U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

For sale by the Superintendent of Documents, U.S. Government Printing Office

Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800

Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001

68–296PDF 2011

PROMOTING PEACE? REEXAMINING U.S. AID TO

THE PALESTINIAN AUTHORITY, PART II

HEARING

BEFORE THE

COMMITTEE ON FOREIGN AFFAIRS 

HOUSE OF REPRESENTATIVES

ONE HUNDRED TWELFTH CONGRESS

FIRST SESSION

SEPTEMBER 14, 2011

Serial No. 112–68

Printed for the use of the Committee on Foreign Affairs

(

Available via the World Wide Web: http://www.foreignaffairs.house.gov/

(II)

COMMITTEE ON FOREIGN AFFAIRS 

ILEANA ROS-LEHTINEN, Florida, Chairman 

CHRISTOPHER H. SMITH, New Jersey 

DAN BURTON, Indiana 

ELTON GALLEGLY, California 

DANA ROHRABACHER, California 

DONALD A. MANZULLO, Illinois 

EDWARD R. ROYCE, California 

STEVE CHABOT, Ohio 

RON PAUL, Texas 

MIKE PENCE, Indiana 

JOE WILSON, South Carolina 

CONNIE MACK, Florida 

JEFF FORTENBERRY, Nebraska 

MICHAEL T. MCCAUL, Texas 

TED POE, Texas 

GUS M. BILIRAKIS, Florida 

JEAN SCHMIDT, Ohio 

BILL JOHNSON, Ohio 

DAVID RIVERA, Florida 

MIKE KELLY, Pennsylvania 

TIM GRIFFIN, Arkansas 

TOM MARINO, Pennsylvania 

JEFF DUNCAN, South Carolina 

ANN MARIE BUERKLE, New York 

RENEE ELLMERS, North Carolina 

VACANT 

HOWARD L. BERMAN, California 

GARY L. ACKERMAN, New York 

ENI F.H. FALEOMAVAEGA, American 

Samoa 

DONALD M. PAYNE, New Jersey 

BRAD SHERMAN, California 

ELIOT L. ENGEL, New York 

GREGORY W. MEEKS, New York 

RUSS CARNAHAN, Missouri 

ALBIO SIRES, New Jersey 

GERALD E. CONNOLLY, Virginia 

THEODORE E. DEUTCH, Florida 

DENNIS CARDOZA, California 

BEN CHANDLER, Kentucky 

BRIAN HIGGINS, New York 

ALLYSON SCHWARTZ, Pennsylvania 

CHRISTOPHER S. MURPHY, Connecticut 

FREDERICA WILSON, Florida 

KAREN BASS, California 

WILLIAM KEATING, Massachusetts 

DAVID CICILLINE, Rhode Island 

YLEEM D.S. POBLETE, Staff Director 

RICHARD J. KESSLER, Democratic Staff Director 

(III)

C O N T E N T S 

Page

WITNESSES 

The Honorable Elliott Abrams, senior fellow for Middle Eastern sudies, Council on Foreign Relations ....................................................................................... 10

Jonathan Schanzer, Ph.D., vice president of research, Foundation for Defense 

of Democracies ...................................................................................................... 15

Mr. James Phillips, senior research fellow for Middle Eastern affairs, The 

Heritage Foundation ............................................................................................ 25

Mr. David Makovsky, Ziegler distinguished fellow, director of Project on the 

Middle East Peace Process, The Washington Institute .................................... 32

LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING 

The Honorable Elliott Abrams: Prepared statement ............................................ 12

Jonathan Schanzer, Ph.D.: Prepared statement ................................................... 17

Mr. James Phillips: Prepared statement ............................................................... 27

Mr. David Makovsky: Prepared statement ............................................................ 34

APPENDIX 

Hearing notice .......................................................................................................... 80

Hearing minutes ...................................................................................................... 81

The Honorable Gary L. Ackerman, a Representative in Congress from the 

State of New York: Prepared statement ............................................................ 83

The Honorable Gerald E. Connolly, a Representative in Congress from the 

Commonwealth of Virginia: Prepared statement .............................................. 85

The Honorable William Keating, a Representative in Congress from the Commonwealth of Massachusetts: Questions for the record .................................... 87

(1)

PROMOTING PEACE? REEXAMINING U.S. AID 

TO THE PALESTINIAN AUTHORITY, PART II 

WEDNESDAY, SEPTEMBER 14, 2011

HOUSE OF REPRESENTATIVES, COMMITTEE ON FOREIGN AFFAIRS, Washington, DC. 

The committee met, pursuant to notice, at 10 o’clock a.m., in 

room 2172 Rayburn House Office Building, Hon. Ileana RosLehtinen (chairman of the committee) presiding. 

Chairman ROS-LEHTINEN. The committee will come to order. I 

would like to remind audience members that disruption of committee proceedings is against the law and will not be tolerated. Although wearing themed shirts while seated in the hearing room is 

permissible, holding up signs during the proceedings is not. Any 

disruptions will result in a suspension of the proceedings until the 

Capitol Police can come and restore order. 

After recognizing myself and the ranking member, Mr. Berman, 

for 7 minutes each for our opening statements, I will recognize the 

chairman and the ranking member of the Subcommittee on the 

Middle East and South Asia for 3 minutes each for their opening 

statements. I will then recognize members for a 1-minute opening 

statement from each. 

We will then hear from our witnesses. Thank you, panelists. And 

I would ask that you summarize your prepared statements within 

5 minutes each before we move to the question and answer period 

with members under the 5 minute rule. 

Without objection, the witnesses’ prepared statements will be 

made part of the record, and members may have 5 days to insert 

statements and questions for the record, subject to the length limitation of the rules. The Chair now recognizes herself for 7 minutes. 

Today’s hearing is a part of a broader oversight by the committee 

to examine U.S. assistance to the Palestinian Authority and U.S. 

policy options to address the troubling turn of events regarding the 

PA’s activities. 

First, I would like to thank my friend and colleague Mr. Chabot, 

the chairman of the Subcommittee on the Middle East and South 

Asia, for assisting us in elevating this hearing to the full committee. We stand at a critical juncture with respect to the IsraeliPalestinian conflict, which will inevitably have a major impact 

throughout the region. Events appear to be heading increasingly in 

a negative direction, and regrettably the administration has been 

slow to take action. 

The most recent challenge to the peace process is the Palestinians’ intention to seek membership in the United Nations as the 

2

State of Palestine, but without having made any effort to seriously 

negotiate with Israel. After weeks of uncertainty and drift, the administration has finally pledged that if the Palestinians go to the 

U.N. Security Council and ask for U.N. membership for a State of 

Palestine, the U.S. will veto that resolution. 

But the administration’s waiting until the 11th hour to make 

this announcement wasted a critical opportunity to prevent the 

problem from building. This sits a stark contrast to the decisiveness that the Truman administration displayed with respect to 

Israel. 

As Clark Clifford reportedly remarked to President Truman on 

the eve of Israel’s independence, when much of the cabinet was 

arrayed against the decision to recognize the State of Israel, and 

I quote:

‘‘In an area as unstable as the Middle East, where there is not 

now and never has been any tradition of democratic government, it is important for the long-range security of our country, 

and indeed the world, that a nation committed to the democratic system be established there on which we can rely. The 

new Jewish state can be such a place. We should strengthen 

it in its infancy by prompt recognition.’’

The United States was indeed the first country to recognize the 

State of Israel, and Israel today is such a government and ally. 

Strong U.S. leadership in this tradition would have drawn a bright 

line that other responsible nations could have rallied behind. 

Now, however, because the Palestinians have been allowed to 

mobilize support, they will probably go to the General Assembly, 

where the U.S. does not have a veto, and ask for explicit recognition of a Palestinian state, or implicit recognition through an upgrade in their status at the U.N. This tactic would enable the Palestinians to seek full membership in other U.N. agencies. 

Given that we know that this is likely to happen, we have time 

to take action to minimize the damage. In 1989, Yasser Arafat’s 

PLO tried to do the same thing that Abu Mazen’s PLO is doing, 

seeking the de facto recognition of a Palestinian state from the 

U.N. through agencies like the World Health Organization. 

The PLO seemed assured of victory, and Israel seemed bound for 

international isolation. But then George Herbert Walker Bush—

which is highly regarded, his administration, to this day, for its 

success in multilateral diplomacy—made a bold pledge: The U.S. 

would withhold funding to any U.N. entity that granted membership, or any upgraded status, to the PLO. 

The PLO’s scheme was stopped dead in its tracks. The administration should use the same funding conditions that worked two 

decades ago to stop Abu Mazen’s dangerous unilateral scheme 

today. 

This controversy regarding unilateral statehood reflects a broader failure by the Palestinian to meet their obligations. They continue to engage in anti-Israel incitement and to glorify violent extremism. They refuse to negotiate directly with Israel, and refuse 

to recognize Israel’s right to exist as a Jewish state. Most troubling 

of all, they have aligned themselves with Hamas, a designated forVerDate 0ct 09 2002 15:37 Nov 30, 2011 Jkt 000000 PO 00000 Frm 00006 Fmt 6633 Sfmt 6633 F:\WORK\FULL\091411\68296 HFA PsN: SHIRL
3

eign terrorist organization whose stated objective is the elimination 

of the State of Israel and all of its Jewish citizens. 

Despite decades of assistance totaling billions of dollars, if a Palestinian state were declared today it would be neither democratic, 

nor peaceful, nor willing to negotiate with Israel. By providing the Palestinians with $2.5 billion over the last 5 

years, the U.S. has only rewarded and reinforced their bad behavior. It raises tough questions as to just what are the tangible benefits for the U.S., or for lasting peace and security between Israel 

and the Palestinians, or derived for decades from assistance provided by United States taxpayers. 

Palestinian leaders are not going to make the tough decisions 

and change their ways unless compelled to. If progress is to be 

made, the administration must stop looking for ways to circumvent 

requirements that the PA must meet certain criteria before they 

can receive U.S. aid. These conditions call for the Palestinians to 

completely abandon their unilateral efforts to secure recognition as 

an independent state, tear up their agreements with Hamas, return to direct negotiations with Israel, stop anti-Israel incitement, 

and begin preparing the Palestinian people for peace with Israel 

and recognize Israel’s right to exist as a democratic Jewish state. 

We hope that those conditions are there. We hope that they will 

be met. I would appreciate our witnesses addressing the most effective course of action to achieve those desired objectives. I thank my 

good friend, the ranking member Mr. Berman, for the time, and 

now I am pleased to recognize him for 7 minutes for his opening 

statement. 

Mr. BERMAN. Well, thank you very much, Madam Chairman. 

And I thank the witnesses. You have put together an excellent 

group of people for a very important subject. 

Madam Chairman, the Palestinian Authority president, 

Mahmoud Abbas, has apparently chosen to scorn the negotiation 

table in favor of unilateral action at the U.N., action that he says 

will bring his people closer to statehood. This step, which runs 

counter both to repeated U.S. requests and to prior Palestinian 

commitments, is likely to have disastrous consequences, and almost 

certainly it will make the prospect of a Palestinian state ever more 

distant. 

Exactly what the Palestinians intend to do, what their resolution 

will say, and what process they will pursue at the U.N. are unknown at this time. Perhaps there is still time for good sense and 

effective diplomacy to prevail. Should the Palestinians follow 

through with their U.N. initiative, however, they will be reneging 

on their past commitment, enshrined in the 1993 Oslo Agreement 

and elsewhere, to resolve their problems with Israel through direct, 

bilateral negotiations. 

One thing is clear: There will be no recognition of Palestinian 

statehood by the Security Council, where I am certain the Obama 

administration would use its veto, just as it has in the past, to prevent the passage of an unbalanced, anti-Israel resolution. 

That means that the Palestinians will likely take their case to 

the U.N. General Assembly. And what exactly would the General 

Assembly recognition of a Palestinian state do for the Palestinian 

people? Absolutely nothing. It would not help the Palestinians 

4

achieve a state that lives in peace alongside Israel. It would not 

solve the Palestinians’ need for recognized borders, nor would it 

solve sensitive issues like the status of Jerusalem, water rights, or 

Palestinian refugees. Nor would it improve the economy or the security of the West Bank or Gaza. 

In fact, Abbas’ strategy would leave the core issues of this conflict unresolved and festering. Yet, while a U.N. General Assembly 

resolution will have absolutely no impact on the ground, it could 

have a major impact in international courts of law, as so many experts assert. 

If the General Assembly enhances the Palestinians’ current status as a non-state observer to that of a state, the Palestinians 

would have standing to bring cases against Israel at the International Criminal Court and the International Court of Justice. 

And that is exactly what President Abbas has indicated he will do. 

Of course, that would merely waste more time and further poison 

relations with Israel, making statehood and peace further away 

than ever. I would appeal to our European friends, and to all nations, not to support a resolution with such calamitous potential. 

Many analysts have suggested that the U.N. initiative reflects 

the fact that Abbas is a prisoner of domestic politics, that he must 

burnish his nationalist credentials if he is to be a credible leader. 

According to a poll 3 months ago, Palestinians favored the initiative by 65 percent to 31 percent. 

But those views may be evolving. According to another Palestinian poll released just last week, only 35 percent of the Palestinians now believe that the Palestinian Authority should go ahead 

with their U.N. strategy, while a clear majority, 59 percent, said 

that the PA should go back to the negotiation table with the 

Israelis for the sake of a permanent peace. 

I don’t want to put too much stock in Palestinian polling, but it 

just may be the case that Abbas is misjudging his own people. I 

would be interested in the views of our panelists on the quality of 

those polls. 

Madam Chairman, Congress has been very generous in its support of the Palestinian Authority’s worthy efforts to build institutions and the economy in the West Bank. There is at least one person at that table who played a major role in that. In fact, we are 

the most generous nation in the world in that regard. 

Therefore, I believe it is appropriate to point out that, should the 

Palestinians pursue their unilateralist course, the hundreds of millions of dollars in annual assistance that we have given them in 

recent years will likely be terminated, and that could well result 

in the collapse of the Palestinian Authority. 

And it pains me to say that. U.S. aid has contributed significantly to many positive developments in the West Bank: Economic 

growth, institution-building, progress in governance and improved 

security for the Palestinians and Israel. But all of that is just a 

Band-Aid. It will not last. It is not enduring if there is no political 

solution, and for that we need negotiations, not U.N. unilateralism. 

We will be prudent in our actions, but one thing is clear: President Abbas’ Palestinian Authority should not be rewarded with 

American taxpayer dollars for actions that defy Palestinian comVerDate 0ct 09 2002 15:37 Nov 30, 2011 Jkt 000000 PO 00000 Frm 00008 Fmt 6633 Sfmt 6633 F:\WORK\FULL\091411\68296 HFA PsN: SHIRL
5

mitments, threaten to destabilize the region, or run counter to U.S. 

interests. These dollars can better be spent elsewhere. 

Just 2 months ago, this body passed H. Resolution 268, which 

said that the House ‘‘affirms that Palestinian efforts to circumvent 

direct negotiations and pursue recognition of statehood prior to 

agreement with Israel will harm U.S.-Palestinian relations and will 

have serious implications for U.S. assistance programs for the Palestinians and the Palestinian Authority.’’

