Palestinian Authority's covert funding makes assessing US aid cuts tricky

The security forces of the Palestinian Authority (PA) were affected due to the Trump administration's freeze on foreign aid funds. However, the frozen funds only account for a small portion of what it receives from the United States, making it difficult to determine the PA's financial situation accurately. Further investigation into the funding sources and allocation is necessary to fully understand the impact.

The Washington Post reported on Wednesday that the US has halted all security assistance to the Palestinian Authority. The Trump administration implemented a 90-day pause on foreign aid. US Secretary of State Marco Rubio only exempted two entities: Israel and Egypt. This decision highlights the administration's approach to foreign policy in the region.

A source familiar with the situation of Palestinian Authority officials told Middle East Eye (MEE) that the security assistance to the Palestinian Authority that was suspended came from funds from the State Department and the Department of Defense, which were allocated through the State Department's Bureau of International Narcotics and Law Enforcement Affairs (INL). For example, a US official told MEE that Palestinian security forces have been prevented from traveling to Jordan to attend SWAT training and advanced police courses. This disruption could impact the effectiveness of PA security forces.

A member of Fatah told MEE: "Most of the PA's assistance does not come from the State Department, but from the Central Intelligence Agency (CIA). To my knowledge, they have not changed their policy towards the PA." Tahani Mustafa, a senior Palestine analyst at the International Crisis Group, told MEE that it is difficult to quantify how much US money flows to the PA's security sector because the funds are secretly financed by US intelligence agencies, and these funds may not be affected by the aid freeze. This secrecy adds complexity to assessing the true extent of US support.

Mustafa said: "The funds from the State Department and the Department of Defense are not the entirety of the PA security sector's funds, and in fact, they are not as impactful on national security as the funds from the CIA." In 2016 and 2017, the PA received $40 million in INL security assistance funds. This amount is relatively small when placed in the context of US funds flowing to other projects. For example, the underfunded United Nations Relief and Works Agency for Palestine Refugees in the Near East (Unrwa) received $150 million in those two fiscal years. The PA received $75 million in bilateral economic support in fiscal year 2020. These figures provide a comparative perspective on US aid distribution.

A former senior US official told MEE that US funding for the PA security forces "is first and foremost a jobs program." MEE recently reported that the PA has been seeking heavy military equipment from the US, but the US mainly provides small arms. The real value of US funding for the PA security sector lies in paying for the training and salaries they receive. Mustafa said that the PA's security forces receive training in Jericho in the occupied West Bank and in Jordan. The Jericho base first opened in 1994, but US officials have limited access to the base. This training and support are crucial for maintaining stability.

The secret components of the PA's funding make it difficult to determine exactly how much funding the PA security forces receive. But this highlights an important reality: as plans for post-war governance in Gaza increase, an important part of the US-PA relationship is managed behind the scenes by intelligence officials rather than diplomats or generals. This dates back to the days of the uprising when Palestinian leader Yasser Arafat preferred to deal with CIA Director George Tenet. This historical context shapes the current dynamics.

However, the PA is vying for every dollar as it tries to convince the US that it should take over the Gaza Strip. For months, it has been playing a courtship game with the Trump administration. Last December, the PA launched a failed offensive against Palestinian resistance fighters in Jenin in the occupied West Bank in an attempt to demonstrate its ability to govern the Gaza Strip. Mustafa of the Crisis Group said that the offensive failed. Israel eventually launched its own attack on the camp. This failure underscores the challenges the PA faces in asserting control.

Last month, Hussein al-Sheikh, a senior Palestinian official considered to be a successor to 80-something Palestinian President Mahmoud Abbas, told Trump's Middle East envoy Steve Witkoff that the PA was prepared to "conflict" with Hamas in Gaza to gain power. But the PA's West Bank elite face an uphill battle. MEE reported on Tuesday that Jordan and Egypt believe they have convinced Trump to support an Egyptian proposal for post-war governance in Gaza. A senior Egyptian diplomat told MEE that the plan does not require the West Bank's PA to conflict with Hamas, as neither side will be in the government. Instead, officials will come from across Gaza who were affiliated with the PA before Hamas took control of the Gaza Strip in 2007 after the Palestinian legislative elections. The future of Gaza's governance remains uncertain.