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Kerry and Blair’s $4 Billion Mystery Plan for Palestine: Crony capitalism under the guise of peace?

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U.S. Secretary of State John Kerry discusses Middle East peace with Quartet Representative Tony Blair at the Villa Taverna, the U.S. ambassador’s residence in Rome, Italy, on May 9, 2013.
(Photo, and caption: U.S. State Department)

The recent World Economic Forum in Amman, Jordan, was billed as the Obama administration’s milestone moment for reviving the comatose US-led peace process. Announced days before in a nationally televised address by the President, Secretary of State John Kerry appeared at the forum to lift sinking hopes about the possibility of a two state solution.

Upon arriving, Kerry took in speeches by two billionaires who sought to claim leading roles in the cause of peace: the Israeli high tech baron Yossi Vardi, and Munib Al-Masri, the Palestinian oligarch known as the “Duke of Nablus” for his Italian revival style mansion, which sits on a hill above the poverty stricken Balata Refugee Camp.

Peres, Kerry and Abbas (Photo: Associated Press)

Next, Kerry arranged a handshake between Palestinian Authority President Mahmoud Abbas and Israeli President Shimon Peres, bringing two unelected figures together for a symbolic photo-op intended to summon fond memories of the halcyon days of Oslo. And finally, the Secretary stood at the lectern to tell his rapt audience about “a plan for the Palestinian economy that is bigger, bolder and more ambitious than anything proposed” in the last two decades.

In a speech brimming with optimism, Kerry introduced an ambitious initiative that promised to turn the whole situation around. Calling it, “Breaking The Impasse,” Kerry claimed the plan would triple tourism to the occupied Palestinian territories, double or triple Palestinian agriculture production, increase the Palestinian GDP by 50 percent, and foster the construction of a whopping 100,000 new, energy efficient Palestinian homes in the West Bank.

Kerry gushed about a dream team of “experts” that had supposedly gathered to implement the project. Pushing back against the naysayers, he asked, “Is this a fantasy? I don’t think so, because there are already great examples of investment and entrepreneurship that are working in the West Bank. We know it can be done, but we’ve never experienced the kind of concentrated effort that this group is talking about bringing to the table.”

The word “occupation” was not uttered once in Kerry’s address.

As soon as he left the stage, Kerry hustled off to a meeting with Timothy Collins, a philanthropist and top Democratic donor who operates a leveraged buyout firm called Ripplewood Holdings. Ripplewood was most recently credited with overseeing the wholesale liquidation of Hostess, losing all of the $130 million it invested in the firm and terminating 18,000 union jobs. “What’s happening with Hostess Brands is a microcosm of what’s wrong with America, as Bain-style Wall Street vultures make themselves rich by making America poor,” said Richard Trumka, the president of the AFL-CIO union federation.

Also on Kerry’s agenda were meetings with the foreign ministers of the United Arab Emirates and Jordan. He was a busy man – too busy, apparently, to discuss his big, bold plan with the media.

Stonewalling Reporters, “Absurd Rhetoric”

Days later, little is known about “Breaking The Impasse.” How the plan is any different from the economic bailout George W. Bush proposed for the Palestinian Authority at the World Economic Forum in 2008 is anybody’s guess. The names of the economic dream team Kerry promoted have not been publicly revealed, nor has any reporter been able to obtain a single specific detail of the plan.

Nearly all that is known is that Tony Blair, the Special Envoy of the Quartet, had been placed in charge of the initiative.

My email and telephone queries to Ruti Winterstein, Blair’s Political and Media Advisor at the Quartet offices in Jerusalem, have not been answered. The few Jerusalem and Ramallah based reporters who requested particulars about the initiative were unable to get any answers either, with one correspondent telling me they were being stonewalled by Blair and Kerry’s people.

David Horovitz, the editor-in-chief of the Times of Israel, said he was told by “various insiders” that Kerry had been thoroughly briefed on the specifics of the plan, and that he and the economic team were due to meet during the conference. “That didn’t happen,” Horovitz wrote. In the end, Horovitz wound up mocking Kerry for his “absurd rhetoric.”

