Wednesday, February 23, 2005

The Facts on ID Security

From FAIR

Due to misrepresentations about the REAL ID act during Congressional debate over the bill (H.R. 418), several members of Congress including Rep. James Sensenbrenner (R-WI) released "Dear Colleague" letters rebutting the claims made about the bill.

FAIR is reposting two of those letters so that our members can get a better perspective on what the bill actually does and does not do.


THE FACTS ON ID SECURITY

February 9, 2005

Dear Colleague:

Don't believe the hype - HR 418 does not establish a national ID, it does not invade individuals' privacy rights, and it is absolutely Congress's prerogative to address this issue of vital interest to our country's national security.

Support H.R. 418. Support meaningful reform.

Sincerely,

/s
Tom Davis (R-VA)
Chairman
Government Reform Committee

/s
Candice Miller (R-MI)
Chairman
Subcommittee on Regulatory Affairs
Government Reform Committee

/s
Mark Souder (R-IN)
Subcommittee on Criminal Justice, Drug Policy and Human Resources
Government Reform Committee

FICTION: This is an attempt to establish a "National ID."

FACT: We are not proposing that the federal government create or issue a national ID card. There is no need to build an expensive new bureaucracy when State DMVs are already in place with the infrastructure to securely issue driver's licenses. Under this legislation, States would still issue driver's licenses and identification cards, and would control their own driver database.

We must, however, take steps to secure our nation's primary means of identification. In fulfilling our security responsibilities to the American people, the federal government needs documents it can trust, and it is perfectly within its right to establish minimum standards for federal acceptance. Just as the States expect the federal government to issue trustworthy, verifiable documents they can use for identification purposes, this legislation sets forth the federal government's expectation that the States do the same. This is not preemption; this is cooperation and common sense. We must have minimum standards of identity security, regardless of who issues the document.

FICTION: This legislation creates a national database and is a threat to privacy.

FACT: This is not true. Under the legislation, States will retain control of the issuance process as well as their driver databases. Importantly, the legislation would enable all States to share information contained in their database with other States requesting such information, in order to close the current loophole in the issuance process that allows individuals to carry driver's licenses from multiple States.

If anything, a more secure document and issuance process will only serve to enhance privacy. After all, the greatest threat to your privacy is that someone will steal your identity and gain access to all your personal resources and data.

FICTION: This legislation is completely unnecessary - States have taken sufficient action.

FACT: The 9/11 Commission specifically recommends this action we are taking. On page 390 of the Report, the Commission states, "Secure identification should begin in the United States. The federal government should set standards for the issuance of birth certificates and sources of identification, such as driver's licenses. Fraud in identity documents is no longer just a problem of theft. At many entry points to vulnerable facilities, including gates for boarding aircraft, sources of identification are the last opportunity to ensure that people are who they say they are and to check whether they are terrorists."

FICTION: This proposal involves an unprecedented preemption of state authority regarding the issuance and production of driver's licenses and birth certificates.

FACT: We are not preempting state authority in this area. What we are doing is establishing minimum standards for federal acceptance of such documents. This is actually consistent with actions taken by individual states to date. For example, the State of Nevada does not accept, as proof of identity, a state-issued driver license or identification card from states that do not meet their own standards (23 states and the District of Columbia).

FICTION: This legislation would be detrimental to road safety by preventing States from issuing licenses to illegal aliens.

FACT: Nothing in our legislation would prevent a State from issuing a license allowing an individual to operate a motor vehicle. In fact, the legislation provides the authority for States to do so, which today is under challenge in State courts, such as in Iowa. What this legislation does, however, is to ensure that licenses and cards that do not meet the federal standard, will not be accepted as proof of an individual's identity for federal purposes, such as boarding an airplane.

FICTION: This is just another unfunded federal mandate that we are heaping upon the States. In addition, the States do not have the resources to accomplish the requirements set forth in this legislation.

FACT: The language provides for grant programs to the States to assist in implementing the minimum standards that are established for federal recognition. The legislation authorizes "such funds as may be necessary" to fulfill these requirements, and a collaborative process is established to make sure we meet this important goal.





February 10, 2005

Support H.R. 418. Strengthen the Security of State Driver's Licenses and ID Cards.



Dear Colleague:

Hysteria and distortions, fueled by the deliberate misrepresentations of the advocates of illegal immigration, have introduced confusion into the debate on H.R. 418. This debate is not about a national ID card, because HR 418 does not create one. READ THE REAL ID Act - it's just not in there!!

HR 418 absolutely does not establish a national ID, it prevents one from becoming necessary.

HR 418 does not invade individuals' privacy rights, it requires new privacy measures by the states to protect the privacy of data, and to compel states to protect identities from theft and fraud.

HR 418 does not create a national database - instead it compels the states to improve the data security of information states already capture about their citizens, and requires the states to improve the physical security of the buildings where data is stored.

HR 418 does not threaten gun owners or legal immigrants, but it does require security checks on the state personnel who manage the process to stop the fraudulent sale of driver's licenses and state ID cards to people who should not have them.

Terrorists, crooks, frauds, and illegal aliens are threatened by HR 418, but the safety of law abiding American citizens will be strengthened and the risk of a new attack by foreign terrorists will be reduced. It is absolutely Congress's responsibility to take on this tough issue in the face of the amazing fantasies conjured up by the opposition. Unfortunately, some grass roots organization have been mislead by advocates for illegal aliens.


FALSEHOOD: HR 418 creates a "National ID."

TRUTH: HR 418 does not authorize the federal government to issue a national ID card. It does set a new minimum standard for physical and identity security that states must meet within three years. Many states already meet most of these standards, but there is a handful of states that continue to have such low standards that they are a magnet for foreign terrorists, criminals, home grown identity thieves and illegal aliens. HR 418 will compel these states to clean up their act.

FALSEHOOD: "The breadth of opposition to H.R. 418 is simply astounding."

TRUTH: The people beyond the smear attack on HR 418 are the same left wing liberal caucus that opposes any internal enforcement of the immigration laws. Surveys show that 80% of the American people support meaningful reforms to driver's licenses. The American public "gets it," and the House leadership which is known and respected for it's conservative values is leading this effort to meet our responsibilities to protect the American people. President Bush sent a letter to the floor yesterday, February 9, in support of this bill, in which he reinforced the federal government's need to join with the states to establish minimum standards for identity security.

FALSEHOOD: This legislation creates a national database.

TRUTH: This is not just wrong - it's a conscious distortion. HR 418 will set up a process to enable all States to use an existing Department of Transportation communication system to confirm that driver's licenses presented are genuine and validly issued to the person who is carrying them. This will close the current loophole in the issuance process that allowed most of the 9/11 terrorists s individuals to carry state issued ID cards and driver's licenses from multiple States.

IGNORE THE FALSEHOODS AND DISTORTIONS AND SUPPORT THIS MUCH NEEDED LEGISLATION!

Sincerely,

/s
F. JAMES SENSENBRENNER, JR.
Chairman
Committee on the Judiciary

/s
JOHN N. HOSTETTLER
Chairman
Subcommittee on Immigration, Claims and Border Security
Committee on the Judiciary
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Tuesday, February 22, 2005

US sees insurers as possible tool in terror fight

By Charlie Savage, Globe Staff

WASHINGTON -- Homeland Security officials in the Bush administration are considering ways to use the insurance industry as a free-market-friendly vehicle to drive chemical facilities, food companies, utilities, and other businesses to take greater precautions against terrorist attacks without heavy-handed new regulations.

The concept of using insurance to spur companies to spend on counterterrorism measures may solve a vexing homeland security problem: Despite improvements the government has made to upgrade security at public facilities since the 2001 Al Qaeda attacks, 85 percent of American infrastructure is privately owned and underprotected.

Any attack on chemical, ground transportation, banking, food, energy, or utility sectors could cause massive destruction and cripple the economy. But companies have lobbied hard to defeat legislation to force them to upgrade their security practices, finding allies among free-market Republicans in Congress.

Proponents hope the insurance proposal will be a sweeping solution to the impasse. The basic idea would be to have the government or each industry develop a minimum set of security "best practices." Then, insurers would audit companies for compliance with those standards, with the power to reduce premiums for those who comply.

The idea is being promoted by homeland security specialists close to the Bush administration, although many still disagree on how the details should work. In addition, the insurance industry is skeptical about any version that would require it to provide terrorism insurance -- a still fledgling and poorly understood market -- or to offer discounts based on someone else's standards.

Valerie Smith, a spokeswoman for the Department of Homeland Security, confirmed that Alfonso Martinez-Fonts, head of the department's Private Sector Office, has been working on the issue, although the department declined to make him available for an in-depth interview.

"The insurance issue is being discussed at the department," Smith said. "It would be premature to talk about it until more conversations have been had with the industry and more decisions have been made. Everyone agrees that this is an important issue and good ideas to think about."

In a further sign that the administration may be quietly paving the way for the model, the White House's 2006 budget request for Homeland Security, unveiled last week, doubled funding for a Freedom of Information Act-exempt program that examines trade secrets from private businesses to assess their vulnerabilities to terrorism.

"The theory is perfect," Paul Rosenzweig, a homeland security analyst with the conservative Heritage Foundation, said of the insurance proposal. "The reality may be problematic. It's absolutely worth exploring, and indeed it looks like they are putting a lot more money into [exploring] it."

Many security specialists warned that relying on each industry to develop its own voluntary security standards has been a failure for two reasons: Executives fear the market will punish them for diverting profits into security if their competitors do not do likewise. And companies suspect that regulatory mandates still may come and they do not want to waste money buying the wrong things.

"In the chemical industry, for example, voluntary standards have not worked, period," said P. J. Crowley, a former insurance executive and former National Security Council official. "Part of the answer is finding incentives for them to make the business decision to adapt their materials or processes to reduce or eliminate the risk."

Frank Cilluffo, who until 2003 served as President Bush's special assistant for homeland security, said he is fascinated by the idea of offering less expensive insurance against terrorism to companies that take appropriate precautions. He said it would constitute "a business case for homeland security to ensure that the private sector is fulfilling its share of their responsibility."

The system would encourage companies to protect against limited threats, such as truck bombs or internal sabotage, and the government would guard against greater threats, such as nuclear terrorism.

"Hopefully, these steps, which will be incentivized and/or mandated, will raise the bar higher and improve our countermeasures against terrorism," said Cilluffo, now head of the Homeland Security Policy Institute at George Washington University. "This is not the panacea. This is not the solution. But it takes us a whole lot closer."

But many homeland security and insurance specialists caution that there are obstacles that must be resolved before an insurance-driven system could work. The challenges include getting insurance companies to provide terrorism insurance and determining which security measures are necessary in each industry.

