Congress To Monitor Aid to Palestinians

By Ori Nir

Published June 10, 2005, issue of June 10, 2005.
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WASHINGTON — Congress is taking the unprecedented step of establishing an in-house oversight apparatus to monitor daily how American aid money to the Palestinian Authority is being spent.

Rep. Jim Kolbe, the Arizona Republican spearheading the effort as chairman of the House subcommittee dealing with foreign aid appropriations, said that the new system will monitor online American funds as they are requested by the Palestinians, appropriated by the American government and spent in the West Bank and Gaza. Kolbe announced the new monitoring mechanism, which is still being designed, during a briefing Monday following his return from a recent trip to the Middle East.

The unprecedented step reflects what Washington insiders describe as a deep anxiety among lawmakers over the potential political and policy ramifications of American dollars being spent to fund terrorism.

“It obviously doesn’t take much brain to figure out that if that money were to fall into the wrong hands it would have a devastating impact on any support that the [American] taxpayers would ever give to assistance to the Palestinians,” Kolbe said. Others on Capitol Hill said that such a development could end up hurting members of Congress at the ballot box.

The ranking Democrat on Kolbe’s subcommittee, Rep. Nita Lowey of New York, said that the auditors’ reports, submitted when the P.A. was still under Yasser Arafat’s rule, convinced her and seemed to convince her colleagues that extra caution should be used in supplying financial aid to the P.A. Lowey, an influential New York lawmaker who has long led pro-Israel efforts in the House, played a key role in negotiating many of the restrictions placed on aid to the Palestinians approved by Congress last month.

Kolbe said that the P.A. accepts and understands Congress’s insistence on stringent supervision. But Lewis Roth, who heads the Washington office of Americans for Peace Now, said that the additional oversight apparatus is both redundant and damaging for Palestinian Authority leader Mahmoud Abbas.

“Reasonable oversight has already been in place for aid to the Palestinians,” said Roth, whose organization has been lobbying Congress for directly funneling American aid to the P.A. The message that the additional oversight sends to the Palestinians, he said, is that Congress “doesn’t seem to want to give Abbas any oxygen to build himself up and demonstrate that he’s getting positive results.”

Kolbe, who returned last week from a quick visit to Israel and the West Bank, where he met with Palestinian officials, said he is now “more comfortable” with Palestinian accountability and transparency but not comfortable enough to trust the existing oversight mechanisms. “I like to use the old phrase that Ronald Reagan had: trust and verify,” Kolbe said. “It’s one thing to trust them, but we are going to verify it.”

He acknowledged that stringent oversight of American spending in the territories already exists and that the new oversight apparatus is unprecedented. “We as a subcommittee have never done this in any country, but we think that it is important enough that we have this kind of oversight,” Kolbe said.

American aid to the P.A. is already scrutinized closely. In addition to routine oversight by the U.S. Agency for International Development and the reporting that the American government demands from Palestinian governmental and nongovernmental institutions, the United States hires independent auditing firms to inspect the way American dollars are spent in the Palestinian territories. “There will be full auditing, but we also want the day-to-day monitoring of how the money is actually being spent,” Kolbe said.

Members of Kolbe’s subcommittee, who in recent months insisted on attaching stringent oversight conditions to Palestinian financial aid, said they were particularly alarmed by reports they received from independent auditors, who found that international financial aid, under the late Yasser Arafat’s rule, was used to support a corrupt system that advocated violence.

In his briefing, Kolbe said that the subcommittee would monitor all American aid dollars to the Palestinians whether the funds are given directly to the P.A. — as President Bush did last month – or indirectly through USAID as is normally the case.

Early last month, Congress passed a $140 million emergency aid package to the Palestinians. The aid was to be disbursed indirectly, under strict conditions, through USAID for development projects carried out by nongovernmental organizations. Then, on May 26, when Bush met with Abbas, he pledged another $50 million in direct aid. The administration is soon expected to ask Congress for another $150 in aid to the Palestinians, to be included in next year’s foreign aid budget.

In addition to the $140 million approved last month by Congress, Washington lawmakers earmarked $5 million for setting up an independent auditing apparatus that would scrutinize the use of the American dollars. Kolbe said his committee’s auditing mechanism would be separate from the independent process called for in last month’s bill or in any existing procedures for monitoring how American aid dollars are spent in the West Bank and Gaza.

“We want to be able to see requests as they come in for contracts, we want to be able to look at those contracts, we want to be able to see the vouchers and we want to see the expenditures on a daily basis,” Kolbe said. The main purpose, he explained, is “to be sure that the money we are providing the Palestinians will get spent for the purposes for which it is allocated and that it does not find its way into the hands of organizations like Hezbollah or Hamas, where it could be used for terrorist purposes.”

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