FOREIGN 

ASSISTANCE

U.S. Programs 

Involving the 

Palestine Investment 

Fund

Report to Congressional Requesters

July 2013

GAO-13-537

United States Government Accountability Office
United States Government Accountability Office

Highlights of GAO-13-537, a report to 

congressional requesters

July 2013

FOREIGN ASSISTANCE

U.S. Programs Involving the Palestine Investment 

Fund

Why GAO Did This Study

According to the State Department

(State), the U.S. government is one of 

the largest donors to the Palestinian

Authority. According to State, the U.S. 

government provided about $3 billion 

in total bilateral assistance for fiscal 

years 2008 through 2012. PIF was 

established by Palestinian Authority 

presidential decree in 2002 and 

became operational in 2003 as an 

investment company aimed at 

strengthening the Palestinian economy 

through strategic investments.

GAO was asked to provide information 

on U.S. involvement with the Palestine 

Investment Fund. This report describes 

(1) the nature and scope of U.S. 

government involvement with PIF, and 

(2) OPIC’s and USAID’s processes for 

vetting PIF and other non-U.S entities 

and individuals participating in 

programs involving PIF and PIF-owned

entities. GAO reviewed documents and 

interviewed officials from U.S. 

agencies, PIF, and implementing 

partners.

What GAO Recommends

This report does not contain any 

recommendations.

What GAO Found 

U.S. agencies and implementing partners participate in various programs with 

the Palestine Investment Fund (PIF) or PIF-owned entities that include home 

mortgage financing, loan guarantees, and educational initiatives. First, the 

Overseas Private Investment Corporation (OPIC) along with PIF and other 

entities have committed to lend $485 million to the Affordable Mortgage and Loan 

Company (AMAL) to support mortgages for low- and medium-income borrowers

in the West Bank. OPIC has committed to lend about $313 million; PIF has 

committed about $72 million, and two banks account for the balance of the 

committed lending. However, as of April 2013, OPIC and PIF had not yet 

disbursed any funds. Second, OPIC and PIF are co-guarantors in a Loan 

Guarantee Facility (LGF) program in the West Bank, guaranteeing up to $110 

million and $50 million in loans, respectively, to nine regional banks to support 

lending to small- and medium-sized enterprises. Third, USAID officials stated 

that, in 2009, USAID provided a U.S. implementing partner $2.1 million for 

technical assistance and training to enhance the lending practices of participating 

banks in support of the LGF. Finally, according to USAID, it provided about $1.3 

million from 2010 to 2013 to three U.S. implementing partners to provide 

technical, in-kind, and scholarship assistance to the American International 

School in Gaza (AISG), which is owned by the Palestine Technology and 

Education Complex, a PIF-owned entity. According to USAID, its involvement 

with AISG ended in June 2013.

OPIC’s and USAID’s processes for vetting PIF and other non-U.S. entities and 

individuals in programs involving PIF and PIF-owned entities rely on various 

information sources. For the AMAL program, the two banks that issue mortgages 

are required under the AMAL agreements to vet potential borrowers for terrorist 

financing against such information sources as Treasury’s Office of Foreign Asset 

Control Specially Designated Nationals and Blocked Persons List (OFAC) and 

the Compendium of United Nations Security Council Sanctions Lists; AMAL and 

OPIC are to conduct additional vetting. OPIC officials stated that OPIC has 

vetted PIF’s board of directors and senior executives, the non-U.S. board 

members and shareholders of AMAL, and key officials of the banks against 

information sources such as the FBI Terrorist Screening Center database, OFAC 

list, and OPIC’s Information Center databases. For the LGF program, OPIC said 

that, based on OPIC’s procedures and the LGF agreements, it has vetted all the 

participating banks and has vetted key officials of each borrower and guarantor 

before loans are approved using information sources such as Treasury’s Office 

of Terrorist Financing and Financial Crimes and FBI’s Terrorist Screening Center 

databases. According to USAID officials, its process for vetting key participants 

of the Technical Assistance and Training program and the AISG program was 

based on documented vetting procedures for the West Bank and Gaza Mission. 

USAID officials said that all banks that participated in the LGF program that 

received training and technical assistance from USAID were subject to USAID’s 

formal vetting process. USAID said it vetted information about AISG’s owners 

and management against law enforcement and intelligence community systems 

accessed by USAID’s Office of Security and through discussions with the U.S. 

Consulate General in Jerusalem, as applicable.

View GAO-13-537. For more information, 

contact David Gootnick at (202) 512-3149 or

gootnickd@gao.gov.
Page i GAO-13-537 Palestine Investment Fund

Letter 1

Background 2

U.S. Agencies Participate in Various Programs with PIF or PIFowned Entities 4

OPIC’s and USAID’s Processes for Vetting PIF or Entities and 

Individuals in Programs Involving PIF Rely on Various 

Information Sources 15

Agency and Third Party Comments and Our Evaluation 22

Appendix I Objectives, Scope, and Methodology 24

Appendix II Time Line of Key Events in the Development of the 

Palestine Investment Fund 26

Appendix III Legal Framework for Terrorist Vetting by USAID and OPIC 30

Appendix IV GAO Contact and Staff Acknowledgments 36

Related GAO Products 37

Table

Table 1: USAID Implementing Partners’ Assistance to the American 

International School in Gaza 14

Contents
Page ii GAO-13-537 Palestine Investment Fund

Figures

Figure 1: U.S. Involvement with the Affordable Mortgage and Loan 

Company and Complex Financial Structure 6

Figure 2: Complex Nature of U.S. Involvement with the Loan 

Guarantee Facility, and Potential Default Scenario 9

Figure 3: Complex Structure of U.S. Involvement with the 

American International School in Gaza 13

Abbreviations

AED Academy for Educational Development 

(renamed FHI 360)

AISG American International School in Gaza 

AMAL Affordable Mortgage and Loan Company

AMIDEAST America-Mideast Educational and 

Training Services 

CHF International Cooperative Housing Foundation 

(renamed Global Communities)

ESAF Expanded and Sustained Access to 

Financial Services 

LGF loan guarantee facility 

MEII Middle East Investment Initiative 

OPIC Overseas Private Investment Corporation

PIF Palestine Investment Fund

PTEC Palestine Technology and Education Complex 

SAKAN Palestinian Affordable Housing Association 

SME small- and medium-sized enterprises

State Department of State

TAT Technical Assistance and Training Program

USAID U.S. Agency for International Development

This is a work of the U.S. government and is not subject to copyright protection in the 

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Page 1 GAO-13-537 Palestine Investment Fund

441 G St. N.W.

Washington, DC 20548

July 25, 2013

The Honorable Nita M. Lowey

Ranking Member

Subcommittee on State, Foreign Operations, and Related Programs

Committee on Appropriations

House of Representatives

The Honorable Ted Deutch

House of Representatives

The Honorable Steve Israel

House of Representatives

The Palestine Investment Fund (PIF) was created by the Palestinian 

Authority to strengthen the Palestinian economy and assist with the 

economic development of the West Bank and Gaza. Both the Overseas 

Private Investment Corporation (OPIC) and U.S. Agency for International 

Development (USAID) are participating in programs involving PIF and a 

PIF-owned entity in the West Bank and Gaza. You asked us for 

information on the nature and extent of U.S. assistance for PIF and how 

U.S. agencies help ensure that U.S. assistance does not support terrorist 

activities.

This report describes (1) the nature and scope of U.S. government 

involvement with PIF, and (2) OPIC’s and USAID’s processes for vetting 

PIF and other non-U.S. entities and individuals participating in programs 

involving PIF and PIF-owned entities.1

To address these objectives, we reviewed and analyzed annual reports, 

U.S. antiterrorism policies, agency-specific vetting policies and 

procedures, and applicable program agreements obtained from PIF and 

relevant U.S. agencies and their implementing partners.2

 1

For purposes of this report, “vetting” refers to obtaining background or biographical 

information about an entity or individual or obtaining such information and checking it 

against relevant information sources to determine eligibility for the programs described in 

this report.

We also 

2

U.S. agencies channel U.S. assistance through entities such as multilateral 

organizations, non-governmental organizations, and recipient country governments that 

serve as implementing partners. 
Page 2 GAO-13-537 Palestine Investment Fund

interviewed officials of OPIC, USAID, the Departments of State (State) 

and Treasury, as well as various U.S. agencies’ implementing partners. 

We also interviewed a high-level PIF official. We did not review PIF or its 

programs in which U.S. agencies are not participants. We described the 

vetting process represented to us by OPIC, USAID, and their 

implementing partners, based on agencies’ applicable policies, 

procedures, and program agreements. We did not determine the extent to 

which OPIC and USAID implemented or complied with their vetting 

policies and procedures or assessed the effectiveness of OPIC’s and 

USAID’s vetting. See appendix I for a detailed discussion of our 

objectives, scope, and methodology.

We conducted this performance audit from October 2012 to July 2013 in 

accordance with generally accepted government auditing standards.

Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that 

the evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives.

The West Bank and Gaza are comprised of about 2,400 square miles and 

have a combined population of 4.3 million people. The Palestinian 

Authority and Israel administer areas within the West Bank, and the 

Hamas-controlled de facto authorities operate in Gaza.

A negotiated two-state solution to the Israeli-Palestinian conflict is a core 

U.S. national security objective, according to State. The U.S. 

government’s foreign assistance program in the West Bank and Gaza is 

designed to advance progress toward the two-state solution by helping 

the Palestinian Authority build the institutions of a future Palestinian state, 

creating an atmosphere that supports negotiations, and improving the 

everyday lives of Palestinians, thereby contributing to the overall stability 

and security of the region.

