Playing with Other People’s Money

By Sherwin Pomerantz


Some of you may have been following the newspaper articles regarding Israel’s decision to withhold tax monies collected on behalf of the Palestinian Authority.

For those who are not fully familiar with the issue, under the provisions of the Oslo Accords when the Palestinian Authority (PA) was established, it was agreed that Israel would continue to collect all taxes on behalf of people living in the territories under the control of the PA and then turn over those moneys to the PA each month. Currently, Israel is holding about 100 million dollars of said funds, essentially acting in a fiduciary role on behalf of the PA.

When the Palestinian Authority went to UNESCO to request membership in that organization and received it, Israel decided to withhold the payment of these funds as a punishment to the Authority for securing UNESCO membership. While I also decried both the application to UNESCO and UNESCO’s agreement to admit the Authority to membership, it always seemed to me that withholding these payments of monies that rightfully belongs to the Authority had no basis in law.

As November wound on, Israel’s Foreign Minister, Avigdor Lieberman went one step further and said that Israel should not convey these funds to the Authority because the Authority was using their treasury, part of which was composed of these funds, to do things like give bonuses to the prisoners released in the Schalit exchange and to build homes for those prisoners as well. Earlier this week Lieberman threatened to bring down the Israeli government if the funds were released although everyone agreed that, in principle, it was not in Israel’s best interests to hold these funds indefinitely.

All of this in the face of incontrovertible evidence that the withholding of these funds not only threatens to cause the Authority to collapse but also threatens the successful maintenance of the security apparatus that the Authority has established, much of it in cooperation with Israeli authorities.

Earlier today reports out of Jerusalem seem to indicate that the government’s line on releasing the funds is softening and, hopefully, this latest crisis will soon be resolved.

But the core issue remains and that is the role of a custodian of funds arbitrarily deciding under what conditions those funds can be released, even though the conditions of release are clearly spelled out in the protocols governing the relationship between the parties. There are, of course, those who will argue that the Authority violated the very same principles when it went to the UN for direct recognition or when it applied for membership in UNESCO. But the basic fact remains that the funds are not Israel’s to keep or use and that our country is simply acting as a conduit for the collection and remitting of those funds. End of story!

What bothers many of us living here is that one cannot simply decide to abrogate a commitment as punishment for the other side seemingly acting against those same agreements. Israel has plenty of ways to put pressure on the Authority in retaliation for the Authority’s defiance of principles to which they have agreed. But withholding the payment of funds that do not rightly belong to us is not one of them. Hopefully saner voices will prevail so that we can continue retain the moral high ground.