From a report by Jon Henley:
Investigators from the European Union's anti-fraud office are currently in Jerusalem examining the [Palestinian] authority's accounts after allegations last year that part of the EU's annual aid package to Palestine - which totals about €350m a year - may have been misappropriated.This suggests that at least part of what MEP Ilka Schroder was saying in the passages I quoted from her yesterday was too pessimistic. See also this report (via Gene at Harry's Place).The EU's concerns arise mainly from an audit of the authority's finances carried out last year by the International Monetary Fund. In September 2003 the chief auditor, Karim Nashashibi, alleged at a press conference in Dubai that as much as $900m had been diverted between 1995 and 2000 into "a special account controlled by Yasser Arafat".
IMF and EU officials say that because of the way the Palestinian leadership has done business over many years, relying on a web of companies to generate money and move cash around when Palestinian political groups were fighting Israel from exile, it is difficult to estimate what proportion of the diverted funds has been misappropriated. The investigation by the EU's anti-fraud office has also taken in documents seized by the Israeli army during its reoccupation of Palestinian cities two years ago. The Israelis say the documents show that EU money went to the Al-Aqsa Martyrs Brigades, responsible for suicide bombings.