The Palestinians have been forewarned. We should not shrink 

from this pledge of just 2 months ago. In closing, I want to reiterate my conviction: Negotiations are the only path to a lasting 

two-state solution to the Israeli-Palestinian conflict. President 

Abbas likes to tell people he wouldn’t get anything in negotiations 

with Prime Minister Netanyahu, but the fact is, he hasn’t even 

tested the proposition, even though Netanyahu has repeatedly 

made clear his desire to commence talks unconditionally. 

It is not too late for President Abbas to abandon his flawed U.N. 

strategy and engage directly with the Israelis. For the sake of 

peace, and for the sake of his relations with the Palestinians’ most 

important benefactor, the United States of America, I urge him to 

do so. 

And I yield back, Madam Chairman. 

Chairman ROS-LEHTINEN. Thank you very much. My good friend 

Mr. Berman, the ranking member. I am pleased to yield 3 minutes 

to Congressman Steve Chabot, the chairman of the Middle East 

and South Asia Subcommittee. 

Mr. CHABOT. Thank you, Madam Chair. Since taking office, 

President Obama has reiterated numerous times his belief that the 

resolution of the Israeli-Palestinian conflict is one of America’s core 

interests in the Middle East. Over the past 2 years, however, even 

as the Palestinian Leadership has repeatedly retreated from a 

meaningful peace process, American assistance has remained unchanged. 

Plainly speaking, a fundamental disconnect has formed between 

our aid policy and our policy objectives. I recently traveled to Israel 

and the West Bank, where I was able to witness firsthand the tremendous gains that have been made on the ground. Indeed, the 

two most prominent features of the Ramallah landscape are construction cranes and unfinished business and buildings. 

Unfortunately, the current Palestinian leadership appears alltoo-willing to sacrifice the achievements of Prime Minister Fayyad’s 

state-building effort in the name of political theatrics. Instead of 

capitalizing on these gains through honest negotiations with Israel, 

the Palestinian leadership seems to be dead set on pursuing a path 

of unilateralism before the U.N. Security Council and/or the General Assembly this September. 

True Israeli-Palestinian peace can only be made between two 

peoples, Israelis and Palestinians, and not the 191 other members 

of the General Assembly. If decades of frustration have taught us 

nothing else, it is that the road to Palestinian statehood does not 

start in New York, and it is not the place of the United States, the 

United Nations, or any other country or institution to short circuit 

the requisite negotiations between the two parties. Indeed, a 

unilateralism is simply rejectionism by another name. 

6

For years, we have invested heavily both money and effort to 

help the Palestinians build a state for themselves, and it is irrefutable that our work has yielded results. The security gains on the 

ground in the West Bank have enabled unprecedented economic 

growth. Israelis have felt comfortable making security concessions 

that would have been unthinkable even a few years ago. 

But just because our current aid policy has yielded results, that 

does not mean that it is currently, or that it will in the future. 

Under the best economic conditions, U.S. aid should not be an everflowing stream of taxpayer money. Under the current economic 

conditions, it simply cannot be. 

The fact of the matter is that we are rapidly approaching a watershed moment in U.S.-Palestinian relations. Both the potential 

reconciliation government that Hamas and the unilateral campaign 

at the U.N. could not be more contrary to U.S. interests in the region. Rejectionist elements within the Palestinian leadership still 

refuse to sit and negotiate in good faith, even as Israel reiterates 

its commitment to have the establishment of a Palestinian state. 

Time and again, Israel has demonstrated its commitment to a 

Palestinian state living as its neighbor in peace and security. But 

there are no short-cuts on the path to that outcome, and there is 

no getting around the hard concessions that will have to be made. 

Although short-term security may be achievable unilaterally, 

peace is not. Palestinian rejectionism, whether by Hamas or Fatah, 

must be abandoned. If the Palestinians continue on their current 

path, the question before this Congress will not be ‘‘What portion 

of our aid will be cut?’’ but rather ‘‘What, if any, portion will remain?’’

I yield back, Madam Chair. 

Chairman ROS-LEHTINEN. Thank you very much, Mr. Chabot, the 

chairman of the appropriate subcommittee. My good friend from 

New Jersey, Mr. Sires, is recognized for 1 minute. 

[No response.] 

Chairman ROS-LEHTINEN. Thank you for passing that up. Mr. 

Cicilline, my mayor? 

[No response.] 

Chairman ROS-LEHTINEN. Thank you. Ms. Bass? 

[No response.] 

Chairman ROS-LEHTINEN. I tell you, this is wonderful. Mr. 

Carnahan? Is recognized for 1 minute. 

Mr. CARNAHAN. Thank you, Madam Chair. I want to thank you 

and Ranking Member Berman for convening this hearing on this 

subject, especially now. This is a critical time. Like many of my colleagues, I have serious concerns about the Palestinian leaders and 

their plans to take to the U.N. this month a unilateral push for 

statehood, an end run around the necessary peace process. 

I strongly oppose any and all of these efforts, and believe that 

it is in the best interests of the Palestinian people, the Israeli people, and the peace process that this resolution as conceived not be 

offered. It is incumbent upon Congress and the administration to 

send the strongest possible message to President Abbas that his efforts are in no one’s interests, including his own people. 

We should reexamine how and whether we continue to offer assistance to the PA in the course of this conversation. I want to 

7

thank the panel for being here today, and really getting us focused 

on the path through this process, over the next few weeks in New 

York. 

Thank you, and I yield back. 

Chairman ROS-LEHTINEN. Thank you, Sir. Mr. Rohrabacher is 

recognized, the chairman of the Subcommittee on Oversight and Investigations, for 1 minute. 

Mr. ROHRABACHER. Thank you very much, Madam Chairwoman. 

The testimony that most concerned me in the first of these hearings was the admission by Jacob Wallace, our Deputy Assistant 

Secretary of Near-Eastern Affairs, which—he was testifying right 

there. He said that we were not using our various programs and 

our aid as leverage to push the Palestinian Authority back to the 

peace table, and for talks with Israel. 

What are we using—or what are we spending all this money for, 

if it is not to promote peace? I mean, this is not anti-Palestinian 

or pro-Israeli, this is pro-peace. I mean, if we are not using our 

money for that, what are we using it for? 

I am very interested to hear the opinions of our witnesses today 

as to how much money we are giving, and whether we are actually 

achieving anything by the aid that we are giving to the Palestinians, if we are not going to push for peace. 

Thank you very much. 

Chairman ROS-LEHTINEN. Thank you, sir. My Florida colleague, 

Mr. Deutch, is recognized for 1 minute. 

Mr. DEUTCH. Thank you, Madam Chair and Ranking Member 

Berman. Thank you to the witnesses for appearing today. We are 

just days away from possible unilateral action at the U.N. by the 

Palestinians. The decisions by Mr. Abbas to use the United Nations 

to bypass face-to-face negotiations with Israel is not only unwise, 

it is utterly unacceptable. The United States has made our position 

clear: The only way to lasting peace is through direct negotiations. 

Madam Chair, this week marks the 18th anniversary of the Oslo 

Peace Accords. In just days, nearly two decades of peace could be 

undone by the Palestinians’ actions at the United Nations. The Palestinians must know there will be consequences for their actions in 

New York. If these actions jeopardize stability in the region, Israeli 

security, and our own U.S. interests in the greater Middle East, 

there must be serious diplomatic and punitive consequences. 

If Mr. Abbas is serious about creating lasting peace and establishing a state for the Palestinian people, he would abandon this 

foolish plan, he would abandon partnership with Hamas, and he 

would return to the negotiating table where Prime Minister 

Netanyahu has been waiting without conditions for the past year. 

Thank you, Madam Chair. 

Chairman ROS-LEHTINEN. Thank you very much. Ms. Schmidt is 

recognized, who will be running her 90th marathon this weekend. 

Good luck. 

Ms. SCHMIDT. Thank you. Thank you, Madam Chair, and thank 

you to the witnesses for being here today. This is a very important 

subject, and I will be succinct. 

Madam Chair, allow me to be clear about my position on the 

Israeli-Palestinian conflict: I support a free, secure, and indeVerDate 0ct 09 2002 15:37 Nov 30, 2011 Jkt 000000 PO 00000 Frm 00011 Fmt 6633 Sfmt 6633 F:\WORK\FULL\091411\68296 HFA PsN: SHIRL
8

pendent Palestine state, but never—and I mean never—at the expense of a free, secure, and independent Israel. Period, case closed. 

Israel is the only democracy in the Middle East, and is a dear 

friend and a great ally. While I understand the argument in favor 

of providing foreign aid to the Palestinians, I have to ask this question: What are we getting in return for our money? Since the 

1990s, the United States has provided over $4 billion in aid. But 

what is the benefit? 

On May 4th of this year, President Abbas and his Fatah-led Palestinian Authority signed a power-sharing agreement with Hamas, 

an organization that has been designated as a foreign terrorist organization by the U.S. President Abbas signed this agreement with 

Hamas, even though Hamas refuses to accept Israel’s right to exist. 

Now, we are faced with the prospect of the Palestinian Authority 

unilaterally pursuing a resolution in the U.N., with the objective to 

garner international support for Palestinian statehood. That being 

said, I have to wonder, why are we still providing U.S. assistance 

to the Palestinian Authority? 

Thank you, Madam Chair. I look forward to this panel, and I 

yield back my time. 

Chairman ROS-LEHTINEN. Thank you, Ma’am. Mr. Keating is recognized. 

Mr. KEATING. Madam Chair, I am going to—since I just came 

in—pass and yield my time. 

Chairman ROS-LEHTINEN. Thank you so much. Mr. Kelly of 

Pennsylvania? 

[No response.] 

Chairman ROS-LEHTINEN. Mr. Connolly of Virginia? Thank you, 

I apologize. I had not seen you there. 

Mr. CONNOLLY. No problem, Madam Chairman. I want to thank 

you for holding this hearing, and I look forward to the testimony. 

Chairman ROS-LEHTINEN. Thank you very much, sir. Mr. 

Gallegly is recognized. 

Mr. GALLEGLY. I thank the chairman, and I just want to be very 

brief. I think this hearing is very timely, and with all of the things 

that we see on the evening news about the rancorous side of Congress, and all of the hostility and lack of bipartisanship, I think 

this is a classic example of how we stand together, not as Republicans or Democrats, but as Americans who truly believe in peace, 

and how vitally important it is, not only to that region of the world, 

but the rest of the world, that we address this issue together, as 

Republicans and Democrats, in a very strong, bipartisan way. 

And your leadership, along with my good friend Howard Berman 

from my home state of California, I want to thank both of you, and 

I yield back. 

Chairman ROS-LEHTINEN. Thank you, sir. Mr. Murphy is recognized. 

[No response.] 

Chairman ROS-LEHTINEN. He was just here a second ago. They 

move fast. Mr. Manzullo, who is the chairman of the Subcommittee 

on Asia and the Pacific, is recognized. 

Mr. MANZULLO. Thank you, Madam Chair, for having this hear- ing. Americans are—at least my constituents are upset over the $4 

billion that the United States has put into bilateral assistance to 

9

the Palestinians in the past 15 years or so. And we are very concerned that the Palestinians are playing a very dangerous game at 

the United Nations by trying to bypass the direct talks with Prime 

Minister Netanyahu. 

The administration must stand with Congress to send a clear 

and unmistakable message that declaring statehood via the U.N. is 

not only counterproductive, but endangers Israel’s security. I’ve 

had the opportunity to meet with five Prime Ministers from Israel, 

sat in the joint session of Congress to hear the great speech of 

Prime Minister Netanyahu. And we as a Congress, I believe, are 

united that the United Nations action cannot supplant the direct 

talks that must take place between the Palestinians and Israel 

itself. 

Chairman ROS-LEHTINEN. Thank you very much. Thank you to 

all of the members for their excellent opening statements. And now 

the Chair is pleased to welcome our witnesses. 

The Honorable Elliott Abrams is certainly no stranger to our 

committee. He is a senior fellow for Middle Eastern studies at the 

Council on Foreign Relations. He has served in a number of senior 

positions in the executive branch, as Deputy Assistant to the President and Deputy National Security Advisor for Global Democracy 

Strategy from 2005 to 2009. From December 2002 to February 

2005, he served as Special Assistant to the President, and as a 

Senior Director for Near East and North African Affairs at the National Security Council. 

From June 2001 to December 2002, he served as Special Assistant to the President, and a Senior Director for Democracy, Human 

Rights, and International Organizations at the National Security 

Council. Welcome, Mr. Abrams. 

Next, we will hear from Dr. Jonathan Schanzer. He is the vice 

president of research at the Foundation for Defense of Democracies. Dr. Schanzer has worked as a terrorism finance analyst at 

the U.S. Department of Treasury, where he played an important 

role in the designation of numerous terrorist financiers. 

Dr. Schanzer has also worked for several other U.S.-based think 

tanks: The Washington Institute for Near East Studies, the Jewish 

Policy Center, and the Middle East Forum. Thank you, Dr. 

Schanzer. It is a pleasure. 

Mr. Phillips is the senior research fellow for Middle Eastern affairs at the Heritage Foundation. Mr. Phillips is a veteran international security specialist who has written extensively on Middle 

Eastern affairs and international terrorism since 1978. He is a 

former research fellow at the Congressional Research Service of the 

Library of Congress, and a former joint doctoral research fellow at 

the East-West Center. Welcome, Mr. Phillips. 

And lastly, we will hear from David Makovsky, who is the Ziegler distinguished fellow and director of the Project on Middle East 

Peace. Mr. Makovsky is a member of the Council on Foreign Relations and the London-based International Institute for Strategic 

Studies. 

Before joining the Washington Institute, he was an award-winning journalist who covered the peace process from 1989 to the 

year 2000. He is the former executive editor of the Jerusalem Post, 

was diplomatic correspondent for Israel’s leading daily, and is a 

10

former contributing editor to the U.S. News and World Report. He 

has served for 11 years as that magazine’s special Jerusalem correspondent. 

A wonderful array of panelists. We will begin with you, Mr. 

Abrams. And as I said at the onset, all of your prepared statements 

will be made a part of the record. Mr. Abrams is recognized for 5 

minutes. 

STATEMENT OF THE HONORABLE ELLIOTT ABRAMS, SENIOR 

FELLOW FOR MIDDLE EASTERN SUDIES, COUNCIL ON FOREIGN RELATIONS 

Mr. ABRAMS. Thank you, Madam Chairman, for inviting me here. 

Thank you to all the members of the committee. It is an honor and 

privilege to return to the committee again. Thank you for holding 

this hearing, which sends, I think, a very tough message to the 

Palestinian Leadership. 

The maneuver in New York by the PLO leadership suggests, as 

many members have said, that they are turning away, both from 

direct negotiations with Israel and from state-building at home, 

and toward a confrontational melodrama in New York. This faces 

you with a difficult problem: What is to be done about our aid program? 

If the Palestinian leadership—the PLO leadership, which is also 

the Fatah leadership—insists on going forward against all American advice, what should change if the PLO insists on this? 

Personally, I say something has to change. You have warned 

against this step in New York, and you have said there would be 

consequences, and you should be as good as your word. Second, I 

would say, as Mr. Berman said, we don’t know quite what is going 

to happen yet. I think this is not a September event; I think it is 

an October event. 

