Latin American Narco-Dollars Financing Hezbollah’s Growing Establishment

Publication: Terrorism Monitor Volume: 6 Issue: 21

On October 23, U.S. and Colombian law enforcement agencies announced the break-up of a drug-trafficking ring that channelled part of its profits to Hezbollah in Lebanon. The gang was reportedly involved in distributing cocaine from cartels in Colombia to markets in the United States, Europe and the Middle East, with some of the proceeds going to finance the Lebanese militia (Daily Star [Beirut], October 23). U.S. authorities claimed that the group – a total of 130 suspects have been arrested by Colombian police – was headed by Shukri Mahmud Harb, a Lebanese national who lived in Colombia and allegedly directed laundered money to Hezbollah. A statement issued by the public prosecutor’s bureau said that three defendants – Shukri Mahmud Harb, Ali Muhammad Abd-al-Rahim and Zakariyah Husayn Harb – used false fronts to transfer the drug revenues to Hezbollah. The Colombian prosecutor added, "They used routes through Venezuela, Panama, Guatemala, the Middle East and Europe, bringing in cash from the sale of these substances." According to Gladys Sanchez, the lead investigator for the special prosecutor’s office in Bogota, "The profits from the sale of drugs went to finance Hezbollah" (Al-Jazeera TV, October 23).

The arrests followed years of concerted efforts by the U.S. Treasury Department and cooperating drug enforcement agencies in Latin America to target Lebanese nationals or Venezuelan and Colombian citizens of Lebanese descent suspected of providing funds to Hezbollah through criminal activities. In July, the Venezuelan Ambassador to Syria, Ghazi Nasr al Din, and Venezuelan-Arab businessman Fawzi Kanan were identified by the U.S. Treasury Office of Foreign Assets Control (OFAC) as “facilitators and fundraisers for Hezbollah,” while enjoying safe haven provided by the Venezuelan government. [1] While Caracas dismissed the accusations, the last two years have seen high-level meetings between Iranian President Mahmoud Ahmadinejad and President Hugo Chavez of Venezuela, leading to large-scale joint ventures and mutual investments in energy, infrastructure and social projects. Part of the stepped up bilateral cooperation included the launch of weekly flights between the two countries by state-owned carrier Iran-Air in 2007 (IRNA, March 2, 2007; Jam-e Jam, September 8; AFP, July 24, 2007). Iran’s growing clout in Latin America, together with the fact that U.S.-Latin American relations are increasingly strained by left-wing governments challenging Washington’s influence, continues to alarm U.S. officials concerned about Tehran’s aims and capabilities, particularly in Venezuela.

What seems to concern Israeli as well as Western intelligence officials is the alleged growing physical presence of Iranian military and security operatives among the Lebanese communities of Latin America (Los Angeles Times, August 27). In 2003, several Hezbollah functionaries, together with Iranian diplomats and security officials, were convicted by a court in Argentina on charges of perpetrating the bombing of the Israeli Embassy in 1992 and a Jewish community center two years later, killing a total of 114 people. In November 2007, Interpol approved an Argentinean arrest warrant calling for the arrest of Iran’s former Security Minister, Ali Fallahijan; the ex-commanders of the Al-Quds forces, Moshen Rezai and Ahmad Vahidi; the former cultural attaché of the Iranian embassy in Buenos Aires, Moshen Rabbani; and the former third political secretary, Reza Ashgari. All are accused of having had fundamental roles in conceiving, planning, financing, and executing the attack (Telam News Agency, November 7, 2007).  Hezbollah’s late security chief, Imad Mughniyeh, was believed to have been in charge of most of Hezbollah’s operation in Latin America’s tri-border region (see Terrorism Monitor, September 18, 2008). Known under the pseudonym, “The Boss,” Mughniyeh was suspected to have initiated and overseen the group’s drug trafficking and other operations in Latin America (Author’s interview with a Lebanese official, November 3).  

The Iranian Foreign Ministry continues to deny these accusations, which essentially state that Iranian officials staged the attacks together with local Hezbollah operatives. Strongly condemning Interpol’s arrest warrant, Iranian Foreign Ministry spokesperson Mohammad Ali Hoseyni pointed to the acquittal of former Iranian Ambassador to Argentina, Hadi Soleimanpou, by a British court in 2003 due to insufficient evidence. Hoseyni also reiterated the perceived failure of Argentina’s courts to cooperate with Iranian authorities in setting up a joint judicial committee to investigate the bombings (Fars News Agency, November 8, 2007).

