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DFID ordered to disclose Audits of Palestinian Authority Funds used to pay Salaries to Terrorists

The Information Commissioner has ordered the Department for International Development (DFID) to disclose audit reports of accounts into which British grant aid was transferred and allegedly used to pay salaries to convicted Palestinian terrorists.  The Commissioner has concluded that there is a significant public interest in the disclosure of the information.


This overturns the refusal of both the DFID and its internal reviewer to disclose these reports, following Freedom of Information requests made by UK Lawyers for Israel (UKLFI) last year.

UKLFI submitted a Freedom of Information request to DFID for copies of audit reports for the Palestinian Recovery and Development Program (PRDP), a World Bank multi-donor trust fund (MDTF) for the Palestinian Authority (PA), along with the terms of reference for these audits.

In the period 2008 to 2015 Britain paid grant aid to the PA totalling £430.5 million, via the World Bank, untied and not earmarked, to the PA Central Treasury.  Palestinian Media Watch (PMW) disclosed documents which showed that the PA pays over 8% of its total budget to fund salaries for convicted terrorists, which serve to reward and encourage terrorism. The funds to pay these salaries came out of the PA’s Central Treasury account.

UKLFI had noted that when questions about payments of salaries to terrorists were raised in Parliament, British Ministers had claimed that the payments were not salaries but welfare payments.  However, the PMW material had shown that these claims were false.  UKLFI demonstrated that British Ministers have repeated claims that the payments were for welfare long after the PMW reports showed that this was untrue.

Price Waterhouse Coopers (PwC) was the independent auditor appointed to audit the PA account into which funds were transferred by the World Bank’s Palestinian Recovery and Development Program Multi Donor Trust Fund (PRDP-MDTF) between 2010 and 2015.  UKLFI had complained that PwC had failed to comply with OECD Guidelines for Multinational Entities by not reporting the use of funds transferred by the World Bank to pay salaries to terrorists.  However PwC responded that the narrow scope of their work did not require them to consider this issue.

DFID Ministers had repeatedly claimed that since the process was audited by independent accountants, the UK knew exactly where British money was going, and that it was not going to terrorists.   However, if PwC were only instructed to audit with a narrow scope, then it seems that the Ministers must have repeatedly misled the public and Parliament.

DFID has now revealed to the Information Commissioner that it did not hold audit reports of any accounts into which funds from the PRDP were disbursed, nor did it hold the terms of reference for the audit of the overall PRDP (ie PwC’s terms of reference).  This revelation means that DFID Ministers could not have known where British money was going, as they had claimed in Parliament, and nor could they rely on the independent audits of the funds, if they were not aware of the terms of reference of those audits.  The position is particularly serious since this misinformation has facilitated the transfer of funds used “to encourage and reward murder”.

“Those responsible for misleading the public and Parliament to facilitate the payment of large sums of money that were used to reward and encourage murder should now be held to account” said Jonathan Turner, chief executive of UK Lawyers for Israel.

The Palestinian Authority is NOT a state

The Commissioner ruled that the PA is not a State, or a territory within another State.  Therefore DFID could not rely on an exemption for confidential information provided by another State.

DFID had argued that the audit reports were exempt from disclosure on this ground.

However, UKLFI argued that the information was not confidential, as one of the audit reports had already been published.  Furthermore, the PA was not a State: the UK had not recognised the PA as a State, it did not meet the criteria for the existence of a State, and to recognise it as such would conflict with the Oslo Accords.

UKLFI also argued that the Memorandum of Understanding between DFID and the PA dated 7 July 2011 emphasised the importance of public accountability of the PA. The PA could not legitimately expect that audit reports regarding the use of large sums transferred by DFID should be kept confidential.

Diplomatic Harm overridden by Public Interest

DFID also argued that the audit reports were exempt from disclosure because disclosing them would prejudice the interests of the UK abroad.  The PA, who had provided the reports to DFID, had refused permission for the disclosure.  DFID claimed that if it disclosed the information against the PA’s wishes, this would lead to a breakdown in diplomatic relations.

The Information Commissioner agreed that harm could be caused to the relationship between the UK and the PA if the information were disclosed contrary to the PA’s expressed wishes.

However, the Commissioner found that the public interest in disclosing the documents was a most important consideration, and overrode the harm that may be caused diplomatically by going against the PA’s wishes.

Suspicion of Wrongdoing

UKLFI argued that the public interest in disclosure of the documents was extremely strong in this case since false information provided by DFID appears to have facilitated the continuation of a policy under which large sums of British public money have been used to reward and encourage murder.

The Commissioner said that “where there is some suspicion of wrongdoing, this may prove to be a relevant factor that needs to be considered as part of the public interest considerations.”

“There must be a plausible basis for the suspicion, even if it is not actually proven”.

“the Commissioner recognises that the complainant has cited the PMW report as evidence to support his position.  Furthermore, and in the Commissioner’s opinion of arguably more significance, is the fact that similar concerns have been raised in Parliament.  In the Commissioner’s opinion this suggests that disclosure would serve a wider public interest …”.

“..  the Commissioner considers there to be a significant public interest in the disclosure of the withheld information….”

“Moreover, in the Commissioner’s opinion, the severity of the allegations arguably increases the public interest in the disclosure of information.”

“by a narrow margin, the Commissioner has concluded that public interest favours disclosing the withheld information.  She has reached this conclusion given the importance of the UK being open and transparent about how it ensures that the aid funds are used appropriately.”

The full decision is available HERE:    Decision of ICO re DFID