IsraelNN.com) 10:15 Dec-05-02, 30 Kislev 5763
According to a report published today by Maariv, Yossi Ginosar, an ex-secret service officer, who was former Prime Minister Ehud Baraks special envoy to Yasser Arafat, was also handling monies on behalf of the PLO leader and PA negotiator Mohammad Rashid. According to the report, the monies that passed through Ginosars hands on behalf of Arafat reached the sum of up to 300 million dollars, and were deposited in a secret account in Switzerland. The monies were supposedly intended for the use of the Arabs of the Palestinian Authority, but ended up being moved out of the Swiss banks to unknown destinations. The transfers were carried out, according to Maariv, with sizable profits for the Israelis involved.
An associate of Ginosar, businessman Azrad Lev, who exposed the corruption in the media told Isreal Radio, There were kickbacks for the transfers. On the other hand, when the monies were disappearing from the Swiss accounts, Lev claims, he and Ginosar were surprised and did not know where the money was going. Azrad Lev was quoted as saying, I came to realize that as the occupation corrupts, so too does the peace process.
WATCH THE GINOSAR SCANDAL GO AWAY
by Barry Chamish
On December 4, just six days ago, Maariv broke the biggest scandal in years in the biggest way in years. On Thursday, there was a massive front page promo for the Ginosar revelations about to appear in the weekend edition. On Friday, the big newspaper day in Israel, it was front page all over again in Maariv, followed by four more pages of expose and commentary. Wouldst that Rabin's real murder had received only 1% of the coverage. And with all this razzmatazz in the country's second largest circulation newspaper, my readers were very excited. This was the scandal that would lead to the Rabin assassination and Oslo. Here's a pretty typical example of the hopes this scandal was engendering: Barry, I think this might be it. If this scandal really breaks and the public demands justice... then you can ride the wave of all the economic corruption in the Oslo deal including Peres, Gillon and Rubin's foreign accounts! Follow the money. It should all lead to the assassination of Rabin. If Ginosar was financially vested in the Oslo windfall, along with his business partner Yasir... What would happen if Rabin threatened to pull the plug? Yasir would lose a lot of money in his personal bank accounts... which were controlled and skimmed by Ginosar. Couldn't Yasir have told his buddy Yosi and his mentor Shimon to get rid of Yitzhak or else he would blow their cover? Didn't Yasir and doesn't he still have information so damaging to Ginosar and Peres to motivate them to commit the crime? Why look to the Europeans and CFR? Shimon and Yosi could easily solve their woes with their history of shenanigans and their contacts within the Shabak. What about opening up a class action civil suit to sue Ginosar on behalf of the taxpayers of Israel. If it's not done in civil court, but in criminal court, Peres will make sure Ginosar is the lone patsy. Why is Maariv breaking this story? D. Dear reader, it's just not going to happen that way. The government is going to bury the story and has already started. Did you notice that at both the Likud and Labor primary conventions, not one candidate mentioned Ginossar? Have you seen how TV coverage of the scandal is becoming nearly non-existant? Here is the test of Israel's political and media honest: if Yossi Ginosar becomes Avishai Raviv, we have double proof of the depths of corruption within the Knesset, Courts and Media. For those unacquainted, here's the Ginosar Scandal. Yossi Ginosar was deputy head of the General Security Services (Shabak) until 1986 when it was discovered that he lied to a government commission of inquiry into the early killings of two terrorists in what is known as the Bus 300 Scandal. It should really be called The President Herzog Is A Crook Scandal because the then-Israeli president, Chaim Herzog pardoned Ginosar from his perjury crimes, (there was another one involving the false imprisonment of an IDF officer, Izat Nafsu for espionage), thus tainting the Herzog name forever. But did Ginosar's double-perjury to the IDF and government disqualify him from public service? Not at all. After being sacked by the Shabak, then-Trade Minister Ariel Sharon, appointed Ginosar to head the Israel Export Institute. When his tenure there ended in 1992, then-Housing Minister Binyamin Ben Eliezer appointed him head of the public housing corporation, Amidar. 