Did the EU’s ‘lost’ €2 Billion aid money ‘fall close to the tree’?

Are the sons of Mahmoud Abbas, the Palestinian president growing rich off their father’s system of ‘lost aid’ and extensive Palestinian corruption?

BY JONATHAN SCHANZER

 

 

In the wake of the Arab Spring, U.S. leaders have promised to reverse the United States’ long reliance on autocratic, unrepresentative leaders who enrich themselves at the expense of their citizens. There’s only one problem: Just as top American officials have been making these lofty promises, new details are emerging of how close family members of Palestinian leader Mahmoud Abbas, a major U.S. partner in the Middle East, have grown wealthy. Have they enriched themselves at the expense of regular Palestinians — and even U.S. taxpayers?

PA President's son Yasser Abbas - Photo: AP

PA President’s son Yasser Abbas – Photo: AP

Abbas’s wealth recently became a source of controversy during the investigation of Mohammed Rachid, an economic advisor to the late Palestinian leader Yasir Arafat, in a high-profile corruption probe. Last month, Palestinian officials charged Rachid with siphoning off millions of dollars in public funds; his trial is set to begin on June 7.

According to a former Palestinian advisor, Abbas holds a grudge against Rachid dating back to the peace talks during the waning days of the Clinton era. In that intense period, Rachid was an advocate of working with Israel to find a solution, while Abbas called diplomacy a “trap that was laid for us.” Abbas also resented Rachid because he was an Iraqi Kurd — not even a Palestinian — who had gained Arafat’s trust and was part of his inner circle, while Abbas was on the outside looking in. “There was a huge amount of jealousy,” the former advisor said.

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With his back up against a wall, Rachid has now fired back at the Palestinian president with claims that Abbas himself has socked away $100 million in ill-gotten gains.

In stalking Rachid, whether or not the charges have merit, Abbas may have opened up a Pandora’s box. The conspicuous wealth of Abbas’s own sons, Yasser and Tarek, has become a source of quiet controversy in Palestinian society since at least 2009, when Reuters first published a series of articles tying the sons to several business deals, including a few that had U.S. taxpayer support.

Yasser, the elder son, graduated with a degree in civil engineering from Washington State University in 1983 and carries both Palestinian and Canadian passports. According to his biography (where he goes by the alias Yasser Mahmoud), he worked for a variety of Gulf contracting firms from the 1980s until the mid-1990s before returning to Ramallah in 1997 to launch businesses of his own.

Yasser now owns Falcon Tobacco, which reportedly enjoys a monopoly on the sale of U.S.-made cigarettes in the Palestinian territories. According to the Toronto Star, Yasser also chairs Falcon Holding Group, a Palestinian corporate conglomerate that owns Falcon Electrical Mechanical Contracting Company (also called Falcon Electro Mechanical Contracting Company, or FEMC), an engineering interest that was established in 2000 and boasts offices in Gaza, Jordan, Qatar, the United Arab Emirates, and the West Bank. This business success has come with a helping hand from Uncle Sam: According to a Reuters report, Abbas’s company received $1.89 million from USAID in 2005 to build a sewage system in the West Bank town of Hebron.

According to Yasser’s biography, other arms of Falcon Holding Group include Falcon Global Telecommunication Services Company and Falcon General Investment Company, companies about which less is known. Through the Falcon companies, Yasser boasted to an Emirati magazine in 2009 that the companies’ revenues total some $35 million per year.

And the Falcon group doesn’t even account for everything. Yasser is listed by the New York-based financial information database CreditRiskMonitor.com as the chairman of the publicly traded Al-Mashreq Insurance Company, with 11 offices across the Palestinian territories. The company is valued on the Palestinian stock exchange at $3.25 million.

Finally, Yasser serves as managing director of the First Option Project Construction Management Company, whose website suggests that it does a great deal of public works projects, such as road and school construction, on behalf of the Palestinian Authority. First Option employs at least 15 people in offices in Amman, Tunis, Cairo, Montenegro, and Ramallah. This enterprise also benefited from the U.S. government’s financial support: As Reuters reported, First Option was awarded nearly $300,000 in USAID funds between 2005 and 2008.

 

View original Foreign Policy publication at: http://www.foreignpolicy.com/articles/2012/06/05/the_brothers_abbas

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