The first problem arises because very few terrorist attacks have occurred in the United States. So, unlike with hurricanes or car crashes, there is little historic data that can be used to predict the risk of attacks now that the United States is at war with Al Qaeda and other Islamist jihadists.

Charles Benda, the homeland security practice leader for Lexington Insurance, said insurers have started to understand damage from terrorist attacks that use conventional methods such as truck bombs, based on blast radius data from military research. But predicting the frequency of attacks is trickier, he said.

"The way to get accurate data is to have more data points to map it out and analyze it," Benda said. "Fortunately, we don't have too many data points, so that makes it very difficult to price insurance costs in terms of future attacks. You can make some assumptions about target cities, target buildings, and target industries, but that still doesn't address the issue of frequency."

Because a terrorist attack from an unconventional weapon, such as a nuclear bomb, would result in incalculably high damages, specialists say the government probably would have to serve as an "insurer of last resort," backstopping the insurance industry against losses above a certain amount.

Still, insurers probably would lobby against legislation that forced them to reduce premiums for companies that follow someone else's guidelines. Each insurer probably would want to preserve the freedom to make pricing decisions, which could jeopardize the uniform standards coveted by security analysts.

"Until you can show that this certified list of things actually does have an impact and does prevent losses, insurers should not be told to provide a discount," said Julie Rochman, senior vice president for the American Insurance Association, a trade group. "Otherwise, you're artificially suppressing the price of coverage, and you've done nothing to prevent the losses."

Richard Thomas, the chief domestic underwriter for AIG, said he "would not recommend any government regulation in this area," adding that his company was closely monitoring efforts to establish uniform standards.

"We're not going to cede our underwriting judgments to the Department of Homeland Security," Thomas said.

But Cilluffo said insurance companies could work together with security specialists in various industries to develop appropriate precautions they agreed with.

He also warned that if the private sector does not establish a "standard of care" on its own, trial lawyers suing businesses after a future terrorist attack would fill that vacuum.

That notion was also sounded by the Sept. 11 Commission. Its final report recommended that the insurance industry use a preparedness standard in evaluating businesses, which would be exposed to lawsuits if they did not comply with the standard.

"Private sector preparedness is not a luxury; it is a cost of doing business in the post-9/11 world," the commission wrote. "It is ignored at a tremendous potential cost in lives, money, and national security."
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Citizens doing what the Government Refuses to do-Protecting Our Borders

'Minutemen' to Patrol Arizona Border

By LARA JAKES JORDAN
Associated Press Writer

WASHINGTON -- Intent on securing the vulnerable Arizona border from illegal immigrant crossings, U.S. officials are bracing for what they call a potential new threat this spring: the Minutemen.

Nearly 500 volunteers have already joined the Minuteman Project, anointing themselves civilian border patrol agents determined to stop the immigration flow that routinely, and easily, seeps past federal authorities. They plan to patrol a 40-mile stretch of the southeast Arizona border throughout April when the tide of immigrants crossing the U.S.-Mexico border peaks.

"I felt the only way to get something done was to do it yourself," said Jim Gilchrist, a retired accountant and decorated Vietnam War veteran who is helping recruit Minutemen across the country.

"We've been repeatedly accused of being people who are taking the law into our own hands," said Gilchrist, 56, of Aliso Viejo, Calif. "That is an outright bogus statement. We are going down there to assist law enforcement."

Officials concede the 370-mile Arizona border is the most porous stretch on the U.S.-Mexico line. Moreover, recent intelligence show that al-Qaida terrorists are likely to enter the country through the Mexico border, James Loy, the deputy secretary of the Homeland Security Department, said last week.

"Several al-Qaida leaders believe operatives can pay their way into the country through Mexico, and also believe illegal entry is more advantageous than legal entry for operational security reasons," Loy said in written testimony to the Senate Intelligence Committee.

Of the 1.1 million illegal immigrants caught by the U.S. Border Patrol last year, 51 percent crossed into the country at the Arizona border. The agency increased the number of agents in the Tucson sector, which has its largest staff, from 1,700 to 2,100 over the last 18 months.

But that number is going to grow to try to plug the remaining holes, said Customs and Border Protection Commissioner Robert C. Bonner. About 10,000 federal agents now patrol the 2,000-mile southern border, he said.

Officials fear the Minuteman patrols could cause more trouble than they prevent. At least some of the volunteers plan to arm themselves during the 24-hour desert patrols. Many are untrained and have little or no experience in confronting illegal border crossings.

"Any time there are firearms and you're out in the middle of no-man's land in difficult terrain, it's a dangerous setting," said Bonner, whose agency is keeping a close eye on the Minutemen plans.

"The Border Patrol does this every day, and they are qualified and very well-trained to handle the situation," he said. "Ordinary Americans are not. So there's a danger that not just illegal migrants might get hurt, but that American citizens might get hurt in this situation."

Civilian patrols are nothing new along the southern border, where crossing the international line is sometimes as easy as stepping over a few rusty strands of barbed wire. But they usually are limited to small, informal groups, leaving organizers to believe the Minuteman Project is the largest of its kind on the southern border.

It may also prove to be a magnet for what Glenn Spencer, president of the private American Border Patrol, described as camouflage-wearing, weapons-toting hard-liners who might get a little carried away with their assignments.

"How are they going to keep the nutcases out of there? They can't control that," said Spencer, whose 40-volunteer group, based in Hereford, Ariz., has used unmanned aerial vehicles and other high-tech equipment to track and report the number of border crossings for more than two years.

"There's a storm gathering here on the border, and there are conditions ripe for some difficulty," he said.

The border agents agree.

The Minutemen "clearly have every reason to be upset with the federal government for abandoning them," said National Border Patrol Council president T.J. Bonner, no relation to the commissioner.

But "if anything goes wrong, God forbid, someone does injure an agent, this government is going to be turning both barrels on them and come after them with a vengeance," he said.

Gilchrist said the Minutemen are under strict orders to merely identify and follow illegal border crossers and alert federal agents. They should not interact with the immigrants except to offer food, water or medical care. If there's a couple of "bad apples" who turn up in the group, Gilchrist said, they will face prosecution if they step outside the law.

Something dramatic needed to be done to curb the years of crime, property damage and trash dumping caused by the border crossings, Gilchrist said.

"Things are out of control" he said. "And they've been out of control for decades."

* __

On the Net:

The Minuteman Project: http://www.minutemanproject.com/

U.S. Customs and Border Protection: http://www.cbp.gov/
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Hezbollah Finances: Funding the Party of God

Washington Institute for Near East Policy

By Matthew Levitt (1)
Chapter from Terrorism Financing and State Responses in Comparative Perspective, Forthcoming in 2006

Matthew Levitt contributed this paper to the project "Terrorism Financing and State Responses in Comparative Perspective," sponsored by the Center for Homeland Defense and Security at the Naval Postgraduate School, Monterey, California. This paper and others will be published in a forthcoming volume edited by Jeanne Giraldo and Harold Trinkunas.
Introduction

It is a painful reality that no counterterrorism technique or effort, however extensive, international, or comprehensive, will put an end to terror attacks or uproot terrorism. There will always be people and groups with entrenched causes, an overwhelming sense of frustration, a self-justifying worldview, and a healthy dose of evil, who will resort to violence as a means of expression.

The goal of counterterrorism, therefore, should be to constrict the environment so that it is increasingly difficult for terrorists to carry out their plots of destruction and death—making it harder for terrorists to operate at every level, such as conducting operations, procuring and transferring false documents, ferrying fugitives from one place to another, and financing, laundering, and transferring funds. This includes cracking down not only on operational cells, but on their logistical and financial support networks as well. In fact, one can so constrict a terrorist group’s operating environment that it will eventually suffocate.

September 11 drove home the central role logistical and financial support networks play in international terrorist operations. Clearly, individuals who provide such support must be recognized as terrorists of the same caliber as those who use that support to execute attacks.

Since September 2001, America—together with many of its allies—has spearheaded a groundbreaking and comprehensive disruption operation to stem the flow of funds to and among terrorist groups. Combined with the unprecedented law enforcement and intelligence efforts to apprehend terrorist operatives worldwide and thereby constrict the space in which terrorists can operate, cracking down on terrorist financing denies them the means to travel, communicate, procure equipment, and conduct attacks. Though the amount of money frozen internationally remains negligible, the impact of freezing terrorists’ assets can be significant if the right accounts, companies, or front organizations are shut down. Denying terrorists access to their preferred means of raising, laundering, and transferring funds complicates their efforts to conduct their activities.

However, al-Qaeda is not the only international terrorist network that poses a serious threat. Deputy Secretary of State Richard Armitage identified Hezbollah as "the A team of terrorism," and warned "their time will come, there's no question about it." (2) Semantics aside, such statements are more than just tough talk. Highlights of Hezbollah’s record of terror attacks include suicide truck bombings targeting US and French forces in Beirut (in 1983 and 1984) and U.S. forces again in Saudi Arabia (in 1996), its record of suicide bombing attacks targeting Jewish and Israeli interests such as those in Argentina (1992 and 1994) and in Thailand (attempted in 1994), and a host of other plots targeting American, French, German, British, Kuwaiti, Bahraini and other interests in plots from Europe to Southeast Asia to the Middle East. (3) As discussed in greater detail below, Hezbollah cross-border operations have spiked since the Israeli withdrawal to the “Blue Line” in May 2000, as has its proactive support for Palestinian terrorist groups targeting Israel.

According to U.S. authorities, concern over the threat posed by Hezbollah is well placed. FBI officials testified in February 2002 that "FBI investigations to date continue to indicate that many Hezbollah subjects based in the United States have the capability to attempt terrorist attacks here should this be a desired objective of the group." (4) Similarly, CIA Director George Tenet testified in February 2003 that "Hezbollah, as an organization with capability and worldwide presence, is [al-Qaeda's] equal, if not a far more capable organization." (5)

Still, some maintain that Hezbollah is merely a "resistance" organization responding to Israeli occupation of disputed land. The distinction is, appropriately, lost on most Western experts, given that the "resistance" groups in question employ acts of terrorism such as suicide bombings to achieve their goals and that many of the operatives go back and forth between serving in guerilla units fighting in South Lebanon and international terror cells plotting bombings abroad. (6) In any event, no goal, however legitimate, legitimizes the use of terrorist tactics and the killing of innocent civilians.

