PA salaries to terrorists rise by 11.8% in 2019 - amidst self-inflicted financial crisis

Maurice Hirsch, Adv. and Nan Jacques Zilberdik | Jul 3, 2019

PA salaries to terrorists rise by 11.8% in 2019 - amidst self-inflicted financial crisis

In the months January - May 2019, the PA’s expenditure on salaries to terrorist prisoners and released prisoners was 234 million shekels
The PA has increased its salary payments to terrorist prisoners by 11.8% compared to 2018
The PA Ministry of Finance put its budget expenditure reports back on its website only after PMW exposed that the PA was hiding its finances
The reports reflect the PA’s decision to plunge the Palestinian economy into crisis and punish its public employees by cutting their salaries, while guaranteeing the payment - in full - of the salaries to the terrorists

By Maurice Hirsch, Adv. and Nan Jacques Zilberdik

The Palestinian Authority has finally publicized its monthly financial expenditures for the first 5 months of 2019. They show that the PA has paid no less than 234,172,000 shekels (over $65 million), or, on average, 46,834,400 shekels/month in salaries to terrorist prisoners (including released prisoners) in spite of its self-imposed financial crisis.

Based on this monthly average, the PA expenditure on the “Pay-for-Slay” salaries to terrorist prisoners in 2019 should reach 562 million shekels, as compared to 502 million shekels in 2018. This amounts to 60 million shekels or a 11.8% rise in PA salaries to terrorist prisoners in 2019.

Since 2014, the PA Ministry of Finance had been publishing an annual anticipated budget in the first part of the year as well as monthly reports of actual expenditures in each budget category. Based on the monthly budgetary updates, Palestinian Media Watch exposed that the PA expenditure in 2018 on salaries to terrorist prisoners and released terrorist prisoners was no less than 502 million shekels.

Immediately after the Israeli cabinet implemented Israel’s Anti “Pay for Slay” Law and started deducting from the 2019 tax income the amount PMW had shown that the PA spent in 2018 on salaries to the terrorist prisoners, the PA decided to disregard its donor countries’ demand of full financial transparency and hid all its budgetary data. In place of the monthly budget expenditure updates, the website of the PA Ministry of Finance carried a notice saying "Due to the contingency law and legal dependencies with the Israeli side, the financial reports were temporarily suspended." This note appeared for almost three months.

Now, less than a month after PMW exposed the fact that the PA was hiding its finances, the PA Ministry of Finance has restored what appears to be most of the current budgetary information that its website used to contain. But strikingly, the PA’s annual budgets for the years 2014 - 2018 have been removed and the PA budget for 2019 has not been published.

The budget updates from the first five months of 2019 show that the PA is indeed implementing its declared priorities - to use their available funds, first and foremost, to pay the salaries to terrorist prisoners and to dead terrorists, the so-called “Martyrs.” PA Chairman Mahmoud Abbas and PA officials have reiterated this numerous times.

In March this year, Abbas again emphasized - to "the entire world" - the PA’s priorities:

"[Israel] has recently begun to deduct a large part of our money that it collects... which is known as the tax deduction money that amounts to $200 million a month, on the pretext that we are paying salaries to the families of the prisoners, Martyrs, and wounded... We have said and will say to Israel and the entire world that we will not abandon our people, and particularly [not] those among them who have sacrificed. We will continue to support them even if these will be the last financial resources that we have."

[Official PA TV, March 31, 2019]

While the PA is admitting to spending even more money this year on salaries to terrorists, an Israeli media report yesterday said that Israel is considering waiving 200 million shekels/month of PA tax payments to Israel for fuel in order to alleviate the PA financial crisis. This report is surprising since it seems to undermine Israeli government policy. It comes at a time when the PA has not only refused to stop rewarding terror but it has actually increased its expenditure. It will be interesting to see if this latest PA admission of increased expenditures on terror will influence the international community's financial support of the PA, or Israeli steps to alleviate the PA financial crisis.

Background:

In July 2018, Israel passed its Anti “Pay for Slay” Law. When Israel implemented it and started deducting 42 million shekels/month, the amount equal to what the PA paid monthly in salaries to terrorists in 2018, the PA made two decisions:

First, the PA decided that it was going to push the Palestinian economy into a crisis and refuse to accept all of the tax revenues collected by Israel - 670 million shekels/month. This decision was apparently intended to invoke a severe financial crisis, which the PA would then leverage to put pressure both on Israel to waive the deduction of the terror salaries, and on the international community to pressure Israel to cancel the deduction, and at the same time have the international donors donate more funds to the PA.

Second, ostensibly as a result of the self-inflicted financial difficulties, the PA decided that is was going to punish its law-abiding employees by cutting their salaries, while guaranteeing that the salaries of the terrorist prisoners would continue to be paid in full.

The budgetary updates reflect both of these decisions.

In place of accurate figures reflecting the PA’s income from the taxes Israel collects and transfers to the PA, the May budget update includes an estimated figure and a clarifying comment which reads as follows (in English):

“*Disclosure related to the Clearance Revenues Accrued for months from February until today. The above figures for January and February shows the amount received in January and February 2019, which are related to the Palestinian rights accrued for month of 12/2018 and 01/2019 respectively. However, due to the Israeli Piracy and embezzlement from the Palestinian monies and rights, the PA refused to receive its accrued monies and rights incomplete. The Israeli embezzlement of the Palestinian people’s financial rights; affected the “accrued clearance Revenues" of month February, March, April, May and June 2019. As a result, the PA did not receive any cash related to the after mentioned months. Moreover, we estimated that the Israeli recently are illegally withholding total Palestinian revenues in 2,802,871,497 NIS (around three Billion NIS gross)”

While referring to the deduction as “piracy and embezzlement” has become the automatic response by PA leaders to Israel’s Anti “Pay for Slay” Law, they have also admitted that the PA cannot accept the tax income after the deduction, since it would be tantamount to agreeing that the Palestinian prisoners are indeed terrorists and that the payment of their salaries is illegitimate.

