In a Ruined Country

How Yasir Arafat destroyed Palestine
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These days Ozrad Lev spends lots of time in a restaurant in Ramat Hasharon called Reviva and Celia, which might pass for a cool screenwriters' hangout in Santa Monica. Lev himself is very Californian, in a green polo shirt and close-cut hair. He got to know Ginossar in the early 1980s, while serving in Israel's military intelligence, Aman. He remembers Ginossar as a brilliant but forbidding figure. Later, while serving as aide-de-camp to General Ehud Barak, then the head of Aman, Lev was at the scene of the Bus 300 hijacking, which destroyed Ginossar's career in Shin Bet. Ginossar's life after that was a long series of failures until he met Muhammad Rachid.

"Every place he went, he failed," Lev remembers. "One day in 1996 he told me, 'Ozrad, I've been waiting for this a long time. You have to meet Muhammad Rachid.' I said, 'Okay, who is Muhammad Rachid?' He said, 'Look, Muhammad Rachid is someone who I know will like you very much and you will like him.'" Rachid made a strong impression on the former Israeli officer.

"He understood the Israeli mentality head and shoulders above any of the Palestinians I've ever met," Lev remembers. "He was very calm, not arrogant, calculating every word that came out of his mouth, and he had an excellent sense of humor. Physically he was very Israeli. I looked at him and I felt as if I had seen this guy dozens of times on the street in Tel Aviv."

Anxious to cover himself in the event that the peace process collapsed, Lev insisted that the money in the Swiss account stay put for five years, and that withdrawals be made only to a heavily monitored Palestinian Authority account at the Arab Bank branch in Ramallah. Starting with $16 million, Rachid funneled tens of millions of dollars to Lev, who took the deposits to Switzerland. Returns were excellent. Arafat was grateful. In July of 1997 Lev was invited to meet Arafat, who presented him with a model of the al-Aqsa mosque made of seashells from Gaza. He found the Palestinian leader to be humble and charming, and well informed about the Swiss accounts.

"He knew about all the details," Lev remembers. "When he talks to you, the sentences are so simple, so clear, which means that he is very smart. He knew that there were several accounts; he talked to me about the other names—Soditic and Atlas. He told me that he appreciates very much what I'm doing for the Palestinian people, and that he hoped many Israelis would go my way." The only thing that disconcerted him about the meeting, Lev says, was how ugly Arafat was. Arafat's hands, he noticed, were as pale as the hands of a corpse.

"Arafat, when you met him, he was not a corrupt person," Lev says. "He lived on five shekels a day. He had a plan. Oslo was not his plan. The whole thing about the secret accounts is to keep the financial flexibility to move money to the second stage. He thought that demographically they're going to win the war, and in order to do that, you have to be patient and let the Israelis bleed."

"He succeeded in everything," Lev concludes. "Our life philosophy here is impatience—because of the Holocaust, because of the military threats. In Israel we say that when we have sex we do it with sneakers on, so that we can run to our friends and tell them how it was. The Arabs have a word, tsumut—which means holding to the ground where your ancestors lived. My ancestors are from Germany," he adds. "I don't understand the meaning of tsumut. You know, Rachid and I went to the promenade once in Tel Aviv, and he said, 'I told Arafat many times, the Israelis are their own worst enemies. We don't have to shoot one bullet—just be patient, don't have any agreement with them, and all of what you see here will be ours.'"

On June 19, 2000, after a dispute about the division of the spoils, Rachid terminated Lev's authority over the account and removed the financial controls that Lev had insisted on. Three months later the second intifada began. In August of 2001 tens of millions began flowing out of the Lombard Odier accounts. By December of 2001 a decision was reached to close the accounts. The money made its way to banks around the world, including accounts controlled by Rachid in London and Cairo.

The Inner Circle

The Oslo Accords created something called the Palestinian Authority, but to this day there really is no such thing. The assertion that the Palestinian Authority does not exist may seem strange to Western ears, because honorifics such as "President Yasir Arafat" and "Foreign Minister Nabil Shaath" have been employed so often over the past ten years that it is hard for all but the most devilish skeptics not to assume the existence of a state apparatus roughly equivalent to that which operates in the United States or in Western Europe. Instead what exists on the ground is a vast and scattered archipelago of randomly located government ministries, competing security-services headquarters, and prisons that operate according to no coordinated plan. In the slow-moving offices of the major ministries, located in the al-Tiri district of Ramallah, you can find the murafiqoon of the dead leader—his companions of the last four decades, the veterans of the legendary victories and defeats and thousands of late-night meetings and press conferences. The one constant among the crystal eagles, EU paperweights, inlaid mother-of-pearl clocks from Syria, and other mementoes of their travels is the standard-issue high-definition photograph of the golden-domed Mosque of Omar, in Jerusalem, set against a cloudless blue sky.

