PLO's pinstripes, money behind fatigues and guns

In the rubble-strewn Beirut suburb of Fakhani there is a dingy basement workshop hidden off the main road. Passers-by would notice it only because of the echoing hum of 40 ancient Japanese sewing machines zipping together brown-and-white gingham aprons and green corduroy jeans. This is an enterprise of the Palestine Liberation Organization (PLO).

In the outlying district of Burj-Al Barajne there is a converted, sawdust-covered warehouse where 155 men cut and sand frames for bedroom suites, rocking chairs, and velvet loveseats.This is also a PLO-run factory.

And just off one of Beirut's main boulevards is the ultramodern headquarters of Rock Cinematographic Industries, where a team of 27 Western-trained technicians dub American and British films into Arabic -- under the watchful poster-eyes of Greta Garbo, Charlie Chaplin, Clark Gable, and King Kong. "Rock" is a third PLO business.

Each represents an emerging trend within the Palestine Liberation Organization: After 17 years as a notorious guerrilla group, the PLO is also becoming synonymous with big business in the Middle East.

With 6,500 full-time employees, and another 4,000 part time, the revolutionary group ranks as one of the largest employers in Lebanon, according to a Western diplomat. That is entirely separate from the activities of 15,000 guerrillas in the PLO's eight military factions.

The civilian enterprises grossed some $40 million in fiscal 1980, according to general manager Ahmad Abu Ala, from nine consumer product companies, a film studio, two farms in Syria, and six model agricultural projects in Africa.

And that is only a small percentage of the billion-dollar budget of the PLO, which includes an investment portfolio on Wall Street, partial control of a management consultancy business, a contracting company, millions of dollars in high-interest US money markets and other investments in Mexico, Switzerland, France, Germany, and Japan.

Salah Dabbagh, a US-trained lawyer and chief PLO fund-raiser, refuses to give specific breakdowns. But he will admit, with a twinkle in his eye, that the PLO budget is larger than those os many small countries.

The internal businesses represent the most interesting aspect of what local observers have begun to call "PLO, Inc." "Samed," an Arabic word for steadfastness, is the official name of the PLO's entrepreneurial wing.

Started in 1969 with only six sewing machines in a Palestinian refugee camp in Jordan, Samed has expanded to the point it now produces kitchen utensils and religious artifacts, Louis XIV chairs, safari suits and hand-embroidered dresses , high-heeled pumps, shoulder bags and lace table-cloths, a nutty candy, poultry , and butter.

A major part of Samed's profit comes from its latest expansion: exports. Abu Ala claims the Soviet Union regularly purschases shirts and jeans. Kuwait and Iraq buy children's clothing. The Saudi royal family has ordered specially made living and bedroom suites. Dubbed movies and educational films circulate throughout the Middle East.

PLO businesses, however, are not without political purpose, as is seen in the heavy rhetoric of products like the 1981 pocket diary. The 18-page introduction to the small blue volume says Samed's goal is "to create the nucleus for a Palestinian revolutionary economy, to develop economic self-sufficiency for the revolutionary and the masses, and to lay the foundation for the economic structure of the future Palestinian soviet."

The yearbook ends with a four-page attack entitled: "Zionism: the Obstacle to Peace."

There is another hint of propaganda usage at Rock Industries. Although recent dubs include work on part of Walt Disney's "Snow White," the studio is also in the final stages of its first film, "The Olive Branch," a history of the movement.

Neutral observers might raise questions about the standard of Samed's operations. Safety precuations are limited. Equipment, mostly from the United States and Europe, is antiquated; the emphasis instead being on labor-intensive production. Work sites are often dirty, except for the film lab, which opened in June. And pay is low.

Ahmad Mergi, a former Haifa tailor, is paid only $300 a month making men's clothing, barely enough to support his family of six. After five years as a carpenter in the furniture factory, Muen Srougi earns $220.

But for both, the PLO at least offers jobs at a time when the Lebanese economy has been badly crimped by six years of civil strife. Palestinians are often disliked or ostracized by potential employers who feel they are responsible for Lebanon's woes. As Mergi put it: "A man cannot live without something to do."

