Hezbollah’s “Criminal Empire”

Introduction

First of all, please let me express my deepest gratitude for the opportunity to address

this esteemed conference in the ancient city of Bordeaux. For young researcher like me it is a

real opportunity and pleasure to present you some results of my long-term research. In my

today’s contribution I would like to focus on the nexus between criminal activity and

terrorism in the context of Lebanese group known as Hezbollah.

Talking about this particular issue today is probably more important than ever. As

most of you probably know, Hezbollah, or the Party of God, is an armed group belonging to

the Shiite strand of Islam. Hezbollah was funded in Lebanon during the early 1980s and it is

has been accused of masterminding several deadliest terror acts of that era. Over the course of

the last thirty years, Hezbollah became a real mirage of regional politics. Nevertheless,

labelling Hezbollah as a terrorist, insurgent or simply as an armed group is a gross

oversimplification of reality. Hezbollah represents much more. The Party of God can be

described rather as a social movement of its sort, which managed to create a distinct identity 1

and vital political wing. Hezbollah became deeply embedded within the Lebanese social and

political fabrics as it posses unquestionable sovereignty over large swathes of the country.2 It

successfully fought off the Israeli military on several occasions and became core of the so-

called “Resistance Front” (jabchat al-muqawama), which is a label given to the coalition of

countries (Iran, Syria) and non-state actors (Hezbollah, Hamas) actively opposing US and

Israeli policies in the Middle East3. Recent cracks within this coalition due to the strife in

Syria only highlighted importance of Hezbollah as its troops marched into Syria in order to

join embattled Syrian president Bashar al-Assad. It has been just a few weeks since the EU

took radical break with its former policies and designed military wing of Hezbollah as a

1 For the overview of this ideological and identity shifts see Alagha, J., Shifts in Hizbullah Ideology, Amsterdam:

Amsterdam University Press, 2006 and Alagha, J, Hezbollah Identity Construction, Amsterdam: Amsterdam University Press, 2011. 2 In fact some authors offered innovative approaches to Hezbollah through the lens of state-building theories.

See: Stel, N., Forcing the Lebanese Back to Dialogue. Hezbollah's Role in the May 2008 Beirut Clashes Analysed From a State-Building Perspective, University of Utrecht, 2009 (http://igitur-archive.library.uu.nl/student-theses/2009-1022-200117/Thesis%20Nora%20Stel.pdf) and Davis, S., Filling the Void: Hizbullah’s Statebuilding in Lebanon, University of Sydney, 2008 (http://prijipati.library.usyd.edu.au/bitstream/2123/2163/1/Peita%20Davis.pdf). 3For useful insights into this dynamics see for example International Crisis Group, Drums of War: Israel and the

Axis of Resistance,” 2010 (http://www.crisisgroup.org/~/media/Files/Middle%20East%20North%20Africa/Iraq%20Syria%20Lebanon/Lebanon/97%20Drums%20of%20War%20-%20Israel%20and%20the%20Axis%20of%20Resistance.ashx).

terrorist organization. Thus it is reasonable to assume that the issue of Hezbollah will be on

the top of the agenda for some time to come.

Due to the importance of the Party of God in the Middle Eastern affairs, a sizeable

body of literature has been written on many aspects of the organization. Nevertheless, the

most obscure and controversial part of this canon is Hezbollah connection to criminal

activities. Some of them even imply that Hezbollah functions as “octopus-styled”

organization by managing vast net of criminal enterprises4. Although non-negligible amount

of analyses and policy papers have been written on the issue, it remains essentially contested.

Thus in my contribution I would like to focus on this nexus between Hezbollah and criminal

world.

Firstly, I will offer a brief survey of the evidence regarding Hezbollah criminal

undertakings against the backdrop of growing academic and policy interest in the economic

and financial aspects of conflict and terrorism. Then I will invite more contexts into our

analysis by explaining the history of Hezbollah and Lebanese Diasporas abroad.

Subsequently, in the light of these realities, I will critically evaluate available evidence

particularly examining Hezbollah’s involvement in so called Tri-Border area, West Africa and

various other drug and money laundering schemes. I will argue that the evidence linking

Hezbollah to criminal undertakings is rather shaky and often misinterpreted. In my opinion,

Hezbollah managed to profit in one way or another from various criminal schemes, which

have been committed by certain individuals within Lebanese emigrant communities.

Nevertheless, I argue that this profiting is rooted mostly in personal motivations and depends

on circumstantial conditions and it is not a part of significant, deliberate fundraising effort.

Hezbollah thus should not be positioned in the same category as PKK, Taliban, FARC and

other armed formations, which, if deprived of illicit financing, would probably cease to

operate.

