When people complain of corruption in the PNA -- and the word is loudly spoken these days – they speak in such vague and sweeping terms as to absolve the vast majority of any wrongdoing at the expense of a precious few.  Clucking noises are made in many quarters about the “need for reform of the security apparatus;” about President Arafat’s “refusal to combat corruption;” and about it being “high time for new leaders to take charge;” but seldom are the sources and uses of corruption specifically discussed; hardly ever are facts connected to faces; and rarely do the rumors that travel the streets translate into any actual indictments of any actual persons in any actual courts of law. 

There are several reasons for this, all of which boil down, in the end, to the breathtaking extent and magnitude of corruption.  A good many PNA officials have dirty hands, and those that don’t are unable or unwilling to speak in specifics, thereby restricting themselves to imprecise generalizations that do little to bring the guilty to book.  And so, the wild stories circulating on the street as to the complicity of so-and-so in such-and-such affair usually remain just that: wild stories aborted, before they can be proven credible, by the powerful individuals implicated and their many minions.  And thus, while the rumors continue to circulate, while the hand wringing about the “need for reform” and the “need for new faces” and, highly ironic, this - “greater power to the Prime Minister” - continues to be publicly indulged in, reform in the PNA remains just an idea; a collective wishful thought; the punch line of yet another bleak Palestinian joke.

The recently-unearthed cement scandal, however, might change all this.  For months now, anonymously-sourced stories have been circulating about the millions allegedly made by high-ranking PNA officials over the years on illicit cement sales to Israeli construction companies, cement which used to build the illegal Israeli settlements in the West Bank and now, possibly, the separation wall.  But only recently has proof of such deals emerged, and the details, horrendous enough in their own right, constitute merely the tip of an iceberg which may, if fully uncovered, render the word reform less sadly fanciful in the Palestinian context.

To its credit, many of these details have been uncovered by the Palestinian Legislative Council (PLC) itself, which launched an investigation into “cement gate” as early as March 2003.  This investigation, sponsored by several PLC committees (the Budget and Financial Affairs Committee, the Oversight and Human Rights Committees and the Legal Committee), was eventually conducted by three PLC members: Dr Hassan Khreishe,[1] Dr. Sa’di al-Krunz, and Mr. Jamal al-Shati.  Most of the known facts about this case stem from a report authored by these three men, and from various interviews given by them (Dr. Khreishe in particular) to the media.

The Case:

The cement scandal was first uncovered about a year ago, when the Egyptian newspaper Al’arabi al-Nassiri reported on a lucrative business agreement between an Egyptian cement company, Beni Sweif, and an Israeli entrepreneur, Mr. Zeev Belinsky, to purchase and transport 120,000 metric tons of cement from Egypt for sale in the Israeli market.  Mr. Belinsky, a wealthy entrepreneur who owns several businesses (among them the Totman Cement Company) and who holds both Israeli and German citizenship, began to bring the cement into Israel through the Al-Oja border crossing (in Hebrew, the Nitsana crossing).  The Al’arabi story broke around about the time that Israel had begun building the separation wall in earnest, and predictably enough, therefore, caused an uproar in the Arab world.  Buoyed by indignant public opinion, Egyptian anti-normalization groups campaigned successfully to bring an end to all such dealings between Egyptian companies and Israeli contractors.

Belinsky, however, was not at a loss for long.  Astute enough a businessman, he approached several large Palestinian cement companies with lucrative ‘middleman’ contracts.  While the PLC report doesn’t list all the companies with which Belinsky signed deals, two in particular are singled out for mention: the Tarifi Cement Companies group, owned by Jamal Tarifi, the brother of Jamil al-Tarifi, the PNA Minister for Civic Affairs (MCA), and the Barakeh General Trade group, owned by the Barakeh family.[2]  These companies had in common two characteristics which doubtless endeared them to Belinsky: both were owned by powerful families with close ties to the highest rung of the PNA leadership, and both had a history of highly profitable illicit business dealings with Israeli companies.

As Belinsky was busy signing contracts with these Palestinian companies, the Israeli army was also busy razing to the ground entire neighborhoods in Gaza (principally in Rafah) with brutal efficiency.  As part of its support for the PNA and the Palestinian people, the Egyptian government has an ongoing offer to sell to Palestinian companies subsidized cement to be used exclusively in PNA-administered territories to rebuild homes and infrastructure destroyed by the Israeli army.  The Ministry of National Economy (MNE) was tasked with administering the licenses for importing into the PNA territories these goods, and, to ensure that the right amounts reached the right destinations and to ensure, doubly, that every bit brought in was accounted for, the Minister of National Economy, Mr. Maher al-Masri, was charged with personally reviewing and approving each application for every import license. 