The U.S. government has provided assistance to the West Bank and 

Gaza both bilaterally and multilaterally for several decades. According to 

the State Department, the U.S. government is one of the largest donors to 

the Palestinian Authority. According to State and USAID, the U.S. 

government provided about $3 billion in bilateral assistance for fiscal 

years 2008 through 2012 to support education and social services, 

economic development, and humanitarian assistance, among other 

sectors. According to USAID, the U.S. government plans to provide $427 

Background
Page 3 GAO-13-537 Palestine Investment Fund

million in fiscal year 2013. USAID is the agency that is primarily 

responsible for implementing bilateral development and economic 

assistance, while State oversees annual contributions for multilateral 

programs. In support of the educational and financial sectors, USAID has 

provided awards to implementing partners to carry out programs and 

initiatives in the West Bank and Gaza. OPIC has supported the financial 

sector by providing loans and loan guarantees to eligible entities.

PIF was established by Palestinian Authority presidential decree in 2002 

and became operational in 2003 as an investment company aimed at 

strengthening the Palestinian economy through strategic investments. As 

of 2012, the year of the most recent annual report available, PIF 

managed about $780 million in assets through multiple wholly owned 

subsidiaries, as well as minority ownership investments, with Palestinian 

investments accounting for 84 percent of its total investments. PIF is 

governed by a board of directors and a general assembly appointed by 

the Palestinian Authority President, and manages investments throughout 

a number of sectors, including real estate and hospitality, infrastructure, 

finance, capital markets, small-and-medium-sized enterprises (SMEs), 

and manufacturing. Appendix II provides a time line of key events in the 

development of PIF.

U.S. agencies must comply with certain restrictions under U.S. law when 

providing funds for Palestinian assistance programs, including restrictions 

reflecting U.S. policy to deny U.S. funds and other support to individuals 

or organizations that engage in or otherwise support terrorist activity. This 

policy is established in laws, executive orders, and regulations that, 

according to USAID and OPIC officials, provide the basis for USAID and 

OPIC terrorism vetting policies and procedures used to vet PIF and other 

entities and individuals associated with PIF-related programs in which 

USAID and OPIC are involved. Appendix III of this report outlines the 

legal framework for U.S. antiterrorism policy and describes applicable 

USAID and OPIC vetting policies and procedures.
Page 4 GAO-13-537 Palestine Investment Fund

Two U.S. agencies—OPIC and USAID—are involved in programs with 

PIF and a PIF-owned entity. OPIC participates in home mortgage 

financing and small business loan guarantee programs along with PIF. 

USAID provided technical assistance and training to benefit participating 

banks in the Loan Guarantee Facility (LGF) program3 and has 

participated in educational programs at the American International School 

in Gaza, which is owned by PIF through a special purpose vehicle.4

OPIC, PIF, and local and regional commercial banks are co-lenders to the 

for-profit Affordable Mortgage and Loan Company (AMAL) in the West 

Bank, which is aimed at encouraging mortgage lending to low- and 

medium-income borrowers. AMAL was established in 2010, and OPIC 

officials told us that the purpose of the program is to purchase home 

mortgage loans from participating banks, as a means to reduce the 

banks’ risk in mortgage lending. According to OPIC, as of April 2013, the 

two participating banks—the Cairo-Amman Bank and the Bank of 

Palestine—have agreed to issue mortgages under the AMAL program. 

OPIC officials told us that when fully operational, AMAL will purchase and 

refinance mortgages from the participating banks with combined financing 

from all of the co-lenders, including OPIC and PIF. AMAL will oversee 

and administer the mortgage financing, while the originating banks will 

continue to service the mortgages and interface with the borrowers. 

According to OPIC, as of April 2013, AMAL is partially operational and 

has originated and disbursed approximately four mortgages, all of which 

are directly funded by the participating banks. OPIC officials stated that 

OPIC and PIF have not yet financed any mortgage purchases under the 

AMAL program.

Under the AMAL Common Agreement, OPIC has committed to lend $313 

million to AMAL (about 65 percent of the total debt commitment),5

 3

According to USAID, it was not a loan guarantor under the LGF program and did not 

provide cash assistance to participating banks.

while 

4

A special purpose vehicle is a legal entity that a company creates to carry out some 

specific financial purpose or activity for the company that creates it. Special purpose 

vehicles can be used for purposes such as securitizing loans to help spread the credit and 

interest rate risk of their portfolios over a number of investors.

5

According to OPIC, the International Finance Corporation–-a member of the World Bank

Group—has committed to provide a $72 million guarantee to OPIC’s lending commitment 

to AMAL, reducing OPIC’s principal at risk to $241 million. 

U.S. Agencies 

Participate in Various 

Programs with PIF or 

PIF-owned Entities

OPIC, PIF, and 

Commercial Banks 

Are Co-Lenders to the 

Affordable Mortgage 

and Loan Program in 

the West Bank
Page 5 GAO-13-537 Palestine Investment Fund

PIF has committed to lend $72 million (about 15 percent of AMAL’s total 

debt commitment). According to the Common Agreement, when the 

Cairo-Amman Bank and the Bank of Palestine cumulatively originate up 

to $10 million in eligible mortgage loans, the funding of the OPIC and PIF 

financial commitments to AMAL will take effect.6

 6

According to OPIC officials, as of April 2013, the participating banks have issued four 

mortgage loans, totaling about $430,000.

Figure 1 shows a 

graphical representation of the complex relationship of AMAL’s financial 

structure and U.S. involvement in the program.
Page 6 GAO-13-537 Palestine Investment Fund

Figure 1: U.S. Involvement with the Affordable Mortgage and Loan Company and Complex Financial Structure

a

The United Kingdom’s Department for International Development has committed a first loss reserve 

to cover the first £13.33 million (about $20 million, based on the exchange rate as of July 10, 2013) in 

losses the lenders to AMAL may incur.

b

According to OPIC, as of April 2013, no loan disbursements have been made by OPIC or PIF to 

AMAL. OPIC officials stated that OPIC and PIF’s disbursements under their respective financial 

commitments will begin when the participating banks have amassed $10 million in qualifying 

mortgages to sell to AMAL.
Page 7 GAO-13-537 Palestine Investment Fund

c

The International Finance Corporation has committed to provide a $72 million guarantee of OPIC’s 

lending commitment to AMAL, reducing OPIC’s principal at risk to $241 million.

d

Pro-rata means the return rate is based on each lender’s principal proportion at risk.

e

MEII manages its investment in AMAL through MEII Partners, LLC.

In the event of a default, the United Kingdom Department for International 

Development has committed £13.33 million (about $20 million, based on 

the exchange rate as of July 10, 2013) in first loss coverage to AMAL’s 

co-lenders; and according to OPIC, additional losses will be incurred by 

all lenders on a pro-rata basis, determined by each co-lender’s principal 

proportion at risk. Under the AMAL Shareholders Agreement, AMAL is 

owned by five shareholders that have provided a total investment of $3.5 

million and, according to OPIC, will be paid dividends based on AMAL’s 

performance. The Palestinian Affordable Housing Association (SAKAN), a 

Palestinian non-governmental organization, received assistance from PIF 

and the United Nations Human Settlements Program (UN Habitat) to fund 

its investment in AMAL. Under this agreement, SAKAN holds 50 percent 

of AMAL’s shares, while two U.S. non-profit organizations—Global 

Communities (formerly CHF International) and the Middle East 

Investment Initiative (MEII), a non-profit U.S. entity created by the Aspen 

Institute 7

—account for 30 percent of AMAL’s ownership, with the 

participating banks holding the remainder of AMAL’s shares.8

In 2007, OPIC, along with PIF and MEII, launched a $160 million loan 

guarantee facility (LGF), which OPIC officials told us is aimed at 

encouraging commercial banks to provide loans to SMEs in the West 

Bank. According to the LGF Framework Agreement, participating banks 

receive assurance that OPIC and PIF will together cover 70 percent of 

each loan in the event of a default.

Under the LGF Framework Agreement, OPIC has committed $110 million 

to guarantee 48 percent of each eligible bank loan, through MEII, while 

PIF, as co-guarantor, has committed $50 million to guarantee 22 percent 

of each loan, in the event a borrower defaults on a LGF loan. According 

to OPIC officials, as of February 2013, OPIC has issued guarantees on 

 7

The Aspen Institute is an educational and policy studies organization based in 

Washington, DC, with a mission to foster leadership based on enduring values and to 

provide a nonpartisan venue for dealing with critical issues.

8

According to MEII, it manages its investment in AMAL through MEII Partners, LLC.

