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THE WORLD / THE MIDDLE EAST

Arafat's Money Man a Focus in Tug of War

April 30, 2002|TRACY WILKINSON and ROBIN WRIGHT | TIMES STAFF WRITERS

RAMALLAH, West Bank — Inside Yasser Arafat's wrecked headquarters, the man near the top of Israel's most wanted list is a pudgy, 62-year-old accountant.

He is Fuad Shubaki, chief financial officer of the Palestinian Authority.

A longtime colleague of Arafat and one of the Palestinian Authority president's most trusted aides, Shubaki knows who has paid how much to whom and when and for what. He has had a hand in procuring weapons for the Palestinians for years, according to both Israeli and Palestinian sources. Israelis consider him the crucial building block in what they hope will become the definitive case to discredit Arafat.

Even as Israel's monthlong siege of Arafat's Ramallah compound comes to an end, it is the fate of Shubaki, a high school graduate with a near-photographic memory for numbers, that is most problematic, according to diplomats and officials.

Shubaki has been holed up inside the compound with Arafat, other aides, guards and the now-convicted killers of an Israeli Cabinet minister.

Shubaki and the killers are destined for a dusty prison in Jericho under terms of a U.S.-brokered agreement, while Israel continues to demand the extradition of all six men.

But it is Shubaki whom Israeli officials are most keen to question--and whom Arafat is most reluctant to give up.

"It's like 'The Untouchables,' " one U.S. official said. "How did they go after Capone? They went after the bookkeeper. . . . In the Palestinian world, Shubaki is that bookkeeper. That's the role he's playing. But the goal is not Shubaki, [it's] Arafat."

Whether or not he has anything to hide, Arafat can ill afford to let the Israelis get their hands on Shubaki and his knowledge of the financial operations of both the Palestinian Authority and Arafat's Fatah movement.

Israeli intelligence officials believe that Shubaki has controlled millions, if not billions, of dollars over the years--money that was used to equip Palestinian militias, before the founding of the Palestinian Authority, and security services afterward.

Once the Palestinian Authority was established, Shubaki, as its chief financial officer, had partial control over the treasury, which was funded by aboveboard sources such as European, Saudi and Israeli contributions, plus tax revenue. More intriguing, he may have intimate knowledge of Arafat's private and extremely well-stocked bank accounts, intelligence officials say.

They hope Shubaki can provide proof that Arafat financed terrorism. They say he may be able to supply information on payments to militant groups such as the Fatah-affiliated Al Aqsa Martyrs Brigade, which has carried out numerous shooting and suicide bombing attacks on Israelis; the structure and membership of it and similar groups; details of arms deals; and Iranian involvement in the region.

"They want him as the smoking gun to definitely link the head of the PA, and to some extent the whole structure of the PA, to the whole structure of terror," said a second U.S. official. "Israel wants to marry the two and create a seamless link so that they can eliminate the PA."

Israeli and Palestinian sources agree that Shubaki could do little without Arafat's permission. Through a lawyer, he has denied wrongdoing.

Shubaki's formal job since the establishment of the Palestinian Authority in 1994 has been to pay the salaries and buy the equipment--from guns to boots--for the three most elite and most powerful of the Palestinians' many security branches: the Preventive Security Service, the General Intelligence Service and the Force 17 presidential guard. Israel maintains that some members of these organizations have engaged in attacks against Israelis. Palestinians do not deny that but say an entire police force cannot be blamed for the actions of a few.

Palestinian sources said Shubaki also controls the purse strings of Fatah, with oversight of all the money that goes into the organization and comes out of it. He is a partner in several businesses, including a yogurt company in the Gaza Strip, that represent investments of Fatah money, associates said.

And before the Palestinian Authority existed, he performed a similar function at Arafat's side, disbursing the funds for Fatah-affiliated militias.

"He's Arafat's pocket," said his lawyer and friend, Hussein Shyoukhi. "Not more, not less."

Shubaki first came to general public attention after the seizure in early January of the Karine-A weapons ship. Israeli authorities intercepted the vessel in the Red Sea and said it contained 50 tons of sophisticated weaponry destined for the Palestinians.

Israeli officials at the time said they had evidence that the shipment came from Iran and was bankrolled by Shubaki. It was Shubaki's role as the official authorizing payments, Israel argued, that established the link between the weapons and the Palestinian Authority and exposed Iranian infiltration into the Palestinian territories in a bid to stoke the flames of the intifada.

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