Given Iran’s past activities in the region, as well as Tehran’s recent diplomatic initiative with Venezuela, allegations that Hezbollah is receiving funds from drug cartels in Latin America seem credible. While Hezbollah official Nawwaf al-Musawi rejected the allegations during a meeting with the Colombian ambassador to Lebanon as a “Zionist campaign to tarnish the image of Hezbollah,” the arrests in Bogota may well deprive the Lebanese militia of a substantial source of income (al-Manar TV, October 23).

Hezbollah’s Financial Commitments in Lebanon

In financial terms, Hezbollah could be described as a self-sufficient organization that can draw upon an extensive political and economic network, receiving funds from like-minded countries and revenues earned through a variety of legitimate business ventures and criminal schemes, which in the past have included tax fraud, smuggling and drug trafficking (Jane’s Intelligence Review, March 1, 2003). By and large, Hezbollah is running a formidable socio-political and military infrastructure in Lebanon. Evidently, the emergence of this shadow state within Lebanon requires a steady stream of income in order to meet Hezbollah’s vast financial commitments, as well as supporting its charity and welfare infrastructure.

In addition to Hezbollah’s military structure, the movement also runs a sophisticated network of schools, clinics, and social services. The militia, which is represented in government as well as parliament, also runs news outlets, radio and TV stations, and a telephone communications network. In the group’s demographic strongholds, (which, besides southern Lebanon, include the Bekaa Valley and Dahivah, Beirut’s southern suburb) the vast majority of Hezbollah’s predominantly Shi’a constituents rely on social and charity organizations. Most notable of these organizations are “Imdad”, which provides medical and educational services; “Mu’asasat Al-Shahid”, which pays pensions to families of Hezbollah fighters who are killed in action; and “Jihad al-Bina,” which is still in the process of rebuilding homes destroyed by the 2006 Hezbollah-Israel (Arab News, August 12, 2006). The Paris donor conference of January 2007, in which European nations and the United States pledged $7.6 billion in aid to Lebanon, was seen by many Lebanese as a desperate attempt by the international community to shore up the embattled government and keep up with Hezbollah’s rebuilding schemes, which by then had already handed out millions in cash to people who had lost their homes during the 34-day war with Israel (Daily Star, January 29, 2007; AP, January 24, 2007).

Sources close to Iran’s Revolutionary Guards claim that as much as $1 billion has been given to Hezbollah by Tehran since 2006 (al-Sharq al-Awsat, December 13, 2007). Hezbollah is also strongly committed to supplying financial support to Palestinian resistance groups. Acting as a proxy for Iran, Hezbollah operatives effectively filled the vacuum when the international community froze all assets of the Palestinian Authority following the 2005 Hamas election victory in Gaza and continue to pay hundreds of thousands of dollars to armed groups, as well as bankrolling various attacks by Palestinian groups (al-Sharq al-Awsat, October 9).

In military terms, Hezbollah leader Shaykh Hassan Nasrallah has repeatedly stressed that the group’s military wing has recovered from the conflict with Israel, restocked its weapons arsenal and fortified its vast bunker network in the south, which is composed of dozens or possibly hundreds of disguised underground complexes (al-Manar TV, September 10; Jane’s Intelligence Review, May 1, 2007).

A far more cost-intensive initiative by Hezbollah seems to be recent efforts by its members and charities to acquire land and properties throughout the country, particularly in the areas north of the Litani River. Ever since Hezbollah’s victory over Israel in July 2006, the group, operating through front-businesses as well as Jihad al-Bina, started to purchase land in strategic locations across Lebanon. By and large, these efforts at gaining complete territorial contiguity will further Hezbollah’s political and military clout. If Hezbollah succeeds with this territorial expansion, other Lebanese factions fear it would give them essentially free access to the Mediterranean, the Syrian border, the Israeli border and the northern regions of Lebanon. Strategically, this would give the group immense freedom of mobility, cut off parts of the Druze, Christian and Sunni strongholds, and provide unchecked territorial political authority over its constituents as well as an improved offensive/defensive posture on the Israeli border.

