The Booming Business of Palestinian Victimhood

Inside the Palestinian money-making machine that is oiled almost perfectly with bribery, nepotism, and kleptocracy.

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In 1993, the Oslo Accords established Palestinian self-rule over 98-percent of the Palestinian population in the West Bank and Gaza.

The Palestine Liberation Organization’s transformation into the Palestinian Authority, as a result of the Oslo Accords, was supposed to reshape the organization from one that largely relied on illegal activities for funding, to a more “mature” version of itself. Instead, the Oslo Accords merely gave legitimacy and expansion to the PLO’s bad behavior.

Since its inception in 1964, the Palestine Liberation Organization (historically the primary Palestinian political faction) was classified as a terrorist organization.

It was mainly funded by the Soviet Union and its satellites in Europe, Latin America, and Africa, as well as by members of the Arab League — positioning it to exact criminal activities and terrorism against Israel with impunity, while funding a worldwide propaganda campaign against Israel that won it great popularity and influence for the “Palestinian people.”

The PLO used drug trafficking, arms smuggling, money laundering, and counterfeiting to amass a fortune estimated to be $10 billion by the early 1990s. It had connections with international criminal organizations, drug cartels, other terror groups, and rogue states such as Libya, Iran, Iraq, North Korea, and Sudan.

“Instead of creating the independent and robust civil institutions necessary for good governance, promoting peace with Israel, and improving the lives of its people, the billions of dollars of international aid were used to create a corrupt dictatorship focusing on enriching its elites, inciting its people against Israel, advocating terrorism, and waging a massive international campaign to demonize, delegitimize, and destroy the Jewish state,” according to Ziva Dahl, a Senior Fellow with the Haym Salomon Center.¹

Yasser Arafat, chairman of the PLO, was notoriously corrupt, using public funds for his own purposes, which ranged from financing an expensive lifestyle in Paris for his wife, to buying and retaining the support of Palestinian politicians, to funding 13 so-called “security” organizations — which Israeli Prime Minister Ariel Sharon used to call “security-terror organizations.”

Hasan Khreishah, the deputy speaker of the Palestinian Legislative Council, spoke out on the issue, saying: “Since the signing of the Oslo Accords, we have had 12 Palestinian governments. Each government has at least 24 ministers. This means we have had 228 ministers, in addition to advisors. All receive high salaries and luxurious vehicles.”

The head of the Palestinian Investment Fund, for instance, makes more than $400,000 per year, while the average Palestinian makes around $5,000 annually.

“The Clinton administration invited Arafat to the White House 13 times, more times than any other foreign visitor, and you can be sure that among the many possible subjects being discussed his personal corruption did not appear on the list,” according to Elliott Abrams, a Senior Fellow for the Middle Eastern Studies Council on Foreign Relations.²

“That was a very damaging position for our country to take, for it just encouraged even more corruption,” Abrams added. “It signaled to Palestinians who were disgusted with public corruption that we were not interested and were not going to hold Arafat to account.”

After the 2000 Camp David Summit failed to produce meaningful progress toward a two-state solution between Israel and the Palestinians, the Second Intifada (a violent Palestinian uprising) immediately ensued, resulting in more than a thousand Israeli deaths, the worst result since Israel’s War of Independence in 1948.

It was at this time that the Palestinian Authority underwent another change: incorporating Islam into its political rhetoric and adding jihad to its agenda. As a result, the Palestinian Authority gained even more support financially and politically within the Arab and Muslim worlds, much like al-Qaeda did later.

According to a report from 2001, during the first year of the Second Intifada, the amount of money officially donated to the Palestinian Authority jumped 80-percent, from $555 million to more than $1 billion.

Meanwhile, a variety of countries and humanitarian organizations continued sending big bucks to the Palestinians, perhaps as a concession for not knowing how to solve the Israeli-Palestinian conflict, or perhaps as a way to show their constituents that they “care about” the Palestinians. The Palestinian Authority has received an estimated $25 billion in financial aid from the U.S. and other Western countries, the highest-per-capita assistance in the world.

Whether Palestinian leaders care about their people is a different story, judging from their long history of kleptocracy: the practice of expropriating the wealth of the people and land they govern, typically by embezzling or misappropriating government funds at the expense of the greater population.

A European Union audit of the years 2008 to 2012 found that two billion euros of its aid were lost to corruption and misappropriation by Palestinian leaders. Yet this didn’t cause the EU to scale back its aid, allocating a nearly two-billion euro budget for the Palestinians between 2021 and next year.³

All this while the Palestinian Authority refuses to use its considerable international aid to relocate more than 100,000 Palestinians from Palestinian-controlled refugee camps to residential locations in the territories, preferring to leave them confined under extremely unpleasant conditions.

