http://www.cbsnews.com/2100-18560_162-582487.html"Arafat for years would cry poor, saying, 'I can't pay the salaries, we're gonna have a disaster here, the Palestinian economy is going to collapse,'" says Indyk. "And we would all mouth those words: 'The Palestinian economy is going to collapse if we don't do something about this.' But at the same time, he's accumulating hundreds of millions of dollars."
The stockpile went well beyond the portfolio. Arafat accumulated another $1 billion with the help of -- of all people -- the Israelis. Under the Oslo Accords, it was agreed that Israel would collect sales taxes on goods purchased by Palestinians and transfer those funds to the Palestinian treasury. But instead, Indyk says, "that money is transferred to Yasser Arafat to, amongst other places, bank accounts which he maintains off-line in Israel."
Until three years ago, Israel put the tax revenues into Arafat's account at Bank Leumi in downtown Tel Aviv, no questions asked. But why?
According to Indyk, "The Israelis came to us and said, basically, 'Arafat's job is to clean up Gaza. It's going to be a difficult job. He needs walking-around money,' because the assumption was that he would use it to get control of all of these terrorists who'd been operating in these areas for decades."
Obviously, that hasn't happened. No one knows this better than Dennis Ross, who was Middle East negotiator for the first President Bush and President Clinton, and now heads the Washington Institute for Near East Policy. He says Arafat's "walking-around money" financed a vast patronage system.
"I used to see that people came in, you know, with their requests," Ross says. "'I need a phone. I need an operation. I need a job.' Arafat had money to dispense."
Like a Chicago ward boss, he still doles out oodles of money; Fayyad says he pays his security forces alone $20 million a month, all of it in cash.
All told, U.S. officials estimate Arafat's personal nest egg at between $1 billion and $3 billion.