OPIC and PIF Are 

Co-Guarantors to the 

Loan Guarantee Facility 

in the West Bank
Page 8 GAO-13-537 Palestine Investment Fund

about $85 million in LGF loans (about 77 percent of its total commitment) 

to MEII, which manages the LGF and serves as a coordinating agent 

between the loan guarantors and the banks. Figure 2 provides a detailed 

graphical depiction of the complexities of the U.S.’s involvement with the 

LGF program and a potential default scenario.
Page 9 GAO-13-537 Palestine Investment Fund

Figure 2: Complex Nature of U.S. Involvement with the Loan Guarantee Facility, and Potential Default Scenario
Page 10 GAO-13-537 Palestine Investment Fund

a

According OPIC officials, as of February 2013, OPIC has guaranteed $ 85,332,500 (77 percent of its 

total commitment) in LGF loans. According to OPIC, LGF management, subject to OPIC’s approval, 

has until the end of fiscal year 2015 to allocate OPIC’s remaining $24,667,500 (23 percent of OPIC’s 

total commitment) to the participating banks.

b

Global Communities, formerly CHF International, received this $2,093,354 sub-award as part of FHI 

360’s, formerly Academy for Educational Development (AED), 3-year, about $36.3 million USAID 

award for expanded and sustained access to financial services (ESAF) in the West Bank and Gaza.

c

According to the LGF Guaranty Agreement, co-guarantors receive a 1.375 percent guarantee fee, 

divided on a pro-rata basis based on their guarantee percentages, which is applied to the outstanding 

principal amount of all LGF loans.

d

As of April 2013, nine commercial banks and one microfinance institution were participating in the 

LGF program.

e

USAID stated that it provided assistance to banks under the Technical Assistance and Training 

program to complement LGF, but was not a loan guarantor under the LGF program and did not 

provide cash assistance to participating banks.

Under the Guaranty Facility Agreement, MEII serves as the coordinating 

agent and, according to OPIC and MEII officials, only disburses OPIC 

funds in the event of a default by a borrower of an LGF loan. According to 

OPIC, as of February 2013, it has paid out about $1.2 million in default 

claims for LGF loans, while its share of outstanding loans in default was 

about $660,000 (48 percent of the total outstanding amount of about $1.4 

million). PIF’s share of outstanding loans in default was about $300,000 

(22 percent), while the banks’ share was about $410,000 (30 percent), 

according to OPIC. As shown in the lower panel of figure 2, the 

commercial bank that originates a loan is responsible for 30 percent of 

the defaulted loan amount. The remaining 70 percent is covered by OPIC 

(48 percent) and PIF (22 percent). Under the Guaranty Facility 

Agreement, the participating banks are required to pay a 1.375 percent 

guarantee fee, which is applied to the outstanding principal amount of all 

LGF loans, with payments divided between OPIC and PIF in proportion to 

their guaranty commitment. According to OPIC officials, as of March 

2013, OPIC has collected about $1.4 million in guarantee fees, which has 

covered the amount the agency has expended due to defaults.

According to USAID and Global Communities officials, USAID has 

provided assistance to banks participating in the LGF program through a 

grant that ended in 2011. They stated that USAID provided $2.1 million to 

Global Communities, formerly CHF International, through a prime 

awardee, for a 3-year program to provide technical assistance and 

training to banks participating in LGF to enhance these banks’ lending 

USAID Provided Support 

to Complement the Loan 

Guarantee Facility Program
Page 11 GAO-13-537 Palestine Investment Fund

practices.9 According to USAID, although the Technical Assistance and 

Training program complemented the LGF program, it was an independent 

program with the goal of improving the capacity of Palestinian financial 

sector institutions.

Beginning in 2010, USAID provided assistance to the American 

International School in Gaza (AISG), a private school that offers a 

Western-style curriculum, as part of the agency’s educational initiatives in 

the West Bank and Gaza. According to USAID and a PIF official, AISG is 

legally owned by the Palestine Technology and Education Complex 

(PTEC),10

According to USAID, it has granted awards to three implementing 

partners in support of AISG, providing an estimated $1.3 million in 

assistance from 2010 to 2013. These awards funded two projects 

providing need-based scholarships, technical assistance, supplies, and 

capacity building initiatives at AISG. According to USAID officials, 

USAID’s primary AISG assistance program, originally implemented by the 

Democracy Council—a U.S. non-profit entity— was a 2 1⁄2 -year, about $2 

million award that focused on building the operational capacity, 

a PIF-owned entity. PTEC was described to us by a PIF official 

as a “special purpose vehicle” through which PIF owns AISG. According 

to the PIF official, AISG operates at a loss and PIF funds the school to 

close the school’s deficit, as part of PIF’s social corporate responsibility 

program. Over the past 6 academic years, PIF’s funding of AISG has 

ranged from about $255,000 to about $465,000 annually.

 9

Global Communities, formerly CHF International, received this sub-award as part of a 

USAID award to FHI 360, formerly the Academy for Educational Development (AED). 

According to USAID, the award was for approximately a 3-year period for about $36.3 

million to implement the Expanded and Sustained Access to Financial Services (ESAF) 

program in the West Bank and Gaza. 

10According to a senior PIF official, PIF’s ownership of PTEC is “indirect” with the 

Palestine Commercial Services Company, a wholly owned PIF subsidiary, holding 95 

percent of PTEC’s shares with the remaining 5 percent held by PIF. According to the PIF 

official, PTEC’s board of directors is comprised of three members, all PIF officers. PTEC 

was established in 1999, prior to the establishment of PIF and, according to a PIF official, 

PTEC’s ownership structure is a legacy from the time PTEC was established. According to 

this PIF official, a board of directors is required under Palestinian law and the board 

members have signing authority on behalf of PTEC. This official also told us that the 

PTEC board of directors has delegated signing authority for the PTEC bank account to 

AISG school management for daily operational matters.

USAID Has Funded 

Two Assistance 

Programs at the 

American International 

School in Gaza, a

PIF-Owned Entity
Page 12 GAO-13-537 Palestine Investment Fund

management efficiency, and academic levels of AISG.11

According to USAID, in 2007, it provided a 5-year, $22.1 million award

USAID officials 

stated that the bulk of the project funds were used for technical and inkind assistance to AISG with no money directly transferred to the school; 

however, they stated that the Democracy Council provided 21 needbased scholarships ($63,000 total) for students to attend AISG, with 

funding deposited into AISG’s bank account. USAID cancelled the 

Democracy Council award early because, according to USAID officials, 

the Democracy Council was unable to achieve programmatic goals and 

comply with the terms of the award. According to USAID officials, 

because USAID funds awards incrementally, about $1 million of the 

award had been funded and spent at the time of cancellation. After 

cancellation, USAID continued the need-based scholarship component of 

the award through the 2012-2013 academic year for 15 students ($45,000 

total), implemented under the Mercy Corps’ Palestinian Community 

Assistance Program. According to USAID, the scholarships will not be 

continued beyond the 2012-2013 academic year and the agency does not 

have any additional planned involvement at AISG.

12

 11In its technical comments on a draft of this report, USAID stated that this project was 

entitled USAID-DC Educating for Peace.

to America-Mideast Educational and Training Services (AMIDEAST) to 

implement the Model Schools Network, an institutional capacity-building 

initiative focused on improving the quality of basic education, which, 

according to AMIDEAST officials, originally operated in the West Bank 

and expanded into Gaza in 2010. According to USAID and AMIDEAST 

officials, through the Model Schools Network award, from 2010 to 2012, 

AMIDEAST provided an estimated $323,000 to AISG through 127 needbased scholarships for students (about $220,000 total) and technical and 

in-kind assistance (estimated $103,000). USAID officials told us that the 

need-based scholarship component of the award, which expired in June 

2012, was paid with USAID award funds by AMIDEAST to AISG’s bank 

account. USAID officials also told us that the technical assistance 

component of this award, which also ended in June 2012, did not provide 

money directly to the school. According to USAID officials, in December 

2012, USAID decided not to pursue further support for AISG through the 

Model Schools Network for the remainder of the award, which expired

12According to USAID officials, while this award was for $22.1 million, $21.1 million was 

obligated.
Page 13 GAO-13-537 Palestine Investment Fund

June 2013. Figure 3 depicts the complex structure of U.S. involvement 

with AISG.

Figure 3: Complex Structure of U.S. Involvement with the American International School in Gaza 

a

The Model Schools Network began operating in the West Bank in 2007 and in Gaza in 2010. In 

Gaza, in 2010, MSN worked with 12 private schools, 1 of which was AISG. At that time the MSN 

program was also comprised of 40 public and 17 private schools in the West Bank.
Page 14 GAO-13-537 Palestine Investment Fund

b

In-kind assistance included teacher training, capacity building, and student extracurricular activities. 

Implementing partners provided these services to AISG.

c

According to USAID, the original award was for $2 million over 2 1⁄2 -years; however, the total costs 

for Democracy Council and Mercy Corps to implement this program were $1,003,512. This total 

includes $421,542 in administrative and other indirect costs incurred by Democracy Council and 

$18,000 in administrative and other indirect costs incurred by Mercy Corps.

According to USAID officials, USAID provided implementing partners in 

support of AISG an estimated total of about $1.3 million in assistance 

from 2010 to 2013. Table 1 shows the amount provided.

Table 1: USAID Implementing Partners’ Assistance to the American International School in Gaza

Area of assistance

Implementing Partners’ Assistance amounts

Democracy Council 

(2010-2011)

Mercy Corps

(2012-2013 

academic year)

AMIDEAST

(2010-2012)

Technical Assistance (in kind, no cash 

provided to AISG)

$455,970 N/A $103,499a

Scholarships (paid to AISG directly) $63,000 $45,000 $219,600

Administrative and Other Indirect Costs $421,542 $18,000 N/A

Total $940,512 $63,000 $323,099

Source: GAO analysis of USAID data.

a AMIDEAST’s estimated value for in-kind assistance to AISG, provided by USAID. Technical 

assistance information and administrative and other indirect costs for schools in the MSN are not 

recorded by individual school.
Page 15 GAO-13-537 Palestine Investment Fund

OPIC’s and USAID’s processes for vetting PIF, a PIF-owned entity, or 

other entities and individuals in the AMAL, LGF, and AISG assistance 

programs rely on various information sources, including information 

provided by their implementing partners.13 Our description of the vetting

processes and information sources is based on OPIC and USAID vetting 

policies and procedures; interviews with OPIC and USAID officials as well 

as officials of their implementing partners; and information in each 

program’s agreements.14

According to OPIC officials, OPIC’s vetting of PIF and other non-U.S. 

entities and key individuals involved in the AMAL and LGF programs is 

based primarily on the agency’s Character Risk Due Diligence policies 

and procedures and the applicable program’s agreements.15 The purpose 

of Character Risk Due Diligence is to uncover any derogatory 

information—including risks for terrorist financing and money 

laundering—about projects in which OPIC is involved, the project 

sponsors, investors, or key personnel. In performing due diligence, a 

project team is to make use of information sources that may include (1) 

OPIC’s Information Center databases,16 (2) the FBI’s Terrorist Screening 

Center database17 and Treasury’s Financial Crimes Enforcement 

Network,18

 13U.S. agencies must comply with restrictions under U.S. law regarding assistance or 

support to terrorists when providing funds for Palestinian assistance programs. Appendix 

III of this report outlines the framework for U.S. antiterrorism policy and describes 

applicable USAID and OPIC vetting policies and procedures. 

