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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.”

The Funding of Terrorism (Part I) – Hookahs and Honey: Funding Terrorism through ‘Benign’ Activities

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by Ian Ralby

4 August 2019

Shisha pipes across the Middle East are being filled with charcoal smuggled from Somalia. This seemingly benign but criminal activity nets the terrorist group Al-Shabaab millions, if not tens of millions, of dollars each year. (Image credit: Flickr)

 

Terrorism catches people’s attention, charcoal does not. It is a certitude much like the fact that a bomb blowing up a building will make international news and a fishing boat laden with jerry cans of diesel will not. Over the last decade, terrorist groups have increasingly sought to fund their operations using activities that many consider ‘benign’ and thus undeserving of serious scrutiny. While the trafficking of arms, drugs or humans draws significant law enforcement attention around the world, goods including fuel, charcoal, honey, sugar, fish and antiquities do not occupy prominent positions on most of these agencies’ priority lists – if they feature at all.  Noting how high-profile crimes tend to attract the close watch of national and international authorities, terrorist organisations around the world have found relative ease in recent years by funding themselves through profitable ‘benign’ operations. It is imperative for law enforcement agencies and counterterrorism authorities to increase their coordination on these matters and scrutinise such often overlooked activities as critical sources of terrorist financing.

Perhaps the best-known instance, at least in counterterrorism circles, of seemingly benign economic activity that actually finances terrorist organisations is the trading of Somali charcoal to the Middle East. Acacia charcoal, excellent for use in shisha pipes, has been exported from Somalia for decades. As Al-Shabaab, a terrorist group established in 2006, took over parts of Somalia, it sought to benefit from the lucrative trade in various ways, including through informal taxes and port revenues.  In response, the Transitional Federal Government banned the export of charcoal from Somalia and later the international community imposed an embargo on it. The result has been an extensive smuggling operation in an effort to maintain the income stream. Publicly disclosed estimates from the British Royal Navy suggest that this operation currently yields $7 million per year for Al-Shabaab. Prior to substantial interdiction efforts, that figure was once estimated to be in the tens, or even hundreds, of millions.  Unlike issues like piracy or wildlife trafficking, charcoal has not captured public attention in the same way, and thus has not garnered the same political interest, though recent exposés have sought to change that. While the counterterrorism community is heavily focused on charcoal, many politicians still view it as a low priority, since compared to other goods it still seems relatively benign.  And even if charcoal does gain further visibility, the situation with Al-Shabaab is only one example of a larger phenomenon.

The same apathy towards smuggling of a benign commodity has been a major factor in illicit oil and fuel activities becoming a substantial source of terrorist financing.  The majority of people around the world rely on fuel in their daily lives. Consequently, it is perhaps the most ubiquitous commodity and one which people are most interested in obtaining at a discount.  Too often, widespread and seemingly harmless shopping for discounts equates to a willingness on the part of law enforcement and the political establishment to overlook the sources of cheaper-than-market-price fuel. They disregard what seem to be low-scale illicit operations as not meriting the attention of law enforcement. This salutary neglect of black market fuel trading has become a major point of manipulation for terrorist groups looking for under-the-radar income streams.

Furthermore, the success of the Islamic State in Iraq and Syria (ISIS) has inspired groups around the world to adopt a Jihadi-Salafist philosophy and seek to ‘restore’ the early Islamic caliphate.  ISIS-inspired groups, however, are inspired not only by ISIS ideology but also by ISIS methods and it is well-known that ISIS’ principle source of income has been proceeds from illicit oil and fuel activities. It is therefore not surprising that affiliated groups in other regions of the world have turned to fuel smuggling as their primary source of income. In the Philippines for example, Abu Sayyaf used fuel smuggling both to fund itself and to reinforce smuggling routes that supported its movement of weapons and ammunition in the lead-up to and throughout the year-long siege of Marawi.  In Trinidad and Tobago, a similar co-location of ISIS ideology and rampant fuel smuggling has given rise to significant international concern. As with charcoal, a prevalent perception of the commodity itself as being benign has created a blind spot that allows terrorist groups to earn substantial profits with little interference or even interest.

Beyond charcoal and fuel, other goods such as fish, livestock, honey, sugar, minerals and antiquities, depending on their availability, profitability, and relative visibility by law enforcement, have all become sources of income for terrorist groups. Osama Bin Laden used honey trading both to make profits and for money laundering.  Few goods could seem less sinister than honey, and that provided the perfect cover and income stream for one of history’s most ominous terrorists.  Whether the trade is initially illegal, as with fuel smuggling, or technically legal, as with honey or charcoal trading, the very fact that it is being used to fund terrorist organisations makes it illegal.

The point is that terrorist groups are relying on economic activities perceived as benign in order to make, maintain and move their wealth. And wealth is extremely important for terrorism, as evidenced by the direct correlation between the number of attacks perpetrated by a group and its relative financial stature.  In a 2016 interview, Maj. Gen. Amos Gilad, former Director of the Israeli Defense Ministry’s Political-Military Bureau, stated, ‘The financial component of terror organizations is critical, and its indispensability for terror attacks is like fuel for the car’. As true as this statement is, the irony is that the financial component of terror organisations may literally be fuel for the car.

To change this dynamic, law enforcement agencies and counterterrorism units need to become more proactive in identifying their own blind spots and false perceptions.  This means consciously reexamining those matters they have overlooked in the past.  That, however, is not easy to do.  Terrorist groups will continue to seek, find and exploit economic opportunities that occupy lower positions on the priority lists of the authoritaries. Inevitably, as law enforcement approaches change, so, too, will terrorist activities. But, it is imperative that the crimes and trading activities that have been relegated to benign status be reconsidered not just in their own right but for their malignant implications.  The profits accruing from such overlooked criminal goods as shisha charcoal, farm diesel or artisanal honey, may actually be funding deadly bombings, hijackings, or militant offensives.

Dr. Ian Ralby is a leading expert in international law, maritime security and countering transnational organized crime.  He and his team at I.R. Consilium, LLC have world leading expertise in oil and fuel crimes, and the nexus between maritime crimes and both criminal and terrorist activities.  Among other degrees, he holds a J.D. from William & Mary and a Ph.D. from the University of Cambridge where he was a Gates Scholar.