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ATTACKING HEZBOLLAH’S FINANCIAL NETWORK:

POLICY OPTIONS

HEARING

BEFORE THE

COMMITTEE ON FOREIGN AFFAIRS 

HOUSE OF REPRESENTATIVES

ONE HUNDRED FIFTEENTH CONGRESS

FIRST SESSION

JUNE 8, 2017

Serial No. 115–51

Printed for the use of the Committee on Foreign Affairs

(

Available via the World Wide Web: http://www.foreignaffairs.house.gov/ or

http://www.gpo.gov/fdsys/

(II)

COMMITTEE ON FOREIGN AFFAIRS 

EDWARD R. ROYCE, California, Chairman 

CHRISTOPHER H. SMITH, New Jersey 

ILEANA ROS-LEHTINEN, Florida 

DANA ROHRABACHER, California 

STEVE CHABOT, Ohio 

JOE WILSON, South Carolina 

MICHAEL T. MCCAUL, Texas 

TED POE, Texas 

DARRELL E. ISSA, California 

TOM MARINO, Pennsylvania 

JEFF DUNCAN, South Carolina 

MO BROOKS, Alabama 

PAUL COOK, California 

SCOTT PERRY, Pennsylvania 

RON DESANTIS, Florida 

MARK MEADOWS, North Carolina 

TED S. YOHO, Florida 

ADAM KINZINGER, Illinois 

LEE M. ZELDIN, New York 

DANIEL M. DONOVAN, JR., New York 

F. JAMES SENSENBRENNER, JR., 

Wisconsin 

ANN WAGNER, Missouri 

BRIAN J. MAST, Florida 

FRANCIS ROONEY, Florida 

BRIAN K. FITZPATRICK, Pennsylvania 

THOMAS A. GARRETT, JR., Virginia 

ELIOT L. ENGEL, New York 

BRAD SHERMAN, California 

GREGORY W. MEEKS, New York 

ALBIO SIRES, New Jersey 

GERALD E. CONNOLLY, Virginia 

THEODORE E. DEUTCH, Florida 

KAREN BASS, California 

WILLIAM R. KEATING, Massachusetts 

DAVID N. CICILLINE, Rhode Island 

AMI BERA, California 

LOIS FRANKEL, Florida 

TULSI GABBARD, Hawaii 

JOAQUIN CASTRO, Texas 

ROBIN L. KELLY, Illinois 

BRENDAN F. BOYLE, Pennsylvania 

DINA TITUS, Nevada 

NORMA J. TORRES, California 

BRADLEY SCOTT SCHNEIDER, Illinois 

THOMAS R. SUOZZI, New York 

ADRIANO ESPAILLAT, New York 

TED LIEU, California

AMY PORTER, Chief of Staff THOMAS SHEEHY, Staff Director

JASON STEINBAUM, Democratic Staff Director 

(III)

C O N T E N T S 

Page

WITNESSES 

Matthew Levitt, Ph.D., director and Fromer-Wexler fellow, Stein Program 

on Counterterrorism and Intelligence, The Washington Institute for Near 

East Policy ............................................................................................................ 4

David Asher, Ph.D., member, Board of Directors, Center on Sanctions and 

Illicit Finance, Foundation for Defense of Democracies ................................... 18

Mr. Derek Maltz, executive director, Governmental Relations, Pen-Link, Ltd. . 31

Mara Karlin, Ph.D., associate professor of practice and associate director 

of strategic studies, School for Advanced International Studies, Johns Hopkins University ..................................................................................................... 42

LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING 

Matthew Levitt, Ph.D.: Prepared statement ......................................................... 7

David Asher, Ph.D.: Prepared statement .............................................................. 20

Mr. Derek Maltz: Prepared statement ................................................................... 34

Mara Karlin, Ph.D.: Prepared statement .............................................................. 44

APPENDIX 

Hearing notice .......................................................................................................... 76

Hearing minutes ...................................................................................................... 77

The Honorable Thomas A. Garrett, Jr., a Representative in Congress from 

the Commonwealth of Virginia: Material submitted for the record ................ 79

The Honorable Theodore E. Deutch, a Representative in Congress from the 

State of Florida: Material submitted for the record .......................................... 84

The Honorable Gerald E. Connolly, a Representative in Congress from the 

Commonwealth of Virginia: Prepared statement .............................................. 86

Written responses from David Asher, Ph.D., to questions submitted for the 

record by the Honorable Christopher H. Smith, a Representative in Congress from the State of New Jersey .................................................................... 88

Written responses from Matthew Levitt, Ph.D., and David Asher, Ph.D., 

to questions submitted for the record by the Honorable Michael T. McCaul, 

a Representative in Congress from the State of Texas ..................................... 89

(1)

ATTACKING HEZBOLLAH’S FINANCIAL 

NETWORK: POLICY OPTIONS 

THURSDAY, JUNE 8, 2017

HOUSE OF REPRESENTATIVES,

COMMITTEE ON FOREIGN AFFAIRS,

Washington, DC. 

The committee met, pursuant to notice, at 10:08 a.m., in room 

2172, Rayburn House Office Building, Hon. Edward Royce (chairman of the committee) presiding. 

Chairman ROYCE. This hearing will come to order. This hearing 

is on attacking Hezbollah’s financial network, and different policy 

options that we have. So we consider these additional steps needed 

to confront one of the top terror threats in the world, and that 

threat is Hezbollah. It is a terrorist group that is based in Lebanon, where it is a significant political force as well. If you look at 

the history, it dates back to 1982 when members of Tehran’s Revolutionary Guard Corps’ Quds Force first deployed in Lebanon’s 

Beqaa Valley. And they created, armed, and funded a small force 

which became Hezbollah. 

Today, as the leading Iranian proxy, Hezbollah continues to be 

Iran’s front line against Israel. Since its 2006 war with Israel, 

Hezbollah has dramatically grown its supply of rockets and missiles, allowing it to strike throughout Israel, with much greater 

precision and force. 

I was in Haifa in 2006, and at that point in time, there were 

10,000 of these rockets fired out of an inventory of about 20,000. 

I saw the consequence of it. There were 600 victims from Haifa in 

the trauma hospital who were being treated as a result of the attacks on civilian neighborhoods. 

It is 11 years since that period of time, and now, instead of 

10,000 rockets and missiles remaining in the inventory, there are 

110,000, and these are of increasing sophistication. One observer 

even wrote that Hezbollah is now, in his words, ‘‘more militarily 

powerful than most North Atlantic treaty organization members.’’ 

One of reasons for this, by the way, is that many of these newer 

missiles Iran is working on developing—and I am talking about the 

government, Iran’s Islamic Revolutionary Guard Corps—is working 

on the ability to make these GPS-guided missiles. 

Hezbollah is putting its military power to very effective use. In 

Syria, its fighters are key to the efforts by Iran’s Islamic Revolutionary Guard Corps and Moscow’s efforts to prop up the Assad regime, along with Russian troops and Iran’s Revolutionary Guards. 

2

For 30 years, Hezbollah has remained Iran’s proxy, and Iran remains Hezbollah’s primary source of financial support. In April 

2015, its leader, Hassan Nasrallah, boasted that even under sanctions, Iran still funded Hezbollah’s terror war. And he anticipated 

that a rich—in his words, ‘‘a rich and powerful Iran, which will be 

open to the world,’’ would be able to do even more. The Iran nuclear agreement has made it possible for Iran to provide Hezbollah 

with a windfall. As one witness will testify today, Hezbollah’s activities since the nuclear agreement have ‘‘expanded in scope.’’

But Tehran is not Hezbollah’s only source of income, because 

since its inception, Hezbollah has developed a broad criminal network involved in a range of illegal activities—from drug trafficking, 

to cigarette smuggling, to money laundering, to counterfeiting. 

These global terrorists double as global criminals. 

Indeed, in February 2016, the U.S. Drug Enforcement Administration—in an operation led by one of the witnesses who is here 

with us today—implicated Hezbollah in a multimillion dollar drug 

traffic and money laundering network that spanned four continents 

and put cocaine ultimately on the streets of the United States. 

The committee is focused on the best way to attack Hezbollah’s 

financial network and its tentacles across the globe. And in 2015, 

we led the way to enact the Hezbollah International Financing Prevention Act to target those that facilitate financial transactions for 

Hezbollah. This has helped put Hezbollah in the ‘‘worst financial 

shape in decades,’’ according to the top Treasury official, despite 

Iran’s continued support. Part two of this legislation is coming, but, 

unfortunately, that is of little comfort to Israelis staring down at 

an arsenal of rockets that sit just across the border from Lebanon 

or the Syrians being slaughtered at the hands of Hezbollah 

operatives that are participating in ethnic cleansing in Syria. 

We look forward to hearing from our witnesses today on ways in 

which the United States can further tighten the grip. 

I now yield to our ranking member today, Mr. Deutch, for any 

opening comments he may have. 

Mr. DEUTCH. Thank you, Mr. Chairman. I would like to thank 

you and Mr. Engel for holding today’s hearing on what is arguably 

one of the greatest threats to U.S. security interests and the interests of so many of our allies. And thanks to the witnesses for being 

here today as well. 

Hezbollah is a terrorist organization that has attempted to carry 

out, or has successfully carried out, attacks on multiple continents, 

from the bombing on in the U.S. Marine barracks in 1983, to the 

bombing of a Jewish center in Argentina in 1994, to the bus bombings in Bulgaria in 2012. Hezbollah’s reign of terror has no geographical boundaries. 

Perhaps most concerning in recent years has been Hezbollah’s 

entry into Syria. Working on behalf of the murderous Assad regime, there are estimated to be 7,000 Hezbollah fighters inside 

Syria. Receiving significant military support from Iran, Hezbollah, 

along with various Iranian-backed militias, has assisted the Assad 

regime in devastating attacks on the Syrian people. 

In turn, ISIS-affiliated retaliatory attacks have been launched inside Lebanon, killing innocent Lebanese civilians. Hezbollah’s involvement in Syria has fed the emergence of the Russia-Iran-Assad 

3

alliance. Open source reporting now details the transfer of advanced weaponry from Russia to Hezbollah. It is reported that 

Hezbollah is in possession of Russian designed surface-to-air shoulder-mounted missiles. This is in addition to the precision-guided 

missiles it is apparently now receiving from Iran that will add to 

its arsenal of over 120,000 rockets capable of reaching every corner 

of Israel. And Hezbollah is now sending fighters to Iraq and to 

Yemen. 

Let me be clear: There can be no future in Syria where Iran and/

or Hezbollah has a permanent, military presence. And it remains 

to be seen how this administration thinks that it can cooperate 

with Russia and Syria when Russia has so far been unwilling to 

separate itself from Iranian efforts to strengthen Assad. 

Last month, Hezbollah’s leader, Hassan Nasrallah, stated that 

the conflict had entered what he described as a new and critical 

phase in which Damascus, Moscow, Tehran, and Hezbollah were, 

and I quote, ‘‘in more harmony politically and militarily than at 

any time.’’

Hezbollah has long received hundreds of millions of dollars a 

year from Iran. However, Hezbollah has expended its own financing operations to include what has become known as the business 

affairs component, a transnational criminal network that engages 

in everything from narcotrafficking to money laundering, to the 

sale of counterfeit cigarettes and goods. These operations have 

gained significant foothold in Latin America, in Europe, and in Africa. Increased cooperation between U.S. law enforcement and law 

enforcement entities around the world has resulted in significant 

exposure and breakup of many of Hezbollah’s illicit financing networks. Project Cassandra, a DEA-led effort, which we will hear 

more about from our witnesses, exposed a massive narcotrafficking 

ring. 

International cooperation is crucial to our efforts to disrupt 

Hezbollah. And this is precisely why our allies in Europe must join 

the United States, the GCC, Canada and others in designating the 

whole of Hezbollah as a terrorist organization. The idea that there 

is separation between Hezbollah’s military and political wings is, 

quite frankly, laughable, which is why I recently introduced a resolution urging that you designate Hezbollah, in its entirety, as a terrorist organization. 

I am proud to be joined by a bipartisan group of members in this 

effort, including members of this committee, our chairman emeritus 

Ros-Lehtinen, and Mr. Lieu, Mr. Zeldin, and Mr. Schneider. 

Congress has played a significant role in preventing funds from 

flowing to Hezbollah. In 2015, I was proud to join Chairman Royce 

in introducing and passing the Hezbollah International Financing 

Prevention Act. And I just want to note that when we first introduced those new sanctions, we were told, as we so often are warned 

against the perils of using economic sanctions, that the Lebanese 

banking sector would collapse. But through the work of this committee and outreach to those Lebanese banks, that has not been 

the case. In fact, Lebanon’s central bank has shut down the accounts of Hezbollah members and affiliates. But there is more that 

we can do. Secondary sanctions, for one, proved extremely effective 

in our policy toward Iran. 

4

Today provides us with an opportunity to hear from our witnesses new policy prescriptions for cracking down on Hezbollah, 

both on the military and terrorism fronts, and ways to stop its 

funding streams. 

Mr. Chairman, before turning back over, I would ask unanimous 

consent to enter into the record a statement by the Anti-Defamation League supporting new legislative efforts to crack down on 

Hezbollah’s funding. 

Chairman ROYCE. Without objection. 

Mr. DEUTCH. I appreciate that. I look forward to this committee 

working together, as we regularly do, in a bipartisan manner under 

your leadership, Mr. Chairman, to move forward with these new efforts. I thank you and I yield back. 

Mr. CONNOLLY. Mr. Chairman, if I could just add, I have joined 

in the resolution so there are other members as well. 

Mr. DEUTCH. I thank my friend from Virginia. 

Chairman ROYCE. Thank you, Mr. Connolly. 

This morning, we are pleased to be joined be a very distinguished 

panel. We have Dr. Matt Levitt, a director at the Washington Institute for Near East Policy. And he previously served as a senior official at the Treasury Department. He has written extensively on 

Hezbollah. 

We also have Dr. David Asher. He is a member of the board at 

the Foundation for Defense of Democracies, and he has played a 

senior role in numerous economic and financial pressure campaigns. He was an early pioneer in tackling North Korea’s proliferation network. 

We also have Mr. Derek Maltz with us, the executive director of 

government relations at Pen-Link. Previously, Mr. Maltz led the 

Drug Enforcement Administration’s special operations division in 

actively targeting narcotics trafficking tied to Hezbollah. 

We have Dr. Mara Karlin, associate professor with the Johns 

Hopkins School of Advanced International Studies. She previously 

served as an aide to the Under Secretary for Policy at the Department of Defense with a focus on the Levant. 

So without objection, the witnesses’ full prepared statements will 

be made a part of the record, and members will have 5 calendar 

days to submit any statements or questions or extraneous material 

for the record. We will start with Dr. Levitt, and we will ask you 

to summarize your remarks. 

STATEMENT OF MATTHEW LEVITT, PH.D., DIRECTOR AND 

FROMER-WEXLER FELLOW, STEIN PROGRAM ON COUNTERTERRORISM AND INTELLIGENCE, THE WASHINGTON INSTITUTE FOR NEAR EAST POLICY 

Mr. LEVITT. Thank you, Chairman, Mr. Deutch, members of the 

committee. It is a pleasure to be here to testify before you today, 

and assess our efforts and those pursued to date to counter 

Hezbollah’s ability to exploit the international financial system to 

its benefit. The regional international threats posed by Hezbollah 

have only increased over time, underscoring the importance of denying the group the financing and resources critical to its ability 

to function. 

5

Hezbollah has, in fact, experienced a series of financial setbacks, 

in part because of the actions we have taken, leading U.S. officials 

to describe the group as being ‘‘in the worst financial shape in decades.’’ In recent months, Hezbollah has resorted to launching an 

online fundraising, crowd-sourcing campaign entitled Equip a 

Mujahid Campaign, which calls for donations large and small, payable all at once, or in installments, to equip Hezbollah fighters. It 

has also promoted a fundraising campaign on billboards and posters in Lebanon, promoting a program in which supporters can 

avoid recruitment into Hezbollah’s militia forces for a payment of 

about $1,000. These are desperate measures for a group suffering 

through tough financial times. And yet it has enough money to do 

a great many disturbing things around the world. 

I should stress here that of the various actions we are suggesting, that I am suggesting and others, the idea is not to undermine the Lebanese economy, but to protect it from exposure to the 

criminal and money-laundering enterprises in which Hezbollah is 

deeply involved. It should, therefore, not surprise that after Congress passed the Hezbollah International Finance Prevention Act, 

Lebanon Central Bank issued a circular ordering Lebanese banks 

to close accounts belonging to individuals and institutions associated with Hezbollah. According to the Central Bank, hundreds of 

Hezbollah-linked accounts have since been closed. 