(3) the U.S. Embassy, any local counsel, and when required, 

14We did not validate whether OPIC and USAID implemented or complied with their 

vetting policies and procedures.

15See app. III for details on OPIC’s Character Risk Due Diligence procedures.

16OPIC’s Information Center databases include more than 300 databases covering such 

lending concerns as creditworthiness, character risk, ties to senior government officials, 

international sanctions violations, and prior legal issues. 

17The FBI Terrorist Screening Center database maintains the U.S. government’s 

consolidated terrorist watchlist-–a single database of identifying information about those 

known or reasonably suspected of being involved in terrorist activity.

18Treasury’s Financial Crimes Enforcement Network mission is to safeguard the financial 

system from illicit use and combat money laundering and promote national security 

through the collection, analysis, and dissemination of financial intelligence and strategic 

use of financial authorities. 

OPIC’s and USAID’s 

Processes for Vetting 

PIF or Entities and 

Individuals in 

Programs Involving 

PIF Rely on Various 

Information Sources

OPIC and Other Relevant 

Entities’ Processes for 

Vetting the AMAL and LGF 

Programs Rely on Various 

Information Sources
Page 16 GAO-13-537 Palestine Investment Fund

Outsourced Foreign Searches through the Information Center,19 (4) the 

State Department Bureau of Intelligence and Research,20 and (5) Office 

of Investment Policy,21

The banks, AMAL, and OPIC conduct vetting to help ensure that there is 

no unacceptable derogatory information regarding non-U.S. entities and 

individuals participating in the AMAL program that might prevent OPIC 

support, according to OPIC.

with respect to derogatory information regarding 

social responsibility, corporate image, and environmental accountability.

Banks’ Procedures for Vetting Borrowers and Guarantors

Under the AMAL agreements, when borrowers and guarantors22 request 

loans from the Bank of Palestine and Cairo-Amman Bank, they are to 

provide specific information, such as their national identity card, passport, 

or similar identification to the banks, which are to conduct security and 

character vetting. Using this information, the Bank of Palestine and CairoAmman Bank are required to check borrowers and guarantors in 

accordance with specified internationally accepted Know-Your-Customer 

Check standards.23

 19According to OPIC, OPIC project teams can request Outsourced Foreign Searches 

when they determine that additional background information is needed on certain 

individuals or entities. OPIC maintains relationships with established and respected 

foreign providers of background checks, which undertake these searches when contracted 

by OPIC. 

Specifically, the banks must verify at the time the 

20State Department Bureau of Intelligence and Research provides value-added 

independent analysis of events to U.S. State Department policymakers; ensures that 

intelligence activities support foreign policy and national security purposes; and serves as 

the focal point in the State Department for ensuring policy review of sensitive 

counterintelligence and law enforcement activities around the world.

21OPIC’s Office of Investment Policy works to ensure that OPIC-supported projects are 

environmentally and socially sustainable; respect human rights, including workers’ rights; 

have no negative impact on the U.S. economy; and encourage positive host country 

development effects.

22Under the AMAL agreements, the banks are required to vet each mortgage obligor. A 

mortgage obligor is the mortgagor, each co-borrower, guarantor, and co-guarantor who 

are obligated under the mortgage loan documents related to the mortgage loan. 

23The Know-Your-Customer Check refers to customer due diligence activities that 

financial institutions and other regulated companies must perform to ascertain relevant 

information from their customers for the purpose of doing business with them and to 

effectively monitor suspicious transactions and comply with requirements to report 

suspicious activity.

Vetting Processes for the 

AMAL Program
Page 17 GAO-13-537 Palestine Investment Fund

mortgage loan is approved that each borrower and guarantor does not 

appear on the Palestine Monetary Authority Central Bank Blacklist,24

AMAL’s Procedures for Vetting and Auditing of Mortgage Loans

Treasury’s Office of Foreign Asset Control Specially Designated Nationals 

and Blocked Persons List (OFAC’s list), and the Compendium of United 

Nations Security Council Sanctions Lists. Under the AMAL mortgage 

origination guidelines, the banks must certify completion of satisfactory 

vetting before a mortgage application can be approved for a loan under 

the AMAL program.

Under AMAL agreements, AMAL is to verify that the banks’ origination 

criteria, including Know-Your-Customer Checks, were met for at least the 

first 100 mortgage loans to assess compliance with the origination 

guidelines. In addition, AMAL has the right to sample or audit subsequent 

mortgage loans.

OPIC’s Vetting of AMAL Program Participants

According to OPIC, it vetted the participants in the AMAL program—

including PIF’s board of directors and senior executives, non-U.S. board 

members of AMAL, non-U.S. AMAL shareholders, and key individuals of 

the banks—against the OFAC list, the FBI Terrorist Screening Center 

database, and other relevant databases.25 Also, officials of Global 

Communities, a U.S. NGO contracted by AMAL for vetting assistance, 

said that PIF and other co-lenders follow OPIC’s lead in determining 

which loans are eligible for the program. OPIC officials said that OPIC 

has conducted extensive vetting of PIF, including its board of directors 

and senior executives through discussions with the U.S. Consulate 

General in Jerusalem, which represents the United States in Jerusalem, 

the West Bank, and the Gaza Strip.26

 24According to OPIC, the Palestine Monetary Authority Central Bank Blacklist is used in 

the Palestinian banking community as a list of persons and institutions with character 

risk/due diligence issues identified by the Palestine Monetary Authority.

In addition, OPIC officials said that 

OPIC vetted the board of directors, senior executives, and major 

25According to OPIC, it did not vet the bank customers; the bank customers were vetted 

by the banks subject to audit by AMAL. 

26According to OPIC, the initial vetting of PIF was done in connection with the LGF project 

presentation to OPIC’s board in 2005. 
Page 18 GAO-13-537 Palestine Investment Fund

shareholders with greater than 5 percent ownership of the Bank of 

Palestine and Cairo-Amman Bank. OPIC stated that it has vetted both the 

Bank of Palestine and Cairo-Amman Bank through Treasury’s Office of 

Terrorist Financing and Financial Crimes and discussed the banks with 

the Palestine Monetary Authority, clearing the banks before OPIC entered 

into an agreement with them. Further, OPIC stated it has vetted the nonU.S. board members of AMAL, as well as AMAL shareholders, including 

the Palestinian Affordable Housing Association. Individual borrowers who 

have applied for loans should have been vetted by the banks subject to 

AMAL’s origination guidelines, according to OPIC.

The private banks and microfinance institutions (lenders), the

coordinating agent (MEII), and OPIC conduct vetting to help ensure that 

there is no unacceptable derogatory information regarding entities and 

individuals participating in the LGF program that might prevent OPIC 

support, according to OPIC.

Private Banks’ and Microfinance Institutions’ Procedures for 

Vetting LGF Borrowers

Under the LGF Guaranty Facility agreements, prior to concluding loan 

agreements with SMEs, the LGF participating banks and microfinance 

institutions are to check the SMEs for potential terrorist connections 

against OFAC and the Compendium of United Nations Security Council

Sanctions Lists and provide the vetting results to MEII. The agreements 

state that if a borrower is found to be on a screening list, the guarantee 

would not be approved; and if a borrower is found to be on a screening 

list after the guarantee has been allowed, the guarantee would no longer 

be in effect.

MEII’s Procedures for Vetting LGF Borrowers and Lenders

As the coordinating agent for the LGF program, MEII is to vet all

borrowers and lenders. MEII contracted with Global Communities to 

assist in reviewing loan applications and vetting the participants. Global 

Communities officials informed us that they checked the borrowers 

against the OFAC list to help ensure that borrowers were not blocked by 

Treasury’s sanctions. According to OPIC, MEII took over this function 

directly in June 2010.

Based on the LGF operational manual, once a lender has indicated 

interest in participating in the LGF program, MEII is to confirm whether 

the lender is licensed to operate in the West Bank and Gaza under the 

Vetting Processes for 

the LGF Program
Page 19 GAO-13-537 Palestine Investment Fund

Palestine Monetary Authority and whether it meets the minimum 

requirement of a 51 percent private sector ownership of the lending 

institution. MEII is to obtain a written affirmation from the authority that the 

lender is in good standing with the authority, has government consent to 

operate, and complies with best banking practices, corrupt practices laws, 

and other standards.

MEII is to collect the necessary information from the lender to begin the 

U.S. government security and character vetting process, which includes 

vetting the lender as an institution, vetting all owners having more than 5 

percent ownership, and vetting executive management. MEII is then to 

present the lender nomination proposal to OPIC and PIF officials who, 

according to OPIC, approve or reject the participation of the lenders.