US intelligence officials have also expressed concern over possible links between Hezbollah and Abu Musab al-Zarqawi, highlighting the ad hoc tactical relationship brewing between Iran's shi'a proxy and the loosely affiliated al-Qaeda network. In September 2003, when US authorities designated Zarqawi and several of his associates as 'Specially Designated Global Terrorist' entities, the Treasury said that Zarqawi not only had "ties" to Hizbullah, but that plans were in place for his deputies to meet with both Hizbullah and Asbat al-Ansar (a Lebanese Sunni terrorist group), "and any other group that would enable them to smuggle mujaheddin [sic] into Palestine." (7) The Treasury claimed that Zarqawi received "more than $35,000" in mid 2001 "for work in Palestine," which included "finding a mechanism that would enable more suicide martyrs to enter Israel" as well as "to provide training on explosives, poisons, and remote controlled devices. (8)

Similarly, while the 9/11 Commission found no evidence that Iran or Hezbollah had advance knowledge of the September 11 plot, the commission’s report does note that Iran and Hezbollah provided assistance to al-Qaeda on several occasions. For example, al-Qaeda operatives were allowed to travel through Iran with great ease. Entry stamps were not put in Saudi operatives' passports at the border, though at least eight of the September 11 hijackers transited the country between October 2000 and February 2001. The report also noted a "persistence of contacts between Iranian security officials and senior al-Qaeda figures" and drew attention to an informal agreement by which Iran would support al-Qaeda training with the understanding that such training would be used "for actions carried out primarily against Israel and the United States.” Indeed, al-Qaeda operatives were trained in explosives, security, and intelligence on at least two occasions, with one group trained in Iran around 1992, and a second trained by Hezbollah in Lebanon's Beka'a Valley in the fall of 1993. (9)

In the final analysis, whether suspected ties between Hezbollah and global jihadist elements such as Zarqawi and the 9/11 plotters are proved or not, Hezbollah warrants being designated a terrorist group of global reach on the merits of its own activities. The means by which the group finances its vast and varied activities is therefore of paramount concern to U.S. intelligence officials and policymakers.

Iran: State Sponsorship of Hezbollah

Iran is believed to fund Hezbollah to the tune of at least $100 million per year. Recently, Western diplomats and analysts in Lebanon estimated Hezbollah receives closer to $200 million a year from Iran. (10) The increase is likely due to Iran’s keen interest in undermining prospects for Israeli-Palestinian peace (and, in general, further destabilizing the Israeli-Palestinian conflict), and Hezbollah’s growing role as Iran’s proxy to achieve this goal. Hezbollah success in funding and training Palestinian groups—not just the Iran’s interest in it—may well explain the increase in funding since Iran is known to employ a results-oriented approach to determining the level of funding it is willing to provide terrorist groups. As a U.S. court noted in Weinstein v. Iran, the period of 1995-1996 “was a peak period for Iranian economic support of Hamas because Iran typically paid for results, and Hamas was providing results by committing numerous bus bombings such as the one on February 25, 1996.” (11) Iranian funding to terrorist groups like Hamas and Islamic Jihad (most often funneled via Hezbollah) increases when they carry out successful attacks and decreases when they fail, are thwarted or are postponed due to ceasefires or other political considerations.

Some of this financial support comes in the form of cash funds, while much is believed to come in the form of material goods such as weapons. Iranian cargo planes deliver sophisticated weaponry, from rockets to small arms, to Hezbollah in regular flights to Damascus from Tehran. These weapons are offloaded in Syria and trucked to Hezbollah camps in Lebanon’s Beka’a Valley. In the wake of the death of Palestinian leader Yasser Arafat, Hezbollah reportedly received an additional $22 million from Iranian intelligence to support Palestinian terrorist groups and foment instability. (12)

Iran also funnels money to Hezbollah through purportedly private charities closely affiliated with the revolutionary elite led by Supreme Leader Khomeoni that controls such key Iranian institutions as the intelligence and security services, the judiciary, and the revolutionary council. Mohammed Raad, leader of Hezbollah’s “Loyalty to the Resistance Bloc” in the Lebanese parliament, readily accedes that the group receives funds from Iran, but maintains these are only for “health care, education and support of war widows.” (13)

Beyond this tangible support, however, Iran also provides Hezbollah less quantifiable financial support through the training and logistical operation support it provides the group. Indeed, the most significant modus operandi that runs through all Hezbollah global activities—financial, logistical and operational—is that at some level all Hezbollah networks are overseen by and are in contact with senior Hezbollah and/or Iranian officials.

For example, Hezbollah operatives in Charlotte, North Carolina, responded directly to Sheikh Abbas Haraki, a senior Hezbollah military commander in South Beirut. At the same time, Hezbolllah procurement agents in Canada who coordinated with the Charlotte cell worked directly with Haj Hasan Hilu Laqis, Hezbollah’s chief procurement officer who operates closely with Iranian intelligence. (14)

In Southeast Asia, members of the Hezbollah network behind a failed truck-bombing targeting the Israeli embassy in Bangkok in 1994, as well as a series of other terrorist plots in the region throughout the 1990s, were intimately tied to Iranian intelligence agents. Comprised almost entirely of local sunni Muslims, the network was led by Pandu Yudhawitna who was himself recruited by Iranian intelligence officers stationed in Malaysia in the early 1980s. (15)

Other examples include senior Hezbollah operatives and Iranian agents involved in the 1996 Khobar Towers bombing in Saudi Arabia, in Hezbollah's efforts to smuggle weapons to Palestinian terrorists through Jordan since 2000, in Hezbollah operations in South America (including the 1992 and 1994 bombings), and in the recruitment of Shi’a students in Uganda. (16) Throughout these and many other cases, a key common thread is the direct contact each cell maintains to senior Hezbollah and/or Iranian intelligence operatives.

Perhaps the best documented example of the operational relationship Iran maintains with Hezbollah is Tehran’s role in the Jewish community center (Asociacion Mutual Israelita Argentina , or AMIA) bombing. According to Abdolghassem Mesbahi, a high-level Iranian defector, the decision to bomb the AMIA building was made at a meeting of senior Iranian decision makers on August 14, 1993. (17) The meeting reportedly included the Supreme Leader Ali Hoseini Khamenei, former President Ali Akbar Hashemi, Rafsanjani, former Foreign Minister Ali Akbar Vlayati, the Head of Intelligence and Security in Khamenei’s Bureau, Mohammed Hjazi, former Intelligence Minister Ali Fallahian, and Iranian secret service agent Mohsen Rabbani. (18) According to Argentinean court documents, the Argentinean intelligence service (SIDE) believes that Khameini issued a fatwa concerning AMIA. This fatwa was then handed down from Fallahian to Imad Mughniyeh, the “special operations” chief of Hezbollah. Mughniyeh worked in conjunction with Rabbani, who was able to help orchestrate the plan for the bombing clandestinely under the guise of heading the Iranian Cultural Bureau at the Iranian Embassy in Buenos Aires. (19) Rabbani attempted to buy a Renault-Trafic model van, the same model that was used in the bombing, and is suspected of being involved with several commercial activities through fictitious or undercover enterprises on behalf of Iranian intelligence. (20) Investigators also uncovered records of phone calls between the Iranian embassy in Buenos Aires and suspected Hezbollah operatives in the triborder area who operated out of a mosque and a travel agency there. (21)

According to expert opinions included in the Argentinean court document, it is well known that Hezbollah operatives often receive training in Iran. (22) In addition, Hezbollah prefers outside operatives to local contacts when running its major operations in other countries. These operatives generally are more trustworthy and better trained. (23) The terrorists that conducted the AMIA bombing would have had greater difficulty operating without the operational support of Iran, which reportedly included the bribing of then Argentinean President Carlos Menem with a payment of $10 million dollars to keep Iran’s involvement quiet. (24)

Iran has also supported Hezbollah’s involvement in the Palestinian-Israeli conflict and support of Palestinian militants. U.S. officials contend that, shortly after Palestinian violence erupted in September 2000, Iran assigned Imad Mughniyeh, Hezbollah's international operations commander, to help Palestinian militant groups, specifically Hamas and Palestinian Islamic Jihad (PIJ). (25) According to a former Clinton administration official, "Mugniyeh got orders from Tehran to work with Hamas." (26) In fact, in the March 27, 2002, "Passover massacre" suicide bombing, Hamas relied on the guidance of a Hezbollah expert to build an extra-potent bomb. (27)

Iran has also demonstrated consistent financial and logistical support of Hezbollah and other terrorist groups by establishing terrorist training programs and camps. As of August 2002, Iran was reported to have financed and established terrorist training camps in the Syrian-controlled Beka'a Valley to train Hezbollah, Hamas, PIJ and PFLP-GC terrorists to use rockets such as the short range Fajr-5 missile and the SA-7 anti-aircraft rocket. (28) The camps, including one in Khuraj near the Syrian border, were reported to be under the command of Iranian Republican Guard Corps (IRGC) General Ali Reza Tamzar, commander of IRGC activity in the Beka'a Valley. (29) According to a "Western intelligence agency" report, which puts the cost of the Iranian program at $50 million, Tamzar's IRGC detachment also trains the Lebanese and Palestinian terrorists to carry out "underwater suicide operations." (30) The Iranian terrorist training program was the result of a secret meeting held in the Tehran suburb of Darjah on June 1, 2002, in advance of a two-day conference in support of the Palestinian Intifada held in Tehran on June 1-2, 2002.

Beyond training and arming Hezbollah, Iran bankrolls the group’s well-oiled propaganda machine as well. Al-Manar is the official television mouthpiece of Hezbollah. Called the “station of resistance”—it serves as Hezbollah’s tool to reach the entire Arab Muslim world to disseminate propaganda and promote terrorist activity.