Hezbollah as a Criminal Octopus

The question of nexus between political and criminal violence has gained pre-

eminence over since the end of the Cold War. It has been widely assumed that the end of bi-

polar confrontation seriously strained flow of resources to various armed groups, which had

been previously generously supported by the superpowers. Those groups have had to turn for

4 One example for all can be found in: Levitt, M., Hezbollah: Party of Fraud, Washington Institute for Near- east

Policy, 2011, (http://www.washingtoninstitute.org/policy-analysis/view/hezbollah-party-of-fraud).

other sources of funding, mostly the illicit ones. Mary Kaldor famously described this

phenomenon as “new wars.”5 New wars are characterized by decreasing importance of

political and ideological agendas and increasingly chaotic environment, where originally

ideological principles have been corrupted by profiteering and criminal goals. Other authors

further spearheaded inquiry into economic aspects of conflict6 with Paul Collier’s greed vs.

grievance thesis as the most prominent example.7 However, notion of “criminalization of

conflict” has been widely disputed by other authors, who disagree with the labels such as

“novelty,” “chaos” and “criminalization” in relation to post-Cold War conflicts. Authors

Stathis Kalyvas8 claim that the difference between general and local conditions of conflict as

well as certain degree of criminal behavior has always played a role in civil war and thus they

cannot be seen as novel, or unique phenomena of our age. These disputes notwithstanding, it

can be accepted that criminal behavior and armed groups are mutually interwoven. In the field

of terrorism studies, the research on cooperation between terrorism and crime has been

spearheaded mainly by Tamara Makarenko, Phil Williams and some other authors.9

There have been a growing number of conflicts and groups, which has been

increasingly described as “criminalized.” This group includes groups, which significantly

support their activities from criminal undertakings (i.e. Taliban10

), through groups, where the

boundary between criminal and non-criminal motivations became completely blurred

5 Kaldor, M., New & Old Wars, Stanford: Stanford University Press, 2006,

6 For example see: Billon, P., Fuelling War: Natural Resources and Civil War, New York: Routledge, 2005; Fischer

M. and Schmelzle B. (eds.) Transforming War Economies: Dilemmas and Strategies, Berghof Handbook for Conflict Transformation (http://www.berghof-handbook.net/dialogue-series/no.-3-transforming-war-economies.-dilemmas-and-strategies/); Zartmann, W. I. And Arnson C. J., (eds.), Rethinking the Economics of War: The Intersection of need, creed and greed, Washington, Woodrow Wilson Center Press, 2005; Weinstein, J. M., Inside the Rebellion: The Politics of Insurgent Violence, Cambridge, Cambridge University Press, 2007. 7 Collier P., Rebellion as a Quasi-Criminal Activity, The Journal of Conflict Resolution, 2000, 44 (6), pp. 839-853.

Collier, P. and Hoeffler A., Greed and Grievance in Civil War, Oxford Economic Papers 56 (4), pp. 563-596, 2004; Collier, P. and Hoeffler, A, Resource Rents, Governance, and Conflict’ Journal of Conflict Resolution 49(4): 625 – 633, 2005; Collier, P. Wars, Guns and Votes: Democracy in Dangerous Places, London: Bodley Head, 2009. 8 Kalyvas, S., “New” and “Old” Wars: A Valid Distinction? World Politics, 54 (10), 99–118, 2001, and Kalyvas, S.,

The Logic of Violence in Civil War, Cambridge, Cambridge University Press, 2006. 9 Makarenko, T., The Crime-Terror Continuum: Tracing the Interplay between Transnational Organised Crime

and Terrorism, Global Crime, 6(1), 129-145, 2004; Williams, P., Terrorist Financing and Organized Crime: Nexus,

Appropriation, or Transformation. In: Biersteker T, and Eckert, S. (eds.,) Countering the Financing of Terrorism,

London: Routledge, pp. 126-149, 2008. Ehrenfeld R., Funding Evil: How Terrorism is Financed and the Nexus of

Terrorist and Criminal Organizations. In: Costigan S. S. and Gold D. (eds.,) Terrornomics. Hampshire: Ashgate,

2007. 10

Peters, G. Crime and Insurgency In Tribal Area sof Afghanistan and Pakistan, West Point: Combating Terrorism Centre, 2010.

(Columbian FARC, PKK11

), until those, which moved from ideology to pure crime (some

elements of the IRA come to mind).12

Over the past decade, an increasing number of authors asserted that Hezbollah has

become more and more involved in criminal and illicit activities. Firstly, there is alleged

Hezbollah’s involvement in various criminal schemes in Western Africa. The most high-

profile case is Hezbollah connection to illicit diamond trade, which was depicted by works of

investigative journalist Douglas Farah.13

In the sequence of his articles and subsequent book

Farah exposed a net of diverse individuals and companies, which were channeling diamonds

and money to Hezbollah and al-Qaeda. This connection was then further evolved by the

prominent non-governmental organization Global Witness14

, which in its quest for regulation

of diamond trade underwent an extensive investigation of alleged al-Qaeda’s involvement in

West African illicit diamond business. In both works, Hezbollah stays rather aside from the

main line of the story, which is largely devoted to al-Qaeda’s profiting from illicit diamonds.