Some of the programs that are up for cutting are actually in our 

interest, and the interest of Israel, such as the security programs 

that Mr. Chabot mentioned. Generally cutting off the PA is a very 

difficult thing to do. For one thing, we should distinguish between 

the PA and the PLO. The PA, the Palestinian Authority, is an administrative body, essentially under Prime Minister Fayyad and a 

bunch of other ministers. 

They are not going to New York. They are not recognized in the 

U.N. They are not in the U.N. That is the PLO. The entire Palestinian Authority is not to blame for what the PLO Fatah crew is 

planning in New York. I think the collapse of the PA would not be 

in our interest, or for that matter Israel’s or Jordan’s. It might actually benefit Hamas and other terrorist groups. 

So the first thing I would say is, give this a few weeks and wait 

and see what President Abbas, in his capacity as Chairman of the 

PLO, does. Does he go to the Security Council to force an American 

veto? That is very harmful for the United States. What language 

does he put forth in his resolution? How bad is it, exactly? Does 

he try to get the General Assembly to pronounce on Jerusalem? On 

refugees? On borders? Does he go forward the next day to say ‘‘I 

am for negotiations,’’ or is he to go forward the next day in the 

International Criminal Court? So you should keep some powder 

dry, I think. 

11

Second, I think you ought to move to close the PLO office in 

Washington. It is the PLO that is doing this. It is the PLO whose 

Ambassador yesterday, in a speech that I would describe as disgusting, said that in the new State of Palestine, there should not 

be one Jew. He didn’t say ‘‘Israeli.’’ He said ‘‘Jew.’’ So Palestine has 

to be Judenrein, in his view. 

That is the kind of thing that ought to get somebody PNGed from 

the United States. That office is open because you provided a Presidential wavier in 1987, and every President has exercised it every 

6 months. Eliminate the waiver, close the PLO office in Washington. 

Third, start looking again at our aid to UNRWA, which is hundreds of millions of dollars. We are the most generous donor. And 

what UNRWA does is perpetuate this refugee problem. It started 

at $750,000. Now it is $5 million. Every other post-World War II 

refugee problem is gone. This one keeps getting larger, thanks to 

UNRWA. 

Finally, I would say, take a far harder line on PLO and PA corruption. This is not a criticism of Prime Minister Fayyad, for whom 

I have the highest regard, but he is surrounded by the old Fatah/

PLO corrupt crew. For example, since 2006, the Palestine Investment Fund, which is worth about $1 billion, has been taken away 

from him, from his authority. 

And there are plenty of allegations about things like self-dealing 

by the members of that board. So I think, given the amounts of 

money that have been mentioned here, $5 billion the United States 

has given, you have every right to demand investigations into and 

the elimination of corruption. 

This is a difficult set of issues, but the PLO leadership should 

know that if they turned from the work of building a decent, democratic state from the ground up, and from genuine negotiations 

with Israel, you are determined that they will pay the price. And 

in that determination, you are right. 

Thank you for this opportunity to appear before the committee. 

[The prepared statement of Mr. Abrams follows:]

12


68296a-1.eps
13


68296a-2.eps
14


68296a-3.eps
15

Chairman ROS-LEHTINEN. Thank you very much. 

Dr. Schanzer? 

STATEMENT OF JONATHAN SCHANZER, PH.D., VICE PRESIDENT OF RESEARCH, FOUNDATION FOR DEFENSE OF DEMOCRACIES 

Mr. SCHANZER. Chairman Ros-Lehtinen, Ranking Member Berman, and distinguished members of the committee, on behalf of the 

Foundation for the Defense of Democracies, I thank you for the opportunity to discuss today some of the challenges associated with 

our country’s annual $600 million aid package to the Palestinians. 

I testify today having conducted interviews last week with Palestinian Authority figures, Fatah party representatives, and Israeli 

officials in both Ramallah and Jerusalem. These interviews confirm 

that our aid package needs an overhaul. While my written testimony is more expansive, in the interest of time I will focus today 

only on the problems of Palestinian Authority corruption and support for terrorism. 

In recent years, the PA has been lauded for its transparency and 

accountability, thanks to PA Prime Minister Salam Fayyad. Recently, however, Fayyad has been sidelined by President Mahmoud 

Abbas. Abbas has consolidated power, and he is now abusing it. 

One egregious example is the Palestine Investment Fund. 

The PIF was created in 2002 to function as a transparent sovereign wealth fund, to benefit the Palestinian people. In recent 

years, however, Abbas has changed the charter, installed his own 

choices for board members, placed the PIF under his full control, 

and neglected to have it properly audited. As the largest donor to 

the PA, the U.S. has a right to oversee the fund. 

The PIF contributes dividends to the PA every year. The PA also 

borrows from this fund, currently worth at least $1 billion, when 

it cannot pay salaries. In return for the money borrowed, Abbas 

has been repaying the PIF with land slated for businesses that enrich his own inner circle. 

Oversight of the PIF is long overdue. One former official charges 

that $1.3 billion has gone missing from the fund. Another claims 

that exposing the PIF would reveal corruption at the highest levels 

of the PA. And the fact that Hamas recently took full control over 

the PIF’s assets in Gaza now adds to the concern. 

Another example of corruption is the way in which Abbas’ sons, 

Yasser and Tarek, have reportedly accumulated wealth since their 

father took office in 2005. Yasser, the oldest son, owns Falcon Tobacco, which has a lucrative monopoly over the marketing of U.S.-

made cigarettes, such as Kent and Lucky, in the West Bank and 

Gaza. Yasser also owns a company that reportedly received $1.89 

million from USAID in 2005 to build a sewage system in the West 

Bank town of Hebron. Another company owned by Yasser Abbas 

received some $300,000 in USAID funds. 

The younger, Tarek, is the general manager of Sky Advertising, 

which receives hundreds of thousands of dollars from USAID to 

bolster opinion of the U.S. in Palestinian territories. His ad agency 

also won a lucrative contract from the controversial Wataniya cell 

phone company, where his brother Yasser sits on the board. 

16

Wataniya was created with international donor funds, including 

U.S. assistance. 

Finally, there is the PA’s troubling financial relationship with 

Hamas. Despite its ongoing feud with Hamas, the PA has secretly 

allowed the Jihadist group to raise funds through an electricity 

scam. Electricity in Gaza is produced by a power plant that is guaranteed by the Palestinian Authority, but the bills are collected by 

Hamas. As one former Palestinian Authority official confided to me, 

the Hamas authorities collect the bills from customers in Gaza, but 

never sends the money back to the West Bank, and the PA continues to foot the bill. 

It should also be noted that Hamas government institutions and 

prominent Hamas members simply don’t pay their bills, and the 

PA covers them as well. Thus, the PA allows Hamas to raise funds 

by billing Gazans for electricity that they don’t generate. And because the PA is funded by U.S. taxpayer money, we are all enabling Hamas to raise those funds. This is a violation of U.S. law, 

and must be addressed immediately. 

In my written testimony, I describe some of my misgivings about 

cutting off aid entirely. Among other things, we could effectively relinquish all of our leverage with the Palestinians, leaving the door 

open for Iran or other bad actors to influence the PA in ways that 

could further threaten regional stability. 

But this does not mean that Congress should maintain the status 

quo. Congress should challenge the corrupt system created by 

Mahmoud Abbas. This includes: One, stricter oversight of the Presidential waiver process that releases Palestinian funds each year. 

Two, oversight of the Palestine Investment Fund, including a full 

audit. Three, conduct an inquiry into the wealth of Mahmoud 

Abbas and his sons Yasser and Tarek, to determine whether U.S. 

funds have contributed to their holdings. Four, demand an immediate resolution to the matter of the electric power plant in Gaza. 

U.S. taxpayers should not be indirectly financing Hamas. Number 

five, scrutinize the Presidential budget of PA President Mahmoud 

Abbas. And finally, find ways to increase the role of Prime Minister 

Salam Fayyad, who has been marginalized by Abbas in recent 

years. 

On behalf of the Foundation for the Defense of Democracies, I 

thank you again for inviting me to testify here today, and I look 

forward to your questions. 

[The prepared statement of Mr. Schanzer follows:]

17


68296c-1.eps
18


68296c-2.eps
19


68296c-3.eps
20


68296c-4.eps
21


68296c-5.eps
22


68296c-6.eps
23


68296c-7.eps
24


68296c-8.eps
25

Chairman ROS-LEHTINEN. Thank you, Doctor. 

Mr. Phillips? 

STATEMENT OF MR. JAMES PHILLIPS, SENIOR RESEARCH 

FELLOW FOR MIDDLE EASTERN AFFAIRS, THE HERITAGE 

FOUNDATION 

Mr. PHILLIPS. Well, Madam Chairman, thank you for this opportunity to testify before the committee. I am the Senior Fellow for 

Middle Eastern Affairs at the Heritage Foundation, and the views 

I express in this testimony are my own and should not be construed as representing any official position at the Heritage Foundation. 

And with that, I would like to summarize my prepared statement. U.S. aid to the Palestinians is aimed at supporting IsraeliPalestinian peace negotiations, strengthening and reforming the 

Palestinian Authority, which was created through those negotiations, and improving the living standards of Palestinians to demonstrate the benefits of peaceful coexistence with Israel. 

These are laudable goals. But unfortunately, peace negotiations 

have bogged down. Even worse, the Palestinian Authority has 

reached a rapprochement with Hamas, the Islamic extremist organization with a long record of terrorism, which is not only opposed 

to peace negotiations with Israel, but is implacably committed to 

Israel’s destruction. 

The Palestinian Authority’s relationship with Hamas and its ongoing efforts to include Hamas in a ruling coalition under a May 

2011 power-sharing agreement raise disturbing questions about the 

long-term intentions of the Palestinian Authority, and cast doubt 

on its commitment to negotiate a genuine peace with Israel. 

By consorting with Hamas terrorists, the Palestinians are violating the Oslo Accords and destroying the rationale for continued 

American aid. Palestinian leader Mahmoud Abbas also has chosen 

to pursue a dubious dead-end path to Palestinian statehood 

through the United Nations, rather than through the negotiations 

with Israel. This U.N. diplomatic gambit could derail any hope of 

resuming Israeli-Palestinian peace negotiations in the near future, 

and could destabilize the region by exacerbating the already tense 

atmosphere between Israelis and Palestinians, provoking widespread anti-Israeli demonstrations that could easily spin out of control. 

The unilateral Palestinian push for statehood not only violates 

previous Palestinian agreements with Israel, but also those with 

the United States, which was a co-signatory of the Oslo Accords. 

Yet the Obama administration has bent over backwards to avoid 

criticizing the Palestinians. This low key, reticent approach has 

failed to halt the Palestinian U.N. drive for unilateral statehood. 

It is long past time for the Obama administration to become actively engaged on this issue at the highest levels. Secretary of State 

Clinton and the President himself should explicitly and forcefully 

state American opposition to Palestinian plans for unilateral statehood. They should explicitly state that the U.S. will veto any Security Council resolution recognizing statehood or calling for full 

membership in the U.N. before an Israeli-Palestinian peace agreement is concluded. 

26

The United States should also declare that it will withhold voluntary or assessed funds to any U.N. organization that admits Palestine as a state or grants it non-member state observer status. As 

the chairman mentioned, in 1989 when the PLO issued its first 

declaration of statehood, the first Bush administration blocked this 

effort by threatening to withhold U.S. funding for the United Nations. 

While the Obama administration’s deference to the U.N. makes 

such a strong stand unlikely, Congress can step into the breach 

and pass legislation prohibiting funding to any U.N. organization 

that endorses unilateral statehood, admits Palestine as a member 

state, or grants it non-member state observer status. 

Congress should also cut U.S. economic aid to the Palestinian 

Authority if it continues to shun negotiations with Israel and ignore its commitments under previous agreements. U.S. aid is not 

an entitlement, and should be closely tied to the Palestinian performance in demonstrating its commitment to peace. 

If the Palestinians persist in their efforts to sidestep direct negotiations in favor of some form of illusory statehood, then they 

should expect to look elsewhere for funds to build that pseudostate. The bottom line is that the United States must block any effort to create a Palestinian state that sponsors terrorism or seeks 

to make an end run around bilateral negotiations with Israel by exploiting the anti-Israeli bias of the U.N General Assembly. 

U.S. aid to the Palestinian Authority must be closely tied to its 

compliance with previous agreements to fight terrorism, halt incitement against Israel, and negotiate a final peace settlement. The 

U.S. should leverage its aid to convince Palestinians that the only 

realistic path to statehood lies through negotiations with Israel. 

Thank you. 

[The prepared statement of Mr. Phillips follows:]

27


68296b-1.eps
28


68296b-2.eps
29


68296b-3.eps
30


68296b-4.eps
31


68296b-5.eps
32

Chairman ROS-LEHTINEN. Thank you, sir. 

Mr. Makovsky 

STATEMENT OF MR. DAVID MAKOVSKY, ZIEGLER DISTINGUISHED FELLOW, DIRECTOR OF PROJECT ON THE MIDDLE 

EAST PEACE PROCESS, THE WASHINGTON INSTITUTE 

Mr. MAKOVSKY. Thank you, Madam Chairman, Ranking Member 

Berman, and distinguished members of the committee. Thank you 

for this opportunity. 

From the start, I would like to emphatically state that I do not 

support the Palestinian appeal to the United Nations. This measure would only be appropriate if Israel was unwilling to directly negotiate an end to this ongoing tragic conflict. Israel, however, has 

repeatedly called for such direct talks. Therefore, I strongly believe 

that the Palestinian leadership’s U.N. approach is wrongheaded 

and contrary to long-standing Palestinian commitments. 

At the same time, I am not convinced that a decision to cut off 

assistance to the PA is the best response, since I fear it would lead 

to the collapse of the Palestinian Authority. Congressional aid since 

Fiscal Year ’08 has produced unprecedented levels of West Bank 

stability, prosperity, improved governance, and previously unimaginable levels of Israeli-Palestinian security cooperation that have 

benefitted Palestinians and Israelis alike. 

Any changes to U.S. aid should therefore be carefully calibrated 

so as not to undermine the benefits that accrue beyond the Palestinian arena. We should also see how the drama at the U.N. plays 

out. As Elliott Abrams just stated, if the Palestinians opt for their 

current maximalist course, then we should consider imposing nonfinancial measures, measures such as against the PLO offices in 

Washington and the suspension of senior-level meetings between 

U.S. and Palestinian officials. 

Of course, in any event, I agree with Dr. Schanzer that abuses 

of the Palestinian Investment Fund should be investigated regardless. 

A total suspension of assistance would certainly be warranted if 

the PA took a premeditated turn toward a third intifada, a third 

uprising. But President Abbas’ record strongly suggests that this is 

not his intent. Policymakers must always ask themselves the question: Who benefits from these actions? I think the group that 

stands to gain the most from a cut-off of U.S. aid to the PA would 

be Hamas, which does not recognize Israel’s existence at all. In 

stark contrast, the PA’s cooperation and security relationship with 

Israel over the last 4 years has produced real and favorable 

change. 

Even Israeli security officials insist—many of them have said 

this to me—that security cooperation is vital and must continue. 

