Block The Money, Stop The Killing

Monday, December 13th, 2004 @ 7:50PM

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‘The biggest problem for the Palestinians now is not the money that’s gone,” says Rachel Ehrenfeld, “but how the billions in new aid that will be given to them is handled.” Petite and stylish, Ehrenfeld cuts an unlikely figure for someone dedicated to exposing the financial corruption that feeds international terror. But that is both her occupation and passion. The author, most recently, of Funding Evil; How Terrorism is Financed and How to Stop It, Ehrenfeld is currently embroiled in a legal battle with Saudi billionaire Khalid Salm A. bin Mahfouz. Mahfouz sued Ehrenfeld in Britain for libel, claiming he “never knowingly funded terrorism.” Last week he was awarded a judgment by default against her and an injunction on her book in the UK. Ehrenfeld is counter-suing in the US, on the grounds that since her book is well-documented, it is not libelous under American law, and therefore Mahfouz couldn’t win such a suit in American courts.

According to Mahfouz’s Web site, he has won many judgments by default ヨ even against big American Publications that preferred to apologize and pay fines. Ehrenfeld seems to be the first person to have challenged him in a US court. An Israeli who has been living in the US for 20 years, Ehrenfeld is the director of the New York-based American Center for Democracy ( and the Center for the Study of Corruption and the Rule of Law. She in Israel a few days ago to attend the Jerusalem Summit, an annual conference dedicated to what it calls “peace through truth.” In an hour-long interview, she painted a bleak picture of the infiltration of terrorist networks into Western democracies, and detailed her formula for thwarting them. Most of it is gone. Suha probably knows where some of it is. But Arafat had others handle the money for him, and each probably knows only what Arafat allowed him to know. In any case, Arafat was always really protective of his “loot.” He considered all the money that was donated to the PA his own private property. And he was never generous with it, even when it came to the funding of homicide bombers that he encouraged. When Marwan Barghouti or somebody else told him, “Listen, here is a terrorist; he needs $2,000 to blow himself up” ヨ to pay for the suicide belt or to manufacture bombs ヨ Arafat approved the payment for that. But later on, when Barghouti returned to Arafat asking for $2,000 for the terrorist’s widow, he approved only $600.

This specific information was made available after the IDF raided several Palestinian institutions and confiscated many documents, a large number of which were translated from the original Arabic. This information is available to the public on All the information I use ヨ though not necessarily easily available ヨ is from public sources. I don’t use sources that cannot be verified. I study such information from all over, and always try to connect the dots.

In 1993, after the Oslo handshake on the White House lawn, I wrote an article in the Wall Street Journal about Arafat’s fortune, and how he had amassed more than $10 billion from a combination of donations and illegal activities, yet, at the same time he was going around the world asking for $12 billion for the PA. In my article, I suggested he should give the money back to the Palestinian people. But he collected, invested and kept the money mostly for himself, and used it as a tool to stay in power. Despite knowing this, the donor community, led by the Clinton administration, awarded him and the PA more than $5 billion since then ヨ at least $2 billion of which came from the European Union.

When one looks at the Palestinian territories, one wonders where all that money went. There’s nothing to show for it. The economy and the infrastructure is a shambles. Clearly, the money never reached the Palestinian people. They mostly didn’t care. As for the Europeans, they knew where most of the money was going ヨ into Arafat’s pocket, and after he began the intifada in September 2000, to fund his terror attacks against Israel. Last fall I testified before the European Parliament about the PA’s corruption and its connection to terrorism. The animosity during the hearing was incredible. I’ve never encountered such naked hatred before. When I pointed out that reform of the Palestinian Authority also means that its own maps should include the State of Israel, Hannes Swoboda, a member of parliament for the Social Democratic Party of Austria, seemed to want to deny Israel’s existence, too. He yelled, “Indeed, it should be Palestine.” Supported by others, he also insisted that “there is no proof that any terrorist acts they committed were ordered by the PA ヨ they may have been acting alone. Only if the DNA of the suicide bombers matches the DNA of those who received euros, will we accept it as evidence.” He invested a lot in real estate and industry all over the world. He owned duty-free stores and airlines, for example, which facilitated smuggling.