At the time of al-Manar’s founding in 1991, the station reportedly received seed money from Iran (31) and had a running budget of $1 million. By 2002 its annual budget had grown to approximately $15 million. (32) Middle East analysts and journalists maintain that most of this funding comes from Iran. (33)

Avi Jorisch, author of Beacon of Hatred: Inside Hezbollah’s al-Manar Television, writes that “Iran provides an estimated $100-200 million per year to Hezbollah, which in turn transfers money to al-Manar, making Iranian funding of the station indirect.” (34) This was confirmed by former al-Manar program director Sheikh Nasir al-Akhdar who asserted that al-Manar receives a large portion of its budget through subsidies offered by Hezbollah. (35)

Syria: Patronage, Headquarters, and Sanctuary in Lebanon

Practically, there is no dealing with Hezbollah without first dealing with Syria. According to press reports from 2002, Syria has actually integrated elements of Hezbollah's military units into the Syrian army in Lebanon and, in a sharp break from the caution exercised by his father, Bashar al Assad supplied Hezbollah with heavy arms itself (on top of Iranian arms transshipped via Damascus), including a new 220 mm rocket in 2002. (36)

Since Assad inherited the presidency from his father, there is strong evidence that the Syrian-backed Hezbollah has moved energetically into the Palestinian arena—both by sending its own operatives to attempt terrorism inside Israel, as in the case of Jihad "Gerard" Shuman, arrested in January 2001, and by establishing links with terrorist groups in the West Bank, Gaza, and among Israeli Arabs. (37)

For example, Hezbollah operatives working with Force 17 colonel Masoud Ayad in Gaza reportedly directed small arms and mortar attacks against Israeli civilians in Gaza. (38) In June 2002, Israeli authorities conducting a search in Hebron arrested a Hezbollah operative who had entered the country on a Canadian passport. (39) The arrest of this individual coincided with the discovery in Hebron of mines previously only used by Hezbollah in Lebanon. (40)

In August 2004, Israeli forces arrested Jordanian national Mohammad Abu-Juyad, who was reportedly plotting to recruit Israeli-Arabs, attack the Israeli train system, kidnap Israeli soldiers and target Israeli facilities in Jordan. Trained by Hezbollah operatives in Syria to conduct operations in the Palestinian arena, Abu-Juyad first went to Iraq to fight against U.S. forces there. He was wounded lightly in Iraq and returned to Jordan, then went to Syria for further Hezbollah training, and finally arrived in the West Bank in June 2004. (41)

Hezbollah and the Iranian Revolutionary Guards Corp are more active in Syrian-controlled Lebanon than ever, including recruiting, training, and dispatching a cell of Palestinians which killed 7 Israelis in a cross-border raid on the northern Israeli community of Metsuba in March 2002. (42) Hezbollah has also engaged in a proactive effort to recruit Israeli-Arabs to provide intelligence on Israel and logistical support for terrorist operations. Israeli authorities have broken several cells of Israeli-Arabs associated with Hezbollah and other "Lebanese groups," including a four-person cell suspected of passing "computer programs, maps, various objects and documents which may constitute intelligence" through the village of Ghajjar (which straddles the Blue Line separating Israel and Lebanon) to groups in Lebanon in exchange for drugs and weapons. (43)

Similarly, a Hezbollah operative recruited a terrorist cell of Israeli Arabs from the Galilee village of Abu Snan, which was uncovered by Israeli authorities as the group was planning kidnapping operations that would have targeted Israeli soldiers. (44) In July 2002, Israeli authorities arrested Hussein Ali al-Khatib and Hatem Ahmad al-Khatib, two Syrians from the Golan who, on top of smuggling weapons and drugs, were spying on Israel and passing classified information to Hezbollah contacts. (45) In fact, Hezbollah operatives are known to have gone to Europe, where they picked up false identification and travel documents and continue on to Israel, the West Bank and Gaza to train and assist Palestinian terrorist groups. (46)

In February 2002, Israeli foreign minister Shimon Peres told a press conference outside the UN in New York that with Syria's blessing Hezbollah had deployed 10,000 rockets capable of penetrating well into Israel to southern Lebanon. The Christian Science Monitor reported in February that "well informed sources" referred to "truck[load] after truckload" of weapons that arrived in southern Lebanon from May 2000 to December 2001. (47)

According to senior US officials, Hezbollah leader Shaykh Hassan Nasrallah and Imad Mughniyeh worked together in planning terrorist attacks globally and across the UN-certified blue line separating Israel and Lebanon. (48) Asked if Syria would now allow Lebanon to "trace and hand over" Mughniyeh—who is prominently listed on the Federal Bureau of Investigation's "most wanted terrorist" list—to US authorities, Syrian spokeswoman Buthaina Shaaban recently responded, "I don't think this is the issue of the moment." (49)

Syria and Lebanon host the greatest concentration of terrorist training camps, with Iran a close second. Camps for Hezbollah and the PFLP-GC dot the Syrian and Lebanese landscapes, where Hezbollah and Iranian trainers have schooled a motley crew of Palestinian, Kurdish, Armenian, and other recruits in a variety of terrorist and intelligence tactics. For example, several of the terrorists who carried out the 1996 Khobar Towers bombing were recruited in Syria and trained in Hezbollah camps in Lebanon and Iran. (50)

To a group like Hezbollah, which maintains parallel and intertwined terrorist, guerilla, political and social-welfare wings under the banner of one large movement, the multiple and varied forms of support Iran (and to a lesser degree Syria) offer are at least as significant as the cash Tehran deposits in the group’s bank accounts. Not only does such support provide Hezbollah with technical know-how and material it would otherwise be hard pressed to find, it frees up funds Hezbollah raises from other sources, including expatriate remittances, charities and front organizations, and criminal enterprises.

Foreign Expatriate Remittances

Hezbollah receives significant financial support from the contributions of Hezbollah supporters living abroad, particularly from Lebanese nationals living in Africa, South America and other places with large Lebanese shia expatriate communities. Hezbollah’s main income, according to Hezbollah Parliamentarian Mohammad Raad, comes from the groups own investment portfolios and wealthy Shiites. (51)

Take the example of the case of the Union Transport Africaines (UTA) Flight 141, bound for Beirut, which crashed on take-off from Cotonou in Benin, West Africa on 25 December 2003. According to accounts in the Arab press, a "foreign relations official of the African branch of the Lebanese Hezbollah party and two of his aides" were among those killed. (52) Arab press reports also claim the Hezbollah officials were carrying US$2 million in contributions, raised from wealthy Lebanese nationals living in Africa, to the organization’s headquarters in Beirut.

Arab media reports regarding the US$2 million that Hezbollah lost in the aircraft crash noted that "this amount represented the regular contributions the party receives from wealthy Lebanese nationals in Guinea, Sierra Leone, Liberia, Benin, and other African states". (53) The fact that Hezbollah immediately sent an envoy to Benin "to console the sons of the Lebanese community" indicates the value that the group places on these expatriate communities. (54)

As is the case among all terrorist groups that raise funds under the cover of charitable giving, some donors are defrauded unwittingly into funding terrorism while others are willing participants in Hezbollah’s financing schemes. As the Israeli estimate suggests, the transfer of US$2 million at once and by human courier—is remarkable in its audacity. The last known transfer of this size occurred in 1998, when Lebanese expatriates in Senegal attempted to smuggle approximately US$1.7 million to Lebanon. (55) At the time, the local community claimed the smuggling operation was merely an attempt to evade Senegalese law, not to finance Hezbollah. Israeli intelligence, however, ranks Senegal as the "secondary centre for Hezbollah’s fundraising activity in Africa" after the Ivory Coast. (56) Israeli intelligence report focusing on Hezbollah fundraising operations in the Ivory Coast, Senegal, the Democratic Republic of Congo (formerly Zaire) and South Africa estimated that the organization raises "hundreds of thousands of US dollars yearly" on the continent. (57) The sum would be higher had more attempts to smuggle such remittances to Hezbollah succeeded.

Hezbollah supporters living in the U.S. also sent remittances back to Lebanon to fund Hezbollah activities. For example, in Charlotte, NC Hezbollah support networks organized regular parlor meetings held in members' homes where a collection basket was passed around after watching Hezbollah propaganda videos, usually produced by al-Manar. (58)

Similar activity has been documented in South America, where authorities investigating the activities of Hezbollah operative Assad Barakat noted his involvement in “a network of economic financing, that would have as its center of operations Ciudad del Este, Paraguay, which would be sending funds to Lebanon disguised as benefiting the families of victims of the conflict with Israel. It is fitting to mention that the remittances have as their destination relatives fallen in terrorist acts and the economic strengthening of Hezbollah.” (59) Argentinean officials express similar concern about Hezbollah activity in Ciudad del Este. Mario Baizan, a former Argentine presidential advisor, described the city as “one of the world’s biggest centers for financing of the pro-Iranian militant group Hezbollah.” (60)

Charities and Front Organizations

Hezbollah uses charities and front organizations to conceal their fundraising activities. Take, for example, the al-Aqsa International Foundation, a terrorist front organization banned by the United States, Germany and Great Britain (though not the European Union). While al-Aqsa primarily served as a Hamas front organization, Sheikh Moayad, the head of the the al-Aqsa office in Yemen, was arrested in Germany and extradited to the United States for providing financial support to al-Qaeda. Moayad proudly told an undercover FBI informant that he not only funded Hamas but also raised millions of dollars, recruited operatives, and provided weapons to al-Qaeda. According to one report, one of the foundation's offices in Europe also raised funds for Hezbollah. (61)

The “Martyr’s Organization” (Bonyad-e Shahid), headed by Mohammad Hasan Rahimiyan, admittedly supplies charitable funds for the family of suicide bombers. In 2001, Paraguayan police searched the home of Hezbollah operative Sobhi Mahmoud Fayad in Ciudad Del Este, a town along the Tri-Border area where the borders of Brazil, Argentina, and Paraguay meet. Searching Fayad’s home, police found receipts from the Martyr’s Organization for donations Fayad sent totaling more than $3.5 million dollars. (62) Authories believe Fayad sent over $50 million to Hezbollah since 1995. According to press reports, Iran has traditionally funded Palestinian dissident groups in the Lebanese refugee camps, including al Maqdah, through the Institute of the Palestinian Martyrs. (63)

Another example is the Al-Mabarrat Charity Association headed by Sheikh Mohammed Hussein Fadlallah. Formerly the spiritual leader for Hezbollah, Fadlallah maintains intimate ties with the organization and remains on the U.S. Treasury’s list of Specially Designated Terrorists. In 2003, Lebanese Finance Minister Fuad Siniora was barred from entering the United States because of a donation he made to the Al-Mabarrat Charity Association in 2000.

In some cases, the foreign remittances discussed above are funneled to Hezbollah though the group’s charities. Members of the Hezbollah cell in Charlotte, North Carolina, received receipts from Hezbollah for their donations, including receipts from the office of then-Hezbollah spiritual leader Sheikh Mohammad Fadlallah. (64) One receipt, signed by Ali Abu Al Shaer, the financial manager of “the office of his Excellency Ayat Allah Mr. Mohammed Hussein Fadlallah,” thanked “brother Mohammed Hammoud,” the subsequently convicted leader of the Charlotte cell, for a $1,300 donation. (65)

According to a declassified research report based on Israeli intelligence Hezbollah also receives funds from charities that are not directly tied to Hezbollah but are radical Islamist organizations and donate to Hezbollah out of ideological affinity. “Besides operating a worldwide network of fundraisers, funds are also raised through so-called ‘charity funds.’ Some of these are extremist Islamic institutions that, while not directly connected to Hezbollah, support it, albeit marginally, in view of their radical Islamic orientation.” (66) The report cites many such charities worldwide, including four in the Detroit area alone: The Islamic Resistance Support Association, the al-Shaid Fund, the Educational Development Association (EDA) and the Goodwill Charitable Organization (GCO). Also cited are the the al-Shahid Organization in Canada, the Karballah Foundation for Liberation in South Africa, the Lebanese Islamic Association and al-Shahid Social Relief Institution in Germany, and the Lebanese Welfare Committee, The Help Foundation and The Jam’iyat al-Abrar (Association of the Righteous) in Britain.