The quality of Samed goods is not yet fully competitive, as Abu Ala admitted: "I remember in 1973-74, our products were accepted in Arab countries only because they were produced by children of martyrs, not because of quality." They still enjoy a tax-free status in East-bloc and Arab countries.

But furniture factory manager Munir Al Aidy claimed current standards represent a vast improvement over the one-room, one-machine, three-man operation opened in 1971. The Adel Fataah Homud plant -- named, like all Samed outlets, after a Palestinian who has died in the conflict -- now employs 155 people and uses 181 machines.

And running big business also means considering worker's benefits. Over the past year, Samed has introduced an employees' association to negotiate gripes with management. At the furniture plant, a small sports club, now under construction, will offer football, basketball, and ping pong. The entranceway features a small flower bed with a fence forming the boundaries of old Palestine.

Yet the Samed boss does not think PLO businesses are reaching their potential as moneymakers. That may be in part because their products include military uniforms, boots, and other essentials for guerrillas operating in southern Lebanon -- all loss operations. Samed does not make anything resembling weaponry, however, except an imitation grenade lighter-holder complete with false detonating pin.

Samed's profits may also be hurt by the 12,000 refugees who have gone through Samed workshops, learned a skill, then left to start business for themselves. Abu Ala also said that a large part of the profits are channeled into expansion, hiring additional employees and buying equipment.

But in an ironic twist, the PLO industries have helped bring in money in another form: loans. Dabbagh conceded that the PLO has recently begun taking out regular loans from banks, mainly in the Middle East, because it can prove it has collateral with its businesses.

A Western commercial attache cited this as one of the factors indicating that the PLO is perhaps the best-managed revolutionary organization in the world. It can afford to be: The guerrilla group is also the richest, as some members, like Bassam Abu Sharif, have even known to boast.

Most of its billion-dollar income is not earned, but given by organizations like the Arab summit, which last year pledged $500 million. Individual countries, like Saudi Arabia, have thrown in up to another $120 million for special projects or specific factions, like Yasser Arafat's Fatah organization.

The income also comes from some unusual sources. Little bits are earned from revenues of special commemorative PLO stamps issued each year by several Arab states.

Millions of dollars are turned over annually by the so-called Palestinian "head tax," the 5 to 10 percent cut from salaries of Palestinians outside Lebanon. Palestinians in the US contribute through the Washington-based Palestine Arab Fund, according to PLO sources.

The head tax was reportedly first instituted in Algeria during the 1960s under then-President Ben Bella, who agreed to a PLO plea to register all Palestinian emigrants at a PLO office before they received work permits, which in turn were not always granted unless the emigrants pledged to turn over a portion of their salaries to the PLO.

Over the years, that wealth has accumulated to the point that, one Western diplomat claimed, if all additional aid dried up now, the PLO could continue operating for another eight years out of its reserve and investments. Mr. Dabbagh denied that vehemently.

However, one PLO "executive" admitted that many Western nations would probably be suprised at the amount of PLO money invested in their backyards. All PLO funds are "laundered" through various banks before they are invested by private brokers, often Palestinian as well.

Mr Dabbagh said that less than 30 percent of these funds actually represent military-related expenditures. (Most weapons, military vehicles, and other supplies are donated).

The PLO also incurs major expenses from other commitments: 100 schools, a radio station, a daily newspaper, several magazines, a research center that offers more than 60,000 volumes and a team of academics, eight hospitals, and a garbage collection service in all the camps scattered throughout Lebanon.

The PLO's 108 "diplomatic" offices in most of the 117 countries that have officially recognized the PLO are an additional drain on its budget.

Mr. Dabbagh also claimed that the PLO has major constraints on it, due to the fluctuations in contributions. After a guerrilla raid on Israel, or an Israeli attack on Lebanon, the money tends to flow in. Peace often means dry times, financially.

Another problem is that many of the governments that pledge aid do not follow through with payments. Getting funds out of Libya's Col. Muammar Qaddafi is sometimes a hassle, according to the PLO.

And big funds may be required on short notice, Such as last summer, when Israeli attacks on Beirut and southern Lebanon killed hundreds and damaged whole blocks of buildings.

At the same time, one Western diplomat concluded: "It is a bureaucratic empire. If you took away its military involvement, the PLO would amount to one of the fastest-growing, most successful business operations in the world."