According to OPIC officials and as provided in the LGF guaranty facility 

agreement, MEII is to provide the vetting results on the borrowers and 

lenders with other identifying information to OPIC. In addition, for all loans 

less than $500,000, MEII makes the loan decision based on credit 

eligibility requirements and subject to OPIC’s ultimate decision pertaining 

to security and character vetting.27

OPIC’s Vetting of LGF Borrowers, Lenders, and Guarantors

According to OPIC, it vets participants (lenders, borrowers, and 

guarantors) under the LGF program. OPIC said it provides information 

about each proposed participating bank to Treasury’s Office of Terrorist 

Financing and Financial Crimes and inquires whether there is any 

unacceptable derogatory information in Treasury’s databases that might 

prevent OPIC from supporting a particular lender. OPIC said that it has 

vetted and cleared all nine participating banks in the LGF program.28

According to OPIC, for all loans, regardless of size, when an LGF 

participating bank submits loan proposals to LGF management, it checks 

the names and identification information on individual owners, directors, 

and senior executive management of each borrower and guarantor 

 27OPIC officials told us that MEII has denied loan applications for credit policy reasons 

and based on its checks of the OFAC list, of which OPIC would not be informed.

28In commenting on the draft of this report, OPIC told us that one bank was recently 

refused participation in the LGF program due to concerns raised by the FBI’s Terrorist 

Screening Center.
Page 20 GAO-13-537 Palestine Investment Fund

through the FBI’s Terrorist Screening Center database before loans are 

approved. According to OPIC, from a credit standpoint, in cases where 

borrowers were seeking loans greater than $500,000, or if loans are 

provided to companies in Gaza, the loan application is sent to the threeperson decisional committee representatives (from OPIC, MEII, and PIF). 

The officials stated that the loan is approved only if the decisional 

committee unanimously agrees, which means that any committee 

representative can veto a loan for any reason. However, OPIC stated that 

it ultimately approves each loan with regard to character vetting, and that 

it has denied loans proposed by LGF management when the borrower did 

not pass the Terrorist Screening Center database review.

In vetting PIF as a co-guarantor, OPIC stated that it also checked 

individual directors and senior executive management of PIF through the 

FBI’s Terrorist Screening Center database. OPIC officials said that it also 

performed Character Risk Due Diligence through its own Information 

Center, consulted with the U.S. Consulate General in Jerusalem and the 

State Department, and had discussions with officials of the Palestinian 

Authority and Israeli Ministry of Defense. OPIC and MEII officials said that 

PIF would recuse itself if any of its subsidiaries applies for a loan, and 

that PIF does not have control over the lenders.

Further, OPIC said it checks information relating to the banks and 

microfinance institutions against other databases through OPIC 

Information Center databases (including the Compendium of United 

Nations Security Council Sanctions Lists and “Do Not Pay” list,29

Treasury officials also informed us that, based on OPIC’s request, 

Treasury has vetted PIF for the two projects PIF is involved in with OPIC. 

In addition, Treasury officials told us that its policy office made inquiries 

regarding how PIF’s money is managed to help ensure it is not directly or 

indirectly being funneled to terrorists or terrorist organizations. According 

to Treasury officials, in both instances, Treasury did not find any 

derogatory information on PIF or any linkage to terrorist financing.

as 

applicable), as well as with the U.S. Consulate General in Jerusalem and 

other sources.

 29The Do Not Pay list is a list of multiple data sources compiled by the U.S. government to 

help prevent, reduce, and stop improper payments from being made and to identify and 

mitigate fraud, waste, and abuse in programs administered and/or funded by the federal 

government. 
Page 21 GAO-13-537 Palestine Investment Fund

According to USAID officials, USAID’s process for vetting key participants 

of the Technical Assistance and Training program for Palestinian banks 

and the AISG program was based on the U.S. Mission to the West Bank 

and Gaza’s Mission Order 21. Mission Order 21 establishes USAID’s 

policies and procedures to help ensure that its assistance does not 

inadvertently provide support to entities or individuals associated with 

terrorism, including guidance on vetting and antiterrorism certification by 

USAID awardees.30

USAID stated that as part of USAID’s broader program to support 

Palestinian financial institutions, Global Communities, a U.S. subawardee, provided technical assistance and training to senior staff of 

participating banks in the LGF program, for which OPIC and PIF are coguarantors. Based on Mission Order 21, if vetting was required, Global 

Communities was to obtain information on the banks and microfinance 

institutions’ key individuals before they participate in training and provide 

the information to USAID.31

According to USAID, Mission Order 21 vetting procedures also apply to 

vetting for the AISG program. As described previously, AMIDEAST and 

Democracy Council were U.S. implementing partners through whom 

USAID implemented scholarships and in-kind assistance at AISG (a nonU.S. entity).

According to USAID, USAID’s Vetting Center 

in Washington, D.C. would check the names of key individuals through 

law enforcement and intelligence community systems accessed by 

USAID’s Office of Security. In addition, USAID stated that for sub-grants 

and certain in-kind assistance, such as technical assistance, USAID 

submits the information to the U.S. Consulate General in Jerusalem for 

additional review. According to USAID, each of the banks participating in 

the Technical Assistance and Training program was subject to USAID’s 

formal vetting procedures.

32

 30See app. III for details on USAID’s Mission Order 21.

31USAID officials told us that AED/FHI 360, the prime awardee (implementing partner), is 

responsible for providing USAID with the names of key individuals and organizations that 

require vetting. 

32According to USAID, although Mercy Corp later became a USAID implementing partner 

for AISG, Mercy Corp was not required to play any role in the vetting process because 

AISG had already been vetted less than 12 months before Mercy Corps became involved. 

USAID’s Process for 

Vetting the Technical 

Assistance and Training 

and AISG Programs Was 

Based on Its Mission Order 

21 and Relied on Various 

Information Sources

USAID’s Vetting of Banks 

Participating in Technical 

Assistance and Training

USAID’s Vetting for the 

AISG Program
Page 22 GAO-13-537 Palestine Investment Fund

Implementing Partners’ Collection of Information Provided to 

USAID for Vetting

AMIDEAST and Democracy Council officials said that they provided 

information about AISG owners and key personnel to USAID, as required 

by the terms of their contracts. Specifically, AMIDEAST and Democracy 

Council officials said they provided information such as name, date and 

place of birth, occupation, and copies of passport or national identification 

cards for AISG owners and employees to USAID for vetting of AISG.

USAID’s Vetting of Relevant Entities and Key Individuals in 

Connection with AISG

According to USAID and based on Mission Order 21, it vetted key 

individuals of PTEC, such as members of the board of directors, as well 

as AISG’s management, such as the principal and vice-principal of the 

school, against law enforcement and intelligence community systems 

accessed by USAID’s Office of Security and through discussions with 

U.S. Consulate General in Jerusalem, as applicable. USAID officials 

stated that it was not necessary to vet PIF, the parent company of PTEC, 

because PTEC is legally responsible for AISG.33 USAID stated that the 

students who received scholarships and their parents were not vetted, 

consistent with Mission Order 21, because the students, who were the 

beneficiaries, were under the age of 16.

We provided a draft of this report to OPIC and USAID for their review and 

comment. OPIC and USAID provided technical comments, which we 

incorporated in this report as appropriate. We also provided portions of a 

draft of this report to PIF for review. PIF provided technical comments,

which we incorporated as appropriate.

 33Under USAID’s Mission Order 21, USAID’s Vetting Center in Washington, D.C., is to 

check the names of key individuals through law enforcement and intelligence community 

systems accessed by USAID’s Office of Security and submit the information to the U.S. 

Consulate General in Jerusalem for additional review, as applicable.

Agency and Third 

Party Comments 

and Our Evaluation
Page 23 GAO-13-537 Palestine Investment Fund

As agreed with your offices, unless you publicly announce the contents of 

this report earlier, we plan no further distribution of this report until 30 

days from the report date. At that time, we will send copies of this report 

to interested congressional committees, the Secretary of State, the 

Administrator of USAID, the President and Chief Executive Officer of the 

Overseas Private Investment Corporation, the appropriate congressional 

committees and other interested parties. In addition, the report will be 

available at no charge on the GAO website at http://www.gao.gov.

If you or your staff have any questions about this report, please contact 

me at (202) 512-3149 or gootnickd@gao.gov. Contact points for our 

Office of Congressional Relations and Public Affairs may be found on the 

last page of this report. GAO staff who made major contributions to this 

report are listed in appendix VI.

David Gootnick

Director, International Affairs and Trade
Appendix I: Objectives, Scope, and 

Methodology

Page 24 GAO-13-537 Palestine Investment Fund

Our objectives were to describe (1) the nature and scope of U.S. 

government involvement with the Palestine Investment Fund (PIF), and 

(2) OPIC’s and USAID’s processes for vetting PIF and other non-U.S. 

entities and individuals participating in programs involving PIF and PIFowned entities.

