Israel to release frozen tax funds to PA

Hamas finance minister: PA should be able to decide how the $100m. is spent.

By HERB KEINON
abbas angry 298.88 (photo credit: AP [file])
abbas angry 298.88
(photo credit: AP [file])
Israel will transfer $100 million within the next couple of days to a "transparent" bank account that will be controlled by Palestinian Authority Chairman Mahmoud Abbas, a senior official in the Prime Minister's Office said Thursday night. The $100m. is part of more than $500m. in PA tax revenue that Israel has collected on behalf of the PA but refused to turn over since Hamas took control of the PA government last spring. Olmert promised Abbas at a meeting on December 23 that he would transfer the funds, as part of what was widely seen as an effort to strengthen Abbas's domestic status. The official said that the transfer of the funds has been held up for nearly four weeks because of a Palestinian delay in setting up a mechanism that would satisfy Israel that the money would not find its way either into Hamas-led government coffers or to pay off "Fatah cronies." The account will be set up in such a way that only Abbas can get to the money, not the PA government or treasury. The money, according to the official, is meant to go for "humanitarian purposes" and to bolster Abbas's Presidential Guard. It was also set up in a way that would allow Israel to monitor where the money is going, the official said. The official said that it was made clear that the money would not be used to pay salaries. "We are completely satisfied that we will know where the money will go and there are no questions about transparency," the official said. "We are satisfied with the mechanism." In the last month Israel transferred NIS 40m., which was not included in the $100m., to hospitals in east Jerusalem. It is widely believed that Israel will watch carefully to see how the sum is being spent before deciding whether to transfer another installment of the money being held. In addition to this money, the Bush Administration last week asked Congress to authorize $86m. to Abbas. US Ambassador Richard Jones, in an interview that appears in the Post's Frontlines section today, said that part of the money will go to improve security at the Karni crossing, while some will be used for Palestinian "security service reform. We will use it for training and non-lethal equipment," he said.