Nevertheless, it is stressed that Hezbollah operatives had laid down the basic structures, which

then al-Qaeda’s benefited from. According to these reports, Hezbollah affiliated individuals

remain active in the region, which is seen as notorious hub for whole range of organized

crime activities.15

Another alleged flashpoint of Hezbollah activities is Latin America in general and Tri-

Border Area in particular. Tri-Border Area, also known as Triple Frontier, is a junction, where

Paraguayan, Brazilian and Argentinean frontiers meet. Triple frontier is characterized by

extremely difficult terrain, weak governance and it is renowned for being a regional hub for

whole spectrum of illicit activities. Moreover, according to various reports Hezbollah has

been active in almost every major Latino American country (Argentine, Chile, Columbia,

Paraguay).16

Frequent accusations have been also directed to alleged cooperation between

11 Saab, B. Y. and Taylor A., Criminality and Armed Groups: A

Comparative Study of FARC and Paramilitary Groups in Colombia, Studies in Conflict and Terrorism, 32 (6), pp. 455-475, 2009. 12

Hoyt, D, Adapting to a Changing Environment: The Irish Republican Army as an Armed Group. In: Nowritz, J. H., Armed Groups: Studies in National Security, Counterterrorism and Counterinsurgency. Newport: Naval War College, 2008. 13

Farah, D., Blood from Stones: The Secret Financial Network of Terror. New York: Broadway Books, 2004. 14

Global Witness, For a few Dollars More: How al-Qaeda Moved into the Diamond Trade, 2003. 15

Shaw, M. West African Criminal Networks in South and Southern Africa. African Affairs, 101 (404), pp. 291-316, 2002. 16

Constanza, W., Hizballah and Its Mission in Latin America, Studies in Conflict and Terrorism, 35 (3), 193-210, 2012.

Hezbollah and some local regimes with an anti-American agenda such as Hugo Chavez’s

Venezuela.

In both regions and beyond, Hezbollah is thought to be involved in different serious

crimes such as smuggling of drugs, cigarettes, cars, identity thefts, counterfeiting, selling of

pirated good and many more. Nevertheless, criminal activities of the Party are not restricted to

Western Africa and Latin America, but they at least partly involve institution and individuals

residing in the United States or European Union countries17

. Especially smuggling of cars,

drugs and cigarettes and subsequent laundering of the profit is behind the most high profile

cases of Mohammad Sayyef Hammoud and Ayman Joumaa, who are supposed to trade in

cigarettes and drugs and lauder their profits for Hezbollah.

With the accusations described, let us focus on the wider perspective, which will serve

us for the evaluation of the above described evidence.

Bringing the Context Back In

Above described evidence cannot be understood without looking at the wider context.

Firstly we have to look at the development18

of Hezbollah in Lebanon in order to fully

apprehend the nature of Hezbollah and its possible criminal activities. The onset of Hezbollah

can be traced back to the early 1980s, when combination of several factors made local Shiite

population particularly vulnerable to political galvanization. Hezbollah emerged in the

aftermath of Israeli invasion to Lebanon in 1982 due to a positive constellation of several

factors such as political vacuum within Shiite community, ongoing insecurity and suffering

resulting from savage civil war in Lebanon and appealing revolutionary ideology supplied by

Ayatollah Khomeini’s Iran. During its beginnings Hezbollah was not much of an organized

group, but rather a loose formation of several religious figures and their respective

constituencies from southern Lebanon, Bekaa valley and southern outskirts of Beirut. At that

time several high profile attacks occurred. They included attacks against the US and French

peacekeepers in 1983, US Embassy in Beirut in the same year and subsequent hijacking of

TWA flight 847 in 1986. Although all of these attacks are widely believed to be perpetrated 17

Ritzmann, A. and Dubowitz, M., Hezbollah German Helpers, Wall Street Journal (http://online.wsj.com/article/SB117676512831571906.html), 2007. 18

This overview is based on several publications such as Norton, A. R., Hezbollah: A short History. Princeton:

Princeton University Press, 2007; Hamzeh, N., In the Path of Hizbullah, Syracuse, Syracuse University Press,

2004; Harik, J. P., Hezbollah: Changing Face of Terrorism, London, I. B. Tauris, 2004; Azani, E., Hezbollah: The

Story of the Party of God From Revolution to Institutionalization, New York: Palgrave Macmillan, 2011;

Ranstorp, M., Hizb’allah in Lebanon, London, MacMillan, 1997.

by Hezbollah, due to the nature of the group at that time, this claim might be seen as

problematic. It is more precious to say that the sub-elements that composed Hezbollah at that

time were involved in the attacks.19

During the ongoing civil war Hezbollah gained

widespread credibility as it focused its attacks on Israeli forces and it restrained from

undisciplined and criminal behaviour, which characterized its rival militias.20

However, since the termination of Lebanese civil war in 1990 Hezbollah underwent

remarkable transformation. Firstly, after bitter struggle with rival Shiite movement AMAL

Hezbollah established dominancy over the Shiite community. The conclusion of Lebanese

civil war marked a huge turn in Hezbollah history. Political protection by the Syrian regime,

which dominated post-War Lebanon, and with continuous massive funding from Iran created

very favourable conditions for Hezbollah rise. While waging relentless guerrilla warfare

against Israeli forces well into the 1990s, Hezbollah tightened its structures, erected sound

bureaucratic and managerial base and it started to build an impressive network of social

services for population. Hezbollah abandoned extreme religious and sectarian stance and

largely nationalized its discourse. In the same time it entered politics and became enormously

important actor on the political scene as the Party of God stroke alliances with diverse actors

across political and sectarian spectrum. Hezbollah coped with many rapid shifts such as

Israeli withdrawal from Lebanon in 2000. It also skilfully navigated through political tensions

following the withdrawal of the Syrians in 2005 and the subsequent war with Israel in 2006.

