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The Funding of Terrorism (Part II) – Terrorist Financing Hidden among Commercial Ties: Venezuela, Iran and Hezbollah

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by Vanessa Neumann

6 August 2019

Comrades in arms? (Image credit: The Commentator)

 

Venezuela, my country, is dying. Money has become worthless and we now face the biggest humanitarian disaster ever seen in the Western Hemisphere as the exodus will surpass Syria’s in 2020. The country is projected to lose a third of its population. One in three, and that number is without a hot, shooting war. The main cause of the catastrophe is illicit finance of every stripe: kleptocracy, corruption, money laundering, and terrorist finance. Together, these illicit financial activities have enslaved the country to foreign interests and turned the government against the people, who want freedom and democracy. However, the regime leaders serve only their own enrichment and the interests of foreigners who help prop them up. Amongst these is the Lebanese Hezbollah.

Financial support for terrorism is a policy of the Maduro regime. In short, Venezuela’s dictator Nicolás Maduro is in a strategic partnership with the Iranian Ayatollah to provide Hezbollah terrorists with financiers and an assortment of facilitators for the covert movement of people, money, and material. The network reaches right to the top: it is managed by the former Vice President and current Minister of Industries and National Production, Tareck el-Aissami, and members of his immediate family. Hezbollah’s External Security Organisation is active throughout Latin America: its Business Affairs Component oversees enormous money laundering schemes using a minimum of 11 US-sanctioned operatives. However, Venezuela has become their heartland.

Maduro’s network of illicit financial interests was established when he was Hugo Chávez’s Foreign Minister, though it grew out of shared interests and diaspora flows. Today, this global network of illicit finance is what helps keep him in power: too many people are making too much dirty money to see him go, including Iran, which has long used Venezuela to bust sanctions and used by Hezbollah to make drug money. In 1960, Venezuela co-founded OPEC with Iran, Saudi Arabia, Iraq, and Kuwait. After its 1979 Revolution, Iran turned towards Latin America to increase trade in the region, and Venezuela was among the first approached because of this relationship through OPEC. The deeper relationship connection with Iran, that opened up the financial channels, was a policy pursued by Hugo Chávez. During 2001 and 2003 visits to Tehran, the former President signed joint venture accords with President Mahmoud Ahmadinejad for the manufacturing of tractor parts and cars, as well as banking through Banco Toseyeh Saderat and others.

The relationship with Hezbollah developed separately. Latin America received many Lebanese immigrants in the 1980s, amid the country’s civil war of 1975-1990. In the following decade, Lebanese Hezbollah sought to deepen its financial associations with its Latin American diaspora, as its funding had been slashed by nearly seventy percent by the administrations of both presidents Akbar Hashemi Rafsanjani (1989-1997) and Mohammad Khatami (1997-2005), further adding to the significant impact of sanctions on the Iranian economy.

The two-track relationship with Iran and Hezbollah merged in 2007, when Nicolás Maduro (then Foreign Minister) and Rafael Issa (then Vice Minister for Finance), joined by one translator, met with Hassan Nasrallah, the Secretary General of Hezbollah, in Damascus. Afterwards, Nicolás Maduro flew to Tehran to join Chávez in his meeting with President Ahmadinejad. Here, a multitude of commercial ties were established, but dirty money was hidden among these broader commercial interests. The Islamic Revolutionary Guard Corps (IRGC) opened subsidiaries in Venezuela that moved money through PDVSA (the Venezuelan state-run oil company), using it to enter the international financial system and evade sanctions. Chávez and Ahmadinejad became so close as to call each other ‘brothers’ and Chávez presented him with a replica of the Sword of Bolívar, a national symbol.