The biggest problem for the Palestinians now is not the money that’s gone, but the money that remained and the billions in new aid that will be given to them and how this new money will be handled. Many among the PA leadership are running monopolies and the question is whether and how those monopolies will be broken. Unless there is more opportunity for the Palestinian people to run their own businesses and there is accountability and transparency in the PA, the post-Arafat era will create even worse conditions for the Palestinian people, will assist Hamas and Islamic Jihad and will destroy any hope for a viable Palestinian state. The PA needs a serious “decorruption” program. Yes, if the donors demand strict accountability and monitor the transparency of the Palestinian governing process very closely. I doubt that the Europeans will take the lead on this. However, since the US is interested in a secure, functioning, democratic Palestinian state, it is the US that should be monitoring the implementation of reforms and the economic development of the PA ヨ not Europe.

The Europeans continue to allow fund-raising for Hamas and Hizbullah, and other illegal activities to go on, ignoring the international conventions they signed, which designated Hamas and Hizbullah as terrorist organizations. For example, even America’s best ally in the war in Iraq ヨ England ヨ is openly allowing funds to be raised and distributed on behalf of Hamas. In addition, Britain houses the biggest distribution center for virulent anti-American and anti-Israeli Publications edited in Syria. They also allow Interpal, the largest Hamas front organization, to collect money from all over the world for Hamas. Interpal transferred at least $20 million to the Palestinian territories last year. Yes and no. Thanks to Arafat ヨ with the help of Saudi money and encouragement ヨ the Palestinians managed to position themselves at the center of the “clash of civilizations” between radical Islam and the West. Don’t forget that in Osama bin Laden’s first video tape after the 9/11 attacks, he said that his goal was to destroy the American economy and to kill Americans and Jews; he didn’t mention the Palestinians. It was only on his second video tape, weeks later, that he referred to the Palestinians. Unfortunately, most of the world doesn’t want to acknowledge that there is no distinction between the terrorists blowing themselves up in Iraq and those blowing themselves up in Israel. The Palestinians succeeded in forcing this false distinction on the world ヨ even on America ヨ and that is very, very disturbing.

Hopefully, now that President Bush begins his second term, with Condoleezza Rice as his secretary of state, the US will ensure that this false distinction is no longer acceptable or tolerated. Yes, they are there. But none has the wide popularity that kept Arafat in power. We can only hope that the donors will refrain from giving control over the PA’s money to one person ヨ whether it’s Abu Mazen or someone else. Currently
, Hamas controls social services and education in the Palestinian territories, but if the money ends up in responsible hands, Hamas is more likely to lose that control. There is an internal struggle, and the PA does want to be victorious over Hamas. I’m not sure about that. Since many of the PA leaders spent a lot of time in the West, some of them might be interested in having the PA resemble a more moderate Arab society with less terrorism, if only to bide their time before attacking Israel again in the future. No, since the American administration was interested in having it publicized, because it had to do with Iraq. Saudi Arabia very proudly takes credit for having spent at least $80 billion in the last decade on building mosques and Islamic/Wahabist centers all over the world, including the US. They also renovate existing mosques and bring in imams from Saudi Arabia to spread Wahabism. They fund many Islamic centers in colleges and universities in the US, and give big grants to professors and students, furthering their influence.

