Home دراسات ووثائق/Studies & Documents Emanuele Ottolenghi/FDD: Hezbollah’s Global Threat/إيمانويل أوتولينغي/مؤسسة الدفاع عن الديموقراطية: تهديد حزب الله...

Emanuele Ottolenghi/FDD: Hezbollah’s Global Threat/إيمانويل أوتولينغي/مؤسسة الدفاع عن الديموقراطية: تهديد حزب الله العالمي

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Hezbollah’s Global Threat
Emanuele Ottolenghi/FDD/January 21/2021
إيمانويل أوتولينغي/مؤسسة الدفاع عن الديموقراطية: تهديد حزب الله العالمي

The Trump administration early on recognized the national security dangers posed by the convergence of organized crime and terror finance, and in particular the threat from Lebanese Hezbollah’s global criminal syndicate. The administration undertook a number of important initiatives to disrupt Hezbollah’s illicit operations.

At the center of Hezbollah’s criminal enterprise is the group’s Business Affairs Component, a branch of its External Security Organization, which is also in charge of overseas terror plots. On February 9, 2017, Trump signed an executive order1 directing federal law enforcement efforts to combat Hezbollah’s global illicit finance networks. In May 2020, to reduce money laundering risks, the Financial Crimes Enforcement Network also renewed its Real Estate Geographic Targeting Orders for 12 metropolitan areas in the United States,2 requiring title insurance companies to identify the individuals behind shell companies used in all-cash purchases of residential real estate.

The Trump administration also reinvigorated efforts to prosecute Hezbollah’s global money laundering operations, especially after a Politico investigation in December 2017 found that the Obama administration had put the Drug Enforcement Administration’s (DEA’s) Hezbollah-focused Project Cassandra on the backburner. The Department of Justice (DOJ) ordered an inquiry into whether Project Cassandra had been stymied, and sought to revive it by creating a new DOJ task force of prosecutors. DOJ also designated Hezbollah as a transnational criminal organization in October 2018.3

In 2017, Morocco arrested and extradited to the United States Kassim Tajideen, a top Hezbollah financier who was designated by the U.S. Treasury Department in 2009 and was wanted on fraud, money laundering, and terror finance charges. Tajideen pleaded guilty to one count of conspiracy to commit money laundering and was sentenced in 2019 to five years in prison. In May 2020, a federal judge ordered Tajideen’s early release, ostensibly for health concerns arising from the COVID-19 crisis, but reportedly as part of a prisoner swap deal.4 Two months later, he was deported to Lebanon.5

Alongside concerted action against the terror group’s financial flows, the administration aggressively pursued Hezbollah in the diplomatic arena, seeking to persuade allies to declare it a terrorist organization. Diplomatic efforts focused on helping allies build law enforcement capacity to increase the number of investigations overseas and facilitate cooperation among agencies tracking illicit finance.6

In Latin America, the administration organized periodic summits,7 as well as regular working groups and seminars, designed to bring together practitioners from the region. The events provided investigators, prosecutors, judges, and other members of law enforcement and intelligence agencies with enhanced opportunities to network and share information. The administration also increased the frequency of trips to the region by senior officials and more generally heightened the visible presence of U.S. law enforcement.

Finally, the president signed Executive Order 133188 in December 2017 to enforce the December 2016 Global Magnitsky Human Rights Accountability Act. He also signed the Hizballah International Financing Prevention Amendments Act (HIFPAA) in October 2018. Both measures were designed to strengthen policy and law enforcement actions against not just Hezbollah financiers and networks but also their enablers, including corrupt officials in foreign jurisdictions who facilitate Hezbollah’s criminal and terror finance activities. Using HIFPAA, Magnitsky, and prior authorities, the administration continued to use sanctions to publicly identify Hezbollah cutouts both abroad and in Lebanon to constrain their ability to conduct financial activities on the terror group’s behalf. The administration also designated Hezbollah’s allies in Lebanon, sanctioning the country’s outgoing Foreign Minister Gebran Bassil for corruption.9

Assessment
The Trump strategy to isolate Hezbollah through diplomatic work with allies enjoyed important successes. At U.S. urging, Argentina, Colombia, Estonia, Germany, Guatemala, Honduras, Kosovo, Latvia, Lithuania, Paraguay, Slovenia, Serbia, Sudan, and the United Kingdom passed a variety of measures against Hezbollah – from the creation of public registries of designated terror groups and their members to outlawing all Hezbollah activities on their soil. They joined Canada, Israel, the Netherlands, the Gulf Cooperation Council, and the Arab League, all of which previously designated Hezbollah.

Unfortunately, the administration failed to persuade the European Union to extend its partial designation of Hezbollah to the entire terror organization. Nor was it able to convince close Latin American partners such as Brazil, Chile, Panama, and Peru, even though they are all theaters of ongoing Hezbollah illicit activities.