While some of these funds undoubtedly paid for Hezbollah’s military and terrorist operations, other funds enable the group to provide its members with day jobs, to drape itself in a veil of legitimacy, and to build grassroots support among not only Shia but Sunni and Christian Lebanese as well. For example, Hezbollah runs the al-Janoub hospital in the southern Lebanese city of Nabatiyah—one out of a network of some fifty hospitals the group runs throughout the country. The hospital receives $100,000 a month from Hezbollah and is run by Ahmad Saad, the hospital director who is also a member of Hezbollah’s “national health committee.” (67)

In light of its support from Iran, Hezbollah needs not rely on charities to raise funds as much as other groups like al Qaeda or Hamas. Nonetheless, as Assistant Secretary of State E. Anthony Wayne testified before Congress in September 2003, donating money to charities affiliated with terrorist groups like Hamas or Hezbollah frees up existing monies to support the group’s terrorist activities. “If you are funding the organization, even if there are many charitable activities going on, there is some fungibility between funds. You are strengthening the organization.” (68) Moreover, such funds are objectionable in their own right when they build grassroots support for terrorist organizations and subsidize the families of suicide bombers.

According to US intelligence officials, "Hizbullah maintains several front companies in sub-Saharan Africa". (69) Little information is available on these purported fronts, though they are widely assumed to include import-export companies (an established terrorist modus operandi). These officials say that many Hizbullah activists in the tri-border region relocated to Africa and other locations as a result of the increased attention drawn to Hizbullah activity after the group's role in the 1992 and 1994 truck bombings in Argentina. In an effort "not to have all their eggs in one basket", one analyst adds, some Hizbullah operatives have "moved on" from locations in South America and Europe and set up shop in Africa, Asia and less conspicuous parts of South America. (70)

Criminal Enterprises

Hezbollah depends on a wide variety of criminal enterprises, ranging from smuggling to fraud to drug trade to diamond trade in regions across the world, including North America, South America, and the Middle East, to raise money to support Hezbollah activities. Published reports even suggest that Al-Qaida and Hezbollah have formed additional tactical, ad-hoc alliances with a variety of terrorist organizations to cooperate on money laundering and other unlawful activities. (71)

In the United States, law enforcement officials are investigating a variety of criminal enterprises suspected of funding Middle Eastern terrorist groups, including the stealing and reselling of baby formula, food stamp fraud, and scams involving grocery coupons, welfare claims, credit cards, and even unlicensed t-shirts sales. U.S. officials believe "a substantial portion" of the estimated millions of dollars raised by Middle Eastern terrorist groups comes from the $20 million to $30 million annually brought in by the illicit scam industry in America. (72) Recent examples include an Arab-American in Detroit caught smuggling $12 million in fraudulent cashiers checks into the United States, and a fitness trainer in Boston accused of providing customers' social security and credit card numbers to Abd al-Ghani Meskini, an associate of Ahmad Ressam, the Algerian convicted of plotting to blow up Los Angeles international airport in 2000. (73) A senior U.S. law enforcement official concluded, "There is a significant amount of money moved out of the United States attributed to fraud that goes to terrorism." (74)

The most outstanding case in North America is the Charlotte North Carolina cell run by two brothers, Mohammed and Chawki Hamoud. In June 2002, the Hamoud brothers were convicted of a variety of charges including funding the activities of Hezbollah from the proceeds of an interstate cigarette smuggling ring. Seven other defendants pled guilty to a variety of charges stemming from this case, including conspiracy to provide material support to terrorists, cigarette smuggling, money laundering and immigration violations. (75) Mohammed Hassan Dbouk and his brother-in-law, Ali Adham Amhaz, ran the Canadian portion of this network under the command of Haj Hasan Hilu Laqis (Hezbollah's chief military procurement officer). Their activities were funded in part with money that Laqis sent from Lebanon, in addition to their own criminal activities in Canada (eg, credit card and banking scams). (76) Among the items that they purchased in Canada and the US and smuggled into Lebanon were night-vision goggles, global positioning systems, stun guns, naval equipment, nitrogen cutters and laser range finders. The Canadian Hezbollah network also sought to take out life insurance policies for Hezbollah operatives committing acts of terrorism in the Middle East. (77) According to a wiretapped conversation with another member of his cell that was summarized by Canadian intelligence, “Dbouk referred to a person down there [in Southern Lebanon] … who might in a short period of time go for a ‘walk’ … and never come back, and wondering if Said [the other cell member] could fix some papers and details … for him (person) and put himself (Said) as the reference.” (78)

Members of the Charlotte cell entered the U.S. from South America using false documents, entered into sham marriages in Cyprus, and conducted their activities under multiple identities. Cell members paid indigent Americans to travel to Cyprus at Hezbollah’s expense and engage in sham marriages so additional operatives could get visas to come to America. (79)

In South America, Hezbollah operatives engage in a wide range of criminal enterprises to raise, transfer, and launder funds in support of their terrorist activities. These enterprises include, among others, mafia-style shakedowns of local Arab communities, sophisticated import-export scams involving traders from India and Hong Kong, and small-scale businesses that engage in a few thousand dollars worth of business but transfer tens of thousands of dollars around the globe. (80) In one case, Paraguayan officials arrested Ali Khalil Mehri for selling millions of dollars in pirated software and funding Hezbollah with some of the profits. (81) The triborder area is especially important to Hezbollah, where the group raises close to $10,000,000 a year, according to a study produced by the U.S. Naval War College. (82)

According to the U.S. Treasury Department, Assad Barakat, “threatened TBA [triborder area] shopkeepers who are sympathetic to Hezbollah’s cause with having family members in Lebanon placed on a ‘Hezbollah blacklist’ if the shopkeepers did not pay their quota to Hezbollah via Barakat.” (83) The Treasury Department noted that Barakat is reported to be “the deputy to a Hezbollah financial director, Ali Kazan, and the primary liaison in the TBA for Hezbollah’s Spiritual Leader Hussein Fadlallah.” (84) Barakat not only served as a treasurer for Hezbollah, he was also “involved in a counterfeiting ring that distributes fake U.S. dollars and generates cash to fund Hezbollah operations” and personally couriered contributions to Lebanon for Hezbollah. (85) Barakat’s personal secretary, Sobhi Mahmoud Fayad, served as Hezbollah’s military leader in the triborder region. Fayad was arrested at least three times since 1999, including once for surveilling the U.S. embassy in Asuncion. (86)

Hezbollah activities in Latin America, however, are by no means limited to the triborder area. Chilean officials have identified several import-export companies, primarily located in free trade zones such as the Iquique Free Trade Zone (ZOFRI) in northern Chile, that are suspected as serving as either front organizations or shell companies for Hezbollah. These include Kalmiar Ltd, Bahamas Ltd., Las Vegas Nevada Ltd., San Francisco Ltd., Saleh Trading Ltd., Frankfourt Ltd., Guarany Ltd., Teen Chile Ltd., and Lucky Crown Ltd. (87)

According to Chilean law enforcement officials, “starting in 1980 Lebanese members of Hezbollah have been expanding its presence in South America and continue developing its network of contacts in the Triple Border area.” (88) In 1994 and 1995, these officials note, Hezbollah operatives began visiting Chile “to establish a new operational center for the development of their activities since the authorities of the Triple Border countries initiated greater and more rigorous control with respect to the activities of these foreigners, especially the Lebanese, who according to information provided by international security services are associated with terrorist members of Hezbollah.” (89) According to a U.S. Naval War College report, “U.S. Southern Command estimates that Islamist terrorist groups raise between three hundred million and five hundred million dollars per year in the Triple Frontier and the duty-free zones of Iquique, Colon, Maicao, and Margarita Island.” (90)

Hezbollah members in Venezuela—centered within the large Lebanese expatriate community on Margarita Island—helped several members of the Hezbollah cell in Charlotte, North Carolina infiltrate into the United States through Venezuela in 1992. (91) In the free trade area of Maicao, Columbia, Hezbollah is believed to participate in cigarette smuggling and may have operated a clandestine radio station broadcasting the group’s propaganda. (92)

Hezbollah also raises money from the drugs and diamonds to support their operations. Hezbollah benefits both financially and operationally from the Beka'a Valley's poppy crop, which the group trades to Israeli-Arabs for intelligence on Israeli infrastructure and placement of Israeli soldiers. Israeli authorities have broken up a series of Israeli-Arab cells working for Hezbollah in return for money and, frequently, drugs. Some of these cells, like one operating out of the Galilee village of Abu Snan, were planning to kidnap Israeli soldiers. In September 2002, an Israeli military court indicted a Lieutenant Colonel in the Israeli army, part of a ten member gang, for spying for Hezbollah. The officer, who reportedly lost an eye fighting Hezbollah guerillas, passed classified information to Hezbollah operatives in return for money, hashish and heroin. (93) Hezbollah benefits from the drug business in Lebanon (which in turn is linked to the group's activities in other drug producing areas like South America and Southeast Asia). (94)

Hezbollah and other terrorist groups also traffic narcotics in North America to fund their activities back in the Middle East. A Drug Enforcement Administration (DEA) investigation into a pseudoephedrine smuggling scam in the American Midwest led investigators as far as Jordan, Yemen, Lebanon, and other Middle Eastern countries, including bank accounts tied to Hezbollah and Hamas. DEA chief Asa Hutchinson confirmed, "a significant portion of some of the sales are sent to the Middle East to benefit terrorist organizations." (95)

Hizbullah is also believed to raise significant funds by dealing in so-called 'conflict diamonds' in Sierra Leone, Liberia , and Congo, a practice that al-Qaeda has reportedly copied using the model and contacts established by Hizbullah. (96)

In his US Senate testimony on the links between conflict diamonds and terrorism the former US ambassador to Sierra Leone, Joseph Melrose Jr., and the former Sierra Leonean ambassador to the US, John Leigh, confirmed that diamonds mined in Sierra Leone finance the activities of terrorist groups such as Hizbullah and al-Qaeda. (97)

According to David Crane, prosecutor for the Special Court in Sierra Leone: "Diamonds fuel the war on terrorism. Charles Taylor is harbouring terrorists from the Middle East, including al-Qaeda and Hizbullah, and has been for years." (98) Moreover, a July 2000 Belgian intelligence report stated that "there are indications that certain persons, the 'Lebanese connection' mentioned in the diamond smuggling file, also put in an appearance in files on money laundering, the drugs trade and the financing of Lebanese terrorist organisations such as Amal and Hizbullah.” (99) Belgian intelligence reports also tie the Congolese diamond trade to the financing of various terrorist groups including Hizbullah. (100)

Speaking in the context of the diamond trade and its links to Middle Eastern terrorist groups, one official recently noted the "influx of hard-core Islamist extremists" in the Congo, over the past three years. He added, "We know Hezbollah is here, we know other groups are here, but they can probably operate a long time before we know enough to stop them.” (101) The movement of Hezbollah operatives to Congo in the late 1990s and early 2000s is significant, given the rebellions that divided the country after the end of Mobutu Sese Seko’s dictatorship in 1997.

