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Palestinian Authority Secretly Paid Terrorists $200M

January 28, 2026 • by DailyClout

Despite public assurances that the controversial “pay-to-slay” system had been dismantled, new findings from the U.S. State Department indicate that the Palestinian Authority continued transferring hundreds of millions of dollars to convicted terrorists and their families through a rebranded payment mechanism in 2024 and 2025.

A non-public State Department notice provided to Congress and later reported by the Washington Free Beacon concludes that the Palestinian Authority (PA) merely shifted the structure of the program rather than ending it. According to the notice, Israeli intelligence estimates that the PA funneled approximately $144 million in 2024 and committed at least $214 million through 2025 to individuals imprisoned for terrorism and to the families of deceased attackers.

A Program Renamed, Not Ended

In February 2025, PA President Mahmoud Abbas publicly claimed that the pay-to-slay program had been terminated. He announced that future welfare assistance would be distributed based solely on economic need, not on imprisonment for terrorism or participation in violent attacks.

However, the State Department’s findings tell a different story.

Rather than eliminating the payments, responsibility was transferred to the Palestinian National Foundation for Economic Empowerment (PNEEI), an entity framed as a civilian welfare organization. According to the department’s assessment, this shift was cosmetic.

“Despite changing the mechanism for doing so, the PA continued the payments to Palestinian terrorists and their families during the reporting period,” the State Department wrote.

The report concludes that compensation was simply routed through a new institutional channel “under the guise of social welfare,” allowing the PA to maintain the same incentives while attempting to evade international scrutiny.

Continued Payments, New Delivery Methods

The State Department further determined that between March and August 2025, the PA actively notified beneficiaries that funds were available using post offices, social media platforms, and encrypted messaging apps. This, the department noted, demonstrated clear intent to preserve the system rather than dismantle it.

These methods, according to the notice, were used to obscure donor oversight while ensuring recipients continued to receive payments tied to acts of terrorism.

The findings directly contradict Abbas’s public statements. Only weeks after announcing the program’s termination, Abbas reportedly told the Fatah Revolutionary Council:

“Even if we only have one cent left, it will be for the prisoners and martyrs.”

Violation of U.S. Law

The continued payments place the PA in direct conflict with the Taylor Force Act, a 2018 U.S. law that froze American aid to the PA until such payments ceased. The law was named after Taylor Force, a U.S. Army veteran murdered by a Palestinian terrorist in Tel Aviv.

The State Department concluded unequivocally that the PA remains non-compliant:

“A shift to a potential welfare system without ending specific payments and benefits for Palestinian terrorists and their families is not compliant with the provisions under the Taylor Force Act.”

In effect, the department stated, the PA is still operating a compensation-for-terrorism program—only under a different name.

Implications for Gaza Governance Plans

The findings arrive as the Trump administration works to implement the second phase of its postwar Gaza framework, which explicitly bars the Palestinian Authority from participating in reconstruction or governance efforts unless it undergoes substantive reforms—including the full termination of pay-to-slay.

While the PA has no formal role in Gaza’s postwar administration, the issue is complicated by the appointment of Ali Shaath, head of the newly created National Committee for the Administration of Gaza. Shaath, a civil engineer by training, has previously held senior roles within PA institutions, raising concerns about indirect PA influence.

The State Department’s notice suggests these connections undermine claims that the PA has meaningfully reformed.

Payments Beyond Direct Oversight

Further concerns were raised by Palestinian Media Watch, which reported that payments now appear to be continuing in jurisdictions beyond the reach of direct donor monitoring, including Jordan and Lebanon.

According to PMW, a Fatah official recently acknowledged that Abbas intends to maintain payments to all recipients, even if doing so requires operating outside PA-controlled territories.

“The PA has clearly not yet determined how to do so in the PA areas without attracting international scrutiny,” PMW reported, “but Abbas has indicated his intent to maintain payments to all recipients.”

A Test of Reform Credibility

For years, international donors have treated Palestinian Authority reform promises as prerequisites for aid restoration and diplomatic legitimacy. The State Department’s findings raise serious doubts about whether those promises are being honored—or merely repackaged.

By continuing payments through renamed institutions and alternative delivery systems, the PA appears to be attempting a familiar maneuver: preserving politically indispensable policies while signaling compliance to foreign governments.

The implications are far-reaching. As long as financial incentives for terrorism remain intact, claims of reform ring hollow—and U.S. law, diplomatic engagement, and regional stability efforts remain at odds with realities on the ground.

Sources

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