For example, in 2002, 410 Israelis were killed by suicide bombings 

and other attacks emanating from the West Bank. From 2007 to 

2010, a period of 31⁄2 years, Israel suffered only one fatality from 

a suicide attack. Imams calling for suicide attacks against Israel 

have been removed from around 1,300 mosques in the West Bank. 

New teachers in the West Bank are now vetted to ensure that none 

purvey the ideals of Hamas. Gone is the revolving door of the 

33

Arafat era, when terrorists would be jailed only to be released 

when others were not looking. 

There has also been a real professionalization of the security 

services, and I thank here the congressionally-supported U.S. Security Coordinators program that has played a large role in strengthening the Palestinian-Israeli security cooperation. If congressional 

aid is suspended and Palestinian security officials engaged in this 

cooperation go unpaid, the risk of terror attacks Israel will grow 

exponentially. 

So who pays the price for this cut-off? Let us not kid ourselves. 

Thanks to American financial support, Palestinian security cooperation with Israel has gone hand in hand with Prime Minister 

Fayyad’s success in institution-building, improved law and order in 

the West Bank, and Israel’s lifting of almost all its major manned 

checkpoints, have been key contributions to the 9.3 percent growth 

enjoyed by the West Bank in 2010. 

However, without U.S. aid, the odds are greater that Fayyad, 

who has been the greatest obstacle to Fatah-Hamas reconciliation, 

will resign, imperiling both security cooperation and institutionbuilding efforts. He is the goose who lays the golden eggs. Without 

eggs, I think he will resign. In other words, withholding U.S. aid 

will undermine the people we want to help, and help the people we 

want to undermine. 

Although the PA may pay a price in its relations to the U.S. for 

its misguided venture at the U.N., regardless it is worth waiting 

to see if their bid for full membership is scaled back to a less maximalist resolution that is more aspirational in nature. I think what 

is clear, that the three poison pills of this resolution for Israel is 

that they would demarcate borders that make peacemaking impossible, that it will encourage, by giving the Palestinians status that 

they could go after Israeli officials and prosecute them at the International Criminal Court, this is a very serious issue. And it means, 

also, the possibility of assertion of Palestinian sovereignty, and an 

attempt to trigger sanctions by accusing that Israel is occupying 

another state’s sovereign territory. 

In the meantime, we shouldn’t just look about what goes on at 

the U.N. We should look out the day after, and we should take very 

specific steps to avoid violence on the ground. And this means making sure that any demonstrations are confined to urban areas, and 

away from Israeli settlements and the like. 

To summarize in a sentence, we should focus on the U.N., but 

we should also look at what happens the day afterwards. I look forward to the discussion. Thank you very much. 

[The prepared statement of Mr. Makovsky follows:]

34


68296d-1.eps
35


68296d-2.eps
36


68296d-3.eps
37


68296d-4.eps
38


68296d-5.eps
39


68296d-6.eps
40


68296d-7.eps
41


68296d-8.eps
42


68296d-9.eps
43


68296d-10.eps
44


68296d-11.eps
45


68296d-12.eps
46


68296d-13.eps
47


68296d-14.eps
48


68296d-15.eps
49


68296d-16.eps
50


68296d-17.eps
51


68296d-18.eps
52


68296d-19.eps
53

Chairman ROS-LEHTINEN. Thank you very much, to you, sir, and 

to all of our panelists. We will begin now the question and answer 

period, and the Chair recognizes herself for 5 minutes. 

Dr. Schanzer, you elaborate on the PA’s ambiguous relationship 

with Hamas, and I quote:

‘‘Despite its ongoing feud with Hamas, the PA has secretly allowed the jihadist group to raise funds through an electricity 

scam. Electricity in Gaza is produced by a power plant that is 

guaranteed by the Palestinian Authority, but the bills are collected by Hamas. As one former advisor to the PA confides, 

‘The Hamas authorities collect their bills from customers in 

Gaza, but never send the funds back to the West Bank, and 

the PA continues to foot the bill.’ It should also be noted that 

the Hamas government institutions and prominent Hamas 

members simply don’t pay their bills: The PA covers them as 

well. In other words, Abbas allows Hamas to raise funds by 

billing Gazans for electricity that they don’t generate. And because the PA is funded by U.S. taxpayer money, we are all enabling Hamas to raise those funds. This is a violation of U.S. 

law, and it must be addressed immediately.’’

So I would like to ask the panelists about the conditioning of 

U.S. assistance to the PA. Successive administrations have failed 

to adequately condition this U.S. taxpayer aid, which has led to a 

sense of entitlement by the PA, and a dependence by the PA on 

U.S. and international assistance. This has enabled the PA, then, 

to avoid taking responsibility for its actions or its own people. If 

you could elaborate on the recommendations for long-term strategy 

to wean the PA off of U.S. assistance, and how do we leverage our 

assistance to achieve our national objectives? Mr. Abrams? 

Mr. ABRAMS. I think it is Prime Minister Fayyad’s goal to eliminate the reliance on all foreign assistance, and he has talked about 

how much they needed 2 years ago, last year, this year. It is actually down from about $1.5 billion to $900 million, and it is his goal 

to eliminate it, as it should be our goal, so they can finance themselves. 

I think you are right about the lack of conditionality. Even on a 

question like incitement in textbooks, we have talked about it, but 

we haven’t conditioned anything on it. I think it probably goes back 

to the beginnings of this, after the death of Arafat. We were so 

pleased to see a Presidential election there, and to see some new 

faces replacing Arafat, and to see a reduction of the unbelievable 

corruption that had surrounded him, that it didn’t seem like it was 

as critical as it does now. 

But I think the idea of doing these investigations of things like 

the electricity company in Gaza, PIF, the personal finances of 

President Abbas and his family, should be part of any aid program. 

Chairman ROS-LEHTINEN. Thank you so much. 

Mr. PHILLIPS. Well, I think, like many other programs that were 

created in Washington, once things are established they tend to 

just float onward. And I think this impending crisis at the U.N. is 

an opportunity to take a harder look, to step back and attach more 

conditions, not only to bilateral aid but also to aid through the 

U.N. 

54

The UNRWA, I think, is a very costly, dysfunctional anachronism that has been around since 1949. I think that we should look 

very hard at disbanding that in the future, and turning the responsibility for aiding the Palestinians over to the U.N. High Commissioner for Refugees, which is much more efficient at helping refugees. 

Chairman ROS-LEHTINEN. Thank you, sir. I am just going to cut 

you off, and if I could hold off on you two gentlemen. I know you 

have a lot to say, but Mr. Abrams, if you could elaborate on how 

closing the PLO office—which is what you were talking about in 

your testimony—here in DC could alter the PA’s strategic calculus? 

Mr. ABRAMS. The thought would be that, first of all, candidly, it 

is meeting the pledge that Members of Congress have made, that 

there would be a reaction to their going forward in the U.N. What 

they are basically saying, if they go forward in the U.N., is, ‘‘The 

status we have, which is we work through the PLO internationally—and the PLO has offices all around. The PLO is a U.N. observer—that is not good enough. We want a different status.’’

So my argument is that you would be responding, ‘‘Okay. If the 

PLO doesn’t work anymore for you, why do we need to have a PLO 

office in Washington? If you guys don’t want to work it that way, 

fine. We will close it off.’’ And the ability to conduct propaganda activities, some of which, as I mentioned, are pretty disgusting, 

would be diminished greatly. 

Chairman ROS-LEHTINEN. Thank you very much. I thank the 

panelists. I am sorry I didn’t get a chance to get to all of you. My 

friend from California, Mr. Berman, is recognized for 5 minutes. 

Mr. BERMAN. Well, thank you very much, Madam Chair. Part of 

what we are talking about is not—Dr. Schanzer makes some very 

interesting suggestions regarding restructuring, examining, investigating, oversight on the aspects of parts of our aid. A lot of the 

Palestinian Investment Fund has nothing to do with our aid, but 

you are pointing out, in some ways it has facilitated some bad stuff 

and we ought to be looking at it. 

But that wasn’t really about the U.N. resolution, that was sort 

of on its own, and it had its own merits as suggestions. On the 

issue of the reaction to pursuing the U.N., Mr. Makovsky has—

what is the resolution they go forward with? And the Obama administration is in a full court press to try and stop them from going 

forward. And all other things aside, that ought to be recognized. 

But if they decide to go ahead, what do they go ahead with? And 

you mentioned several different aspects of—is this just another one 

of the troublesome, bothersome U.N. resolutions that are going before bodies all the time, or is this something more serious? And you 

have raised what makes it more serious, more dangerous, and bad. 

But if that, in the end, is what the resolution is, I have a hard 

time thinking that closing the PLO office, in and of itself, is the 

significant consequence to doing something which is such a fundamental breach of Oslo, and so contrary to what is needed to get 

there, that that’s enough. 

And I guess I would like to hear you speak a little more to the 

whole question of meaningful consequences for a really dangerous 

action, initiated by the—it may be the PLO, but he is President of 

the PA. And that is one aspect of it I would like you to address. 

55

The second one is, to the extent that you folks have talked about 

the U.N.—and the chairman mentioned some effective strategy 

that Bush 41 took with respect to not funding organizations that 

recognize the Authority as a state. If this is a General Assembly 

resolution—that is what I am talking about. I am not talking about 

the Security Council issue right now. I am talking about the General Assembly resolution. 

What is it? If one wants not to fund agencies of the U.N. that 

accept the Palestinian state, when the General Assembly takes 

that action, is that—are you guys calling for an end to all funding 

of the United Nations? 

Mr. MAKOVSKY. I think that there are a couple things in your 

question. On the first issue, in terms of meaningful consequences, 

Elliott was explaining how the PLO is not the lead actor anymore. 

And they always say, ‘‘Well, the PLO is the body that is to negotiate with Israel,’’ but the PLO is going in the opposite way, here. 

So I think I share the skepticism of the role of the PLO. If the Palestinians are sidelining itself, they say ‘‘We will be a Government 

of Palestine. We won’t even be PLO observer status.’’ So I think 

that has merit. 

Another suggestion I mentioned is, frankly, a suspension of highlevel meetings with the United States. I mean, this administration 

from day two named a Middle East envoy, George Mitchell. It has 

devoted a lot of efforts in focusing on this issue, and if the Palestinians, in that 21⁄2 years, have only come to the table for 21⁄2 weeks, 

then I think the United States—we are well within our rights to 

say, ‘‘Well, the President has a lot of foreign policy issues to attend 

to, and if you don’t value this effort there might not be a need for 

meetings. We have got a lot of other meetings to hold.’’

So I think that is something that would send a clear message, 

while averting what we really care about, which is, we don’t want 

a collapse. We don’t want a collapse of the security cooperation on 

the ground that——

Mr. BERMAN. Is there a U.N. resolution that could be taken 

up——

Mr. MAKOVSKY. Yes, look——

Mr. BERMAN. That should not—doesn’t—should reduce our concern? 

Mr. MAKOVSKY. Yes. In my full testimony—I just didn’t—I 

couldn’t get to it in the verbal testimony, given the time constraints. But the European Union is working behind the scenes to 

put forward, to take these—what I would call these three poison 

pills that I mentioned in my remarks—out. 

And if they are successful—and I am not saying they will—they 

have a lot of leverage. They are 27 countries. The Palestinians are 

desperate to get European support, because they were not the ones 

that supported the 1988 upgrade at the General Assembly. So they 

have a lot of leverage. There are also a lot of countries that vote 

with Europe at the United Nations, that could get them up to 50 

votes. 

They could say, ‘‘You want our support? Fine. But this is what 

it will take. You have got to remove the three poison pills and 

make the declaration more aspirational for two states, which is 

56

predicated on a bilateral negotiation and reaching the end of conflict.’’

Mr. BERMAN. All right. My time has expired. I am sorry I didn’t 

get to hear Mr. Abrams’ answer, but that is because I talked too 

much in the beginning. 

Chairman ROS-LEHTINEN. Thank you, Mr. Berman. And now Mr. 

Rohrabacher is recognized, the chair of the Subcommittee on Oversight. 

Mr. ROHRABACHER. Yes, Mr. Berman, there are some of us who 

would like to cut funds to the United Nations when those funds are 

not used to promote peace. Just for the record. Five billion dollars. We have spent $5 billion, and what have we 

gotten for it? I think it is a fair question that the American people 

can ask, at a time when we are in a financial crisis. We haven’t 

gotten peace. There are still rockets being shot from Gaza into 

Israel. And we haven’t gotten goodwill. So if we are giving people 

billions of dollars, and we are not getting peace, and we are not 

getting goodwill, what the Hell are we getting? 

We are getting a feel-good position for people in the United 

States who really do believe in peace, but feeling good doesn’t mean 

that you are going to have any progress. Let us just note that there 

has been some progress made, but I don’t think you can draw that 

to the $5 billion that we have given to the Palestinians. 

I remember when Israel was not accepting the two-state solution. 

In fact, I advocated the two-state solution, and a lot of my Israeli 

friends were upset with me for doing that. Well, now we realize 

that in order to have peace, there has to be two parties that you 

are respecting and trying to get them together. 

Unfortunately, Israel has accepted the two-state solution, has 

given up territory, but I don’t recognize anything that the Palestinians have given up. I know what we have done: We have given 

them $5 billion. But what have they given up? They haven’t even 

given up, even the principle that they cannot return to Israel, pre-

’67 Israel, and envelop it. Meaning, to destroy Israel. They haven’t 

even given up that concept. 

Why are we giving money to people who have not even given up 

the concept that they are going to destroy Israel as it exists? I 

mean, this is absurd. Have we bought any goodwill with this $5 billion? That is the first question. Is there someone you can point to 

now, who is our buddy now because we have been giving this 

money? Anyone want to defend that? Go right ahead. 

Mr. SCHANZER. Congressman Rohrabacher, I very much appreciate the sentiment. And I think, if I were to characterize the way 

that we have given aid, it has really been about a transaction, and 

not transformation. And I think that cuts to the heart of what you 

have just said. 

Mr. ROHRABACHER. Yes. 

Mr. SCHANZER. We have just been furnishing aid. In the same 

way we furnished aid to Egypt, we haven’t changed the sentiment 

on the ground, so the Palestinian people still largely hate Israel 

and are anti-peace. And we have allowed this to continue. 

And so what I have suggested here today, and what I think my 

colleagues here have suggested as well, is that we really need to 

start to squeeze the system that has been created. I think part of 

57

the problem is that we began to do that under President George 

W. Bush in the aftermath of the intifada. But after the Hamas 

electoral victory in 2006, and then the takeover of Gaza in 2007, 

we began to look at the Fatah/PLO/PA apparatus as the moderates, 

and we gave them a free pass. And we stopped squeezing them in 

the way that we should have, to reform. And this is, I think, how 

we have gotten to where we are today. 

Mr. ROHRABACHER. Well, I think this is the best example of the 

phrase ‘‘Being taken for granted.’’ Here we are, providing the—I 

mean, $5 billion is a lot of money. I mean, this is a lot of money 

for the American people. You know what else we could have done in this country with $5 

billion? But now, that is—I mean, we are totally taken for granted, 

because we have not predicated that on specific actions by these—

by the people who are receiving the money. 

