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Mohamad Rashid, former Palestinian leader Yasser Arafat's powerful economic adviser, looks away during an interview in Jerusalem Thursday, May 29,1998.EYAL WARSHAVSKY/The Associated Press

A search for millions that were allegedly embezzled from the Palestinian Authority has led to Canada – and raised questions about how the prime suspect obtained Canadian citizenship.

Muhammad Rashid was once a senior aide for the Palestinian Authority's founding President, Yasser Arafat, and head of the Authority's public investment company, which owned stakes in companies operating businesses from cement to cellphones.

Last June, a Palestinian court convicted Mr. Rashid, in absentia, of embezzling $34-million.

The Globe and Mail has learned that Mr. Rashid's ties to Canada have led Palestinian authorities to ask Ottawa for help looking for assets. The Canadian government, however, says there is little it can do.

The Globe has learned Mr. Rashid obtained Canadian citizenship in 2003, even though Palestinian sources claim that he resided primarily in the Middle East. Palestinian prosecutors believe Mr. Rashid, also known as Khaled Salam, now lives in London, England but that he may be travelling on a Canadian passport.

They are also following up his business dealings in Canada, including a period on the board of a Canadian bio-science company.

The Palestinian Authority's Foreign Affairs Minister, Riad Malki, has asked his Canadian counterpart, John Baird, for help in locating what they deem stolen property. Mr. Malki personally sent a letter to Mr. Baird in February, The Globe and Mail has learned.

Mr. Baird is in the Middle East this week, visiting not only Israel and the West Bank but also Jordan and several key Gulf nations. He is likely to hear renewed requests for help when he meets with Palestinian officials in Ramallah on Saturday.

"He managed to put his assets all over the world, but not in Palestine," the deputy chairman of the Palestinian anti-corruption commission, Akram Al Khatib, said in an interview before Mr. Malki sent his official request for assistance. The Palestinian Authority wants information on Mr. Rashid's assets and business dealings in Canada: "We are very interested in that," he said.

The Palestinian Authority asked Interpol to issue an arrest warrant, but was turned down because the Authority doesn't have status as a country. Canada has also rebuffed requests for assistance. A spokesman for the Foreign Affairs Department, Amanda Reid, said because Canada does not have a formal legal-assistance treaty with the Palestinian Authority that arranges for help in foreign investigations, "Our capacity to assist is limited."

Mr. Rashid was Mr. Arafat's key financial adviser and chairman of Palestinian Commercial Services Company, which made more than $700-million in investments, operating a West Bank cement monopoly and buying into businesses that ranged from Egypt's Orascom Telecom to a New York bowling alley.

Last year, he was convicted of embezzling, money laundering and taking commissions "by which he was able to unjustifiably enrich himself," Mr. Al Khatib said. He was sentenced to 15 years in jail and a $15-million fine.

Mr. Rashid, who has been in a bitter feud with current Palestinian President Mahmoud Abbas, said in a television interview last year that the accusations are false, and in turn accused Mr. Abbas of building a family fortune with Palestinians' money.

But the chase for Mr. Rashid is now raising questions in Canada. How could a man working in the West Bank as a senior adviser to one of the most high-profile figures in the world, Yasser Arafat, manage to obtain Canadian citizenship?

Sources confirmed Mr. Rashid was granted citizenship in 2003. But Mr. Al Khatib said Mr. Rashid was in the West Bank for at least eight years prior. Mr. Rashid lived in Cairo for a time in 2003, when, according to reports, he had a rift with Mr. Arafat. But Mr. Al Khatib said he did not leave the West Bank for good until 2005.

The law requires that a person seeking Canadian citizenship must live in Canada for three of the four years prior to his application. Only the federal cabinet can waive those requirements. It's not known whether Mr. Rashid claimed on his citizenship application he lived in Canada. A spokesman for the Citizenship and Immigration department, Erika-Kirsten Easton, said that because of privacy laws, the government cannot comment.

Mr. Rashid does have established links to at least one Canadian business venture, through a 1999 investment by the Palestinian Authority in human and veterinary pharmaceuticals maker Bioniche Life Sciences Inc., then based in London, Ont.

It came about, Bioniche president Graeme McRae said, after he was told of a potential investor by Joe Fontana, then a London, Ont. MP and chair of the House of Commons citizenship and immigration committee. Mr. Fontana is now London's mayor. The Canadian government, Mr. McRae said, was helping the Palestinian company look for investments.

"He said there's these very interesting people who want to invest in Canadian businesses – 'ethical Canadian businesses,' is the way it was expressed," Mr. McRae said in telephone interview.

"And he said, 'I want to try to bring them to London and bring their investment.' "

Mr. Fontana did not return telephone calls requesting comment.

The 1999 investment landed Mr. Rashid a spot on the company's board of directors. Mr. McRae said he thought highly of Mr. Rashid, who came to a few board meetings. But Bioniche asked to buy out the Palestinian investment in 2003 due to concerns their presence might get in the way of efforts to organize new financing in the U.S.

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