June 1, 2021 | Tablet

Underwriting Hezbollah Inc.

By funding the failed Lebanese state and lifting sanctions on Iran, the United States is partnering with the world’s deadliest crime syndicate
Emanuele Ottolenghi

Senior Fellow
June 1, 2021 | Tablet

Underwriting Hezbollah Inc.

By funding the failed Lebanese state and lifting sanctions on Iran, the United States is partnering with the world’s deadliest crime syndicate

Emanuele Ottolenghi

Senior Fellow

Hezbollah’s direct involvement with organized crime is well documented, ongoing, and a threat to U.S. national interests. Iran’s complicity in Hezbollah’s crimes, as well as its own criminal conduct, are also public knowledge. So why is the Biden administration preparing, as part of its return to the 2015 nuclear deal, to release billions of dollars in funds to Iran and open business opportunities for a global criminal enterprise?

On March 30, Adalberto Fructuoso Comparán Rodríguez walked into a meeting in Guatemala City, thinking he was about to complete an arms’ deal with a Hezbollah financier. Instead, he was arrested. This was a classic Drug Enforcement Administration sting operation. The DEA had Comparán Rodríguez, the former mayor of Aguililla, in Michoacan, Mexico, in its sights. Court documents allege him to be one of the leaders of the Michoacan United Cartel. To lure him and his associates, the DEA engaged a confidential source, who posed as a Hezbollah representative with close ties to Hezbollah Secretary General Hassan Nasrallah. The informant offered Comparán Rodríguez to buy drugs, launder money, and sell weapons. Comparán Rodríguez fell for it, and after arranging a meth deal, he sought to procure sniper rifles and assault weapons from the informant. The delivery was to take place at a Guatemalan port that Comparán Rodríguez had “greased” to let illicit merchandise elude inspections.

This was an elaborate ruse, but a credible one to Latin American narco traffickers. In the past two decades, Hezbollah has earned a stellar reputation among criminal syndicates as an efficient and reliable partner in crime. And not just in Latin America.

Just four weeks after Comparán Rodríguez was arrested in Guatemala, Saudi officials seized more than 5 million Captagon pills hidden in a pomegranate shipment from Lebanon. They believe Hezbollah is behind the shipment. Captagon, a powerful synthetic drug currently flooding both European and Gulf markets, is increasingly produced in Syria and the Hezbollah-controlled Beqaa Valley in Lebanon. From there, it is smuggled out through the Syrian port of Latakia or directly from Lebanon, thanks to the ongoing cooperation between the Syrian regime of Bashar Assad, who controls the production, and Hezbollah, which manages the logistics. Shipments tied to this racket of Iranian proxies keep showing up in alarming quantities all over the Mediterranean: In July 2020, Italian authorities seized 84 million pills worth more than 1 billion euros at street price, and in 2019, 33 million pills worth almost 600 million euros were seized in Greece.

One key difference between Hezbollah’s business operations and those of other criminal syndicates is that amassing wealth is not itself the end goal, but a means to promote the revolutionary political and military ambitions of Hezbollah and its patrons in Tehran. The same networks that generate income also provide the infrastructure for terror attacks. Confronting Hezbollah’s criminal syndicate is not simply part of the unending struggle against organized crime, but rather a national and global security imperative.

Crime is a core component of Hezbollah’s fundraising. Open-source studies suggest that involvement in illicit activities generates roughly 30% of Hezbollah’s annual operating budget of roughly $1 billion, and that Iran provides the rest. But a closer look at Hezbollah’s narco trafficking operations suggests its proceeds from criminal activity may far exceed prevailing estimates.

The Ayman Joumaa network, which the DEA exposed in 2011 and the Treasury Department linked to Hezbollah in 2012, was laundering up to $200 million a month for Mexican and Colombian cartels. Joumaa, according to the DEA, took a hefty commission for his services—between 8% and 14%, or between $16 million and $28 million per month. In its heyday, the Joumaa operation alone would therefore cover at least two-thirds of Hezbollah’s annual revenue from illicit activities. And while Joumaa’s operation was disrupted, his complex scheme of used cars to launder drug proceeds continued to operate long after sanctions and indictments were made public.

Joumaa’s money-laundering organization was not the only game in town. In a 2016 operation code-named Cedar, the DEA and its European counterparts jointly targeted a network that, according to Europol, laundered on average 1 million euros a week in drug money. According to a former U.S. official familiar with the investigation, Hezbollah used the same scheme to also earn more than 20 million euros a month selling its own cocaine, in addition to laundering hundreds of millions of euros in drug proceeds on behalf of the cartels in exchange for a fee. During the arrests, authorities seized 500,000 euros in cash, $9 million worth of luxury watches that Hezbollah couriers intended to transport to the Middle East for sales at inflated prices, and physical property worth millions. These were peanuts compared with how much the network laundered overall. In 2019, U.S. authorities seized $50 million from a convicted Hezbollah financier, Kassim Tajideen, as part of a civil forfeiture action against his money laundering activities on behalf of Hezbollah.

Hezbollah also plays a large part in the illicit economy of the Tri-Border region of Argentina, Brazil, and Paraguay, which is said to generate at least $5 billion a year in illicit transactions. The group likewise helps Venezuela’s regime launder money through multiple waypoints in Venezuela and Central America, and it runs multiple fraudulent schemes in West Africa. There is simply no crime that the “Party of Allah” is above committing for money: Drug trafficking, gun running, blood diamonds, illicit timber, even human trafficking. Whatever funds the cause, God will forgive.

