed that Arafat controls most of the £3.3bn in international aid that has flowed to the Palestinian Authority over the past nine years, during which time he has established a system of financial aid that guarantees the support of a host of Palestinian factions.
Last March, Forbes magazine claimed Arafat had a personal fortune of about £181m that was stashed away in secret Swiss bank accounts.
At the time the Jerusalem Post wrote that he had "done more than his fair share of plundering his own people, treating their public resources as his personal ATM machine to be looted at will".
In 1997, the Israeli media claimed he had a secret bank account in Tel Aviv.
ARAFAT 'DIVERTED $300M OF PUBLIC MONEY TO SWISS BANK ACCOUNT'
Arafat 'diverted $300m of public money to Swiss bank account'
By Inigo Gilmore in Jerusalem
Sunday Telegraph (U.K.)
November 9, 2003
More than $300 million (£176 million) of Palestinian Authority funds were diverted by Yasser Arafat into a previously undisclosed Swiss bank account and the money can no longer be traced, according to a damning American television report to be broadcast today.
The CBS network's 60 Minutes, a respected investigative programme, claims that missing Palestinian funds were held in Switzerland in an account set up in the name of a British Virgin Island company. The account has since been closed.
The revelation follows the disclosure by the International Monetary Fund in September that Mr Arafat had diverted more than £560 million of Palestinian Authority funds from 1995 to 2000.
The new report coincides with a BBC documentary, also to be screened tonight, which claims the Palestinian Authority is paying members of the al-Aqsa Martyrs' Brigades, an armed militia responsible for carrying out suicide attacks against Israelis, up to $50,000 (£29,000) a month.
The BBC will quote a former Palestinian cabinet minister claiming that the money was intended to wean the gunmen away from suicide bombings. But an al-Aqsa leader interviewed by the BBC said that despite the payments, the group had not declared a formal ceasefire and Mr Arafat had not asked it to stop the suicide bombings.
Details about the two potentially damaging reports emerged yesterday as the Palestinian prime minister, Ahmed Qureia, announced that Mr Arafat had agreed to divide responsibility for security between the interior ministry and the national security council. The deal clears the way for the formation of a new Palestinian government.
The CBS programme reports that $300 million of Palestinian money was channelled into a private account at the Lombard Odier Bank in Geneva. The account was closed in 2001, and the report says that it is unclear where the funds are now.
Some of the money was tax refunds from the Israeli government to the Palestinian Authority for duty levied on imports destined for the Palestinian-run areas - all of which must enter through Israeli ports.
Mr Arafat's "economics adviser" Mohammed Rashid asked Israel to pay fuel taxes to a secret account opened in 1994 at Bank Leumi in Tel Aviv, over which he and Mr Arafat had sole signing authority.
Investigators believe that some funds from this account were channelled into the Swiss account. A letter written by Mr Rashid and obtained by CBS states that the Swiss account would draw on revenue from Palestinian "taxes" and "customs" levies.
CBS claims that $300 million was in fact sent to the Swiss bank. With the help of an Israeli businessman, Mr Rashid apparently opened the account at Lombard Odier in Geneva in the name of a UK-registered company.
In the programme Mr Rashid tells Lesley Stahl, the 60 Minutes reporter: "I don't decide what we do with the money." Ms Stahl asks him "why Arafat did not bring the money back" to help benefit the Palestinian people.
Mr Rashid replies: "Why don't you ask him?" There is no suggestion that either Mr Arafat or Mr Rashid has personally benefited from Palestinian Authority funds.
The IMF issued a report in September which said Mr Arafat, in a five-year period between 1995 and 2000, diverted £560 million from the Palestinian Authority budget into the special bank account at Bank Leumi.
Mr Arafat's chaotic handling of Palestinian finances has long been condemned and he was forced to agree to more rigorous auditing after foreign donors threatened to withhold promised funds.
The IMF statement followed the first authoritative investigation of the Palestinian body's finances. Salam Fayad, the new finance minister and a former World Bank official, is working with a team of American accountants to unravel the finances.
Of the money sent to accounts controlled by Mr Arafat and Mr Rashid, the IMF said $700 million had been accounted for and was in investments held by the Authority.
Officials admitted that there was a gap of at least $200 million which they suggested may represent a decline in investment value, rather than a further diversion of money by Mr Arafat.
In the programme Mr Fayad sheds light on Mr Arafat's extensive system of patronage, claiming that the Palestinian leader hands out $20 million a month to his security forces in cash. However, Mr Fayad says: "There is corruption out there. There is impropriety, and that's what had to be fixed."
