Featuring Matthew Levitt
Wall Street Journal
November 12, 2013
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Samuel Rubenfeld interviews Washington Institute fellow Matthew Levitt about how Hezbollah raises and uses its money.
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Rubenfeld: Hezbollah is more than an anti-Israel militant organization,
despite its perception as such in the U.S. What does its global
footprint look like, and why should it concern Americans?
Levitt: What amazed me as I got into the research of the book
(http://washin.st/13Zb5a4) was how global the footprint really is,
spanning not only the Middle East but Africa, Asia, Europe, South
America and even here in North America. Just [Friday], the U.S. Drug
Enforcement Administration got a Surinam counterterrorism official [Ed
note: It's a son of the president] in a Hezbollah-related case. Until
9/11, Hezbollah was responsible for the deaths of more Americans than
any other terrorist organization, and its history of targeting Western
interests, including American interests, goes back 30 years.
Thirty years ago last month, Hezbollah blew up the U.S. Marine barracks
and the French military barracks in Beirut, both of which were part of
the multinational force of peacekeepers.
Today, the U.S. intelligence community describes the relationship
between Iran and Hezbollah as a strategic partnership, with Iran as a
primary partner, which explains in part why Hezbollah is more engaged in
more international terror today than at any time since the late 1980s.
Rubenfeld: Discuss the various ways Hezbollah raises money.
Levitt: Hezbollah gets millions of dollars a year from Iran; it receives
as much as $200 million a year. It's also engaged in abuse of charity
and takes money from some deep-pocketed major donors, but more than
anything else, Hezbollah has been more involved in criminal activity
than any other terror organization out there.
These schemes range from small-scale frauds perpetrated by individual
Hezbollah supporters such as credit-card fraud, check fraud,
watered-down baby formula, cigarette smuggling, mortgage fraud, visa
fraud and more, all the way to far more-organized criminal activity such
as complicated arms procurement schemes involving import-export front
companies and, more recently, not the production but the movement and
laundering of proceeds of narcotics, particularly cocaine from West
Africa.
Rubenfeld: Hezbollah was allegedly engaged in a scheme involving used-car sales. Can you talk about it?
Levitt: The used car sales in the U.S. relate to Hezbollah's laundering
the proceeds of narcotics. When the U.S. Treasury exposed Hezbollah's
penetration of the Lebanese Canadian Bank, it also revealed that, in
some cases, it moved drugs from South America across the 10th Parallel,
which law enforcement calls "Highway 10," to West Africa.
In some cases, the proceeds were laundered through the purchase of used
cars in the U.S., which were then shipped to West Africa and sold there.
In at least some of these cases, the individuals selling those cars
here in the U.S. are believed to have been knowing and complicit in the
criminal nature of the activity, and possibly the Hezbollah connection
as well.
Rubenfeld: How does it bank the money?
Levitt: Hezbollah uses the formal financial system like any other entity
would. It maintains bank accounts in the name of individuals, it has
institutions like money managers, a construction company and much more.
Remember, Hezbollah is not a banned entity in Lebanon. It has overt and
covert activity...It's difficult for banks to necessarily know when
funds are in fact covert, because they're always in somebody's name.
Rubenfeld: What do the U.S. and others do to stop the flow?
Levitt: It all depends on the jurisdiction. In those places where
Hezbollah is banned, in whole or in part, there are legal thresholds to
target Hezbollah funds moving through those financial systems. In places
where the group is not banned, there still are industry standards that
require banks to do their due diligence and address their fiduciary
responsibility to their shareholders and balance risk.
Even if the funds are in a jurisdiction where the group is not banned,
there are ways to approach financial institutions and share information
that explains the nature of the risk that they may be exposing
themselves to by banking Hezbollah money if they do so knowingly.
Rubenfeld: Is there anything else we should know about Hezbollah?
Levitt: Hezbollah is many things. They are a political party, they are a
militia, they are also a terrorist group, and they're involved in
international crime. The international criminal activity is increasingly
becoming the most important revenue source for them, and it is their
Achilles heel because it exposes them to additional law enforcement
scrutiny.
Even before the European Union banned its military and terror wings,
southern European countries where Hezbollah was moving drugs tended to
be cooperative. They had no interest in anybody, whether it was
Hezbollah or anyone else, moving drugs in their country.
Hezbollah has a preference in counterfeiting $100 bills and 200 euro
notes. All terrorism definitions aside, the authorities protecting
international and national financial systems have to take this
seriously.
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