Hezbollah operatives also run otherwise legitimate business enterprises that function as shell companies or fronts for raising, laundering and transferring large sums of money. The most egregious example appears to be the use of Western Union offices by local Hezbollah operatives. Though Western Union officials were not complicit in this activity, the company failed to make any real efforts to vet local operators even as their international operations grew exponentially over a few short years, especially in areas of conflict. (102) According to Israeli officials, Hezbollah operatives run several Western Union offices in Lebanon and use the coopted services of others worldwide, especially in Southest Asia. In some cases, where the local Western Union agent is a Hezbollah member or supporter, experts believe Hezbollah gets a cut of the 7% service fee charge split between Western Union and the local agent. In other cases, Hezbollah simply uses the money wiring company to launder and transfer funds. For example, Hezbollah funding to Palestinian terrorist groups in the West Bank is almost entirely transferred via Western Union – including some $3 million over a one year period in 2003-2004 alone. (103)

Trends in Raising and Spending Funds

Unlike most terrorist groups, which need to focus much time and attention on raising, laundering and transferring funds, Iran’s largesse provides Hezbollah with a sizable and constant flow of reliable funding. By all accounts, Hezbollah operates under no revenue constraints; indeed, it often serves as a middleman funneling funds from Iran to other terrorist groups such as the Palestinian Islamic Jihad (PIJ), Fatah Tanzim, and others. Still, despite not having the need to be particularly successful at independent fundraising, the organization is in fact very adept at raising, laundering and transferring funds on its own through a wide array of activities. It remains unclear whether funds raised independently go toward specific, perhaps more clandestine, purposes and funds received from Iran toward other, perhaps more overt purposes. The little available evidence suggests that funds from all sources finance a wide array of needs, including both overt and covert activities (note, for example, Iranian funding of charities in Lebanon and direct support of Hezbollah bombings in Argentina). In any event, attempts to make such distinctions are hollow in any event since money is fungible and therefore funds provided for any one function frees funds for other functions. Hezbollah’s fundraising activities can often be boiled down to simply taking advantage of opportunities that arise from having a vast expatriate Shia population sympathetic to the group. Lebanese expatriate support for parties and militias back home is an age old phenomenon. But the group’s independent fundraising, conducted alongside its generous subsidies from Iran, are also intened to guarantee the groups’ future independence through diversified funding no matter what happens to Iran. That is, Hezbollah likely wants to ensure that even in the event that Iran were to ever strike a “grand bargain” with the West (trading support for international terror, proliferation activities and pursuit of a nuclear weapon for full economic and diplomatic relations with the West) the group would continue to be able to exist and function on its own.

Interestingly, while engaging in criminal activity often increases groups’ vulnerability by exposing them to the scrutiny of law enforcement authorities, Hezbollah’s reliance on fellow sympathizers and members of local expatriate communities minimizes that potential exposure. Still, as the case of Hezbollah criminal activity in the triborder region of South America makes clear, the group does engage in criminal activities that gave rise to the unwanted attention of local and international authorities, including mafia-style shakedowns of local store-owners, illegal pirating of multimedia, and the international drug trade.

Hezbollah funds are spent primarily on furthering the group’s overall agenda of establishing a Shia entity in Lebanon and radicalizing Muslims against the West. To that end, the majority of its funds finance social welfare and political activities that finance terror in a more indirect fashion (e.g., by freeing funds for other purposes, radicalizing and spotting future recruits, serving as a financial and logistical support network for the group’s clandestine guerilla and terrorist activities). “Annuities” are paid to the families of killed or captured Hezbollah operatives, and the group aims to provide its members with jobs through its vast social welfare and political infrastructure.

While the attacks of September 11 raised public awareness of terrorism and created a surge in international counterterrorism efforts, Hezbollah financing efforts continue unabated. A small number of Hezbollah charities have been designated as terrorist entities by the United States, and fewer still individual Hezbollah operatives have been added to European lists, Hezbollah’s reliance on local Shia communities—with ties among members and supporters often as tight as family relations or shared neighborhoods from childhoods in Beirut—has made it a particularly difficult group to penetrate. Iranian largesse alone provides the group with plenty of funds, and international fundraising tied to social welfare and political activities are still considered sacred cows in European capitals (not a single European country nor the EU itself has designated Hezbollah as a terrorist group, though several European countries denied the group permission to open “political” offices there for fear of what other activities such offices would facilitate). (104)

Organizational Dynamics of Hezbollah Financing

Little is known about the internal decision making process that governs Hezbollah’s covert activities, though these are not believed to be run separately by unknown elements. With the exception of Imad Mughniyeh, the group’s mysterious international operations chief who is believed to be particularly close to Iranian intelligence, the leadership structure of Hezbollah—from Secretary General Sheikh Hassan Nasrallah to the groups Shura council—are widely known and believed to be responsible for all major decisions related to the group’s over and covert activities alike. While the roles of mid-level operatives may shift over time—note that Mohammed Dbouk, the al Manar television camera man and producer, also served for a time as Hezbollah’s chief procurement officer in North America—senior leadership positions tend to be more clearly defined over time.

What is known is that the myth that groups like Hezbollah maintain separate and distinct pools of funds for their purportedly legitimate social and political activities and their violent guerilla (which, while not terrorist, are no less illegal) or terrorist activities is just that—a myth. Together with significant input from their Iranian sponsors, the most senior Hezbollah leaders—specifically Nasrallah—make the key decisions about how and where to spend funds. As an ideologically driven organization, fiscal honesty and responsibility by Hezbollah members is more often the norm than the exception, though the group is believed to maintain a policy of zero-tolerance for financial indiscretion not only to maintain its reputation as a clean organization (compared to the corrupt Lebanese regime) but to satisfy its sponsors in Tehran. Indeed, because of its intimate relationship with Tehran Hezbollah faces no competition for funds – in fact Iran often uses Hezbollah as a middleman to fund other groups that further its agenda. While Hezbollah’s relationships with Iran and Syria mean that few operational vulnerabilities are available to counterterrorism agencies, these same relationships suggest that the best means of targeting the group is by targeting its relationship with these two states.

Policy Recommendations

Efforts have been made by US policy makers to hold states accountable for their support of designated terrorist groups such as Hezbollah. The Syria Accountability Act represents a long overdue effort to hold Syria accountable for is sponsorship of terrorism, its development of chemical weapons, its illegal smuggling of $1.1. billion in illicit Iraqi oil in violation of UN resolutions, its procurement of military hardware and spare parts for the Iraqi military, and its ongoing occupation of Lebanon. (105) In fact, despite this activity Syria remains the only State Sponsor of terrorism not subject to trade or investment bans, nor are Syrian diplomats subject to the same travel restrictions as diplomats from other states listed as sponsoring terrorism. (106)

In the wake of September 11, the goal of compelling change in Syrian support for terrorism must become a higher U.S. priority than ever before, in order to check Syria's own sponsorship and cut off Iran's outlet to terrorist groups in Lebanon. Only with creative and persistent effort can Washington compel Damascus to discard its use of terrorism-by-proxy. Any such effort must incorporate measures to allow Syria to save face while demanding it jettison terrorism as a state policy and shut down local terrorist groups. Having said that, Syria must be held accountable for any continued double-dealing, i.e. providing some measure of cooperation in the war on al Qaeda while fanning the flames of other terrorist groups of global reach. As the United States considers what carrots and sticks to apply in its effort to motivate Syria, it should consider the need to apply inducements and consequences in tandem and in gradations: small carrots for small gestures, large sticks for large infractions.

Additionally, after significant pressure and lobbying by both Israeli and American authorities, several individual European countries (but not the European Union) have joined the United States in banning the al Aqsa International Foundation, a Hamas front organization which is also suspected of sending money to Hezbollah. The head of the foundation's office in Yemen was arrested in Germany—not for fundraising on behalf of Hamas but for sending weapons and millions of dollars to al-Qaeda operatives well after September 11. (107) Banning Hezbollah in Europe would mark and significant step forward in the effort to stem the group’s international financial activity. The first sign the movement in that direction may be possible occurred in Germany on January 5, 2005, when a Dusseldorf court denied a Hezbollah member a German visa because he "is a member of an organization that supports international terrorism." In a statement, the court said that "Hezbollah is waging a war with bomb attacks against Israel with 'inhumane brutality', and against civilians.” (108)

Shutting down organizations such as front companies and charities that have been found to be facilitating financial support of international terrorist networks will go a long way toward stemming the flow of funds to and among terrorist groups. Terrorist groups will always find other sources of funding. The amount of money frozen and put into an escrow account is not the issue; the issue is shutting down the key nodes through which terrorists raise, launder and transfer funds.

The foreign funding of subversive domestic organizations linked to designated terrorist groups poses immediate dangers to the national security of the United States. This much is clear: should the U.S. fail to adapt the culture of our law enforcement and intelligence community, to enact appropriate laws and procedures, and to commit the necessary resources and resolve, we will find the war on terror that much harder to fight, lasting that much longer in duration, and exacting that much higher and tragic a cost in human life.

Counterterrorism is not about defeating terrorism; it is about constricting the operating environment—making it harder for them to do what they want to do at every level: conducting operations, procuring and transferring false documents, ferrying fugitives from one place to another; financing, raising, and laundering funds. It is about making it more difficult for terrorists to conduct their operational, logistical, and financial activities. Only with greater international coordination will authorities succeed in targeting Hezbollah’s international financial support network and constricting the operating environment in which this designated terrorist organization currently thrives.

