The Peres Center Scandal

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First came Foreign Minister Shimon Peres's lone defense of Terje Roed-Larsen, the UN special coordinator for the Middle East peace process who last week insinuated that Israel committed war crimes in the UN-managed Jenin refugee camp. He stated, among other things, that "Israel has lost all moral ground in this conflict."



Then came the Makor Rishon newspaper's revelation that, in 1999, the Shimon Peres Center for Peace gave Larsen and his wife, Norwegian Ambassador Mona Juul, an unprecedented cash payment of $100,000.


Larsen sits on the board of governors of the Peres Center. Then, too, the Norwegian government is one of the chief contributors to the multimillion dollar enterprise.


Peres strenuously denied charges whispered by high-ranking members of his own Labor Party, and made public by investigative journalist Yoav Yitzhak on Channel 1 on Tuesday, that the payment to Larsen and Juul was a kickback for their intervention on his behalf with the Nobel Committee in 1994. In this, he must be given the benefit of the doubt.


But it strains the imagination that the fact that Larsen sits on his center's board of governors and his wife represents one of the center's main donors had no impact whatsoever in Peres's unabashed defense of Larsen after he libeled Israel in front of the international community, and did so hours before the UN Security Council passed a resolution calling for the establishment of a fact-finding mission about the battle in Jenin.


Just hours after the cabinet meeting at which Attorney-General Elyakim Rubinstein said Larsen's mendacious remarks were cause for declaring him persona non grata, Peres released a statement rejecting the "horrible calls to declare Larsen persona non grata."


"A procedure like this," he added, "would do injustice to a man who has made a special contribution toward peace in our region for years."


Looking over the Peres Center's Web site, one is hard-pressed to understand what the center, whose 1998 budget was almost NIS 30 million, actually does. Its project descriptions, which mainly describe actions the center "promotes" or intends to carry out, have not been updated since the Oslo process disintegrated at Camp David and the Palestinian terrorist war against Israel began.


According to an independent audit conducted for the registrar of non-profit organizations by accountant Boaz Gazit in March 2001, the center's largest outlay is salaries, of which the directors receive a disproportionately large share.


The auditor's report pointed out that in 1997, the center's 35 employees received a total of NIS 2,312,688 in salary payments and that five of the employees received 78 percent of the total amount. In 1998, the center expanded its workforce to 63 and paid close to NIS 5 million in salaries, of which the top eight salaries constituted 54 percent of the total.


In addition to payment of employees, the Peres Center apparently also knows how to throw a good party. A three-day meeting of its full board of governors in 1999 cost NIS 2,328,990. Outlays included footing the bill for the travel and lodging expenses of all board members.


One of the members of the board is Andrei Azulay, president of the Marc Rich Foundation in Israel. The auditor's reports states that "one of the most prominent contributors to the center since its inception is Marc Rich." According to press reports at the time, Andrei Azulay was the main lobbying force for then US president Bill Clinton's 11th-hour pardon of Rich, a fugitive from justice. Peres was one of many Israeli personalities who sent letters to Clinton beseeching him to pardon Rich in the closing months of his presidency.


One cannot help but notice the strong stench of influence-peddling that rises from Peres's defense of both Larsen and Rich, given their intimate connections with his center. But these examples are not isolated. According to the Peres Center's Web site, among the many projects it promotes, one that actually received funding ($63 million) was the "Peace Technology Fund."


The fund's aim, according to the site, is "making equity investments in Palestinian companies and joint ventures." The two Palestinian companies that were invested in by the fund, are "Paltel – the Palestinian telephone operating company – and the Palestinian Mortgage Housing Corporation."



Both of these concerns are infected root and branch by Palestinian Authority corruption.

Muhammad Rashid, Arafat's economic adviser, is vice president and one of the principle stockholders in Paltel.


In an investigative report from December 1998, The Financial Times reported that Rashid and Paltel were deeply involved in stealing the $160 million Gaza Employees Pension Fund, which was transferred to the PA by Israel in 1994 and emptied of its funds by Rashid between early 1996 and late 1997. Freih Abu Medein, the PA's justice minister told the paper at the time the money had been invested in telecommunications projects.


The Palestinian Mortgage Housing Corporation was involved in scandal in 1998, when the EU discovered that $20 million it had donated for the construction of low-cost housing in Gaza had been used instead to build luxury apartments for wealthy supporters of Palestinian Authority Chairman Yasser Arafat.


So not only does the Peres Center reward its managers and European friends, it also serves to legitimate PA corruption committed by Arafat's men, who steal money from their own impoverished people. But this should come as no surprise.


Former Shin Bet officer Yossi Ginossar, Rashid's partner in his various business dealings and behind-the-scenes go-between with Arafat for Labor prime ministers, also sits on the board of directors of the Peres Center.


Ginossar is himself so intimately involved in the business end of the PA that when Ehud Barak brought him in as a pinch hitter at the Camp David summit, press reports at the time described the participants joking that they didn't know whether he was there to represent Israel or Arafat.


The single largest contributor to Arafat's PA since its inception is the EU. Still today, as the evidence has become overwhelming that the PA is a terrorist entity from head to toe, the EU insists on continuing its financial support. Just last month the EU announced it was donating another 340 million euros to the PA. This week, the Ad-Hoc Liaison Committee, the body responsible for coordinating aid to the PA is meeting in Oslo to put together a new financing package.


The EU also is a major financial backer of Yossi Beilin's Economic Cooperation Foundation. In addition, it funds organizations like Rabbis for Human Rights, which recently participated in organizing delegations of foreign activists who were brought here to stand in front of IDF tanks and attempt to force their way through IDF roadblocks.


Aside from the realpolitik justification for such meddling in Israel's internal politics – that such organizations, through their work provide a source of influence and a launching pad for increased EU power in the Levant – the revelation that the Peres Center paid Larsen and Juul $100,000 provides a fiduciary interest as well.


Simply put, keeping Oslo alive is good business.


The victims of all of this inbreeding are, of course, the Israeli and Palestinian peoples. On the Israeli side, having Shimon Peres wearing the twin hats of life force behind the Peres Center enterprise and foreign minister represents an inherent conflict of interest with potentially serious repercussions for the conduct of foreign policy.


On the Palestinian side, the continuation of Arafat's mafia-style reign suffocates any prospect for economic growth and develo
pment and, of course, destroys any possibility of political settlement.



A few months ago, a senior governmental source said to me, "If you want to understand why Israel isn't fighting Arafat, follow the money." Well here you have it.



Originally published in The Jerusalem Post


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