Skip to content
Jerusalem Center for Public Affairs
Strategic Alliances for a Secure, Connected, and Prosperous Region

The Palestinian Authority’s Corruption and Its Impact on the Peace Process

Filed under: Palestinians
Publication: The Oslo Accords at 30: Lessons Learned

The Palestinian Authority’s Corruption and Its Impact on the Peace Process
Abbas’ Presidential Palace outside of Ramallah, built in 2017 with helipads and a swimming pool at a cost estimated at $16 million. Public discontent led Palestinian officials to declare it would house the National Palestinian Library. (Ameen Rammal/CC BY-SA 4.0)

Nearly three decades after its establishment, the Palestinian Authority and its institutions continue unchecked in their corruption and human rights violations. This has negatively impacted the Palestinian public’s confidence in its leadership’s policies and decisions. The ramifications of this on the Palestinian Authority’s leadership have been devastating, especially regarding the peace process with Israel and its ability to lead the Palestinians toward statehood.

The Palestinian Authority has a dismal record of human rights violations, including the maltreatment of dissidents and prisoners. Nizar Banat was an outspoken critic of PA corruption. On June 24, 2021, Palestinian Authority security forces stormed his house, beat him with clubs, and took him away. Banat was dead an hour later, and the officials responsible have not been charged.

PA security personnel dragging Banat to the hospital
A screenshot of PA security personnel dragging Banat to the hospital, where he was pronounced dead. (YouTube, Middle East Eye)

The allegations of corruption, leveled against the Palestinian Authority almost from day one, severely undermined the credibility of former PLO Chairman Yasser Arafat and his successor, Mahmoud Abbas, in the eyes of their people.

The charges, which have exponentially increased over the past three decades, are among several factors that have made it more difficult, if not impossible, for Arafat and Abbas to make substantial concessions that would lead to a peace agreement with Israel.

One of the main priorities of these two leaders has been to prove that, when it comes to dealing with Israel, they are not “getting into bed with the enemy” for personal profit. Countering this perception has superseded their considerations of making peace with Israel.

Many Palestinians believe that weak compliance with the rule of law, absence of the parliament, failure to hold corrupt senior officials accountable, and weak civil society organizations have all contributed to the spread of corruption.

From the very beginning of the “peace process” in 1993, many Palestinians saw it as a “transaction” between the Israeli government and the corrupt PLO leadership that was hungry for money after being dumped by many Arab countries as retaliation for supporting Iraqi dictator Saddam Hussein’s invasion of Kuwait in 1990.

After the liberation of Kuwait a year later, the oil-rich emirates and other Gulf states decided to cut off funds to the PLO, causing the organization one of its most serious financial crises.

The Oslo Accords, however, saved the PLO from collapsing once the Arab financial aid was replaced with massive funds by the United States, Europe, and other countries.

Many Palestinians observed that the only things the “peace process” brought about were the enrichment of senior PLO officials and their family members and associates who greedily siphoned publicly-designated funds to drive luxury cars and build extravagant mansions, particularly in Ramallah and the Gaza Strip.

Many Palestinians quickly realized that what was unfolding before their eyes was no “peace process” but a process of avaricious PLO leaders and their entourage diverting international aid and making huge profits out of the Oslo Accords.

The conspicuous wealth and consumption of Mahmoud Abbas’ sons, Tarek and Yasser, have been very controversial in Palestinian society since 2009, when Reuters published articles linking Tarek and Yasser to several multi-million-dollar business deals, including a few that were U.S. Government contracts.1

Western donors’ failure, or refusal, in the first two decades after the “peace process” to hold the Palestinian Authority accountable for their outlandish abuse of funds, was one of the main reasons most Palestinians lost faith in the Oslo Accords.

Moreover, it was also one of the primary reasons so many Palestinians were radicalized and ultimately voted for Hamas in the 2006 parliamentary election. When they saw no benefit from the Palestinian Authority’s “peace process” with Israel and became furious about its leaders’ corruption, they saw Hamas as their only recourse.

The bitterness and frustration on the Palestinian street were evident from the first days of the arrival of the “Tunisian Mafia” (the term some Palestinians use to describe the then Tunisia-based PLO leadership). The ordinary Palestinians felt that the Oslo Accords were not about improving their living conditions or building a stable economy but about serving the interests of Arafat and his cronies.

