PALESTINE INVESTMENT FUND MOVED UNDER PRESIDENT

C O N F I D E N T I A L SECTION 01 OF 02 JERUSALEM 000585 SIPDIS SIPDIS NEA FOR FRONT OFFICE; NEA/IPA FOR WILLIAMS/WATERS/LOGERFO; TREASURY FOR NUGENT/ADKINS E.O. 12958: DECL: 02/06/2016 TAGS: EFIN KBIO KWBG SUBJECT: PALESTINE INVESTMENT FUND MOVED UNDER PRESIDENT ABBAS; NEW BOARD OF DIRECTORS NAMED Classified By: Consul General Jake Walles for reasons 1.4 (b) and (d). ¶1. (SBU) President Abbas issued a presidential decree February 4, 2006, that named a new board of the Palestine Investment Fund (PIF) and moved the PIF under the responsibility of the President and away from the PA cabinet. According to the presidential decree which the ConGen has seen, the chairman of the PIF board of directors is now a private individual and not the Finance Minister. New Board of Directors -------------- ¶2. (C) The presidential decree named the following members of the board of directors of the PIF: -- Chairman: Shokri Bishara Bishara was the former West Bank/Gaza regional director of Arab Bank and is now the Global Chief Banking Officer at Arab Bank headquarters in Amman. Bishara owns a residence in East Jerusalem and has a Jerusalem identity card. -- Member: Minister of Finance Acting Finance Minister Ahmed Quraya' currently fills this position but will be replaced by the Finance Minister in the next PA cabinet. -- Member: Minister of National Economy Minister of National Economy Mazen Sinokrot currently fills this position but will be replaced by the National Economy Minister in the next PA cabinet. Sinokrot, politically independent and a prominent businessman before joining the cabinet in February 2005, told the Consul General February 7 that Hamas has not approached him about serving in the next cabinet. -- Member: Managing Director of the PIF Effective January 1, Mohammed Moustafa was named the new Managing Director of the PIF, formally succeeding Mohamed Rashid. He is also the Economic Advisor to President Abbas and previously worked at the World Bank. -- Member: Nabil al-Sarraf Al-Sarraf is a businessman and Palestine Investment and Development Company (PADICO) board member He currently resides in Jordan but is originally from Gaza. -- Member: Samer Khoury Khoury has served on the PIF's board since its founding in ¶2002. He resigned from the board in February 2005 over the sale of the PIF's Orascom Algeria and Tunisia shares. He is the Executive Vice President of Operations of the Consolidated Contractors Group (CCC) and is close to Abbas. -- Member: Mohammed Abu Ramadan Abu Ramadan is a Gaza-based businessman and member of the board of PalTrade, the public-private Palestinian trade promotion agency. -- Member: Talal Nasiruddin Nasiruddin has served on the PIF's board since its founding in 2002. He is the Chairman and Chief Executive Officer of the Birzeit Pharmaceutical Group. He also heads a local investment brokerage house, Lotus, and is the Chairman of the recently established al-Rafah Bank. He also serves on the board of directors of PalTel. -- Member: Tariq al-Akkad Al-Akkad is the Chairman and Chief Executive Officer of the Arab Palestinian Investment Company, a major vehicle for foreign and Palestinian diaspora investment in the West Bank and Gaza. JERUSALEM 00000585 002 OF 002 ¶3. (C) Comment: This presidential decree places the PIF more directly under the control of the office of the President; however, the PIF's sole shareholder will continue to be the Palestinian Authority. The next PA government could challenge this action and ask that the Palestinian Legislative Council overturn the decree. In the meantime, the billion dollar-plus portfolio of the PIF, though partly collateralized against PA commercial bank loans, is now more securely in the hands of President Abbas with a board that is of his choosing, except for the two ministerial slots. It remains unclear, however, to what extent the President plans to use PIF assets to address the PA's current fiscal crisis. End comment. WALLES