The paper discusses methods that the US uses to ensure that money that is earmarked for the PA or Palestinian Arabs are not diverted to terrorist organizations. For direct aid, they have made progress compared to the past, although it is far from perfect.
The section on UNRWA aid is most revealing.
The US has given over $4 billion to UNRWA since its inception, and the amount has been increasing. Of course, the US is UNRWA's biggest donor, by far.
UNRWA tries to assure the US that funds are not going to terrorists, but there is a significant loophole. Here's the relevant section:
The primary concern raised by some Members of Congress is that U.S. contributions to UNRWA might be used to support terrorists. Section 301(c) of the 1961 Foreign Assistance Act (P.L. 87- 195), as amended, says that “No contributions by the United States shall be made to [UNRWA] except on the condition that [UNRWA] take[s] all possible measures to assure that no part of the United States contribution shall be used to furnish assistance to any refugee who is receiving military training as a member of the so-called Palestine Liberation Army or any other guerrilla type organization or who has engaged in any act of terrorism.”
The May 2009 GAO report said that, since a previous GAO report in 2003, UNRWA and the State Department had strengthened their policies and procedures to conform with Section 301(c) legal requirements, but that “weaknesses remain.”33 Neither report found UNRWA to be in noncompliance with Section 301(c), and to date, no arm of the U.S. government has made such a finding. The following are some points from the 2009 report and subsequent developments related to it:
- ...UNRWA said that it screens its staff and contractors every six months and that it screened all 4.6 million Palestinian refugees and microfinance clients in December 2008 (and intends to make this a routine procedure) for terrorist ties to Al-Qaida and the Taliban, pursuant to a list established pursuant to U.N. Security Council Resolution 1267. UNRWA said that it is unable to screen those of its beneficiaries who are displaced persons from the 1967 war because it does not collect information on those persons.37
This means that while UNRWA will happily check to ensure that none of its contractors or other beneficiaries of aid are members of Al Qaeda or the Taliban, they refuse to check for membership in Hamas, Islamic Jihad, Fatah's Al Aqsa Martyr's Brigades, the PFLP, the DFLP or any of other known terrorist groups. The ones that are actually based in areas that UNRWA works!
- UNRWA’s UN 1267 terrorist screening list does not include Hamas, Hezbollah, or most other militant groups that operate in UNRWA’s surroundings. UNRWA is unwilling to screen its contractors and funding recipients against a list supplied by only one U.N. member state. Nevertheless, UNRWA officials did say that if notified by U.S. officials of potential matches, they would “use the information as a trigger to conduct their own investigation,” which led to the report’s recommendation that the State Department consider screening UNRWA contractors. In response, State says that it now screens quarterly against the Excluded Parties Lists System (EPLS, which is a list of parties excluded throughout the U.S. government from receiving federal contracts)....
The report touches on other problems with UNRWA as well, and dismisses them:
In Gaza, most observers acknowledge that the role of UNRWA in providing basic services (i.e., food, health care, education) takes much of the governing burden off Hamas. As a result, some complain that this amounts to UNRWA’s enabling of Hamas and is an argument militating for its activities to be discontinued or scaled back. However, many others, U.S. and Israeli officials included, believe that UNRWA plays a valuable role by providing stability and serving as the eyes and ears of the international community in Gaza. They generally prefer UNRWA to the uncertain alternative that might emerge if UNRWA were removed from the picture.29The footnote points to a document justifying the US foreign policy budget, with these words:
U.S. government support for UNRWA directly contributes to the U.S. strategic interest of meeting the humanitarian needs of Palestinians, while promoting their self sufficiency. UNRWA plays a stabilizing role in the Middle East through its assistance programs, serving as an important counterweight to extremist elements.Nowhere does the footnote say that UNRWA is serving any constructive role as the "eyes and ears of the international community in Gaza" - and that is a dubious assumption, since practically all UNRWA employees are Palestinian Arab. Also, nowhere does it say that Israeli officials agree.
Elsewhere the budget documentsays (sorry, it doesn't allow copy/pasting, but it is on page 88) that if the UNRWA wouldn't provide the services, then extremist groups would, especially in Gaza and Lebanon. But what this also means is that Hamas would have to divert some of its budget that now goes towards weapons into basic services for its people!
From all appearances, while Congress seems to be trying mightily to oversee US funds to UNRWA, it is not enough. UNRWA's pushback on not vetting for Hamas or Islamic Jihad terrorists is unacceptable, especially to the major donor country of that agency. And no real evidence has been provided that UNRWA is in fact acting as a moderating factor against terrorist influence in Gaza or elsewhere.