Scenes of senior Palestinian officials driving in motorcades escorted by bodyguards and personal assistants and reports about the lavish lifestyle of PLO leaders further exacerbated the sense of anger and marginalization among the Palestinians.

The story of the Oasis Casino in Jericho, which operated briefly before the eruption of the Second Intifada in 2000, was and remains – in the eyes of many Palestinians ­– one of the most prominent symbols of the corruption of the PLO leadership. The casino was viewed as a joint project by corrupt Palestinian and Israeli officials to enrich themselves at the expense of Palestinians and Israelis.

The Jericho casino, which opened in 1998, reportedly earned more than $50 million in its first year. In the 2000 Intifada, Palestinian gunmen on the roof shot at Israeli positions, and Israeli tanks damaged the building. It never reopened.

Gambling is banned in Islam, and Palestinian Islamists used the casino to depict the PLO leadership as infidels and traitors. These allegations further undermined the credibility of Arafat and his associates among their own people.

The security coordination between the Palestinian security forces and Israel, for example, is often cited by many Palestinians as a direct result of the corruption of senior Palestinian officials. They argue that these officials, some of whom are tainted with corruption scandals, refuse to halt the security coordination because they fear losing their Israeli-issued VIP entry cards and other privileges that they and their families enjoy due to cooperation with Israel.

The increased talk about corruption has prompted many Palestinians to regularly question the motives and reasons behind decisions made by Palestinian leaders. If, for example, the Palestinian Authority decides to build a hospital, the first question that many Palestinians would ask is who in the “President’s Office” earned a commission from the project.

The same applies to the “peace process” with Israel. Each time Israeli and Palestinian negotiators have met at the negotiating table to discuss ways of moving forward on this track, reports and rumors have surfaced on the Palestinian street about the privileges and rewards certain Palestinian officials have been offered (by Israel and the United States) in return for making far-reaching concessions to Israel. These claims and rumors have not been brushed aside. They have played a role in deterring Palestinian leaders from making meaningful concessions for peace with Israel.

Corruption remains a significant obstacle to fulfilling the national aspirations of the Palestinians, particularly in building a democratic society, transparent institutions, and establishing a Palestinian state.

Worse, the corruption has played into the hands of the Palestinian Authority’s rivals, particularly Hamas, the Islamist movement that does not recognize Israel’s right to exist and whose 1988 Charter calls for Jihad (holy war).

In late 2005, Hamas decided for the first time to run in the parliamentary election, which took place in January 2006. Hamas’s slogan then was “Partners in the Blood, Partners in the Decision,” reflecting a desire to present itself as capable of being part of the Palestinian leadership and decision-making process.

The corruption facilitated Hamas’ victory in that election. Hamas’ electoral list was named “Change and Reform Bloc,” with a platform that promised to end corruption and bring good governance. Hamas, in short, knew precisely what the Palestinian public wanted.

Hamas won 76 out of 132 seats of the Palestinian parliament, the Palestinian Legislative Council.2

The victory of Hamas was mainly a vote of protest against corruption and the Palestinian leadership’s failure to tackle the issue.

The platform of Hamas’ Change and Reform Bloc attracted many Palestinians. It included a pledge to “fight corruption in all its forms,” plainly identifying it as “a major cause of weakening the Palestinian home front and undermining the foundations of national unity.”

The platform also included promises to:

Enhance transparency, oversight, and accountability in dealing with the general budget and reformulating the public employment policy to ensure equal opportunities for all the Palestinian people based on competence and to prevent the position from being used for private interest.

Hamas further promised to “combat nepotism and factionalism in appointments and promotions in all public institutions, as well as fighting ‘negligence’ in government performance and waste of public money.”3

A Weak Attempt to Fight Corruption

In 2010, the Palestinian Authority, facing immense pressure from the Palestinian public and some Western donors, established the Palestinian Anti-Corruption Commission.