Meanwhile, the demand for cement in Israel was skyrocketing because of the heightened construction activity on the wall and several new settlements.  A bidding process for the import licenses ensued, with two companies coming out on top, the same two, unsurprisingly enough, that were now in business with Mr. Belinsky.  Once they obtained the permits from the MNE, these Palestinian companies began to buy large quantities of high-quality, international grade cement from Egypt at the subsidized prices, which they then channeled illegally into Israel on Belinsky’s – and, more likely than not, the separation wall’s – behalf.  The cement thus transported illegally into Israel was sold at an enormous profit: according to a report recently published in Al-ahram Weekly, it was bought for $12-$15 per ton from Egypt, and sold in Israel at $80-$100 per ton; while the actual prices have been disputed, the overall profit, given the large quantities involved, amounts to millions of dollars.  The PLC report claims that of the 420,000 tons of cement sold by Egypt to the Palestinian companies under the agreement between Egypt and the PNA, at least 390,000 tons ended up in Israel, with only about 30,000 remaining tons going into the Palestinian territories.

While the MNE has denied any complicity in the dealings between the Palestinian companies and Belinsky, certain incriminating facts that implicate the Ministry in the scandal have become known to the public.  For one, Mr. Maher al-Masri, the Minister charged with personally reviewing and approving each import license application, signed the approvals for the Tarifi company in one day – this for a process that is meant to be quite involved and protracted - while a guest at Mr. Jamil Tarifi’s house.[3]  For another, when it was brought to his attention in March last year that cement was being illegally transported to Israel from Egypt by the Tarifis, Mr. al-Masri continued to issue them import licenses for at least for another year.  Worse still, the Director General of Trade of the MNE, Mr. ‘Abd al-Hafiz Naufal, was spotted meeting with Mr. Belinsky, Mr. Jamal al-Tarifi and Mr. Mohammad Rashid “Khaled Slam” (personal economic advisor to President Yasser Afrafat) in the Samir Amiss hotel in Cairo, which clandestine meeting Mr. Naufal has since claimed happened entirely “by chance.”  (According to an interview published in the Arab journal Middle East Transparent on July 20^th 2004, Mr. Khreishe said Mr. Naufal was supposed to be in Dubai at the time, thereby rendering the fortuitous nature of this meeting highly improbable).  Also, according to the PLC report, the permits and licenses issued by the MNE to these Palestinian companies did not have expiration dates, and the open-ended quantities thus allowed in were recorded in numbers and not in letters, which made them easy to manipulate.  Moreover, the MNE did at no time monitor the quantities of cement bought from Egypt and brought into the Palestinian territories; nor did it publish any studies or statistics on the need for cement in the Palestinian market.  Incredibly, according to the same report in Middle East Transparent, a letter was sent from the office of Mr. Naufal (signed by a Mr. Shawan, who also happens to work for Tarifi) to the Egyptian plant at Beni Sweif, attesting that the cement purchased from it reached the Tarifi plants in the West Bank.  At around the same time, the MNE also sent a letter to the Prime Minister’s office, reassuring him that there were no irregularities in the import of cement. 

The complicity of the Prime Minister in this affair is as yet unclear, and the PLC report studiously avoids any allegations to that effect, although Dr. Hassan Khreishe has charged in subsequent interviews that PM Ahmad Qurie and his entire cabinet should resign because of their role in the affair. 

While President Arafat’s economic advisor, Mr. Khaled Slam, was present during the infamous meeting in Cairo, President Arafat’s own personal involvement in the affair remains as yet unclear.  What is known for a fact, however, is that Arafat has been aware for a while of the basics of the case, for a letter was sent to him by the PNA Comptroller Jarrar Al-Kidwa about the open-ended licenses issued to the Tarifis, and about the large amounts of imported cement being diverted into Israel by trucks belonging to a transportation company owned by the Tarifi family.  Interestingly enough, Mr. al-Kidwa, whose appointment has not been approved by the PLC,[4] has refused for undisclosed reasons to divulge to the PLC investigative committees and to the press the facts on which his letter to President Arafat was based.

While the report authored by the investigative committee of the PLC contains strong language calling for the indictment of the persons involved in the scandal, the Attorney General’s office has yet to prosecute anyone, and it is unclear, as usual, what steps will be taken in the future.  Meanwhile, the chain of dirty hands continues to grow longer, as more and more dirty facts about “cement gate” are unearthed by enterprising journalists in the region.  And, dirtiest fact of all, the separation wall continues to go up, strangulating Palestinian towns and people, while simultaneously contributing to the coffers of untold numbers of Palestinian politicians.