Let me just note this: I believe the real peace will come, if it ever 

does—and if it does, it will be predicated on Israel giving up all of 

the settlements in the West Bank, and it will be predicated on the 

Palestinians giving up all their notions of ever going back to pre-

’67 Israel, and the settlement, perhaps, of some property claims 

that, perhaps, can be paid for by those Arab countries that took all 

the Jewish property when the Jews left and went back to Israel, 

and their land was confiscated. 

So hopefully, we have got to get serious about this. And we are 

not serious. We simply keep doling out money to people without 

any preconditions. Thank you very much, Madam Chair. 

Chairman ROS-LEHTINEN. Thank you, Mr. Rohrabacher. Mr. 

Sires of New Jersey is recognized for 5 minutes. 

Mr. SIRES. Thank you, Madam Chair. Thank you for holding this 

hearing today. I sit here. Different people come before us. And I 

keep hearing the same thing all the time about this part of the 

world: That we give money, and most of the people we deal with 

are corrupt. Somehow, the money disappears, especially in this region. 

Are there any honest actors in the region that we could deal 

with, that would put forward the money? I mean, I am sure we 

could stand here and go back and forth. But the real question that 

I have is this: Let’s say the Palestinians are successful in getting 

this through the U.N., and nothing changes. Whatever the resolution is, nothing changes for the Palestinian people. 

What does that say about the Palestinian Authority’s leadership? 

Are they going to hang in there? I mean, nothing is going to 

change. Because the corruption is the same, the sentiment is the 

same. Nothing moves forward. There is no treaty. There is no future. So what happens? We go through another something else. 

Mr. ABRAMS. If I could, Mr. Sires, I think you have put your finger on something critical here, which is the failure of leadership. 

This is a curse the Palestinians have had for 100 years. I mean, 

their leadership all along, even before Arafat, during Arafat, has 

been marked by corruption and not by any real desire to build, 

from the bottom up, a Palestinian state. 

And that is what we are seeing now. President Abbas seems to 

be concerned—he is the guy who lost Gaza, and he seems to be concerned now with trying to get some kind of unity with Hamas, to 

58

reunite everybody, get this resolution in the U.N., and then maybe 

call it quits and retire, and retire with—we will investigate this, 

I guess, but a fair amount of money that the family has gotten. 

So I think this is a huge problem for us, and of course it is a 

greater problem for the Palestinians, that they have never had—

with I think the sole exception of Prime Minister Fayyad—a leader 

who is really trying to build from the bottom up. 

Mr. SIRES. Mr. Phillips? 

Mr. PHILLIPS. If I could just add, I think one of the tragedies of 

this situation is that there was an opportunity for a possible peace 

settlement, but under the leadership of Yasser Arafat, I think the 

PLO squandered that opportunity, and I think he played fast and 

loose with his agreements, and never fully delivered on his promise 

to halt terrorism, and other things. 

And now, in his stead, we have President Abbas, who as a 

prote ́ge ́ of Arafat, has only limited ability to break with Arafat’s 

legacy. And although I think he gives some commitments to a twostate solution, it looks more like a two-stage disemboweling of 

Israel. If there is going to be a Palestinian state, then refugees 

should be returning to that state, not to Israel. And there is a fundamental inconsistency there. 

Mr. SCHANZER. In answer to your question, sir, I think one of the 

problems is just the ideology of Palestinian nationalism, over the 

last 100 years, has unfortunately been more about the destruction 

of something rather than the creation of something—i.e. the destruction of the State of Israel, and not the creation of a viable Palestinian state. And there have been fits and starts in this regard, 

but they have never really undertaken a serious effort to build a 

state that is viable. 

In terms of what we are looking at right now, I would liken what 

Abbas has done at the U.N. to having thought through the first 10 

or 15 games of a chess match, but without having any idea how 

to end it in a victory. And so what I heard from people in Ramallah 

last week was that there is a great fear that, after this political 

theater has passed in New York this month, Palestinians will wake 

up and look outside their homes and see that nothing has changed, 

as you mentioned. 

And that could actually lead to, not an intifada against Israel, 

but what we might call an ‘‘intra-fada,’’ where we would see something like the Arab Spring come to visit the West Bank. And this 

could obviously have a very serious impact on U.S. interests there, 

because a weakened Palestinian Authority/PLO apparatus would 

certainly give rise to Hamas. So this is something that we are 

watching now. We could be watching the self-destruction of Abbas’ 

PLO. 

Mr. MAKOVSKY. I would just like to say, I would like to respectfully disagree with what you have suggested, that if Congressman 

Rohrabacher—I think this is not a long-term view of what has been 

going on there. Under the Yasser Arafat era, corruption was rampant. All the Palestinian polling said that even the Palestinians 

knew this. 

What Fayyad has done is fundamentally different. He has got it 

all audited. The U.S. Government looks at this. You have a situation that the Israeli military, everyone says that the effort against 

59

corruption is 100 times better today than it was during the Arafat 

era. 

This doesn’t mean we shouldn’t be vigilant. We should investigate if there is the PIF, which is not a U.S. aid issue—we should 

be vigilant about that and try to improve it, but let us not pretend 

that things are the same as they have always been. 

We have seen a marked change for the better, and we should 

make it even better. And we should also talk about the lack of 

Arab support for the Palestinian Authority. That deserves a hearing in and of itself. 

Chairman ROS-LEHTINEN. Thank you, sir. Thank you, Mr. 

Sires——

Mr. SIRES. Thank you, Madam Chairman. 

Chairman ROS-LEHTINEN [continuing]. For your questions. Ms. 

Schmidt is recognized for 5 minutes. 

Ms. SCHMIDT. Thank you. Mr. Abrams, public reports indicate 

that Tony Blair, the former British Prime Minister, who represents 

the Quartet, a diplomatic group focused on the Middle East that 

is made up of the U.S., European Union, United Nations, and Russia, is looking for a new basis for Israeli-Palestinian negotiations. 

He hopes that the Quartet’s statement will cushion or shift the Palestinians membership bid toward talks. What do you believe are 

the essential components of any Quartet statement? Could you 

elaborate? 

Mr. ABRAMS. Yes, I think your description of what Blair is trying 

to do is quite accurate. And I think, basically, what he is trying to 

do and what the Quartet is trying to do is get Prime Minister 

Netanyahu to agree to some version of ‘‘We will start negotiating 

from ’67 lines,’’ and get the Palestinians to agree to some version 

of the term ‘‘Jewish state.’’

And he figures if he can get that balance, he can get them back 

to the negotiating table. And then, with that agreement in hand, 

in the next week or two, Abbas does not go to the U.N. It is a valiant effort. I just think it is probably not going to work. 

Ms. SCHMIDT. Thank you. And what do you believe are the red 

lines for Palestinian activities, as it pertains to their efforts in the 

United Nations? Could you elaborate? 

Mr. ABRAMS. Well, as has been said here, I think they should not 

be doing this at all. If they are going to do it, then the question 

becomes, what is the content of the resolution? 

The worst thing could be if it has in it anything about borders, 

refugees, or Jerusalem. I say that because if you have a U.N. resolution that says, for example, ‘‘There is a Palestinian state exactly 

on the ’67 borders,’’ that kills negotiations. Because in the future, 

no Palestinian negotiator is going to be able to take less than the 

U.N. has already given him. So I think those are the three things 

that have to be out of any resolution. 

Ms. SCHMIDT. Thank you. Mr. Phillips, what are the so-called—

the Arab Spring was just mentioned. What do you see would happen in the region if the Arab Spring occurs in Palestine? 

Mr. PHILLIPS. Well, I think one of the drivers in terms of Palestinian domestic politics behind this rapprochement between Hamas 

and the PLO is a fear that both could be threatened by a Palestinian Spring. I think there is a lot of pent-up dissatisfaction in 

60

Gaza, with Hamas, much more than is generally reported in the 

West, and that Hamas is seeking protection from such popular repudiation by going along with this political theater at the U.N. 

General Assembly, and trying to get out ahead of it and refocus 

popular discontent against Israel. I think it is part of the same old 

scapegoat strategy. 

Ms. SCHMIDT. And I have a couple more things. As we see it 

played out in the polls of the administration regarding the potential showdown are not working at present. What could we have 

done to have avoided this situation, and what should the administration do to correct it? And I will open that up to all four of you 

in the 11⁄2 minutes I have left. 

Mr. SCHANZER. If I may, I think that the administration, respectfully, has handled this rather poorly. We have known about this 

UDI, Unilateral Declaration of Independence, for more than 2 

years. Salam Fayyad laid this out in 2009, with a deadline of September 2011. 

There have been moments along the way where, admittedly, the 

President has come out very squarely and said that this runs 

counter to peace. But at the same time, this administration has 

taken steps to encourage this action. The vilification of Israel for 

building in the West Bank, and this campaign against Israel over 

the last year or 2, I think, has certainly encouraged the Palestinians to believe that this was all being done in the name of their 

national project. 

When the President announced his peace process last year 

around this time, he indicated that he hoped to see an independent 

Palestinian state by September 2011, certainly giving a nod to, 

again, Fayyad’s plans. And then, earlier this year, the President 

upgraded the PLO offices to the equivalent of an Embassy, allowing the Palestinian flag to fly over Washington. These were all indications that the President supported this maneuver in some way 

or another, and now is asking for this to end. 

Ms. SCHMIDT. Thank you. I yield back. 

Chairman ROS-LEHTINEN. Thank you so much, Ms. Schmidt. Mr. 

Deutch of Florida is recognized. 

Mr. DEUTCH. Thank you, Madam Chairman. Mr. Makovsky, can 

you respond to Dr. Schanzer’s suggestion that the administration 

has waged a campaign against Israel over the past year? 

Mr. MAKOVSKY. I have been critical over the over focus on settlements for the first 2 years of the administration. I feel time was 

wasted. We ended up boxing in Abbas no less than we boxed in 

Israel. And we focused too much on the symptoms, when we should 

be going for the cure. I wish the administration would have been 

giving its speech in May, they would have done it 2 years earlier. 

But I wish, before the administration would have given that 

speech, it would have gone to Brussels, and London, and Paris, and 

said, ‘‘Look. We are about to take a big speech. What are you going 

to do? We are willing to administer tough love. Are you willing to 

administer tough love to the Palestinians? You never have.’’

And when Elliott correctly mentioned the valiant effort by Tony 

Blair, I think we would have been in a much better leverage position if we would have gone before the speech to the Europeans, saying, ‘‘We are about to do something big here in Washington, but we 

61

are not going to do it unless we know the Europeans are going to 

do something comparable, that they are going to give a corollary 

speech, given either by Lady Ashton, or Sarkozy, or Merkel, or 

whoever.’’

That would have strengthened our bargaining position. I fear 

that the Europeans have basically taken our concession, so to 

speak, and put it in their pockets. And therefore Tony Blair doesn’t 

have many bullets this summer, and that is sad. So I think those, 

to my mind, are the two major—the major mistakes. The over focus 

on settlements for the first 2 years, instead of trying to actually 

solve the problem, and not using the moves we did make to leverage European concessions, which really would have changed the 

landscape as we would have approached the whole U.N. business. 

Mr. DEUTCH. Could you speak to the administration’s actions, the 

past—starting, perhaps, at the United Nations, with the veto of the 

Security Council resolution, and forward? I understand you are 

looking back to the start of the administration. Could you talk 

about the efforts at the United Nations, starting then and proceeding through the current efforts with the Quartet? 

Mr. MAKOVSKY. Are you talking about the February veto on settlements, or the speech of Obama last year? 

Mr. DEUTCH. The veto of settlements. 

Mr. MAKOVSKY. You know, the administration did veto it, but a 

lot of the buzz around the veto, the way it was done, frankly, basically dissipated it. It was a time when the Arabs were focused on 

the Arab Spring, and the administration feared this would be a 

huge distraction and lead to demonstrations against the United 

States, which it didn’t lead to it, because the Arabs were more focused—they were more preoccupied with their own problems. 

So I think the administration—I understand their concerns, and 

they were thinking worst case scenario. It didn’t materialize. 

Again, this summer the administration wanted to do the Quartet. 

That was the main strategy. And the administration actually has 

not aligned behind—when Congressman Berman asked me about 

an alternative resolution idea, the administration has not come out 

in support of that. 

Basically, the administration wants to be aligned with Israel, 

and is not offering its support. And that is why the Europeans are 

actually the key actors. The U.S. main bid was the Quartet. That 

was the main focal point to get us off this issue at the U.N. in September. But it is a little too little too late, because the Europeans 

have not found the incentive to cooperate sufficiently with the 

United States. 

They always have their reasons, of course, but I think that that 

was—we didn’t maximize our leverage, and so ostensibly that 

wasn’t a U.N. move per se, but that was our main bid, was earlier 

this summer. And I think when we didn’t get that thing nailed 

down on July 11th in the Secretary of State’s office with the Quartet members, frankly the closer we get to the U.N., it dwindles. 

U.S. leverage dwindles. Everyone is staking out their own positions, and isn’t stopping Abbas. So I think things could have been 

done differently. 

Mr. DEUTCH. At this point, though, as you point out, Mr. 

Makovsky, the criticism—your criticism seems to be that the adVerDate 0ct 09 2002 15:37 Nov 30, 2011 Jkt 000000 PO 00000 Frm 00065 Fmt 6633 Sfmt 6633 F:\WORK\FULL\091411\68296 HFA PsN: SHIRL
62

ministration’s position is, in supporting Israel at this point, rather 

than looking for some other alternative and leaving that to the Europeans. Are you questioning that? 

Mr. MAKOVSKY. No, I am not questioning at all. I think President 

Obama said, ‘‘This is a principal position for this administration, 

that this issue of the Palestinians is not settled at the U.N., it is 

settled at the table.’’ And I think the President is 100 percent 

right. 

Mr. DEUTCH. All right. Does anyone—do any of the other witnesses doubt that that has been the administration’s commitment? 

Chairman ROS-LEHTINEN. We will have to wait for that response. 

Mr. DEUTCH. Thank you, Madam Chair. 

Chairman ROS-LEHTINEN. Thank you, Mr. Deutch. Mr. Chabot, 

the chairman of the Subcommittee on the Middle East and South 

Asia, is recognized. 

Mr. CHABOT. Thank you, Madam Chair. And I will direct this to 

any of the panel members that might be interested. As I had mentioned in my opening statement, I had recently returned from a 

trip to Israel and the West Bank. 

I was actually in Ramallah, discussing with Prime Minister 

Fayyad his tremendously important state-building effort, when the 

reconciliation agreement between Hamas and Fatah was being 

signed, without his blessing and probably without even his knowledge. At the meeting that we had with him—we happened to hear 

about the reconciliation later on that evening, and he certainly 

didn’t seem to know anything about it. I can’t vouch for that, but 

that was the impression that I had. 

Since then, several potential cabinet formulations have been discussed which would result in his replacement as prime minister. 

That is Prime Minister Fayyad. As we all know, Fayyad’s integrity 

and competence has been essential in building the credibility of 

Palestinian institutions, which for a very long time were bottomless 

pits of corruption. 

