Speaking at a summit with Israeli Prime Minister Benjamin Netanyahu in Davos on Thursday, President Donald Trump ripped into his Palestinian counterpart. He threatened to withhold American assistance if the Palestinians don't return to negotiations. "All that money is on the table," he warned.
This is no empty threat. Washington provides hundreds of millions of dollars in direct assistance to the Palestinian Authority. But don't forget that the United States is also the largest single-state donor to the United Nations Relief and Works Agency (UNRWA), an organization that provides dedicated welfare assistance to the Palestinian Arab refugees from the 1948 Arab-Israeli war and millions of their descendants. The little-known agency was making headlines even before Davos; the Trump administration announced it was withholding some of the agency's funding, pending reform.
On its face, it would appear that the White House is depriving poor Palestinians of crucial aid. But it's not that simple. Since 1950, Joe Q. Taxpayer has contributed a whopping $6 billion to UNRWA—more than $1 billion in the past four years alone. As taxpayers, it's only fair to ask: What are we getting for our money?
The answer would prompt any sane donor to walk away. UNRWA has a staff of more than 30,000—roughly one per every surviving refugee from the 1948 war, according to some estimates. To put this into proportion: The world's leading refugee agency, the United Nations High Commissioner for Refugees (UNHCR), serves 17 million people with a staff of just under 11,000.
The contrast in performance metrics of the two agencies is even more striking. UNHCR prides itself on how many refugees it can resettle or integrate into host nations. UNRWA, by contrast, grades itself on how many more people it can put on its welfare rolls. This is why UNRWA, since the late 1950s, has officially recognized the descendants of the original refugees—the children, grandchildren, great grandchildren—as refugees. The result is that UNRWA's numbers have swelled to more than 5 million. This has led to eye-popping budgets, but also an over-inflated refugee problem that becomes harder for the international community to solve with each passing year.
As the largest donor, it would seem like a no-brainer that Washington should ask for some accountability, but that hasn't been the case until now. A decade ago, when Congress mandated an independent expenditure audit of UNRWA's cash assistance program—quite literally hundreds of millions of dollars in cold cash handed out to people without regard for terrorist affiliations—UNRWA refused to allow the Government Accountability Office to comprehensively audit the books. GAO concluded, "internal UNRWA audits do not assess controls for all cash assistance programs or whether contracts contain antiterrorism clauses." Amazingly, the State Department forked over its full contribution the next fiscal year.
And the problem doesn't end with financial audits. During the most recent Israeli war with Hamas, in 2014, UNRWA schools were used as launching pads for rocket attacks against Israeli civilians. Prior to that, the headmaster of an UNRWA school was even found moonlighting as a terrorist. Astonishingly, neither event stopped the State Department from writing its lump-sum check.
That's right: Every year the United States hands over its annual contribution to UNRWA in one lump sum, in the beginning of the year, only to see the agency declare an emergency appeal for more money well before the year's end. The lack of basic management expectations for UNRWA has become so institutionalized that the State Department budgets for both a regular and emergency contribution in advance.
While many believe the U.S. should simply end further contributions, the Trump administration has yet to cut a single penny from UNRWA. All it's done so far is change its method of donations from one lump sum gift to a series of tranches based on performance and reform—while reserving the right to withhold payment if it is not satisfied.
UNRWA's leadership and supporters are now howling with displeasure. A campaign is now underway to portray the U.S. as taking food and medicine out of the hands of children and the elderly. It's worth noting here that this would be the case only if UNRWA has already burned through the $60 million the U.S. doled out a few weeks ago. But also: Since when does a United Nations-run agency have the right to demand an annual gift from the U.S. taxpayer, let alone dictate the schedule on which those gifts are made? These are voluntarily charitable donations, not mandatory assessments.
If the U.S. is expected to continue as UNRWA's biggest benefactor, the management of the agency needs to fundamentally change. The U.S. should assume a permanent role in the agency's governance. This could include the installation of U.S. Ambassador to the U.N. Nikki Haley, or (more realistically) one of America's other capable diplomats at the U.N. in New York, as its chair. With that title ought to come the basic oversight prerogatives reserved for any nonprofit's board of directors and top donors—establishment of performance metrics, evaluation of key staff, freedom to audit any program or expenditure, and the ability to shape the mission, mandate and future of the organization.
This does not mean that the U.S. should halt funding for those most in need. On the contrary. But there must be a plan to move UNRWA's 5 million dependents from international welfare to self-sufficiency.
The culture of hopelessness and permanent dependency in the Middle East breeds terrorism and violence. By contrast, economic self-sufficiency and advancement produce peace and tolerance. Today, UNRWA stands for the former; under American leadership, it can transform to the latter.
Jonathan Schanzer, a former terrorism finance analyst at the U.S. Department of the Treasury, is senior vice president at the Foundation for Defense of Democracies (FDD).
Richard Goldberg, a senior advisor at FDD, is a former staff associate for both the House and Senate Appropriations Subcommittees on State-Foreign Operations.