Some Chavistas are tied to Hezbollah by family. A prime example is Tareck el-Aissami Maddah who is Venezuelan of Syrian descent. His father was the head of the Ba’ath party in Venezuela and called Osama bin Laden “the great Mujahideen leader” after 9/11 and himself “a Taliban.” His great-uncle Shibli el-Aissami was Assistant to the Secretary General of the Ba’ath party in Iraq under Saddam Hussein. el-Aissami was a radical student leader at the University of the Andes in the city of Mérida, on the border with Colombia. There have been many Hezbollah sympathisers at the top of the Chávez regime: Fadi Kabboul was the Executive Director of planning for PDVSA; Aref Richany Jimenez was the President of Venezuela’s military-industrial complex, CAVIM; and Radwan Sabbagh was the president of the state-owned mining concern, Ferrominera.

Yet it is el-Aissami that continues to be the lynchpin, and the US Treasury’s Office of Foreign Asset Control (OFAC) designated him under the Kingpin Act in February 2017, for playing a significant role in international narcotics trafficking, while he was the Executive Vice President of Venezuela. el-Aissami is also linked to the coordination of drug shipments to Los Zetas, a violent Mexican drug cartel, as well as providing protection to Colombian drug lord Daniel Barrera and Venezuelan drug trafficker Hermagoras Gonzalez Polanco. Los Zetas, Barrera and Polanco were previously named as Specially Designated Narcotics Traffickers under the Kingpin Act in April 2009, March 2010, and May 2008, respectively. El-Aissami’s primary frontman, Venezuelan national Samark Jose Lopez Bello, was also designated for providing material assistance to el-Aissami’s drug trafficking activities through an international network spanning the British Virgin Islands, Panama, the United Kingdom, the United States, and Venezuela. El-Aissami and Lopez Bello had an international network of businesses and asset holding companies to launder the drug proceeds. Many had government contracts with PDVSA.

Maduro’s diplomatic corps has shown to be the circulatory system of the transnational crime syndicate. Tareck el-Aissami’s sister is posted to the Netherlands, where she oversees the traffic in narcotics and diamonds, shielded by her diplomatic immunity. Chávez’s daughter, Maria Gabriela, is Venezuela’s wealthiest woman (with a net worth of over US$ 4 billion) and was (until recently) the Deputy Chief of Mission to the United Nations. Rocío Maneiro, Maduro’s Ambassador to the Court of St. James, still occupies all three of our buildings in London, and uses them freely to house staff and rent rooms, despite the fact that she is indicted for grand larceny from a money laundering account in Andorra (two separate crimes). She retains her immunity and the properties, despite the fact that the UK recognises Juan Guaidó, and not Nicolás Maduro, as the legitimate head of state and government. Hence the frequently used hashtag #MaduroCrimeFamily. I am personally pressuring for the US and UK to appropriately apply counter-organised crime statutes against the Maduro regime.

The vast and multi-layered money laundering network set up by el-Aissami works through a structure designed by the former Deputy Chief of Mission in Syria, Ghazi Nasr al Din, who was sanctioned in 2008 by OFAC and designated a ‘person of interest’ by the FBI in 2015 for his support of Hezbollah. While el-Aissami was Interior Minister (2008-2012), 173 Middle Easterners with suspected ties to Hezbollah were provided with authentic, fully-legal Venezuelan passports, birth certificates, and national identification cards. In short, they were provided with completely new Venezuelan identities, to conceal these Hezbollah operatives from detection by international intelligence agencies. This case was covered in a CNN documentary, Passports to Terror. The main source of information on this is Misael López Soto, a legal attaché at the Venezuelan embassy in Baghdad, who turned whistleblower in 24 November 2015 and revealed the identities of several of these suspected Hezbollah militants. These are highly skilled and effective well beyond their numbers.