To address our first objective, we reviewed and analyzed program 

agreements, annual reports, and other documents from OPIC, USAID, 

PIF, and OPIC’s and USAID’s implementing partners (AMIDEAST, CHF 

International/Global Communities, Democracy Council, Middle East 

Investment Initiative (MEII), and Mercy Corp). To describe the Affordable 

Mortgage and Loan (AMAL) and the Loan Guarantee Facility (LGF) 

programs in which OPIC is involved with PIF, we reviewed various 

documents, including the AMAL Common Agreement, AMAL’s Mortgage 

Loan Origination and Purchase Agreement, OPIC’s press release 

regarding its involvement with PIF in the AMAL program, PIF’s description 

of the AMAL program, AMAL organization structure, the LGF Guaranty 

Facility Agreement, OPIC’s signed LGF agreement, LGF Operational 

Manual, LGF organizational structure, as well as various documents 

containing responses to our questions from OPIC. To describe USAID’s 

Technical Assistance and Training (TAT) and the American International 

School in Gaza (AISG) programs in which USAID is involved with a PIFowned entity, we reviewed CHF International/Global Communities LGFTAT quarterly, annual, and final reports for 2009-2011, USAID’s West 

Bank/Gaza fact sheet on the Expanded and Sustained Access to 

Financial Services program (ESAF) under which USAID provides TAT,

USAID’s AISG project fact sheet, USAID’s fact sheet on the Model School 

Network, Democracy Council’s brochure on AISG, the AMIDEAST Model 

School Network Final Report, as well as various documents containing 

responses to our questions from USAID. We interviewed USAID officials 

about funds spent in support of programs at AISG and determined that 

the data were sufficiently reliable for our purposes. Further, we reviewed 

PIF’s 2006 to 2012 annual reports to determine the involvement of U.S. 

agencies with PIF.

To address our second objective, we reviewed U.S. government-wide 

antiterrorism laws, executive orders, and regulations that provide the 

basis for USAID’s and OPIC’s terrorism policies and procedures for 

vetting PIF and other entities and individuals participating in programs

involving PIF. (Appendix III provides the general legal framework for the 

U.S. antiterrorism policy and OPIC’s and USAID’s terrorist vetting policies 

and procedures.) For the AMAL and LGF programs in which OPIC is 

involved, we reviewed OPIC’s Character Risk Due Diligence Policies and 

Appendix I: Objectives, Scope, and 

Methodology
Appendix I: Objectives, Scope, and 

Methodology

Page 25 GAO-13-537 Palestine Investment Fund

Procedures, the AMAL program’s common agreement, AMAL’s Fixed 

Rate Financing and Floating Rate Financing Agreements, AMAL 

Shareholders Agreements, excerpts from the LGF Operational Manual, 

and the LGF agreements. For the USAID TAT and AISG programs, we 

reviewed CHF International/Global Communities’ LGF-TAT quarterly, 

annual, and final reports for 2009 to 2011, as well as various documents 

containing responses to our questions from USAID. In addition, we 

reviewed USAID’s Mission Order No. 21, which establishes USAID’s 

vetting policies and procedures for its programs in the West Bank and 

Gaza. We also reviewed Treasury’s Licensure No. 7, which allows U.S. 

entities to engage with Palestinian entities in the West Bank and Gaza. 

Further, we reviewed prior GAO reports that discuss USAID’s vetting 

procedures for programs in which it is involved in the West Bank and 

Gaza.1

For both objectives, we interviewed officials from OPIC, State, Treasury, 

USAID, PIF, CHF International/Global Communities, Middle East 

Investment Initiative, AMIDEAST, and Democracy Council and received 

written responses to our questions from Mercy Corps.

We described the information sources represented to us as being 

used by OPIC, USAID, and other entities to vet PIF and program 

recipients; however, we did not determine the extent to which OPIC and 

USAID implemented or complied with their vetting policies and 

procedures or assessed the effectiveness of OPIC’s and USAID’s vetting 

because it is beyond the scope of this review. In addition, we did not 

travel to the region to assess these programs or the agencies’ vetting 

procedures.

We conducted this performance audit from October 2012 to July 2013 in 

accordance with generally accepted government auditing standards.

Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that 

the evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives.

 1

GAO, Foreign Assistance: U.S. Assistance to the West Bank and Gaza for Fiscal Years 

2010 and 2011, GAO-12-817R (Washington, D.C.: July 13, 2012); Foreign Assistance: 

Measures to Prevent Inadvertent Payments to Terrorists under Palestinian Aid Programs 

Have Been Strengthened, but Some Weaknesses Remain, GAO-09-622 (Washington, 

D.C.: May 19, 2009); Foreign Assistance: Recent Improvements Made, but USAID Should 

Do More to Help Ensure Aid Is Not Provided for Terrorist Activities in West Bank and 

Gaza, GAO-06-1062R (Washington, D.C.: Sept. 29, 2006). 
Appendix II: Time Line of Key Events 

in the Development of the Palestine Investment 

Fund

Page 26 GAO-13-537 Palestine Investment Fund

1993-1994: The Palestinian Authority Granted Control over Parts of the 

West Bank and Gaza. The government of Israel and the Palestine 

Liberation Organization signed the Oslo Peace Accords,1

1994: PCSC, Forerunner of the Palestine Investment Fund (PIF), 

Established as a Holding Company. The Palestinian Authority began 

acquiring shareholdings in a number of companies across various sectors 

which called for 

the withdrawal of Israeli forces from parts of the West Bank and Gaza and 

affirmed the Palestinian right to self-government within those areas, under 

the Palestinian Authority. The Palestinian Authority was established in 

May 1994 to begin assuming self-governing responsibilities in the West 

Bank and Gaza Strip.

 1

Oslo I Accords (Declaration of Principles on Interim Self-Government Arrangements),

September 1993.

Appendix II: Time Line of Key Events 

in the Development of the Palestine 

Investment Fund
Appendix II: Time Line of Key Events 

in the Development of the Palestine Investment 

Fund

Page 27 GAO-13-537 Palestine Investment Fund

of the economy. According to a report by the World Bank,2

1997: Inquiry Finds PCSC Profits Diverted Outside of Palestinian 

Authority Budget. According to the World Bank report, following a public 

inquiry, the Palestinian Legislative Council found that PCSC was not 

monitored by the external audit body of the Palestinian Authority, known 

as the General Audit Institute, and that PCSC generated significant 

profits, which were diverted outside of the Palestinian Authority budget. 

Additionally, the report stated that the finances of the PCSC were not 

released to Palestinian Legislative Council members or the public.

these 

commercial undertakings were placed under the umbrella of a holding 

company, the Palestine Commercial Services Company (PCSC), 

managed by the economic advisor to the Palestinian Authority’s thenpresident, Yasser Arafat. According to the World Bank Report, the PCSC 

had full equity ownership of the Cement Company, which held an 

exclusive contract for the import of cement from Israel. In addition, the 

report stated that PCSC had partnerships with private investors in 

numerous businesses, including hotels, casinos, cigarettes, telecoms, 

real estate, flour milling, and other sectors.

2000: Initiative Calls for PIF Creation. The International Monetary Fund 

(IMF) and President Arafat initiated the Economic Policy Framework 

reform which, among other reforms, called for the creation of a Palestine 

Investment Fund, although no action was taken to establish such a fund 

at that time. According to a report by the IMF,3

2000: External Audit Values PCSC’s Asset at $345 million. An external 

audit of PCSC’s 1999 operations found that the PCSC had net profits of 

$77 million and assets valued at $345 million. In addition to this audit, an 

IMF report found that many of PCSC’s commercial operations were 

funded from diverted tax revenue. These commercial activities generated 

profits which, according to the IMF report, were also being diverted away 

the Economic Policy 

Framework initiative resulted in two achievements: the consolidation of 

excise tax revenue within the Minister of Finance’s office, and the auditing 

of the assets of the PCSC.

 2

The World Bank, West Bank and Gaza: Improving Governance and Reducing Corruption, 

Report number 61701-GZ (2011).

3

International Monetary Fund, West Bank and Gaza: Economic Performance and Reform 

under Conflict Conditions (September 2003).
Appendix II: Time Line of Key Events 

in the Development of the Palestine Investment 

Fund

Page 28 GAO-13-537 Palestine Investment Fund

from the Palestinian Authority budget. Because PCSC did not publish 

balance sheets or annuals reports, the IMF reported that it was difficult to 

determine PCSC’s profits between 1995 and 2000; however, the IMF 

estimated that about $300 million in profits from PCSC were channeled 

outside of the Palestinian Authority budget from 1995 to 2000.

2002 (June): Reform Plan Prepared. A new Palestinian Authority cabinet 

was appointed and a ministerial committee prepared a 100-day reform 

plan, which, according to an IMF report, began addressing revenue 

consolidation, budget reform, and monopolies, among other reforms.

2002 (October): PIF Formally Established. According to the World Bank 

report, as part of broader reforms the Palestinian Authority was 

undertaking under the 100-day plan, PIF was formally established by 

presidential decree, to consolidate all Palestinian Authority commercial 

activities and asset ownership. According to the report, it became illegal 

for the Palestinian Authority to conduct any commercial activity or hold 

any assets outside of PIF.

• According to a PIF official, the President appointed a board of 

directors, which included the Minister of National Economy and was 

chaired by the Minister of Finance.

• The report noted that the board of directors ordered a full valuation 

and transparency assessment of Palestinian Authority assets—

previously held under PCSC—to be transferred to PIF.

2003: External Assessment Values PIF Assets at $633 million. The 

Democracy Council and Standard and Poor’s published the valuation and 

transparency assessment of Palestinian Authority assets, as ordered by 

the board of directors.

• As of January 1, 2003, PIF assets were valued at $633 million, 

including 67 commercial entities and liquid assets.