A press release posted on May 26 on the Quartet Representative’s website suggests that specifics are not immediately forthcoming, stating that the Quartet “will provide further details of the potential options for investment, job creation and economic growth in the West Bank, Gaza and East Jerusalem in due course.”

Back in 2011, Blair declared that “time was short” on reaching peace in the Middle East. This April, Kerry proclaimed that “the window for a two state solution is shutting. I think we have some period of time a year,” he warned, “a year and a half, to two years or its over.”

If the situation is so urgent, why has Blair’s office been unable to offer anything more than vague promises to get down to business “in due course?” And why was Kerry unwilling to discuss details of a plan he touted as a potential game-changer?

It may be that Kerry’s announcement was a trial balloon the authors of the initiative floated before deciding to roll out a formal blueprint. There is also the strong possibility that the big, bold, plan was just a fantasy, after all.

Whether the plan is a non-starter or simply non-existent, it is now in the hands of Blair, an ultra-connected man on the make.

Failing upwards with Tony Blair Inc.

On the day he resigned as British PM, Blair took on the role of official envoy of the Quartet. And since that day, he has accomplished little of substance in occupied Palestine. As the veteran Israeli reporter Akiva Eldar said of Blair’s work in the region, “if you judge by results, they are below zero.” Even the pro-Israel Saban Center at the Brookings Institute has slammed Blair’s record, declaring, “The Quartet has little to show for its decade-long involvement in the peace process…. The current mechanism is too outdated, dysfunctional, and discredited to be reformed.”

Blair is reportedly despised by Palestinian Authority officials, who yearn to see him clear out the luxury penthouse he rented in East Jerusalem and head back to his late-18th century Georgian townhouse in London. Already, they have rejected his “Breaking The Impasse” plan, with a PLO official telling Hugh Naylor of The National that the initiative was “not an alternative to resolving the political issues we face.”

But Blair’s gig as Quartet envoy has allowed him to remain in the international spotlight, where he cultivates an image as a tireless dealmaker wading into a seemingly intractable conflict with the best of intentions. While claiming credit for breakthroughs that few on the ground in Palestine seemed to notice, Blair established a vast business empire, advising banks, corporations, and governments – including the dictatorship of Kazakhstan — while tapping a vast web of advisors to help him ink deals around the globe. Since 2007, Blair and his network of firms have earned over $90 million, a vivid demonstration of how Tony Blair the special envoy propels Tony Blair Inc.

In 2008, Blair took up a consulting position at JP Morgan worth around $2 million a year, and perhaps more. Back in occupied Palestine, Blair took credit for persuading Israeli administrators to open up radio frequencies to allow the Palestinian telecom company, Wataniya, to provide service in the West Bank. The deal reaped a major windfall profit for Blair’s employer, JP Morgan, which happened to have provided the $2 billion loan that brought Wataniya into existence. Indeed, Wataniya was owned by the Qatari telecom giant QTEL, which was one of JP Morgan’s top clients. Detailed in the UK Channel 4 documentary, “The Wonderful World of Tony Blair,” the lucrative deal represented crony capitalism at its crudest.

In Gaza, meanwhile, Blair has pushed to allow the development of a huge natural gas field located inside Gaza’s territorial waters. Discovered by the British Gas, another client of JP Morgan, Blair stands to generate another huge profit for his employer if the field is fully developed. Already, he has blocked British Gas from selling Gaza’s gas to Egypt, which would have provided it directly to Gaza, requiring the company to sell it to Israel instead.

Blair reportedly intended to funnel Gaza’s gas profits into an international account controlled by Abbas, circumventing Gaza’s Hamas authorities in a bid to promote economic collaboration between Israel and the PA. Given Israel’s long record of withholding revenue in from the PA, and doing so in bad faith, it appears unlikely that much of the gas profits will ever make into Palestinian hands. If any of it does, it may only wind up enriching the small circle of oligarchs who dominate the increasingly stratified Palestinian economy.

Blair’s record of questionable wheeling and dealing raises serious questions about the “Breaking The Impasse” plan – to the extent that it is a plan at all. Is this initiative just another slush fund for Blair and his business partners? Will executives from JP Morgan clients like Wataniya be involved? What about Qatar’s ruling Al-Thani family, who own Wataniya and are major investors in PADICO, the private investment holding firm chaired by Blair’s billionaire friend, Munib Al-Masri? And what role, if any, will Tim Collins, the Bain-style “vulture capitalist,” play?