Having known and trusted him for so long, Arafat's companions found it impossible not to believe that with one roll of the dice, the Old Man would reverse his fortunes and escape from the morass of petty administrative details and large-scale corruption that had come to characterize his rule. The Fatah men who had been his equals and trusted advisers over the years, and had the revolutionary credentials to stand up to him, like Abu Jihad, engineer of the Palestinian uprising against Israeli rule in the late 1980s, which became known as the "intifada," and Abu Iyad, the organizational boss of the Black September terrorist group, were assassinated before the Oslo process began. Having buried his peers and survived repeated assassination attempts himself, Arafat was no longer first among equals. His was the only opinion that mattered in Palestine. Arafat's fantasy life and his money gripped the vital organs of the Palestinian national movement for so long that practical political thinking became impossible.

As the identification of Yasir Arafat with the Palestinian national movement became fixed in stone with the signing of the Oslo Accords, those members of the international diplomatic community who saw Oslo as a great moral and political achievement felt themselves to be correspondingly obliged to excuse the Palestinian leader's most outrageous statements and actions as the quirks of a man who had dedicated himself to peace.

Not everyone was convinced by the hopeful fiction that Arafat was the Middle East's answer to Nelson Mandela. Young Palestinian revolutionaries soon had a closer look at the leader they had helped to bring back from exile. The Arafat they had worshipped from afar during the seventies and eighties was a visionary ascetic—the imaginative projection of brave and frightened Palestinians, most of whom were barely out of their teens, who conjured up the heroic leader they needed from radio broadcasts and clandestine texts that were passed from hand to hand and studied like pages of the Koran. The sight of the high-handed autocrat and his potbellied retinue in the flesh came as a shock to many young Palestinians, few of whom had ever ventured outside the West Bank, Gaza, and Israel.

Young Fatah cadres in the West Bank and Gaza soon found that the corruption of their elders was matched by a complete lack of positive ideas—however farfetched or loony—about the form that a future Palestinian polity might take. There would be no Year Zero of the Palestinian revolution. Western-style parliamentary institutions did exist but had little power. What followed Arafat's return to Palestine was a decade-long thieves' banquet at which Fatah's old guard divided up the spoils of Oslo and treated ordinary Palestinians as conquered subjects. When the second intifada, popularly known as the al-Aqsa intifada, started, the members of the young guard, most of whom were now firmly anchored in middle age, rallied around the Fatah leader Marwan Barghouti—whose fiery denunciations of official corruption had led to frequent clashes with Arafat—in the hope that violence would serve as a catalyst for change. Here again, the young guard of Fatah would become little more than cannon fodder for their elders; Barghouti was arrested by the Israelis in 2002, during Operation Defensive Shield, for masterminding terror attacks, and was sentenced to five consecutive life terms in prison.

In the cafés and apartments in Ramallah where we met, some of the leading members of Fatah's young guard spoke openly of their anger and disappointment at what had happened in Palestine since Oslo. They reserved their bitterest denunciations not for the Israelis but for Arafat's cronies, who had used state jobs to get rich, and showed little interest in their revolutionary progeny. "We remember their songs, their poems, their speeches, their beliefs, their thoughts, the names of their kids, even the number of their shoes," Ziad Abu Ain, one of Barghouti's closest friends, told me one afternoon, as we sat and talked in his apartment in Ramallah. "They don't even remember our names."

For the members of the old guard questions about how a few million Palestinians living in the West Bank and Gaza were to be governed were not of any particular interest. The Palestinian question was part of the larger pan-Arab discourse that had occupied the Nasserite and anti-colonialist study groups of their student days in Cairo, Damascus, and Beirut. As the symbolic leader of the Palestinian people, Yasir Arafat was the incarnation of a revolution that presented itself as a model for the rest of the Arab world—a symbol of secular revolutionary purity and anti-colonial zeal that had been supplanted in the eighties by the success of the Iranian revolution, the Sunni fundamentalist jihad against the Soviets in Afghanistan, and Hizbollah's war against the Israelis in Lebanon.

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David Samuels is a regular contributor to The Atlantic.

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