Can We Give To Gaza Without Giving To Hamas?

Claudia Rosett
Forbes
New U.S. and U.N. money for Palestine goes into a black hole.

If stuffing billions worth of aid into the Palestinian territories could end Islamist terrorism out of Gaza, it might be worth the money. That seems to be President Obama's gamble, with Secretary of State Hillary Clinton jetting to a donors' conference in Sharm el-Sheikh, Egypt, this past Monday, to chip in $900 million on behalf of U.S. tax payers. All told, more than 70 countries, cheered on by United Nations Secretary-General Ban Ki-Moon, pledged a whopping total of $4.5 billion in fresh aid to the Palestinians.. he focus was largely on repairing damage to Gaza, after Israel's recent three-week battle to shut down mortar and rocket attacks out of the terrorist-controlled enclave. But, as Clinton described it, this is a nuanced effort. The broad aim is to bypass the Iranian-backed Hamas terrorists who control Gaza, and shovel resources for strictly humanitarian uses into the enclave "in coordination with" the Palestinian Authority, which is run by the U.S.-favored Fatah faction, Hamas' rival, based in the West Bank.

Thus the long and winding title for the Sharm el-Sheikh powwow: "The International Conference in Support of the Palestinian Economy for the Reconstruction of Gaza." Thus, also, the confusion and contradictory news accounts over how much of the multiple billions in aid will flow to the West Bank, how much to Gaza, when and how this will happen, and who will decide.

And so, despite a record which suggests that decades of aid to the Palestinians--bilateral, multilateral, you name it--have fostered not peace, but continuing violence, here we go again. The plan this time seems to be to flood the Palestinian Authority with funds that might somehow grease the way toward somehow easing Hamas out of the cockpit in Gaza.

Speaking of her aim to "foster conditions" to create a responsible, accountable Palestinian state, living in peace with Israel, Clinton pledged that America's $900 million in new aid to Palestinians--still to be approved by Congress--would include $300 million for Gaza. To blunt concerns that some of these taxpayer dollars might end up bankrolling Hamas, Clinton spelled out that "We have worked with the Palestinian Authority to install safeguards that will ensure that our funding is used only where, and for whom, it is intended, and does not end up in the wrong hands."

Good luck. The downside of this gamble, and the likelier scenario, is that this new multibillion-dollar wave of aid, pouring in from many sources, will boost Hamas. In case anyone needs a reminder, Hamas is an Islamist, terrorist group, spun out of the Egyptian Sunni Muslim Brotherhood but backed and trained these days by the Shiite mullocracy of terrorist-sponsoring Iran--which looks close to acquiring a nuclear arsenal. Hamas is dedicated in its charter to the destruction of Israel and hostile in its principles to western democracy.

Hamas was elected in 2006 by a Gazan population that five years earlier had celebrated the Sept. 11 terrorist attacks on America by handing out sweets and dancing in the streets. Hamas consolidated its control over Gaza in 2007, kicking out Fatah in a bloody battle that included fighting in hospitals and apartment buildings, and both sides throwing prisoners off rooftops. Nor does Hamas mind putting Gaza's 1.5 million people at risk in order to pursue its terrorist "Death to Israel" agenda. Since Israel called a halt on Jan. 17 to its Operation Cast Lead, Hamas-controlled Gaza has continued to serve as a launching pad for attacks on Israel, firing more than 50 rockets, including 11 over the past weekend, one of them hitting a school in Ashkelon.

Were such attacks targeting, say, New York, one might hope they would be treated as terrorism and answered with force. But on Monday, the de facto reply of the "international community" to these assaults on Israel was to promise Gaza--already one of the developed world's top per-capita welfare clients--billions more in aid. Clinton, while making her pledge, and detailing rosy visions of the future, made just one ritual nod to the Hamas rockets of the here-and-now: "These attacks must stop." Expect more rockets.

As for the financial safeguards--somewhere in Gaza, or maybe Damascus or Tehran, members of Hamas must be smiling. As long as Gaza is controlled by Hamas, any aid funneled into the enclave is one dollar less that Hamas might be impelled to spend on upkeep of its turf, and one dollar more available for terrorist activities.

On the matter of how exactly the "safeguards" will work, the State Department has been stunningly vague. At a State Department press briefing on Monday, while Clinton was in Egypt making her pledge, a spokesman said that up to $300 million would go for Gaza's "urgent humanitarian needs" as identified by the U.N. and the Palestinian Authority. Those funds, he said, would flow via United States Agency for International Development "in coordination with U.N. agencies, international organizations and USAID grantees" and "through the State Department for the U.N. agencies, [International Committee of the Red Cross] and other humanitarian organizations."

