Probes find EU taxpayer aid was diverted to Palestinian extremists

SUSPICIONS were growing last night that funds sent by the European Union to support ordinary Palestinians have been diverted to terrorists.

Despite strong denials from senior European Commission leaders, two separate investigations have uncovered disturbing evidence that taxpayers’ money has fallen into the wrong hands.

A committee of the European parliament, which reported last week, was split over the allegations. A majority report by seven of the 13 members of the group did not rule out the possibility that EU funds had been misappropriated, but concluded that only evidence acceptable to a court should be taken into account.

But a minority report by the other six members concluded that money had been diverted from the Palestinian Authority to members of Fatah, which is linked to the ‘Al Aqsa Martyrs Brigades’ - a group on the EU’s terror list.

"Examination of documents showed that payments to alleged Fatah activists had been authorised for a sum of $21,000," the report said.

Armin Laschet, a German Christian Democrat, who drafted the report, concluded: "It is legitimate to consider that budgetary assistance was not the most appropriate financial instrument."

The allegations relate mainly to funds given by the EU to the Palestinian Authority between June 2001 and December 2002, when Israel withheld tax transfers, threatening the Palestinian Authority with collapse.

The EU stepped in to provide $10m a month to pay salaries and keep basic services running. It withdrew direct assistance after Israel resumed payments.

Potentially even more lethal is a forthcoming report from the European Commission’s Anti-Fraud Office, which will conclude that tens of millions of dollars of aid donated by the EU for humanitarian purposes to the Palestinian Authority has been diverted to terrorist operations against Israel.

The report is expected to confirm Israeli allegations that Palestinian leader Yasser Arafat has channelled the funds to the Fatah and Hamas terrorist organisations, according to Brussels insiders.

The findings are based on documents seized at the Palestinian Authority’s headquarters by Israeli troops. Officials visited Jerusalem earlier this year to be briefed by Israeli security personnel, and are said to be have been convinced of the authenticity of the documents they were shown. They include letters signed by Arafat ordering payments to 11 terrorist leaders for guerrilla operations, mortgage payments of the families of Hamas suicide bombers, and cash awards of several thousand dollars to the family members.

Other documents reveal that EU funds went to the Palestinian Authority’s ‘Preventative Security Forces’ to organise so-called spontaneous demonstrations in support of the imprisoned Fatah member Marwan Barghouti, who was on trial in Israel for masterminding terror attacks that killed 26 Israelis.

One Brussels insider said: "Everyone knows that the Palestinian Authority is deeply corrupt, but you can’t follow where the money goes because it’s like pouring water on to sand. That is what sustains the denials, and that is what frustrates the Israelis."

Last week OLAF said it had "not finalised its investigation" and that "any conclusions attributed to OLAF are premature and are not confirmed by evidence."

Both the OLAF and the parliamentary investigations were launched despite opposition from Chris Patten, the EU’s foreign relations commissioner.