In a Ruined Country

How Yasir Arafat destroyed Palestine

Arafat refused al-Masri's invitation to meet with the king at Amman. Instead he went to Lebanon. Wasfi al-Tal was assassinated shortly after by members of Black September, the Fatah terrorist group that was created to avenge the Palestinian defeat in Jordan. His assassins shot him in a hotel lobby in Cairo; one of them got down on his hands and knees and lapped at Tal's blood.

"No doubt Arafat was a great man," al-Masri says. "No doubt he had vision. Most of the people that you see now being very important, I see them wanting the grace of Yasir Arafat. They want to be in his grace. Ah, he thought money was power," al-Masri adds, with a wistful glance around his study. The money he spent to buy the loyalty of his court, al-Masri gently suggests, could easily have paid for a functioning Palestinian state instead.

"With three hundred, four hundred million dollars we could have built Palestine in ten years. Waste, waste, waste. I flew over the West Bank in a helicopter with Arafat at the beginning of Oslo, and I told him how easy we could make five, six, seven towns here; we could absorb a lot of people here; and have the right of return for the refugees. If you have good intentions and you say you want to reach a solution, we could do it. I said, if you have money and water, it could be comparable to Israel, this piece of land."

Al-Masri's eyes mist over. "Abu Ammar, yes. He's a simple man. He slept on a simple bed. He doesn't want any houses. He doesn't want anything. I remember one day I wanted to bring him some free suits, tailor-made suits, you know, and he said no, no, no. I can't. But he gave me a suit. He told me, 'This is my suit. You make it longer, you wear it and have it.' Be very interesting for you to see."

"Let's go eat," he says, beckoning me to join him. We eat at the table in his kitchen, which is adjacent to his grand house.

Halfway through lunch an aide brings down the suit, one of the famous military tunics that Arafat's guards bought at surplus stores. The brass buttons are decorated with the Fatah eagle. I check the inside of the jacket for a tailor's label, and find there is none. "Who would dare?" al-Masri explains.

"Put it on," he urges me. I put on the jacket, and find that Arafat was approximately my size, with slightly narrower shoulders. One of the inner pockets closes with a zipper.

"He kept money inside," al-Masri says. I suggest that it is strange to think that Arafat managed the affairs of his people from the inside pocket of this coat.

Al-Masri remembers sitting with Arafat one night in 1988 as the Palestinian leader negotiated a formula that would allow the United States to recognize the PLO. "They gave him the formula, and he said it in a speech in Geneva, but he put in extra words, so no one could figure out what he was saying," al-Masri remembers. "The Americans said, 'No way.' So I stayed up all night with him and Dick Murphy, the assistant secretary of state, to work out what he must say. The formula was 'We totally and absolutely renounce all forms of terrorism.' So they called a press conference, and he said everything right, except instead of 'terrorism' he said, 'We announce tourism! We announce all forms of tourism!'"

Talk of Arafat's last illness makes al-Masri sad again. "Every morning I used to go see him and give him the medicine because he would not take it from anybody else," he remembers, looking moodily out over his lawn. "Yeah, and I never thought he would die."

"How long did you know that he was sick?" I ask.

"For the last year. Last year in September he told me he doesn't feel well. So, and he felt that something was not right, and it looks like he had the same symptoms again, but the last time he had enough immunity. Yeah, he knew."

I am struck by al-Masri's use of the word "immunity," which is a word characteristically associated with aids. Rumors that Arafat died of "a shameful illness" spread quickly through the West Bank and Gaza. Arafat, who married his wife, Suha, in 1990, was often surrounded by children and was openly affectionate with some of his bodyguards. The Palestinian leadership denounced reports that Arafat was a homosexual as lies spread by Mossad, the Israeli foreign-intelligence agency. Accounts also circulated that a secret agreement had been reached between the Israelis and Arafat's heirs, stipulating that the truth about Arafat's fatal illness would not be released, the Palestinian leader would be buried in Ramallah and not in Jerusalem, and the wanted men who had accompanied him in his captivity would not be pursued by Israeli forces.

"He knew that it was the same disease that he had a year ago?" I ask. Al-Masri nods his head.

"Same symptoms," he answers. "But look how strong he was. I mean, when Abu Mazen came," he says, referring to Arafat's longtime deputy, Mahmoud Abbas, "we brought him from one bed in his small room to a bigger room where we could sit. I sat on the bed. Abu Mazen sat in front of him and Abu Alaa sat in front of him. He said, 'Ah, Mazen.' His face was very red, and you know that he was very sick, but he wants to show that he was still in control of the details with Mazen, you know? He said, 'I have this flu, ah, ah. I have this flu. Came and went to my stomach.'"

The Old Man's Pockets

Along the outer walls of the Muqata guards lounge beneath tattered posters of the white-bearded lunatic figure that Abu Ammar became in the last years of his life. His people accepted his foibles because he was their father. He named them. He paid for their weddings and their funerals. It was part of his paternal pose that no Palestinian who asked him for money went away empty-handed. When he visited cities, he was followed by an aide with a Samsonite briefcase stuffed with bundles of cash, which he distributed to the people who lined up to beg for money. Ordinary Palestinians placed classified advertisements in the newspaper asking Arafat for money. Others wrote him letters. "I sent him a letter on the occasion of the wedding of my second daughter," a qahwehgee, or "coffee guy," who works outside the Muqata tells me one afternoon, as he fills a small cup with hot black coffee from a large brass boiler. He indicates with a nod that the Old Man was generous.