That's just the U.S. agenda, before we get to the even less transparent donations, such as the $1.65 billion pledged by the Gulf Arab States, to be handled out of the Saudi capital. To explore every rabbit hole on this list could be the work of an entire career. But let's go down just one of the big ones.

Looking for further hints about what this three-ring aid circus might entail, I pulled up the Web site on Tuesday of the U.N.'s lead agency in Gaza, the U.N. Relief and Works Agency for Palestine Refugees in the Near East, best known as UNRWA. There, on UNRWA's home page, as of this writing, is a photo of the U.N.'s Ban Ki-moon, standing in a damaged UNRWA warehouse, backlit by what appear to be rays of the sun, during his visit in January to Gaza. Next to Ban's photo is a blurb about his appeal for "crucial funds needed for Gaza's reconstruction after the recent Israeli offensive."

But just below Ban's photo is where it gets interesting. The same Web page lists several banks, complete with Society for Worldwide Interbank Financial Telecommunication (SWIFT) codes and account numbers through which benefactors are invited to send money to UNRWA for its "Special Gaza Appeal."

One of them is the state-owned Commercial Bank of Syria, headquartered in Damascus, which is an intriguing choice for Ban and UNRWA to condone, because for the past five years this bank has been under sanctions by the U.S. Treasury as an institution of "primary money-laundering concern."

In 2004, Treasury imposed sanctions on the Commercial Bank of Syria, alleging it had laundered illicit proceeds from the U.N.'s Oil-for-Food program in Iraq, and had also handled "numerous transactions that may be indicative of terrorist financing and money laundering." According to Treasury, this included two accounts "that reference a reputed financier for Usama bin Laden."

In 2006, Treasury finalized its rule, which is still current, against the Commercial Bank of Syria. Under-Secretary Stuart Levey alleged that the bank had been used by terrorists to move money, and "as a state-owned entity with inadequate money laundering and terrorist financing controls, the Commercial Bank of Syria poses a significant risk of being used to further the Syrian Government's continuing support for international terrorist groups." Among the terrorist groups cited as examples of such clients were Hezbollah in Lebanon, and such denizens of Gaza as Palestinian Islamic Jihad, the Popular Front for the Liberation of Palestine and Hamas.

UNRWA's choice of this bank is all the more curious in light of the lifestyle choices of a number of Hamas leaders, such as Khaled Meshal, who are based not in Gaza, but work "in exile" in Damascus. According to a Council on Foreign Relations backgrounder released in 2006, Meshal has served Hamas from Damascus as head of the terrorist group's politburo, and as chief strategist and fundraiser. In 2006 he was alleged by Israeli then-Vice Premier Shimon Peres to have ordered the kidnapping into Gaza of Israeli soldier Gilad Shalit, who has not been released.

It's hard to know whether it is of any concern to UNRWA that one of the conduits headlined by Ban Ki-moon for its Gaza relief appeal is a U.S.-censured bank, headquartered in a country that hosts Hamas leaders such as Meshal, and is designated by the U.S. as a state sponsor of terrorism. The U.N. has no definition of terrorism. UNRWA, which employs mostly local Palestinian staff, and has never had an independent outside audit, is not bound by U.S. sanctions. My queries to UNRWA about this Syrian banking connection were answered evasively by a spokesperson, who stated in an email that "UNRWA's strict financial regulations, and its close oversight of all resources contributed to it, serve to ensure that funds are used appropriately in our humanitarian relief activities."

It's likewise hard to say whether the U.S. State Department cares that U.S. funds might mingle via UNRWA with money flowing to Gaza through the Commercial Bank of Syria. My queries to the State Department received no reply.

These are, of course, busy times for American diplomacy in the Middle East. There are slews of new envoys setting out, and the new administration is stepping up "engagement" already begun during the final years of President Bush, by courting Syria as a potential U.S. partner. But if President Obama wants to try banking on multi-tiered diplomacy and massive aid to turn terrorist-infested, Iranian-armed Gaza into a place of peace, it looks like someone in his administration needs to be keeping a closer eye on who, exactly, might be cashing in on the largesse.

Claudia Rosett, a journalist-in-residence with the Foundation for Defense of Democracies, writes a weekly column on foreign affairs for Forbes.com.