Another aspect of Hezbollah, which must be addressed before proceeding to the

analysis of his criminal activities, is the nature of Hezbollah financing. Hizbullah possess

several sources of funding. The first and most important ones are contributions coming from

Iran. Not surprisingly, however, there is serious confusion regarding the exact amount of

funds received by Hezbollah. The most common estimates talks about 100 million USD.21

Nevertheless this estimate is probably rather too low. Other sources claim 400, or even 1.2

billion USD.22

As everything related to Hezbollah, the nature of Iranian funding is very

19

Probably the best overview of the nature of Lebanese Shiite radicals at time has been offered by Chief UN negotiator Giandomenicco Picco in Picco, G., Man Without a Gun: One Diplomat’s Secret Struggle to Free the Hostages, Fight Terrorism, and End a War, New York: New York Times Press, 1999. 20

See Picard, E., Trafficking, Rents and Diasporas in the Lebanese Civil War. In: Zartmann, W. I. And Arnson C. J., (eds.), Rethinking the Economics of War: The Intersection of need, creed and greed, Washington, Woodrow Wilson Center Press, 2005. 21

Norton, A. R., Hezbollah: A Short History. Princeton: Princeton University Press, 2007. pp.110 22

Saad, Ghorayeb, A., Hezbollah’s Iran Money Trail: It’s Complicated, Al-Akhbar (http://english.al-akhbar.com/content/hezbollahs-iran-money-trail-its-complicated), 2012. Frankel, R. D, Keeping Hamas and Hezbollah Out of a War with Iran. The Washington Quaterly, 35 (4), 2012, pp. 55.

complicated. Most of the funds for Hezbollah do not come from “official” Iranian state

budget, but from various specific sources, which stand outside the state ledgers. Religious

“foundations” (bonyads) are the most common source of finance for Hezbollah. Bonyads are

normally described as charitable institution, but in fact they represent a unique economic

conglomerate of diverse businesses and other economic subjects, which do not have an

equivalent in the Western economies. Bonyads are heavily subsidized by the state budget but

they are run by senior clerical establishment under the supervision of the Supreme Leader.23

Bonyads thus represent a parallel economy of its sort. These bonyads and other shadowy

money trails exempted from the conventional budget constitute the major source of funding.

According to respected Hezbolllah scholar N. Hamzeh Iranian money flows can be as high as

1 billion USD.24

Moreover, Hezbollah financing does not depend solely on the Iranians.

Religious contributions, so-called khums, represent another important pillar of Hezbollah’s

budget. Khums are an exclusive phenomenon related to the Shiite Islam. They represent one

fifth of individual income and they are paid to local marjiyyah (pl. marjaa), who exercise

religious authority with the right to explain Islamic law. For the majority of Lebanese Shiites,

the main religious authority is Iranian Supreme leader, who, nevertheless, named Hezbollah

representatives Hasan Nasrallah and Shaikh Yazbak its representatives, thus religious

contributions can be channelled to Hezbollah directly. Furthermore, Hezbollah runs a net of

legal or half-legal businesses in Lebanon profiting thus from Lebanese free market

economy.25

Thus it is reasonable to ask: “Why then there is a need for Hezbollah to be

involved in criminal activities?

Another point, worth noting is the nature of Lebanese emigrant communities.

Lebanese Diasporas have been created during several waves of migration from the 19th

century onwards. Reflecting shifting political realities in Lebanon, the migration was initially

a Christian phenomenon, but over the course of time the percentage of other sects increased as

well and the Muslims gradually surpassed the Christians and the main migrating community.

Important phenomenon became the migration of the Lebanese Shiites, which had been

traditionally an underprivileged community. Shiite’s misfortune was compounded after the

23

Hamzeh, A. N., In the Path of Hizbullah. Syracuse: Syracuse University Press, 2004, pp. 63. 24

Ibid. 25

Ibid.

outbreak of civil war in Lebanon as the Shiites particularly suffered from intense military

engagements between Palestinian militias and the Israeli military.26

In their new countries of origin, particularly in West Africa, Lebanese usually became

very successful businesspeople due to their centuries-long experience as traders and

merchants. However, Lebanese abroad experienced great difficulties with integrating into

their new homes and they often retained certain form of distinguished identity. Generally

speaking, Lebanese around the world also maintain large degree of empathies with their

homeland, what was proofed for example during 2006 conflict between Hezbollah and

Israel.27

These distinctive features of Lebanese communities made the relationship with local

populations tense. Lebanese businessmen have been also frequently accused of unfair or even

illicit business practices and exploitation of local labour. This has lead into widespread

resentment against Lebanese population. In fact this perception of Lebanese and Syrians has

been even immortalized in legendary novel by Graham Greene At the Heart of Matter. As a

consequence, despite being materially wealthy, Lebanese community in West Africa and

beyond has been often politically marginalized and often used by various “ethnic

entrepreneurs” as widely accepted “others.”28

Evidence versus the Context

Having the context outlined, we should turn our attention back to the evidence. Firstly

let us look at the nature of the evidence itself. If we scrutinize it carefully we often find that it

is not based on a sound number of sources, but rather on a few, who tend to mutually quote

each other. Authors such as Passass and Jones29

they have been even unable to validate many

claims coming these sources about alleged connections between diamonds and al-Qaeda and