The commission was charged with receiving complaints from the public and ensuring that corruption cases were dealt with quickly and effectively. But according to Palestinian political analyst Tareq Da’na:

Although the commission is described as independent, financially and administratively, its president is appointed by presidential decree, and many members of its advisory board have previously held official positions as ministers, ambassadors, and advisers to the Palestinian Authority president. Although some corruption cases were referred to the judiciary, the investigations were selective, according to press reports and interviews conducted by the author. Moreover, polls indicate that public opinion is losing confidence in the commission at an increasing pace and believes that the presidency, security services, and political parties regularly interfere in its work.4

Public opinion polls show that a vast majority of Palestinians continue to believe that corruption exists in the Palestinian Authority, despite the efforts of the anti-corruption commission.

According to a December 2022 opinion poll by the Palestinian Center for Policy and Survey Research (PCPSR), 81% of Palestinians think there is corruption in Palestinian Authority institutions.5 Similar results were registered in polls held by the same organization in previous years,6 and they did not surprise those following the Palestinian Authority since its inception in 1994.

Another poll conducted by the Coalition for Accountability and Integrity (AMAN) in December 2022 found that most Palestinians (85%) consider the efforts to combat corruption insufficient.7

Many Palestinians believe that weak compliance with the rule of law, absence of the parliament, failure to hold corrupt senior officials accountable, and weak civil society organizations, have all contributed to the spread of corruption. In addition, they do not believe in the efficiency or effectiveness of the efforts of the anti-corruption agencies in combatting corruption and continue to doubt their impartiality and independence.

According to the Palestinians, the most important reasons for insufficient anti-corruption efforts are:

  • Lack of transparency in the administration of state institutions.

  • Lack of political will to hold the corrupt accountable.

  • The penalties against the offenders of corruption offenses are too light to deter.

  • Lack of role models among the officials who would comply with the values of integrity and preserve public resources and interests.8

AMAN states, “The offenses of favoritism and nepotism, embezzlement of public funds, breach of trust, abuse of power, bribery, and money laundering are the most common forms of corruption.”

In the absence of a functional parliament (which has been effectively paralyzed since the Hamas takeover of the Gaza Strip in 2007) and in the absence of an open and free debate about sensitive issues under the Palestinian Authority, it is hard to see how things can change any time soon.

The weakness of the judiciary system under the Palestinian Authority has also contributed to the sense of despair in the West Bank. Court rulings are sometimes ignored by the Palestinian Authority and its security forces. This has contributed to an increase in anarchy and lawlessness in areas under the control of the Palestinian Authority, especially with the emergence of armed gangs.

How to Deflect Citizens’ Anger

Meanwhile, The Palestinian Authority continues to engage in massive incitement against Israel to draw attention away from its own corruption, lack of public freedoms, and democracy. The incitement ensures that criticism and grievances would only be directed against Israel. The Palestinian leadership wants its people to be busy hating Israel; otherwise, they might come to the leaders in Ramallah and demand reforms and democracy.

The Palestinian Authority has lost the faith of the people they are supposed to represent. More than 70% of the Palestinians want Abbas to resign, according to recent polls. Nepotism and favoritism run rampant, while officials and their cronies shamelessly flaunt wealth attained by absconding with billions in funds meant for the betterment of their own people.

This loss of faith has allowed Hamas to prey on the rightful misgivings of the Palestinian people and, consequently, to challenge PA leadership. Subsequently, this has led to a schism between the Palestinian Authority-controlled West Bank and the Hamas-controlled Gaza Strip, sundering the Palestinians’ dream of building good government and securing democratic rule while bringing anarchy and lawlessness to many Palestinian communities.

What Should Be Done?

The only way to combat the corruption is for Western donors to increase the pressure on the Palestinian Authority leadership by demanding transparency and accountability and no longer giving them a free pass. Internal supervisory organizations have proven not only to be ineffective but mere extensions of the corruption they were designated to fight.

American, European, and other sources of funding that allow the Palestinian Authority to continue must insist on accountability. Fiscal transparency must be inextricably interwoven in the funding process.

Only these actions can stop the spiraling abuse of funds and return international aid to those it was intended to help. Freeing those funds to build the necessary infrastructure to educate and to create jobs will change the dynamic from a hungry and angry people (easily diverted to incitement against Israel for their misfortunes) to a satisfied and happier people.

Only full financial accountability can halt the Palestinian people’s deep mistrust of its leadership and, ultimately, its subsequent reticence in engaging as a partner in any viable peace process.

* * *