At the same time, Tareq Abbas, son of the current Palestinian Authority president, is a multi-millionaire who owns villas in Jordan, Lebanon, and London. His older brother, Yasser (named after Arafat), has made a fortune from his monopoly sale of U.S.-made cigarettes in Judea and Samaria (also known as the West Bank).

Leaked records from a Panamanian law firm show that Palestinian Authority President Mahmoud Abbas and his two sons used power and influence to control the two major Palestinian economic boards and built a West Bank economic empire worth more than $300 million.⁴

Mahmoud Abbas’ authoritarian rule — he’s now in the 18th year of a four-year term — has allowed his family’s consortium to dominate the West Bank’s commerce and labor markets, including owning shopping centers, media, and insurance companies, while distributing food, cigarettes, cosmetics, and other consumer items.

Jared Kushner, the son-in-law of Donald Trump and one of the former U.S. president’s senior advisors during their time in office, recently told a story about Mahmoud Abbas, saying that Kushner and his team would meet with Israeli Prime Minister Benjamin Netanyahu “who runs a military superpower and an economic superpower,” but “would take a commercial EL AL flight” to Washington, D.C.

On the other hand, Abbas would come visit them in Washington “and he obviously represents a ‘refugee group’” yet “he would fly in a $60-million Boeing private business jet,” Kushner said. “I’d meet with him and we’d be sitting around and he’d put a cigarette into his mouth and somebody would come over to light the cigarette for him. I’d be like, ‘Am I meeting with the head of a refugee group or am I meeting with a king?’”⁵

According to Aaron Menenberg, Executive Director of the Public Interest Fellowship, many of the Palestinian Authority’s supporters tend to look for ways to explain away their problems.

“They have composed a popular narrative in which, despite the Palestinian Authority’s corruption — or perhaps regardless of it — the Palestinians’ problems are primarily Israel’s fault,” Menenberg said. “Economic and political development in the Palestinian territories, it is claimed, can only move forward if Israel withdraws from the West Bank, voids its security requirements for border movement, and allows the free flow of people and goods.”⁶

If you think that’s the butt of the joke, get this: Between 2002 and 2004, Israel began building a security barrier, separating it from the West Bank to prevent repeated Palestinian terrorism. Publicly, the Palestinian Authority called this the “apartheid wall,” but while the barrier was being denounced, it was being built with Palestinian cement, corruptly diverted by Palestinian Authority officials.

Some 20,000 tons of cement, imported from Egypt for building Palestinian homes and buildings in Gaza, had been resold at huge profits to the Israelis for use in constructing separation barriers and settlements throughout the West Bank.⁷

“The refusal of the international community to hold Abbas and the Palestinian Authority accountable for nepotism and corruption drove Gazan Palestinians into the open arms of Hamas, the terrorist group which promised them reform,” Ziva Dahl wrote.

In 2007, the year it took over governing power in Gaza, Hamas managed to allocate (through funding from Iran) $60 million in monthly stipends for 100,000 workers in Gaza, and a similar sum for 3,000 fishermen laid idle by Israel’s imposition of restrictions on fishing offshore, plus grants totaling $45 million to Palestinian detainees in Israeli prisons and their families.⁸

Even the Palestinian Authority, which is considered to be the more moderate governing body compared to Hamas, has legislation and allocations of monthly salaries and benefits that reward imprisoned and released terrorists, as well as the families of “Martyrs” — amounting to $300 million annually at one point.⁹

To be sure, these grants are subject to a rigorous cost-benefit analysis of if and how beneficiaries will support Palestinian factions, with those linked to terrorist activities often receiving more than others.¹⁰

Hamas leaders have taken this sort of civilian bribery to new heights, making Abbas and the Palestinian Authority look like mere peasants. The terror group’s top three leaders alone are worth a total of $11 billion and enjoy a life of luxury in Qatar and Turkey.¹¹

Even though Hamas is largely relegated to the Gaza Strip, the terror group and its affiliated charities run at least 40-percent of the social institutions in the West Bank and Gaza, which offer monthly financial aid to hundreds of thousands of Palestinians.

In turn, Hamas marinates its Islamic terrorist ideology into Palestinian education and social systems, indoctrinating children from a young age to despise Jews and Israel, while turning them and their families into Hamas aficionados.

