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Message: <br /><br /> If you are having trouble reading this email, you may view this article online at: http://www.jweekly.com/18983/full/18983/new-financial-scandal-could-hurt-arafat-and-labor-party-in-israel/ <br /><br /> <b>New financial scandal could hurt Arafat and Labor Party in Israel</b> <br /> Friday, December 13, 2002 | by <p>GIL SEDAN </p> <br /><br /><p>JERUSALEM—Those inclined to look on the bright side might say Israeli-Palestinian cooperation is alive and kicking: Israelis and Palestinians allegedly joined ranks to make big money, until one of them woke up with a bad conscience.<br /><br /> The joint venture in question began in February 1997, when Palestinian Authority President Yasser Arafat transferred official Palestinian Authority funds from the Arab Bank in Ramallah to private accounts in Swiss banks.<br /><br /> The money was Palestinian, mostly customs and levies on products imported into the Palestinian Authority via Israel.<br /><br /> But the intermediaries allegedly were Israelis, who in return allegedly received generous commissions—millions of dollars, according to reports.<br /><br /> The key people allegedly were Yossi Ginossar, a former senior official in the Shin Bet security service, and his partner Ezrad Lev. The two allegedly succeeded in opening the doors of Switzerland's Lombard Odier Bank to the Palestinian money.<br /><br /> The cooperation allegedly continued until the summer of 2001, well into the intifada.<br /><br /> Like some other former senior officers, Ginossar had been involved in business transactions between Israeli and Palestinian companies ever since the early days of Palestinian Authority rule under the Oslo peace accords. The Palestinians dubbed him "Mr. 5 Percent," a reference to the commissions he earned on business deals.<br /><br /> The hidden Swiss accounts eventually grew to more than $300 million, according to Israeli press reports. The Israeli partners allegedly managed the accounts, though they were not authorized to make withdrawals.<br /><br /> But then, in August 2001, something unexpected happened: Mohammed Rashid, Arafat's closest financial adviser, suddenly withdrew some $65 million from the account, which then couldn't be traced.<br /><br /> Lev told the Israeli daily Ma'ariv that he suspected the money was going to finance terrorist activities.<br /><br /> He decided that enough was enough, that there was no real control over the money and that it was politically unacceptable that Ginossar—whose extensive business ties had led Prime Ministers Yitzhak Rabin and Ehud Barak to use him as an unofficial emissary to the Palestinian Authority—should also be involved in controversial financial transactions with the Palestinians.<br /><br /> Lev, 42, went to Ma'ariv and disclosed the secret deals Ginossar allegedly was involved in. He even charged that Ginossar had paid millions of dollars to Rashid to ensure his continued involvement in the accounts.<br /><br /> While the ultimate use of the funds in Arafat's bank account is still unclear, the Ginossar scandal sheds light on the dubious character of financial relations between Israel and the Palestinian Authority.<br /><br /> Over the years, Israeli authorities approved the transfer of official Palestinian Authority funds to private accounts, though they knew the money could have been used instead to help hundreds of thousands of Palestinians suffering in the Palestinian territories.<br /><br /> The Israelis believed that financial interactions with the Palestinian Authority—even if not strictly kosher—ultimately would strengthen ties and lead to a peace agreement.<br /><br /> Ginossar defended himself as the revelations about the Swiss account surfaced late last week, saying that Israel had taken advantage of his business contacts, not vice versa.<br /><br /> "I served the state" in political missions "voluntarily, and I made significant contributions not only to the security of Israel's citizens, but also directly saving lives," he said.<br /><br /> The exposure of the affair, just as the election campaign is kicking, was like a ripe fruit falling into Sharon's hands.<br /><br /> "This is an invaluable gift for the election campaign of the Likud, worth more than 1,000 election slots," analyst Aluf Benn wrote in the Ha'aretz newspaper. Like Sharon, the other Likud prime minister to serve in the post- Oslo period, Benjamin Netanyahu, also refrained from using Ginossar's services.</p> <p> </p>

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