Now Hezbollah continues to operate in Europe, despite the partial ban in July 2013, and it is aggressively engaged in criminal enterprises and Africa and in South America. And despite being designated as a terrorist group by the Gulf Cooperation Council, 

Hezbollah reportedly began storing some of its funds outside Lebanon in response to the effects of the HIFPA legislation, including 

in places like Iraq and Dubai. 

Now, Hezbollah continues to get significant support from Iran, 

but I think today I want to focus on its global criminal enterprise. 

Now I am going to leave the business affairs components and other 

things to my colleagues. What I want to highlight here are some 

of other successes. For example, the extent of Hezbollah’s drug connection was underscored in the wake of the U.S. Treasury’s narcotics kingpin designation of the Panama based Waked Money 

Laundering Organization in May 2016. This action wasn’t taken 

under a terrorism authority, and the press release said nothing 

about Hezbollah, but when this particular money laundering organization was targeted, it tied up the illicit finances linked to various elements within the Iran threat network, including Hezbollah, 

and forced them to find other money laundering channels in the region. Much of that activity reportedly shifted to the Tri-Border 

Area, and to Paraguay in particular. Hezbollah criminal enterprises run deep in Africa, as evidenced most recently by the arrest 

in Morocco, Hezbollah financier Kassim Tajideen, who has since 

been extradited to the United States and indicted in Washington, 

DC. 

There a bunch of steps I think we can do to further actions we 

have already taken. The first is to designate additional Hezbollah 

entities as appropriate. HIFPA prescribes doing business with designated Hezbollah entities. So the more a Hezbollah entity is designated, the more impactful the legislation will be. This should inVerDate 0ct 09 2002 16:44 Aug 16, 2017 Jkt 000000 PO 00000 Frm 00009 Fmt 6633 Sfmt 6633 Z:\WORK\_FULL\060817\25730 SHIRL
6

clude, but not be limited to, entities operating in Lebanon. For example, consider the list of Lebanese businesses designated with 

Lebanon-based IRGC Quds Force operative, Hasan Ebrahimi, in 

February. 

Targeting Hezbollah criminal enterprises in South America, Africa, and Europe will be very important as well. Again, think about 

the Waked money laundering organization and that success. And 

finally, in this regard, consider follow-on actions to existing designations where appropriate. For example, the IRGC official in Lebanon, Ebrahimi, was providing Hezbollah funds through 

Hezbollah’s al Waad construction firm, which we had already designated in 2009 or this Equip a Mujahid Campaign in Lebanon is 

being run by the Islamic Resistance Support Organization, IRSO, 

which Treasury already designated back in 2006. 

Second, we should target Hezbollah criminal support networks of 

a variety of different types. I get into those in my testimony. 

Third, we should consider applying secondary sanctions under 

HIFPA to financial institutions banking Hezbollah, its associates 

outside the Middle East. And here, for example, I think we should 

look at places like Balboa Bank & Trust, which was designated by 

Treasury in the context of the action taken against the Waked 

money laundering organization. 

We should revisit the question of designating Hezbollah a 

transnational criminal organization, which it absolutely is without 

question. We should resume sanctioning Iran for state sponsorship 

of terrorism. 

Again, we saw the Ebrahimi action in February, but the Quds 

Force, Mahan Air—a whole host of other low-hanging fruit, Iranian 

entities involved in Tehran’s support for terrorism—should be designated. And this, in no way, would jeopardize or conflict with the 

JCPOA Iran deal. 

And finally, we absolutely must continue to enhance interagency 

coordination and cooperation against the Iran threat network. That 

began to fall apart a little bit in the context of the Iran deal where 

some agencies wanted to push harder and some did not. Today 

there is, I think, greater consensus on the need to push hard on 

the maligned activities that Iran is engaged in beyond procurement, such as support for terrorism. And I think that there is a lot 

more we can do here. There are positive signs, on this I will conclude, for example, of using the global counterterrorism forum, the 

law enforcement and coordination group, both to address best practices for countering Hezbollah terrorist, criminal, and other terrorist activities that have been a great success. The State Department, similarly, has used the counterterrorism partnership fund to 

launch an international initiative in very close partnership with 

the Department of Justice to raise awareness about Iran and 

Hezbollah’s broad range of terrorist and criminal activities around 

the world, and to help train our allies around the world to figure 

out how best to prosecute and deal with those activities. These 

types of efforts should be doubled down on. There is a lot more we 

can do. I thank you for the opportunity to testify before you today. 

[The prepared statement of Mr. Levitt follows:]

7


25730a-1.eps

Attacking Hezbollah's Financial Network: Policy Options 

Dr. Matthew levitt 

Fromer-Wexler Fellow and Director, Stein Program on Counterterrorism and Intelligence, 

The Washington Institute for Near East Policy 

Testimony submitted to the Committee on Foreign Affairs, U.S. House of Representatives 

June 8, 2017 

1 

Chairman Royce, Ranking Member Engel, and Members of the Committee, thank you for this 

opportunity to appear before you today to assess efforts pursued to date to counter Hezbollah 's 

ability to exploit the international financial system to its benefit, and to propose policy options to 

more effectively target Hezbollah's bottom line. 

The regional and international threats posed by Hezbollab have only increased over time, 

underscoring the importance of denying the group the financing and resources that are critical to 

its ability to function. Hezbollah has experienced a series of financial setbacks, leading U.S. 

officials to describe the group being in the "worst financial shape in decades " 1 Indeed, 

Hezbollah has in recent months resorted to launching an online fundraising crowdsourcing 

campaign entitled "Equip a Mujahid Campaign" which calls for donations, large or small. 

payable all at once or in instalments, to equip Hezbollab fighters 2 Hezbollab has also promoted 

a fundraising campaign on billboards and posters promoting a program through which supporters 

whereby supporters can avoid recruitment into Hezbollah's militia forces for a payment of about 

$1,0003 These are desperate measures for a group sutJering tough financial times. 

And yet, Hezbollah continues to collect sut1icient ti.mds to deploy a significant militia at home 

and next door in Syria, to send smaller groups of operatives to Iraq and Yemen, and to operate an 

international terrorist network with deadly effect. To effectively counter Hezbollah's financing, 

the U.S. must lead an international effort to target the group's illicit financial conduct both at 

home in Lebanon and around the world. The idea here is not to undermine the Lebanese 

economy, but to protect it from exposure to the criminal and money laundering enterprises in 

1 "HcLbollah in 'worst fimncia1 s1mpe in decades,· US says," The Times of Israel. May 25. 2016, 

.h!112~~}1}}'\Y. ti mesoflsme I. co n1L.bc7bo! iillJ.:-i~1-'iYO rst -fi na nc ial-shape-i n-decades-us-says/ 

'"Hizbullah Launches Online Fundraising Campaigll" MEMRI. Febmary 10. 2017, http://cj1ab.menni.org/1abprojccts/tnacki1H0-illmdl-lcrrorist-usc-of-social-m.::di..1111itbullah-launchcs-onlinc-[tmdmlsing-cmnpnlgn/ 

3 "Hezbollah Asks for Support on Billboards and Posters," AI Ardbiya, June 7, 2017, 

https ://english.a1arabiva.net/en!N ews/middle-east/20 17/06/07/Hezbollah-asks-for -support -on-billboards.html 
8


25730a-2.eps

which Hezbollah is deeply involved. It should therefore not surprise that after Congress passed 

the Hezbollah International Finance Prevention Act (HIFPA), Lebanon's central bank issued a 

circular ordering Lebanese banks to close accounts belonging to individuals and institutions 

associated with Hezbonah. According to the central bank, hundreds of Hezbonah-linked 

accounts have since been closed. 

z 

Similarly, outreach to foreign partners regarding Hezbollah is based not only on the increasingly 

shared position that Hezbollah is an international terrorist group, but also on the universal 

position that the group is deeply involved in criminal enterprises that put national economies and 

the international financial system at risk. Hezbollah continues to operate in Europe even after 

the ban placed on parts of the group (it's military and terrorist wings) in July 2013, and is 

aggressively engaged in criminal enterprises in Africa and South America. Despite being 

designated a terrorist group by the Gulf Cooperation Council (GCC), Hezbollah reportedly began 

storing some of its ti.mds outside Lebanon in response to the etl'ect of the HIFPA legislation, 

including in places like Iraq and Dubai. 

Hezhollah 's TransfiJrmalion 

The war in Syria has dramatically changed Hezbollah. Once limited to jockeying for political 

power in Lebanon and fighting Israel, the group is now a regional player engaged in conflicts far 

beyond its historical area of operations (Iraq and Yemen), often in cooperation with Iran. The 

strongest indicators ofHezbollah's transfonnation are structural. Since 2013, the group has 

added two new commands-the first on the Lebanese-Syrian border, the second within Syria 

itselt'-to its existing bases in southern and eastern Lebanon. In establishing its new presence in 

Syria, Hezbollah has also transferred key personnel trom its traditionally paramount Southern 

Command, along Lebanon's border with Israel. 

In addition to the traditional Lebanese Hezbonah, which has been deploying fighters to Syria 

since 2011, Islamic Revolutionary Guard Corps (TRGC) General Hossein Hamedani declared in 

May 2014 that Iran had forrned "a second Hezbonah in Syria." In early 2014, several Shiite 

militias in Syria began to can themselves, "Hezbonah fi Suriya," or Hezbonah in Syria. Inspired 

by the success of Lebanese Hezbonah, Iran had begun to build a Syrian wing of the movement, 

to "carry out ideological as well as other regional power-projection goals " 4 While most of their 

actions so far have been limited to Syria, Hezbonah fi Suriya has made cans to unify with other 

Shia militia groups in Iraq as well. The Hezbollization of these groups, in name, structure, and 

anegiance, signifies a major accomplishment for Tehran, an owing Iran to preserve harder-core 

influence and more effectively project power within and beyond Syria5 

Iranian support for Hezbollah is believed to continue at the same level it has been at for several 

years, but more of that money now goes to underwrite Hezbollah activities in Syria than in 

Lebanon. That is putting significant pressure on Hezbonah back home in Lebanon, where 

tensions are rising over the group's lack of support for its constituent base6 This, in turn, has led 

'

1 Philip SmytlL "HO\:v Iranls Building Its SyrianHcLbollalt" 'ihe /Vashingwn lnslilUlefiw Near Hast Policy, March 

8, 20 16, https://;,y_y,~v. ;v<J shi ngtoni J~t_iM~po! icY -<1_no lysi s/v!eTv/hmv -i ran--is-bui !dillg:lt.§.::svri:l n. he;zJ)o! hili 

'Philip Smytll "How Iran Is Building Its Syrian Hezbollall" The Washington Institute jar Near East Policy, March 

8, 2016, bups://\\ \\\\. \\as!Iin£1oninstilute.orz/polic\ -analvsis/\'levr lhmv-iran-is-buildi,!tg-its-svrian-heLbollal! 

''Hannin Ghadar. "Hczbollah·s Women Arcn'tHappy'"' The Wa.1hinRtonlnstitute, October 12.2016, 

http://\y1..-.,'\·v. t·vashinctmlin~titute.on:/policy -mmlvsis/Yie"'IY/hczbollahs-·1-vonlen-.:.uent-happv 
9


25730a-3.eps

to an ideological crisis for the group because many of its fighters no longer see the war in Syria 

as a sacred battle 7 

Even as it deepens its activities in Syria, Hezbollah continues to aid Shiite militias in Iraq, 

sending small numbers of skilled trainers to train Shia militias and help defend Shiite shrines 

there. Indeed, Hassan Nasrallah admitted on March 6, 2016 that Hezbollah had covertly 

dispatched Hezbollah operatives to Iraq, "In Iraq, we fought under the Iraqi command and we 

did not interfere in their atl'airs. It is an ethical, humanitarian and pan-Arab duty," and he 

continued to say that some Hezbollah fighters remained in Iraq now because the Islamic State is 

still there. s 

3 

According to the U.S. Department of the Treasury, Hezbollah has also invested in commercial 

front organizations to support its operations in lraq 9 Hezbollah member Adham Tabaja, the 

majority owner of the Lebanon-based real estate and construction finn Al-lnmaa Group for 

Tourism Works, has exploited the finn's Iraqi subsidiaries to fund Hezbollah, with the assistance 

of Kassem Hejeij, a Lebanese businessman tied to Hezbollah, and Husayn Ali Faour, a member 

ofHezbollah's overseas terrorism unit. 

And while the number oft!ghters Hezbollah has sent to Yemen to assist the Houthis may be 

small, that is certainly not a ret1ection of the importance with which they view the civil war 

there. Take for instance Khalil Harb, a fonner special operations commander and a close adviser 

to Nasrallah, oversees Hezbollah's activities in Yemen-managing the transfer of funds to the 

organization within the country-and travels frequently to Tehran to coordinate Hezbollah 

activities with Iranian otllcials. Given his experience working with other terrorist organizations, 

his close relations with Iranian and Hezbollah leaders, and his expertise with special operations 

and training, appointing Harb to work in Yemen no doubt made a great deal of sense to 

Hezbollah. 

Harb, however, is not the most senior operative dispatched to Yemen by Hezbollah. In the spring 

of2015, Hezbollah sent Abu Ali Tabtabai, the senior commander formerly stationed in Syria, to 

upgrade the group's training program for Yemen's Houthi rebels, which reportedly involves 

schooling them in guerilla tactics. "Sending in Tabtabai [to Yemen] is a sign of a major 

Hezbollah investment and commitment," an Israeli official told me. "The key question is how 

long someone ofTabtabai's stature will stay." 10 

Shiites From Hezbollah." The Washington institute, 

"Nasmllah: Hezbollah sent fighters to Imq." Dai(vStar Lebanon. March 7. 2016. 

bttps :/ltv\\·\\-.dailv slar.com. lb/N C\\· s/LcbQJlo n-Nen s/20 16/Mar-07/3 -t08SI2 -nasrallah-hcLbollal1-scnt-fi ghl~rs-toimq.nshx 

"""Treasury Sanctions Hizballah Front Companies and Facilitators in Lebanon And Imq_-- US Department of 

Treasury. June 10, 2015, lmps:/l~,v\\·\\ .treasurv. gm /press-cenler/press-relea'!.es/Page~/il006Y .astJx 1

" Matthew Leyitt, "'Waking Up the Neighbors:· Foreign.1ffairs. July 28, 2015, 

https:! h.n,,·~,y .foreiguaffairs.com/ artK les/]srael/20 15-07-23i";::aking-ueighbors 
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Beyond Iraq and Yemen, Hezbollah cells have been uncovered in Bahrain, Kuwait and the UAE 

as welll 1 

Glohal Criminal J;;merprise 

4 

To further its operational objectives, Hezbollah relies on a worldwide network of supporters and 

sympathizers to provide financial, logistical, and operational support. These include both 

informal networks of supporters and centrally-run enterprises that effectively operate like 

international organized criminal organizations. The former provide small level financial or other 

support, as they are able. But the latter are relied upon for multi -million dollar funding schemes, 

for logistical support activities like setting up front and cover organizations, and to procure 

weapons, dual-use items, false documents, and more for the group. Of the former, few tend to be 

formal networks; often they are intentionally structured to be opaquely affiliated with Hezbollah 

as to avoid detection. But the latter, which also rely on relationships with criminal "super 

facilitators" who can move and launder massive amounts of money, for example, are involved in 

large-scale money laundering, drug smuggling, and anns sales. 

Consider the arrests by the US Drug Enforcement Administration (DEA) and Europol that 

targeted what U.S. law enforcement now refer to as the Business Atiairs Component (BAC) of 

Hezbollah's terrorist wing, the Islamic Jihad Organization (also known as the External Security 

Organization). Engaging in drug trafficking and drug smuggling, U.S. ot1icials report that the 

BAC was founded by deceased Hezbollah Senior Leader Irnad Mughniyah and currently 

operates under the control of senior Hezbollah ot1icial Abdallah Safieddine and recently 

designated Specially Designated Global Terrorist (SDGT) Adham Tabaja. 12 

The BAC established working relationships with South American drug cartels that supplied 

cocaine to drug markets in both the US and Europe. The BAC would then launder the drug 

proceeds through the well-known Black Market Peso Exchange. Tn late January 2016, the DEA 

and Customs and Border Protection coordinated with multiple foreign counterparts to arrest top 

leaders ofHezbollah 's BAC, including U.S.-designated SDGT Mohamad Noureddine, who has 

worked directly with Hezbollah 's financial apparatus to transfer Hezbollah funds via his 

Lebanon-based company Trade Point International S.A.R.L. and maintained direct ties to 

Hezbollah commercial and terrorist elements in both Lebanon and Iraq. 11 United States 

Department of Treasury similarly targeted Noureddine and his accomplice Hamdi Zaher El Dine 

and their company, Trade Point International S.A.R.L. 14 

Hezbollah's aggressive and ongoing procurement efforts have not been reigned in since the 

signing of the JCPOA, but have actually expanded in scope. These aggressive efforts span the 

11 Yara Bayoumy. "Kuwait court sentences two to death for spying for lrmt HcLbollah,'' Reuters. Jammry 12, 2016. 

http://wmv.reuters.com/article/us-kuwait-security-idUSKCNOUQORS20 160112: '·Bahrain says it dismantled lranlinl.;:ed terror celL-· Agence Fmnce-Presse, January G, 2016. http://\v\V\v.timesofisrdel.com/baluain-says-itdismantled-iran-linked-terror-cell: Abdulla Rasheed. -rran set up Hezbollah cell in UAE. court hears ... Gulf News. 

