Hezbollah’s Financial Lifeline Extends Beyond Iran’s Cash Transfers

U.S. sanctions have strained Iran’s finances and disrupted some funding channels to its Lebanese proxy, Hezbollah. Yet sanctions have not eliminated the group’s access to outside funding, including support from organizations outside Hezbollah’s formal hierarchy.

On October 7, two sources told Reuters that Hezbollah received $200 million from Iran in September for Lebanese displaced by the war. The sources claimed that unspecified intermediaries “charged 20 percent” on these transfers but did not explain how the money reached Lebanon. One source said money-transfer firms in Iraq and Dubai were no longer viable routes. State Department spokesperson Tommy Pigott even disputed the transfer, accusing Hezbollah of “trying to save face with fake stories about cash influxes from Iran.”

Whether or not the reported transfer occurred, other funding channels remain open. Treasury reported that Iran sent Hezbollah more than $1 billion through money exchanges in 2025. Hezbollah also benefits from organizations outside its formal hierarchy that finance relief and reconstruction in coordination with it, including WaTaawanou, a Lebanese charity relying heavily on crowdfunding.

Hezbollah’s Growing Financial Strain

Even before Hezbollah resumed fighting Israel in March, the group struggled to honor compensation commitments from 2024. In January, Lebanese outlet Al Modon reported that families sold Hezbollah-issued compensation checks for 70 to 80 percent of their value to obtain cash.

Yet the following month, Hussein Khair al-Din, reconstruction coordinator at Hezbollah’s sanctioned construction arm Jihad al-Bina, announced three months of housing allowances: $1,500 in Beirut and its southern suburbs and $1,000 elsewhere. Checks were redeemable through Al-Qard al-Hassan, Hezbollah’s quasi-bank. Khair al-Din identified himself in a December 2024 interview as the director of Meamar Construction, a sanctioned Hezbollah-controlled contractor that concealed money transfers to the group. His dual role is a testament of how Hezbollah’s reconstruction overlaps in a network of sanctioned companies.

Following March’s renewed fighting, however, Hezbollah reduced or suspended housing and reconstruction payments. Hezbollah media official Youssef al-Zein acknowledged the financial strain and said the group was prioritizing its spending.

Reconstruction Is Another Channel for External Funding

Rebuilding damaged communities is essential to retaining Hezbollah’s support among Lebanon’s Shiites. Hezbollah Secretary-General Naim Qassem recently promised housing assistance using “available resources and donations.”

In March, Treasury reported that financier Alaa Hamieh obtained millions for Hezbollah-associated projects under an Iraq-Lebanon trade agreement supporting reconstruction. In August, Treasury identified couriers moving cash for Hezbollah through Iran, Turkey, and the United Arab Emirates through money exchanges and bulk cash smuggling on commercial flights. Reconstruction has served as cover before: Hezbollah established the separate Waad reconstruction firm in 2007 partly because Jihad al-Bina’s designation impeded fundraising. Treasury sanctioned Waad in 2009 for constructing military facilities under the guise of rebuilding.

But Hezbollah need not receive every dollar directly. WaTaawanou president Afif Shouman acknowledged receiving Iranian assistance through an organization he called the Imam Reza Association while working in “full coordination” with Hezbollah. WaTaawanou’s Wajh al-Hassan reconstruction program, named for slain Hezbollah leader Hassan Nasrallah, partnered with Iran Hamdel, a fundraising campaign linked to the late Iranian supreme leader Ali Khamenei’s institutions, and the Popular Cultural Front, a Lebanese group likewise linked to that network, to restore facilities in Majdal Selm, southern Lebanon. Iraq’s al-Sawaed tribe also financed prefabricated classrooms for schools damaged by the war in southern Lebanon, while WaTaawanou arranged their purchase.

WaTaawanou has solicited donations through Al-Qard al-Hassan and made payments to Treasury-designated Al Moukhtar Products, a Hezbollah-linked food company. Shouman credited Nasrallah’s guidance and described WaTaawanou’s work as complementing Hezbollah’s fighters.

Washington Should Target Hezbollah’s External Support Networks

Washington should designate WaTaawanou under Executive Order 13224 for materially supporting Hezbollah.

Its coordination with Hezbollah, use of Al-Qard al-Hassan, and payments to designated businesses support such an action. Treasury should also assess Khair al-Din for designation as an official of sanctioned Jihad al-Bina, given his current reconstruction role and previously documented Meamar leadership.

Additionally, it should investigate Iran Hamdel, the Popular Cultural Front, and other reconstruction intermediaries, sanctioning those providing material support. Washington should press Lebanon to enforce restrictions on Al-Qard al-Hassan and audit Iraq-Lebanon reconstruction disbursements.

David Daoud is a senior fellow at the Foundation for Defense of Democracies (FDD) focused on Israel, Hezbollah, and Lebanon affairs. Ahmad Sharawi is a senior research analyst at FDD focused on Syria and Iranian intervention in Arab affairs and the Levant. For more analysis from the authors, please subscribe HERE. Follow FDD on X @FDD. Follow David on X @DavidADaoud. Follow Ahmad on X @AhmadA_Sharawi. FDD is a Washington, DC-based, nonpartisan research institute focusing on national security and foreign policy.