Notes:

1. Matthew Levitt is a senior fellow and director of terrorism studies at The Washington Institute for Near East Policy. Julie Sawyer and Andrew Eastman, research assistants in The Washington Institute’s terrorism studies program, assisted in the preparation of this chapter.
2. "US Deputy Secretary of State: Hizbalah—"A Team of Terrorism," www.Albawaba.com, September 6, 2002; "Hezbollah Says Will Defend Lebanon from US Threats," Reuters, September 6, 2002.
3. See Matthew Levitt, “Hizbullah’s African Activities Remain Undisrupted,” RUSI/Jane’s Homeland Security and Resilience Monitor, March 1, 2004 (posted online February 4, 2004); Matthew Levitt, “Smeared in Blood, Hezbollah Fingerprints All Over Globe,” The Australian, June 9, 2003; Ely Karmon, Fight on All Fronts: Hezballah, The War on Terror, and the War in Iraq, Policy Focus No. 46, The Washington Institute for Near East Policy, December 2003.
4. “Current and Projected National Security Threats to the United States,” Hearing Before the Select Committee on Intelligence of the United States Senate, February 6, 2002 (see response number 3 to “Questions for the Record” on page 339 of GPO print edition).
5. “Threats to National Security,” Hearing before the Senate Armed Services Committee of the United States Senate, February 12, 2003.
6. See Matthew Levitt, "Hezbollah: A Case Study of Global Reach" Remarks to a conference on "Post-Modern Terrorism: Trends, Scenarios, and Future Threats,” International Policy Institute for Counter-Terrorism, Herzliya, Israel, September 8, 2003 available online at http://www.washingtoninstitute.org/media/levitt/levitt090803.htm
7. “Treasury Designates Six Al-Qaeda Terrorists,” US Department of the Treasury press release (JS-757), September 24, 2003. Available online: http://www.treasury.gov/press/releases/js757.htm
8. “Treasury Designates Six Al-Qaeda Terrorists,” US Department of the Treasury press release (JS-757), September 24, 2003. Available online: http://www.treasury.gov/press/releases/js757.htm
9. The 9/11 Commission Report: Final Report of the National Commission on Terrorist Attacks Upon the United States, available online at http://www.9-11commission.gov/report/index.htm
10. Scott Wilson, “Lebanese Wary of a Rising Hezbollah,” The Washington Post, December 20, 2004, A17.
11. Susan Weinstein et al v. The Islamic Republic of Iran et al, United States District Court for the District of Columbia, Civil Action No. 00-2601 (RCL), February 6, 2002.
12. “Iran Expands its Palestinian Control; Offers al-Khadoumi Five Million Dollars,” al-Watan (Kuwait), December 13, 2004.
13. Scott Wilson, “Lebanese Wary of a Rising Hezbollah,” The Washington Post, December 20, 2004, A17.
14. United States v. Mohamad Youssef Hammoud, et al. United States Court of Appeals for the Fourth District.
15. Phlippino judicial and intelligence documents, author’s personal files, including: People of the Philippines versus Pandu Yudhawinata, Criminal case No 99-2013, Republic of the Philippines, Regional Trial Court, National Capital Judicial Region, Branch 117, Pasay City, November 1999.
16. Hezbollah: A Case Study of Global Reach.
17. Rohter, Larry. “Defector Ties Iran to 1994 Bombing of Argentine Jewish Center.” New York Times, November 7, 2003, Section A, pg. 9.
18. Ranzoni, Alvaro. “The Teheran Connection.” Panorama. April 10, 2003.
19. Argentine court proceedings investigating the bombings of the Israeli Embassy in Argentina and the AMIA Jewish community center in Buenos Aires (the Asociacion Mutual Israelita Argentina, or AMIA) in 1992 and 1994 respectively, National Federal Court on Criminal and Correctional Matters No. 9, Court Office No. 17, Judicial Branch of the Nation, Federal Judge Juan Jose Galeano, Federal Court Clerk Jose F. M. Pereyra, Buenos Aires, March 5, 2003 (hereafter referred to as AMIA Indictment).
20. Ranzoni, Alvaro, “The Teheran Connection,” Panorama (Italy), April 10, 2003.
21. Mark S. Steinitz, “Middle East Terrorist Activity in Latin America,” Policy Papers on the Americas, Vol. XIV, Study 7, Center for Strategic and International Studies, July 2003.
22. AMIA Indictment, Expert Opinion of Bruce Hoffman.
23. AMIA Indictment, Expert Opinion of Ariel Merari.
24. Rohter, Larry. “Defector Ties Iran to 1994 Bombing of Argentine Jewish Center.” New York Times. Section A, pg. 9. November 7, 2003.
25. Douglas Frantz and James Risen, "A Secret Iran-Arafat Connection is Seen Fueling the Mideast Fire," The New York Times, March 24, 2002.
26. Douglas Frantz and James Risen, "A Secret Iran-Arafat Connection is Seen Fueling the Mideast Fire," The New York Times, March 24, 2002.
27. Molly Moore and John Ward Anderson, "Suicide Bombers Change Mideast's Military Balance," Washington Post, August 17, 2002.
28. "Iran Establishes Rocket Training Centers in Lebanon," Middle East Newsline, August 8, 2002.
29. "Iran Establishes Rocket Training Centers in Lebanon," Middle East Newsline, August 8, 2002.
30. Nicholas Blanford, "Report Claims Iran Running Bekaa Training Camp," Daily Star (Beirut), August 13, 2002 (the article also appeared in Arabic in the Beirut daily An Nahar, August 13, 2002).
31. Jorisch interview with Lebanese Hezbollah expert, October 11, 2002 in Avi Jorisch, Beacon of Hatred: Inside Hezbollah’s al-Manar Television (Washington, DC: Washington Institute for Near East Policy, 2004), Page 32.
32. Nicholas Blanford, “Hezbullah Sharpens Its Weapons in Propoganda War,” Christian Science Monitor, December 28, 2001 in Jorisch, Page 32.
33. Robert Fisk, “Television News Is Secret Weapon of the Intifada,” The Independent (London), December 2, 2000 in Jorisch, Page 32.
34. Ali Nuri Zada, “Iran Raises Budget of ‘Islamic Jihad’ and Appropriates Funds to Fighters,” al-Sharq al-Awsat (London), June 8, 2000 in Jorisch, Page 32.
35. “Hizbollah Inaugurates Satellite Channel via ArabSat,” al-Ra’y (Amman), May 29, 2000, BBC Summary of World Broadcasts, May 31, 2000 in Jorisch, Page 32.
36. Zeev Schiff, "Don't Underestimate Assad Jr.," Haaretz, August 2, 2002.
37. Jack Katzenell, "Barak Signs Six Month Detention Order Against Lebanese Suspect," AP Worldstream, February 21, 2001.
38. "IDF abducts Force 17 Member in Gaza, Arrests 4 Hamas activists," Ha'aretz Daily, January 2, 2002.
39. Lenny Ben-David, "Iran, Syria and Hezbollah: Threatening Israel's North," Jerusalem Issue Brief, vol 2, no 3, Jerusalem Center for Public Affairs, July 18, 2002.
40. Lenny Ben-David, "Iran, Syria and Hezbollah: Threatening Israel's North," Jerusalem Issue Brief, vol 2, no 3, Jerusalem Center for Public Affairs, July 18, 2002.
41. “Jordanian Terrorist Nabbed on West Bank,” Maariv International, December 21, 2004.
42. Lenny Ben-David, "Iran, Syria and Hezbollah: Threatening Israel's North," Jerusalem Issue Brief, vol 2, no 3, Jerusalem Center for Public Affairs, July 18, 2002.
43. "Israel Arrests Arabs Spying for Lebanese Groups," The Daily Star (Beirut), August 6, 2002.
44. Dina Kraft, "Seven Israeli Arabs Charged with Spying for Lebanese Guerillas," AP Worldstream, November 29, 2000.
45. "Israel Annouces the Arrest of Two Syrians in the Golan," al Sharq al Awsat, August 8, 2002.
46. See Matthew Levitt, "Hezbollah: A Case Study of Global Reach" Remarks to a conference on "Post-Modern Terrorism: Trends, Scenarios, and Future Threats,” International Policy Institute for Counter-Terrorism, Herzliya, Israel, September 8, 2003 available online at http://www.washingtoninstitute.org/media/levitt/levitt090803.htm
47. Nicholas Blandford, “Emboldened by US Jibes, Hizbullah Prepares For War,” The Christian Science Monitor, February 8, 2002.
48. Daniel Sobelman, “Jordan to Indict 18 on Terror-linked Charges,” Ha’aretz Daily, February 7, 2002.
49. Janine Zacharia, “Terrorist Camps in Lebanon, Syria Bigger Threat to U.S. than Iraq,” The Jerusalem Post, July 8, 2002.
50. "Senior Fatah Militant in Lebanon Directed and Financed Serious Terror Attacks in Territories and Israel," Press Release Communicated by Israeli Prime Minister's Media Advisor, May 26, 2002, at http://www.imra.org.il
51. Scott Wilson, “Lebanese Wary of a Rising Hezbollah,” The Washington Post, December 20, 2004, A17.
52. Hamid Ghiryafi, 'Hizbullah Officials Carrying Donations Reportedly Killed in Lebanese Plane Crash,' al-Siyasah (Kuwait ) 29 December 2003 [FBIS].
53. Hamid Ghiryafi, 'Hizbullah Officials Carrying Donations Reportedly Killed in Lebanese Plane Crash,' al-Siyasah (Kuwait ) 29 December 2003 [FBIS].
54. Miriam Karouny, 'Benin Plane Crash Deaths Rise to 111,' Reuters 26 December 2003.
55. Author interview with Israeli intelligence official, Tel Aviv, July 2003; also see Hizbullah (Part I),' op cit.
56. Hizbullah (Part I),' op cit.
57. Hizbullah (Part I): Profile of the Lebanese Shiite Terrorist Organization of Global Reach Sponsored by Iran and Supported by Syria,” Special Information Bulletin, Intelligence and Terrorism Information Center at the Center for Special Studies, (CSS), Israel, June 2003, available online at http://www.intelligence.org.il/eng/bu/hizbullah/hezbollah.htm.
58. United States v. Mohamad Youssef Hammoud, et al. United States Court of Appeals for the Fourth District.
59. Text of presentation by Chilean Police Intelligence, Department of Foreign Affairs, at a law enforcement conference in Santiago, Chile, March 2002, author’s personal files.
60. Sebastian Rotella, “Jungle Hub for World’s Outlaws,” Los Angeles Times, August 24, 1998, A1.
61. USA vs. MOHAMMED ALI HASAN AL-MOAYAD, Affidavit in Support of Arrest Warrant, E astern District of New York, January 5, 2003; Hizbullah (Part I): Profile of the Lebanese Shiite Terrorist Organization of Global Reach Sponsored by Iran and Supported by Syria,” Special Information Bulletin, Intelligence and Terrorism Information Center at the Center for Special Studies, (CSS), Israel, June 2003, available online at http://www.intelligence.org.il/eng/bu/hizbullah/hezbollah.htm.
62. Mark S. Steinitz, “Middle East Terrorist Activity in Latin America,” Policy Papers on the Americas, Vol. XIV, Study 7, Center for Strategic and International Studies, July 2003.
63. “PLO Bids to Win Back Refugee Support,” Agence France-Presse, July 5, 1994; Muntasser Abdallah, “Iran Pours Thousands of Dollars in Lebanon’s Palestinian Camps,” Agence France-Presse, June 21, 2002.
64. Hezbollah: A Case Study of Global Reach.
65. Copy of receipt, presented as evidence in US v. Mohammed Hammoud, in author’s personal files.
66. Hizbullah (Part I): Profile of the Lebanese Shiite Terrorist Organization of Global Reach Sponsored by Iran and Supported by Syria,” Special Information Bulletin, Intelligence and Terrorism Information Center at the Center for Special Studies, (CSS), Israel, June 2003, available online at http://www.intelligence.org.il/eng/bu/hizbullah/hezbollah.htm.
67. Scott Wilson, “Lebanese Wary of a Rising Hezbollah,” The Washington Post, December 20, 2004, A17.
68. Testimony of E. Anthony Wayne, Assistant Secretary of State for Economic and Business Affairs, Department of State, to the House of Representatives Committee on Financial Services, September 24, 2003.
69. Author interview with US intelligence official, Washington, DC, July 2003.
70. Author interview with US intelligence official, Washington, DC, July 2003.
71. Maurice R. Greenberg, Chair, “Terrorist Financing: Report of an Independent Task Force Sponsored by the Council on Foreign Relations,” The Council on Foreign Relations, October 2002. Available online at http://www.cfr.org/publication.php?id=5080.
72. John Mintz and Douglas Farah, "Small Scams Probed for Terror Ties: Muslim-Arab Stores Monitored as Part of post-Sept. 11 Inquiry. the Washington Post, August 12, 2002.
73. John Solomon, "U.S. Builds Terror Funding Cases," the Associated Press, August 28, 2002.
74. “U.S. Drug Ring Tied to Aid for Hezbollah,” The New York Times, September 3, 2002.
75. United States v. Mohamad Youssef Hammoud, et al. United States Court of Appeals for the Fourth District.
76. United States v. Mohamad Youssef Hammoud, et al. United States Court of Appeals for the Fourth District; .Jeffrey Goldberg, 'In the Party of God, Hizbullah Sets Up Operations in South America and the United States', the New Yorker 28 October 2002.
77. United States v. Mohamad Youssef Hammoud, et al. United States Court of Appeals for the Fourth District.
78. Transcript of Canadian Secret Intelligence Service (CSIS) transcript for Wednesday, May 26, 1999, author’s personal files.
79. United States v. Mohamad Youssef Hammoud, et al. United States Court of Appeals for the Fourth District.
80. Jeffrey Goldberg, “The Party of God: Hezbollah Sets Up Operations in South America and the United States,” the New Yorker magazine, October 28, 2002.
81. Mark S. Steinitz, “Middle East Terrorist Activity in Latin America,” Policy Papers on the Americas, Vol. XIV, Study 7, Center for Strategic and International Studies, July 2003.
82. Paul D. Taylor, Editor, “Latin American Security Challenges: A Collaborative Inquiry from North and South,” Newport Paper No. 21, Newport Papers, Naval War College, 2004.
83. “Treasury Designates Islamic Extremist, Two Companies Supporting Hezbollah in Tri-border Area,” Office of Public Affairs, U.S. Department of the Treasury, June 10, 2004, available online at http://www.treas.gov/press/releases/js1720.htm
84. “Treasury Designates Islamic Extremist, Two Companies Supporting Hezbollah in Tri-border Area,” Office of Public Affairs, U.S. Department of the Treasury, June 10, 2004, available online at http://www.treas.gov/press/releases/js1720.htm
85. “Treasury Designates Islamic Extremist, Two Companies Supporting Hezbollah in Tri-border Area,” Office of Public Affairs, U.S. Department of the Treasury, June 10, 2004, available online at http://www.treas.gov/press/releases/js1720.htm
86. “Treasury Designates Islamic Extremist, Two Companies Supporting Hezbollah in Tri-border Area,” Office of Public Affairs, U.S. Department of the Treasury, June 10, 2004, available online at http://www.treas.gov/press/releases/js1720.htm
87. Text of presentation by Chilean Police Intelligence, Department of Foreign Affairs, at a law enforcement conference in Santiago, Chile, March 2002, author’s personal files.
88. Text of presentation by Chilean Police Intelligence, Department of Foreign Affairs, at a law enforcement conference in Santiago, Chile, March 2002, author’s personal files.
89. Text of presentation by Chilean Police Intelligence, Department of Foreign Affairs, at a law enforcement conference in Santiago, Chile, March 2002, author’s personal files.
90. Paul D. Taylor, Editor, “Latin American Security Challenges: A Collaborative Inquiry from North and South,” Newport Paper No. 21, Newport Papers, Naval War College, 2004.
91. Mark S. Steinitz, “Middle East Terrorist Activity in Latin America,” Policy Papers on the Americas, Vol. XIV, Study 7, Center for Strategic and International Studies, July 2003; United States v. Mohamad Youssef Hammoud, et al. United States Court of Appeals for the Fourth District.
92. Mark S. Steinitz, “Middle East Terrorist Activity in Latin America,” Policy Papers on the Americas, Vol. XIV, Study 7, Center for Strategic and International Studies, July 2003.
93. Dina Kraft, "Seven Israeli Arabs Charged with Spying for Lebanese Guerillas," Associated Press Worldstream, November 29, 2000; James Bennet, "Israeli Bedouin Colonel Is Formally Charged With Spying," the New York Times, October 25, 2002.
94. Dina Kraft, “Seven Israeli Arabs Charged with Spying for Lebanese Guerillas,” Associated Press Worldstream, November 29, 2000; James Bennet, “Israeli Bedouin Colonel Is Formally Charged With Spying,” the New York Times, October 25, 2002.
95. "U.S. Drug Ring Tied to Aid for Hezbollah," the New York Times, September 3, 2002.
96. “For a Few Dollars More: How al Qaeda Moved into the Diamond Trade,” Global Witness, April 2003, available online at http://www.globalwitness.org/reports/show.php/en.00041.html
97. US Senator Dick Durbin Press Release, 'Durbin Hearing Confirms Conflict Diamond-Terrorist Link' 13 February 2002, available online at durbin.senate.gov/~durbin/new2001/press/2002/02/2002213610.html
98. Douglas Farah, 'Liberian is Accused of Harboring Al-Qaeda,' Washington Post, 15 May 2003, pA18.
99. "Angolan Diamond Smuggling: The Part Played by Belgium ('Algemene Dienst Inlichting En Veiligheid (Adiv)'), Service General du Renseignement Et de la Security (Sgr), July 2000, included in 'For a Few Dollars More: How Al-Qaeda Moved into the Diamond Trade,' Global Witness April 2003, available online at www.globalwitness.org/reports/show.php/en.00041.html
100. Douglas Farah, 'Digging Up Congo's Dirty Gems; Officials Say Diamond Trade Funds Radical Islamic Groups,' Washington Post, 30 December 2001.
101. Douglas Farah, “Digging up Congo’s Dirty Gems; Officials Say Diamond Trade Funds Radical Islamic Groups,” the Washington Post, December 30, 2001.
102. Glenn R. Simpson, “Expanding in an Age of Terror, Western Union Faces Scrutiny as Fund-Transfer System Grows In Risky Parts of the World,” the Wall Street Journal, October 20, 2004.
103. Author interview with Israeli officials, Tel Aviv, May 2004.
104. Author interview with Israeli officials, Tel Aviv, July 2003.
105. Syria's illicit oil trade with Iraq best exemplifies the ever-warming relationship between the regimes of Bashar al-Assad and Saddam Hussein. The 150,000-barrel-per-day Syrian pipeline into which the illicit Iraqi oil is pumped earns each country around $1.1 billion a year. Assad reportedly promised Secretary of State Colin Powell several times during their meeting in February 2001 that he would register the Iraqi oil under the UN's oil-for-food program; nevertheless, Syria has continued to pump the oil illicitly, undermining UN Security Council Resolution 1382 even as Syria assumed a seat on that council on January 1, 2002.
106. Cuba, Iran, Iraq, Libya and Sudan are all subject to additional sanctions such as the Iran-Libya Sanctions Act (ILSA), the Helms-Burton Act, the Cuban Democracy Act, the Trade Sanctions and Export Enhancement Act, the Trading with the Enemy Act, the Arms Export Control Act, the International Emergency Economic Powers Act, and more. For a complete listing of the U.S. Treasury Department's sanctions programs and country summaries, see http://www.treas.gov/offices/enforcement/ofac/sanctions/index.html
107. USA Vs. Mohammed Ali Hasan Al-Moayad, Affidavit in Support of Arrest Warrant, E astern District of New York, January 5, 2003.
108. “Lebanese Hezbollah official forced to leave Germany,” Agence France Presse, January 5, 2005.
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Monday, February 21, 2005