Amongst them is Hakim Diab Fattah, a Palestinian-Venezuelan dual national with suspected ties to the 9/11 hijackers. In 2015 he resurfaced in Amman, where he was arrested for potentially plotting a terrorist attack on the Allenby Bridge, connecting Jordan to the West Bank. The Venezuelan consulate in Jordan funded his legal defence. On 28 October 2014, Lebanese national and accused Hezbollah operative Muhammad Ghaleb Hamdar, was arrested in Lima, Peru for allegedly planning a terrorist attack. During questioning, he admitted he travelled to Venezuela to obtain new identification, which was eventually secured in Liberia. As recently as February 2018, OFAC sanctioned Jihad Muhammad Qansu (who has a Venezuelan passport) and five other individuals tied to an important Hezbollah financier, Adam Tabaja. The sanctions announcement describes him as “a Hezbollah member that maintains direct ties to the senior leadership.”

In October 2018 the US Department of Justice named Hezbollah one of the top five transnational criminal organisations in Latin America. The Drug Enforcement Administration led an effort to undercut Hezbollah financing from illicit drug sources, known as Operation Cassandra. Within Cassandra was Operation Perseus, targeting the Venezuelan syndicate. The effort uncovered links between two important Hezbollah financiers, directly related to Nasrallah, and cutouts connected to Maduro. Venezuela under Maduro is a hub for the convergence of criminal and terrorist networks that fund Hezbollah, loot Venezuela, and destabilize both the Western Hemisphere and the Middle East. Getting Maduro and his cartel out of power and restoring Venezuela to democracy, will not only end the horrible suffering of 32 million people, a newly free Venezuela will deal a significant blow to Hezbollah operational capabilities. That is a diplomatic win-win if ever there was one.

Dr. Vanessa Neumann is President Juan Guaidó’s appointed Ambassador and Chief of Diplomatic Mission to the United Kingdom. She is also the President of the British-Venezuelan Society and Chamber of Commerce, which is partnered with UK Trade & Investment’s Oil & Gas Team for the Americas, as well as the Caracas-based British-Venezuelan Chamber of Commerce. Prior to her diplomatic appointment, Dr. Neumann was a long-standing expert on crime-terror pipelines, the founder & CEO of Asymmetrica, and the author of “Blood Profits: How American Consumers Unwittingly Fund Terrorists.”

Chavez Versus Maduro: Who Did It Worse?

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by Roisin Murray

29 May 2019

Hero vs. Scapegoat? (BBC)

For most of the late twentieth-century, Venezuela was considered the most stable democracy in Latin America, held up as an example for its volatile Latin American neighbours. Venezuela is renowned for being a country rich in natural assets. It is a major producer of oil, as well as a manufacturer of other goods such as gold, diamonds and natural gas. Yet, despite the abundance of its resources, a combination of chronic government mismanagement, corruption and a failed socialism project has meant that Venezuela is on the brink of implosion. The fate of Venezuela is key for the West as the Venezuelan crisis risks wreaking havoc with the international oil market, which would be particularly damaging to its main oil customer, the United States. Challenges to Nicholas Maduro’s legitimacy as President during the escalating political situation have begged the question: who is to blame for the collapse of Venezuela?

This question cannot be answered without considering Maduro’s predecessor, Hugo Chavez. Venezuela’s socialism was the brainchild of Chavez, but his death in 2013 meant he failed to experience the widespread poverty and mass emigration induced partially by his policies. In order to address the question of where culpability lies for the current crisis in Venezuela, this article will scrutinise Chavez and Maduro’s policies and their social impact on the Venezuelan people. This will help to contextualise the origins of the unrest in Venezuela and demonstrate to what extent the cause of the chaos can be attributed to Maduro’s policies, or inherited from his predecessor. Ultimately, this article will seek to demonstrate that Chavez orchestrated the disaster, while Maduro simply executed it.

