CATF Reports Feb. 9, 2016, 11:56am


Last week the U.S. Drug Enforcement Administration (DEA) revealed the arrests of key leaders of Hezbollah’s Business Affairs Component, which has been involved for decades in worldwide racketeering activities such as drug trafficking and drug-related money laundering. The arrests were an integral part of a little known DEA initiative — Project Cassandra — which targets cells of the global Hezbollah network behind the clandestine movement of large quantities of cocaine into the U.S. and Europe. According to DEA and other authoritative sources, Hezbollah uses the laundered funds to advance its core terrorist purposes. Recently, according to a DEA press release, the illicit proceeds have been churned to buy large scale weapons for Hezbollah to deploy in Syria. DEA also affirmed that Hezbollah has established business relationships with South American drug cartels responsible for supplying enormous quantities of cocaine to the European and U.S. drug markets, allowing Hezbollah it to launder the drug proceeds through a trade based money laundering scheme known as the Black Market Peso Exchange”.

In case Monday’s DEA announcement appears to come out of nowhere, last October a prominent imam was arrested in Atlanta on money laundering and firearms charges was brought before a Brooklyn, NY, federal court. He was allegedly involved in a plot to sell thousands of firearms — including military assault rifles, machine guns, and sniper rifles — to Hezbollah terrorist and organized crime cells in Iran and Lebanon. The case originated with a DEA “‘sting” and the investigation confirmed that the Hezbollah-connected and other defendants agreed to conduct laundering transactions to assist a DEA undercover agent, whom they believed to be a drug trafficker, in concealing the drug proceeds so it could be channeled to foreign terrorists. In addition to offering the undercover agent laundering services, the principal defendant informed the agent that her Hezbollah associates were eager to purchase large quantities of cocaine, advanced weapons, and ammunition.   Another defendant discussed, in secretly taped conversations, potential narcotics transactions with the undercover agent and suggested that he could exploit his connections with Hezbollah to provide security to safeguard narcotics shipments. Together, the defendants explained they could arrange for planes from South America bulging with multi-ton shipments of cocaine to land safely in Africa — a common transit point before the drugs were smuggled to the U.S. or Europe.

Thankfully, the sting operation neutralized the ability of these Hezbollah-linked terrorists to consummate this deal, thereby preventing its ability to inflict additional violence on behalf of Islamic extremism. Direct links between international narcotics traffickers and extremist groups like Hezbollah by no means exploded onto the scene in October. Rather, they have been percolating both openly and clandestinely since the 1970s, when anti-Israeli Muslim extremism fused forces with burgeoning narcotics — and more specifically heroin — trade originating in Lebanon’s historically contentious Bekaa Valley.

The search for historical precedents turns up further evidence. In January of 2014, Australia’s national security Project Eligo suggested that key financial sectors were unwittingly facilitating money laundering that supported Hezbollah terrorism—and evidenced by the discovery and seizure of large quantities of raw cash, frequently in bags bulging with $400K-$500K. Law enforcement agents reported seizing tens of millions of dollars in laundered assets and over $500 million in narcotics. Jonathan Schanzer, a former Treasury Department intelligence expert, offered an explanation linking the Australian revelation to Hezbollah: “These schemes have been of increased importance to [Hezbollah] in recent years as Iran’s disposable income has dried up, due to financial sanctions imposed in response to the Iranian nuclear program”. Matthew Levitt, former U.S. Treasury official and key expert at the Washington Institute for Near East Policy, observed that in several African countries, Lebanese citizens with ties to Hezbollah were associating with key military and key government officials, and had even become financial advisers and confidants to them.

The Eligo case, in turn, followed a 2012 Israeli operation where eight residents of Lebanese border towns were charged with attempting to smuggle almost 25 pounds of explosives into Israel. According to a spokesman for Shin Bet (Israeli internal security agency), the explosives included the deadly C-4 component, used to cause the most widespread damage possible. Israeli authorities said the explosives crossed the border with an underworld “facilitator” with known ties to both established drug smugglers and Hezbollah. The explosives traversed a complex route managed by middlemen that mimicked known heroin smuggling pathways. Law enforcement findings in this case mirrored the modus operandi of traffickers who had perfected drug smuggling originating with poppy growing and heroin production in Lebanon’s Bekaa Valley — one of the world’s most massive raw opium regions once believed second only to Afghanistan. The sophistication of Lebanese trafficking operations, perfected as far back as the 1970s, represents one of the salient and most durable assets available to any terrorist organization.

The U.S.-led campaign to isolate and neutralize Hezbollah appears, from the above persuasive examples, to have ratcheted up to a far more aggressive level than when counterterrorism efforts were Israeli-centric, spilling out into the Mideast region. Clearly, the scope of the Hezbollah problem is as expansive as worldwide narcotrafficking. With that in mind, the best advice would seem to be to “stay the course” and continue (as DEA actions signal firm U.S. policy commitment) to attack Hezbollah’s economic foundations wherever its principal sources of revenue are found.  

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