April IS. 2016. http:!/gulfnews.com/news/uae/govenuuent/iran-set-up-hezbollah-cell-in-uae-court-hears-1.1715716 

t::: ·'DEA and European Authorities Uncover !vlassivc Hizballah Drug and Money Laundering Scheme." US Drug 

Enforcement Administration, Februnry 1, 2016, lrrtp://w,Yw.def1_goY/dh;J2i.m.:lli!~QJ 6/hgQ_2n ll6.shtml 11 ·'DEA and European Authorities Uncover MassiYe Hizballah Drug and Money Lmmdering Scheme_-- US Drug 

Enforcement Administratiott Febmary l, 2016. http://\Y\\ \\' .dea.gov/division5/1tq/20 16/hqt/201 1 6.shtrnl 14 "Treasury Sanctions Hizballah Moncv Laundering Network," US Department of Treasury. January 28, 2016. 
11


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globe, but have been especially pronounced in Europe and South America. Outside of the BAC 

arrests, United States Department of Treasury designated Hezbollah procurement agent Fadi 

Hussein Serhan, his company Vatech SARL, Hezbollah procurement agent Adel Mohamad 

Cherri and his company Le-Hua Electronics Field Co. Limited, and two companies owned or 

controlled by Specially Designated Global Terrorist and Hezbollah procurement agent Ali 

Zeaiter. 15 

Vatech SARL, run by Fadi Serhan, was designated for purchasing sensitive technology and 

equipment, including but not limited to UAVs on behalf ofHezbollah. Serhan sought these 

products from companies in the US, Europe, Asia and the Middle East Adel Mohamad Cherri 

was attempting to procure a variety of electronics from China and send them to the Houthis in 

Yemen by using his company, Le-Hua Electronic Field Co. Ali Zeaiter's two companies, Aero 

Skyone Co. Limited and Labico SAL Offshore, were designated for again trying to procure 

UAV-related equipment through Europe and Asia. 16 

5 

Investigation into Hezbollah BAC finance and facilitation networks has touched the United 

States as well. In October 2015, U.S. officials arrested !man Kobeissi in Atlanta, Georgia. 

Kobeissi was arraigned on money laundering conspiracy charges and unlicensed fireanns dealing 

conspiracy for laundering funds she believed to be drug money, and for arranging for the sale of 

thousands offireanns, including military assault rifles, machine guns, and sniper rifles, to 

criminal groups in Iran and Lebanon, including Hezbollah. The same day, her Hezbollah 

associate, Joseph Asmar, was arrested in Paris and charged with money laundering conspiracy. 17 

Hezhollah Operations in South America 

The extent ofHezbollah's drug connection was underscored once more in the wake of the U.S. 

Treasury narcotics kingpin designation of the Panama-based Waked Money Laundering 

Organization in May 2016. 18 The press release tied to this action mentions neither Hezbollah nor 

Iran, but the action reportedly proved to be particularly damaging for both Hezbollah and Iranian 

illicit financial conduct in the region. When this particular money laundering organization was 

targeted, it tied up illicit finances linked to various Iran Threat Network entities, including 

Hezbollah, and forced them to flnd other money laundering channels in the region Much of that 

activity reportedly shifted to the Tri-Border Area, and to Parat,>uay in particular. 

The Tri-Border Area remains a place where Hezbollah and other militant and criminal 

organizations engage in a wide array of criminal activities, including the sale of stolen and 

15 .. Treasury Sanctions Hizballah Procurement Agents and Their Companies," US Department of Treasury. 

November 5. 2015, httns:/hi"i"'>V\Y .treasurv. vov/press-ccmer/press-rekases/Pagcs!il0255.uspx 16 ·'Treasmy Sanctions HiLballah Procurement Agents and Their Companies ... US Department of Treasury. 

November 5, 2015, https:/hv-...Y\Y .rrcn~urr _gov/prcss-ccnt£I!n.r.css-rclcascs/Parrcs/j I0255.aEll2:..~ 

~ ··T,·vo He7bollah As~ociates Arrested On Charges Of Conspiring To Launder Narcmics Proceeds And 

Intenmtional US Attomey· s Office E:Jsten1 Di~trict ofNe,·v York, October 9, 2015, 

18"Treasury Sanctions the Waked Money Laundering Organization:· U.S. Department oft he Treasury, MaY 5, 2016, 

https ://v~""\\,"'>V. treasun;. gmr/press-ceater/press-rc leases/Pages/jJ0-1-50 .aspx 
12


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counterfeit goods. Indeed, Hezbollah profits from illegal tobacco trade around the world, 

including in Israel, according to a report issued by the Israeli Ministry of Health. 19 

6 

Fifteen years ago this month, Hezbollah operative Assad Barakat was arrested in Brazil. Today, 

the Baral<at clan reportedly remains active in the region20 and Hezbollah activities in the region 

have picked up pace significantly. In its 2014 annual terrorism report the State Department 

highlighted the financial support networks Hezbollah maintains in places like Latin America and 

Africa. The report concluded that Hezbollah remains, "capable of operating around the globe." 21 

This conclusion was underscored in November 2014 when Brazilian police reports revealed that 

Hezbollah helped a Brazilian prison gang, the First Capital Command (PCC), obtain weapons in 

exchange for the protection of prisoners of Lebanese origin detained in Brazil. 22 The same 

reports indicated that Lebanese traffickers tied to Hezbollah reportedly helped sell C4 explosives 

that the PCC allegedly stole in Paraguay. 23 

Peruvian counterterrorism police arrested a Hezbollah operative in Lima in November 2014, the 

result of a surveillance operation that began several months earlier. In that case, Mohammed 

Amadar, a Lebanese citizen, arrived in Peru in November 2013 and married a dual PeruvianAmerican citizen two weeks later. They soon moved to Brazil, living in Sao Paulo until they 

returned to Lima in July 2014. Authorities were clearly aware of Amadar at the time, because 

they questioned him on arrival at the airport and began watching him then. When he was arrested 

in October, police raided his home and found traces of TNT, detonators, and other flammable 

substances. A search of the garbage outside his home found chemicals used to manufacture 

explosives. At the time of his arrest, intelligence indicated Amadar's targets included places 

associated with Israelis and Jews in Peru, including areas popular with Israeli backpackers, the 

Israeli embassy in Lima, and Jewish community institutions. 

It warrants noting that Hezbollah activity in the Southern Hemisphere often includes links to the 

United States. This was underscored in January 2015 when the FBI's Miami field office released 

a "request for information" bulletin about a dual Venezuelan-Lebanese Hezbollah operative 

known both for raising money for the group and meeting with Hezbollah ofiicials in Lebanon to 

discuss "operational issues"2

-l 

19 Mirrister ofHcallh Report on Smoking in IsraeL 2015. page 5~. 

~{1Y1.\'\Y.health.gov.il/PublicmionsFiles/smoking 2011.pdf 

"'Emanuele Ottolenglri and John Hmmah. -To Combat Illegal Inunih>rdtion. Trump Should Target Latin America· s 

Hczbollah-Narco Nexus." December 23ru. 2016 hun;LL&!£.i£!1DOlic\ .conl/2<ll6/12/23/to_:goniQll1: 

21 ·'HeLbolhh lms tics to BraLil's Largest Crinriml Gang: Group also Found Active in Peru." Fox News Latino. 

November 11. 2014.l1ttp://!a!Jng_f.QEne\ys.com/latillQ!.D~JI2i20l {/I I /J l/hezbo!lah-has-ties-to-bm?il-1Qrgest-crlnlli1al-

~allg-b'TOup-also-found-actiYe-illi 

-

2 ·'Hezbollah has ties to Brazil's Largest Criminal Gang: Group also Found Active in Pent'" Fox Ne\vs Latino. 

November 11, 2014. http:/ /lut]no Joxrle\vs.conlllatillo/nnYs/20_1 -l-/ 11/ ll!ltezbollah-lns-ties-to-brJZil-lan~e~t -cri1ninaJgang-group-also-Cound -acti vc-i 11/ 

3 ·'Hezbollnh has ties to Brazil"s Lnrgest Criminal Gang: Group also Found Active in Pent'" Fox Ne\vs Lntino, 

November 11, 2014. http:/t1atino.fosne\Ys.com/htlno/ne\Ys/20 14/ ll/ 11/hczbollah-llas-ties-to-brazil-Jarge~t -criminalgang-group-also-lound-acllve-iJJ/ 

"Fedeml Bureau oflnvcstigation. Miami and San Diego Field Offices, "Seeking Information Ghazi Nasr ai-Din." 

January 29, 2015, htms:/l\Y'\"t"\'i.fui.govh.Yanted/terroriufo/vhazi-mlsr-:::1-din 
13


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7 

Hezbollah today is more invested in operations in South America than ever before. Not only are 

counterterrorism officials tracking Hezbollah operational plotlines there on a regular basis, but 

one of the most prominent operatives behind the AMIA bombing has now risen ufs the ranks of 

the organization and is personally overseeing Hezbollah operations in the region. 5 Salman alReda, whose true name is reportedly Salman Raouf Salman, was the on-the-ground coordinator 

of the A MIA bombing. A dual Lebanese-Colombian citizen who lived at various times in 

Colombia, in Buenos Aires and in the Tri-Border area, al-Reda fled the region after the bombing, 

before being indicted by Argentine authorities for his role in the attack. But in the years that 

followed, he served as an active member ofHezbollah's Islamic Jihad Organization (UO), the 

group's international terrorist apparatus, also known as the External Security Organization 

(ESO). He was especially active in Southeast Asia and South America in the 1990s, including a 

flurry of operational missions in 1997 with three visits to Panama, two to Colombia, and one to 

Brazil 26 Following Mohammad Hamdar's arrest in Peru, he identified al-Reda as the Hezbollah 

operative who served as his handler and with whom he met with on three different occasions in 

Turkey to plan the Peru operation. 27 

Hezbollah' sties to certain governments in Latin America have been of particular concern. Of 

note, the current Vice President of Venezuela, Tareck al Aissami, was designated by the U.S. 

Treasury Department in February 2017 under a counter narcotics authority28 and is also 

reportedly close to Hezbollah29 

Hezhollah 's Foreign Relations TJepartment 

Alongside its clandestine foreign operatives and networks, Hezbollah also maintains a more 

public international presence through the Foreign Relations Department (FRD) representatives it 

maintains around the world. Sometimes referred to as Hezbollah's External Relations 

department, the FRD functions overtly in Lebanon and in a semi-public fashion abroad. 

Previously headed by Nawaf al-Musawi, the FRD is headed today by Ali Darnush who added to 

the U.S. list of designated terrorists in January 2017 30 Some FRD personnel stationed around 

the world are Lebanese sent abroad to perform these functions, while others are Hezbollah 

supporters who live in foreign countries and willingly perform this service for the group. Most 

have close ties to senior Hezbollah o±1icials, and many have some military training themselves 

and personal ties to ESO otlicials as welL Around the world, Hezbollah FRD personnel provide 

logistics to visiting Hezbollah delegations and build "community centers" to engender support 

forHezbollah within local Shia communities and serve as a base for the group's local activities. 

They also raise funds, spot potential recruits, and serve as liaison o±1icials maintaining 

communications not only between local supporters and Hezbollah leaders in Lebanon but also 

among Hezbollah operatives around the world. 

5 Author intervietv \vith counterterrorism officials, June 9, 2015 6 Author intervie\v \Vith counterterrorism officials, June 9, 2015 

~~ Author intervietv \vith counterterrorism officials, June 9, 2015 

~i( ·'Treasury Sanctions Prominent Venezuelan Drug Trafficker Tareck El Aissami and His Primary Frontnmn 

Samark LapeL Bello ... U.S. Department ofTrcasur)'. February 13Lh 2017. https://\\ n \1-.lrcasun .Gov/prcss-

£~l}ter/ru~e:ss--r~leasef-/!J]_ges/ns00C9~.JJ.~ 

"Emanuele Ottolenghi, --Meet Venezuela's New VP, fan oflmn and Hezbollah," The Hill, January 3, 2017, 

htl!J ://the hiU.c0111'b logs/ pundits-b log/internal i onal/:1 1-t 283 -meet -veneLuelas-Ile\\ -vp-a-he:tbo Halt-fan 3

" ·'State Department Terrorist Designations of Ali Damush and Mustafa Mughniyeh:- U.S. Department of Stnte, 

January 9. 2017, https:f/\:nHv.statc.vov/i/ct/r]s/other/des/2GGi..J.8.htm 
14


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FRD ot1icials have long been active in South America and elsewhere around the world. In 

Africa, FRO ot1icial Ali Ahmed Chehade has coordinated travel for Hezbollah members and 

actively assists Abd al Menhem Qubaysi, who, according to U.S. government information, 

8 

serves as a personal representative ofHezbollah leader Hassan Nasrallah in West AfricaJ 1 

Qubaysi has also hosted senior Hezbollah officials visiting the Ivory Coast and elsewhere in 

Africa. His activities included speaking at Hezbollah events and opening an official Hezbollah 

foundation in the Ivory Coast which is used "to recruit new members for Hezbollah military 

ranks in Lebanon." 12 Such activities have drawn the attention of officials in Africa, where the 

regional body of the Financial Action Task Force (F AFT) noted Chehade's FRD activities in a 

report on terrorist financing in West Africa33 Elsewhere in Africa, the duties ofFRD operatives 

Fouzi Fawaz and Abdallah Tahini included organizing Hezbollah delegations' visits to Nigeria34 

Hezbollah criminal enterprises run deep in Atrica, as evidenced most recently by the arrest in 

Morocco, extradition, and indictment in Washington, D.C., ofHezbollah financier Kassim 

Tajideen35 

iranian Stale Sponsorship 

Of course, Hezbollah continues to enjoy significant financial and other support trom Tehran. 

Beyond training, weapons and other kinds of support, Iran provides Hezbollah massive amounts 

of money, as exposed most recently in the February 2017 Treasury Department designation of 

Hasan Dehghan Ebrahimi, a Lebanon-based IRGC-Qods Force ot1iciaL According to The 

Treasury Department, "Ebrahimi has facilitated cash transfers to Hezbollah worth millions of 

dollars," some of which was sent and laundered through the U.S.-designated Hezbollah 

construction firm al Wa'ad Company. Ebrahimi and some of his employees raised money and 

transferred and laundered funds through a network of Lebanon-based companies with ties across 

the region. 36 

Policy Options 

There are several concrete steps that could be taken to strengthen current efforts to counter 

Hezbollah's ability to exploit the international financial system to its benefit: 

1 ·'Treasury Sanctions Hizballah Operatives in West Africa," U.S. Department ofTreasur:y, June 11, 2013, 

hlUJ:/.1\\-\\ \\ .trcasur\ .goy/pr.:ss-ccnt.,:;r/prcss-rcicascs/Pagcs/jl] 930.aspx 32''Treasnry Target Hizballah Network in Africao" U.S. Department of the Treasury. May 27, 2009, 

http:/ h.."\\V"\Y .treasury. goy/press-center/press-re leJ.ses/F;ures/tg 149 .aspx 33 ·'Terrorist Financing in West Africa." Firmncial Action Task Force. Inter Govcmmcntal Action Group Against 

Money Laundering in West Africa, October 2011. 

http://'"''"''~' .fatf -gafi.org/pub licatious/mcthodsandtrends/documents/tf -\vest -aJrica.html 34 ·'Treasury Targets Africa- Based Hizballah Support Nenvork," U.S. Department oft he Treasury, Febmary 26th' 

2015, http::;://-..-...·"ktY. trc;tsun' .go-,·/press-ccnter/press-re ]eases/Pages!il9982.a.">px 35 ·'Lebanese Busit1essnk1n Tied to HiLballah Arrested For Violating JEEP A and Defrauding the U.S. Govcmmcnl," 

United Stutes Depnrtment of Justice. Mmch 24. 2017, htill.5://Yr'\Y'\Y.iusticc.gm:/usa9-dC/~banese-ht.l~ins,:~i;mantied-hizballah-anested-Yiolating-ieepa-aud-defnruding;-llS-govemment 

36"Treasu:r;.· Sanctions Supporters of Iran's Ballistic Missile Program and Iran's Islamic Revolutiomrry Guard Corps 

- Qods Force," US Department of the Treasury, Fcbrunry 3, 2017, ]lttps:i/-..,..._,,Y ... ll'.trcnsurv,wiJill::ss-c£~}~.§.§:. 

rdeascs/PagesiasOOO-J..aspx 
15


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1. Designate additional Hezbollah entities, as appropriate. HIFPA proscribes doing 

business with designated Hezbollah entities, so the more Hezbollah entities included in 

Treasury and State department lists the more impactful the HIFP A legislation will be. 