For many years, Saudi money in the US provided an equal opportunity for corrupting lobbyists on behalf of Saudi Arabia among Democrats and Republicans alike. The Saudis try to pay off anybody who is in power, and anybody who they think is going to be in power. Not at all. We know that most Arab countries and their European allies supported Kerry and not Bush, and for a reason. Bush realizes that fundamentalist Islam can be very dangerous, and he declared a preemptive war against it. And it seems unlikely he will change his mind about it during his second term in office. There is a global Islamist terror network, though some parts of it are more loosely connected than others. As for Arafat, he was a model even for bin Laden. Arafat showed up at the UN in 1974 with an olive branch, after he’d just hijacked an airplane, and everybody cheered him. Later he won the Nobel Peace Prize. No terrorist was as successful in selling himself as an underdog again and again, while committing heinous crimes, as was Arafat. He was what you might call a “masterful” terrorist. That was a huge mistake. It’s easy to say all this in hindsight, but bringing him back from the dead, so to speak, was really an egregious error on Israel’s part. If we’d paid more attention back then, maybe we wouldn’t have had to deal with this culture of death and destruction that Arafat developed and bin Laden and his followers adopted. Absolutely. He did it, of course, under the guise of religion. He had several lives: In one he was a communist; in another, a nationalist; and then he ended up using religion to further his goals and convince his people to became martyrs. His methods of propaganda were clearly influenced by what he’d studied in the Soviet Union. Arab money or Arab terrorism.

While studying for my doctorate, I was invited by the State Department to participate in a special program and told that I could focus on any project I wanted. At the time I was very interested in drug addiction. As an outsider, I observed that Americans seemed to be taking drugs as though someone were pointing a gun to their heads and forcing them to do it. But, of course, there was nobody forcing them. I also noticed that the American culture of consumption was fed by constant PR. People would buy anything they didn’t need as long as someone was persuading them they needed it. It seemed to me that a similar thing was happening with the drug culture. So I tried to figure out who could have an interest in “drugging” the American people. I knew that the PLO, Hizbullah and the Syrians were selling drugs in Lebanon. Cuba was doing it in Latin America, and Bulgaria and East Germany were selling drugs in Europe. Narcotics, it turned out, was not only an illegal money-making tool, but a tool for debilitating a society from within. We witness the use of this tool in the Islamic world today against the West. Narcotics destroy the mental and physical health of a population, as well as a country’s political and economic infrastructure, while generating fantastic revenues. There is hardly a better weapon the terrorists can use to undermine their targeted enemy.

It is also interesting to see how the Muslim world uses American drug abuse in its own propaganda campaign to illustrate how evil, weak and decadent the West is. Since drugs are not allowed in Islam, they issued special fatwas to allow their sale. It is fascinating to see how they adopted the Communist methods of propaganda against their enemies in the West. Observing all this led to me to write my first book, Narco-Terrorism. And you can’t delve into this subject without getting to the issue of money, so I became interested in the subject of money-laundering, and wrote Evil Money. The more I researched the funding of terrorism, the more I became aware of the danger to Western societies posed by fundamentalist Islam. Back in 1992, I wanted to write a book about the Muslim proselytization of America. I was connected for a while with the American Psychiatric Association. In Mobile, Alabama, on a visit to a maximum security prison, I asked the chief warden how many Jews there were there. He scratched his head, said there were none, but then added: “Wait a minute! We’ve got quite a few kosher food orders.” Right away I knew what he was talking about: Muslims. It was then that I started to follow up on other prisons and found that orders for kosher food were steadily growing.

Further research confirmed that the Muslims were proselytizing the prison population. Armed with these facts, I wrote a proposal, but was turned down by publishers who told me that this was not a real problem. The fence stops terrorists from getting into Israel. But in order to really stop terrorism, much more needs to be done. The first step, of course, is identifying the terrorists. Then we should stop their finances. One of the reasons politicians shy away from this is that once the terrorists are identified, they’ll have to be dealt with. It’s time, especially for the US, to wake up and identify the terrorists ヨ as well as all the countries that support them, including Saudi Arabia and Iran ヨ by name. It’s also time we stopped the money flow to terrorists, including Palestinian terrorists, and shut down their Web sites and virulent TV broadcasting, as well as their Publications. We can make it difficult for them to communicate, operate, recruit and raise money. But we need the political understanding and will to win this war.

Categories: Terrorist Financing, U.S. Policy

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