An Unwelcome Palestinian Reformer

Salam Fayyad was once seen as a bright hope for peace in the Middle East. By the time he became prime minister of the Palestinian Authority in 2007, Mr. Fayyad had already earned credentials in the West as a World Bank technocrat. During his six years as a reformist prime minister, per capita GDP among Palestinians in the West Bank rose by 222%. Perceptions of Palestinian government corruption, as measured by Transparency International, also dropped dramatically. No wonder David Welch, a former assistant secretary of state for Near Eastern Affairs, once called Mr. Fayyad’s administration “the best Palestinian Authority government in history.” President Obama praised him as “a true partner.”

In 2013 Mr. Fayyad resigned as prime minister of the Palestinian Authority after a series of policy disagreements with PA President Mahmoud Abbas... In late 2013, Mr. Fayyad established Future for Palestine, which is dedicated to building small- and medium-scale infrastructure projects, such as water-well rehabilitation centers and power plants. He has focused in particular on improving conditions for the poorest Palestinians, such as the Bedouin community or those living in the Jordan River valley. Mr. Fayyad employs the so-called third-way approach to state-building. As opposed to the traditional Palestinian politics of harassing Israel at the United Nations or urging boycotts of the Jewish state, third-way politics stresses the need for economic empowerment and social progress—for building the institutions of a Palestinian country from the ground up.

This approach is not popular with many Palestinian officials, who want a hand in every economic project and aren’t known as champions of good governance. Earlier this year, they targeted Mr. Fayyad directly. As detailed by his legal team in court documents, the harassment began after May 10, when two bank transfers from the United Arab Emirates totaling some $749,000 were cleared and credited to the Future for Palestine development organization Mr. Fayyad heads. The money was intended to aid Bedouins who suffer from water shortages in what is called Area C—a region of the West Bank administered by the Israeli government.

On May 18 the Anti-Money Laundering Unit of the Palestine Monetary Authority froze the bank transfers and accused Mr. Fayyad of money laundering. On June 15—and without permission from any court, as required by law—Palestinian Authority Attorney General Abdelghani al-Owaiwi ordered a freeze on all of Future for Palestine’s assets. Then, on June 22, the Palestinian Authority issued a news release withdrawing its initial accusation. Instead of being prosecuted for money laundering, Mr. Fayyad was to be investigated for “using money for political purposes.”

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So far, the High Court has listened to Mr. Fayyad’s pleas. On July 8 it issued an injunction blocking the freeze. The court has also asked Attorney General Al Owaiwi to explain his reasons for the seizure. Court proceedings are scheduled to resume Sept. 22, when Mr. Al Owaiwi presumably will present his findings.

Mr. Fayyad’s travails indicate that Mr. Abbas doesn’t wish him well. Writing June 30 at the Gatestone Institute website, Palestinian journalist Khaled Abu Toameh said that the decision to set investigators on Mr. Fayyad’s organization should be seen “in the context of PA President Mahmoud Abbas’s effort to undermine and discredit Fayyad. Abbas believes that Fayyad, who resigned in 2013, is seeking to replace or succeed him as president. ” As for claims of financial irregularities, the Palestinian Authority is no stranger to this problem. Between 2008 and 2012, $3.13 billion in foreign aid to the PA went unaccounted for, according to a 2013 report by the European Union’s Court of Auditors.

None of this has stopped leaders in the West from treating Mr. Abbas as a serious partner. Pope Francis recently signed a treaty with him officially recognizing the “State of Palestine.” Secretary of State John Kerry has said that Mr. Abbas “understands the road to the solution” in negotiations with Israel, and that he is essential to Palestinian self-government.

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