Select Committee on International Development Minutes of Evidence

Examination of Witnesses (Questions 111-119)

11 NOVEMBER 2003


  Q111  Chairman: Dr Samuels, I understand you would like to make some introductory remarks. You are very welcome to do that, provided they are no more than three or four minutes.

  Dr Samuels: Thank you, Mr Chairman. First, I would like to express my sympathy and compliments to the previous two speakers. We feel their pain but their representation remains, I believe, in harmony until it becomes politicised. Our concern here is with the political and with the economic, and the Simon Wiesenthal Centre has supported Ms Ilka Schro­der's campaign in the European Parliament for transparency. If you will recall, Mr Chairman, I wrote to you just before the first of these sessions to say that we were so hopeful that, despite the fact that campaigns for transparency were blocked in the European Parliament, this initiative would review all of the issues that were behind the scenes in terms of misappropriation charges of EU funding—the British taxpayers' contribution to that EU funding—and moneys that may have been creamed off for terrorism, for incitement for hate and for personal enrichment. When we saw your agenda and the agenda items we were very dismayed—checkpoints, walls of separation, settlement, etc. Indeed, the first session that we attended, and this one, made us wonder whether you were really interested in the question of irregularities.

  Q112  Chairman: Dr Samuels, we were interested in what you had to say, otherwise you would not be sitting there giving evidence. If all you are going to do is berate the Committee for the evidence we have taken or the evidence we have not taken, it does not seem to be a very good way to start winning friends on this Committee.

  Dr Samuels: I would like to redress the balance of this agenda, with the 8% of the time of these sessions, by pointing out that we believe—and we have documents to prove—that moneys provided by the  United Kingdom through the EU were misappropriated by the Palestinian Authority. We are not suggesting that the humanitarian needs of the Palestinian people do not deserve to be covered by all types of programmes, not necessarily through the PA or through UNRWA, (some of the direct award programmes are indeed excellent) but we are saying there has to be some kind of accountability. That accountability requires change. The issues that I would like to raise or have raised in the session are the projects funded by the EU, such as Palestine Television, which is broadcasting hate, which is broadcasting anti-Semitism and that is blown back through satellite and through the internet to Western Europe where it is increasingly exacerbating the relationships between the Muslim and the Jewish community (particularly in France where I work); music videos for teenagers, for example, replete with hate, showing the Jews as cold-blooded murderers; EU-funded school texts and school teachers who promote hate and the denial of Israel and denial of the Holocaust; EU-funded websites—and I can point to them in some of the documents that I would like to make as a submission to this Committee[2]I think Ms Ilka Schro­der, as an MEP, is better endowed than me to tell you about that campaign.

  Q113  Chairman: I have some questions and then if, at the end, you feel that there is any point that my questions have not covered we will deal with them. During our recent visit we met a member of Knesset who stressed the importance of a future Palestinian state within the occupied territories being a stable and prosperous neighbour for Israel. I just wondered whether that was a view that you shared, and how do you see development assistance working to ensure that a future Palestine is a good neighbour rather than a failing state?

  Dr Samuels: First, in the sessions you have had, I think all of the speakers—whether they were from the European Commission or governmental or NGOs—all agreed that the need is truly great. I think it was the DFID representative who said that an unprecedented provision of $315 per capita of the Palestinian population had not stopped poverty tripling. The question is, is there not a contradiction there? Our concern is: where is the money going which is being creamed off? In answer to your question I believe that if the humanitarian aid were funnelled and monitored (and possibly it would be the role of this Committee to demand that the EU sets up monitoring agencies or instruments against the misuse of these funds and these projects) then I believe that certainly this would help to ensure a stable Palestinian economy. In the mean time, the incitement that we see on, as I have mentioned, television and, I have mentioned, the schools—projects which are funded by the EU—do not help in settling the relationship to have an independent Palestinian state alongside Israel; the opposite, because any intergovernmental peace agreement has to be underpinned by popular will. There does not seem to be a popular will at this point, and I think that the last three years of the incitement that we have seen has poisoned the well of Palestinian thinking.

  Q114  Chairman: During our visit we heard from the Israeli Ministry of Foreign Affairs that they had been impressed with the reforms in the Palestinian Authority's Ministry of Finance. Indeed, I think everyone we met seemed to be pretty impressed by the new Palestinian Authority Minister of Finance. Certainly he took us through what he is trying to do to ensure accountability and transparency. Are your concerns on-going concerns, or are they primarily historic concerns about what has happened before? I would just like to get some perspective on that. Do you feel that the PA is seeking to address the issue of accountability and transparency? What is your view?

