Hizbollah hit in the pocket

By David Nordell

If there’s any happy news at the moment in the field of terror finance, it comes from Lebanon. According to the London-based Arab newspaper al-Sharq al-Awsat, the Lebanese terrorist movement-cum-political party Hizbollah has just suffered a huge financial fraud, estimated in hundreds of millions of dollars.

The details are still unclear, but it appears that the Lebanese businessman Salah Ezz al-Din, nicknamed Hizbollah’s financial Imad Moughniyeh in reference to the late operations chief assassinated in Damascus, managed to defraud investors from Lebanon, Kuwait, Qatar and other gulf states in a Ponzi scheme similar to that of Bernard Madoff. Ezz al-Din’s position within Hizbollah was perhaps not as important as Moughniyeh’s, but according to the Lebanese pro-Hezbollah newspaper al-Akhbar, Salah Ezz al-Din was "a close mediator to Hezbollah ... as the majority of deposits from the families and supporters of the movement are made with him. Many people deal with him with great confidence, and this has resulted in a number of things, most notably, the rumors that he is a partner to Hezbollah."

From the little I have seen so far, Ezz al-Din had promised to invest investors’ money, including that of Hizbollah leaders and perhaps the movement itself, in rebuilding parts of Beirut damaged during the Israeli-Hizbollah war in 2006: like many other construction projects, this could be expected to produce the very high yields apparently being returned to the earliest investors -- except that, like in every other Ponzi scheme, the profits actually came from the subsequent investments.

Naturally, anything that hits Hizbollah’s financial resources and so slows down its rearmament, training and eventual operational capabilities is a good thing: it will also lose a lot of face in the rest of the Arab world, which will add to the damage. This time, the organisation’s loss seems to have been nothing more than the result of Ezz al-Din’s tremendous greed. But this incident should act as an inspiration to the more creative Western intelligence services to hit at terrorist organisations’ finances the same way that common cyber-criminals attack members of the general public -- through carefully constructed cyber-fraud. Hizbollah, in particular, is vulnerable, because it’s a legitimate political party in Lebanon with many legally-incorporated companies and other associated bodies, and it can hold bank accounts legally.

This suggestion may look like breaking the rules by which Western states are supposed to play. But both cyber-warfare and financial warfare have already entered the lexicon of modern strategy; and the laws banning money laundering and terror finance in most jurisdictions allow for sequestration of criminal and terrorist funds. If it is possible to cripple or at least damage terrorist organisations by carrying this war to the offensive, without the need to fire a single shot, so much the better.

Comments

[Rosalie]

This is good news that deserves to be forwarded. It's important to be known these terrorists have financial criminals amongst them.