PA Prime Minister Muhammad Shtayyeh explained this in an interview with the New York Times:

“Accepting the reduced monetary transfer from Israel, he [Shtayyeh] said, would be tantamount to acknowledging that the payments support terrorism, a premise he rejects.

“Politically, we cannot take it that our kids in jail are terrorists,” he said, and legally, it could expose the authority and Palestinian banks alike to lawsuits in Israeli and American courts.”

[The New York Times, June 5, 2019]

Muwaffaq Matar, Fatah Revolutionary Council member and regular columnist for the official PA daily, similarly stated that:

“Do the critics not see that the leadership agreeing to accept the partial tax money is a kind of willing recognition of the Israeli law, which is called ‘the terror salaries,’ and which was legislated on the basis of ‘the war on terror funding’?

What has blinded these critics and caused them to ignore the fact that if we accept the tax money, this means that we recognize that the self-sacrificing fighters (Fedayeen) - the Martyrs, prisoners, and released prisoners... will be considered terrorists, not just by virtue of the Israeli law but also by virtue of our agreeing to the deduction.”

[Official PA daily Al-Hayat Al-Jadida, April 30, 2019]

Were the PA to actually accept that it is illegitimate to pay financial rewards to terrorist prisoners, and abolish its “Pay for Slay” policy, this decision would have a double effect. Firstly, the Israeli government would then transfer to the PA all of the funds it has deducted from the tax revenues. Secondly, the decision would also allow for the renewal of the US aid to the PA that has been stopped in accordance with the Taylor Force Act - which conditions US aid to the PA on the abolishment of the “Pay for Slay” policy.

As regards the salaries, while the budgetary update clearly states that there are accruing “arrears” for the salaries of the PA’s public employees, there is no such reference regarding the salaries of the terrorist prisoners.

The PA’s insistence to dogmatically adhere to its “Pay for Slay” policy, even to the detriment of their law-abiding public employees, is based on the clear admission that the PA is responsible for all the Palestinian terrorists, as it is the PA that sent the terrorists to carry out acts of terrorism.

The following is a longer excerpt of Fatah official Matar’s article quoted above:

Excerpt of an op-ed by Muwaffaq Matar, Fatah Revolutionary Council member and regular columnist for the official PA daily

Headline: “The tax money - a new battle for honor”

“Do those who did not like [PA] President Mahmoud Abbas’ decision to return the tax money (refers to PA response to Israel’s Anti “Pay-for-Slay” Law to deduct terrorist salaries; see note below -Ed.), from which the cost of the salaries of the families of the Martyrs and the prisoners was deducted, know that the title of the law that terrorist [former Israeli Minister of Defense] Avigdor Liberman proposed was ‘the terror salaries’? Do they know that Israeli Parliament Member Avi Dichter of the Likud party, one of the organizers of the bill, addressed the Palestinian leadership and said: ‘You are spending 7% of your budget on terror funding.’?

...

Do the critics not see that the leadership agreeing to accept the partial tax money is a kind of willing recognition of the Israeli law, which is called ‘the terror salaries,’ and which was legislated on the basis of ‘the war on terror funding’?

We know for certain that the Israeli Parliament members who legislated the law know well that every Palestinian or Arab fighter and self-sacrificing fighter who was with us and who fell as a Martyr or fell into captivity acted in accordance with the laws and conventions of the international institutions, which have given him the right to legal resistance against the occupation and settlements. (sic., Palestinian terrorists target civilians and no law allows that)

A Palestinian patriot would never register to his detriment an agreement defining the Palestinian, Arab, and foreign self-sacrificing fighters who have fought together with us for freedom as ‘terrorists.’ Likewise, we will not register to our detriment the disgrace of betraying the families of the Martyrs and the prisoners; it is more dignified to commit suicide, if not to die of starvation, than to reach the day when we would sell the honor of the revolutionary and the revolution and our national honor.”

[Official PA daily Al-Hayat Al-Jadida, April 30, 2019]

Israel's Anti "Pay-for-Slay" Law - Israeli law stating that the PA payments to terrorists and the families of dead terrorists is a financial incentive to terror. The law instructs the state to deduct and freeze the amount of money the PA pays in salaries to imprisoned terrorists and families of "Martyrs" from the tax money Israel collects for the PA. Should the PA stop these payments for a full year, the Israeli government would have the option of giving all or part of the frozen money to the PA. The law was enacted by the Israeli Parliament on July 2, 2018. During the parliamentary vote, the law's sponsor Avi Dichter said: “The Foreign Affairs and Defense Committee received much help in its deliberations... from Palestinian Media Watch who provided us with authentic data that enabled productive and professional deliberations, nuances that are very difficult to achieve without precise data.” [Israeli Parliament website, July 2, 2018] In accordance with the law, as of September 2021 Israel’s Security Cabinet had ordered the freeze of 1.857 billion shekels ($580.15 million) - the sum equivalent to the PA payments to terrorists in 2018, 2019, and 2020.

PA salaries to terrorists rise by 11.8% in 2019 - amidst self-inflicted financial crisis

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