1993 was a turning point. Yitzhak Rabin was forced by President Bush at a meeting in Kenebunkport Maine, on September 17, 1992 to begin what became known as the Oslo process. By the next year, the "peace" process was rolling in high gear and Rabin appointed Ginosar his special envoy to the PLO. Now why did Rabin choose such a slimeball for this sensitive post? Maariv provides an answer; "Ginosar threatened Rabin that if he didn't have his way, he'd spill the beans about everything. As a result, Rabin's daughter Dahlia would have nothing to do with him." It's a fair bet that Ginosar received Herzog's pardon and Sharon and Ben Eliezer's cushy jobs because he threatened them the same way. If you were once deputy head of the internal security services, it's not surprising what information you'd pick up along the way. Whatever Ginosar knew, it was strong enough to risk extortion charges against one president, one serving and one future prime minister, and one future head of the opposition. And more kingpins were to follow, but for slighty different motivations. The carrot would replace the stick. That is because Ginosar exploited his position as the emissary to the PLO to create a crime empire with Yasir Arafat. Perhaps the first offer was to arrange to have a casino built in Jericho, with everyone scraping away lots of the profits. But it didn't take long for Ginosar to expand his and Arafat's holdings. He offered to open up a secret Swiss bank account for Arafat and lots of straw companies to launder the funds through. Ginosar hired General Ehud Barak's paymaster Ozrad Lev to arrange the banking formalities and Arafat summoned his paymaster, Muhamed Rashid to work hand in hand with Lev. Eventually some $350 million of monies stolen from Arafat's people entered the account. Some of the money was invested in Israeli companies contracted to the PA in return for kickbacks, some went to offshore corporations which existed only to launder Arafat's stolen cash. But all the money came from either international aid or Israel tax rebates to the PA. Last August, Rashid emptied the account and no one has any idea where the $65 million he removed is today. This particular scam ended for Ginosar and he was at least $10 million richer for it, according to Rashid. However, Ginosar's downfall lay in wait. Ozrad Lev now had the time to consider what he had done. While much of the money went to buying new villas for Arafat and his cronies and other such expenses, at least some of the money might have been used to finance terrorism. Ozrad used the word "might," we will say "did." Ginosar and Lev were financing the mass murder of their countrymen and endangering the viability of the state. And a week after the facts came out, the attorney-general and police are debating whether there is any basis for opening a criminal investigation against Ginosar and Lev and the media is slowly killing the issue. And here are two reasons why: Barak and Peres. Of Barak, he was so fond of Ginossar that he wanted him to be a representative at the Camp David "Peace" Talks under the "honest" tutelage of William Clinton. But attorney-general Elyakim Rubinstein, the same one we're stuck with today, forbade Barak appointing him a member of his delegation because Ginosar refused to sign a declaration detailing his business ties with the PLO. So, now get this, it's rich, Barak persuaded Clinton to invite Ginosar to be a member of HIS delegation. And Clinton agreed. Ginosar now sat in the inner corridors of Camp David as a member of the American team. No kidding, this really happened. And what was Barak's pretext for excusing Ginosar? He claims that Mossad chief Danny Yatom told him Rubinstein was wrong. According to a 1996 article in the London Observor, PM Netanyahu appointed Yatom head of the Mossad in return for his silence about the true Rabin murder. Let's ignore Barak's flimsy excuse and start asking real questions. So here we have, negotiating away Israel's security, both Arafat and his business partner Ginosar. Why would Barak really agree to this arrangement when Rubinstein informed him precisely what the problem was? Maariv provides us with two hints. Just after Barak was elected, Lev and Ginosar drove to Ramallah to meet the PLO leaders, probably all getting a cut of the action by now. Ginosar told Lev, "You were Barak's paymaster. They want to know everything about him from you and they'll pay you well for the information." Lev claims he rejected Ginosar's proposal with disgust. But what do we make of this insight from Maariv? A few months later Ginosar phoned Lev and said, "I just had a meeting with Barak. He's completely nuts, you know." Though nuts, Barak likes to earn money