The PA Plan to Steal Hundreds of Millions of Dollars in Foreign Aid

The financial corruption of the Palestinian Authority (PA) is already infamous and well documented. However certain incidents are more indicative than others to demonstrate the true depths of the cynicism. As with any other criminal enterprise, PA corruption is sometimes blatant, but more often disguised, nuanced, and hidden. As one commentator noted in a context most pertinent to this article, the corruption is such a widespread phenomenon within the PA’s ministries and institutions, the private sector, and Palestinian NGOs, that it is viewed as “a cancer that eats the flesh of the Palestinian people…”¹

When PA corruption intersects with sectors that can raise funds relatively easily, especially from international donors, like health services, the temptation becomes impossible to resist. The PA takeover of the Makassed hospital, which often receives tens of millions of dollars in donations, is clearly one such event.

The Makassed Hospital

The Makassed hospital’s foundation stones were laid in Jerusalem in 1964, while the area was still under Jordanian occupation, but construction was only completed in 1968 after it already came under Israeli jurisdiction. The hospital is funded predominantly by the Al-Makassed Islamic Charitable Society, an organization established under Jordanian law that is now registered as an NGO (Amuta) in Israel. The hospital is located within greater Jerusalem in an area to which Israeli law applies.² Accordingly, the hospital is licensed by the Israeli Ministry of Health.

Since the hospital is located in Jerusalem, the PA should have nothing whatsoever to do with it.

While the hospital did once cater to the medical needs of some of the Arabs living in Jerusalem who hold Israeli residency, this has not been the case for many years. Under Israeli law, Arabs who hold Israeli residency are fully entitled to benefit from the modern and developed Israeli medical system, at minimal cost.

Thus, a 2014 report published by the Israeli Ministry of Health found that 50% of those treated by the hospital were residents of Judea, Samaria, and the Gaza Strip, and their treatment was paid for by the PA. Twenty percent of patients were covered by private insurance, and 17% were covered by the Israeli HMO’s (kupot holim). ³

In total, according to financial reports submitted by the NGO to the Israeli Registrar, the annual financial cycle of the hospital for the last few years ranged from NIS 210,000,000 to NIS 235,000,000 (approximately $65-$70M).

While the PA is prohibited from operating in Jerusalem, the ban did not bother PA Chairman Mahmoud Abbas, who issued a “Presidential Decree” to appoint the NGO’s management team.

In the decree, Abbas appointed a list of Fatah activists to control the NGO. One of those appointed by Abbas was Ahmed Al-Ruwaidi, who was recently appointed, in addition to his position in the NGO, as the “Ambassador of the State of Palestine” to Iraq.⁴ Another one of those appointed was Kamal Obeidat, who has been frequently arrested and investigated for conducting PA activities in Jerusalem.

Just weeks before Abbas issued the decree, on November 29, 2022, appointing his own people to run the NGO that controls the hospital, the United Arab Emirates (UAE) signed a deal with the World Health Organization (WHO) to donate $25M to the hospital.⁵ As part of that agreement, in March 2023, the WHO delivered a $1.5M shipment of critical medicines and medical supplies to the hospital through the generous support of UAE Aid.⁶ In April 2025, it appears that the UAE donated an additional $64.5M.⁷

While there is no reason to suggest that the UAE reneged on the donations, they are entirely absent from the NGO’s financial reports.

Israeli NGOs are required by law to submit annual financial statements, which include, among other details, donations from abroad. According to the NGO’s financial reports,⁸ in 2022, it only received NIS 3,988,561 (just over $1M) in donations from abroad. In 2023, the donations from abroad rose to NIS 20,871,959 (approximately $6M).⁹

This begs the questions: what happened to the rest of the money donated by the UAE? And what happened to the money donated by the other foreign organizations?

What Happened to the Money Donated for the Khaled Hasan Cancer Center?

The PA’s hostile takeover of the Makassed hospital is not the first event of widescale corruption connected with medical facilities.

In 2016, the PA launched an international campaign to raise $250M to build the Khaled Hasan Cancer Center.¹⁰ Promotional plans were drawn up and the international community donated tens of millions of dollars. The hospital was never built and the funds disappeared.¹¹

Breach of Israeli Sovereignty

Paragraph 3 of the Law on the Implementation of the Interim Agreement Concerning the West Bank and the Gaza Strip (Restriction of Activity), 5755 – 1994¹² (one of the laws passed in Israel to implement the Oslo Accords), prohibits the PA from operating in Jerusalem, specifically outlawing any form of governance activities. The fact that Abbas, in a PA “Presidential Decree,” took the liberty to appoint his people to run the NGO, is a fundamental breach of that prohibition.

After more than three decades and the inflow of tens, if not hundreds, of millions of dollars in foreign aid, Makassed Hospital still outperforms every major hospital in PA-administered areas.

Given this record, it is implausible to argue that the PA seeks control of Makassed because of superior administrative capacity or a proven ability to run healthcare institutions more effectively than Israel. Since the PA has not excelled in managing the hospitals already under its jurisdiction, its attempt to take over Makassed is unlikely to be driven primarily by professional or medical considerations. The initiative therefore suggests additional, non-medical objectives.

Two such objectives stand out. The first is financial: gaining leverage over Makassed’s budgets and donor funding would open a channel for patronage, corruption, and potentially the misappropriation of resources. The second is political: extending PA authority over a flagship Jerusalem institution would function as a symbolic and practical challenge to Israel’s sovereignty in the city.

Policy Recommendations

Given these driving factors, the Israeli government should step in and, using the provisions of already existing laws, prevent the PA’s further infraction of Israeli sovereignty.

If the international community is genuine in its desire to provide aid to the Palestinian people and not to further line the corrupt PA officials’ pockets, it should reconsider the manner in which the aid is provided. Additional donations should only be given subject to the removal of any PA influence over the hospital and the replacement of the NGO management team.

Both Israel and the international donor community should reject leaving the situation unaddressed.

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Notes