How $500 million was lost downGaza’stunnelnetwork
large loans taken in order to invest in the tunnels, unable to return the money from the tunnels’ profits — which never materialised.
Those who lent them the money have just as big a problem.
Both the tunnels’ operation and the collection of money for their construction and operation were undertaken with the full knowledge and encouragement of the Hamas government. Now the investors are demanding that the Hamas movement compensate them. But the movement does not have the resources to cover such a financial burden, and has offered each investor 16.5 cents for every dollar invested — that is, less than a sixth of their investment.
Officially, Hamas claims it has nothing to do with the matter. Finance Minister Ziad al-Zaza claimed that the people who recruited the public’s money invested a large part of it in dodgy schemes overseas, which lost the money in the international credit crunch.
In order to prove that Hamas had no part in the scandal, the Hamas government arrested 200 people involved in the tunnels industry, but most of them were freed in order not to open another front against it. The al-Kurd family, which received a large proportion of the investment money, returned part of it, and Hamas is intending to distribute the compensation from that pot.
All the financial activity surrounding the tunnels took place without any transparency, documentation or supervision. No one really knows what happened to the half a billion dollars, and the suspicion is that more than a few Hamas men — who encouraged the public to invest in the tunnels — got rich through the business.
Many in Gaza say that effects of the Madoff affair in New York are small compared to the tunnels scandal, given the small scale of the economy in the Strip.
The affair has damaged Hamas’s popularity, and many in Gaza accuse them of being no better than the corrupt regime in the West Bank. These allegations were one factor bringing Hamas to support the riots on Temple Mount during Succot, in order to divert attention from their internal problem to Israel.
The only question left is when the world will wake up to what the “poor people” in Gaza are doing with the billions being donated to them. Professor Mordechai Kedar is a lecturer in Arabic at Bar-Ilan University
A Palestinian receives goods smuggled from Egypt into Gaza through an underground tunnel last month
A Gaza worker hoists goods from a tunnel near the Rafah refugee camp