Palestinian cement sold to Israel for barrier, probe finds
By Charles A. Radin, Globe Staff | July 28, 2004
RAMALLAH, West Bank -- Thousands of tons of cement sold to Palestinian businessmen at below-market prices by Egypt to help rebuild communities devastated by years of war with Israel have been resold at huge profits to the Israelis, for use in building Israel's controversial separation barrier and settlements in the occupied territories, according to an investigation by Palestinian legislators.
Palestinian Authority officials have assisted in the scheme, allowing the businessmen to make millions of dollars and depriving the Palestinian government of tax revenues, according to the probe. The businessmen, using permits given to them by a high-ranking member of Palestinian leader Yasser Arafat's Cabinet, sold the cement to Israeli contractors at a 50 percent profit.
In addition to aiding the Israeli projects and producing up to $5.5 million in profits for the middlemen, the cement arrangement cost the Palestinian public treasury as much as $1.6 million in uncollected taxes, according to the investigators. They say it is unclear whether the practice is continuing.