One question that comes to mind is how we can ensure Fayyad 

does not get forced out of office. As I ask that, though, it occurs to 

me that if the gains achieved under his leadership are dependent 

on his leadership, perhaps we have already lost. How should U.S. 

aid policy be adjusted if Fayyad is no longer the Palestinian Prime 

Minister, and are any gains in the West Bank sustainable after he 

is gone, taking into consideration what we have seen Palestinian 

leadership in the past, and other than Fayyad in the present, be? 

And whoever would like to take it—maybe we will start with Mr. 

Abrams. 

Mr. ABRAMS. I would be very pessimistic about how much of the 

gains will stick. On security and on financial probity, he is not a 

one-man band, but he is a leader. And without that leadership at 

the top, I think it will start to crumble. How should we respond 

to it? I think we should talk to the other aid donors who are significant, which is primarily the Europeans, the EU and the individual 

countries, and a couple of others, like the Saudis. 

And so that we are all sending the same message to the Palestinians, including to President Abbas, saying, ‘‘Don’t do it, because we 

don’t trust where the money is going to go after he is gone.’’ I think 

63

that is actually one of the reasons he is still there. The Saudis, 

among others, told Abbas, ‘‘Don’t do it.’’

Mr. CHABOT. Thank you. Anybody else like to take a stab? Yes, 

Mr. Makovsky? 

Mr. MAKOVSKY. No. I mean, I am very happy with your question, 

because, I mean, my point is, there has been this huge improvement because of his leadership. And it is not about supporting one 

man and tying yourself to a man. It is tying yourself to a set of 

principles that he has represented. If he goes, and his successor is 

more like the Arafat era, then I would be more of the view of Mr. 

Rohrabacher and the gentleman we heard from before, that the 

U.S. should reexamine it. 

But I think, when he is making all these gains for transparency, 

and trying to create an ethos of accountability, which is not easy, 

because Yasser Arafat—let us be honest—left a very toxic legacy. 

But he is building schools. He is paving roads. He is opening health 

clinics. He is reforming the security services, making it professional. He is getting the preachers out of the mosques who are calling for Jihad. He is doing everything that any person, not just the 

United States, would want a Palestinian Authority to be like. If his 

ethos of accountability is somehow returned to the past, then I 

would be for a reexamination myself. 

Mr. CHABOT. Okay. Yes, sir? 

Mr. SCHANZER. I will add just one thought to that, and that is 

that, as much as I agree with David about how much Prime Minister Fayyad has accomplished, I would say that in recent years, 

that progress has been undercut significantly by Abbas and his cronies. In other words, Mahmoud Abbas has been taking away some 

of the power that Fayyad had, and so the impact that Fayyad has 

been making—and admittedly, it was good progress—you get the 

sense now that some of that transparency is being wiped away. 

Mr. CHABOT. Thank you. 

Mr. SCHANZER. And so we need to do everything that we can to 

ensure that we empower Fayyad, and to take power back out of the 

hands of Abbas and put it into the hands of Fayyad. If we don’t 

do that, I do fear that ultimately we are headed toward disaster. 

Mr. CHABOT. Thank you. Let me just follow up, and I have only 

got a short period of time here, but Prime Minister Fayyad has 

made it clear that he does not support this campaign at the U.N., 

and yet they are apparently going to go forward with it without 

him. What does this tell us about his political—not his economic—

influence or lack thereof? And I guess the panel would agree that 

that tells us that he doesn’t have a heck of a lot of political influence. Is that correct? I think everyone is nodding. Madam Chair, 

I have exhausted my time. I yield back. 

Chairman ROS-LEHTINEN. Thank you for noting the nod. Mr. 

Connolly is recognized. 

Mr. CONNOLLY. Thank you, Madam Chairwoman. Mr. Abrams, 

good to see you again. I listened with great interest to your understandable disgust with certain statements attributed to—or that 

most certainly came out of the mouth of the PLO representative. 

But your prescription was, ‘‘So let us close the PLO office in Washington,’’ which every President has used the waiver authority for, 

64

Democratic and Republican, since we granted it, and make him 

PNG. 

What would be the consequences of doing that, though, in terms 

of U.S. leverage, our ability to try to continue to urge the two parties to the table, and so forth? 

Mr. ABRAMS. In my view, it is a symbolic step that would show 

the people running the PLO how angry you are in Congress, and 

the United States is. It doesn’t foreclose the possibility, if they ever 

really want to negotiate peace, to do it. 

I can tell you that when we started looking at the after-Arafat 

period, in 2002 and 2003, in the Bush administration, we had people fly in from Ramallah, and we talked to them. People who were 

close to the then-Prime Minister Abbas. You could continue to have 

those conversations. But they would lose their perch here in Washington, and it would, in a sense, be the price they paid for defying 

the President and the Congress and going ahead in New York. 

Mr. CONNOLLY. What about Mr. Makovsky’s suggestion, if I 

heard his testimony correctly, that unwittingly, certainly, that 

could play into the hands of Hamas, which is the last thing in the 

world we want to do? 

Mr. ABRAMS. Well, the collapse of the PA institutions, and particularly security institutions, could, I think, play into the hands of 

Hamas. Closing the PLO office, though, I think would not. 

Mr. CONNOLLY. You would agree, would you not, though, that as 

we look at our options, we do need to take cognizance, however 

frustrated and upset we may be—we do need to take cognizance of 

unintended consequences that strengthen the hands of forces we 

would prefer be weakened, not strengthened? 

Mr. ABRAMS. Absolutely. And unintended consequences that end 

up hurting Israel or Jordan. 

Mr. CONNOLLY. Mr. Schanzer, I saw you shaking your head. Did 

you want to comment? 

Mr. SCHANZER. Absolutely. I agree with Elliott that I think closing down the PLO offices, given the fact that this is an Abbas initiative, is something that should be considered by Members of Congress. I think it is also worth noting here that there may be some 

unintended consequences for the Palestinians as a result of this 

UDI. 

According to some of the legal opinions that I have heard, first 

of all, the PLO could be relegated to some sort of a secondary authority, if and when a Palestinian state is declared, so that the 

road may be paved for us to really downgrade relations with the 

PLO nevertheless. 

And then also, we heard earlier about UNRWA, this U.N. agency. If, in fact, a state is declared, to a certain extent the Palestinians living inside the West Bank who claim refugee status would 

have to relinquish those claims. So there are unintended consequences that we could play to, in terms of how it might impact 

the Palestinians, as well. 

Mr. CONNOLLY. Thank you. Mr. Makovsky, okay. Despite our 

best efforts, despite a veto at the U.N. Security Council, the UNGA, 

sort of eerily reminiscent of the whole China vote many years 

ago—I am old enough to remember—votes Palestinian statehood. It 

65

is the day after. What are our real options, besides expressing frustration? 

Mr. MAKOVSKY. Like I said in my testimony, I am very concerned 

about what happens on the ground. And to be blunt, neither the 

Israel Defense Forces nor the Palestinian Authority’s Security 

Services have vast experience in crowd control. And if there is 

going to be a lot of demonstrations going on, my—even though I 

don’t think Abbas, given what he says and his record, is at all interested in spearheading violence—nobody accuses him of—his biggest critics, anywhere, would not say that he plays a double game 

with violence. 

So I don’t think that is really something to be concerned about. 

But you know, when you gather all these people, you don’t know 

if you are unleashing dynamics you cannot control. That is why I 

think there needs to be strong security cooperation on the ground. 

I think the U.S. Security Coordinator who is there now, General 

Moeller, needs to play a role before the U.N. vote, during, after. 

This may go on for weeks. This is an asset of the United States. 

Mr. CONNOLLY. But if I could interrupt you for just 1 second, because we are running out of time. But is it the posture of the 

United States, the day after, to take a hard line position that we 

are not going to recognize this act, and therefore in no way, shape, 

or form, even inferentially, will we in any way recognize the statehood outside of the multilateral——

Chairman ROS-LEHTINEN. Another very good question whose 

time will await the answer. 

Mr. CONNOLLY. Oh, cheap. Just say yes or no. 

Chairman ROS-LEHTINEN. Go ahead, Mr. Makovsky. 

Mr. MAKOVSKY. Look, we will only recognize—the United States 

will only recognize a state that is a result of bilateral negotiations 

between Israel and the Palestinian Authority. Any administration, 

Democrat or Republican, I am confident will be of that view. 

Mr. CONNOLLY. Thank you, Madam Chairwoman. 

Chairman ROS-LEHTINEN. Thank you. Thank you, Mr. Connolly. 

Mr. Poe of Texas is recognized. He is the vice chair of the Subcommittee on Oversight and Investigations. 

Mr. POE. Thank you, Madam Chair. Thank you for being here, 

gentlemen. I see this playing out maybe not so good for Israel and 

the United States. One dynamic that I believe is taking place is the 

unfortunate commitment of the United States toward the Nation of 

Israel. It seems to me in the last few years mixed signals have 

been going to the Israelis. Mr. Netanyahu said as much when he 

spoke before a joint session of Congress. 

And personally, I think that little family rift, if we can use that, 

is being noticed by people all over the world. And maybe this is 

coming to the U.N. with that in the background. That is unfortunate. I think the United States—Congress obviously has shown a 

strong support, bipartisan support for the Nation of Israel, and I 

think we should continue to send that message. 

To get to the U.N., I agree with Ambassador Dore Gold, Israel’s 

former U.N. Ambassador, when he said, ‘‘If there was a resolution 

whose first clause was anti-Israel and whose second clause was 

that the earth was flat, it would pass the United Nations.’’ I think 

it is true. There is such a bigotry against Israel in the United NaVerDate 0ct 09 2002 15:37 Nov 30, 2011 Jkt 000000 PO 00000 Frm 00069 Fmt 6633 Sfmt 6633 F:\WORK\FULL\091411\68296 HFA PsN: SHIRL
66

tions as a whole. This is what we are faced with under this Palestinian issue. 

Mr. Phillips, why do you think withholding funds to any U.N. organization that admits Palestinians as a state, or grants it a nonmember state observer status, is a good move? 

Mr. PHILLIPS. I think it is a good move because it would help 

minimize the damage to possible future peace negotiations. And I 

think one of the great dangers of this kind of a U.N. unilateral 

strategy is that it could lead the Palestinians to conclude that they 

don’t have to negotiate with Israel, that they can sit back and wait 

for further Israeli concessions. 

And I think one of the mistakes of the Obama administration 

was not only to, I think, set a very unrealistic deadline for coming 

to some kind of framework agreement by September 2011, which 

tremendously raised expectations, but also their very public friction 

with Israel, which led the Palestinians and other Arabs to believe 

that the U.S. was going to deliver concessions, and they didn’t need 

to negotiate, which is one reason why President Abbas has only 

agreed to about 2 weeks of negotiations since Prime Minister 

Netanyahu came to power. 

And I think that, unfortunately, the impact was raising expectations so high that when the U.S. wasn’t able to deliver and Abbas 

felt that we had lured him out on a limb and then cut off the limb 

by stepping back and failing to deliver on the settlement issue, that 

part of the bitter fruit of that policy is coming to fruition now. 

Mr. POE. So you think that the U.S. should just withhold funds 

to states that support the statehood of Palestinians? 

Mr. PHILLIPS. I think that we should be cutting back our funds 

for U.N. organizations that contribute to this very——

Mr. POE. Specifically, what U.N. organizations? That is my question. 

Mr. PHILLIPS. I would say all organizations that take those actions. 

Mr. POE. I believe this resolution has to be resolved between the 

Palestinians and the Israelis. They have to solve this issue, not the 

U.N. They have to solve it. Of course, the Palestinians aren’t motivated to talk to Israel when they have got the U.N. on their side, 

going to do the deed for them. You know, you made a comment 

about Israel’s concessions. You know, that’s always been, ‘‘Well, let 

us give land for peace.’’ Well, Israel has continued to give up land, 

and they still have no peace. Pretty soon, they are going to be out 

of land. 

All right. One more question, Mr. Abrams. You suggest Congress 

should wait and see how the U.N. votes. Well, we know how they 

are going to vote. Is there something we can do to be proactive, 

rather than be reactive about this situation? The United States of 

America, what should we do now? 

Mr. ABRAMS. I think this hearing is important, because they are 

listening. They are listening to this, and they are hearing all of you 

say if they go ahead with the resolution, and particularly with a 

resolution that has terrible content, that you are going to cut them 

off. 

67

Mr. POE. Maybe they will have that ‘‘Earth is flat’’ part in the 

resolution. Maybe they will put ‘‘The earth is flat’’ in that resolution. 

Mr. ABRAMS. It will still pass. They do have an automatic majority, that is true. As the Israelis say, anything the Palestinians put 

forward, they get the automatic vote of every Muslim State, and 

Israel gets the automatic support of every Jewish state. 

Mr. POE. Thank you, Madam Chair. 

Chairman ROS-LEHTINEN. That is a small group, there. Thank 

you so much, Mr. Poe. Mr. Ackerman is recognized for 5 minutes. 

He is the ranking member on the Subcommittee on the Middle 

East and South Asia. 

Mr. ACKERMAN. Two questions just raised, of what we can do 

now. I wish someone would have thought before of what we should 

have done then, before we got this far down the road with this idiotic pursuit of the Palestinians, to raise the bar so high of the expectations of its people that it is going to be a total disaster for 

them when they do not get, from the U.N., what they think they 

are going to get, and aren’t prepared to handle the consequences. 

I wish somebody, before this thing went so far down the road, 

understood that in life, we don’t get to pick our choices and then 

choose among them, but we have the choice only of picking between 

the realistic choices that are presented to us. I wish somebody was 

a chess player, among all the people playing the piddling game of 

checkers, and could play chess on a three dimensional basis, and 

offered up a solution or a choice that was much better than we are 

looking at presented to the U.N. right now, and in that choice said, 

‘‘Why don’t we embark on a process of negotiation between the two 

sides, starting almost anywhere?’’ Any line, as long as it included 

a proposal that there would be exchanges or swaps between the 

parties, that they would have to mutually agree to before they decided. But it had to be negotiated between the parties. 

I wish somebody would have thought of that, because I think 

that is a much better choice that we would have had at that moment, rather than the choice that is facing the U.N. right now. At 

least there would have been an alternative that offered a degree of 

hope of the parties getting back to the negotiating table. But alas, 

I guess that was not to be. 

I guess there was nobody around on the whole planet who 

thought of offering the choice as an alternative, preemptively, to 

the parties sitting down, using a line to start with that was really 

inconsequential, because you were going to arrive at a different situation once you did the swaps. 

But here we are. My question, first, is, should not there be a 

clause, if we could affect the resolution that the Palestinians are 

going to bring forth, a clause that said, ‘‘Once this resolution is 

voted on, immediately the parties, in order for this to be effective, 

must sit down and negotiate face to face?’’ What is wrong with 

that? Dr. Schanzer? 

Mr. SCHANZER. You raise an excellent point. And one of the 

things that the Foundation for Defense of Democracies has been 

doing over the last several months is advocating for just that. Unfortunately, what we have seen over the last several months is that 

68

this is seen as a binary choice for members of the U.N.: Either you 

support a Palestinian state or you don’t. 

And what we think is the right move, and I think what you have 

just expressed here really dovetails with that, is that there should 

be some language in this resolution that says that the U.N. member states view with favor the creation of a Palestinian state, but 

that that state needs to be negotiated with Israel, and the borders 

need to be ultimately decided by the two parties, and that there 

needs to be recognition of Israel as a Jewish state. 