Such generosity was a common feature of Arafat's rule. Documents taken by the Israeli army from the Muqata paint an astonishing portrait of the range of requests to which Arafat routinely responded with cash. The captured documents record requests for school fees for poor children in Gaza (Arafat gave them $250 each) and $34,000 in tuition and expenses for the daughters of a PLO official to study in Britain ("$10,000 is to be paid"). Though Arafat routinely cut his bequests to ordinary Palestinians to half or a third of what was asked, no such economies were inflicted on the petitions of his top officials. When one member of Arafat's circle requested money for the purchase of paintings of Mecca and Medina intended as gifts for a lady friend, Arafat was glad to oblige ("The two pictures should be paid—66 thousand dollars").

Members of the presidential guard got more money than they asked for. When Lieutenant Mahfoudh Aissa asked for plane tickets for his wife and four children to visit his sick mother-in-law in Tunis, Arafat approved the request, adding, "The tickets are to be paid for and an additional $1,000 for expenses." He then forwarded it as usual to the Ministry of Finance, which served through most of his reign as the Palestinian leader's personal cashbox.

For those at the top of the heap the rewards were much larger and more systematic. The amounts of money stolen from the Palestinian Authority and the Palestinian people through the corrupt practices of Arafat's inner circle are so staggeringly large that they may exceed one half of the total of $7 billion in foreign aid contributed to the Palestinian Authority. The biggest thief was Arafat himself. The International Monetary Fund has conservatively estimated that from 1995 to 2000 Arafat diverted $900 million from Palestinian Authority coffers, an amount that did not include the money that he and his family siphoned off through such secondary means as no-bid contracts, kickbacks, and rake-offs. A secret report prepared by an official Palestinian Authority committee headed by Arafat's cousin concluded that in 1996 alone, $326 million, or 43 percent of the state budget, had been embezzled, and that another $94 million, or 12.5 percent of the budget, went to the president's office, where it was spent at Arafat's personal discretion. An additional 35 percent of the budget went to pay for the security services, leaving a total of $73 million, or 9.5 percent of the budget, to be spent on the needs of the population of the West Bank and Gaza. The financial resources of the PLO, which may have amounted to somewhere between one and two billion dollars, were never included in the PA budget. Arafat hid his personal stash, estimated at $1 billion to $3 billion, in more than 200 separate bank accounts around the world, the majority of which have been uncovered since his death.

Contrary to the comic-book habits of some Third World leaders, such as President Mobutu Sese Seko, of Zaire, and Saddam Hussein, Arafat eschewed lurid displays of wealth. His corruption was of a more sober-minded type. He was a connoisseur of power, who used the money that he stole to buy influence, to provoke or defuse conspiracies, to pay gunmen, and to collect hangers-on the way other men collect stamps or butterflies. Arafat had several advisers who oversaw the system of patronage and theft, which was convincingly outlined in a series of investigative articles by Ronen Bergman that appeared during the late 1990s in the Israeli newspaper Ha'aretz. The PLO treasurer, Nizar Abu Ghazaleh, ran the company al-Bahr ("the Sea") for a small number of wealthy shareholders, including Arafat's wife, Suha. Al-Bahr set the price of a ton of cement in Gaza at $74, of which $17 went into Arafat's private bank account. One of Arafat's favorite bagmen, Harbi Sarsour, ran the General Petroleum Company, which established a monopoly over all the gasoline and fuel-oil products sold in the West Bank and Gaza. A company called al-Sakhra ("the Rock"), run by Fuad Shubaki on behalf of Fatah, profited hugely from an exclusive contract to provide all uniforms and other supplies to the Palestinian security forces. Official monopolies on basic goods and services had exclusive suppliers on the Israeli side. These profitable contracts were made available by Arafat to companies associated with former high-ranking members of the Israeli civil administration and the security services in the West Bank and Gaza.

The genius behind this system was Muhammad Rachid, who became Arafat's closest economic adviser. A onetime protégé of Abu Jihad, Rachid was a former magazine editor who became involved in the diamond business. He came to Arafat's attention because of his keen talent as a businessman, and because he was an ethnic Kurd—which meant that he was safely removed from the family- and clan-based politics that always threatened to disrupt the division of the spoils.

In their cities and villages Palestinians were subject to the extortion and violence of Arafat's overlapping security services, which competed among themselves for payoffs, arbitrarily arrested people and seized their land, and forced citizens to pay double or triple the price for everything from flour and gasoline to cigarettes, razor blades, and sheep feed. The fact that nearly everyone in Palestinian political life had taken something directly from Arafat's hand made it hard to criticize him; it was easier to go along. In 1991, at the low point of Fatah's finances, Ali Shahin, one of Arafat's earliest allies, wrote a secret report lambasting Fatah's "inconceivable moral degradation," for which he blamed the excesses of a leader whose true interests were "the red carpet, the private plane of the President, free rein to spend money." Shahin became the minister of supplies in Arafat's government and was notorious for selling spoiled flour and making truckloads of chocolates sit at the Erez checkpoint in the heat in order to help out a friend who owned the only candy factory in Gaza. The economy of the Palestinian territories, which had enjoyed startlingly high growth rates after 1967, when it passed from Jordanian and Egyptian control into the hands of the Israelis, stagnated and then went backward. In less than a decade Yasir Arafat and his clique managed to squander not only the economic well-being but also the considerable moral capital amassed by the Palestinian people during two and a half decades of Israeli military rule.

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David Samuels has written for Harper's Magazine, The New Yorker, and The American Scholar. This is his first article for The Atlantic Monthly.

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