The Trump administration did make progress on the sanctions front. Some of its most important designations included two Lebanese financial institutions – Jammal Trust Bank and three of its subsidiaries (designated under E.O. 13224 on August 29, 2019), as well as Chams Exchange and its owner, Kassem Chams (designated under E.O. 13224 on April 11, 2019).10 The administration also targeted suspected Hezbollah financier Mohammad Ibrahim Bazzi (who sued Treasury over his designation.) While the Jammal Trust action marked the first time a Lebanese bank had been designated since 2011, it still left the bulk of Lebanon’s troubled banking sector untouched. The administration instead pursued a largely unsuccessful strategy of cooperating with Lebanon’s central bank to address the sector’s massive exposure to Hezbollah’s illicit activities.

On the law enforcement front, DOJ brought to fruition several ongoing investigations against suspected Hezbollah financiers. These investigations led to the arrest of multiple suspected Hezbollah External Security Organization operatives inside the United States11 and the extradition of two suspected Hezbollah financiers from Paraguay, along with the indictments of some of their U.S.-based co-conspirators.12 An important case out of Florida’s Miami-Dade County also received new momentum when Ghassan Diab, one of the three indicted co-defendants, was extradited from Cyprus in July 2020.13

While the administration’s decision to revive Project Cassandra was commendable, it led to some sub-optimal results. DOJ’s decision to create a task force of prosecutors was accompanied by a shift of authority over Hezbollah investigations from the DEA to the FBI. While the DEA remains heavily involved in targeting financial crimes linked to drug trafficking and money laundering, the shift (according to law enforcement officials) led to increased difficulties in information sharing. Trump’s failure until May 2020 to appoint a new DEA administrator also hindered the agency’s effectiveness.

The case of Kassim Tajideen – the Hezbollah financier released from jail just half-way through his sentence, likely as part of a prisoner swap, underscored the shortcomings of the administration’s approach to prosecutions. He returned to a hero’s welcome in Lebanon. His case illustrates the downsides of a strategy built on targeting white-collar crimes, which all too often results in long investigations that yield light sentences, frequently watered down by plea bargains. Rather than serving as an example to deter others from colluding with Hezbollah, the relative ease with which money launderers jump off the hook demonstrates little downside to working with the terror group.

Recommendations
Do not reinvent the wheel, but focus on achieving better results. The Trump playbook for fighting Hezbollah’s global criminal networks does not lack inputs but is wanting in terms of outputs. Rather than creating a completely different strategy, the Biden administration should focus on making better use of the means already at hand to target the terror group’s networks. Critically, the Biden administration should not repeat the mistake of the Obama administration: Pursuing Hezbollah terror financing should continue independent of diplomatic agreements with Iran and Lebanon.

Make more frequent Treasury designations. Targeting more entities and individuals requires strengthening the capabilities, including manpower, of Treasury’s Office of Foreign Assets Control, Treasury’s Office of Terrorism and Financial Intelligence, and the Department of State, which are chiefly responsible for these actions.
Target Lebanon’s banking system more aggressively. Lebanon’s economic collapse in 2020 underscored the extent to which the country’s central bank is part of the problem, including when it comes to ridding its financial sector of abuse by Hezbollah’s global criminal network. U.S. strategy should move toward a more sector-wide approach rather than targeting individual banks once every several years.

Make more extensive use of HIFPAA and executive orders in support of the Global Magnitsky Human Rights Accountability Act and against transnational organized crime. These authorities allow the United States to punish enablers and financial supporters not necessarily affiliated with Hezbollah who nevertheless act as facilitators through corruption and white-collar crime. The incoming administration should use these authorities to aggressively pursue Hezbollah and their global illicit financial network.

Provide more resources to DOJ to increase its investigative and prosecutorial capacity to pursue Hezbollah-linked cases. DOJ needs to ramp up indictments if it is to make a dent in Hezbollah’s global money laundering networks. This cannot be achieved unless more resources are allocated to beef up investigations, including more personnel and better language training for field agents.
Revise laws regarding white-collar crime with a clear nexus to designated terrorist groups. For successful deterrence, those convicted of assisting Hezbollah’s illicit financial flows need to receive longer jail sentences.

Increase diplomacy to convince more allies to issue meaningful terrorist designations of Hezbollah. Such efforts should focus on going beyond mere declarations that Hezbollah is a terrorist group. They must establish national legal frameworks that allow its networks to be targeted by law enforcement. With respect to the European Union, in particular, an effort to improve transatlantic relations could significantly increase U.S. leverage on this critical national security issue.
Focus on reducing interagency rivalries and maximizing information sharing. The challenges that affected the intelligence and law enforcement communities on the eve of 9/11, which also impacted the DEA’s ability to pursue Hezbollah cases under Project Cassandra, continue to hinder information sharing across the board, diminishing the effectiveness of policy and prosecutorial actions against Hezbollah networks.