  Dr Samuels: I think you have to follow the paper trail. The compartmentalisation and double reporting that we have documented shows that the minister to which you are referring certainly has attempted and, with some success, managed to create some type of accounting system, but in a very narrow area. That is why Israel has now paid and is paying the back taxes that were due to the Palestinian Authority because the monitoring of those taxes is very different from, for example, that moneys that are coming from the EU. The 10 million euros per month which is coming through the EU is, in fact, creamed off at various levels. We have documents which show that only 60% of the figure mentioned for salaries are paid; 40% is creamed off. The 60% that is paid is paid at an advantageous exchange rate; as the salaries are paid in shekels they are exchanged at 3.7 to the dollar whereas the true figure is 4.45. That provides a 20% edge for the PA. The question is, where is that 20% going? In addition, 1.5% of the salaries paid, in many cases, is taken off for Fatah membership. In fact, only two nights ago, the BBC—which is certainly not uncritical of Israel—showed in The Correspondent programme on BBC2 the relationship between Fatah and the Al-Aqsa Martyrs Brigade, which is on the EU's list of terrorist organisations for its claims of suicide bombing. If you follow the paper trail I think it is certainly an on-going issue, it is not historical, and it is extremely disconcerting.

  Q115  Chairman: I do not want to put words into your mouth, but is what you are saying that the Minister of Finance in the Palestinian Authority is only controlling part of the budget that is going to the PA or that he is dealing with different income streams in a different way?

  Dr Samuels: I think it comes to the same thing. He is dealing with different income streams of those that have been allotted to him. There was a poll—it may not have been a scientific one—and some 70% of the West Bank at one point over a year ago claimed that the PA was corrupt. This gentleman was brought in—

  Q116  Chairman: What I am trying to understand from all your evidence is this: is what you are saying that the Palestinian Minister of Finance is being accountable and transparent with some sums of money it receives—?

  Dr Samuels: Yes.

  Q117  Chairman: —but just not the money it gets from the European Union?

  Dr Samuels: Not just "not just the money from the European Union" but some of the moneys—certainly any Israeli back taxes and some of the moneys, for example, through USAID, which is not going directly to the PA but is going to earmarked projects—that go through his control. Therefore, he is able to provide transparency. The problem is the other funds, the lion's share of the funds. I think it would be the mandate of this Committee to ask the question and to press the European Union, the European Parliament, to make that necessary investigation.

  Q118  Mr Battle: Could I ask, perhaps from a different angle? Maybe I would be tempted to question the money from this point of view: in any other situation where there is an occupation, for whatever reason, the occupying power pays the cost of that occupation, perhaps, in terms of health care, education, services and infrastructure. Would you support total withdrawal of aid and Israel to pay the bill for occupation?

  Dr Samuels: At one point, possibly, before the violence and the Intifada, while there were negotiations towards settlement (which were rejected by the Palestinian side) that might have been a reality. Today, as every step is beset by conflict I do not think that is a reality. Nobody is suggesting that the structures that are there should be dissolved. I am not suggesting that the Palestinian population do not require it, though they are possibly the most subsidised per capita of any population in the third world; what I am suggesting is that the moneys which ostensibly are sent to the Palestinian population arrive to their target, which is the needy people, and not $100,000 a month to the First Lady, Suha Arafat and her daughter in Paris, or $50,000, as we have been shown in the BBC programme, to line the coffers of Mr Arafat. Something is wrong where there is a system based upon crime and corruption.

  Q119  Chairman: Given that part of the complaint appears to be EU development money, what have colleagues been doing in the European Parliament to question Poul Nielson and Chris Patten about this?

  Ms Schro­der: The question starts a bit earlier because as we probably all know it is the duty of Israel to provide the Palestinian Authority with some custom duties that it collects on behalf of the Palestinian Authority. Israel stopped to do that late 2000 after the Intifada began and gave reasons for this breaking of an international agreement. Israel said it was afraid that this money would be used for anti-Semitic terror activities. What happened was the EU was already at the time the provider of a lot of money that went to the PA and did not check whether its own money would be used properly but jumped into the financial gap and provided exactly the money that Israel stopped to pay to the Palestinians. To put it very clearly, Israel was afraid of being attacked from the Palestinian side, stopped to pay the money that it was obliged to pay to the PA and then the EU jumped into this gap. From June 2000 onwards until the beginning of 2003 it paid 10 million euro monthly. In 2002 the IDF presented a vast amount of material that it found in the territories. Please do not tell me it is a one-sided statement. It might be or it might not be—we need to check the figures because there seems to be only one institution that seems to have the interests of checking what happens to the PA money. But the argument is not refuted by simply quoting the source. I do not know if you have seen some statements, it sounds like some of you have not, but it provided exactly the proof that they have been created off-budget, that can be used for any action because you do not need to legitimise it—for example, with the current exchange rate, with an exaggerated amount of employees that supposedly were paid—and you even had documents in here that proved that PA officials that were paid by the PA to do a normal administrative job were part of terrorist organisations, and those are not singular cases. It happens often. So if we talk about suffering and victims here it is very sad to say that the bullets which shot many of those people are financed by the EU.

2   Not printed. Copy placed in the Library. Back

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