Border seen as gateway to U.S. for al-Qaeda

WASHINGTON - Rep. Solomon Ortiz of Texas has been sounding an alarm since last summer that al-Qaeda might exploit holes in the nation's southern border, and now the Department of Homeland Security agrees with him.
Adm. James Loy, deputy Homeland Security secretary, said in written testimony that he gave to the Senate Intelligence Committee on Tuesday that "recent information from ongoing investigations, detentions and emerging threat streams strongly suggests that al-Qaeda has considered using the southwestern border to infiltrate the United States."

Loy said al-Qaeda operatives believe they can pay to get into the country through Mexico and that entering illegally is "more advantageous than legal entry."

But Loy also said there's no conclusive evidence that al-Qaeda operatives have entered the country through those methods.

Ortiz, a Democrat from Corpus Christi, has been urging the federal government to end its practice of releasing non-Mexican immigrants awaiting deportation hearings after they've been arrested for illegally entering the country. The majority of the non-Mexican immigrants released are from other Latin American countries.

Officials have said that detaining the immigrants would be costly. Immigration and Customs Enforcement keeps in custody those who have committed crimes or are considered a public threat and on average has about 21,000 people in custody daily nationwide.

Cathy Travis, a spokeswoman for Ortiz, said some who are arrested and released are from "countries of interest."

"Brazil is one. It's a visa-waiver country with Mexico. A bad guy who wants to go to the United States can first go to Brazil and then go to Mexico, and at that point it's easy to go north and cross illegally and not be caught or be caught" and released, Travis said.

Countries with visa-waiver agreements allow each other's citizens to enter their countries without visas.

Last summer Ortiz said "credible sources" told him that a Border Patrol agent found on a watch list the name of a woman arrested at the McAllen airport with a damaged passport. Federal officials continue to deny that claim. Earlier this year, he suggested the MS-13 gang, which has its roots in El Salvador and is also known as Mara Salvatrucha, may have links to al-Qaeda.

Loy named MS-13 as one of several violent criminal groups that pose a legitimate threat to homeland security, though those groups are "not necessarily connected to transnational terrorist groups."

Loy also said the United States is a "harder target" for terrorists and illegal immigrants than in the past because of improvements in security since the Sept. 11, 2001, attacks.

"There is much evidence to convince us that interdiction measures have improved, intelligence is working, technology has helped, and far fewer illegal immigrants are now able to enter our ports of entry or cross our border than in the past," Loy testified.
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