Monday, March 21, 2005

EU Funding and Palestinian Terrorism: The End of the OLAF "Investigation"

Last Thursday (March 17), the European Anti-Fraud Office, known by its French initials OLAF, issued a press release announcing the closing of its two-year-long investigation into possible “misuse” of EU financial contributions to the Palestinian Authority budget. According to the press release, OLAF investigators had found “no conclusive evidence of support of armed attacks or unlawful activities financed by the European Commission’s contributions to the budget.” At the same time, however, the OLAF concedes – in remarkably convoluted language displaying a rather unusual grasp of scientific logic – that

...there are consistent indications to support the hypothesis that it cannot be excluded that some of the assets of the PA may have been used by some individuals for other than the intended purposes.

Presumably the OLAF means to say that there are indications to support the hypothesis that the assets have been used by some individuals for other than the intended purposes – a fact that is, in any case, well known. So long as there is no positive evidence disproving it, one would not need “indications” to support the “hypothesis” that this hypothesis "cannot be excluded"! In any case, as the EU Observer notes: “OLAF declined to give more precise indications about what exactly ‘consistent indications’ or ‘other than the intended purposes’ meant.” No public report has been released that might fill in the details or, for that matter, clarify just what exactly the OLAF has been doing for the last two years in ostensibly investigating the matter. With charming redundancy, the OLAF press release also admits that “A number of factors remain unclear.”

On the occasion of the OLAF closing its investigation, I permit myself to quote what I wrote two years ago when the investigation was first opened:

...the OLAF investigators could spare themselves the trouble....[T]he disclaimers of European officialdom – massively reinforced by the pretense of opening an “anti-fraud” investigation – create the impression that the very shekels into which a euro contribution was converted would have to have gone to the purchase of the explosives used in an attack or to the payments of the operatives who planned it or of the family of the “martyr” who carried it out, before European responsibility could be established. But from an economic perspective it is self-evident nonsense even just to expect to be able to obtain such “proof.” It lies, after all, in the very nature of money – what economists call its “fungibility” – that even if a financial contribution to a given budget is ostensibly “targeted” to some particular expenditure, it necessarily frees up resources for all others. Given a range of expenditures, it is in fact meaningless to try to distinguish to just which of them a particular revenue went. If, then, the PA has been financing terrorist attacks, the EU has been subsidizing them. And, given the massiveness of the evidence that has surfaced, no one seriously denies today that the PA has been financing such attacks.

(A revised and updated version of the essay from which this quote is taken is available on Trans-Int here.)

For more on the winding up of the OLAF investigation, see the response by the Funding for Peace Coalition here. And for further background material, see the “EU and Palestine” file in the Trans-Int sidebar.