2006-2007: PIF Governance Structure Changed Following Hamas 

Legislative Election Victory. According to PIF and U.S. officials, following 

the Hamas victory in the Palestinian legislative elections, President Abbas 

initiated major changes in the governance structure of PIF. According to a 

PIF official, the changes to the governance structure were initiated to 

insulate PIF’s assets from Hamas interference. By Presidential decree, 

both the Minister of National Economy and the Minister of Finance were

removed from the board and replaced by external appointees.
Appendix II: Time Line of Key Events 

in the Development of the Palestine Investment 

Fund

Page 29 GAO-13-537 Palestine Investment Fund

2008: President Appointed 30-member General Assembly. According to 

its annual report, PIF added a 30-member general assembly to its 

governance structure to provide strategic guidance to the board of 

directors, with the Palestinian Authority President appointing each 

assembly member to serve a 3-year term. According to a PIF official, this 

change was made in accordance with existing Palestinian corporate law 

and to enhance accountability, transparency, and good governance.

2011: Hamas Seized PIF Assets in Gaza. Hamas seized a number of PIF 

assets in Gaza, including PIF’s branch office, a commercial building, and 

a juice factory. Following the seizure of assets, PIF officials released a 

statement denouncing the seizures as illegal and in violation of 

Palestinian law. A PIF official estimated the value of these assets at 

around $10 million, which PIF had to write off. According to this official, as 

of February 2013, PIF’s only remaining asset in Gaza is vacant land, 

valued at about $5 million. The official also told us that PIF has no control 

over or access to the vacant land, which Hamas has publicly stated it has 

seized. However, the official noted that PIF continues to keep the land on 

its books because Hamas has not taken physical control of the land.

2013 (June): PIF currently governed by Board of Directors and Generally 

Assembly. According to PIF’s audited financial statements and a PIF 

official, PIF is governed by a board of directors and a general assembly, 

both appointed by the Palestinian Authority President. The board of 

directors is comprised of 11 members responsible for setting and 

overseeing PIF’s goals and objectives, while the general assembly, 

comprised of 30 members, provides strategic guidance to the board.

According to PIF’s publicly available annual financial statements, Ernst 

and Young was PIF’s external auditor from 2006 to 2012. According to a 

PIF official, internal auditing functions at PIF are performed by Deloitte, to

help ensure there are adequate internal controls and that management 

complies with the law and standards governing administrative and 

investment operations. This official also noted that PIF is audited by the 

Palestinian State Audit and Administrative Control Bureau.
Appendix III: Legal Framework for 

Terrorist Vetting by USAID and OPIC

Page 30 GAO-13-537 Palestine Investment Fund

U.S. agencies must comply with restrictions under U.S. law when 

providing funds for Palestinian assistance programs, including restrictions 

reflecting U.S. policy to deny U.S. funds and other support to individuals 

or organizations that engage in or otherwise support terrorist activity. This 

policy is established in laws, executive orders, and regulations that 

provide the basis for USAID and OPIC terrorism vetting policies and 

procedures used to vet PIF and other entities and individuals associated 

with PIF-related programs in which USAID and OPIC are involved.1

Various federal laws and executive orders dealing with terrorism allow the 

blocking or “freezing” of targeted assets located in the United States or 

under the control of a U.S. person outside of the United States. The 

International Emergency Economic Powers Act (IEEPA) (50 USC §§ 

1701-1706) grants the president authority in times of emergency to block

assets in the United States in which any foreign nation or national has an 

interest. Executive Order 12947 (Jan. 23, 1995, amended Aug. 20, 1998), 

issued pursuant to the IEEPA, declared an emergency with respect to 

“grave acts of terrorism committed by foreign terrorists that disrupt the 

Middle East peace process,” and blocked all property subject to U.S. 

jurisdiction in which there is any interest of certain Middle East terrorist 

organizations included in an annex to that executive order.

The Antiterrorism and Effective Death Penalty Act of 1996 (the 

Antiterrorism Act) contains several relevant provisions. Section 302 of the 

Antiterrorism Act (18 USC § 2339A) makes it a criminal offense to, among 

other things, provide material support or resources to or conceal or 

disguise material support or resources with knowledge that such support 

or resources are to be used in the commission of a terrorist act. Section 

303 of the Antiterrorism Act (18 USC § 2339B) makes it a criminal offense 

to provide material support or resources to such foreign organizations and 

requires financial institutions to block all funds in which foreign terrorists 

organizations or their agents have an interest. Under 8 USC § 1189, the 

Secretary of State is authorized to designate organizations as “foreign 

terrorist organizations” for purposes of Section 303 of the Antiterrorism 

Act. Section 321 of the Antiterrorism Act (18 USC § 2332d) makes it a 

criminal offense for U.S. persons, except as provided in regulations

 1

The laws, executive orders, and regulations referred to in this appendix are not intended 

to be exhaustive of all U.S. laws, executive orders, and regulations pertaining to 

antiterrorism.

Appendix III: Legal Framework for 

Terrorist Vetting by USAID and OPIC

Government-Wide 

Antiterrorism Laws and 

Executive Orders
Appendix III: Legal Framework for 

Terrorist Vetting by USAID and OPIC

Page 31 GAO-13-537 Palestine Investment Fund

issued by the Secretary of the Treasury in consultation with the Secretary 

of State and the Attorney General, to engage in financial transactions with 

the governments of countries designated under section 6(j) of the Export 

Administration Act of 1979 (50 USC App. § 2405) as supporting 

international terrorism.

The USA Patriot Act broadened the president’s authority under the IEEPA 

by allowing the blocking of assets during the pendency of an 

investigation. Executive Order 13224 (Sept. 23, 2001), was issued 

pursuant to the IEEPA and the USA Patriot Act. This executive order 

prohibits all U.S. persons from engaging in any kind of transactions with 

persons, groups, or entities, or their supporters or associates, who 

commit, threaten to commit, or support terrorism and authorizes the 

Department of the Treasury to block all U.S. assets of certain individuals 

and entities listed in the executive order as “Specially Designated Global 

Terrorists” (SDGTs) and to list additional SDGTs.

In addition, since fiscal year 2003, annual foreign operations 

appropriations laws have included provisions requiring the Secretary of 

State, prior to obligation of Economic Support Funds (ESF) for assistance 

for the West Bank and Gaza, to take “appropriate steps to ensure that 

assistance is not provided to or through any individual, private or 

government entity, or education institution, that the Secretary knows or 

has reason to believe advocates, plans, sponsors, engages in, or has 

engaged in, terrorist activity.” Since fiscal year 2005, annual foreign 

operations appropriations laws have also included provisions prohibiting 

provision of any funds appropriated under those laws for purposes of 

recognizing or otherwise honoring individuals who commit or have 

committed terrorist acts.2

The Department of the Treasury’s Office of Foreign Asset Control (OFAC) 

administers various U.S. sanctions programs, including the terrorism 

sanctions programs in 31 CFR Parts 595, 596 and 597 which implement 

 2

See, Consolidated Appropriations Resolution, 2003, Pub. L. No. 108-7, § 568(b), Feb. 20, 

2003, and Consolidated Appropriations Act, 2005, Pub. L. No. 108-447, Div. D, Title V, § 

559(c), Dec. 8, 2004. See also, for example, Consolidated Appropriations Act, 2012, Pub. 

L. No.112-74, § 7039(b) and (c), Dec. 23, 2011, for an example of legislation containing 

both types of provisions. Similar provisions were included in the Palestinian Anti-Terrorism 

Act of 2006, Pub. L. No. 109-446, § 3(b)(2) and (3), Dec. 21, 2006, extending the 

requirements through fiscal years 2007 and 2008. 

Government-Wide 

Implementing Regulations
Appendix III: Legal Framework for 

Terrorist Vetting by USAID and OPIC

Page 32 GAO-13-537 Palestine Investment Fund

the above-cited laws and executive orders government-wide. The 

Terrorism Sanctions Regulations at 31 CFR Part 595, which implement 

Executive Order 12947, were issued pursuant to the IEEPA. The 

Terrorism List Governments Sanctions Regulations at 31 CFR Part 596 

implement section 321 of the Antiterrorism Act. The Foreign Terrorism 

Organizations Sanctions Regulations at 31 CFR Part 597 implement 

sections 302 and 303 of the Antiterrorism Act and 8 USC § 1189.3

OFAC licenses4

General License No. 7 does not authorize transactions with Hamas, a 

U.S.-designated terrorist organization which is still a target of the 

sanctions programs. Provisions in U.S. annual appropriations acts have 

prohibited funding for Hamas or a Hamas-controlled entity and generally 

have allowed in certain instances for USAID and its 

grantees and contractors to engage in transactions with the Palestinian 

Authority and related entities, including PIF, in order to conduct financial 

transactions and other activities otherwise prohibited by the sanctions 

programs in 31 CFR Parts 595, 596, and 597. OFAC has issued a series 

of general licenses authorizing transactions with the Palestinian Authority, 

including OFAC General License No. 4 (issued April 4, 2006) and OFAC 

General License No. 7 (issued June 20, 2007). General License No. 4 

authorized U.S. persons to engage in all transactions with the Palestinian 

Authority President and certain other entities, including PIF. General 

License No. 7 includes the authorizations under previous licenses by 

providing broad authorization for U.S. persons to engage in all 

transactions with the Palestinian Authority otherwise prohibited by the 

terrorism sanctions programs, noted above.

 3

OFAC “targets” an individual, group, or entity by placing its name on a Specially 

Designated Nationals (SDN) list. In addition to its country sanctions, OFAC publishes a list 

of individuals and companies owned or controlled by, or acting on behalf of, targeted 

countries, which may include senior government officials and persons who provide 

substantial economic and political support for those governments. It also lists individuals, 

groups, and entities, such as terrorists and narcotic traffickers designated under programs 

that are not country specific. Collectively, such individuals and entities are called 

“Specifically Designated Nationals and Blocked Persons” or “SDNs.” Their assets are 

blocked, and U.S. persons are generally prohibited from dealing with them.

