An Israeli intelligence report that was compiled by one of Israel’s intelligence services notes that Palestinian Finance Minister Salem Fayed has achieved only partial success in implementing the economic reforms he planned for the Palestinian Authority.

The information in the report addresses the situation that reigned as of November 2003.

Quotes from the intelligence report appear below, which present the truth behind Fayed’s efforts to introduce reforms.

Palestinian Security Forces Are Still Paid in Cash

One of the reforms Fayed announced was to have salaries paid by means of bank transfers. Prior to Fayed’s reform, the security forces received their salaries in cash from paymasters in their units (as the IDF used to do many years ago). Among the problems with that system, state the report’s authors, are: the system allows Arafat to retain his control over the security organizations and bolsters the security organization agents’ fidelity to Arafat and the organizations’ commanders, all of whom are closely affiliated with Arafat; it allows the commanders to deduct part of the agents’ salaries and to divert these sums to finance other, irregular activities, including terrorism, and to line their own pockets; it creates a situation in which the names of fictitious agents can be added to the lists of people on the payroll; and it does not allow for any real supervision over either salary expenses or budget surplus.

Fayed’s reform called to have the agents’ salaries paid directly by the Palestinian Finance Ministry into the agents’ bank accounts. The goal of this reform was, principally, to reduce Arafat’s control, to prevent the agents’ salaries from being docked and from having those funds used either to finance irregular activities or to line their commanders’ pockets, and to afford supervision over personnel in the security organizations.

With the passage of time, however, it has become evident that only the security organizations that are subordinate to the Interior Ministry, which was under the control of Mohammed Dahlan while Abu Mazen was prime minister, have revised their salary system and have their agents receive their salaries by means of a direct deposit into their bank accounts. The agents who serve in those security organizations constitute, however, less than 40% of the total number of agents in the Palestinian security organizations-just 20,000 out of the total of 53,000 agents who serve in the Palestinian security organizations, according to an IMF report. The other security organizations are subordinate to Arafat and continue to pay their agents’ salaries in cash.

This aricle ran in Hatzofeh on January 4th, 2004

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