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Canada shrugs off Palestinian request to track down millions in stolen funds

There are two questions looming over the flap about accused embezzler Muhammad Rashid.

Why is the Canadian government dragging its feet on requests by the Palestinian Authority to help track down money the former senior official may have squirrelled away in Canada?

And how did Rashid manage to obtain Canadian citizenship and a passport while functioning as one of late president Yasser Arafat's right-hand men in Palestine?

According to the Globe and Mail, Rashid is wanted by the Palestinian Authority after being convicted in absentia last year of purloining $34-million in his role as head of the Palestinian government's investment company. He's facing 15 years in prison and a $15-million fine.

Rashid is reportedly living in London, beyond extradition, but the Palestinian Authority has been trying to recover allegedly stolen funds. The Globe reports its Foreign Affairs Minister, Riad Mailki, has written to Canadian Foreign Affairs Minister John Baird personally requesting Canada's help.

What Mailki apparently got was the brush-off. Although Canada has diplomatic relations with the Palestinian Authority, Foreign Affairs spokeswoman Amanda Reid told the Globe it does not have a formal legal-assistance treaty with the authority, which would facilitate investigative help.

"Our capacity to assist is limited," Reid said.

The issue, which has made headlines in the Middle East, may come up in Baird's swing through the region, which includes stops in Iraq, Israel, the West Bank and Jordan.

Canada's relations with the authority have been frosty ever since last fall, when it successfully won recognition at the United Nations as a non-member observer state. Canada, one of a handful of countries that opposed the move, temporarily recalled its diplomats but Baird stated it would not cut ties with the authority, the Toronto Star reported at the time.

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Baird, on the eve of his Middle East trip, made no commitment to renew a five-year, $300-million aid package that expired at the end of last month, The Canadian Press reported. He said he wanted to talk with the Palestinian leadership first and noted the Harper government has fundamental differences with the authority.

Ironically, the aid program includes measures to strengthen the Palestinian justice system.

The Palestinian government also asked Interpol to issue an international arrest warrant for Rashid but was turned down because Palestine is not a recognized state, the Globe said. That's left the authority to fall back on the good will of countries, like Canada, whose help it needs.

Rashid was Arafat's chief financial adviser and headed a company that made more than $700 million in investments, the Globe reported.

But like many things in the Middle East, there are wheels within wheels, which many account for Canada's reticence.

The National Post noted Rashid may have been targeted because he fell afoul of Arafat's successor, Mahmoud Abbas, after the Palestinian leader died in 2004. As accusations of corruption swirled, Rashid accused Abbas of amassing $100 million and demanded the source of that wealth be investigated, the Post said.

The more interesting question for Canada is how Rashid apparently obtained Canadian citizenship despite little evidence he lived here. He was at Arafat's bedside when he died.

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The Globe said sources confirmed Rashid was granted citizenship in 2003. He apparently had lived in the West Bank for the previous eight years, though he moved to Cairo for a while in 2003 after a dispute with Arafat.

To qualify for Canadian citizenship, a person must live in Canada for three of the four years prior to making an application. Only the federal cabinet can waive those requirements, the Globe said, adding it's not known if Rashid claimed on his application that he lived in Canada. The government declined to comment, citing privacy laws.

Rashid was a member of the board of directors of Bioniche Life Sciences of London, Ont., after making an investment in the pharmaceutical firm in 1999, the Globe said.