In this way, the Palestinians can have their moment at the U.N., 

which is I think what they seek here, but ultimately some of the 

impact of this, the legal impact that David mentioned earlier, could 

be diluted. And why that was not forwarded by official channels up 

until very recently is something that is very troubling. And it is 

even more troubling to think that, ultimately, what is going to happen—and this is, by the way, part of the Palestinian plan right 

now—is that when this UDI goes through and the United States 

vetoes this, the impact will be that the Arab world, where we have 

gone to great pains to support their revolutions, whether in Egypt 

or Tunisia or Syria or elsewhere, will look at the United States as 

if it is an anti-Arab initiative. 

Mr. ACKERMAN. I don’t have a lot of time left. Let me just add, 

because I do want this on the record, I just want it to be known 

that there are those of us who have been in the vanguard of supporting a two-state solution and promoting the just solution that 

the Palestinians are entitled to, with safeguards for the security of 

Israel, and trying to get our European friends on board. 

That there are some of us who strongly believe that people have 

to live with the consequences of their actions, and that there are 

those of us who are thinking that maybe a total cutoff of all aid 

to a group that is pursuing this course of action, which is very illadvised, is willing to consider cutting off everything. 

And if they are willing to consider putting their future in the 

hands of the United Nations, perhaps they should look to try to 

find the kind of aid that would come with whatever U.N. resolution 

there might be, from their friends in the United Nations. Thank 

you, Madam Chair. 

Chairman ROS-LEHTINEN. Thank you very much, Mr. Ackerman. 

Mr. Fortenberry is recognized. He is the vice chair of the Subcommittee on Africa, Global Health, and Human Rights. 

Mr. FORTENBERRY. Thank you, Madam Chair, and thank you, 

gentlemen, for coming today to this important hearing. I had a 

question that Mr. Connolly asked, but I think it is an important 

question and it deserves a little bit more consideration, because he 

was only able to ask it late and you, Mr. Makovsky answered it in 

terms of what the day after looks like. 

Sadly, here we are in a reactionary position, as Mr. Ackerman 

alluded to, without many options. The reality is, after a General 

Assembly passage of some sort of recognition here, what is our next 

hearing going to look like? But instead of just focusing on the 

morning after, with the possibility of things looking the same, or 

people in the streets, project out in terms of the geopolitics, into 

the future, as to how this shifts things significantly, or not. Please 

start. 

69

Mr. MAKOVSKY. Look, the issue of what are the geopolitical implications of this—if it goes through as the Security Council—they 

go to the Security Council, which they know they are going to hit 

a U.S. veto, and the only way to do that is to poke the U.S. in the 

eye, because they know the result, and because they want a negative result for the U.S. in the Arab World. 

That could be serious. If they avoid going to the U.N. Security 

Council and try something else at the General Assembly, where 

they don’t face that hand going up on Aljazeera and al-Arabiya 

around the world, then it could look differently. 

The Arabs are preoccupied with their own problems right now. 

But this issue is evocative. So I think it depends a lot on how the 

Palestinians play it. Are they out to embarrass the United States 

by going deliberately to the Security Council, while we have all 

been focused on the General Assembly? 

That could aggravate the response in the region. And getting to 

Congressman Ackerman’s point of where was the forward thinking 

in all of this, I think in a certain way, the U.S. has been—the administration has been betwixt and between, because what happened is, is that the United States did not want to be seen—the 

administration—as favoring an alternative resolution that would 

take out the three poison pills that I keep referring to from my testimony, because it would be viewed, in the Congress and other 

parts, as stepping away from Israel, that by trying to reshape the 

resolution, that would be deemed as, ‘‘Well, you say you are against 

the U.N., but you are really trying to reshape something at the 

U.N.’’

So the administration put all its eggs, so to speak, on the Quartet’s statement this summer, in trying to keep the Europeans and 

have some trans-Atlantic unity, even if we thought it couldn’t stop 

Abbas. 

So I think in the administration, and how they have been trying 

to think about this, is they have been focused about trans-Atlantic 

unity, and they have been concerned that the perception that they 

are working behind the scenes to reshape the resolution would be 

interpreted, I think, as weakness by the Republicans. And so that 

actually has led them from stepping back and maybe not having 

the influence that they could in reshaping the resolution, and putting all their effort on the Quartet. 

Mr. FORTENBERRY. So it is my fault? 

Mr. MAKOVSKY. I did not say that it is your fault, at all. I did 

not say that it is your fault at all. But maybe there are some efforts that have been kept Top Secret, and we will find out afterwards that the U.S. was doing things behind the scenes, but it was 

so worried about the way it would be perceived outwardly that it 

didn’t maximize its efforts. 

So I think those were always the two strategies to avoid the full 

thrust of what we are dealing with now: Either a Quartet statement or an alternative resolution that would take out the poison 

pills. 

Mr. FORTENBERRY. Thank you. 

Mr. MAKOVSKY. But how the Arabs deal with it—I think if the 

Palestinians want to poke America in the eye, the U.S. will have 

70

to see that accordingly. Because that will be done just to stir up 

Arab reaction. 

Mr. FORTENBERRY. Thank you. Mr. Abrams? 

Mr. ABRAMS. Very briefly, sir. I think this does stem, in part, 

from a gigantic mistake the administration made at the very beginning. It believed that by distancing us from Israel, it would increase our influence on the Palestinians and the Israelis. In fact, 

it has diminished our influence with the Palestinians and the 

Israelis, and we now see a situation where we are more distanced 

from Israel, and your position, the position of the President on this 

resolution is crystal clear, and they are just not listening. They are 

not paying attention. 

Mr. PHILLIPS. If I could just add, I think that the administration’s efforts to distance itself, even, has greatly disappointed the 

Palestinians in the long run. Because they interpreted that as the 

administration coming around to their position. And today, the Palestinian Authority is running radio ads that are replaying the 

words of President Obama about having a Palestinian member 

state in the U.N. And they are trumpeting that as the Obama 

promise. 

And I think part of the problem here is a tremendous disconnect——

Mr. FORTENBERRY. I once—I am sorry to cut you off. I once saw 

an editorial cartoon in which someone from the region, with an arm 

in his hand, was standing on a pile of skulls and said, ‘‘I won.’’ We 

have got to move beyond what appears to be irrationality. 

Chairman ROS-LEHTINEN. Thank you very much, Mr. 

Fortenberry. Mr. Rivera, my Florida colleague, is recognized. 

Mr. RIVERA. Thank you, Madam Chair. My question is for Mr. 

Abrams to start off. The Palestinian Authority, instead of returning 

to talks with Israel, is engaging in diplomatic warfare against 

Israel. They have launched a campaign outside of direct negotiations in order to win admission as a full member to the United Nations, and are setting preconditions on final status which are supposed to be resolved through direct negotiations. 

What has this administration done to prevent the Palestinian 

Authority from following through with their diplomatic warfare 

against Israel and their campaign? And is there more the U.S. 

could or should be doing to dissuade the Palestinians from proceeding at the U.N.? 

Mr. ABRAMS. Well, sir, I think the administration has tried 

jawboning. That is, it has talked, publicly and privately, to the Palestinians and asked them not to do this, and probably used you in 

Congress as an argument that there would be a penalty to pay. 

But it has been too little, too late, I think. And I do think the 

Palestinians received a wrong message early on, that they didn’t 

have to negotiate with the Israelis because the administration 

would distance itself from the Israelis and then deliver the Israelis. 

So they have not been interested in negotiations, really almost 

from the very beginning. It is very late at this point, and I think 

the only thing you can do is to make it clear to them, as you are 

doing today, that there will be a serious price to pay. 

Mr. RIVERA. Well, speaking of that, and a serious price to pay, 

specifically on foreign aid, what should the implications for U.S. asVerDate 0ct 09 2002 15:37 Nov 30, 2011 Jkt 000000 PO 00000 Frm 00074 Fmt 6633 Sfmt 6633 F:\WORK\FULL\091411\68296 HFA PsN: SHIRL
71

sistance be if the Palestinians continue with their efforts? And do 

any of you think that the Palestinians realize that their efforts 

could jeopardize U.S. assistance? I will start with Mr. Abrams, but 

anybody on the panel that wants to chime in. 

Mr. ABRAMS. I think they do realize it, but maybe they figure you 

won’t go through with it. And maybe they figure they can get it 

made up by the Qataris, or some other donor who will step in. But 

the utility of this hearing, I think, is driving home ‘‘This is a serious business.’’

Mr. RIVERA. Mr. Makovsky, I saw you nodding. 

Mr. MAKOVSKY. I think I would just like to put forward the suggestion that I feel that it is not getting enough focus. And you are 

powerful people. Imagine if you had part three of this hearing, and 

would start inviting some Arab Ambassadors to here. And you 

would start asking, ‘‘How is it Mr. Turki al-Faisal writes to the 

New York Times that they are giving $2.5 billion, when Salam 

Fayyad says they have only received $347 million?’’

It is a little over a tenth of what Turki al-Faisal says that they 

have given to the Palestinians. The United States has been far 

more generous than any Arab state, and the U.S. Congress should 

put some focus on that. Why does Qatar get away with murder in 

this country by funding Hamas? Is it because of a U.S. Air Force 

Base in Qatar, and the U.S. Congress isn’t focusing on the fact that 

Qatar is supporting Hamas? 

Why isn’t there more attention to this? This, I think, would be 

a very strong signal. ‘‘We want to help the Palestinians, but we are 

astonished that you Arabs don’t do more to help the very people 

that you claim are your brothers, and yet when it comes to the 

money, the United States is the single biggest donor to the Palestinian cause.’’

I think that repositioning for the U.S. Congress would be fantastic. It would draw attention in the Arab media, around the 

world, to the lack of Arab support. It would embarrass them, and 

they should be embarrassed. 

Mr. RIVERA. Mr. Schanzer? 

Mr. SCHANZER. Well, I agree with everything that David has just 

said, and I think it would draw attention to an issue that has not 

been covered enough. But I also have to mention this, that if you 

invite the Qataris, and you invite the Saudis, or perhaps the Iranians, to backfill some of the aid that is not given to the Palestinians, what you are doing is inviting bad actors to influence the Palestinians in ways that could further upset the balance of power in 

the region. 

We already know that Qatar has been financing Hamas. We 

know that Iran covers a great deal of the budget of Hamas. In 

other words, these countries have been fomenting violence in the 

region, and I have deep concerns about inviting them to begin to 

backfill some of the aid that might go unfulfilled by the United 

States. 

Mr. RIVERA. And Mr. Phillips? 

Mr. PHILLIPS. I think, unfortunately, one of the long-term problems in this conflict is that many Arab states use the Palestinian 

issue only as a club to attack and undermine Israel. They are not 

72

so much interested in building a Palestinian state as they are in 

destroying an Israeli state. 

And this really becomes clear when you look at the disconnect 

between Arab promises and delivery of aid. I think according to the 

New York Times, of $971 million pledged for this year, the Palestinian Authority has received only about $330 million as of midyear, with many Arab states in large default. 

And this has led the Palestinian Authority to cut its wages this 

month to half wages for the Palestinian bureaucrats, and I think 

one of the good impacts of this kind of a hearing, I think, is to possibly lead the Palestinian Authority leaders to reconsider what is 

going to happen when their——

Chairman ROS-LEHTINEN. Thank you. Oh, finish that sentence. 

Mr. PHILLIPS. Just that they are not going to be able to count on 

the financial assistance of their friends to the degree that, perhaps, 

they expect. 

Chairman ROS-LEHTINEN. Thank you so much, Mr. Phillips. 

Thank you, Mr. Rivera. Another dear Florida Colleague, Mr. Gus 

Bilirakis, a.k.a. Just Ray. Inside joke. 

Mr. BILIRAKIS. Thank you, Madam Chair. I appreciate it very 

much. I would like to ask a question for the entire panel. It is offensive to me that the U.N. Relief and Work Agency, or UNRWA’s, 

stated goal since its inception in 1950 is essentially to keep the 

Palestinian people in a refugee status. 

Mr. Abrams, as you noted in your testimony, it seems that 

UNRWA has done nothing but perpetuate refugee status for the 

Palestinians forever. Would the panel agree with me that we 

should finally end the nearly $4 billion of aid that we have already 

wasted on UNRWA? I would like to hear from the entire panel, 

please. 

Mr. SCHANZER. I can start. I will say this, that UNRWA needs 

to end now. It is an absolute waste of money. Rather than solving 

the problem, it perpetuates it. UNRWA sees the Palestinian refugees as clients, rather than refugees that need to be settled. Every 

other refugee problem has been addressed appropriately in history 

since World War II. The Palestinians remain a dagger in the back 

of Israel, and it is a political issue, it is no longer a humanitarian 

one. 

One thing that has been suggested, that I think is a very good 

idea to consider, is the U.N. High Commissioner for Refugees. That 

is the body that handles every other refugee problem. I think that 

this portfolio should be given back to the UNHCR, and to leave 

UNRWA to its own devices. It is interesting that UNRWA understands right now that it is under pressure. They recently opened 

an office here to try to lobby for more funds and influence here in 

Washington. This is a corrupt organization that must be shut 

down. 

Mr. BILIRAKIS. Thank you. 

Mr. MAKOVSKY. The UNRWA issue is—I share a lot of the sentiments, but here is the problem: Ask the Israelis if they want 

UNRWA shut down. I think their answer will be no, because they 

will end up feeling they have to pay for all these Palestinian citizens, for their schooling and the like, and this has been their view 

for a while now. And we can’t ignore it. 

73

There are a lot of problems with UNRWA, although I would still 

rather have people go to their summer camps than to the Hamas 

summer camps in Gaza. But let me just say, we did a study at The 

Washington Institute by someone who actually once worked at 

UNRWA called Fix UNRWA, and I would urge people to go to our 

Web site, to look at James Lindsay’s study. 

And he made a couple of very practical moves. Remove from the 

UNRWA rolls citizens who have this oxymoronic status of citizenrefugees. That doesn’t exist in any other relief agency. Second, 

make the focus more on needs-based assistance, and not on an entitlement for refugees who don’t need the assistance. And also, 

depoliticize the institution in terms of its political statements. 

There are a lot of things that could be done to fix UNRWA if you 

can’t end it now. We all would look forward to the day where you 

phase out UNRWA and it is no longer needed, but at least it has 

to be trimmed down and focused on its original mission. And the 

mission has really changed in a very, I think, disastrous way coming forward. But we should just be careful that the remedy is the 

right remedy for today. 

Mr. BILIRAKIS. Thank you. Mr. Abrams? 

Mr. ABRAMS. Well, in a sense, I think they are both right. That 

is, I think you should demand the reforms of UNRWA starting immediately, and should start the process of shutting it down and 

turning all of these responsibilities over to the U.N. High Commissioner for Refugees. 

Mr. BILIRAKIS. Thank you. Mr. Phillips? 

Mr. PHILLIPS. I would agree with Mr. Schanzer. I think it should 

be folded into UNHCR. And I wish it could be fixed, but I don’t 

think it can. And if there is a silver lining in the cloud, if this Palestinian pseudo-state comes into being, then it should bear the responsibility of acting like a government and supporting these refugees, since it claims that it is capable of fulfilling all the responsibilities of a state. 