A senior Palestinian official refused to comment on the claims but said: "It is a shame that CBS focused on allegations of corruption rather than Israel's ongoing military occupation of Palestinian lands."
TRANSCRIPT: 60 MINUTES: ARAFAT'S BILLIONS
Transcript: 60 Minutes: Arafat's Billions
November 9, 2003
Yasser Arafat diverted nearly $1 billion in public funds to insure his political survival, but a lot more is unaccounted for.
Jim Prince and a team of American accountants - hired by Arafat's own finance ministry - are combing through Arafat's books. Given what they've already uncovered, Arafat may be rethinking the decision. Lesley Stahl reports.
"What is Mr. Arafat and the Palestinian Authority worth today?" asks accountant Jim Prince. "Who is controlling that money? Where is that money? How do we get it back?"
So far, Prince's team has determined that part of the Palestinian leader's wealth was in a secret portfolio worth close to $1 billion - with investments in companies like a Coca-Cola bottling plant in Ramallah, a Tunisian cell phone company and venture capital funds in the U.S. and the Cayman Islands.
Although the money for the portfolio came from public funds like Palestinian taxes, virtually none of it was used for the Palestinian people; it was all controlled by Arafat. And, Prince says, none of these dealings were made public.
"Our whole point is to bring it out of control of any one person," Prince says.
That's what happened with the portfolio money, which is now under the control of Salam Fayyad, a former World Bank official who Arafat was forced to appoint finance minister last year after crowds began protesting his corrupt regime.
According to Fayyad, "There is corruption out there. There is abuse. There is impropriety, and that's what had to be fixed."
Statements like that have earned Fayyad, a bookish technocrat who spent 20 years in the U.S., a reputation for courage - which was enhanced when he immediately posted the details of Arafat's secret portfolio on the Internet.
Fayyad's investigators are treading softly, well aware that their probe may become too embarrassing for Arafat.
Has he tried to stop them? "We run into obstacles in a number of places, particularly among the old PLO types," Prince says, adding one might draw their own conclusions as to whether his statement includes Arafat himself.
Martin Indyk, a top adviser on the Middle East in the Clinton administration and now head of the Saban Center, a Washington think-tank, says Arafat was always traveling the world, looking for handouts. Money, he says, is "essential" to Arafat's survival.
"Arafat for years would cry poor, saying, 'I can't pay the salaries, we're gonna have a disaster here, the Palestinian economy is going to collapse,'" says Indyk. "And we would all mouth those words: 'The Palestinian economy is going to collapse if we don't do something about this.' But at the same time, he's accumulating hundreds of millions of dollars."
The stockpile went well beyond the portfolio. Arafat accumulated another $1 billion with the help of -- of all people -- the Israelis. Under the Oslo Accords, it was agreed that Israel would collect sales taxes on goods purchased by Palestinians and transfer those funds to the Palestinian treasury. But instead, Indyk says, "that money is transferred to Yasser Arafat to, amongst other places, bank accounts which he maintains off-line in Israel."
Until three years ago, Israel put the tax revenues into Arafat's account at Bank Leumi in downtown Tel Aviv, no questions asked. But why?
According to Indyk, "The Israelis came to us and said, basically, 'Arafat's job is to clean up Gaza. It's going to be a difficult job. He needs walking-around money,' because the assumption was that he would use it to get control of all of these terrorists who'd been operating in these areas for decades."
Obviously, that hasn't happened. No one knows this better than Dennis Ross, who was Middle East negotiator for the first President Bush and President Clinton, and now heads the Washington Institute for Near East Policy. He says Arafat's "walking-around money" financed a vast patronage system.
"I used to see that people came in, you know, with their requests," Ross says. "'I need a phone. I need an operation. I need a job.' Arafat had money to dispense."
Like a Chicago ward boss, he still doles out oodles of money; Fayyad says he pays his security forces alone $20 million a month, all of it in cash.
All told, U.S. officials estimate Arafat's personal nest egg at between $1 billion and $3 billion.
Arafat may have $1 billion, but he sure isn't spending it to live well. He's holed up in his Ramallah compound, which the Israelis all but reduced to rubble a year-and-a-half ago. Arafat has always lived modestly, which you can't say about his wife, Suha. According to Israeli officials, she gets $100,000 a month from Arafat out of the Palestinian budget, and lives lavishly in Paris on this allowance.
He also uses the money to bolster his own standing. Both Israeli and U.S. sources say those recent outpourings of support at Arafat's compound were "rent-a-rallies," and that Arafat has spent millions to support terrorists and purchase weapons.
