International funding to Palestinians in peril Fears of corruption, killings of land sellers make donors hesitate

WASHINGTON — WASHINGTON -- The delivery of international aid to Palestinians is under new threat because of the killing of people who sold land to Jews in the West Bank and because of charges of mismanagement and possible corruption in the Palestinian leadership.

Two powerful congressional Republicans, Sen. Jesse Helms of North Carolina and Rep. Benjamin A. Gilman of New York, are holding up $1.25 million in U.S. aid to the Palestinian government because of the slayings.


International donors who met here yesterday expressed concern about an internal Palestinian audit that reported $329 million in uncollected revenue and unnecessary spending -- an amount equal to nearly half of the 1997 budget.

The possible cuts in aid come at a precarious moment for the Palestinians, with the violence-prone West Bank and Gaza more economically strapped than at any time since 1992 and the peace process with Israel stalled.


"Because of the [political] stalemate, it is even more important to have support on the economic side," said Mona Juul, a Norwegian diplomat who chaired the international donors' meeting yesterday.

Otherwise, she said, "the suffering of the Palestinian people will be even more severe."

According to U.S. figures, the per-capita income of Palestinians has declined 40 percent since 1992, and the jobless rate is 29 percent.

Maintaining international support for Palestinians has been a problem since the Palestinian leader, Yasser Arafat, made peace with Israel in 1993.

In Washington this week, Palestinian Planning Minister Nabil Shaath seemed to recognize that the leadership itself had contributed to the problem.

"Sometimes one shoots oneself in the foot," Shaath said in a televised interview that was aimed at the Arab-American community.

Foreign aid to the developing world is unpopular in general on Capitol Hill and is usually approved only because it is packaged with aid to Israel, which enjoys overwhelming support and is the largest recipient of U.S. aid.

The pro-Israel lobby in the past has been an enthusiastic supporter of aid to the Palestinians as a way to shore up the peace process.


But in a recent switch, the American-Israel Public Affairs Committee, the most influential pro-Israel organization, has refrained from trying to rescue Palestinian aid on Capitol Hill.

Gilman, the chairman of the House International Relations Committee, has made no secret of his skepticism about Arafat's commitment to peace.

Gilman already has held up $10 million of the annual $75 million in U.S. aid to the Palestinians.

In a May 22 letter to Secretary of State Madeleine K. Albright, also signed by Helms, Gilman declared that further support for the Palestinian authority, the governing entity in lands ceded by Israel to the Palestinians, would be held up until the Clinton administration assured Congress that the Palestinian authority was "in no way involved" in the killings possibly linked to land sales.

Three Arabs have been found slain since Palestinian Justice Minister Freih Abu Medeen was quoted May 4 as warning that Palestinians who sold property to Jews faced execution.

Congressional aides say support for Palestinians on Capitol Hill has been further weakened by the detention of a respected Palestinian journalist, Daoud Kuttab.


The immediate impact of Gilman's move is to delay $1.25 million that the administration wants to send now to the Palestinian authority. The aid to projects not directly under the authority's control has not been touched.

"People who didn't support the process in the first place have annually latched on to new reasons to oppose it," said Jim Zogby, president of the Arab-American Institute in Washington, referring to Gilman and other critics of the Palestinians.

"I think they will make an effort this year and will probably be successful" in cutting aid, he said.

Since large-scale aid to the Palestinians began in late 1993, the World Bank and the U.S. government have set up systems to monitor how the money is spent.

But there is no international or U.S. oversight of tax revenue collected by the Palestinian authority or of money that is given directly to Palestinians, such as from Japan.

Meeting the international donors yesterday, Shaath sought to reassure them that the audit report did not point to actual corruption, but only raised questions about how money could be better raised and managed.


At issue, he said later, were "policy issues about potential savings." Shaath's own ministry has been criticized for overspending on cars and entertainment, including $50,000 for meals at a Jerusalem hotel.

Shaath said the amount covers all the entertainment expenses of his agency.

Juul said "all donors made clear" that there needs to be a follow-up inquiry by the Palestinians and quick action to correct any embezzlement that might be uncovered.

Pub Date: 6/06/97