Though details are impossible to come by, it is hard to imagine that any plan overseen by Blair and his associates will bring much relief to ordinary Palestinians subjected to the toxic blend of military occupation and neoliberal experimentation.

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U.S. Secretary of State John Kerry greets former British Prime Minister Tony Blair as the two attend the World Economic Forum in Dead Sea, Jordan, on May 26, 2013.
(Photo: State Department)
Max Blumenthal

Max Blumenthal is an award-winning journalist and bestselling author.

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38 Responses

  1. just on May 31, 2013, 5:44 pm

    “Blair is reportedly despised by Palestinian Authority officials, who yearn to see him clear out the luxury penthouse he rented in East Jerusalem and head back to his late-18th century Georgian townhouse in London”

    I ‘despise’ and distrust the Poodle, too. I have hope for peace, otherwise I would go entirely mad, but I think this is “crony capitalism”, indeed.

    Thanks Max.

  2. James Canning on May 31, 2013, 6:13 pm

    I applaud measures intended to enhance economy of West Bank without hurting the environment.

    John Kerry should take every chance he gets to make clear, off-the-record, that the “1967” borders will have to be accepted by Israel.

    • talknic on June 1, 2013, 3:15 am

      “1967″ borders

      No such thing … yet.

      Israel has never legally annexed any territory to its internationally recognized sovereign extent of 1948 “.. the state of Israel has been proclaimed as an independent republic within frontiers approved by the General Assembly of the United Nations in its Resolution of November 29, 1947” Thus Israel was recognized and accepted into the UN.

      • pabelmont on June 1, 2013, 8:20 am

        “talknik recites, unsourced: : .. the state of Israel has been proclaimed as an independent republic within frontiers approved by the General Assembly of the United Nations in its Resolution of November 29, 1947″.

        Oh how I hate such formulations, by whomever and whenever made. “Within frontiers” suggests “bounded by frontiers and consisting of all territory within frontiers” but it also permits the reading that it means “not outside (but possibly quite a bit smaller than)” the land bounded by the frontiers.

        At any rate, the 1947 proposed boundaries were far smaller than 1950-1966 Israel. As to legal annexation, I don’t know what would be “legal” or “illegal” about annexation, but the UNSC has gone on and on (and on and on) (always without sanctions for enforcement) stating that Israel’s efforts to extend its boundaries (Golan, East Jerusalem, etc.) are without legal force, so perhaps it is these pronouncements that create the legal rules for “legal” annexation in this case.

      • James Canning on June 1, 2013, 7:37 pm

        @Pabelmont – – All Arab countries have agreed to accept 1966 border as Israel’s border. This, with UN usage, would seem to be significant.

      • talknic on June 1, 2013, 8:23 pm

        pabelmont “talknik recites, unsourced..”

        “At any rate, the 1947 proposed boundaries were far smaller than 1950-1966 Israel. “

        The boundaries Israel asked to be recognized by and was recognized by are those of UNGA res 181. Confirmed in the Israeli Government statement to the UNSC May 22nd 1948

        The 1949 Armistice Agreements specifically did not change any territorial boundaries.

        Article V
        1. The line described in Article VI of this Agreement shall be designated as the Armistice Demarcation Line and is delineated in pursuance of the purpose and intent of the resolutions of the Security Council of 4 and 16 November 1948.
        2. The Armistice Demarcation Line is not to be construed in any sense as a political or territorial boundary, and is delineated without prejudice to rights, claims and positions of either Party to the Armistice as regards ultimate settlement of the Palestine question.

        Israel’s first claim to territories “outside the State of Israel” … “in Palestine” (ibid) was on the 31st Aug 1949

        FOR PALESTINE, citing the Armistice Agreements.