Did he steal from his own people?
"He defines himself as being the embodiment of the Palestinian people," Ross answers. "So what's good for him is good for them. Did they benefit? The answer is no. Did they lose? The answer is yes."
Palestinians certainly paid dearly for something else Fayyad uncovered: a system of monopolies in commodities -- like flour and cement -- that Arafat handed out to his cronies, who then turned around and fleeced the public.
Fayyad says it could accurately be seen as gouging his own people. "And especially in Gaza which is poorer, which is something that is totally unacceptable and immoral, actually."
Of all the monopolies, none was as lucrative or as corrupt as the General Petroleum Corporation, the one for gasoline. The corporation took the fuel it purchased from an Israeli company and watered it down with kerosene, not only defrauding the Palestinian drivers, but wrecking their car engines.
Fayyad says the Petroleum Corporation charged exorbitant prices, and Arafat got a hefty kickback. "To the president, I can tell you, if there was not money in the treasury, he went to the Petroleum Corporation."
When Fayyad dismantled the corporation, the man who had run it fled to California. Ever since, with the monopoly broken up, Palestinian drivers have paid 20 percent less for gas and 80 percent less for diesel fuel. Gas stations now advertise 100 percent pure products.
Fayyad became a hero, like the Robin Hood of the Palestinians. Millions of people were affected by this one move.
He says he was just doing his job. "A lot of this is about, you know, distinguishing between right and wrong. And that's a straightforward proposition."
Mohammed Rachid, Arafat's economic adviser who set up his tangled web of investments and monopolies, says he's cooperating with Fayyad's investigators. Rachid left the Palestinian territories about a year ago under a cloud. He asked CBS News not to reveal where we met him for his first television interview.
"I'm proud of what I did till now," Rachid says. "I think I showed a good performance."
He's referring to the investment portfolio he managed for Arafat. He also opened that account at the Leumi Bank in Tel Aviv. According to a recent report by the International Monetary Fund, that secret account was: "Under the control of President Arafat and his financial adviser Mohammed Rachid" -- and no one else.
"If we are having a secret account, we should have it in Israel? You think this is logical?" Rachid asks.
But that's what the Israelis, and the people working for Fayyad, say it was.
Rachid says that "transfers to Leumi Bank account never stayed. It was receiving the revenues and transferring the revenues to the Palestinian Authority's account in the Arab bank in Gaza."
He's saying the Leumi money was sent to the Palestinian Authority. But, in fact, much of it was sent to Switzerland, to the prestigious Lombard Odier Bank, for yet another secret investment account that held over $300 million. In a letter obtained by CBS News, Rachid tells the bank that the funds will come from Palestinian "taxes" and "customs revenues."
"It was all under the name of the Palestinian authorities," Rachid says. Doesn't he mean Arafat? "No, Palestinian Authorities, Palestinian Authorities."
Actually, it was under a code name, "Ledbury" -- not the Palestinian Authority -- and Minister Fayyad says that this pot of money, too, was available only to Arafat. The Swiss account was closed out in 2001. No one really knows where that money is today.
Does Rachid think that it should have gone, in some way, back to help the Palestinian people?
"Of course," he says. But, "I don't, I don't decide what we do with the money."
Those who want to know why Arafat didn't bring the money back, he says, should ask him. But Arafat didn't want to talk.
There's yet another stash of money Arafat might be asked about: the funds he collected when he was chairman of the PLO in exile. The PLO's former treasurer told us he saw Saddam Hussein hand Arafat a $50 million check for supporting him during the first Gulf War. And there were other large gifts from the KGB and the Saudis.
Ross says, "Arafat used to say to me, 'Where's my money? You need to go to the Saudis and get my money.' It was never the Palestinians' money."
Fayyad is trying to make sure it's the people's money, but many say his one-man reform effort is having only limited success. Arafat recently sent armed men to prevent Fayyad from replacing the head of the civil service, who runs Arafat's patronage apparatus. That has lead some to think Fayyad himself could be in danger.
"He cannot know, and we cannot know at what point he crosses the red line," says Indyk.
Other people who have dared to call for transparency of all these finances have been beaten up, shot, and silenced. Why is Fayyad surviving? Indyk says, "We should not take it for granted."
He has upset so many powerful people, and his offices have already been ransacked more than once. But Fayyad says he does not feel threatened.
"It's a dangerous neighborhood," he admits. "But you know this is about, you know, doing the right thing for the people."