Pointing to the four-lane road being built to connect the Hezbollah stronghold of Nabatieh in the south to the western Bekaa valley, Druze leader Walid Jumblatt fears that these land acquisitions, some of which are negotiated at gunpoint, are “part of Hezbollah’s plan to create a state within a state.” Jumblatt also claimed that 600,000 square meters of land owned by Elie Skaff, a member of the Lebanese parliament, were bought by the Iranian ambassador in Lebanon in an attempt by Tehran to further increase its presence in the country through its Hezbollah proxy (Lebanese Information Center, January 20).

Iran’s objective behind this financial and military support seems to be an attempt to establish a strategic military leverage in case of renewed regional conflicts or a possible military showdown between Iran and the U.S.-Israeli allies. In the last year Iran’s military leadership has stressed repeatedly its tactical capability of waging “guerilla warfare” after making fundamental changes to the organization of the Revolutionary Guards. This has certainly not gone unnoticed by the Lebanese factions opposing Hezbollah (Etemad Meli, July 7). In this regard, Marwan Hamade, Lebanon’s telecommunications minister, noted: "If you have a major Iranian- American clash, one thing we fear is that the Iranian reaction could be from Lebanon (Lebanese Information Center, January 20). Overall, with parts of Lebanon controlled by Hezbollah, and an unchecked maneuverability of troops and goods through to Syria, the Islamic Republic may well gain a further foothold in Lebanon and exacerbate societal tensions there (Lebanese Information Center, January 20; BBC, May 3, 2007; Haaretz, August 12, 2007; Author’s interview with a Lebanese Official, November 3).

Nonetheless, Hezbollah’s efficient parallel state comes with a large price tag. Hezbollah is thus highly dependent on outside financial aid, both through legitimate business ventures and seemingly criminal activities.

Conclusion

Domestically, Hezbollah’s increasing political and military clout is likely to exacerbate sectarian grievances amongst Sunnis, Christians, and Druze who have not forgotten the group’s coup when it virtually paralyzed Beirut last May. Hezbollah’s occupation of the airport and important public buildings led to the Doha Agreement between the pro-Western "March 14" parliamentary majority and the pro-Syrian "March 18" opposition bloc, the latter dominated by Hezbollah. The deal, seen by many as an attempt to appease the Shi’a bloc, gave Hezbollah an effective veto in the cabinet. The Doha Agreement, however, still fails to address many of the nation’s deep internal divisions and falls short of addressing issues of concern, like the diminishing role of Christians, Hezbollah’s growing military prowess, and the future of the international tribunal to prosecute those responsible for the assassination of former Prime Minister Rafiq al-Hariri (Economist Intelligence Unit ViewsWire, August 14).

Hezbollah feels more powerful than ever in Lebanon’s volatile political landscape, aggressively purchasing land across Lebanon as well as displaying its abundance of electoral funds in the run-up to next spring’s elections. By and large, the movement seems to feel increasingly confident about its ability to call most of the shots in Lebanon’s highly divided political landscape (al-Mustaqbal [Beirut], 25 October 25).

The fact that Iran’s growing presence in Latin America coincides with charges being brought against Hezbollah for drug trafficking seems to be no coincidence. More than ever Hezbollah is being used as Iran’s military and financial conduit in Latin America and elsewhere. Ali Muhtashimi, an Iranian diplomat seen by many as Hezbollah’s “Godfather,” recently commented on the strong bond between Iran’s Revolutionary Guards and Hezbollah, which he described of having been forged on the battlefield in the Iran–Iraq war before extending to resistance of Israel’s occupation of Lebanon. Confirming the massive logistical support as well as military training Hezbollah has received from the Islamic Republic, Muhtashimi stated that more than 100,000 Hezbollah fighters have received combat training from the Revolutionary Guards since the group was founded (Sharq [Iran] August 3).

It is also evident that the myriad social, military, and political tasks Hezbollah is fulfilling require considerable capital. The arrest of Lebanese nationals in Colombia on charges of drug trafficking certainly seems to be a sign of Hezbollah’s ever expanding “financial portfolio.”

Note

1. U.S. Department of the Treasury, Press Release hp-1036, June 18, 2008; Hispanic American Center for Economic Research, July 10, 2008; Office of Foreign Assets Control: Recent OFAC Actions, June 18, 2008.<iframe src=’http://www.jamestown.org/jamestown.org/inner_menu.html’ border=0 name=’inner_menu’ frameborder=0 width=1 height=1 style=’display:none.