        “.. I don’t know what would be “legal” or “illegal” about annexation…”

        1933 Montevideo Convention on the Rights and Duties of States required Israel to have A) a defined territory and; B) codified the illegality of acquiring territory by war. (codified by the citing of pre-existing International Law. Only two states, Brazil and Peru, accepted the doctrine of inadmissibility of acquiring territory by war in principle, tho they did not consider it codifiable)

        “ARTICLE 1 The state as a person of international law should possess the following qualifications: a ) a permanent population; b ) a defined territory

        ARTICLE 11
        The contracting states definitely establish as the rule of their conduct the precise obligation not to recognize territorial acquisitions or special advantages which have been obtained by force whether this consists in the employment of arms, in threatening diplomatic representations, or in any other effective coercive measure

        Legal annexation embraces the right to self determination. E.g., by 1854 US had adopted the legal custom of annexing via an agreement with the party whose territory was to be annexed, either through a referendum of the legitimate citizens of the territory to be annexed (the Mexican citizens of Texas ), or by some other agreement mechanism, as with Hawaii & Alaska. Although the US bought Alaska, it was not sovereign to the US until annexation, which was by agreement.

        The US was instrumental in this customary legal method passing into what is known as Customary International Law under which the UNSC condemned Israel’s unilateral annexation of East Jerusalem. UNSC res 252 and EIGHT reminders and UNSC Res 497 (Golan)

        Re – the territories acquired by war by Israel by May 11th 1949 and the signing of the 1949 Armistice Agreements. The UN can only tell UN Members how they may or may not act towards non-members, it cannot directly censure non-members. Thus there are no UNSC resolutions directly censuring Israel for acquiring territory by war prior to becoming a UN Member, even though the acquisition of territory by war was inadmissible under the 1933 Montevideo Convention.

        Israel must, but has not yet attempted to, annex any of the territories it acquired by war before becoming a UN Member. If Israel now attempts to annex unilaterally, it will be condemned by the UNSC.

        Contrary to popular belief, it is Israel who MUST negotiate an agreement with the Palestinians in order to circumvent the legal consequences of 65 years of illegal activities. The Palestinians meanwhile are under no legal obligation to forgo any of their rights, even in negotiations. Their incredibly generous offer of 2011 and 2012 were ignored by Israel.

  3. James Canning on May 31, 2013, 6:15 pm

    Apparently the Saudi and Qataris have put a few billion dollars into supporting the insurgents in Syria. Perhaps putting that money into the West Bank would have been wiser?

  4. gingershot on May 31, 2013, 6:23 pm

    Kerry’s just got to find the right Indian wanting to sell Manhattan – whoops – there he is!

  5. DICKERSON3870 on May 31, 2013, 7:22 pm

    I love that photo of Kerry (with his back to the camera) greeting former British Prime Minister Tony Blair as the two attended the World Economic Forum. Just look at the expression on Tony Toady Blair’s face as Kerry greets him. Would you buy a used car from that man (Blair)? I sure as hell wouldn’t! ! !

    ● I Taut I Taw a Puddy Tat [VIDEO, 02:56] –
    ● Bugs Bunny and Elmer Fudd battle-cartoon (Un-censored) [VIDEO, 07:08] –

  6. Bumblebye on May 31, 2013, 8:24 pm

    No-wonder scumbag Blair has built nearly impenetrable walls around the sources of his sudden, post-office fortunes. How does one go from a big mortgage on a fairly average London house on becoming PM, to multi-millions in the bank? As much as possible protected from the tax-man of course. I always swear I could see the £ signs in his eyes, could see him setting his ducks in a row, in the run up to Iraq. He’ll do nothing of any substance whatsoever for Palestine.

    • pabelmont on June 1, 2013, 8:22 am

      Au contraire, he’s already done much of substance — for himself at least and therefore for whomever is paying him. But against, not for, Palestine. Colonialism is not dead. Blair is one of its most effective prophets.

      • James Canning on June 1, 2013, 7:14 pm

        Blair has indeed grown quite rich, since leaving No. 10.

        But, prophet of “colonialism”?

    • seafoid on June 1, 2013, 4:20 pm

      Blair needs 24 hour protection whenever he enters the UK. He will never get over Iraq, no matter how much money he makes.
      Someone described him as the equivalent of a loose horse at the Grand National.
      He has all the PR credibility of a rat.

