On Yassir Arafat's death I wrote:
Arafat was duplicitous and untrustworthy. Instead of abjuring violence he fomented it. Instead of governing wisely and well in preparation for statehood, he exercised arbitrary power and exhibited relentless cupidity. No agreement signed by Arafat could have been made to stick. His people were greatly the poorer for having been misrepresented and misruled by him; they urgently require better leadership on his passing.
I was of course being generous to the recently-deceased. Arafat's extraordinary financial mismanagement extended beyond personal corruption. A story has come up on the Bloomberg financial information service this morning that is the most detailed account of his fecklessness that I have seen. It appears that donor money intended for services and infrastructure in the Palestinian Authority was devoted also to speculative schemes divorced from both Palestinian interests and the principles of efficient investment management. Through the incompetence and profligacy of an unaccountable leader, the Palestinian Authority lost millions of dollars by taking large and illiquid positions in software and telecommunications companies in the late 1990s:
Arafat used a holding company to buy stakes that ranged from $285 million in Egyptian mobile-phone company Orascom Telecom Holding SAE and its affiliates to some $30 million in private equity, mostly in the U.S. These included $3.2 million in Herndon, Virginia-based Simplexity Inc., which makes electronic-commerce software, $2.1 million in New York- and Boston-based Vaultus Inc., which makes software for wireless computers, and $1.3 million in New York-based Strike Holdings LLC, which owns the Bowlmor Lanes bowling alley in Manhattan's Greenwich Village.
Arafat, who died on Nov. 11 at age 75, disclosed $799 million of investments in documents the Palestinian Authority has released over the past two years that show he didn't just invest in building basic services in the West Bank and Gaza.
At a time when the authority was starved for funds, Arafat's money managers placed bets from Tel Aviv to Silicon Valley on venture capital funds, software startups and telecommunications companies.
President Bush has been much-criticised for his insistence on political reform in the Palestinian Authority as a prerequisite of a Middle East peace settlement. His position seems to me simple common sense as well as unexceptionable liberal principle. Apart from any other reasons, financial mismanagement and corruption are often accompaniments of autocracy. Personal ascetism and financial probity are not values encouraged by the exercise of arbitrary power. (Perhaps Stalin and Ho Chi Minh lived as frugally as their apologists claim; Saddam Hussein and Robert Mugabe certainly haven't.)
I served for some years as a trustee of a pension fund about as large in total as a single one of Arafat's private-equity holdings. I can only say that if I and my fellow-trustees, in the regulated and democratic UK system, had discharged our fiduciary responsibilities as Arafat did his, I should probably be writing this post in somewhat less comfortable and more constrained circumstances than I am used to.