Ideology

Venezuela’s foray into socialism can be traced to Hugo Chavez, an army officer who called for a ‘Bolivarian Revolution’ drawing on the legacy of Simon Bolivar, the leader of Venezuelan liberation. Chavez was elected president in 1998 after two unsuccessful government coups. He won the election on the platform of redistributing power to the people, a refreshing divergence from the corruption that had dominated the politics of the mainstream political parties for the preceding twenty-five years. In reality, however, Chavez’s presidency did not signify an end to corruption in Venezuela. Rather, he orchestrated a regime that was run according to patronage and nepotism. Furthermore, the ambiguity surrounding the government’s finances also contributed to Venezuela’s poor score on the Transparency International corruption perception index, which ranked the country 165th out of 180 countries in 2012. Nevertheless, the hallmark of Chavez’s rule was his ‘socialist’ agenda, which manifested itself in high government spending, redistribution of wealth and the nationalisation of Venezuelan industries. Chavez managed to win the trust of the working classes by injecting public money into social welfare programmes. One of the most notable merits of his government was the transformation of the ‘ranchos’ or shanty towns. However, as Webber highlights, his leftist, socialist ideology was not a permanent feature of his leadership. Rather, when Chavez entered office as ‘moderately reformist’, his socialist policies conversely began to develop in response to challenges from the right. And, even then, Chavez’s pseudo socialism remained built upon a market-focused approach to the predominantly private-sector economy.

Dissent intensifies as Maduro clings to power (Opensourceinvestigations.com)

Nicholas Maduro assumed power in 2013 following the death of Chavez, his former mentor. Previously a bus driver, he was quick to emphasise his humble origins, immediately establishing an affiliation with the working classes. Maduro appeared fully invested in Chavez’s socialist brainchild. He continued to rule Venezuela with greatly regulated price controls and a highly centralised, hands-on economy- all hallmarks of aspiring socialist regimes. He lacked the presence and charisma of Chavez, but secured legitimacy for his actions by constantly referring to Chavez’s memory and the longevity of his legacy. In this sense, Chavez’s shadow was never far from Maduro’s course of action. Unfortunately, Maduro’s tendency to follow the precedent set by Chavez was particularly replicated in his use of corrupt governance to rule. He centralised his power by establishing a more loyal Constitution Assembly under the rule of a new Constitution, thereby undercutting the opponent led legislature, the National Assembly. He further secured the allegiance of the military by offering it control over profitable businesses. For both Chavez and Maduro, corrupt practices seemed to be instrumental in propping up their regimes.

Economy

Chavez’s socialist dream was primarily financed by the surging price of oil, a material that Venezuela is fortuitously rich in and built its entire economic infrastructure around. Large investments in social programmes, facilitated by the country’s oil reserves, transformed the lives of poor Venezuelans and did much to bolster Chavez’s approval rating. However, the gains that Chavez made for the poor of Venezuela were negated by his eventual decimation of the Venezuelan economy under the auspices of implementing ‘socialism’. Government overspending caused rampant inflation, culminating in a recession in 2014 shortly after Chavez’s death.  Furthermore, foreign investment stagnated under Chavez: revenue produced by foreign investment in 2004 amounted to $1.5 billion, in comparison to almost $5 billion in 1998. Culpability for the economic ills of Venezuela cannot be far removed from Chavez’s hands. As Corrales and Penfold point out, Chavez’s level of power over the economy was unparalleled, even in comparison to other leftist regimes of the era.

Venezuela’s persistent over-reliance on oil, initiated by Chavez and inherited by Maduro, became a contentious issue when the oil boom imploded and prices plummeted around the time of Chavez’s death in 2013. Maduro’s solution to prop up the failing economy was to print more money, thus devaluing the Bolivarian currency further. The combination of these ineffective fiscal economic solutions, widespread corruption and gross mismanagement precipitated an economic and political collapse. Nevertheless, Maduro attempted to continue the socialist legacy that Chavez had begun, despite the economic circumstances rendering this course of action unfeasible. Maduro increased the national minimum wage on six separate occasions in 2018, but the positive effects of this move were negligible given the rate of hyperinflation. Maduro is a living proof that Chavez’s socialist experiment was completely unfeasible in the long-term, but stubborn persistence regardless signed Venezuela’s death warrant.

