Exposed: World Bank’s Palestinian Recovery and Development Program Funding Salaries for Terrorists

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Photo by Adi Gefen/TPS on 13 February, 2019

By Baruch Yedid/TPS • 16 October, 2019

International aid transferred to the Palestinian Authority (PA) through the World Bank’s Palestinian Recovery and Development Program (PRDP) Trust Fund is used to pay the salaries of Palestinian terrorists, an in-depth investigation by TPS has exposed. A joint inquiry by TPS and the Palestinian Media Watch (PMW) has uncovered the fact that the PRDP, in its signed agreements with the PLO, does not prohibit the use of international funding transferred through it to pay the salaries of Palestinian terrorists killed or imprisoned by Israel and to their families.

The expose further showed that the World Bank is aware of the issue, but has taken no action to prevent it. The PRDP does not directly pay the salaries of the Palestinian terrorists, but a lack of proper legal procedures and oversight enables the PA to use the funding to pay fund the terrorist’s stipends, which Israel has demonstrated serve as an incentive for terrorism.

Established in 2008, the PRDP, the World Bank’s organ that helps donor countries to support the Palestinian Authority’s policy agenda as expressed in the PA’s National Policy Agenda 2017-2022 by channeling budget support for its implementation.

The donor countries transferred the funds, which are then relayed to the PA and to its Ministry of Finance. The PA has so far received a total of $1.6 billion from the PRDP. An examination of the agreements between the PRDP and the PA shows that the former did not act to ensure that the aid transferred through it was not used to incentivize terrorism.

Similarly, donor countries, including the United Kingdom’s Foreign Ministry, have for years neglected to keep track of the funds the transferred to the PRDP. The UK Lawyers for Israel (UKLFI), has petitioned the Foreign Ministry for reports on the subject and was told that documents on the issue show that the funds transferred to the PRDP have not been misused.

The UK over the past seven years has transferred £430 million through the PRDP to the PA. While the Foreign Ministry claims it has kept track of its donations to the PA, officials at the World Bank have admitted in a conversation with TPS that no such control of the funds is possible, and that the funds continued to stream through the World Bank as long as it was pleased with reforms the PA was conducting.

The World Bank could have ensured that the funds passing through it to the PA were not used for terrorism-related issues when it formulated the agreements on the aid with the PA, but did not do so and established only an overall mechanism to ensure that the funds were in fact used for development projects and for the benefit of the residents of the PA. While the agreement prohibits the use of the funds for the purchase of tobacco, alcohol, jewelry, weaponry of any kind, and other commodities, and may not be used to pay bills and taxes, it does not ban the use of the funds to pay the stipends of terrorists.

The agreements are signed with the PLO, which has ensured that the PA will follow the guidelines. Palestinian sources told TPS that in 2008, after Hamas gained control of the Gaza Strip in 2007 and there was no unified stable government, it was feared that the PRDP funds would reach Hamas hands, and therefore it was decided to transfer the funds through the PLO and not directly to the PA. While the World Bank in 2007 criticized the PA for the far-encompassing support the PA provided to families of terrorists, saying it was “very generous” support which exceeded social support, the Bank did not ensure that funds transferred through it were used for the same purpose.

PRDP Funds Abused

The investigation further revealed that the World Bank did not designate the funds for any specific project, and there is no evidence that PRDP required that the funds be used specifically for schools, hospitals or similar projects as a prerequisite to receiving them. The funds were also not used to finance the reforms the PA is supposedly undergoing, and as long as the PA claimed it was going through with the reforms the funds continued to flow.

Special grants were transferred directly to the PA’s Finance Ministry to help support the PA’s budget, but the PRDP did not work to ensure that the funds were used for necessary civilian infrastructure. The PRDP’s founding agreement states that the PA will open a designated bank account into which the aid will be deposited. The PA is the sole signatory for the account, and PRDP did not reserve the right to act as a co-signer to the account, which would have provided it with oversight, and the funds were treated as an “all use grant.”

The PRDP knows that the moment the funds are deposited in the designated account it has no way of knowing how they were spent, World Bank officials told TPS.Based on official PA reports, the PA has drawn some of the funds from the account and has relayed them back to the PLO, which has used them to fund projects which are not defined as civilian development projects.

The PLO has utilized the funds to finance its foreign service, which is separate from that of the PA. The PLO also utilized to finance its institutions, which include several anti-Israel organizations and BDS groups, and to finance the Fatah as well.

A senior PA official, who spoke on condition of anonymity, told TPS that the PA’s embassies around the world are officially funded by the PLO, and not the PA. However, the PA reimburses the PLO for these expenses, and in effect, the donor countries are funding these activities, and their aid is not routed toward civilian projects. The funding is split in such a way because the PA is banned by the 1994 Oslo Accords from officially having a foreign service. Therefore, the PLO officially runs it, so as to keep a semblance of abiding by the agreement.

The PA further pays out mass sums to families of terrorists who were injured while carrying out attacks. The bureau for the deceased and wounded spent NIS 687 million in stipends to some 22,000 families of deceased and wounded terrorists in 2018. In 2008, when the PRDP was established, the World Bank should have known that the PA provides substantial financial support to families of terrorists, but did nothing to stop the flow of foreign aid to the families of terrorists. It is of significance to note that the PA relays such support to some 13,500 Palestinians who are not residents of the PA, including the victims of the 1970 Black September purges in Jordan.

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