Buitenen charges that the European Anti-Fraud Office OLAF ignored evidence that money given by the EU to the PA was diverted to buying weapons for use in terror attacks.
European Antifraud Office (OLAF) The Director-General
Mr. F-H. Brüner
30, Rue Joseph Il
Palestinian monies Final Case Report
Place and Date:
Breda (NL), 28 April 2008
Dear Mr. Brüner,
The European Union financially supports the Palestinian Authority, the Palestinian society as well as organisations that work in the territories controlled by the Palestinian Authority. This is performed through various mechanisms, either directly by the EU, or indirectly through the EU Member states individually, the World Bank or through United Nations organisations such as UNRWA. Although EU-support already started in the year 1994, more structural support started in the year 2000 and has since then increased to the present level of an estimated amount of almost 800 million per year (exact figures not known to me). The amount of this EU financial support, is unmatched by any other EU support in the world, if compared to the size of the Palestinian territories and population.
Following allegations in the past that some of the EU funding to the Palestinians may have been used for corruption or financing of terrorist activities, the European Parliament initiated a Working Group (WG) in March 2003 (active until March 2004), while OLAF carried out an investigation into these allegations in 2003 and 2004, with a Final Case Report and press release in March 2005.
The WG analysed the EU Direct Budgetary Assistance (DBA) to the Palestinian Authority (PA). The period under their examination was the end of 2000 to the end of 2002. Next to its task to assess the decisions of the European Commission with respect to the DBA, it was to establish whether the above mentioned allegations were founded.
With respect to the documents handed over by the Israeli Defence Forces (IDF) which claimed these would prove transfers of funds to terrorist activities, the WG report (endorsed by Wynn, on behalf of the Committee of Budgets, and Mrs. Theato, on behalf of the Budgetary Control Committee) states that the Commission responded as followed:
"many of these documents were already known and had been commented upon. Furthermore, many documents related to the period before 2000 when EU was not supporting the PA budget”. Moreover, the report also claims that the evidence was insufficient since "proven execution of payment" were missing (pp. 6). Also OLAF holds the view that it discards the documents provided by the IDF as evidence which would be acceptable in court since these were "based on, or largely rely on, intelligence reports” (pp. 7). The IDF, however, remained convinced that EU funds were used for terrorist purposes while the Minister of Finance of the PA at the time, Mr Fayyad (Minister of Finance since June 2002, Prime Minister since June 2007), denied these claims. While the other report of Mr. Laschet (on behalf of the Committee of Foreign Affairs) confirms this position of OLAF, it does state that "this is OLAF’s way of proceeding. However from a political point of view, the numerous documents with President Arafat’s signature and authorising the payment cannot be discarded" (Draft Conclusions by Laschet, pp. 13). Both reports finally conclude that the allegations of payments to terrorists cannot be proven.
This OLAF investigation covered the Palestinian Authority budget period of 2000 to 2003. On 17 March 2005, OLAF published an official press release stating:
”On the basis of the information currently available to OLAF, the investigation has found no conclusive evidence of support of armed attacks or unlawful activities financed by the European Commission’s contributions to the budget. However, the possibility of misuse of the Palestinian Authority’s budget and other resources, cannot be excluded, due to the fact that the internal and external audit capacity in the Palestinian Authority is still underdeveloped."
Moreover, the press release also contains the following passage which is not elaborated upon any further:
"However, there are consistent indications to support the hypothesis that it cannot be excluded that some of the assets of the PA may have been used by some individuals for other than the intended purposes”
On 12 January 2006 and 6 November 2006, I have made a request for access to the 2005 Final Case Report of OLAF on the alleged abuses of the spending of the subsidies received by the Palestinian Authority. You refused such access on 3 April 2006 and on 18 December 2006.
On 17 January 2007, the former chairman of the EP Committee on Budget Control, Fazakas MEP, also asked access to this OLAF report under the provisions of the framework agreement between the Commission and Parliament. You replied on 22 February 2007 in which you offered a confidential 10-page summary of the OLAF report. This summary did not meet the needs of the Committee on Budgetary Control as it did not reveal any additional substantial information in comparison to the press release of 17 April 2005, which OLAF had published on its report.
On 25 April 2007, the newly appointed chairman of the EP Committee on Budget Control, Bösch MEP, reiterated the request for access to the OLAF Final Case Report on the Palestinian moneys. He even suggested access to be granted just to one member of the Budget Control Committee, namely me. On 25 May 2007, you refused to grant access, even under the confidentiality clauses that are applicable for such circumstances.
On 17 July 2007, OLAF gave a presentation behind closed doors, in the Budget Control Committee, on the results of the investigations, which were covered in their report of March 2005. Again no new information was given to the MEP’s.
Finally, on my parliamentary question of 2nd October 2007, requesting further clarifications on the conclusions of the 2005 OLAF investigation as well as the follow-up that was given, the Commission, on proposal of OLAF, replied on 29th November 2007 that the OLAF conclusions were confidential and that disclosing them would undermine public security, military matters, international relations and commercial interests.
This leaves me, as Member of the parliamentary Committee on Budget Control, with the question what indications were found by OLAF towards abuses of the Palestinian moneys and whether the conclusions, as presented in the OLAF press release, actually cover the contents of the findings in the Final Case Report. As OLAF systematically refused to provide me and the EP Committee on Budget Control with any substantial information on this matter, l have tried to obtain the information that OLAF possesses, elsewhere.