4

A license is an authorization from OFAC to engage in a transaction that otherwise would 

be prohibited. There are two types of licenses: general licenses and specific licenses. A 

general license authorizes a particular type of transaction for a class of persons without 

the need to apply for a license. A specific license is a written document issued by OFAC to 

a particular person or entity, authorizing a particular transaction in response to a written 

license application.
Appendix III: Legal Framework for 

Terrorist Vetting by USAID and OPIC

Page 33 GAO-13-537 Palestine Investment Fund

prohibited funding for a power-sharing government of which Hamas is a 

member or that results from an agreement with Hamas and over which 

Hamas exercises undue influence, though under certain conditions, 

assistance may be provided to such a power-sharing government. See 

Consolidated Appropriations Act, 2010, Pub. L. No. 111-117, §7040(f), 

123 Stat. 3034 at 3367-68, Dec. 16, 2009, and Consolidated 

Appropriations Act, 2012, Pub. L. No. 112-74, §7040(f), 125 Stat. 786 at 

1222, Dec. 23, 2011.

The USAID Mission to the West Bank and Gaza developed USAID/West 

Bank and Gaza Mission Order 215 to implement E.O. 13224 and the 

vetting provisions in annual foreign operations appropriations legislation. 

The Mission’s antiterrorism policies and procedures, as provided in 

revised Mission Order 21,6

 5

The Secretary of State deferred to USAID, the implementing agency, to ensure 

compliance with the vetting requirements in annual foreign operations appropriations 

legislation. In addition, State is currently working with USAID to set up a pilot program for 

a comprehensive partner vetting system as authorized by the Consolidated Appropriations 

Act, 2010, Pub. L. No. 111-117, § 7034(o), Dec. 16, 2009. The act restricts the use of 

funds by State or USAID to implement a partner vetting system, except that funds 

appropriated by the act may be used to implement a partner vetting system pilot program, 

to be applied equally to the programs and activities of State and USAID. 

state that the Mission must vet certain nonU.S. recipients of USAID funding, which involves checking recipients’

names and other identifying information against databases and other 

information sources to determine if they are involved with terrorism. In 

addition, the order clarifies how its antiterrorism policies and procedures 

apply to USAID assistance instruments, by requiring, among other things, 

that (1) all solicitations and awards for such assistance instruments 

contain an antiterrorism clause that reminds award recipients that they 

6

Mission Order 21 was originally issued March 17, 2006, and revised and updated May 

26, 2006, and October 3, 2007. See Mission Notice No. 2007-WBG-26. The Mission 

published implementing guidance in 2002 and 2003 concerning terrorist vetting and 

certification procedures (2002-West Bank and Gaza-05, Mar. 26, 2002; 2003-Dir.-01, Aug.

26, 2003). Mission Order 21 cites several legal authorities for its antiterrorism procedures. 

These include (1) E.O. 13224; (2) 18 U.S.C. §§ 2339A and 2339B; and (3) Executive 

Orders 12947 (Jan. 23, 1995) and 13099 (Aug. 20, 1998) which prohibit transactions with 

terrorists who threaten the Middle East peace process. Mission Order 21 also includes the 

antiterrorism vetting provisions of special relevance to the USAID Mission in the West 

Bank and Gaza in § 559 of the Foreign Operations Export Financing and Related 

Appropriations Act, 2006 (Pub. Law No. 109-102) and similar provisions in subsequent 

foreign operations appropriations acts, including § 7039(b) and (c) of the Consolidated 

Appropriations Act, 2012, Pub. L. No. 112-74, Dec. 23, 2011.

USAID Policies 

and Procedures
Appendix III: Legal Framework for 

Terrorist Vetting by USAID and OPIC

Page 34 GAO-13-537 Palestine Investment Fund

must comply with U.S. executive orders and laws prohibiting transactions 

with terrorists and the provision of resources and support to individuals or 

organizations associated with terrorism; (2) all U.S. and non-U.S. 

organizations sign an antiterrorism certification before being awarded a 

grant or cooperative agreement to certify that the organization does not 

provide material support or resources for terrorism; and (3) all assistance 

instruments contain a naming clause that states that no assistance shall 

be provided under the instrument for any school, community center, or 

other facility that is named after any person or group that has advocated, 

sponsored, or committed acts of terrorism.

USAID has also issued various policy directives since 2002 that 

implement Executive Order 13224 and applicable antiterrorism laws that 

require antiterrorism certification and antiterrorism clauses with respect to 

all awards. Among other things, those directives require USIAD personnel 

to check OFAC’s SDGT list prior to making an award (see AAPD 02-04 

[Mar. 20, 2002], ADS 302.3.5.5 and -.3.6.12 [Mar. 23, 2007], and PEB 

2005-12 [July 20, 2006]); require all U.S. and non-U.S. organizations to 

certify, before being awarded a USAID grant or cooperative agreement, 

that the organization does not provide material support or resources for 

terrorism, (ADS 303 Jan. 30, 2007) and AAPD 04-14 (Sept. 24, 2004)7

; 

and require inclusion of a mandatory clause in all solicitations and awards 

for contracts, grants, cooperative agreements, and subcontracts and 

subawards that reminds USAID contractors and implementing partners of 

their legal duty to comply with applicable antiterrorism laws (AAPD 02-04 

and PEB 2005-12).8

 7

AAPD 04-14 superseded earlier versions of the directive issued in AAPD 02-19 (Dec. 31, 

2002 and AAPD 04-07 (Mar. 24, 2004).

8

In addition, on February 14, 2012, USAID issued a final rule amending its AIDAR 

regulations at 48 CFR Chapter 7 to implement a comprehensive Partner Vetting System 

(PVS) pilot program for USAID assistance and acquisition awards. See 77 Fed. Reg. 

8166-8174, Feb. 14, 2012. The PVS pilot program was authorized by the Consolidated 

Appropriations Act, 2010, Pub. L. No. 111-117, § 7034(o), Dec. 16, 2009. That act 

restricts the use of funds by the State Department or USAID to implement a partner 

vetting system, except that funds appropriated by the act may be used to implement a 

partner vetting system pilot program, to be applied equally to the programs and activities 

of State and USAID. The Consolidated Appropriations Act, 2012, § 7034(i) directed State 

and USAID to implement the PVS pilot program no later than September 30, 2012.
Appendix III: Legal Framework for 

Terrorist Vetting by USAID and OPIC

Page 35 GAO-13-537 Palestine Investment Fund

OPIC has developed “Security and Character Reference/Due Diligence 

(CRDD) Procedures, contained in the OPIC Operations Manual, which 

are intended to uncover any derogatory information—including risks for 

terrorist financing and money laundering—about projects in which OPIC 

is involved, the project sponsors, investors, and key personnel. According 

to OPIC’s CRDD procedures, in performing CRDD for a project, a project 

team must make use of necessary information sources that may include 

(1) OPIC’s Information Center databases; (2) the FBI’s Terrorist

Screening Center and Treasury’s Financial Crimes Enforcement Network; 

(3) relevant U.S. Embassy, any local counsel, and when required, 

Outsourced Foreign Searches (OFS) Information Center; (4) State 

Department Bureau of Intelligence Research; and (5) OIP, with respect to 

derogatory information regarding social responsibility, corporate image, 

and environmental accountability.

OPIC’s policies regarding loan guarantees and affordable mortgage 

programs relating to PIF and other entities in the West Bank and Gaza 

are based on the U.S. government security/ character vetting process, 

according to OPIC officials.

OPIC Policies and 

Procedures
Appendix IV: GAO Contact and Staff 

Acknowledgments

Page 36 GAO-13-537 Palestine Investment Fund

David Gootnick, (202) 512-3149 or gootnickd@gao.gov

In addition to the individual named above, Godwin Agbara (Assistant 

Director), Barbara Shields, Martin De Alteriis, Karen Deans, Etana 

Finkler, Ernie Jackson, and Nicholas Jepson made key contributions to 

this report. Other contributors include Shirley Brothwell, Brian Egger, Kay 

Halpern, Mathew Scire, and Steven Westley.

Appendix IV: GAO Contact and Staff 

Acknowledgments

GAO Contact

Staff 

Acknowledgments
Related GAO Products

Page 37 GAO-13-537 Palestine Investment Fund

Foreign Assistance: U.S. Assistance to the West Bank and Gaza for 

Fiscal Years 2010 and 2011. GAO-12-817R. Washington, D.C.: 

July 13, 2012.

Foreign Assistance: U.S. Assistance to the West Bank and Gaza for 

Fiscal Years 2008 and 2009. GAO-10-623R. Washington, D.C.: 

May 14, 2010.

Foreign Assistance: Measures to Prevent Inadvertent Payments to 

Terrorists under Palestinian Aid Programs Have Been Strengthened, but 

Some Weaknesses Remain. GAO-09-622. Washington, D.C.: 

May 19, 2009.

Foreign Assistance: Recent Improvements Made, but USAID Should Do 

More to Help Ensure Aid Is Not Provided for Terrorist Activities in West 

Bank and Gaza. GAO-06-1062R. Washington, D.C.: September 29, 2006.

Foreign Assistance: Middle East Partnership Initiative Offers Tool for 

Supporting Reform, but Project Monitoring Needs Improvement.

GAO-05-711. Washington, D.C.: August 8, 2005.

Related GAO Products

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