      • James Canning on June 2, 2013, 1:40 pm

        @Seafoid – – One of Blair’s clients pays him $2,500,000 per year for advice. Meaning, apparently, connections to rich and powerful people. Blair is a fixer, essentially.

  7. Dan Crowther on May 31, 2013, 8:59 pm

    kind of always assumed “neo-liberal hell-hole” was going to be the price paid for “independence” – it’s the same everywhere.

    • seafoid on June 2, 2013, 1:50 am

      It wouldn’t even be independence, Dan, The bots have always thought there is a perfect balance of money and violence to deal with the neighbours but they are so full of sh#t.

  8. Les on May 31, 2013, 10:21 pm

    It’s not Britain or Blair, but US taxpayers that pay bag lady Abbas his salary for work as a longstanding loyal employee.

    • James Canning on June 2, 2013, 1:47 pm

      @Les – – Tell us what you think Abbas should have done, that he has failed to do. In a nutshell.

  9. talknic on May 31, 2013, 10:51 pm

    Anything BUT require Israel to adhere to the law. Kerry, Netanyahu, Blair, are quite insane.

  10. Blownaway on May 31, 2013, 11:00 pm

    Lord Owen then went further. He suggested that Cameron and Blair have entered into a private deal: Mr Cameron is helping to prevent publication of vital documents, essential to discovering the truth about the background to the Iraq War, in return for political support for the Tories. “No 10 reveals that they are in constant contact on many issues with Tony Blair and Blair’s own people confirm this,” he said. “Not for nothing does Cameron see himself still as the ‘heir to Blair’. It is hard to escape the conclusion that No 10 hopes to… win the neutrality or possibly tacit support of Blair by the General Election.”
    Many people will be eager to dismiss Lord Owen’s allegation, and no wonder. He is in effect asserting that there is an active conspiracy between past and present prime minister to hide the truth about Iraq. It sounds absurd.
    Nevertheless, Lord Owen’s comments deserve to be taken seriously, and not simply because he is a former foreign secretary and privy counsellor who knows the issues – and many of those involved – extremely well. For example, he is right to draw attention to the political closeness between Tony Blair and the current Prime Minister. It is true that Tory strategists have long worked on detaching Tony Blair from Ed Miliband, just as Blair in his day successfully encouraged Margaret Thatcher to turn on John Major. Indeed, the Blair business empire, which has made millions giving very profitable advice to Middle Eastern and African dictators, could not exist for a second without the implicit consent of the Foreign Office.

    Read the whole [email protected]

    • pabelmont on June 1, 2013, 8:31 am

      Forgive us our trespasses.

      “Many people will be eager to dismiss Lord Owen’s allegation, and no wonder. He is in effect asserting that there is an active conspiracy between past and present prime minister to hide the truth about Iraq. It sounds absurd.”

      This reminds me of the Obama administration’s ever-eager willingness to overlook (and presumably to continue) (war) crimes committed by the Bush administration. And crime-like acts by big banks. But, of course, a conspiracy requires an agreement, and perhaps Obama — without any agreement — is merely hoping that whoever follows him will excuse the crimes of his administration as he has forgiven those of the Bushies.

  11. annie on May 31, 2013, 11:54 pm

    no more twinkies?

  12. annie on June 1, 2013, 12:10 am

    the day after obama won the last election blair was on hand to hold netanyahu’s. they held a mini press conference talking about ‘re-energizing’ the ‘peace process’. what joke, you can watch the little video they made together here:(scroll)

    blair is such a lapdog.

    • DaveS on June 1, 2013, 7:59 am

      Annie, that short video was both enlightening and nauseating. Anyone who has the slightest confidence in this lapdog’s potential to make a positive contribution is self-delusional.

      • Maximus Decimus Meridius on June 1, 2013, 9:02 am

        Blair is truly one of the most despicable individuals on the world stage. It’s good to be reminded of that, lest we forget. The fact that he could become leader of anything with the words ‘Middle East’ and ‘peace’ in it is beyond a joke. As George Galloway memorably said, it’s a bit like putting Count Vlad Dracul in charge of the blood bank.