Social Impact

In the short-term, life for Venezuelans had been rejuvenated by Chavez’s measures. Between 2005 and 2014 unemployment rates and poverty rates fell by 50% and infant mortality plummeted. Workers were met with increased increments to the minimum wage, and literacy levels increased sharply. However, the improved lives of Venezuelans cannot be attributed solely to Chavez, and to do so risks overstating the impact of his policies at the expense of minimising the role of oil. As Canon argued, ‘the oil boom has without a doubt contributed an inordinate amount to the current upswing in growth and reduction in poverty.’ And even when society gave the impression of flourishing, this Chavez inspired ‘age of prosperity’ was built on shaky, unsustainable foundations. Chavez’s policies drummed up substantial national debt, and this ‘boom’ paved the way for the inevitable ‘bust’ when the oil prices crashed.

Venezuelan citizens queue for food as shortages worsen (Wall Street Journal)

Nobody has felt the effect of this escalating hyperinflation more than the citizens of Venezuela. Inflation levels have peaked at 1.7 million per cent, obliterating people’s life savings. Savings in bolivars equivalent to $10,000 at the beginning of 2018 only amounted to 59 cents by the end of the year. Widespread malnutrition has emerged due to basic food shortages, with Venezuelan citizens losing a median of twenty-four pounds in weight during 2017. Venezuela’s healthcare system also lies in tatters. Hospitals are lacking in vital supplies, and many HIV-positive and cancer patients are facing shortages of their medication. The growing dissatisfaction with Venezuelan life is reflected in the rate at which citizens are fleeing the country; 1.5 million people emigrated between 2014 and 2017. For those that remain in Venezuela dissent is not easy to express. Censorship of the media obscures the reality of the crisis and the Venezuelan police harshly subdue protesters with tear gas, and on occasion, bullets. Maduro’s recent measures have also resulted in the incarceration of protestors as political prisoners, causing an uproar from human rights groups.

Conclusion

Maduro is bearing the brunt of the criticism from the international community on the handling of the Venezuelan crisis- and rightly so. His economic ‘solutions’ to the recession have only worsened Venezuela’s economic position, he has rejected vital international aid and his authoritarian response to dissenting voices has demonstrated his unwillingness to be held accountable. But it would be injudicious to forget Chavez’s part in determining the crisis. The situation he created formed a set of unsustainable preconditions that Maduro was bound by when he inherited leadership of the country. His policies, that promised to uplift the lower classes, were inadvertently responsible for their being plunged into poverty years down the line. His irresponsible economic measures and unsustainable ideals set Venezuela on a course to crash and burn- but just not during his lifetime. Both Maduro and Chavez should be held equally accountable, whether they are here to face the charges or not.

Roisin Murray is currently working as a researcher at a private security consultancy. She holds an MA in International Relations from King’s College London. Her research interests include diplomacy, authoritarian regimes and counter-terrorism.

Bibliography

Canon, Barry. Hugo Chávez and the Bolivarian Revolution. Manchester: Manchester University Press, 2009.

Ellner, Steve and Miguel Tinker Salas. “The Venezuelan Exceptionalism Thesis: Separating Myth from Reality.” Latin American Perspectives 32, no.2 (2005): 5-19, https://www.jstor.org/stable/30040273.

Webber, Jeffery R. “Venezeula Under Chavez: The Prospects and Limitations of Twenty-First Century Socialism, 1999-2009.” Socialist Studies: the Journal of the Society for Socialist Studies 6, no.1 (2010): 11-44, http://dx.doi.org/10.18740/S47W2R.

Corrales, Javier and Michael Penfold. The Dragon in the Tropics: Hugo Chavez and the Political Economy of Revolution in Venezuela. Washington D.C.: Brookings Institution Press, 2011.

Gunson, Phil.”Chavez’s Venezuela.” Current History 105, no.688 (2006): 58-63,  https://search.proquest.com/docview/200735447?rfr_id=info%3Axri%2Fsid%3Aprimo.