While Lebanese regulatory authorities intervened to prevent so-called over-compliance 

with the U.S.law by local banks and forestall further confrontation with Hezbollah, 

additional U.S. designations of Hezbollah businessmen and businesses would give 

Lebanese banks cover to protect the Lebanese financial system from further abuse. This 

should include, but not be limited to, entities operating in Lebanon. Consider, for 

example, the list of Lebanese businesses designated along with Lebanon-based IRGC 

Qods Force operative Hasan Dehghan Ebrahimi in February 2017 37 

9 

Targeting Hezbollah's criminal enterprises in South America, Africa and Europe would 

be important as well. Additionally, whenever possible, note the Hezbollah connections to 

Treasury or other actions taken under authorities other than support for terrorism, as in 

the case of the counter-narcotics action taken against the Waked Money Laundering 

Organization, so that these can be covered by HIFPA as well. 

Finally, consider follow on actions to existing designations, where appropriate. For 

example, Ebrahimi was providing Hezbollah funds through Hezbollah's a! Waad 

construction firm, which was designated in 20093 s Similarly, Hezbollah's "Equip a 

Mujahid" social media fundraising campaign was launched by Hezbollah's Islamic 

Resistance Support Organization (TRSO), which was designated in 2006 39 In fact, the 

Treasury Department revealed at the time that IRSO was raising funds for Hezbollah 

around the world using terms like "equipping a mujahid project" 40 

2. Target key Hezbollah criminal support networks. Hezbollah's Foreign Relations 

Department has taken on a variety of criminal and operational functions over the past few 

years and targeting its operatives and front organizations would deal a significant blow to 

the group 41 Similarly, Hezbollah increasingly relies on the services provided by "super 

facilitators" who may not be Hezbollah members themselves but provide the group 

specialized services that are mission-critical for Hezbollah 's criminal enterprises. 

Targeting these super facilitators would also be an effective way of undermining the 

group's ability to access and abuse the international financial system42 The arrest, 

37 c .. TreastiTy Sanctions Snpporters of Iran· s Ballistic 1\1issile Progmm and Imn· s Islamic Revolutionary Guard Cmps 

-Qods Force .. " US of the Treasury, Febm.aiJ' 3, 2017, https:/b,v\Y\v.treasnrv.gov/press-center/press-

"Treasury Designated Key Hezbollah Fundraising Organization," US Department of the Treasury, August 29, 

2006, https://www.treCJsur~Ln.res"i-center/m_e.g;-releases.Lf:EgedJJ.QZl~J:; 40 English translation of IRSO donation form including in Treasury's IRSO designation 

https J/www. treasu rv .gov /resou rcc center/terrorist i! !1 cit-fi nan ce/Docu ments/0829tra n slationofrcccipts. pdf 01 Matthew Leyitt, "Hezbollah's 'Diplomats Go Opemtional," The Washington Institute, December 2nd, 2016, 

http: I /Vi'\"\t·v. i·vashingtoninstitnte org/policY -analvsis/Yle\v/hezbollahs-diplomats-go-operationa l 

'" Malt!Je" LeYill. ·'Hezbollah's Criminal Networks: Usefulldiols, HencluneiL and Organized Crinrinal 

Facilitators," The Washington Institute, October 2016, 
16


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10 

extradition and forthcoming prosecution of designated Hezbollah tlnancier Kassim 

Tajideen indicates a newfound willingness to target individuals or organizations that play 

key roles in Hezbollah' s criminal support networks, and stands in stark contrast to the 

failure to secure the extradition of other arrested Hezbollah supporters around the world, 

such as the case of Ali Fayyad who was arrested in the Czech Republic but later released 

to Lebanon. 

3. Apply secondary sanctions under HIFPA to a financial institution banking 

Hezbollah or its associates outside the Middle East, such as in Africa or Latin 

America. This would serve as a powerful reminder ofHIFPA's global reach and 

minimize the impact on Lebanon's tlnancial sector. Consider a tlnancial institution like 

Balboa Bank & Trust, which was designated by the Treasury Department in the context 

of the action taken against the Waked Money Laundering Organization 43 

4. Revisit the question of desi~natin~ Hezbollah as a Transnational Criminal 

Organization. The outing ofHezbollah's Business Affairs Component resulted from a 

series of DEA cases run under the rubric of "Project Cassandra," which targeted "a global 

Hezbollah network responsible for the movement of large quantities of cocaine in the 

United States and Europe." But there are many other recent cases in which transnational 

organized criminal activities were carried out by people with formal, even senior ties to 

Hezbollah. Hezbollah's status as a transnational criminal organization (TCO) should be 

revi si ted44 

5. Resume sanctioning Iran for state sponsorship ofHezbollah (and other) terrorism. 

Hezbollah continues to receive significant funding and resources from Iran. Without 

undermining the Iran Deal, which is limited to nuclear development and proliferation, 

more vigorous action could be taken against entities such as the IRGC Qods Force, 

Mahan Air, and a host of other Iranian entities involved in Tehran's support for terrorism. 

The designation of Hasan Dehghan Ebrahimi in February 2017 was a move in the right 

direction. 

6. Enhance interagency coordination and cooperation against the Iran Threat 

Network (TTN). All of the policy options laid out here require close interagency 

coordination and cooperation. In the past, that has been in short supply when it comes to 

dealing with Iran, Hezbollah and Tehran's other proxies. Today, organized Shiamilitias 

closely tied to Iran are operating in Iraq and Syria. These include Shia militants not only 

from Iraq and Lebanon, but from Pakistan, Afghanistan, the Gulf, and Africa 

Designations and other interagency actions targeting ITN actors allied with Hezbollah 

would go a long way toward undennining some ofHezbollah's key allies. The ITN 

threat is growing, not shrinking, and demands maximum coordination between the 

intelligence community, law enforcement, regulatory bodies and policy departments and 

agencies. One positive sign in this regard is the use of convening bodies such as the 

41 ·'Treasury Sanctions the \Vaked Money Laundering Organizatim~" U.S. Department of the Treasury, May 5th_ 

2016, blips :/h,v \·\ \\' .lre<Js urv. gov /pres5-center/ press-releases/Pagc~;j !I 1-f.:"iO .aspx 44 Matthew Lcyitt, "Hczbollah's Transnational Organinod Crime," The Washington Institute, April 21 '', 2016, 

j1ttp:/ /'.;<./\"\ tY. ~.-YClshingtoninstltute org/policy -analvsis/vletv/hezbollahs-transuatio nal-organized -crime 
17


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11 

Global Counterterrorism Forum (GCTF) and the Law Enforcement Coordination Group 

(LECG) to address best practices for countering Hezbollah's terrorist, criminal and other 

illicit activities 45 

-1 5 Matthew- Levitt, ··America May Hnve Unlocked a Key to Fighting Terrorism-and It Doesn't Involve Drones,'' 

The \Vashington Institute. January gth_ 2016. http:!hnv"\V.\Yashingtoninstitnte.org/policv-allalvsis/ne'\Y/america-mavllm e-unlock.ed-a-l~ev-to-fightine-terror1sm-and-it-d.oesnt-invoh e; and"Treasur)' Hosls Meeting of lhe Lmv 

Enforcement Coordination Group Focused on Countering Hizballah·s Terrorist Acth·itics," U.S. Department of the 

Treasury, May 8111 , 2017, lill:.Qill1V'i'\'"\:v .treasurv. goY/press-center/press-releascs/Pages/sm0075.asnx 
18

Chairman ROYCE. Thank you. Mr. Asher. 

STATEMENT OF DAVID ASHER, PH.D., MEMBER, BOARD OF DIRECTORS, CENTER ON SANCTIONS AND ILLICIT FINANCE, 

FOUNDATION FOR DEFENSE OF DEMOCRACIES 

Mr. ASHER. Chairman Royce, Ranking Member Deutch, and 

other members of the Foreign Affairs Committee, thanks for the 

opportunity to discuss with you the challenges we face countering 

Hezbollah’s rapidly expanding global web of terror, crime, and insurgency, including its direct ties to the United States. 

I will be brief about the challenges we face in combating Lebanese Hezbollah’s illicit web of activities and finances, and begin 

with a little recounting of how I got involved. Beginning in 2008, 

in the summer, I had the honor of advising the man on my left and 

several others in the room at the Drug Enforcement Administration 

and the Department of Treasury, Special Operations Command, 

Department of State, and Customs Border Protection on developing 

and spearheading a unified strategy across law enforcement and 

special operations to pursue Hezbollah’s web of activities, with the 

goal of fundamentally disrupting Hezbollah’s growing involvement 

in cocaine trafficking and money laundering, including through the 

United States financial system and through our own borders. 

I am proud to say that a seamless collaborative web of combining 

a small group of U.S. agencies was established and leveraged to 

combat these activities using every agency’s unique authority. So 

it is a whole-of-government approach that makes you proud about 

being part of this government. It is a combination of law enforcement, financial, criminal, civil, and regulatory authorities that led 

to a wide range of actions that you have heard about, providing a 

framework to deter, disrupt, and publicly illuminate the global illicit Hezbollah network. I think it was probably the most successful 

operational effort taken against Hezbollah to date by the U.S. Government after many years of inaction. 

Yet, in the last years of the previous administration, for reasons 

that most definitely had to do with the Iran deal and concerns of 

interfering with it, which I thought were totally unfounded as a 

former nuclear negotiator with Iran and North Korea, we lost much 

of the altitude that we had gained in our global effort. And many 

aspects—including key personnel who were reassigned, budgets 

that were slashed, and many key elements of the investigations 

that were underway—were undermined. And it was a bit of a tragedy and a travesty. And I think it was, again, very unfounded. But 

today, we have to deal with the legacy of that and how to rebuild 

this capability, knowing that you can have a nuclear deal with Iran 

and you can contain and disrupt its illicit activities and terrorist 

activities, and we really have to do both. 

But the result today is that criminal states and criminal terrorist 

organizations continue to benefit from a type of implicit immunity 

from prosecution. And Mr. Royce, you and I have gone over this 

with North Korea over the years. We still haven’t seen the types 

of charges that were assembled against that government, even in 

the wake of the Sony attacks, and more recently, hacking of the 

Federal Reserve Bank in New York. Moreover, neither al-Qaeda 

nor Hezbollah has ever been organizationally prosecuted by the DeVerDate 0ct 09 2002 16:44 Aug 16, 2017 Jkt 000000 PO 00000 Frm 00022 Fmt 6633 Sfmt 6633 Z:\WORK\_FULL\060817\25730 SHIRL
19

partment of Justice for repeatedly attacking the United States, killing thousands, or hundreds, of our citizens, and for being tied to 

a wide range of transnational organized crimes and violations of 

our laws. And by the way, the same is true with the Islamic State, 

of which I had the honor to be the Deputy Special Coordinator on 

the economic warfare side at the State Department a couple years 

ago. 

We have not applied Mafia-style RICO prosecutions that would 

aim to incarcerate the members of these organizations for life, take 

away their sanctuaries, strip them of their finances, and undermine their credibility. I, frankly, have no good answer why, except 

that I have heard from people, including Director Comey, that 

there is a sense of fear that if we do this, it is going to lead to reprisals. 

I personally spearheaded the targeting of a Lebanese Canadian 

bank, a $51⁄2 billion bank that was at the heart of Hezbollah and 

Iran’s finances in Lebanon. We did not receive retaliation as a nation for bankrupting their largest financial institution. I think the 

fears are overwrought, and I find the phobias surrounding prosecution of terrorists baseless, bizarre, and moreover, largely against 

the spirit in the letter of the laws we are sworn to uphold. 

Today, I would like to highlight that the Department of Justice 

needs to rebuild, properly fund, and expand capabilities and investigations against what I call the Iran action network, not just the 

threat network: Hezbollah’s terrorist and military wing and their 

friends and partners in criminal states like Venezuela and North 

Korea. 

And indeed, we can discuss this if you would like. The level of 

cooperation between the Government of Venezuela, the Government of Iran, the Government of Syria, and Lebanese Hezbollah 

that we observed in undercover operations with which we personally were involved, including people in this room, was absolutely 

astonishing. The evidentiary basis to take down this entire global 

network exists. The facts are clear, and they are already revealed 

in many unsealed indictments. 

Thank you for your time and I look forward to any questions you 

have. 

[The prepared statement of Mr. Asher follows:]

20


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ac ng 

Financial 

ezbollah 

e rk: 
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David Asher June 8, 2017 

Chairman Royce, Ranking Member Engel, and other members of the Foreign Affairs 

Committee, I thank you for the opportunity to testify on this important topic of U.S. and 

international efforts to counter Hizballah's global network of terror, crime, and 

resistance, including its direct ties to the United States. 

I will be brief about the challenge we face, touch on the strategy I helped the previous 

administration develop against Hizballah's illicit activities and finances, and then propose 

where we need to go next to achieve a long sought, but so far unattained, strategic effect 

against this pernicious, but highly capable, criminal resistance and terrorist organization 

and its state sponsors and partners. 

Over the last decade, Lebanese Hizballah has morphed from being a terrorist 

organization and politico-military (pol-mil) resistance movement to becoming a 

transnational criminal terrorist resistance organization fueled by a large and global 

illicit financial and business apparatus. 

Hizballah's dmgs-for-intelligence program has evolved into a massive drugs-forprofit initiative. 

Hizballah, partnered with Latin American cartels and paramilitary partners, is now 

one of the largest exporters of narcotics from South and Central America to West 

Africa into Europe and is perhaps the world's largest money laundering 

organization. 

Organized crime-ranging from cocaine and heroin trafficking to selling 

counterfeit currency and cigarettes, along with massive money laundering via the 

Lebanese banking system-has become a much larger source of funding for 

Hizballah than support from Iran. 

Hizballah's External Security Organization (i.e. its terrorist wing) uses crime for 

exporting its influence, increasing followers around the world, and generating 

income. 

Defending against, attacking, and defeating Hizballah's growing military capacity 

requires defending against, attacking, and defeating its global financial and 

facilitation network. 

We built the means to do this but for reasons that remain mysterious, elusive, and 

hard to comprehend, much of what we built was willfully scrapped toward the end 

of the previous administration. 

Rebuilding this capacity and strategy will require significant resourcing, 

prioritization, and oversight by this Committee. 

Beginning in the summer of 2008, I had the honor of advising the Dmg Enforcement 

Administration, Department of the Treasury, Special Operations Command, Department 

of State, and Customs and Border Protection on developing and spearheading the 

implementation of a strategy to pursue Hizballah's web of illicit activities and finances, 

focusing on Hizballah's rapidly expanding involvement in cocaine trafficking and money 

laundering of the proceeds. 

Our joint strategy contained the following key elements: 

Use evidence from criminal investigations to support designations as 

well as make criminal cases. 
22


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Pursue the narco-traffickers-DEA Operation Titan (Colombia La Oficina De 

Envigado partnership with Hizballah); Project Cassandra (Hizballah global 

cocaine trafficking network under the Islamic Jihad); and Operation Perseus 

targeting Venezuela Cartel de Soles, "Los Turkos" and the Chavez regime's 

partnership with Hizballah, Iran, and Syrian governments (Conviasa flights from 

Venezuela to Syria and Iran, onward shipments to Europe) 

Pursue the narco-money launderers: Designation of Ayman Joumaa, Ali 

Kharroubi, the Ellissa Group, and the Hassan Ayash Exchange House under Drug 

Kingpin Act (Jan 2011). Join forces with CBP and FBI. 

Pursue the bankers: Designation of LCB as "a primary money laundering 

concern" under section 311 of the USA PATRIOT act (February 2011) 

Pursue the used car money laundering scheme: $483 million SDNY IEEP A 

forfeiture complaint against LCB, Hizballah, and the used car "dirty thirty" 

(December 2011) 

Seize and forfeit financial assets: USC 18-981K strategy 

Use USA Patriot Act Section 311 against exchange houses 

(Halawi/Rmeity) 

Pursue the kingpins, Super Facilitators, and the Islamic Jihad 

Organization plus government partners under the Racketeer 

Influenced Corrupt Organizations Act (RICO) (2012- present) 

A seamless collaborative effort combining a small group of U.S. agencies was established 

and then leveraged to combat Hizballah utilizing each agency's unique authorities. This 

combination oflaw enforcement's criminal, civil, and regulatory authorities led to actions 

that provided a framework to deter, disrupt, and publicly illuminate Hizballah's global 

illicit network. The result was the most successful path taken against Hizballah to date. 