And yet for all the cash and cases that we know about, there are still numerous undetected active networks, servicing a global industry of crime that is worth tens of billions of dollars in illicit transactions every year. It is big business.

To play in the big leagues with Latin America’s cartels and Europe’s criminal underworld, Hezbollah cannot afford to improvise. Its party stalwarts run a tight ship from their safe perches in Tehran, Baghdad, and Beirut. Nicknamed the Business Affairs Component by the DEA, Hezbollah’s fundraising directorate is part and parcel of its External Security Operations branch, which is in charge of terror attacks overseas. The BAC oversees overseas funding and assists in weapons procurement. Unlike cartels, whose territorial reach is usually limited, Hezbollah has a global footprint, thanks to its reliance on expatriate communities.

Like a sailor with a girlfriend in every port, Hezbollah has loyalists just about everywhere. Since the early 1980s, under Iranian guidance (and often with Tehran’s direct participation), Hezbollah began dispatching clerics and teachers to establish a foothold amid Shiite Lebanese communities overseas. In time, emissaries built miniature South Lebanons in their midst, with schools, scout movements, mosques, mullahs, and charitable organizations that mirror Hezbollah’s institutions in the homeland. They also found Shiite businessmen happy to welcome them, or even to provide them with assistance. This global program targeting the Lebanese diaspora successfully infiltrated their communal institutions, using them to nurture loyalty and indoctrinate new generations.

As a result, Hezbollah can launder money globally, through intricate networks built not just on religious and party allegiance, but also on blood ties and clan loyalties. Through their businesses, friendly Lebanese merchants support trade-based money laundering schemes that move merchandise such as used cars, electronics, brand clothing, and cosmetics to cover the transfer of illicit proceeds. Hezbollah relies on money exchange houses, both in Lebanon and overseas, to move currency. It also has access to Lebanon’s banking system through a Hezbollah-controlled phantom bank, the U.S.-sanctioned Al Qard Al Hassan.

Hezbollah’s militia commanders and clerics have relatives managing businesses across the world—for example, Sheikh Khalil Rizk, the Hezbollah cleric who was, until recently, in charge of the group’s foreign relations department, has a brother who runs a cellphone business in Sao Paulo, Brazil. Mohamad Mansour, a Hezbollah operative arrested in Egypt over a decade ago, also has a brother running a business in Sao Paulo, just two blocks away from Sheikh Rizk’s sibling. The de facto leader of Hezbollah’s financial operations in the Tri-Border Area, Assad Ahmad Barakat, is the brother of Sheikh Akram Barakat, another figure in Hezbollah’s clerical hierarchy. The Barakat family’s business interests extend across Chile, Argentina, Paraguay, Brazil, and Angola. Joumaa ran his business from Colombia with his brother and his cousin, who is still there. In short, Hezbollah relies on a worldwide network of familial ties, much like its Christian Mediterranean counterpart, the Italian Mafia. And much like La Cosa Nostra, loyalties to blood and kin go a long way to keep the network tight and hard to infiltrate.

As if its criminal empire was not concerning enough, there is another dimension to Hezbollah’s racketeering that should have Washington’s attention. The same international network that conducts Hezbollah’s business operations also provides the infrastructure for terror attacks.

In just the past few years, authorities have thwarted plans to carry out bombings in Thailand, Panama, and London, and additional plots based in Detroit, New York, and Cyprus. Tactically, all these operations have one thing in common: the use of massive quantities of ammonium nitrate to build bombs. This chemical compound can be found in ice packs and fertilizer, so Hezbollah operatives relied on local friendlies to buy and store them. These accomplices required front companies to order large quantities under the guise of legitimate commercial operations, and they needed to accumulate the products slowly so as not to attract attention. (In one case, a front company bought thousands of first-aid kits, each containing an ice pack, over the course of several years.) Hezbollah operatives also needed warehouses to store this merchandise until the moment they received the order to assemble the explosives and carry out an attack. They also needed false papers and safehouses from which to operate or lie in wait. These things cost money and require a local network.

The facilitators who provide these services are not bombmakers or sharpshooters. They are businessmen devoted to the cause and ready to mobilize for faith, family, and party. The assassins may come in at the last minute to execute the plot, but it is the businessmen who raise the funds to make attacks possible, and who, when called upon, also patiently provide the building blocks to the operatives.

A recent U.S. case against a Hezbollah operative makes it clear what Hezbollah has in mind and why the convergence of terror and organized crime is so lethal. In June 2017, U.S. authorities announced the arrest of Samer El Debek just outside of Detroit. According to court documents, Hezbollah trained him to handle ammonium nitrate and dispatched him to Thailand in 2009 to clean up a safe house filled with ice packs left behind after a thwarted attack. Hezbollah later sent El Debek to Panama to scout the Panama Canal, where an attack might have disrupted global shipping.

Sometimes the terror plots succeed. In 2012, a Hezbollah suicide bomber blew up a bus transporting Israeli tourists in Burgas, Bulgaria. The bombing killed the Bulgarian bus driver and five Israelis, including a pregnant woman, and injured 32 others. According to the Bulgarian interior minister, the perpetrator worked with as many as five accomplices who had been planning the attack for a year and a half. In other words, it took not just one willing martyr, but a network with funds and resources.

“Bottom line: Let Iran reopen for business, and the surplus cash will fund a global criminal enterprise.”

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Issues:

Hezbollah Iran Iran Global Threat Network Iran in Latin America Iran Sanctions Iran-backed Terrorism Sanctions and Illicit Finance