Money Games

Yassir Arafat's tight control of PLO finances has put
off foreign aid donors.

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DOUGLAS DAVIS FOREIGN CORRESPONDENT

en PLO Chairman
Yassir Arafat met offi-
cials of the German
auto company Daimler-
Benz and the French aerospace
contractor Dassault recently, he
made them an offer he thought
they couldn't refuse: exclusive
rights to invest and distribute
their wares in the new au-
tonomous Palestinian areas.
In both cases, however, execu-
tives of the two firms found the
deals highly resistible and both
replied with a fu-m,"thanks, but
no thanks."
The prospect of getting in on
the ground floor was an attrac-
tive proposition. But what nei-
ther corporation
could stomach
was the small
print stipulat-
ing that the
price of exploit-
ing Mr. Arafat's
nascent state
was a 10 per-
cent "commis-
sion" to be paid
into his person-
al slush fund.
The PLO
leader has al-
ways operated
on the tightest
political and
military mar-
gins. But de-
spite regular
defections and
the consequent
threats from
dissidents who
have cut and
run, his role as
leader has re-
mained unas-
sailable.
To those fa-
miliar with the
most intimate
workings of the
organization, Yassir Arafat
the reason for
Mr. Arafat's
longevity is obvious. He is not
only the PLO's leader but also its
paymaster, the man who has
presided exclusively over its once-
vast financial fortunes. He has,
almost literally, signed every
check and, until recent years,
there has been no shortage of
funds to back those checks.
It was those payments, hand-
outs and kickbacks that bought
him the support of a large retinue
of flunkies, retained the loyalty
of a fighting force and enabled
him to win the hearts and minds
of the Palestinian grass-roots
with health, education and wel-

fare programs and various "na-
tional institutions."
But if money was the key to
Mr. Arafat's success, someone
changed the lock. First to do so
were the PLO's old milk cows,
Saudi Arabia and Kuwait, whose
leaders repaid his kiss-and-cud-
dle with Iraqi leader Saddam
Hussein during the Gulf crisis by
turning off his cash flow.
Then the international donors,
who pledged their billions to the
Palestinian endeavor, changed
the lock again by insisting on
complete transparency and ac-
countability in the disbursement
of their largesse. It was an envi-
ronment that was entirely alien

a.
>-
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0
0
o_

to Mr. Arafat — and one in which
he appears incapable of func-
tioning.
In a bid to assuage the suspi-
cions of the international donors,
Mr. Arafat created the Palestine
Economic Council for Develop-
ment and Reconstruction (PEC-
DAR), which he confidently
declared would be the transpar-
ent body that the donors were de-
manding for handling their
billions of aid dollars.
However, Mr. Arafat prompt-
ly appointed himself its chairman
and chief executor. So, while the
PLO has deployed its police force