Yet success was undermined just as it was occurring, perhaps because of fear of the 

consequences. For a very low financial cost we could have legally taken apart the finances, 

the global organization, and the ability of Hizballah to readily terrorize us, victimize us, 

and run a criminal network through our shores, inside our banking system, and-in 

partnership with the world's foremost drug cartels-target our state and society. Instead, 

in narrow pursuit of the P5 + 1 agreement, the administration failed to realize the lasting 

effect on U.S. law enforcement collaborative efforts and actively mitigated investigations 

and prosecutions needed to effectively dismantle Hizballah and the Iran "Action 

Network". Senior leadership presiding, directing, and overseeing various sections within 

the Department of Justice, Department of Homeland Security, Department of State, and 

portions of the U.S. Intelligence Community systematically disbanded any internal or 

external stakeholder action that threatened to derail the administration's policy agenda 

focused on Iran. Top law enforcement officers working Hizballah, Iran, and Venezuela 

cases were reassigned from key investigative units and moved to peripheral assignments. 

Several top cops retired. Frankly, it was a mix of tragedy and travesty combined with a 

seriously misguided turn of policy that resulted in no real strategic gain and a serious 

miscarriage of justice. 

The result is that criminal states and criminal terrorist organizations continue to benefit 

from a type of implicit immunity from prosecution. Neither al-Qaeda nor Hizballah has 

ever been organizationally prosecuted for repeatedly attacking the United States, killing 
23


25730b-4.eps

our citizens, and for being tied to a wide number of trans-national organized crimes in 

violation of our laws. The same is true with the Islamic State. Despite clear and abiding 

bodies of evidence and testifying witnesses, these terrorist organizations have, in effect, 

been shielded from mafia-style RICO prosecutions that would aim to incarcerate their 

members for life, take away their sanctuary, strip them of their finances, and undermine 

their credibility. I have even heard statements of fear of reprisal should these terrorists be 

prosecuted from top DOJ officials as well as senior law enforcement agency leaders and 

intelligence analysts. I personally find this phobia, baseless, bizarre, and, moreover, 

against both the spirit and the letter of the laws we are sworn to uphold. 

Today I am confident all of this is coming to an end. We have a White House and NSC 

determined to attack and defeat not only the Islamic State and al-Qaeda but also take on 

Iran and Hizballah terrorist networks, finances, facilitators, and senior functionaries. We 

have a superb and determined National Security Advisor who believes in the power of 

strategic law enforcement, the most knowledgeable and capable NSC Middle East team 

in history, and a new NSC Trans-National Threats Directorate that is ably run and 

mandated to take on narco-terrorism, criminal states, and counter threat finance and 

facilitation networks globally. 

However, even with a proper policy and strategy in place, we need to see actions-and lots 

of them-synched together in a coherent and effective campaign strategy. The capabilities 

and capacities of the Department of the Treasury, intelligence community, and special 

operations community to inflict economic damage, infiltrate and undermine adversarial 

networks, states, and organizations must be broadened, deepened, and bolstered. The 

FBI, ICE, Customs and Border Protection, and the Secret Service must not only find, foil, 

and put down terrorist plots, they need to tackle entire networks and organizations. Our 

Department of Justice must rebuild, properly fund, and expand capabilities and 

investigations against the Iran "Action Network," Hizballah's terrorist and military wing, 

and their friends and partners in the leadership of the criminal governments ofVenezuela 

and North Korea. Our prosecutors must be prepared to use tools like RICO to indict these 

terrorists' networks from foot to toe and tail to tooth, aiming to destroy them, bankrupt 

them, and lock up their leaders for life. I also have hope that the State Department will 

not be stripped of its resources and mandate for counter-threat finance and law 

enforcement but rather refocus its efforts to actively carry out economic and political 

"warfare" as an alternative to actual war. Finally-and critically-we need an overarching 

counter Hizballah USG task force, with intel agencies supporting law enforcement 

agencies (not opposing them) and evidence gathered, shared, and used coherently by all 

the investigators (including the FBI). This task force would support a unified prosecution 

strategy among all the different US Attorney's offices and the DOJ writ-large. 

In closing, I have great hope that this administration has the capacity and strategy to 

effectively take on Lebanese Hizballah and its partners in crime but there is much work 

to do and no time to wait. Thanks to this Committee for its tremendous support on 

legislative mandates and resources. 

I ask that the rest of my remarks be submitted for the record. 

4 
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Timeline of the Iran-Hizballah Super Facilitator Initiative 

• January 26, 2011: Foreign Narcotics Kingpin Designation, U.S. Department of 

Treasury, Office of Foreign Asset Control (OFAC): JOUMAA Drug Trafficking and 

Money Laundering Organization. The U.S. Department of the Treasury·s Office of 

Foreign Assets Control (OFAC) designated (NON USPER) Lebanese narcotics 

trafficker Ayman JOUMAA, as well as nine (NON USPER's) individuals and 19 

entities connected to his drug trafficking and money laundering organization as 

Specially Designated Narcotics Traffickers (SDNTs) pursuant to the Foreign Narcoti<'OS 

Kingpin Designation Act (Kingpin Act). Financial companies designated were the 

Hassan Ayash Exchange Company, the Ellissa Kxchange Company, and New Line 

Exchange Trust Co. OFAC also targeted Hassan AYASH, Hassan Mahmoud AYACHE, 

Jamal Mohamad KHAROUBI, Ali Mohammed KHA.RROUBI, Immel Mohammed 

YOUSSEF, and Ziad Mohamad YOUSSEF for their roles in these money exchanges. Ali 

Mohammed KHARROUBI owns Ellissa Holding, which was designated. Ellissa 

Holding controlled nine companies in Lebanon. Benin, and the Democratic of Congo. 

including Ellissa Group SA, the subsidiary of Ellis sa Holding in Benin involved in the 

sale of used ears in Afriea. 

• February 10, 2011: U.S. Department of Treasury, Financial Crimes 

Enforcement Network (FinCEN) public announcement that the Lebanese 

Canadian Bank SAL and subsidiaries has been identified under the U.S. 

Patriot Act Section 311 as a financial institution of primary money 

laundering concern. Hizballah·s $5.5 billion main bank was thrown into crisis, 

suffering several billion dollars in runs on deposits. 

• November 3, 2.011: (NON USPER) Ayman JOUMAA Criminal Indictment in the 

United States Eastern District of Virginia (EDVA). True Bill: Cocaine conspiracy, 

money laundering conspiracy, and criminal forfeiture proceedings. 

December 15, 2.011: The United States Attorney's Office (USAO) in the 

Southern District of New York (SDNY) filed a civil money lalUldering and 

forfeiture complaint seeking $483 million dollars from entities including 

the Lebanese Canadian Bank, exchange houses, and car dealers that 

facilitated a Hizballah-related money laundering scheme through the 

United States. 

• December 2.9, 2.011: The U.S. Department of the Treasury•s Office of Foreign Assets 

Control (OFAC) designated (NON USPER's) Lebanese-Colombian nationals Jorge 

Fadlallah CHEAITELLY ("CHEAITELLY") and Mohamad Zouheir EL KHANSA ("EL 

KHANSA") as Specially Designated Narcotics Traffickers (SDNTs) due to their 

significant role in international money laundering activities involving drug trafficking 
25


25730b-6.eps

proceeds. OFAC also designated nine other individuals and 28 entities in Colombia, 

Panama, Lebanon, and Hong Kong "'~th ties to CHEAITELLY and EL KHA.l\JSA This 

action was taken pursuant to the Foreign Narcotics Kingpin Designation Act (Kingpin 

Act), prohibits lLS. persons from conducting financial or commerdal transactions 

'"lith these entities and individuals and freezes any assets the designees may have 

under U.S. jurisdiction. 

• June 24, 2012: (NON USPER) Lebanese National NayefMahmoud FAWAZ was 

arrested by Panamanian authmities pursuant to a DEA-issued provisional arrest 

warrant on drug trafficking and money laundering charges issued in the SD~. (NON 

USPER) Rawson WATSON, a citizen of the United Kingdom, and (NON USPER) 

C'Jicolas EPSKAMP, a citizen of the "'etherlands were also arrested as co-conspirators 

with FAWAZ for conspiring to transport over $30 million dollars' worth of cocaine 

utilizing a U.S. registered aircraft. FAWAZ pled guilty to the conspiracy and in 

addition also pled guilty to violating International Traffic in Arms Regulations 

(ITAR) and Export Administration Regulations (EAR) by procuring Bell 

Helicopters for export to and on behalf of the Islamic Republic of Iran. 

• June 27, 2012: United States Treasury designation of (NON USPER's) Lebanese 

Nationals Abbas Hussein HARE and Ibrahim CHIBLI pursuant to the Kingpin Act for 

collaboration ffith designated drug kingpin Ayman JOUMAA in the movement of 

millions of dollars of narcotics-related proceeds. BARB's Colombia- and Venezuelabased organization laundered money for the JOUMAA network through the Lebanese 

financial sector. Chibli used his position as the manager of the Abbassieh branch of 

Fenicia Bank in Lebanon to facilitate the movement of money for both JOUMAA and 

BARB. Ali Houssein BARB (Abbas Hussein BARB's brother) and Kassem Mohamad 

SALEH (Ali Mohamad SALEH's brother) were also designated under the Kingpin Act 

for their links to the JOUMAA network. Ali Houssein HARE and Kassem Mohamad 

SALEH are dual citizens of Lebanon and Venezuela. 

• June 27, 2012: The U.S. Department of the Treasury designation of Lebanese 

Colombian national Ali Mohamad SALEH pursuant to E.0.13224 as a Specially 

Designated Global Terrorist for acting for or on behalf of and providing financial, 

material, or technological support to Hizballah. He is a former Hizballah fighter mth 

knowledge of Hizballah operations plans due to his contact ffith Hizballah authorities 

in Lebanon. He was previously designated under the Kingpin Act on December 29, 

2011, for his role as a Macau based money launderer for the CHEAITELLY/EL 

KHAN SA criminal organization, which is linked to the JOUMAA network. 

• August 20, 2012: The USAO SDNY conducted a forfeiture action on the 

Societe Generale Banque au Libon (SGBL) accounts that contained $150 

Million Dollars from the sale of the Lebanese Canadian Bank which were 
26


25730b-7.eps

held at Banque Libano Francaise (BLF). The seizure and forfeiture action 

utilized statutes of U.S. Law pursuant to Section 981 (K) and was attributed to the 

December 15, 2011 tiled complaint by the USAO SDNY. 

• October 2012: The December 15, 2011 $483 million dollar SDNY filed civil money 

laundering and forfeiture complaint was amended to include specific information that 

outlined Hizballah's Drugs for Intelligence Program. This amendment added 

judicially obtained criminal evidence that revealed Hizballah members located in the 

Dahiya neighborhood of Beirut, Lebanon discussed trafficking cocaine in Europe and 

expressed interest in developing transnational cocaine transport routes to Europe and 

Africa. The Hizballalt member's explained that Hizballalt had used cocaine as part of 

a drugs for intelligence program to buy intelligence about Israel. 

• April 23, 2013: U.S. Department of Treasury, FinCEN public announcement that 

identified the Kassem Rmeiti & Company for Exchange and the Halawi Exchange 

Company co-located in Lebanon along with their respective subsidiaries under the 

U.S. Patriot Act Section 311 as a financial institution of primary money laundering 

concern. 

• September 24, 2013: The Drug Enforcement Administration (DEA) in partnership 

with the US Special Operations Command, Customs and Border Protection, the 

Department of State, the United States Treasury, U.S. Federal Prosecutors, 

International Law Enforcement and judicial partners, formally began the Super 

Facilitator Initiative utilizing both criminal and civil resources to target the illicit 

narcotics trafficking in Europe, Latin America, West Africa and the Middle East. The 

initiative also focuses on the narcotics trafficking derived illicit financial flows that 

utilize existing External Security Organization (ESO) financial support units. 

• Aprils, 2014: Arrest of Lebanese National's (NON USPER's) Ali FAYYAD, 

Faouzi JABER, and Khaled EL MEREBI in Prague, Czech Republic pursuant to 

international weapons trafficking, drug trafficking, and money 

laundering charges issued by the USAO SDNY. FAYYAD is still a United 

States criminal fugitive wanted by the U.S. Department of Justice. 

• February 6, 2014: Arrest of Lebanese National (NON USPER) Ali El Delbi 

KOLEILAT in Brussels by the Belgian National Police pursuant to a U.S. Interpol Red 

Notice issued by DEA. KOLEILATwas arrested on a provisional arrest warrant based 

on charges of international drug trafficking and money laundering with judicial 

proceedings conducted by the USAO SDNY. KOLEILAT coordinated multi-ton 

shipments of cocaine and laundered narcotics proceeds globally. KOLEILAT was 
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previously sanctioned by the United States Treasury for actions committed on behalf 

of the government of Liberia and Dictator (NON US PER) Charles TAYLOR. 

• June 10, 2015: The U.S. Department of the Treasury designated Hizballah member 

(NON USPER) Adham TABAJA, his company Al-Inmaa Group for Tourism Works, 

and its subsidiaries, as well as Lebanese businessman (NON USPER) Kassem 

HEJEIJ and Hizballah Islamic Jihad member (NON USPER) Husayn Ali FAOUR 

who provide support and services to Hizballah. Car Care Center, a front company 

based in Lebanon that supports Hizballah's transportation needs was also designated. 

Treasury's actions against these three individuals and four companies were taken 

pursuant to Executive Order (E.O.) 13224, which targets terrorists and those 

providing support to terrorists or acts of terrorism. 

• July 29, 2015: Arrest of Lebanese National (NON USPER) Ali Hassan MANSOUR 

arrested pursuant to a provisional arrest warrant issued in the USAO Southern 

District of Florida by French authorities through diplomatic channels. MANSOUR 

was charged with multiple counts of money laundering over the course of a narcotics 

conspiracy. MANSOUR a large-scale money launderer based in Beirut, Lebanon, who 

operates on six continents and launders hundreds of millions of dollars 

annually. Mansour is also a key money launderer and drug trafficker for the Lebanese 

Hizballah (LH), External Security Office, and Business Affairs Component (BAC) 

global illicit network. 

• October 1, 2015: The U.S. Department of the Treasury's Office of Foreign Assets 

Control (OFAC) designated (NON USPER's) four Lebanese and two Gennan 

nationals and 11 companies as Specially Designated Narcotics Traffickers pursuant to 

the Foreign Narcotics Kingpin Designation Act (Kingpin Act). These individuals 

provide support for narcotics trafficking and money laundering activities conducted 

by Lebanese-Colombian drug trafficker and money laund ercr Ayrnan Saied JOUMAA, 

key JOUMAA associate (NON USPER) Hassan AYASH, and the JOUMA.A. criminal 

organization, which has ties to Hizballah. The action targets Lebanese nalional Merhi 

Ali ABOU MERHI who ovms and controls the Abou Merhi Group, a holding company 

in Lebanon that is also designuted today. Abou Mer hi Group has multiple subsidiaries 

in Af1ira, the Middle East, and Europe including the following 10 designated 

companies: Ahon-Merhi Lines SAL, a shipping line in Lebanon; Abou-Merhi Cruises 

(Al'llC) SA.L, a travel agency in Lebanon; Le-Mall-Saida, a shopping mall in Lebanon; 

Queen Stations, a gas station in Lebanon; Orient Queen Homes, a real estate 

development in Lebanon; maritime shipping subsidiaries in Benin (Abou Merhi 

Cotonou), Nigeria (Abou Merhi Kigeria), and Germany (Abou Merhi Hamburg); 

Lebanon Center, a shopping mall in ,Jordan; and Abou J\-1erhi Charity Institution in 

Lebanon. 
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• October 9, 2015: Arrest of (NON USPER's) Lebanese National's Iman KOBEISSI 

and Joseph ASMAR self-proclaimed Hizballah affiliate and associate on charges of 

laundering narcotics proceeds 3nd international am1s trafficking conspiring "~th a 

U.S. Department of State (DOS) Designated Foreign Terrorist Organization (ITO). 

The arrest warrants and indictments were conducted as a result of a DEA led 

investigation with judicial proceedings enacted by the USAO Eastern District of New 

York (ENDY). 

• January 30, 2016: Arrest of Lebanese National (NON USPER) Ali KHALIFE in 

Bogota, Colombia by the Colombia National Police Special Investigations Unit (SIU) 

pursuant to a Drug Enforcement Administration (DEA) sealed Provisional Arrest 

Warrant (PAW) and sealed indictment issued by the U.S. Attorney's Office USAO 

SONY. KHALIFE was arrested on U.S. Charges of engaging in a Cocaine Conspiracy 

and Money Laundering. 