Hezbollah. Another point worth noting is certain vague language, when it comes to the labels

such as “support,” “connection,” “related” etc. The same problem can be said about so called

Tri-Border area. As Costa and Schulmeister30

argue there is little doubt that this area is the

bedrock of smuggling and insecurity. Nevertheless, they also point out speculative and

26

Tabar, P., Lebanon: A Country of Emigration and Immigration, American University of Cairo, (http://www.aucegypt.edu/gapp/cmrs/reports/documents/tabar080711.pdf), non-date. 27

Leichtman, M. A, Migration, War and the Making of a Transnational Lebanese Shi’i Community in Senegal, International Journal of Middle Eastern Studies, 42, pp. 269-290, 2010. 28

Winder, B. R., „The Lebanese in West Africa.“ Comparative Studies in Society and History, 4 (3), pp. 262-333, 1962; and Bierwirth, Ch., The Lebanese Communities of Cote d’Ivoire, African Affairs, 98, 79-99, 1999. 29

Passas, N. and Kimberley, J., „Commodities and Terrorist Financing: Focus on Diamonds.“ European Journal on Criminal Policy and Research, 12, 1-33, 2006. 30

Costa, T. G. And Schuilmeister, The Puzzle of the Ighuazu Tri-Border Area : Many Questions and Few Answers Regarding Organised Crime and Terrorism Links, Global Crime, 8 (1), pp. 26-39, 2007.

uncertain evidence based on presumptions and very little factual evidence, which further

derails credibility of Hezbollah’s alleged criminal activities.

Then there is the question of context. Due to the limited space here I was able to only

sketch the complicated history and nature of Hezbollah. Nevertheless, even from such a short

introduction we can question some facts and presumptions about Hezbollah criminal empire.

For example, Douglas Farah and Global Witness’ reports designed certain Lebanese

individuals as brokers between AMAL, Hezbollah and al-Qaeda. Nevertheless, it is quite

obvious that these three organizations stand at quite contradictory position vis-à-vis each

other. Hezbollah and AMAL fought bloody war and they are still engaged in protracted, albeit

more sophisticated contest for the support of the Shiite population in Lebanon.31

Farah and

GW reports named Lebanese individual Ali Ahmad and Aziz Nassour as supposedly

important segment of the chain linking Hezbollah and diamonds in Western Africa.

Nevertheless, despite being supposed to act as a broker for Hezbollah, Nassour is close to

Nabih Berri, who is leader of AMAL. This sheds quite negative light on possible cooperation

between Nassour and Hezbollah32

. Moreover, I think that in the light of current battle between

Hezbollah and al-Qaeda inspired or affiliated structures in Syria, there is little to say about

mutual enmity between Sunni radicals and Hezbollah. Hezbollah and the Sunni radicals have

been at odds for decades both in Lebanon and beyond,33

despite some sources try to suggest at

least certain degree of cooperation between pre-9/11 al-Qaeda and Hezbollah in Sudan and

other places.34

Another contextual remark should be directed at the nature and perception of Lebanese

community in Western Africa. As Gberie35

reminds, there is widespread resentment against

Lebanese diamond traders in the area. They are often, frankly speaking not unjustly, accused

of smuggling and exploitative practices. There is also an aspect of market concurrence, where

31

This problem is discussed in more detail by Passas, N. and Kimberley, J., „Commodities and Terrorist

Financing: Focus on Diamonds,” European Journal on Criminal Policy and Research, 12, 1-33, 2006. More about

the context of the Hezbollah-AMAL relations in Shaery-Eisenlohr, R., Shi’ite Lebanon: Transnational Religion

and the Making of National Identities. New York: Columbia University Press, 2008.; and Shanahan, R., The Shi'a

of Lebanon: Clans,Parties and Clerics. London, I.B. Tauris, 2005. 32

Global Witness, For a few Dollars More: How al-Qaeda Moved into the Diamond Trade, 2003, pp. 33

Uneasy relationship between Hezbollah and Sunni radical groups was described for example by Saab, B. and

Ranstorp M., Securing Lebanon from the Threat of Salafist Jihadism. Studies in Conflict & Terrorism, 30: 825–

855, 2007. 34

For example Bergman, R., The Secret War with Iran: The 30-year Clandestine Struggle Against the World’s Most Dangerous Terrorist Power, New York: Free Press, 2008. 35

Gberie, L., War and Peace in Sierra Leone, Partnership Africa Canada, Occasional Paper 6, 2002, pp. 10-18.

charging your peer of involvement in terrorism business can be employed as very effective

way, how to get rid of him.

Moreover, if look at history of Hezbollah we can find other interesting observations.