And boy are there a lot of children in Gaza — 47-percent of the local 2.2 million populace — a byproduct of Hamas’ strategy to urge women “to have more children to create a larger army.” The result is one of the world’s lowest percentages of women in the labor market, at less than 15-percent.¹²

In addition to Hamas’ theological stance about “the role of women in Islamic society” being the “maker of men”¹³ (according to their charter), there is economic stimulus for the high fertility rate: While women are housebound, their husbands earn more money as their families expand. Traditionally, men will receive extra wages if they have more children.

To subsidize these “services,” Hamas draws its money from a variety of avenues, such as:

• Qatar, which sends Hamas between $120 million and $480 million per year for government salaries and cash handouts to families

• The United Nations, which funds and runs schools and hospitals in Gaza, spending $600 million in 2020 alone

• Iran, which provides Hamas with $100 million annually

• Smuggled Egyptian goods, which generate between $12 and $15 million per month

But what might be most impressive about Palestinian factions like Hamas and the Palestinian Authority is not how much money they receive, but how they fundraise. The process works something like this: Palestinian terrorists brutally attack Israel to force a significant military response from the Israeli government, which translates into mass misery for the Palestinian civilian population, captured by a news media eager to disseminate this agony far and wide.

In turn, Hamas and the Palestinian Authority use this mass misery to generate new recruits, propaganda, and support — both diplomatic and financial — from allies in the region and across the world.

The West, easily fooled by the news media, encourages their countries and humanitarian organizations to continue funneling billions of dollars to the Palestinian territories, thereby giving Hamas and the Palestinian Authority a very literal free pass from spending its money on socioeconomic initiatives for the everyday Palestinian people.

This means more money for terrorism and other illegal activities, and the process repeats itself, taking on a lethal flywheel effect that pushes a two-state solution further from any semblance of reality.

Welcome to the booming business of Palestinian victimhood: a money-making machine oiled almost perfectly with bribery, nepotism, and kleptocracy.

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1. “Palestinian kleptocracy: West accepts corruption, people suffer the consequences.” The Hill. https://thehill.com/blogs/congress-blog/foreign-policy/306179-palestinian-kleptocracy-west-accepts-corruption-people.

2. “Palestinian Foreign Aid: Where Does the Aid Money Go?” Jewish Virtual Library. https://www.jewishvirtuallibrary.org/where-does-the-palestinian-aid-money-go.

3. “EU backtracks on previous suspension of Palestinian development aid.” Al Jazeera. https://www.aljazeera.com/news/2023/10/9/eu-suspends-development-aid-payments-to-palestinians-after-hamas-attack.

4. “Palestinian kleptocracy: West accepts corruption, people suffer the consequences.” The Hill. https://thehill.com/blogs/congress-blog/foreign-policy/306179-palestinian-kleptocracy-west-accepts-corruption-people.

5. “E153: In conversation with Jared Kushner: Israel-Hamas War, paths forward, macro picture, AI.” All-In Podcast. YouTube.

6. “Terrorists & Kleptocrats: How Corruption is Eating the Palestinians Alive.” The Tower. https://www.thetower.org/article/terrorists-kleptocrats-how-corruption-is-eating-the-palestinians-alive.

7. “Chronic Kleptocracy: Corruption Within the Palestinian Political Establishment.” Council on Foreign Relations. https://cdn.cfr.org/sites/default/files/pdf/2012/07/Abrams.HFACTestimony_07092012.pdf.

8. Mohsen Saleh, The Palestinian Strategic Report 2006, Al Manhal, 2007 p. 198.

9. “Incentivizing Terrorism: Palestinian Authority Allocations to Terrorists and their Families.” Jerusalem Center for Public Affairs. https://jcpa.org/paying-salaries-terrorists-contradicts-palestinian-vows-peaceful-intentions.

10. James J.F. Forrest, "Conclusion", in James Dingley, Combating Terrorism in Northern Ireland, Routledge, 2008 pp. 280–300 [290].

11. “Hamas leaders worth staggering $11B revel in luxury — while Gaza’s people suffer.” The New York Post. https://nypost.com/2023/11/07/news/hamas-leaders-worth-11bn-live-luxury-lives-in-qatar.

12. “The reasons why Gaza’s population is so young.” NewScientist. https://www.newscientist.com/article/dn25993-the-reasons-why-gazas-population-is-so-young.

13. “Hamas Charter.” Wikipedia. https://en.wikipedia.org/wiki/Hamas_Charter.