• January 24, 2016: Operation Cedar enforcement raids occurred on January 

24th and 25'\ 2016 by law enforcement authorities in France, Germany, 

Italy, and Belgium, supported by DEA and CBP. These enforcement 

actions specifically targeted Lebanese Hizballah criminal operations in 

Europe. 15 individuals involved in international criminal activities such as drug 

trafficking and drug proceed money laundering were arrested. During this series of 

raids across Europe 500,000 Euros in bulk cash, property in the form of 70 watches 

valued at $9 million (USD), weapons, one luxury vehicle and property valued at 

several million USD was seized. The seizure was a result of connecting assets in 

European via judicial proceedings to drug proceeds that were being collected by 

money launderers throughout Europe. The money was financing the same South 

American drug organizations that send cocaine shipments to the US, This action 

included support from Europol and Eurojust as well as law enforcement authorities in 

France, Germany, Italy, and Belgium. The following (NON USPER's) were arrested 

and are aftlliated with or members ofHizballah, Mohammed NOUREDDINE (France 

Arrest), Mazen EL ATAT (France Arrest), Ali ZBEEB (France Arrest), Oussamah 

FAHS (France Arrest), Abdel MEHO (France Arrest), Elie SLIM (France Arrest)), 

Romanos KHATTAR (France Arrest)), Pierre NASSAR (France Arrest), Daniel 

KANDALAFT (France Arrest), Hassan TARABOLSI (Germany Arrest), Ali 

MANSOUR (Germany Arrest), Mohamed CHAHROUR (Germany Arrest), Hassan 

BERJAWI (Germany Arrest), Jamal KHALIL (Italy Arrest), and Maya KHALIL (Italy 

Arrest) Tarek BOUKAI (currently in the US was arrested in France upon his return), 

Adnan EL RAHI (currently in Angola- fugitive), Salwa ZBEEB (currently in Lebanonfugitive), and Hassan BERJAWI (currently in Lebanon -fugitive). 

• January 28, 2016: U.S. Department of the Treasury targeted Hizballah's financial 

support network by designating Hizballah-affiliated money launderers Mohamad 

NOUREDDINE and Hamdi ZAHER EL DINE, as well as Trade Point International 

S.A.R.L, a company owned or controlled by NOUREDDINE. NOUREDDINE and 

ZAHER EL DINE were designated to under Executive Order (E.O.) 13224 for 

providing financial services to or in support of Hizballah, which has long been 
29


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designated by the U.S. as a terrorist organization. Trade Point International S.A.R.L. 

was designated for being owned or controlled by NOUREDDINE. Mohamad 

NOUREDDINE is a Lebanese money launderer who has worked directly with 

Hizballah"s financial apparatus to transfer Hizballah funds via his Lebanon-based 

company Trade Point International S.A.R.L. and maintained direct ties to Hizballah 

commercial and terrorist elements. TABAJA operated in both Lebanon and Iraq. 

Hamdi ZAHER EL DINE is a Lebanese money launderer and employee of Trade Point 

International S.A.R.L., who has worked with Mohamad NOUREDDINE to transfer 

money for Adham TABAJA and Al-Inmaa Engineering and Contracting employees. 

February 1, 2016 DEA and European Authorities Uncover Massive Hizballah Drug 

and Money Laundering Scheme (7 countries involved in disrupting drug money 

flow for terror regime). The Drug Enforcement Administration announced 

significant enforcement activity including arrests targeting Lebanese 

Hizballah's External Security Organization Business Affairs Component (BAC), 

which is involved in international criminal activities such as drug trafficking and 

drug proceed money laundering. These proceeds are used to purchase weapons 

for Hizballah for its activities in Syria. This ongoing investigation spans the globe and 

involves numerous international law enforcement agencies in seven countries, and once again 

highlights the dangerous global nexus between drug trafficking and terrorism. This effort is 

part ofDEA's Project Cassandra, which targets a global Hizballah network responsible for the 

movement of large quantities of cocaine in the United States and Europe. This global 

network, referred to by law enforcement as the Lebanese Hizballah External 

Security Organization Business Affairs Component (BAC), was founded by 

deceased Hizballah Senior Leader Imad Mughniyah and currently operates 

under the control of Abdallah Safieddine and recent U .S.-designated Specially 

Designated Global Terrorist (SDGT) Adham Tabaja. Members of the Hizballah 

BAC have established business relationships with South American drug cartels, 

such as La Oficina de Envigado, responsible for supplying large quantities of 

cocaine to the European and United States drug markets. Further, the Hizballah BAC 

continues to lanndcr significant drug proceeds as part of a trade based money laundering 

scheme known as the Black Market Peso Exchange. 

May 5, 2016: U.S. Department of the Treasury Office of Foreign Asset Control (OFAC) 

designated the WAKED Money Laundering Organization (WAKED MLO) and its 

leaders, (NON USPER) Nidal Ahmed WAKED Hatum (WAKED Hatum) and (NON 

USPER) Abdul Mohamed WAKED Fares (WAKED Fares), as Specially Designated 

Narcotics Traffickers pursuant to the Foreign Narcotics Kingpin Designation Act 

(Kingpin Act). OFAC also targeted six WAKED MLO associates and 68 companies 

tied to the drug money laundering network, including Grupo Wisa, S.A., Vida Panama 

(Zona Libre) S.A., and Balboa Bank & Trust. Panamanian-Colombian-Spanish 

national WAKED Hatum and Panamanian-Lebanese-Colombian national WAKED 

Fares co-lead the WAKED MLO, which uses trade-based money laundering schemes, 

such as false commercial invoicing; bulk cash smuggling; and other money laundering 

10 
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methods, to launder drug proceeds on behalf of multiple international drug traffickers 

and their organizations. 

• September 20, 2016: Arrest of (USPER) U.S. Citizen Mohammad AMMAR in 

Altadena, California by members of a combined State and Federal Task Force. 

AMMAR was arrested pursuant to a sealed State of Florida criminal indictment that 

includes charges of money laundering, wire fraud, and engaging in a narcotics 

conspiracy. AMMAR's role in the global network involved the illicit transnational 

movement of multi ton cocaine shipments along with a focus in the laundering of 

hundreds of millions of dollars on behalf of South American dmg cartels. AMMAR 

specifically worked with the largest Colombian based drug cartel's, La Oficina de 

Envigado and Los Urabenos (AKA: Clan Usuga) AMMAR is a Colombia based 

Hizballah associated drug trafficker and money launderer. 

• February 13, 2017: U.S. Department of the Treasury's Office of Foreign 

Assets Control (OFAC) designated Venezuelan national (NON USPER) 

Tareck Zaidan EL AISSIMI MADDEH (EL AISSAMI) as a Specially 

Designated Narcotics Trafficker pursuant to the Foreign Narcotics 

Kingpin Designation Act (Kingpin Act) for playing a significant role in 

international narcotics trafficking. EL AISSAMI is the Executive Vice 

President of Venezuela. EL AISSAMI 's primary front man, Venezuelan national 

(NON USPER) Samark Jose LOPEZ BELLO (LOPEZ BELLO), was also designated 

for providing material assistance, financial support, or goods or services in support of 

the international narcotics trafficking activities of, and acting for or on behalf of EL 

AISSAMI . OFAC further designated or identified as blocked property 13 companies 

owned or controlled by LOPEZ BELLO or other designated parties that comprise an 

international network spanning the British Virgin Islands, Panama, the United 

Kingdom, the United States, and Venezuela. 

• March 13, 2017: Arrest of Lebanese National (NONUSPER) Kassim 

Mohammad TAJIDEEN in Morocco pursuant to a U.S. Interpol Red 

Notice. TAJIDEEN was previously named as a prominent Hizballah 

member and money launderer and was designated by the United States 

Treasury in 2010. TAJIDDEN was arrested pursuant to a sealed 

indictment for Money Laundering, Wire Fraud, and International 

Emergency Economic Powers Act Statutes (IEEPA) pursuant to willfully 

violating U.S. Treasury Designations. Belgian police previously arrested 

TAJIDEEN and his wife in a 2003 during a raid on Soafrimex, one of TAJIDEEN's 

Hizballah businesses in Antwerp. Belgian authorities accused TAJIDEEN and his wife 

of transferring "tens of millions of Euros" to Hizballah through his brother Ali, then a 

Hizballah commander. 

11 
31

Chairman ROYCE. Mr. Maltz. 

STATEMENT OF MR. DEREK MALTZ, EXECUTIVE DIRECTOR, 

GOVERNMENTAL RELATIONS, PEN-LINK, LTD. 

Mr. MALTZ. I would like to thank you for this opportunity to discuss this important topic. I retired from DEA, but I remain in daily 

contact with my colleagues and I pay close attention to the emerging threats to our country. I lost my brother Michael, U.S. Air 

Force para rescue early in the war and I am very passionate about 

national security and public safety issues. During the period I was 

the director of SOD, I had the privilege of working with numerous 

law enforcement agencies around the world, the intelligence community, and the Department of Defense. We had 30 agencies to include the U.K., Australia, Canada, NYPD, and we represented a 

center that was synchronizing efforts around the globe. I have witnessed the amazing results that have been achieved when agencies 

share operational intelligence and coordinate their efforts. Unfortunately I have also witnessed the lost opportunities that have been 

created when information wasn’t shared. 

In response to September 11th, very smart people in the government decided to form a counter-narco terrorism center inside the 

SOD operation. And they had vision because they knew the nexus 

between drugs and terrorism and crime was very, very closely tied, 

so the coordination became really important. 

Over the years the nexus between crime and terror has grown. 

It is all about the money, they need money to operate. That is the 

bottom line. We heard from the experts that they are losing money, 

they are in bad financial shape, so drug trafficking is very important. We must shut down these funding streams, and we must use 

all the powerful tools of national power to attack this global threat. 

We can’t investigate terrorism in a cocoon. The American public expects the government to cooperate and share information on these 

major threat investigations. And we must work very hard to break 

down the barriers that currently exist between those that investigate criminal groups, and those that are responsible for preventing terrorism. We need to develop a mutually supportive 

framework so the law enforcement actions can enhance intelligence 

community actions and vice versa, so intelligence community actions can enhance law enforcement actions. 

I was the head of SOD when we started this initiative back in 

2006, 2007 looking at global trade-based money laundering very, 

very alarming to me. I was fortunate to meet Admiral James 

Stavridis, the commander of SOUTHCOM, and he showed me a 

very disturbing visual that remains in my iPhone today, a fireball 

when narco terrorists and Islamic terrorists are joined; that is 

what I saw in my observations working on Project Cassandra, Operation Titan for almost 10 years. It was alarming that this decorated admiral had the vision back in those days to see what was 

evolving in South America with the drug traffickers. 

Unfortunately, based on what I observed, this is what I see everyday in my mind, that fireball. Hezbollah, one of the worst terrorist organizations—killing all these Americans around the 

world—was laundering proceeds of cocaine through the Lebanese 

Canadian Bank. They were operating like a major drug cartel. 

32

Now, in the press, we are hearing about the Captagon all over 

Syria. And I have some other information on that we can’t discuss 

today. 

Despite the limited support that our CNTOC task force received, 

we were very effective in what we were able to do. Project Cassandra was a long-term initiative target against a very significant 

organized crime network. We combined the resources and the expertise of some really, really smart people in the government from 

Treasury, CBP, and other agencies—including Dr. Asher and the 

lead agent in the back, Jack Kelly, who was the catalyst on this 

operation. 

We were able to use the tools of national power to make a difference for our country’s safety. And we went after this bank very 

hard, and we did a 311 action, we did civil actions with the Southern District of New York, and we actually seized $150 million from 

a bank account in Lebanon, because of really, really innovative and 

powerful laws of the United States. And you know what? They felt 

the pain because they tried to hide the money from us in LCB and 

they moved it to another bank, but we found it because we have 

some good investigators in this country. Thanks to the CNTOC 

task force, we actually ultimately forfeited $102 million, and it is 

in the U.S. asset forfeiture fund, so we are very proud of that. Investigators documented $300 million moving into the U.S. from 

Lebanon for the purchase and the shipment of these cars to west 

Africa. There were 30 businesses named in this particular action. 

Unfortunately, and sadly, there are many more businesses operating that were not affected because of the lack of information 

sharing. 

Although criminal law enforcement, the intelligence community, 

and others working on terrorism have come a long way in sharing 

information, there is a lot more to be done. At this point in this 

country’s history, we don’t need any more inspector general reports 

talking about lack of information sharing. We need some accountability on the people that aren’t sharing. As state sponsorship of 

terrorism is fueled by drug trafficking, and criminal activities are 

on the rise, we have to pay more attention. The special operations 

division, within the Department of Justice, established itself as a 

multiagency coordination center that can immediately deconflict investigative information, coordinating operation and mitigating 

threats through its resources and its global capabilities. 

I would highly recommend that this committee and other Members of Congress consider enhancing the special operations capabilities and designate it as the transnational organized crime center for America. It is critical, in my view, that we continue to use 

all the powerful laws and we continue to enhance the laws. There 

must be open and collaborative efforts between the criminal investigations and the intelligence community because we are in this together. We all are going to face the same consequences if we don’t 

work together. We must illuminate the networks with the really 

smart people we have in America. We must use every tool and have 

an all-tools-available approach. 

As the Senate report adequately and accurately depicted, the 

Lebanese Canadian Bank investigation served as a model for interagency success. I am excited and hopeful that the Department of 

33

Justice and Homeland Security under the Trump administration 

will examine operations like Project Cassandra and pick out the 

best lessons learned and let us move forward. 

Thank you for the opportunity to appear before you today. And 

I would like to discuss this important topic in any details. Thank 

you. 

[The prepared statement of Mr. Maltz follows:]

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UNITED STATES HOUSE OF REPRESENTATIVES 

HOUSE COMMITTEE ON FOREIGN AFFAIRS 

"ATTACKING HEZBOLLAH'S FINANCIAL 

NETWORK: POLICY OPTIONS" 

JUNE 8,2017 

STATEMENT OF DEREK S. MALTZ 

INTRODUCTION 

Chairman Royce, Ranking Member Engel and distinguished members of tbe committee, I would like to 

thank you for this opportunity to speak with you today regarding attacking Hezbollah's tinancial network and 

the dangerous connections bet\veen drug trafficking and terrorism. This topic has been a priority of mine 

while serving as tbe Special Agent in Charge (SAC), Dmg Enforcement Administration (DEA), Special 

Operations Division (SOD) for almost 10 years. I have some recommendations and lessons leamcd to share as 

the new administration develops strategies to deal with this evolving and complex threat to the United States 

National Security 

I would also like to tbank you for the continued support you provide DEA and the other law enforcement 

agencies in their ctforts to address these complicated global threats. As the fanner Special Agent in Charge 

of the Special Operations Division. I had tbe privilege of working with munerous local, state, federal and 

intcmational law enforcement agencies and have witnessed the amazing results that can happen when lm\ 

enforcement, both our U.S. agencies and our foreign counterparts, share operational intelligence and 

coordinate effOrts against our common enemies. 

BACKGROUND: 

Over tbc last 30 years, I have been honored to be an active participant of the Dmg Enforcement 

Administration and now in tbe private sector to work with some of the best and brightest investigators. T11at 

being said. I'm very concerned that our collective efforts have some significant challenges as our agencies 

attempt to establish stronger counter threat finance operations against global terrorist organizations like 

Hezbollah. I will discuss a very successful operation of which I am highly familiar with. The imestigation 

also kno\vn as Project Cassandra is a long term initiative targeting a very significant transnational organized 

crime organization. I have highlighted some invcstigati'e details within tbis document that demonstrates tbe 

amazing ability for the United States Government to dismpt, dismantle and destroy Transnational Organized 

Crime capabilities \Vhen agencies \Vork in a unified fashion as opposed to compartmentalizing infornmtion 

and operations. T also included some recommendations. 

In my 28 years in la\v enforcement, I've seen many operations that were both successful and failures. Many 

of the failures that I have witnessed were not a result of lack of effort or skill by the investigators. Rather, 

those failures were the result oflack ofleadership and political intighting that created an environment built 

around securing and maintaining one's own kingdom. as opposed to serving tbc American people. I believe 

that if the U.S.G. would implement some of the ideas and philosophies in this document, we can make this 

country a safer place for current and future generations. 
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PROJECT CASSANDRA: 

During 2004, Drug Enforcement Administration (DEA) agents in Miami initiated a large-scale money 

laundering investigation, titled Operation Titan. Operation Titan successfully used confidential sources to 

infiltrate a significant organized crime group in Medellin Colombian identified as the Oficina de Envigado. 

This very successful DEA imcstigation, coordinated by the Special Operations Division (SOD)_ a multi- agency 

operational coordination center with 30 agencies represented_ led to unprecedented results and exposed 

elements of the Terrorist Group Hezbollah who were being fimded by worldwide cocaine sales_ 

During this investigation several undercover activities were conducted \Vhich involved large sums of U.S. 

currency. As a result of the great investigative \Vork, there was eAiensive intelligence developed on the main 

Colombia based organization and the Colombian National Police (CNP) initiated an investigation on the 

organization located in Colombia. Over a two-year period tl1e CNP and DEA conducted an exceptional 

investigation and they identified a large scale Lebanese money launderer \Yith activities connected \Yith the 

Oficina de Envigado. 