As already mentioned above, Hezbollah originally represented rather a certain form of

franchise of radical organizations, which differed in their interest and relationship to Iran and

agenda. This nature of early Hezbollah was extremely well depicted in the memoirs of former

UN diplomat Giandomenicco Picco, who succeeded in negotiating the release of Western

hostages in Lebanon. Mr. Picco convincingly shows, how difficult it was to negotiate with

different subdivisions of Hezbollah and how limited the influence of outside patrons was at

that time. Although Hezbollah radically transformed its nature during the 1990s, there is still

a certain degree of independence of some of its parts, especially those, which operate

abroad.36

This fragmentation and need to flexibly adapt on pre-existing conditions of the

ground might lay behind Hezbollah relationship with the drug cultivation in Lebanon. In his

recent book, Jonathan Marshall37

argues that despite the fact that Hezbollah is one of the few

Lebanese armed groups, which has not compromised itself with direct involvement in drug

trade and drug cultivation. On the contrary, the Party even tried to stop farming of drug-

related plants. Nevertheless, such attempts had to yield to the local realities. Hezbollah leader

Hassan Nasrallah repeatedly called on tough stance against drug trade and argued even

against selling of drugs to “enemy.38

Nevertheless, at the same time Hezbollah called for

revision of some 30 000 warrants against the residents of Bekaa, which were from significant

part issued for drug trafficking. When asked about these conflicting statements Nasrallah

defended Hezbollah’s calls for general pardon by pointing at fact that most of the warrants are

outdated and they were issues mostly for less serious crimes. Nevertheless, these

contradictions towards drug dealing clearly show that Hezbollah has to take the interests of its

constituency in Bekaa into account.39

Another interesting aspect is the fact that drug

cultivation has been traditionally in hands of powerful local families, so-called zu’ama,

especially Hamadi clan. Although the social and economic transformation broke the authority

36

Daniel Byman, one of the leading experts on the organization, notes that Hezbollah „international“ wing is much more closely cooperating with the Iranians. See: Byman, D., Deadly Connections: States that Support Terrorism, Cambridge: Cambridge University Press, 2009. 37

Marshall, J. V., The Lebanese Connection: Corruption, Civil War and the International Drug Traffic, Stanford, Stanford University Press, 2012, pp. 148-152. 38

Nasrallah, H. Alnahdanews. 2009, http://english.alahednews.com.lb/essaydetails.php?eid=9510&cid=450#.UgjMNpI9-EE 39

Nasrallah, H.. Alnahdanews. 2009http://english.alahednews.com.lb/essaydetailsf.php?eid=9632&fid=54

of zu’ama40

, some of these families play vital role within Hezbollah structures. In fact the

Hamadis are widely believed to play crucial role in the security-apparatus of Hezbollah.41

Another aspect worth looking is Hezbollah involvement in criminal undertakings in

Latin America. There has been a widespread assumption that Hezbollah established solid

foothold in the Western hemisphere. The most prominent examples of this trend were deadly

terror attacks against Israeli embassy and Jewish cultural targets early 1990s. It is widely

assumed that the operation was a result of cooperation between Hezbollah and Iran in order to

avenge death of Hezbollah leader Mussawi, who had been killed by Israeli strike in the early

1990s42

. Subsequent investigation resulted in multiple INTERPOL warrants against several

high-profile Iranian and Hezbollah officials43

.

Nevertheless, since then various sources claim that Hezbollah established solid

networks in this part of the world creating thus clear danger for Western interests.44

Particularly important in this matter is alleged connection to the Tri-Border Area. But

Hezbollah is believed to be involved in money-laundering schemes, counterfeiting, identity

thefts, smuggling, drug trafficking, selling of pirated goods and other more or less serious

crimes, which are believed to generate reasonably solid income.45

These activities are not

limited on Tri-Border Area, but they have allegedly involved almost every Latino-American

country.46

Moreover, criminal enterprises have not avoided operating even from the inside of

the United States as the case of Mohammad Yusuf Hammoud shows.47

Some analysts also

40 Shanahan, R., The Shi'a of Lebanon: Clans, Parties and Clerics. London, I.B. Tauris, 2005. 41 Ranstorp, M., Hizb’allah in Lebanon, London, MacMillan, 1997. 42

Byman, D., HIgh Price: The Triumphs and Failures of Israeli Conuter-Terrorism. Oxford: Oxfrod University Press, 2011, 222-225. 43

Interpol, INTERPOL Executive Committee takes decision on AMIA Red Notice dispute, 2007 (http://www.interpol.int/News-and-media/News-media-releases/2007/PR005). 44

Berman, I. Hezbollah in the Western Hemisphere: Statement the US House of Representatives Committee on Homeland Security, Subcommittee on Counterterrorism and Intelligence, 2011 (http://homeland.house.gov/sites/homeland.house.gov/files/Testimony%20Berman.pdf). 45

Constanza, W, Hizballah and its Mission in Latin America, Studies in Conflict and Terrorism, 35 (3), pp. 193-210, 2012; Levitt, M., Criminal Connections: Hizbollah’s Global Illicit Financing Activities, IHS Defense, Risk and Security Consulting, 2012, (http://www.washingtoninstitute.org/uploads/Documents/opeds/Levitt20120930-Janes.pdf); Hezbollah in Latin America – Implications for US Homeland Security, Subcommittee on Counterterrorism and Intelligence, 2011 (http://www.gpo.gov/fdsys/pkg/CHRG-112hhrg72255/pdf/CHRG-112hhrg72255.pdf), 46

Berman, I. Hezbollah in the Western Hemisphere: Statement the US House of Representatives Committee on Homeland Security, Subcommittee on Counterterrorism and Intelligence, 2011 (http://homeland.house.gov/sites/homeland.house.gov/files/Testimony%20Berman.pdf). 47

Ibid.

warn that this bustling underworld implies that Hezbollah possesses necessary structures to

conduct terrorist strikes in case it serves its interests48

.

