by Shammai Siskind20

EXPOSING Hezbollah’s Economy

BY SHAMMAI SISKIND

One morning in late December, thousands of Lebanese citizens woke up to find their most sensitive personal details had been leaked to a public webpage.

The massive data dump included bank account numbers and even personal addresses.

From the tens of thousands of names exposed on the page, there was one commonality to all of them: every one of these individuals were clients of a particular Lebanese financial institution by the name of Al Qard Al Hassan (AQAH).

AQAH is a very unique organization in Lebanon. Founded in the mid-1980s, Al Qard Al Hassan (which translates from the Arabic to “The Benevolent Loan”) is officially a charitable organization. It allows depositors to funnel money to various social causes and also offers interest-free loans in accordance with Islamic law.

However, behind the innocuous-sounding name and inconspicuous-looking logo, Al Qard hides a dark secret. In actuality, AQAH is none other than the private bank of the Lebanese-based Shiite militant group Hezbollah.

From its very inception nearly four decades ago, the Al Qard Al Hasan “Association” has been subordinate to, and under direct control of, Hezbollah’s Executive Council.

Officially, AQAH’s purpose was to engage in quasi-banking activity, consisting primarily of providing loans and operating charitable community funds. The Association specialized in extending loans in relatively small amounts to members of the Shiite community, which form Hezbollah’s political support base. These loans, which were quickly and easily accessible, provided a much needed financial lifeline to impoverished swaths of the Shiite demographic. In this way, Al Qard played an important role in Hezbollah’s populist strategy of securing support for its political wing.

But the charity work of AQAH, as valuable as it may have been for the organization, provided cover for the more nefarious activities Hezbollah undertakes.

Follow the Money

Running a militant enterprise is actually rather expensive. This is especially true of one like Hezbollah with interests that spread far from Lebanon’s borders and across the entire region and even the globe.

Hezbollah has, since its earliest years, acted simultaneously as a Lebanese political faction, an armed paramilitary organization, an international smuggling ring orchestrator, and the Lebanese branch of the Iranian Revolutionary Guard Corps. These roles mean Hezbollah has its hands full with everything from major geopolitical episodes to illicit business dealings on a regular basis. Hezbollah was instrumental in crushing rebel armies during the Syrian civil war. It is constantly on the ready for the possibility of clashes with the IDF and frequently engages in low- to medium-level operations targeting Israel. Hezbollah’s black market businesses and drug dealing enterprises have a presence in both Western Europe and South America. Needless to say, this colorful spectrum of activities requires large amounts of capital to maintain.

This is where an organization like Al Qard comes in handy.

Whether it’s for its profits from bootlegging or donations from the Ayatollahs, Hezbollah needs a place through which it can funnel its money – and store it securely.

Al Qard has, for all intents and purposes, all the capabilities of a regular bank. It can receive deposits, transfer money, and even deploy ATM machines for the convenience of its account holders. And since Al Qard has always remained under the direct control of Hezbollah leadership, it is a perfect place for the group’s funds to be kept.

Even more importantly, Al Qard provides to its Hezbollah overlords the invaluable asset of complete concealment from government scrutiny. As it is officially a charity, Al Qard is exempt from most, if not all, of the disclosure requirements and other regulations banks have to abide by in Lebanon. This has allowed AQAH to operate with total impunity in the country for years, all the while providing vital financial services to one of the world’s most dangerous militant groups.

Under the Radar No More The massive amounts of dark money regularly flowing though Al Qard remained a secret for a while. But, already in 2007, the U.S. State Department identified AQAH and its strategic role in Hezbollah’s activities. It was designated and sanctioned by the United States and other counties. Yet this did not prevent Al Qard from keeping its doors open.

Al Qard was able to continue its operations for a few reasons.

First and foremost was Hezbollah’s political clout in the country. Holding a large portion of the Lebanese parliament and controlling many important government agencies, taking down Al Qard (like any action against Hezbollah) is easier said than done.

Second is the plausible deniability Al Qard was able to maintain. Weak scrutiny and exemption from serious oversight meant the Lebanese people or their policymakers were never able to see overwhelming conclusive proof of the Hezbollah-AQAH connection.

Now, this has all changed.

The cyber-attack executed last month on the Al Qard Association was beyond thorough. The hacking group that took responsibility, SpiderZ, gained access to seemingly all of the data belonging to the bank’s clientele. Hackers even wrested control of the security camera systems at individual branches of Al Qard – possibly throughout the entire country.

