Soccer Dad

Great moments in auditing

As blogger, Elder of Ziyon and Roger L Simon noted the European Union is eager to reward the PA with even more funds for ...
As AFP reports:

"As the biggest donor to the Palestinians, the EU is determined to pull its weight, in facing up to the new opportunities and challenges post-disengagement," Ferrero-Waldner said.

"Europe is ready to be a major partner for peace, as long as real efforts are made by all parties to create the climate for success," she said, noting that Brussels had in the past often reacted to crises rather than plan ahead.

"We want to do more to improve legitimacy, accountability and also security."

She said she envisaged no problems with the money being frittered away through corruption, and that the EU was, in any case, closely watching what happened to its money.

"All the investigations carried out by all of us, have indeed not shown any proof that the money that has been spent from our side has been misused," she said.

To paraphrase "...investigations carried out by all of us, have indeed not shown any proof ..." What exactly did a recent investigation say? Here's a short summary:

The European Anti-Fraud Office (OLAF) has closed its investigation into the European Commission’s Direct Assistance to the Palestinian Authority’s budget. 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.

In other words "Absence of proof is no proof of absence." I have no idea where the EU's auditors were looking, but I'm sure they weren't looking too hard. (Yes I've commented on the subject here, here and here.)

Of course even the EU couldn't find evidence of the PA's misuse of their funds, their funds enabled the PA to spend other funds to terror groups. For what it's worth Israel did some actual investigative work. Or more precisedly found a load of documents showing how the PA's money flowed to terror groups.

And if this example of throwing good money after bad sounds familiar, well, it should, as Michael Kelly wrote in "Investing in Yasser Arafat":

THERE WAS A WONDERFUL MOMENT in the annals of diplomacy this week. Yasser Arafat, the president of the Palestinian Authority, had come to town to attend an international conference convened by the White House to raise a new pile of money to give to President Arafat. And the conference had gone splendidly.

Everyone had behaved perfectly fine; no one had so much as mentioned the inconvenient London Sunday Times story the day before, which said that the Palestinian Authority had swiped $20 million in British aid intended to build housing for the poor of Gaza, using the money instead to build luxury flats for Arafat's military and bureaucratic elite. After a day of pleasantries, representatives of 43 nations had pledged $3 billion in new aid to the Palestinian Authority, including an extra $400 million from the U.S. president. Arafat saw that it was good. "I am satisfied with the reality of this conference," he pronounced.

Oh right that didn't go to terrorists. It went to luxury apartments for well connected party members.

BTW I love the way the article ends:

The commission's plan is an immediate response to an assessment by the international envoy to the region, James Wolfensohn, that the Palestinian territories would need around three billion dollars a year to survive.

According to a study by the Rand Corporation, a future Palestinian state would need capital investment of 3.3 billion dollars annually over the first decade of its existence to achieve solid economic growth.

What? How about encouraging industry and commerce? How much foreign aid have the Palestinians received until now? Has that helped achieve economic growth? Why not?

Until the Palestinians prefer butter to guns there will be no change. The money will find its way to terrorists no matter how much the EU chooses to avert its eyes. My guess is that $3 billion a year in aid will provide enough of a cushion for the PA to avoid making the decisions it has to make to create a viable state.

Technorati Tag: Israel, European Union, Palestinian Authority.

Crossposted on Israpundit and Soccer Dad.

Posted by SoccerDad at October 9, 2005 6:59 AM