Watchdog group cites corruption in Palestinian areas

RAMALLAH, West Bank (Reuters) - The Palestinian territories saw some improvement in public finance management in 2008 but corruption in other areas was still high, a Palestinian transparency group said in its annual report on Wednesday.

The Coalition for Accountability and Integrity said that while there was more transparency in disclosing the finances of the Palestinian Authority, there was still a "general weakness in the system of combating corruption."

In its 41-page report, the group cited better transparency in employment in the public sector and in public tendering.

But it added:

"Despite these reforms, many forms of favouritism, nepotism, misappropriation of public money and abuse of public position continue to impact many sectors of the Palestinian society."

The lack of an effective Palestinian Legislative Council (PLC) meant many anti-corruption bills were unratified, the group said. They would have covered areas such as the right to access information, privatization, and an anti-graft commission.

Corruption has also spread to some domains of the private sector, mainly because of a lack of oversight by the PLC, the report said.

Parliament has not been functional since Israel jailed top lawmakers and because of the open schism between the rival Palestinian factions, pro-Western Fatah and Islamist Hamas.

The Islamist group won a majority in the 2006 election in part by seizing on allegations that Fatah and its Palestinian Authority were rife with corruption.

Palestinian President Mahmoud Abbas sacked the Hamas-led government after the group seized control of the Gaza Strip in June 2007. Hamas remains in power there but Abbas appointed his own administration which runs the Israeli-occupied West Bank.

The physical and administrative division has made it difficult to enforce accountability, allowing both administrations to operate with little oversight, the report said.

(Writing by Mohammed Assadi; editing by Tim Pearce)