For the OLAF investigation, the Israeli Authorities provided extensive information to OLAF, including documentation from the Palestinian Authority and Fatah that they had confiscated during the operation 'Defensive Shield’ in 2002, when they entered the Ramallah Headquarters of the late PA President Arafat. According to the Israelis, this information contained clear evidence of PA support to terrorist activities. When I asked some Israeli Authorities to provide me with the same information, they initially promised me to provide the material, but finally I did not get it. Informally, one of the Israeli officials told me that the Israelis did not want to undermine the position of Fatah and President Abbas in their power struggle with Hamas. Revealing incriminating material to a Member of the European Parliament that would prove corruption and the financial support of terrorists by Fatah and/or the Palestinian Authority would have an undermining effect and was to be avoided by the Israeli authorities.
Meanwhile however, I have managed to obtain parts of this material through informal channels. After studying the material, I conclude that its contents confirms what the Israeli authorities have stated all along. The documents show clear evidence that the High representatives within the Palestinian Authority, including President Arafat himself, at least until April 2002, which is almost two years after the start of massive and structural EU financial support to the PA, were providing financial support to a significant number of known terrorists as well as supporting the dealing and production of light and heavy arms.
Copies of letters and lists showing the names of these terrorists and proving the involvement of the highest political authorities within the PA are now in my possession and must also be in the possession of OLAF. The hand-written notes and signatures of Arafat, asking the PA Treasury department to execute payments to many lists with between 5 and 20 named terrorists each, of S350, S600 and $800 per person, leave no doubt of the involvement of the official Palestinian Authority Treasury.
Also documents with altogether 150 Fatah activists were found on which it is shown that these Fatah activists are integrated on the payroll of the official Palestinian Authority security forces. Yet another example are the financial reports that were found with the costs of a production plant for heavy artillery rockets and mortars (costs $80,000), as well as the calculation of financial needs for the buying of rockets, bombs and rifle ammunition. This is the same Palestinian Authority Treasury that received, at the same time (in 2001/2002) millions of Euros from the European Union as Direct Budgetary Assistance to the same budget as from which these abusive payments were made.
In sharp contradiction with these findings is the official OLAF press release of 17 2005, concerning the closure of the OLAF investigation into the allegations of abuses by the Palestinian Authority over the period 2000-2003. In this press release, OLAF concludes the following (I repeat):
”On the basis of the information currently available to OLAF, the investigation has found no conclusive evidence of support of armed attacks or unlawful activities financed by the European Commission's contributions to the budget. However, the possibility of misuse of the Palestinian Authority'5 budget and other resources, cannot be excluded, due to the fact that the interna/ and external audit capacity in the Palestinian Authority is stil/ underdeveloped."
On 24 April 2008, I met with your chief investigator in charge of Palestinian moneys, Vlogaert, in his office at OLAF, who confirmed that you gave clearance for this meeting. I informed Mr. Vlogaert that I could not match the information I possess on the Palestinian Authority support to terrorist activities with the text of the official OLAF press release on this matter. After I showed to Mr. Vlogaert some of the documents that I obtained he confirmed to me that OLAF had received similar information and that they had taken it into account in their investigation. The conclusions of the OLAF final case report would confirm the following:
- It was established that in the years 2001 and 2002, indeed payments from the official Palestinian Authority budget have effectively been made by the Palestinian Authority Treasury to terrorists and terrorist activities.
- At the same time, the European Union contributed substantially to this same official Palestinian Authority Budget.
- It is not realistic to make a distinction between parts of the PA budget that would originate from EU moneys and parts that would not originate from EU sources. The PA budget, from which these irregular payments originated, was one budget of which the EU moneys were one of the substantial sources.
During the meeting, I agreed to submit to OLAF a copy of all the material that I have obtained concerning irregularities with the Palestinian budget. OLAF would then check whether they are already in possession of this material or whether there is new information included. I would get feedback on this from OLAF. Please find this material attached to this letter.
Therefore, I have the following questions:
1. Can you confirm the above observations made concerning the OLAF Final Case Report?
2. Which members of the European Parliament Working Group received access to the documents as handed over by the IDF to OLAF?
3. Why did OLAF not provide this information to the European Parliament, but instead chose to stick to its official declaration made in the press release of 17th March 2005, as quoted above?
4. As the parliamentary Working Group concluded in its report of March 2004 that there was no proof of execution of payments, did you inform the parliament that OLAF indeed found proof of payment on request by President Arafat, by the PA Treasury to terrorists?
5. What information did OLAF transmit to the European Commission on its conclusions of the Final case report? Did the Commission get a copy of the complete Final Case Report? Did either the Israeli authorities or the Palestinian Authorities receive a copy of the Final Case Report? Did any other organization or individual receive a copy of the Final Case Report or their conclusions?
6. Can OLAF confirm to me in detail whether the information attached to this letter was
already in possession of OLAF in the course of its investigation that lead to the report on which the 17 March press release was issued?
Paul van Buitenen
Copy: Vice-President of the European Commission, in charge of the fight against fraud, Mr. Siim Kallas
Copies of captured IDF documents from the Palestinian Authority, with translations and explanations by the Israeli Defence Forces; 141 pages.
Much of Israel's documentation and findings can be seen here, including documents with Arafat's signature authorizing payments to terrorists.
It appears that the EU stonewalled the investigation into misuse of funds by the PA.
See also this 2005 analysis from EU Funding:
If the aid was effective in alleviating poverty, the World Bank may not have been moved to comment "55% of those who receive emergency assistance are not needy.... 32% of the needy do not receive emergency assistance." [Related story]
If the aid has been effective, then Muhammed Dahlan, Abu Mazen's close ally, would hardly have stated in August 2004 that all of the funds which foreign countries had donated to the Palestinian Authority, a total of $5bn "have gone down the drain, and we don't know to where." [Related story]
To put it bluntly, aid has been diverted and the EC cannot admit it.
(h/t MP, CHA)