    • James Canning on June 1, 2013, 7:43 pm

      Blair is making many millions of pounds per year, partly by pleasing rich powerful people.

  13. Xpat on June 1, 2013, 12:25 am

    Thanks, Max for this well-researched report.

    Interesting to see Kerry adopt classic liberal Zionist imagery: the almost closed window/door and the 90th minute/the 11th hour.

    As you show, Blair is depraved. My take on Kerry is that he feels he first has to put in some hard work and enthusiasm on Israel/Palestine. After his inevitable failure (prophesied in the soon to be closed window), he can drop I/P with dignity and move on to being a successful Secretary of State elsewhere.

  14. DaveS on June 1, 2013, 8:02 am

    Max, that’s a great report. How long will it be before Palestinians are blamed for spurning this generous opportunity to improve their condition, for focusing more on “destroying” Israel than building their own country, or society, or whatever minuscule scrap of political independence they might be thrown?

  15. tidings on June 1, 2013, 1:30 pm

    I’ve just remembered reading about the Rand Corporation’s plan for the West Bank (and more). The most recent reference is 2011, pre-Kerry but not pre-Blair.

    • James Canning on June 2, 2013, 1:42 pm

      @Tidings – – Any opinion on the aesthetics of the Rand proposals for the West Bank?

      Surely it is a good idea for better public transport to be built in the WB.

  16. American on June 1, 2013, 3:03 pm

    oh gawd, oh gawd, oh gawd, oh gawd……another 4 billion rip off, that if it ever gets off the ground will end up in the pockets of Israelis and Blair…and the current Israeli settlers and the ones Isr will move in to take advantage of Palestine economic package.
    Please…someone just bomb DC so we can save the rest of the country.

    • ToivoS on June 3, 2013, 12:51 am

      It is not that bad. Based on the Oslo process we can also break down that $4 billion into these categories: at least 3 to 5 hundred million will go PA officials for their own use and perhaps a billion will go to PA security forces to pay salaries for those whose job it is to suppress Palestinian uprisings. The Israelis will of course take the biggest cut, as they always do, but I would be surprised to see Blair clear more than a few tens of millions of dollars.

      It doesn’t help to exaggerate. After all Blair has only made about $90 million since leaving office.

  17. Citizen on June 2, 2013, 7:22 am

    Mystery Plan–Mystery meat is a disparaging term for meat products, typically ground or otherwise processed, such as chicken nuggets, Spam, Salisbury steaks, sausages, or hot dogs, that have an unidentifiable source. Most often the term is used in reference to food served in institutional cafeterias, such as prison food or an American public school lunch.
    The term is also sometimes applied to meat products where the species from which the meat has come is known (e.g., cow or pig), but the cuts of meat (i.e., the parts of the animal) used are unknown. This is often the case where the cuts of meat used include offal and mechanically separated meat, where explicitly stating the type of meat used might diminish the perceived palatability of the product to some consumers.

  18. quirx on June 2, 2013, 10:10 am

    Even though Blair’s chicanery is well known (and well deserved), keep in mind that there are many in Israel who are hoping that this will never come to fruition (as one commenter said-paraphrasing “What a relief Abbas didn’t take the bait”). There is a pervasive attitude that as long as false fronts are put up in the form of pre-conditions (the truly transparent and the not-quite-opaque) that are inherently odious to Palestinians, Israel can continue to claim that it is the Palestinians who are obstructurists because, “See? They refuse to even come to the table to negotiate!” This is becoming increasingly clear to Europeans (citizens and governments), and to Americans/Canadians (citizens) and the rest of the world who are not in the thrall of the brainwashing box. That number is rising daily, thank goodness.

  19. Citizen on June 2, 2013, 11:54 am

    Kerry has now protested twice in the last two weeks that settlement expansion is “not productive.” Pretty hilarious, if it was not so damn important. It’s hard to believe Kerry is unaware he’s carraying out a charade for Obama, so the latter can say he tried on his post-POTUS resume.

  20. James Canning on June 3, 2013, 7:38 pm

    @Citizen – – What do you think John Kerry can do, to stop the growth of the illegal colonies in the West Bank? Or, to help stop the growth of those colonies?

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