Mr. BILIRAKIS. Thank you very much. Appreciate it. I yield back, 

Madam Chair. 

Chairman ROS-LEHTINEN. Thank you very much, Mr. Bilirakis. I 

am pleased to yield to Mr. Sherman of California, the ranking 

member on the Subcommittee on Terrorism, Nonproliferation, and 

Trade. Five minutes. 

Mr. SHERMAN. Thank you, Madam Chairman. Instead of talking 

with Israel, the Palestinian Authority has launched a campaign 

outside the negotiating process to win recognition this September 

at the United Nations General Assembly. Palestinian statehood efforts at the United Nations undermine efforts at peace, and reject 

the principle of solving the conflict in terms of direct negotiations 

between the parties. The Obama administration, I hope and I am 

confident, will make it clear to the Palestinians that we will veto 

any resolution creating a Palestinian state in the U.N. Security 

Council. 

I think that is a given. And at the same time, the administration 

needs to press the PA to return to the negotiating table. Does the 

PLO fear the collapse of its governing body if U.S. funding were to 

end? Mr. Abrams, or any other witness that indicates an interest? 

74

Mr. ABRAMS. I think they probably worry about it, but not very 

much. I think they probably feel, in the end, you won’t do it. And 

if you cut them back, they will make it up from some other donor, 

maybe Europeans or the Arabs. 

Mr. SHERMAN. Does anyone else have a comment? 

Mr. PHILLIPS. I would just say, I don’t think they are worried 

enough. But they should be worried, because the U.S. is one of 

the—in fact, it is the leading bilateral aid provider to the Palestinian Authority. And these Arab states aren’t going to be willing 

to, in the long term, on a reliable basis, make up the funding, I 

don’t think. 

Mr. MAKOVSKY. I would just add that I think this issue has been 

controversial within the Palestinian circles. Salam Fayyad gave an 

interview, I believe to the Financial Times in June, making clear 

that this was not the way to go. He is not the only one among the 

Palestinians who has criticized the move. This has been viewed 

often as a legacy issue for Abbas. 

Someone asked, ‘‘Does that mean he has no influence?’’ Well, 

they have always had a demarcation of responsibilities. He deals 

with more domestic governance and improving institutions and economic life, and Abbas deals with foreign policy. So I don’t think it 

speaks to Fayyad’s weakness, as it really does to the way there’s 

a division of labor between them. 

But I think many among Abbas’ even inner circle question the 

wisdom of this move, but he has basically, I think, staked himself 

on this because he—there was an issue called the Goldstone report, 

which I think you are familiar with. 

Mr. SHERMAN. You mean the one that Mr. Goldstone withdrew, 

in effect? 

Mr. MAKOVSKY. Right. 

Mr. SHERMAN. Yes. 

Mr. MAKOVSKY. The one he withdrew and retracted. But there 

was a time that Abbas felt that this was not good for him, because 

he was seen as a cheerleader, actually, behind the scenes, urging 

Israel to attack Hamas. And he just wanted to shelve this whole 

idea of an investigation in Geneva. The Arab Ambassadors said, 

‘‘We are with you, we are with you,’’ and then he said he would 

withdraw it, and then he was attacked for being a traitor by 

Khaled Mashaal, and Aljazeera played it every hour, and his 

grandson said, ‘‘I hear in school, they say you are a traitor, 

grandpa.’’

So I think his response is, ‘‘I am never going to be outGoldstoned again, and no one is ever going to be able to do this 

to me, that I am not seen as pressing the interests of the Palestinians to the max.’’ But I think in those circles, there is a lot of questioning whether this is wise, for the reasons we have been saying 

here. 

Mr. SHERMAN. And I think that the Palestinian Authority is 

probably more familiar with our foreign policy experts and our 

State Department than our Congress and our people. And if they 

really understood this democracy, they would recognize that the 

possibility of a cutoff is far greater than anyone would know from 

a foundation conference on this issue. 

75

What would be Israel’s likely reaction to an action taken at the 

General Assembly that recognizes so-called Palestinian statehood? 

Doctor? 

Mr. SCHANZER. Yes, Congressman Sherman. Having chatted with 

a few people in Israel last week, the sort of nuclear option that the 

Israelis would consider, should this UDI go through, is something 

that the Israelis have done before, and that is to withhold the 

value added tax, that is the VAT. And that is about $100 million 

a month that contributes to roughly half of the Palestinian budget 

each year. 

And so the Israelis have indicated that, if the UDI language is 

disagreeable enough to them, that they would consider doing that 

while the U.S. Government considers its own cutoff. There, you are 

looking at somewhere in the vicinity of $1.5 billion, or close to 

three quarters of the total budget of the PA. So you are looking at, 

perhaps, an imminent collapse. 

Mr. SHERMAN. Well, if Aljazeera covered our town halls, the Palestinians would understand just how popular aid to the Palestinians is in this democracy. And I yield back. 

Chairman ROS-LEHTINEN. Thank you so much, Mr. Sherman. Mr. 

Duncan of South Carolina is recognized for 5 minutes. 

Mr. DUNCAN. We are just about finished, guys. Thank you for 

your patience, and thank you for being here today. And I am going 

to direct my question—is it Dr. Schanzer, is that how you pronounce it? Okay. 

First off, let me just say how saddened I was this weekend to recall the scenes of the Palestinians celebrating after the 9/11 attacks. This is a group, the Palestinians, that we give a tremendous 

amount of U.S. aid to annually. Along that line, I am deeply concerned about the Palestinian Authority’s relations with the terrorist organization Hamas. And that is going to, I guess, permeate 

everything that I think about with regard to Palestinian statehood 

and U.S. taxpayer dollars going to assist with the Palestinian 

Authority’s mission going forward. 

We were over in Israel back in August, and had an opportunity 

during that time to travel over into the West Bank. And I remember some good things that I saw going on in the West Bank. In the 

city of Bethlehem as an example, we saw a USAID sign over a construction project that was going on right there, and so I do know 

that some good things are going on. 

So don’t think that I think all USAID projects and money we 

give to the Palestinian Authority is being wrongly spent. But I did 

see some past projects in the city of Jericho that Yasser Arafat 

built, that I think my constituents would raise their eyebrows on, 

and say, ‘‘Was that a good use of U.S. taxpayer dollars being spent, 

the aid that we give to the Palestinians?’’

And so while we were there, we met with the Prime Minister, 

Fayyad, and I applauded him at that time for the transparency efforts, bringing in a world-renowned CPA firm to audit the money 

going to the Palestinian Authority. So I applauded him, and I 

thanked him. But I am concerned that his lessening or diminished 

role going forward is going to allow that transparency to continue. 

And then I read in your comments about the Palestine Investment Fund, and some moneys that may be missing from that. ConVerDate 0ct 09 2002 15:37 Nov 30, 2011 Jkt 000000 PO 00000 Frm 00079 Fmt 6633 Sfmt 6633 F:\WORK\FULL\091411\68296 HFA PsN: SHIRL
76

tinued oversight of USAID, or U.S. aid, period, to the PA and the 

PIF, the possibility of an accounting audit of that fund, I think we 

have got to be good stewards of taxpayer dollars, and we have got 

to have an accounting, whether it is U.N. money or whether it is 

money given directly to the Palestinian Authority or projects 

through USAID. 

What do you think the prospects are, going forward, that we are 

going to have transparency, auditability, so that I as a congressman can tell my constituents that the aid that we do give to countries all over the world, particularly the PA, is going to be accounted for? 

Mr. SCHANZER. Thank you for that question. And I think the answer is, right now, given this hearing and the urgency, I think, expressed by the American people, that is something that we must 

demand if aid is to continue. And I think that is not a foregone conclusion, but if aid is to continue, then we need to have strictures 

on those funds, and we need to have a better accounting of exactly 

how they are spent. 

Some of the other things that I didn’t include in my testimony 

today is, there could be a bleed of PA and PLO funds. So we could 

be seeing, for example, this unilateral declaration of independence, 

and all the diplomacy that went behind it, President Abbas may 

have been flying around and spending a great deal of U.S. taxpayer 

funds in order to pursue this. 

And so what we need to have is a greater accounting of Abbas’ 

office specifically, because I believe that he is the problem. And if 

you can do that while continuing to work with Fayyad, I think you 

have got a fair shot at getting better oversight over the PA. 

Mr. DUNCAN. Do you think that the lessening role of the Prime 

Minister going forward is going to hamper those efforts? And what 

do you see? Are they trying to keep him down, to keep the transparency out? 

Mr. SCHANZER. Well, absolutely. I mean, his role has been diminished. And I think you can sense some frustration with some of the 

public statements that Fayyad has made. And again, we need to 

do our best. 

We saw a good bit of this during the George W. Bush administration, where there was an attempt to really elevate his stature. That 

has stopped, and we have relied almost entirely on Abbas’ efforts. 

And now we have seen that Abbas is actively undermining U.S. interests. And so what we really need to do is squeeze Abbas more 

than we have in the past. 

Mr. DUNCAN. Thank you. Madam Chairman, I will yield back. 

Chairman ROS-LEHTINEN. Thank you so much, Mr. Duncan. And 

we have a wonderful wrap-up questioner, my good friend, Mr. Eliot 

Engel from New York, ranking member on the Subcommittee on 

the Western Hemisphere. 

Mr. ENGEL. Well, thank you. Thank you very much, Madam 

Chair. And thank you for those kind words. I listened to your testimony, gentlemen, with interest, even before I came to the room. 

And you all seem to—what struck me is that there is a lot of agreement in what you are saying. And I agree with what you are saying. 

77

Let me first say that when the President of the United States 

talks about settlements or ’67 lines, it is not helpful at all. I know 

he said ’67 lines with swaps, but it is just, to me, giving the Palestinians one more excuse, one more precondition to refuse to talk 

to Israel. And I think that that is the bottom line, here. 

I think that the Palestinians going to the U.N., the way I see it, 

sets back the cause of peace or a two-state solution for years and 

years, maybe even decades. Because what Palestinian leadership 

down the road can ever accept, in a negotiated treaty with Israel, 

less than what the United Nations has given them? And what 

Israeli Prime Minister—I don’t care left, right, center, or whatever—can ever accept anything near what the U.N. is apparently 

going to say? 

So to me, this dooms peace. Yesterday was the 18th anniversary 

of the signing of the Declaration of Principles on the White House 

lawn. I was there when Rabin and Arafat were there. My wife was 

8 months pregnant with our youngest child. I remember, it was 

very, very hot. And we all had some great hope. 

How the times have changed. It seems to me, and I would like 

your comment on it, that by going to the U.N., the Palestinians are 

in the process of tossing aside the Oslo process, and the process underlying Oslo. Because Oslo was two states working together and 

negotiating. Going to the U.N. unilaterally, to me, tosses out Oslo. 

And I would take it one step further, and I would like your comments on that as well. I think it tosses out Resolution 242. I said 

this to Bibi Netanyahu. I was in Israel last week, came back. You 

know, land for peace. Land for negotiated peace. That was 242. 

Well, this is not land for peace. 

This is totally—it is land for nothing. Where is Israel’s peace in 

all of this? So I just think that it is part and parcel, again, of the 

hypocrisy of the Palestinian Authority, the hypocrisy of the United 

Nations, and the nonsense—and quite frankly, I think that Congress and I, at least speaking for myself, are fed up. I don’t think 

I am prepared to send one red cent more to the Palestinian Authority unless they prove to me that they are serious about peace with 

Israel. 

So I would like Mr. Abrams. 

Mr. ABRAMS. I would just say, Congressman, that President 

Abbas could address this if he wanted to. If he goes ahead with this 

vote, the day after the vote he could say, ‘‘Okay, I have got my 

symbolic vote. Now, without preconditions, I want to sit down and 

negotiate.’’ I suspect, unfortunately, he won’t do that. And by refusing to do it, by insisting on the kind of preconditions he has had 

for 2 years, he will, I am afraid, be proving your worst fears are 

perhaps right. 

Mr. PHILLIPS. Yes, I share your concerns. I think one of the problems we are facing now is the Israeli withdrawal from Gaza opened 

up space for a terrorist organization to infest, and that has become 

an even greater threat. I think Oslo essentially boiled down to land 

for the promise of peace, and that promise was never kept. 

Mr. ENGEL. And you know what is interesting? The terrorist organization that is there, down the line, even if there is a rapprochement between the Palestinian Authority and Hamas, it is 

78

very interesting about how Israel is then supposed to negotiate 

with an entity who denies its very right to exist. 

I mean, people can criticize Israeli policy, but one thing you can’t 

criticize the Israelis for: They are not stupid. And I think it is an 

absolute insult to ask any country to negotiate with a terrorist entity that denies their very right to exist, their whole reason for 

being is to destroy you, and somehow or other Israel is supposed 

to negotiate peace with them. It just makes me scratch my head. 

Yes? 

Mr. SCHANZER. Just one quick thought on the legal status of 

Oslo. I mean, I know we spoke earlier about the question of refugees and where that leaves them, the question of the PLO. Certainly, Oslo has always been the framework for our aid here in this 

country, and it was always based on bilateral negotiations to end 

the conflict. 

This is certainly circumventing that, and it is certainly a very 

valid legal predicate for cutting aid, should Congress wish to do so. 

Mr. ENGEL. And by the way, we also—I also met with Fayyad, 

who said to me that he thinks the Palestinians going to the U.N. 

is the stupidest thing that they could possibly do. 

Mr. MAKOVSKY. We all agree that we all think it is negative that 

they are going to the U.N. I keep referring—I don’t know if you 

were here for my testimony. I talked about the three poison pills, 

components, why Israel will not react so benignly to such a declaration. 

But I also feel that an aid cutoff that will lead, in my view, to 

Fayyad’s resignation, is going to help Hamas. And so I just think 

we have to be mindful that we don’t help the people we want to 

hurt, and we don’t hurt the people we want to help. 

Mr. ENGEL. I think they are exing Fayyad out anyway. I don’t 

think he is long for this world, and I think he thinks he is not long 

for this government. 

Mr. MAKOVSKY. Well, I think—I disagree with the idea that he 

is ineffective, or his role has been phased out. He has built much 

more in the last 4 years than any of us could have dreamed, and 

it is the success of the U.S. Congress, actually, that has been supportive of him. And I just think we have to be careful, not pulling 

the plug on him. But clearly, without him we are in a different position. 

Mr. ENGEL. He is the best they have, and that is why they are 

exing him out, in my estimation. Thank you. 

Chairman ROS-LEHTINEN. Thank you very much to all of our colleagues. And thank you for excellent presentations by our panelists. The committee is now adjourned. Thank you. 

[Whereupon, the committee was adjourned at 12:19 p.m.] 

(79)

A P P E N D I X 

MATERIAL SUBMITTED FOR THE HEARING RECORD

80

f


68296n.eps
81


68296m-1.eps
82

f


68296m-2.eps
83


68296f-1.eps
84

f


68296f-2.eps
85


68296g-1.eps
86

f


68296g-2.eps
87


68296h-1.eps
88

[NOTE: Responses to these questions were not received prior to printing.]

Æ


68296h-2.eps