Prepared for the
Conference of Presidents of Major American Jewish Organizations

in association with the Fairness Project
by the Jerusalem Center for Public Affairs
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June 14, 2002

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In-Depth Issue:

How Did Arafat Pay for the Karine-A?
    (Part II of the German newspaper Die Zeit's report on how EU funds intended to support peace were turned to finance a terror network.)

  • At least 4.1 billion Euros have flowed to the PA, not including grants from individual European countries. Since June 2001 the EU has been contributing 10 million Euros a month in direct budgetary assistance, no longer for specific "project assistance."
  • How Arafat paid 10 million dollars for the Karine-A weapons ship cargo remains a mystery. At the time of the weapons deal, Europe paid at least 10% of Yasser Arafat's day-to-day budget and 50% of all aid payments.
  • The Israelis found payment receipts with which the salaries for terrorists were paid, through a cascade of transfers, from accounts funded by the European Union.
  • The Germans sent their own experts from the Federal Intelligence Service (BND) to conduct an investigation. In the middle of April the BND reported that it considered the documents provided by Israel to be authentic and agrees with the Israeli conclusions.
  • On May 2, 2002, the BND filed another report, describing "known mismanagement" and "far reaching corruption." It concludes: "At no point could it be realistically assumed that EU-funds were...100% accounted for."
  • The EU paid in dollars for the salaries of Palestinian teachers, doctors, and police. Arafat transferred the money in shekels, at a discount of 25%. The civil servants also had 3.7% withheld as a tax, without this money being recorded in the budget as tax revenue.
  • Not until June 4 did the EU Budget Committe decide to suspend the payments to Arafat. As long as the European Parliament doesn't affirm this decision, however, the money will keep flowing. (Die Zeit)

    Request for Photos

    The Conference of Presidents is seeking interesting, high-quality photos of the April 15th Israel Solidarity Rally in Washington for a forthcoming book.
        Please submit images and contact information by June 14 to [email protected].

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    Back Issues

  • News Resources - USA and Europe:

  • Bush Mulls "Provisional" Palestinian State
    President Bush is considering calling for a "provisional" Palestinian state as part of a new statement on the Middle East, but has not yet made a decision. "You would have two sovereign states debating a border dispute, as opposed to one state openly questioning whether there is any right or reason for the other state to exist," one official said. (CNN)
  • For Al-Aqsa Brigades, A Change of Tactics
    Al-Aqsa Martyrs Brigades members in Nablus acknowledge, as do their colleagues in Bethlehem and other West Bank towns, that Israel's spring offensive has thrown them on the defensive. One leader of a small al-Aqsa Brigades cell acknowledged that the main commanders in Nablus have been killed or are in jail. A member of Arafat's intelligence service said that the Palestinians will not repeat the frontal defense they mounted two months ago when scores of gunmen died in a futile attempt to slow Israel's entry into the city: "This time, everyone disappears when the Israelis come." (Washington Post)
  • Six Men Who Could Succeed Arafat
    Mahmoud Abbas (Abu Mazen), late 60s, a founder of Fatah. Marwan Barghouti, 42, general secretary of Fatah in the West Bank, currently under arrest. Muhammad Dahlan, 40, recently resigned chief of preventive security in Gaza. Ahmed Qurei (Abu Ala), mid-60s, one of the main authors of the Oslo agreement. Jibril Rajoub, 49, chief of preventive security in the West Bank. Sheik Ahmad Yassin, mid-60s, spiritual leader of Hamas. (New York Times)
  • U.S.-Saudi Relations Show Strains
    Saudi citizens continue to plot terror attacks against Americans -- the latest an alleged plot uncovered by Moroccan officials to target U.S. and British ships in the Strait of Gibraltar. The Saudi government also remains at odds with the U.S. over how to deal with those accused in the 1996 Khobar Towers bombing that killed 19 U.S. servicemen. A year ago the U.S. indicted 13 Saudis and a Lebanese for the bombing, but Saudi officials have said they will not recognize those indictments. (Washington Post/AP)
  • News Resources - Israel and Mideast:
  • Sources: U.S. to Monitor Interim Accord Progress
    The U.S. Middle East diplomatic program is based on Prime Minister Sharon's proposal for a long-term interim agreement under which a Palestinian state would be established without defined borders, according to Israeli sources. The sources said Washington also accepted Sharon's position that instead of setting a timetable, diplomatic progress should be conditioned on performance benchmarks. The U.S. will serve as the judge of whether the benchmarks have been met, thereby enabling advancement to the next stage. (Ha'aretz)
  • Two Homicide Bombers Caught; Five Others Sought
    Two female Palestinian would-be homicide bombers were arrested in the West Bank, including a 15-year-old teenager and a 23-year-old teacher. Five other bombers remain at large in Ramallah. (Jerusalem Post)
  • IDF Commander Escapes Death a Second Time
    Eight years ago, Golani brigade company commander Major Yoav Yarom, 28, lost a leg from an exploding mine in south Lebanon, but fought to return to active duty. Yesterday, with an IDF force operating in Tubas, southeast of Jenin, Yarom was hit by gunfire as he ran to help a wounded officer. During the operation, the IDF discovered a car bomb and arrested 7 wanted terrorists. (Maariv)
  • Global Commentary and Think-Tank Analysis (Best of U.S., UK, and Israel):