Notes

  1. Executive Order 13773, “Presidential Executive Order on Enforcing Federal Law with Respect to Transnational Criminal Organizations and Preventing International Trafficking,” February 9, 2017. (https://www.whitehouse.gov/presidential-actions/presidential-executive-order-enforcing-federal-law-respect-transnational-criminal-organizations-preventing-international-trafficking)
  2. S. Department of the Treasury, Financial Crimes Enforcement Network, Press Release, “FinCEN Reissues Real Estate Geographic Targeting Orders for 12 Metropolitan Areas,” May 8, 2020. (https://www.fincen.gov/news/news-releases/fincen-reissues-real-estate-geographic-targeting-orders-12-metropolitan-areas-1)
  3. Josh Meyer, “The Secret Story of how Obama let Hezbollah off the Hook,” Politico, December 17, 2017. (https://www.politico.com/interactives/2017/obama-hezbollah-drug-trafficking-investigation); Josh Gerstein, “Sessions orders review of abandoned Hezbollah-linked drug prosecutions,” Politico, December 22, 2017. (https://www.politico.com/story/2017/12/22/obama-hezbollah-iran-review-doj-jeff-sessions-317403); Josh Gerstein, “Sessions creates team to focus on Hezbollah financing and drugs,” Politico, January 11, 2018. (https://www.politico.com/story/2018/01/11/jeff-sessions-justice-department-hezbollah-team-336396); S. Department of Justice, Press Release, “Attorney General Sessions Announces New Measures to Fight Transnational Organized Crime,” October 15, 2018. (https://www.justice.gov/opa/pr/attorney-general-sessions-announces-new-measures-fight-transnational-organized-crime)
  4. Laila Bassam, “Lebanese man freed by S. as part of secret talks, sources say,” Reuters, July 13, 2020. (https://www.reuters.com/article/us-lebanon-usa-releases-exclusive-idUSKCN24E2LP)
  5. Sarah El Deeb, “Lebanese man who financed Hezbollah in the US returns home,” Associated Press, July 8, 2020. (https://apnews.com/article/f909a8af3e241c6a2a964f2b0ca434d4)
  6. Martin Boerr, “Capacitan a fuerzas de seguridad en prevención del terrorismo y el crimen organizado en la Triple Frontera [Training of security forces in the prevention of terrorism and organized crime in the Tri-Border Area],” La Nación(Argentina), September 20, 2018. (https://www.lanacion.com.ar/seguridad/capacitacion-fuerzas-seguridad-prevencion-terrorismo-crimen-organizado-nid2173880)
  7. S. Department of State, “Joint Communique: Second Hemispheric Ministerial Conference on the Fight Against Terrorism,” July 19, 2019. (https://www.state.gov/joint-communique-second-hemispheric-ministerial-conference-on-the-fight-against-terrorism)
  8. S. Department of Justice, Press Release, “Attorney General Sessions Announces New Measures to Fight Transnational Organized Crime,” October 15, 2018. (https://www.justice.gov/opa/pr/attorney-general-sessions-announces-new-measures-fight-transnational-organized-crime)
  9. S. Department of the Treasury, Press Release, “Treasury Targets Corruption in Lebanon,” November 6, 2020. (https://home.treasury.gov/news/press-releases/sm1177)
  10. S. Department of the Treasury, Press Release, “Treasury Labels Bank Providing Financial Services to Hizballah as Specially Designated Global Terrorist,” August 29, 2019. (https://home.treasury.gov/news/press-releases/sm760); U.S. Department of the Treasury, Press Release, “Treasury Sanctions Lebanese Money Launderer Kassem Chams Who Moves Money on Behalf of Narcotics Trafficking Organizations and Hizballah,” April 11, 2019. (https://home.treasury.gov/news/press-releases/sm650)
  11. S. Department of Justice, Press Release, “Bronx Man And Michigan Man Arrested For Terrorist Activities On Behalf Of Hizballah’s Islamic Jihad Organization,” June 8, 2017. (https://www.justice.gov/usao-sdny/pr/bronx-man-and-michigan-man-arrested-terrorist-activities-behalf-hizballah-s-islamic); U.S. Department of Justice, Press Release, “New Jersey Man Indicted for Terrorist Activities on Behalf of Hizballah’s Islamic Jihad Organization,” September 19, 2019. (https://www.justice.gov/opa/pr/new-jersey-man-indicted-terrorist-activities-behalf-hizballah-s-islamic-jihad-organization)
  12. S. Department of Justice, Press Release, “Seven Owners and Employees of Import-Export Companies Arrested for Conspiracy to Launder Drug Trafficking Proceeds and Related Crimes,” November 15, 2018. (https://www.justice.gov/usao-edny/pr/seven-owners-and-employees-import-export-companies-arrested-conspiracy-launder-drug)
  13. Callum Paton, “Lebanese national accused of laundering drug money for Hezbollah extradited from Cyprus,” The National(UAE), July 19, 2020. (https://www.thenational.ae/world/europe/lebanese-national-accused-of-laundering-drug-money-for-hezbollah-extradited-from-cyprus-1.1051446)