During 2008_ the U.S. cooperative investigation with Colombia culminated with over 130 arrests_ to include 

many of the senior-level operati,es, and $23 million was seized. (Rotella_ 2008) This case identified the 

scope and the alliance between South American drug traffickers to money laundering operations in Hong 

Kong, Central America, Africa and Canada, and a connection to several Lebanese criminals associated \vith a 

global organized crime network. 

Based on the substantial infonnation developed during Operation Titan and very alanming and emerging 

trends, the Counter-Narco Terrorism Operations Center (CNTOC) located at SOD commenced an initiative 

focusing on all aspects of this network. The CNTOC has representatives from numerous agencies to ensure 

that infonnation collected and analyzed can be immediately passed to the appropriate agencies and that 

the agencies can work in a collaborative task force environment. The CNTOC spearheaded a focused 

investigation with tl1e field offices on the Middle Eastern money launderers working witl1 the South American 

drug traftickers who were shipping multi-ton quantities of cocaine into West Africa for distribution around 

the world. During this initiative, DEA identified the leader of tl1is sophisticated network who coordinated 

multi-ton shipments of cocaine trom Colombia to Los Zeta's Mexican Drug Cartel and "as laundering 

hundreds of millions of dollars in dmg proceeds back to Colombia. T11e main operative also established a very 

sophisticated network in West Africa to move currency via couriers back to Lebanon. 

The CNTOC organized a four-phased plan to include OFAC designations against substantial targets, 

identified as Ayman Joumaa_ Elissa and Ayash E'Xchangc_ a USA Patriot Act 311 action against 

Lebanese Canadian Bank, a civil money laundering action against Lebanese Canadian Bank and Hezbollah, s 

used car businesses imolved in the scheme and criminal prosecution directed at d1e leaders of the Hezbollah 

involved with the drug and money laundering operation. CNTOC's stmtegy included all the tools of national 

po;>er in a focused etTort to disrupt and dismantle this tmde-based monev-laundering scheme. 

In January 2011, the Office of Foreign Assets Control (OFAC) of the Department of Treasury_ under the 

specially designated narcotics traffickers kingpin program_ designated ten indi,iduals and twenty entities 

related to the Jmm1aa organization to include the Elissa and Ayash Exchanges in Lebanon_ (CcnteL Treasury 

Targets Major Lebanese-Based Drug Trafficking and Money LaunderingNel\vork, 2011) 

In February 2011, l11e Department of Treasury with DEA announced the identification of the Lebanese 

Canadian Bank (LCB) as a financial institution of primary money-laundering concern under section 311 of 

the USA Patriot Act. This \Yas the first time ever the 311 Action \Yas used in a drug case. TI1e organized 

crime network was moving large shipments of drugs from South America to Europe and the Middle East via 

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West Africa and laundering hundreds of millions of dollars to accounts held at LCB as well as through trade 

base money-laundering imolving consumer goods throughout the world, including used car dealerships in 

the U.S. LCB was helping Hezbollah through the Joumoa network. (Center, Treasury Identifies Lebanese 

Canadian Bank Sal as a '·Primary Money Lmmdcring Concern''. 2011) 

Subsequently in December 2011. there was a complaint filed in tl1e Southern District of New York exposing 

this Lebanese money-laundering scheme which investigators documented over $300 million into United 

States for the purchase and shipment of used cars to West Africa. The complaint alleged that the assets of 

LCB. Hassan Ayash Exchange and Elissa Holding. along with the assets of approximately 30 U.S. car buyers 

and a U.S. shipping company and related entities that facilitate the scheme, are forfeitable as the proceeds of 

violations of the International Emergency Economic Powers Act (JEEP A). Through this investigation, the 

task force of agencies exposed the LCB as money-laundering for Hezbollah through a very aggressive 

financial attack against the network T11e elaborate scheme exposed very innovative \Vays terrorist groups 

like Hezbollal1 could identifv alternate sources of income to fund their operations. As terrorists are 

increasingly turning to criminal networks for their funding_ this operation clearly supported this statement 

made by the President of the United States and Senior Homeland Security Officials. This particular 

complaint was seeking penalties totaling $483 million. From January I, 2007 to early 2011 at least $329 

million was transferred by wire from LCB and the two exchange houses and other financial institutions for the 

purchase and shipment of used cars. (DEA. DEA News: Civil Suit Exposes Lebanese. 20 11) 

One of the key elements identified during this investigation was the millions of dollars that »ere declared 

being transported across the Togo and Ghana border on its way from Benin to the airport in Accra where the 

cash was then be shipped by Middle East and couriers to Lebanon. When the cash arrived in Lebanon at 

Bcimt airport. Hczbollah security safeguarded the delivery of the cash into the financial exchange houses. 

The money was then routed through the Lebanese Canadian Bank and other financial institutions and 

subsequently wire transferred to the United States so the used-car businesses can purchase vehicles. The 

vehicles were then shipped to West Africa for resale. It was estimated tl1at the network would earn 

approximately 20% protit on each car that was sold. The DEA working with our partners at CBP also 

identified how the carparks in West Africa were exploding with volume. 

During the same December time frame_ the Easten1 District of Virginia announced the indictment of A )1Uan 

Joumoa for coordinating the shipment of tens of thousands of kilogran1s of cocaine from Colombia to Los 

Zetas Dmg Cartel for distribution into tl1e United States over an eight year period. Joumaa was also charged 

\Yith laundering millions of dollars in drug proceeds for the organization. Joumaa's organization \Vas further 

exposed through the OF AC sanction. (EDV A, 20 11) 

Subsequent to the lawsuit against the LCB. investigators revealed that tl1e LCB persom1elmoved assets to 

other banks in Lebanon in a \vay to hide the assets from the United St.'1tes government. This criminal 

activity was part of the inten1ational scheme where several Lebanese financial institutions with connections 

to Hezbollah used the U S. banks to launder narcotics proceeds through West Africa into Lebanon. In 

August 2012, the Southern District of New York filed a 981K action against five corresponding banks in 

the United States that were doing business with Banque Labano Francais. This particular Lebanese bank 

received $150 million from the Lebanese Canadian bank after they vverc exposed with their international 

money-laundering business. As a result of this very successful 981 K action, the Banque Labano Francais, 

transferred $150 million to the United States Marshals Service account in New York. In June 2013, the 

Southern District of New York settled a civil forfeiture action against the Lebanese Canadian bank and the 

settlement required LCB to torfeit $102 million to the United States. This was an unprecedented action 

targeting Hezbollal1 and tl1eir worldwide illicit activities. T11e settlement also identified to the world that 

international money-launderers for terrorists and narco-traffickers \Yill face serious consequences even \Yhen 

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the activity is outside the US (Justice_ 2012) (York, 2013) 

In April 2013, the Treasury Department along with DEA named two more Lebanese Exchange Houses, 

Kasim Remeiti and Halawi Exchange, as foreign financial institutions of primary money- laundering concern 

under section 311 of the USA Patriot Act. l11is was very significant since it was the first time the Treasury 

Department had used section 311 against a non-bank financial institution. These actions were all part of the 

ongoing DEA CNTOC strategy working closely with the Treasury Department to expose the businesses 

around the \vorld vvorking \vith the Joumaa organization. The significance of these actions is that it forces 

these financial institutions out of working in the US and international financial systems_ These exchange 

houses used their money transmitting businesses to process millions of dollars on behalf of drug traffickers. 

Bel\wen 2008 and March 2011 Rmeti Exchange provided at least $25 million in payments to US based car 

dealerships and other exporters connected to Juma· s organization_ Halawi Exchange laundered profits from 

drug trafticking for a main Hczbollah oftieial. In one year alone this business were engaged in multiple 

transfers over $4 million on behalf of one organization. (Center, Treasury Identifies Kassem Remeiti & Co. 

for Exchange and Halawi Exchange Co_ as Financial Institutions of ''Primary Money Laundering Concern"'_ 

April) 

Later in 2013, Rachel Louise Ensign_ wrote in the Wall Street Journal, the Senators Call for Financial 

Sanctions on West Africa Drugs as part of a conclusion made in a report by Sen. Dianne Feinstein (D, 

Calif), Chairman of the Caucus, and Sen_ Chuck Grasslcy (R__ Iowa) who is co- Chairman. The Senators 

called for financial sanctions targeting the \Vest African drug trade in a ne\v report. The bipartisan senate 

caucus on international narcotics control said the Treasury Department and other agencies should prioritize 

efforts to quash the flow of money linked to the growing dmg trade in the region_ Terrorist organizations in 

West and North Africa are in part financed by drug monev, the report said. In recent years, a number of 

arrests in the region have exposed collllcctions between the two, it said. The report hailed the U.S. 

government's 2011 lawsuit against the now-<lefunct Lebanese Canadian Bank, which alleged that the 

institution participated in a scheme that frmded Hezbollah and involved cocaine sales in West Africa_ The 

bank eventually settled for $102 million earlier this year_ (Ensign_ Senators Call for Financial Sanctions on 

West Africa Dmgs, 2013) 

The investigation began in 2006 and involved multiple agencies, including the Treasury Department and the 

U.S. Dmg Enforcement Administration. "The Lebanese Canadian Bank investigation and associated 

enforcement actions should serve as a model for future interagency cooperation," the report said. 

Another suggestion \Vas to prioritize by adding drug traftlckers operating in the region to the Treasury 

Department"s blacklist. A designation freezes a person-s assets and generally prohibits Alnericans from 

engaging in business dealings with him or her. (Ensign, Senators Call for Financial Sanctions on West 

Africa Dmgs- Wall Street Journal, 2013) 

During February 2016, DEA working »ith European law enforcement identified a massive Hezbollah drug 

and money-laundering scheme. This complex investigation targeted Hezbollal1's Lebanese Hezbollah's 

Business Atfairs Component (LHBAC). l11is particular component has been engaged in weapons purchases 

for Hezbollah to support its activities in Syria. l11is investigation involved multiple countries and 

showed once again the co1111ection between Hezbollal1 and drug trafficking. This particular aspect fucused on 

LHBAC. The LHBAC fom1ed a business relationship with the South American cocaine trat1ickers 

responsible for shipping multi -tons of cocaine around the world. The massive proceeds made by this 

element provides proceeds for the purchase of \Veapons needed for their inten1ational terrorist operations. 

(DEA, DEA and European Authorities Uncover Massive Hezbollah Drug and Money Laundering Scheme, 

2016) During the entire initiative. DEA working with counterparts around Europe fully identified a very 

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intricate network of couriers who were transporting millions of curos from Europe to the Middle East. 

Building the Future: 

One of my main recommendations to the new administration would be to take the fOundation of ,.\!tat has 

been created at the CNTOC at the Special Operations Division with the several supporting intelligence 

centers and enhance the interagency efforts. After the U.S. Congress report on combatting drugs in West 

Athca rightfully concluded, "The Lebanese Canadian Bank investigation and associated enforcement 

actions should serve as a model for future interagency cooperation". (Ensign, Senators Call tor 

Financial Sanctions on West Athca Drugs, 2013). Now is the time for action and the U.S.G. should build on 

this success. 

To illustrate the need for tmits such as CNTOC and added support from the new incoming leadership. one 

only needs to look at the December 19, 2016 article published by the Wall Street Joumal titled. 'The 

travels of Mrs. Murray·s Toyota Unveils Terror-Finance Netvvork". In this investigative article, the 

authors did a tlwrough job and re,icwcd the United States to Benin used car trade. which DEA and its 

partners had established, were involved in a global trade base money-laundering scheme to support 

Hezbollah's global operations. 1l1e WSJ concluded that the scheme is still operational and involved usedcar businesses in the United States. The article goes on to describe the following disturbing facts: 

Many of the car dealers identified in the 311 initiative continued to ship cars toW est Africa. 

T11e used-car export business to West Africa has expanded and is very active. 

1l1e vehicle exports to Benin in 2015 totaled $434 million and were up !rom $47 million in 2005. 

(Christopher S. Stewart. 2016) 

As we move into the future. identifying terrorist groups using criminal enterprises in order to ftmd and 

facllitatc activities \\'111 continue to become increasingly more complex. The new leaders under President 

Tnunp must support and advance the multi-agency successful efforts of groups like the CNTOC. The 

United States Gmernmcnt also needs to continue its efforts to advance technical capabilities within law 

cntOrccmcnt agencies. 

I believe that by placing qualified personnel in key leadership positions with law enforcement 

background, we can ensure that communication is flowing appropriately in both directions between law 

enforcement and the other pertinent agencies. There arc some reasonable and justified reasons to withhold 

infommtion at times from key law enforcement personnel, but should be minimized. It would be my hope 

that we can improve those relationships by ensuring that law enfOrcement docs not feel that they arc ""only 

a source of information" as opposed to a partner in the fight against terrorism. As terrorists arc looking for 

funding to carry out their dangerous agendas, criminal activity has been a golden source of revenue. TI1is 

means, the agencies need to 'break down the barriers" and unite. In the year 2017, it's almost impossible to 

successfi.tlly imestigatc global terrorists without utilizing the an1azing criminal law enforcement personnel 

around the globe. It should be "one great U.S.G. force" We need to unite not divide. 

I an1 excited and hopeful that key Homeland Security and Justice Department personnel in the Tnm1p 

administration will examine succcssfi.d operations like the Lebanese Canadian Bank and Operation Titan 

and develop best practices moving forward. The complex transnational organized crime groups are 

constantly evolving and becoming more sophisticated. Law Enforcement and the Intelligence Commmtity 

needs a sound strategy to continue to pursue the sophisticated groups and the U.S. Government needs a 

unified effort. They must place some of the best and brightest people into positions like the CNTOC and 

continue to pursue the sophisticated groups in a focused and prioritized manner. If you successfully cmsh a 

5 
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25730c-6.eps

criminal organization's financial network, you will significantly increase the chances of disrupting their 

illicit activities 

Recommendations: 

SOD needs to be designated as the Transnational Organized Crime (TOC) Coordination Center for 

the USG and should be provided the necessary enhancements. support and directives from the 

highest levels ofgovemment to support PresidentTntmp's Executive Orders on Transnational Crime 

and Violent Crime. The SOD Center currently has over 30 agencies represented to include the 

NYPD. UK, Canada and Australia and has years of operational multi-agency successes of fighting 

TOC. The DOD and Intelligence Community also have participation and their equities arc protected 

in the process. 

The basic principle that needs to be enforced to keep America safe is I 00% Infonnation sharing The 

DOJ needs to maintain the leadership, oversight and responsibility for the multi-agency project since 

they arc responsible for the ultimate prosecution. The Center needs to be adequately staffed. FBI and 

HSI should elevate the leadership within the center for ma-ximum "unity of eftOrt" and "buy in" from 

their field operati,es and management. 

1l1e DICE Dc-Contliction system, which is currently mandated by DOJ and DHS leadership, needs 

to be expanded to include the counter-terror investigations. The foundation has already been 

established. We also need the resources to ensure the DICE system is maintained, updated and 

refreshed. 

Since Crime and Terror overlap and we have identified several global fund raising schemes that arc 

crossing into the criminal investigations. we need to break down the walls and legal impediments 

and develop sound sharing processes. Need to enhance the existing Global1l1rcat Finance Teams 

with the expertise to disrupt and dismantle the financial aspects of these networks using all the 

powerfirl U.S. Treasury Actions. 

SOD has a robust Intemational Investigations Progran1 to go around the globe and take down huge 

threats vvorking vvith our foreign counterparts around the globe. Since DEA has the largest 

worldwide presence of criminal imestigators and years of experience working in the foreign arena, 

SOD. with input !rom all the agencies. is in a position to provide solid action plans on the highest 

level TOC targets. 

1l1e leadership and command and control elements of the biggest threats to the United States are 

foreign and SOD has proven they can usc the rule of law and obtain full cooperation from the 

counterparts to maximize the prosecutions in the United State. 