  • The Europeans Owe Israel an Apology - Hirsh Goodman
    Norwegian unions have imposed a boycott on Israeli goods, the Danes are no longer buying Israeli oranges, the Germans are holding back on tank parts, and the Belgians couldn�t leave politics out of the Eurovision song contest. But the people of Norway or Denmark have never suffered from living under the constant threat of terror, a situation where a child cannot go to a birthday party, or even to school, without fear of being killed or maimed. (Jerusalem Report)
  • Troubled, But Not Terrorized - Charles Krauthammer
    Operation Defensive Shield has been remarkable in combating the feeling of helplessness which is the chief objective of all terrorism. What despair there is tends to be generational. The parents -- the ones who made the great leap of faith into the Oslo peace process -- are depressed. The kids -- the young people in the army -- are defiant. (Washington Post)
        The full text of Charles Krauthammer's recent speech, "Jewish Messianism and the Oslo Peace," is now available.
  • Sharon Grants Victory to Arafat - Yisrael Harel
    The government of Israel has decided to build a security wall that will generally match the 1949 armistice lines. But Arafat, drunk with accomplishments, won't stop at the wall. He will find a way, just as the Egyptians did with the Bar-Lev Line along the Suez Canal, to breach it or sow death over it. (Ha'aretz)
  • Moderation - Kuwait-Style - Neil MacFarquhar
    When the Kuwaiti religious affairs minister ordered a halt to "cursing all Jews and Christians" during weekly Friday sermons, a compromise was reached with the prayer leaders, who now single out specific American officials. "Now I can say, 'God punish Bush, God punish Rumsfeld, God punish Rice,'" said Abdel Razak al-Shayegi, an Islamic spokesman. (New York Times)
  • Talking Points:

    Steps Needed Prior to the Resumption of Political Negotiations

    From remarks by Israel's Charge D'Affairs at Israel's Embassy in Washington, Ambassador Rafi Barak, before the Zionist Organization of America, in Washington, D.C., June 11, 2002

    The following steps must be taken before political negotiations can resume.

    • First and foremost -- before anything else -- we must re-establish security to Israel. We must secure our citizens, borders, and cities from harm. We will not turn a blind eye as attacks continue. Or sit idly by as terror grows in our midst. We will restore the security of Israel, and we are prepared to do so by whatever means it takes.
    • Second, there must be considerable reform of the Palestinian Authority itself. There must be a chief executive that will lead a provisional government, and a clear balance of power created between various governing institutions -- such as security, economics, justice, and education.
    • Most importantly, the new government must be free from corruption, abiding by the rule of law, and promoting an atmosphere conducive to peace.
    • Only once the PA begins to undergo successful and substantive reform, can we ever hope to begin negotiations that will lead to a durable and lasting peace.

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