Nevertheless, when we look at available evidence we discover largely different

picture. Again we face very vague formulations, repeated, almost impossible to validate, facts

and other conflicting information.

Let us focus on some high-profile cases. Firstly, what is quite remarkable is the fact

that media display tendency to indicate that Hezbollah affiliated individual’s generated

enormous profits from large-scale criminal schemes49

. But what is often omitted is that not all

of this money was actually channelled to Hezbollah. This lead some experts into claiming that

Hezbollah actually does not mastermind criminal enterprises in the area, but it just partly

profits from individual donations, which seem to be a product of personal sympathies rather

than systematic cooperation.50

Nevertheless, some exceptions, when certain individuals were

in close touch with Hezbollah leaders and generated large amounts of money, probably did

exist. However, majority of these cases was discovered more than ten years ago.51

Moreover,

2012 US State Department’s reports affirmed absence of Hezbollah operational terror cells in

Latin America.52

Let us have a look at two cases, which, in my opinion, clearly exemplify many

problems, which are related to Hezbollah alleged criminal undertakings. Firstly, there is the

case of already mentioned Mohhamad Hammoud. Mr. Hammoud entered the US illegally on

forged visas in 1990s. Despite the fact that he was arrested, he managed to apply for asylum

claiming that he is pursued by Hezbollah. He then made several fake marriages in order to

obtain US citizenship. This effort was ultimately successful and he was thus free to set up a

smuggling chain. Hammoud et al. exploited different taxation rates on tobacco North Caroline

and Michigan as they purchased large quantities amounts of cigarettes in former state and sold

48

Farah, D. Hezbollah’s External Support Network in West Africa and Latin America, International Assessment and Strategy Centre, 2006 (http://www.strategycenter.net/research/pubid.118/pub_detail.asp). 49

BBC, “US seizes $150m 'linked to Hezbollah money-laundering,“ 2012 (http://www.bbc.co.uk/news/world-middle-east-19327919). 50

Ramsey, D., Hezbollah in Latin America: an Overhyped Threat?” Christian Science Monitor, 2012 (http://www.csmonitor.com/World/Americas/Latin-America-Monitor/2012/0113/Hezbollah-in-Latin-America-an-over-hyped-threat/(page)/1). 51

Madani, B., Hezbollah’s Global Finance Network: The Triple Frontier, Middle East Intelligence Bulletin, 2002 (http://www.meforum.org/meib/articles/0201_l2.htm). 52

US Department of State, Country Reports on Terrorism 2012 (http://www.gpo.gov/fdsys/pkg/CHRG-112hhrg72255/pdf/CHRG-112hhrg72255.pdf).

them in the latter state with considerable gain. FBI managed to infiltrate his cell and

ultimately arrest him and his accomplices in 2000.

Hammoud was then charged with many serious crimes, including the support of

foreign terrorist entity, which meant Hezbollah. In the end, he was found guilty of most of the

crimes, including the support of terrorism and sentenced for 155 years in prison. Nevertheless,

careful scrutiny of the case reveals many problematic points.53

Firstly, Hammoud was the

only one from the whole group, who was found guilty of the support of terrorism. And despite

the fact that the group allegedly deprived state of Michigan of almost 8 million USD and

many journalists asserted that the group created huge profits for the moment54

, the only hard

evidence of Hammouds financial support of Hezbollah was his personal gift of 3 500$ (!).

The rest of the evidence was based on Hammoud’s proven sympathies for Hezbollah as he

repeatedly praised Hezbollah’s operations to the wider audience and distributed materials

related to the movement55

. This clearly undermines opinions, which claim that the group was

of crucial importance to Hezbollah.

Network of prominent drug trafficker Ayman Joumaa present us with another worth

noting example of alleged Hezbollah criminal undertakings. Joumaa was accussed of

committing large-scale drug trafficking, car-smuggling and subsequent money laundering.

He was allegedly in business with several dangerous drug cartels from Mexico and Columbia.

Quoting government officials, major media designed Joumaa as main Hezbollah financier and

Hezbollah was presented as “drug cartel.”56

Nevertheless, careful reading of the indictment

and subsequent releases of the US department of Treasury reveal a little bit different, more

unclear picture.

Firstly, the original indictment against Joumaa does not contain support of terrorism.

Money laundering, drug trafficking, criminal conspiracy etc. are indeed listed, but not support

of terrorism57

. The link between Joumaa and Hezbollah was established later and it is based

through its connection to Lebanese-Canadian bank, which was designed as an “entity of

53

United States v. Hammoud, United states Court of Appeals, 2005 (http://www.ca4.uscourts.gov/opinions/Published/034253.P.pdf). 54

Kaplan, D. E., Homegrown Terrorists: How Hezbolllah Made Millions in sleepy Charlotte, N.C., U.S. News, 2003 (http://www.usnews.com/usnews/news/articles/030310/10hez.htm) 55

United States v. Hammoud et. al. United States District Court, Western District of North Caroline, 2011 (http://www.investigativeproject.org/documents/case_docs/120.pdf). 56

Solomon, J. U.S. Moves Against Hezbollah 'Cartel' Wall Street Journal, 2013 (http://online.wsj.com/article/SB10001424127887323735604578441251544900808.html). 57

United States v. Joumaa, United States District Court, Eastern District of Virginia, 2011 (http://www.investigativeproject.org/documents/case_docs/1856.pdf)

primary money-laundering concern.”58

LCB served Joumaa’s network as the main money

laundering point, where illicit transactions (worth tens of millions USD) took place.