Actual bank statements of thousands of Lebanese and internationals were posted online to the hackers’ website, a page supported by Sites.Google and still currently up and running. Scrolling through the site, one can observe, in neat categories, all of

the bank’s most sensitive assets. Accounts linked to actual Hezbollah members value in the millions. Beyond the rank and file members of Hezbollah are the numerous business moguls that support Hezbollah’s business activities that hold accounts in the bank. Many of these individuals have long been suspected of links to the militant group, but little evidence has been available.

Also posted to the site are the locations in which AQAH maintains foreign currency and other assets such as gold bars, with some of these facilities containing tens of millions of dollars in various valuables. This revelation in particular is very important in light of the current situation in Lebanon. For the past two years, the Lebanese people have been in the midst of the greatest economic crisis in the country’s history. The root causes of this collapse – primarily negligent monetary policy – have only had their effects accelerated by the COVID crisis. For months, with the entire country on the edge of total collapse, strict rules have been put in place regarding currency valuations and trade in foreign money. Its hoarding of dollars and other international notes mean that Al Qard (again, through its unique legal status) has managed to circumvent rules that are making life exceedingly harder for other citizens.

In short, the expose showing Al Qard actively supporting a militant group and its billionaire business partners, along with skirting restrictions everyone else needs to live with, has, shall we say, tainted the organization’s image.

The public backlash that has ensued in wake of the hack has been tremendous. After having their personal data dumped online, a large group of Al Qard clients formed a Facebook group with the goal of publicizing the episode and calling for action against the AQAH.

“We affirm that our names and all our details mentioned in the regulations published by the pirates are correct,” reads a pinned post on the group’s page. “We, the customers of the Foundation and those affected by Al Qard, have established this page to express our tragedies suffered since the start of the economic collapse.”

As more and more Lebanese have caught wind of this unprecedented scandal, there is no question Al Qard as an organization will suffer tremendously – perhaps even collapse.

This could come in one of two ways: either authorities will be forced to clamp down on the bank’s activities, or, the more likely scenario, a lack of public confidence in Al Qard will lead to a liquidity problem the bank will simply be unable to deal with. Already, reports from around the country are indicating bank runs on AQAH branches are becoming more and more common.

The Fallout

Hezbollah has already been under tremendous strain for years.

U.S. sanctions on Iran have meant the flow of funds from its main benefactor have been all but been cut off. This has meant the loss of tens of millions in annual funds which has already had real ef-

Hezbollah has, since its earliest years, acted simultaneously as a Lebanese political faction, an armed paramilitary organization, an international smuggling ring orchestrator, and the Lebanese branch of the Iranian

Revolutionary Guard Corps.

fects on Hezbollah’s ability to operate – especially in places like Syria.

At home, Hezbollah has been facing increasing pressure to acquiesce to international demands for policy reform, demands that have become conditions for international aid being delivered to the teetering country. Now, with one of its key institutions under threat, Hezbollah may actually feel more emboldened to take drastic measures.

It seems more than a bit noteworthy that the Al Qard incident has coincided with an increase in Hezbollah activity to its southern border. For at least two weeks now, the IDF’s Northern Command has been warning of increased threats of Hezbollah incursions.

In late December, several suspects coming from the north approached the security fence between the two countries. One of them climbed over the barrier and walked several meters into Israeli territory before fleeing back to Lebanon. This followed another incident only months before when Israel thwarted an infiltration attempt by up to five Hezbollah gunmen, an event which is extremely rare on Israeli borders in recent times.

According to the most recent assessment by an unnamed Israeli Northern Command high-up, “a resumption of aggression by the Shi’ite Lebanese terror group Hezbollah against targets in northern Israel is merely a matter of time.” Considering the escalation over the recent period, “there’s high probability that the northern border would see a resumption of full-blown hostilities. This requires us to prepare accordingly; the chances of a sudden escalation are on the increase.”

What Israeli troops are sensing on the ground seems to be the result of a pattern long in the making. The Al Qard crisis is only the most recent incident, and perhaps one of the most devastating, in this trend. It is only logical to conclude Hezbollah feels the walls are closing in on it. In addition to being cut off from its long-time sources of cash and being under the gun from authorities at home, Hezbollah is now being pursued internationally, as more and more governments in the West are cracking down on the group’s activities. Months ago, Germany executed a nationwide raid on Hezbollah-linked entities. Even today, Hezbollah-connected individuals are being increasingly targeted even regionally, as occurred recently in Morocco with the arrest of a 57-year-old Hezbollah agent.

The saber-rattling of Hezbollah leaders (including by its Secretary General Hasan Nasrallah) containing bombastic threats against the U.S. and Israel and bragging of the terror group’s improved missile arsenal only add weight to the theory that the group is, at the moment, feeling extremely desperate.