through fraud and extortion. The second biggest recent scandal, after the Rabin murder, that the government has managed to squelch, is Barak's illegal campaign funds. His cronies collected many millions of dollars from unwary foreign donors, assuring them that the money was not going to be used to defeat Netanyahu but to defeat poverty and ignorance. Naturally it all ended up in Barak's back pocket. And why is Barak so reluctant to answer congressional questions about how he persuaded Clinton to pardon Marc Rich? The answer is the same one as why Barak appointed Ginosar to Camp David: he was getting a cut of Ginosar and Arafat's action. Why else? And now we go back to 1995. Rabin is dead and Peres takes over as prime minister. It doesn't take very long before he appoints Ginosar his special envoy to the "Palestinian" rulers. As my astute reader pointed out at the beginning of this explanation, Rabin wanted out of Oslo and that would have been very costly for Ginosar. Was he in on the Peres assassination team? If he isn't investigated, we'll never know. Peres got a cut of Ginosar's deals and we know that because Peres, through the Peres Center For Peace, owns a 1.3% share of Arafat's telephone company, Paltel. The Bin Laden family of Saudi Arabia owns the lion's share. This was another revelation made initially by Maariv, some two years ago. Now look at the list of directors of the Peres Peace Center. What do you know, Yossi Ginosar is on Peres' board. No, my hopeful readers, this scandal will be buried because it will take down Peres and Barak for starters and then spread throughout the Israeli and "Palestinian" leadership, finally exposing the Oslo "Peace" Process as model of statesmanship by graft and embezzlement.
The following Haaretz article provides all the background you'll need to absorb my previous explication. If the length intimidates you, jump to the end for an enjoyable contest:
Challenge No. 43
A Secret Account in Tel Aviv Funds Arafat's Oppression Hand in Glove
By Michal Schwartz
The Palestinian Authority (PA) has a huge bureaucracy and numerous militias, but few people knew until recently how these establishments get their money. The countries that donate to the PA, especially Japan and the European Union, do not like to fund such non-productive entities. They want their largesse to go into infrastructure, not into the salaries of bureaucrats and policemen, especially since the PA record on human rights has been sharply criticized. What is worse, these donor countries demand a reckoning. How then can the PA meet its payroll? The answer lies in a branch of Bank Leumi, on Ha-Hashmonaim Street, Tel Aviv, in an account controlled by two men: Yasser Arafat and his economic advisor, Mohammed Rashid. Only now has the secret account become public knowledge. Because the private sector is so meager and the bureaucracy so large, Arafat is by far the largest employer in the Territories. About 80,000 breadwinners depend upon him for their salaries -- and this at a time of soaring unemployment. But Arafat himself depends upon the account in Tel Aviv. Thus Israel continues to hold the real power. Only by its good graces can Arafat continue to buy support, curb democratic freedoms, and use his employees to stifle opposition. He and his acolytes are thought to have stashed away some of the money abroad, however, in case things get out of hand.1 Deposits to this "second fund," as the account has been dubbed, come from two main sources: 1. Israel imports gasoline and supplies a portion of this to the PA areas; all import customs collected on this portion go to the fund. 2. The heads of the monopolies in the PA areas likewise divert shares of their profits to the account. Where does the money come from? Let us look at the sources of the bank deposits in detail. Customs duties: Israel and the PA signed the Paris economic accords in April 1994. The accords stipulate that most of the goods entering the Palestinian areas must first be imported by Israel. All revenues on the goods are collected by Israel on behalf of the PA. These include the Value Added Tax (VAT), customs duties, import taxes, and levies on tobacco, alcohol and gasoline. Israel likewise collects health and income taxes from Palestinians who work within its area. Israel transfers these revenues to the PA after deducting service fees, as well as any amounts the PA owes it for the use of its electricity, telephone and medical services. The remainder, except for the refund on the gasoline levy, goes to four bank accounts in the Gaza branches of the Palestine Bank, as well as to the Arab Bank. These Israeli transfers