$700 million missing from Palestinian coffers -probe

GAZA - At least $700 million of funds from the Palestinian Authority's coffers have been squandered or stolen by officials over the past few years, an internal investigation revealed on Sunday.

Palestinian Attorney-General Ahmed al-Moghani cited 50 cases of "financial and administrative corruption" and said 25 officials had been arrested so far.

He said 10 officials had fled abroad but that the Palestinian Authority was seeking their extradition.

"The amount of money that was squandered and stolen is more than $700 million," Moghani told reporters. "Some of these millions were transferred into personal accounts here and abroad."

The disclosure followed the Jan. 25 parliamentary election victory of the militant Islamic group Hamas, which ran on a platform of ending corruption and mismanagement in the Palestinian Authority.

The mainstream Fatah faction has run the Palestinian Authority since limited self-rule was established in the occupied West Bank and Gaza Strip in 1994 under interim peace deals with Israel.

Palestinian President Mahmoud Abbas had previously transferred 32 cases of abuse to the attorney general for review and said corruption would not be tolerated.

"We have the support from President (Abbas) to open all the files and strict instructions that everyone must be under the law," Moghani said.

The cases under investigation included a fictitious pipe factory funded by $4 million of Palestinian Authority cash and $2 million of Italian aid money, Moghani said.

"The factory existed only on paper and the investigation is under way to find out where the money went," Moghani said.

He also cited land deals in the northern West Bank in which the land only existed on paper.

Nigel Roberts, the World Bank's former representative in the Palestinian territories, said in a recent interview with Israel's Haaretz daily that the Palestinian Authority received more than $5 billion of aid over a five-year period but was on the verge of bankruptcy.

Urging the Palestinian Authority to implement sweeping reforms, Roberts said foreign donors had become reluctant to contribute due to concerns of mismanagement and corruption.

Welcoming the investigation, a spokesman for Hamas said those responsible should be brought to justice.

"One of Hamas's top priorities for the coming stage in the parliament and in the government is to open this file and to chase and bring to justice all the corrupt officials who stole public money and made huge wealth," Mushir al-Masri, a spokesman for Hamas, said. (Additional reporting by Mohammed Assadi in Ramallah)