Nevertheless, US treasury does not explicitly say, how big part ended with in the hands of

Hezbollah. Instead, it claims that some members of LCB had contacts with Hezbollah, which

means that the Party profited from Joumaa’s criminal business59

. US government filed a civil

suit aimed at financial punishing of the bank and almost 30 other businesses. However,

despite making multiple claims about alleged amount of money laundered, the complaint does

not stay, how large was the amount of money provided to Hezbollah.60

In the end the

settlement was reached between the US Government and the bank provided that the Lebanese

Canadian bank pays fine of 102 million USD. Nevertheless, management of the bank

continued denying complicity in money laundering schemes and deliberate support of

terrorism. In the end, the US agreed not to pursue any member of the bank’s management,

member of staff or other stakeholder in personam (i.e. directly)61

Thus the real extent of

factual financial support as well as transferring mechanism for Hezbollah remains unclear. It

seems more likely that Hezbollah did make some profits through connections to the bank

management. However, the extent of this gain is largely unclear, despite the fact that original

case against Joumaa has been upgraded by adding the support of terrorism to the list of

charges. To complicate matters further, Joumaa is a son-in-law of Nabih Berri, the leader of

AMAL .62

And, as already mentioned, despite their mutual cooperation, AMAL and Hezbollah

are seen as traditional rivals, thus it is legitimate to ask why would be Joumaa’s profit

channelled to Hezbollah instead of AMAL. The complexity of the cause was confirmed by

some unnamed officials, who ruled out possibility that Hezbollah and drug cartels in Latin

America cooperated in more deliberate manner63

.

58

US. Dept. Of Treasury, Treasury Identifies Lebanese Canadian Bank Sal as a “Primary Money Laundering Concern, US Dept of Treasury, 2011 (http://www.treasury.gov/press-center/press-releases/pages/tg1057.aspx); and US. Dept of Treasury, Finding that the Lebanese Canadian Bank SAL is a Financial Institution of Primary Money Laundering Concern, 2011 (http://www.fincen.gov/statutes_regs/patriot/pdf/LCBNoticeofFinding.pdf) 59

Ibid. 60

United States vs Lebanese Canadian Bank et al., United States District Court: Southern District of New York, (http://www.investigativeproject.org/documents/case_docs/1861.pdf) 61

United States vs. Lebanese Canadian Bank, Stipulation and Order of Settlement. United States District Court: Southern District of New York, 2013 (http://www.investigativeproject.org/documents/case_docs/2191.pdf) 62

Berri's Son-in-Law Denies Involvement in Money Laundering, Naharnet, 2011

(http://www.naharnet.com/stories/en/2991).

63Bosworth, J., Hezbollah, terrorist financing, and Venezuela: Don't panic, Christian Science Monitor, 2011(

http://www.csmonitor.com/World/Americas/Latin-America-Monitor/2011/1215/Hezbollah-terrorist-financing-and-Venezuela-Don-t-panic)

Conclusion

In the limited space of this paper, I tried to go through some of the most high-profile

cases of terrorism-crime nexus in case of Hezbollah. Despite the fact that there is much more

to talk about in this case I wanted to show that “facts,” often taken for granted when it comes

to Hezbollah financing, are often build on rather shaky grounds. What I especially tried to

contest is the perception of Hezbollah as certain kind of “godfather” organization, which is

directing criminal operations globally. For example Matthew Levitt claims that destroying

Hezbollah criminal sources of financing offers a real possibility to effectively throw it off

balance64

. I think that this conclusion is rather wrong.

First of all, I am not trying to deny that Hezbollah is profiting from criminal

undertakings. Indeed, due the amount of evidence, it literally is impossible to question the

involvement of Hezbollah in criminal world as such. Nevertheless, I argue that the nature of

this involvement is rather different.

First and foremost, I argue that the extent of this involvement is much smaller and

much less important for Hezbollah than other sources of finances such as collection of

donations, religious taxes and income from the Iranians. In contrast with this massive influx

of resources, criminal activities are a fracture of the overall Hezbollah budget. Matter of fact,

most of the cases have, so far, failed to establish clear evidence that Hezbollah made

significant gain from criminal activities especially in contrast to the other sources of

financing.

Secondly, I argue that most of the income generated by the group was rather a by-

product of the activities of its sympathizers rather than deliberately targeted fundraising.

Hezbollah does enjoy considerable degree of popularity and its support from Lebanese

community abroad is thus a result of a complex interplay between kinship affiliations,

personal sympathies and ad-hoc conditions. In my opinion, Hezbollah is also able to tap the

money flows due to its very penetration of various levels of Lebanese banking system and

bureaucracy. Nevertheless, I disagree with notion criminal activities represent an important

pillar of Hezbollah budget. I rather perceive them as one of less significant bricks, on which a

complex web of financing of the Party of God stands.

64

Levitt, M., Hezbollah: Party of Fraud, Washington Institute for Near- east Policy, 2011, (http://www.washingtoninstitute.org/policy-analysis/view/hezbollah-party-of-fraud).