account for almost 50% of the Palestinian budget. The gasoline levy is an exception. Israel transfers it to the account in Tel Aviv. Since 1994 it has put at least $166 million in that "second fund." This year's deposits alone amount to $82.5 million. Monopolies: Monopolies control 27 basic commodities entering the PA-controlled areas, including steel, cement, gasoline and meat. These firms do not manufacture goods or provide employment, but merely import from Israel. Members of a clique close to Arafat have set up joint ventures with Israeli businessmen. Together they reap the benefits of monopolistic overpricing and excessive profits. Arafat's partner in the secret account, Mohammed Rashid, heads the Territories' largest monopoly, which controls gasoline. He pockets part of the profit and sends the rest to the "second fund," which also receives the gasoline customs levy. Various members of the Palestinian Legislative Council (PLC) have asked the PA for details about the gasoline monopoly, but the questions have always been shunted aside for "security" reasons. Before the Paris economic accords, Israel supplied gasoline to the Palestinians through the Pedesco consortium, consisting of three companies: Paz, Delek and Sonol. Pedesco had contracts to supply several gasoline stations in the Territories until the year 2000. But in 1994, with the coming of Palestinian self-rule, members of Jibril Rajoub's Preventive Security Services (one of the militias) notified gasoline stations all over the Territories that henceforth they were to buy only from Dor, another Israeli firm. Rajoub's security men forcibly kept Pedesco trucks from selling their gas. Pedesco also lost all the equipment it had supplied to stations in Gaza. Pedesco lost out because the PA, without so much as issuing a tender, had selected Dor as the sole supplier. Pedesco estimates its losses at $13.3 million. It has appealed to the Israeli state comptroller, to the PA and to the Israeli High Court -- so far to no avail. Mohammed Rashid also signed a contract with Nesher, Israel's largest cement factory, so he now has that monopoly too. Nesher's sales to the PA amount to 18% of its total revenues. Many other top officials are part of this system. Nabil Sha'ath, the Minister of Planning, for instance, owns a big Egyptian computer company, which is the main supplier to the PA. Yasser Abbas, son of Abbas Zaki, a PLC member from Fatah, and Sami Ramlawi, a senior official in the Palestinian Ministry of Finance, both import electronic gadgets for supply to the PA. Mohammed Dahalan, chief of Preventive Security in Gaza, owns a freight company in Erez and heads a monopoly that controls the gravel industry. Hashem Abu Nada, an economic advisor to Arafat, and Ramzi Houri, chief of Arafat's bureau, head the monopoly known as Al-Baher.2 At the time Israel and the PA signed the Paris accords, many of these monopolies already existed. The accords merely gave them an official sanction to operate. An Oslo Idyll: From Enemies to Friends To run their import businesses, the monopoly chiefs have linked up with Israeli suppliers. Shmuel Goren, for example, once the chief military coordinator in the Territories, is a manager at Dor. Yossi Ginosar was a senior member of the General Security Services (GSS or Shin Bet). The GSS dismissed him after he was implicated in cases of torture and cover-up. He then joined the Labor party. After failing to make a mark in politics because of his dubious past, he moved on to business. He is a close friend of Mohammed Rashid; he was even invited to Rashid's wedding in Cairo. At one stage Ginosar arranged a meeting between Rashid and an Israeli tobacco importer. According to the latter Rashid proposed that they establish a company to import tobacco into the Territories and split the profit among themselves: 45% to each of the owners and the remaining 10% to Ginosar for his role as broker. The deal, however, has not gone through. The Hebrew daily Ha'aretz attempted to interview Ginosar, but he refused. The PA severely punishes any attempt by the Palestinian press to publish articles which mention these links. When Asad al-Asad, a Palestinian editor, translated criticisms of Ginosar which had appeared in Globus, the prestigious Israeli financial newspaper, he was held for 24 hours by Rajoub's men for "breaching security". The close friendship between one of the most detested people in the GSS and top PA officials typifies the new era of collaboration and corruption. Silence is golden Challenge and its sister publication in Arabic, Al-Sabar, have revealed aspects of this system in the past. Al-Sabar wrote about the secret bank account,3 as well as the collusion between top PA officials and dubious Israeli businessmen.4 Both Al-Sabar and Challenge have described the growth and domination of monopolies in the Territories, especially in Gaza.5 Dr. Sara Roy, an American economist, has also dealt with monopolies extensively in academic journals.6 Yet not one Arabic newspaper in the Territories published any of this information. Politicians too kept quiet. The only exception was Husam Khader, an independent PLC member from Nablus. Khader exposed the sale of adulterated flour. This too led nowhere. Al-Sabar attempted to get more details about this scam from the Control and Economic Committees of the PLC. The legislators promised the newspaper more details after completion of a report on corruption and monopolies. The report has never seen the light of day. The Hebrew and Arabic media in Israel, for their part, have also shown little interest in this growing, insidious system. The Israeli courts and the Office of the State Comptroller (a body that deals with corruption in government) turned a deaf ear to complaints by Israeli companies which had lost out on business. The lid on this corrupt system popped open at last only after sections of the International Monetary Fund and the European donor countries, as well as disgruntled companies on both sides of the Green Line, took the inside details to the journalists of the mainstream paper Ha'aretz. It published an extensive investigative report,7 presenting the information uncovered earlier by Al-Sabar, together with much more. We dare say that this is still but the tip of the iceberg. Turning a blind eye Challenge asked a European official based in Gaza for his thoughts concerning Palestinian officials involved in corruption. He answered, "The source of all problems is the Paris accord, which leaves the Palestinian economy in Israeli hands, as well as the Israeli closure, which suffocates the Palestinian economy." He hoped that the monopolies would be on the way out by the end of 1998, as Palestinian officials had promised the donor countries. The official's attitude can be summed up thus: This is how Third World countries operate, these are the people who must put the Oslo accords into practice, and we have to accept them as they are if we want to save Oslo. By no means will we exert pressure on them. We want their stability. The official vehemently denied a statement in Ha'aretz , according to which the donor countries had threatened to stop aiding the PA if it failed to curb corruption and dismantle the monopolies. Israel's attitude resembles that of the European official. It is quite happy with the present arrangement, which leaves the Territories in the hands of a clique whose members are dependent for their personal wealth on Israel's economy. One incident epitomizes the skewed power equation. In September last year, Palestinian policemen and Israeli soldiers were firing at each other because Netanyahu had opened a tunnel in Jerusalem's Old City. Even at the height of the battle, a high-ranking Palestinian official phoned Arye Zaif, the head of Israeli customs. Zaif controls the huge monetary transfers to the PA. The official asked Zaif to make a scheduled transfer two days ahead of schedule. Zaif agreed. The street battles, it turns out, were just a superficial show of resistance. Many died, but the PA knew in advance there was nothing to gain by fighting. It depends overwhelmingly on Israel for its day-to-day needs, and both sides know this. Israel and the PA have yet to negotiate the final status of the Territories. Given the background described above, the talks can only tilt in one direction. Israel will dictate what it pleases. Arafat will protest, but he will finally make do with token concessions in order to keep his regime in power. The Palestinian people will continue to suffer under the double yoke of two rapacious regimes. The fundamental problem will remain unsolved. Peace has become more elusive than ever.
Notes 1 Ronen Bergman and David Ratner, "The man who swallowed Gaza," Ha'aretz, April 4, 1997. We are indebted to the Bergman-Ratner article for many of the details in what follows.
2 Iyad Khalaile, "Al-Baher company: A corrupt monopoly," Al-Sabar, June 28, 1996; and Iyad Khalaile, "Where is the donor's money going?", Challenge, No. 39, Sept.-Oct 1996.
3 Michal Schwartz, "Israel encourages Palestinian monopolies: Corruption finances Oppression," Al-Sabar, Feb. 28, 1997.
5 See footnote 2.
6 Dr. Sara Roy , "Economic deterioration in the Gaza Strip," Middle East Report, July-Sept. 1996.
7 See Footnote 1.