6 
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Chxanized Crime G1ruup. Retrieved from Treasury.gov: https:i/\\ww.treasury.gov/presseenter/press- releases/Pages/tg201.aspx 

Center, P. (20 I I, February I 0) Treasury Identifies l,ehanese Canadian Rank Sal as a "Primary Money 

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Center, P. (20 II. January 26). Treaswy Targets Major Lebanese-Based Drug Trafficking and Money 

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Ensign, R. L. (20 13, December 12). Senarors Callfor Financial Sanctions on West Africa Dnl);S. Retrieved 

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Ensign, R. L. (2013. December 12). Senators Call for Financial Sancilons on West A{l-ica Drugs- Wall 

5Jtreet .Journal. Retrieved from fcinstcin.scnatc.gov· 

https://www.tcinstcin.senatc.gov/pub1ic/indcx.cfi11/fcinstcin-in-thc-news?ID~45858AOD-A037-

4C55-A2D6-B7 AEDAF357E7 

Justice. (2012, August 20). Manhattan U.S. Attorney Announces Seizure Of $1SO Million In Connection 

With A Hizballah-Related Money Laundering Scheme. Retrieved from Justice.gov: 

https :/ /www. justice .gov I archive/ u sao/nys/ pressreleases/ Augu st12/l cbseizu re. htm I 

7 
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Rotella, C. K. (2008, October 22). LA Times. com. Retrieved from Drug probe finds Hezbollah link: 

http:/ I articles .I a tim es.coml 20081 octl22lwo rldlfg-coca in e ri ng22 

York, S.D. (2013, June 25). Manhattan U.S. Attorney Announces $102 Million Settlement Of Civil 

Forfeiture And Money Laundering Claims Against Lebanese Canadian Bank. Retrieved from 

Justice .gov: https :I lwww .justice .gov I u sao-sdy I pr lm an h attan-u s-attorney-a n nou nces-10 2-

million-settlement-civil-forfeiture-and-money 

8 
42

Chairman ROYCE. Thank you, Mr. Maltz. Thank you for your 

service. 

Dr. Karlin. 

STATEMENT OF MARA KARLIN, PH.D., ASSOCIATE PROFESSOR 

OF PRACTICE AND ASSOCIATE DIRECTOR OF STRATEGIC 

STUDIES, SCHOOL FOR ADVANCED INTERNATIONAL STUDIES, JOHNS HOPKINS UNIVERSITY 

Ms. KARLIN. Chairman Royce, Mr. Deutch and members of the 

committee, thank you for this opportunity to appear before you 

today. Having examined Hezbollah as a national security policymaker and a researcher for nearly two decades, I can confidently 

say this is a critical time to assess it. To effectively examine 

Hezbollah’s financing, one must consider the political military context, particularly the impact and implications of the Syria conflict. 

Hezbollah has both benefited from and suffered because of its involvement there. Starting with the latter, support around the region has been shaky, as Sunnis around the Middle East watch 

Hezbollah aid in Syria’s destruction. In Lebanon, the Shia see body 

bags of its youth. With estimates of 5,000 to 10,000 Hezbollah 

members fighting in Syria, it is hemorrhaging members like never 

before. Indeed, it has bled more in Syria than in fighting Israel, 

over a much shorter period of time. Hezbollah is waging a 

counterinsurgency to prop up Assad. The American military has 

learned, over the last decade and a half, that this type of conflict 

is extremely difficult and costly in blood and in treasure. Notable 

power shifts are at play because of the Syria conflict. The Assad 

regime owes its continued existence to Hezbollah. Meanwhile, 

Hezbollah has become a regional player—it has a substantial presence in at least four different countries—but is increasingly exerting Iran’s mandate. 

Today, Qassem Soleimani is the decider of Hezbollah’s future, 

not Hassan Nasrallah. The conflict in Syria shifted the dynamics 

between them such that Hezbollah seems willing to do whatever 

Iran wants, whenever it asks, and regardless of the cost. Iran is 

willing to fight until the last Hezbollah member in Syria, and it appears Hezbollah is, too; that is a problem for Hezbollah. Lebanon 

Shia are isolated, increasingly disillusioned by Hezbollah, but see 

few protectors. Many of those now joining Hezbollah focus on 

money. Indeed, one out of every four Lebanese Shia receives a salary from Hezbollah. Given this, the Lebanese Shia desperately 

need alternative, political representation and new opportunities, 

particularly in the economic sector. 

Now to be sure, Hezbollah has benefited from its involvement in 

the Syrian conflict. Ten years ago, I was most worried about 

Hezbollah’s weapons, now I am more worried about the experience 

Hezbollah has gained. Before it was a capable military force, good 

at a limited number of missions. Its portfolio has expanded dramatically. It has become a hardened force, adept at facilitating Iranian power projection around the Middle East. It has learned to 

command and control a complicated conflict in collaboration with 

numerous actors. It has acquired substantial experience in diverse 

environments, using increasingly sophisticated weapons. And as 

the operating space in Syria becomes crowded, and the U.S. miliVerDate 0ct 09 2002 16:44 Aug 16, 2017 Jkt 000000 PO 00000 Frm 00046 Fmt 6633 Sfmt 6633 Z:\WORK\_FULL\060817\25730 SHIRL
43

tary deepens its direct involvement there, we could see inadvertent 

or deliberate interactions with Hezbollah. 

Now turning to Lebanon. While the situation appears quiet, one 

should not be fooled. For a country of a few million brimming with 

sizable populations of long-term Palestinian refugees, and more recent Syrian ones, and 18 or so different confessional groups, it is 

a miracle Lebanon exists. That is important to remember—the 

state has institutions, but they are fragile. They do little in the 

way of actual governing, and are often beholden to nonstate forces 

or external actors. 

As you all know well, Lebanon’s military is a top recipient of U.S. 

security assistance. It is in U.S. interests for the military to fight 

nefarious actors whenever it is willing. Without U.S. support, its 

ability to do so is minimal. It has deployed throughout much of 

Lebanon and taken important, albeit insufficient, steps to counter 

violent actors. The Lebanese military is flawed, but it is nationally 

supported and well-respected in a country with few institutions 

that can be described as such. It has an impeccable record of maintaining control over its weapons over the last decade. And, of 

course, Hezbollah does not need the Lebanese military’s weapons. 

It has Tehran and Damascus for that. Hezbollah poses the most potent threats to Lebanon’s internal security. It turned its weapons 

on the Lebanese people in 2008 and will do so again if necessary. 

There is a memorial to the civil war at the front of Lebanon’s 

ministry of defense composed of weapons collected from various 

groups melted together. You will not, however, find Hezbollah 

stockpile in that hunk of resting metal. 

As you seek to legislate further action against Hezbollah, I urge 

you to ask the following questions: To the White House, is the 

strategy focused on ISIL or does it include the Assad regime? To 

the intelligence community, how are Iran, Syria, and Russia adjusting their support for and/or collaboration with Hezbollah and 

Syria? What points of friction exist between them and Hezbollah? 

Can they be exploited? And what about between the Lebanese Shia 

and Hezbollah? To the State and Defense Departments, how are 

they regularly assessing their program to strengthen the Lebanese 

military? And to the Defense Department, how is the U.S. military 

accounting for the increased potential of U.S.-Hezbollah confrontation in and around Syria? Thank you very much. 

[The prepared statement of Ms. Karlin follows:]

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Testimony of Mara Karlin, Ph.D. 

Associate Professor of Practice and Associate Director of Strategic Studies, 

The Paul H. Nitze School of Advanced International Studies (SAIS) 

Johns Hopkins University 

House Committee on Foreign A±Iairs 

Hearing on "Attacking Hizballah' s Financial Network: Policy Options" 

June 8, 2017 

Chairman Royce, Ranking Member Engel, and Members of the House Committee 

on Foreign A±Iairs, thank you for this opportunity to appear before you today to discuss 

Hizballah. The Committee's leadership on Middle East a±Iairs is essential, and I am 

grateful for the opportunity to share my expertise and assist with your mission. 

Having examined Hizballah as a national security policymaker and as a researcher 

for nearly two decades, I can confidently say that this is a critical time to assess it While 

its nefarious activities have been a concern for the United States since its creation, 

Hizballah is facing unparalleled challenges amidst a dynamic period in the Middle East 

Such challenges can offer opportunities to those opposing Hizballah's deadly mandate, 

but also present indicators and warnings about further regional instability. E±Iectively 

tackling the scourge Hizballah presents by minimizing its financing will benefit from 

grounding in a political-military context Today I look forward to doing so and to 

offering suggestions as to how the Committee should consider acting. 

Hizballah's History 

A coalescence of events throughout the late 1970s and early 1980s, including the 

Lebanese civil war, nascent activism among the Lebanese Shia community, the 

disappearance of a major Shia figure (Imam Musa Sadr), multiple Israeli invasions, and 

Iran's revolution enabled Hizballah's establishment 1 Iranian military training and 

financial assistance to Hizballah began early on and the fruits of its investment were clear 

in the horrific bombings against American installations in Lebanon throughout the early 

1980s, most famously the U.S. Embassy and the Marine barracks. As this Committee's 

Members know well, before the 9/11 attacks, Hizballah was responsible for the loss of 

more American lives than any other violent non-state actor. 

After Lebanon's civil war ended, its military largely disarmed, demobilized, and 

reintegrated many of the militias, although traces remained2 Hizballah was the only one 

that was not forced to tum in their weapons after Lebanon's long and bloody civil war. lf 

you go to the Lebanese Ministry of Defense, you will see a memorial to this terrible 

conflict, which is composed of weapons collected from the various violent groups and 

1 Literature on the varied elements that enabled Hi,ballah·s emergence includes Augustus Richard Norton. 

Hezbo/lah: A .%or/ History (Princeton: Princeton University Press. 2007): Ahmad Nizar Hanueh.In !he 

Path ofiiizbullah (Syracuse: Syracuse University Press. 2004): Fouad Ajami. The T'anished Imam: i\1usa 

a! Sadr and the Shia of Lebanon (Ithaca: Cornell University Press. 1986): Zc'cv Schiff and Ehud Ya'ari. 

Israel's Lebanon War (New York: Simon & Schuster, 1985). 2 Elizabeth Picard. '/he /)emohi/ization of the /.ehanese A!ilitia.\· (London: Centre for Lebanese Studies, 

1990). 

1 
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melted together. You will not, however, find Hizballah's stockpile in that pile of rusting 

metal. 

In recent decades, Hizballah has received increasingly sophisticated materiel and 

training, and financial assistance, from Iran and Syria. As former Secretary of Defense 

Robert Gates underscored, Hizballah possesses "far more rockets and missiles than most 

governments in the world." 3 Over the years, it effectively redefined its justification for 

maintaining its armed capability, allowing it to develop into one of the most wellequipped and best-trained non-state forces in the Middle East. 

Since early in its creation, Hizballah has been a complex entity, delivering social 

services, political support, and at least the perception of security to the Lebanese Shia 

amid an extremely divided Lebanese polity. Note there are few meaningful and viable 

alternatives for the community it serves in Lebanon. The substantial assistance Hizballah 

receives from nefarious actors like Iran and Syria enable it to play a singular role in 

Lebanon as a political, social, and extremely powerful military force. Without this 

support, it would simply be another militia or political actor among many in Lebanese 

society. 

Hizballah Today: A Diagnosis 

To effectively examine Hizballah today, one must consider the impact and 

implications of the Syrian conflict, which is entering its seventh year. My diagnosis 

begins with the following argument Hizballah has both benefited from and suffered 

because of its lengthy involvement in this imbroglio. 

Hizballah's Losses 

On the negative side of the ledger, Hizballah faces profound challenges as it loses 

domestic support, regional popularity, and likely thousands of fighters courtesy of its 

efforts to bolster the appalling Assad regime. 

It's remarkable to compare Hizballah's popularity today to just over a decade ago, 

when it fought Israel in a 34-day summer war. Hizballah Secretary-General Hassan 

Nasrallah was one of the most popular leaders in the Middle East after that conflict. I was 

the Pentagon's Levant Director at the time, and as we organized the largest noncombatant evacuation of Americans in U.S. history, I couldn't help but be frustrated by 

Nasrallah's growing fame. Yet that luster has long since faded. 

Today, support for Hizballah across the region is much shal<ier as Sunnis from 

around the Middle East watch Hizballah aid in the death and destruction of Syria and its 

people. The Gulf Cooperation Council and the Arab League have declared it a terrorist 

organization, and the Organization of Islamic Countries has condemned it. While they did 

so for a number of reasons, not least parochial sectarian ones, their actions demonstrate 

further isolation ofHizballah around the Middle East. 

The Lebanese Shia now watch as body bags of its youth return from waging this 

ghastly war on behalf of Tehran and Damascus. With estimates of 5,000-10,000 

Hezbollah members fighting in Syria in support ofBashar Assad's murderous regime, it 

is hemorrhaging members like never before; indeed, Hizballah has bled more in Syria 

3 Dan DeLuce. "Gates: Hezbollah Getting Improved Missiles," Defense News, 27 April 2010. 

2 
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than in fighting Israel-over a much shorter period oftime.4 And the enormity of these 

casualties is magnified in such a small community. 

Hizballah is waging a counterinsurgency to prop up Assad. The American 

military has learned over the last decade and a half that this type of conflict is extremely 

ditlicult and costly, in blood and in treasure. It has lost important commanders, like 

Mustafa Badreddine, among others. Moreover, this conflict has been going on for seven 

years and shows little potential for ending any time soon, increasing the opportunity cost 

Hizballah is paying. 

And perhaps most worrisome for Hizballah, its mission is increasingly 

questionable. The cont1ict in Syria is being waged on behalf of Iran and Syria, and it 

promotes Hizballah' s needs, not those of the Lebanese Shia. It is distant from Hizballah' s 

historical emphasis on waging war against Israel, to which it can attribute much of its 

domestic and regional support historically. By enabling the death of half a million 

Syrians and the displacement of 11 million Syrian refugees, its rhetoric about defending 

the weak rings hollow. 

Notable power shifts are at play because of the Syria cont1ict. The Syrian regime 

owes Hizballah its continued existence. Hizballah, meanwhile, has become more of a 

regional player-it has a substantial presence in at least four ditl'erent countries around 

the Middle East-but it is increasingly exerting Iran's mandate to the detriment of its 

own community. 

It's important to underscore that Hizballah's leadership did not really have a 

choice about whether to join the Syria cont1ict, even though many of these costs were 

likely clear to them. Hizballah initially took a number of steps to hide its malign activity 

in Syria; Hassan Nasrallah finally owned up to it after nearly a year5 But without 

Tehran's support and Syria's geography, he knew Hizballah would no longer be the most 

capable force in Lebanon. And from Iran's point of view, the entity it has trained, 

equipped, and built for decades has enabled Tehran to project power around the region, 

particularly in places of paramount concern, like Iraq and Syria. lf Hizballah wanted to 

continue playing the singular role it holds in Lebanon, it had to go all in on the Syria 

cont1ict. 

Hizballah has effectively become part and parcel of the Iranian Revolutionary 

Guards Corps-Quds Force (lRGC-QF). Qassem Soleimani is the decider now of 

Hizballah's future-not Hassan Nasrallah. Years ago, I wondered how Hizballah would 

respond to a profoundly escalatory mission by Tehran. I no longer wonder that today. lt is 

now clear that Soleimani says jump and Hizballah asks how high. The evidence of this 

shift has grown palpable in recent years-if Iran wants Hizballah to assassinate Lebanese 

politicians, prop up a murderous Syrian dictator, or kill Israelis, Nasrallah's willingness 

to debate these missions has become immaterial. The cont1ict in Syria has shifted the 

power dynamics between them such "that the relationship is now a boss-employee 

situation rather than a partnership." 6 As one Lebanese political figure explained, 

., Bilal Y. Saab and Nicholas Blanford. "Will Syria be Hezbollah's Proving Ground. or Its Undoing?'" 

WorldPolilicsReview. 26 July 2016. 5 Bubak Dchghanpishch '"Hczbolluh Becomes Wild Card in Syria." The Washington Post. 27 September 

2012. Anne Barnard. "Hezbollah Commits to an All-Out Fight to Save Assad,'" The New York Times. 25 

Mav 2013. 6 H~nin Ghaddar. "Hezbollah Losing Its Luster Under Soleimani." Policywatch 2766. 22 February 2017. 

3 
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"Nasrallah is not going to say 'No' to someone who has given him $30 billion over the 

past 30 years." 7 Simply put, it now appears that Hizballah is willing to do whatever Iran 

wants, whenever it asks, and regardless of the cost. 

Iran is willing to fight to the last Hizballah member in Syria and it appears 

Hizballah is, too. That is a problem for Hizballah in many ways, but particularly 

domestically. The Lebanese Shia are more isolated than they have been in a very long 

time. They are increasingly disillusioned by Hizballah-which raised their community's 

stature in Lebanon over the last 30 years-but today they are fearful and see few 

protectors. Their community is facing deep domestic discontent. Many of those now 

joining Hizballah are doing so more for monetary than ideological reasons, as Hizballah's 

shift in recruiting methods has illustrated (e.g., multi-year contracts for new fighters 

headed to Syria)g This skews incentives and invariably int1uences the very nature of the 

organization, especially if its new recruits are less enamored with Iran's vision. But, one 

out of every four Lebanese Shia receives a salary from Hizballah and there is little 

evidence that other state actors can or would etiectively till this void, even as it grows 

while Hizballah's emphasis on social services thins out compared to military operations 9 

ln light of all of these dynamics, the Lebanese Shia desperately need alternative political 

representation and new opportunities-particularly in the economic sector. 

Hizballah's support at home has grown more precarious and its popularity around 

the region has plummeted as it has bled on behalf of Damascus and Tehran. 

Hizballah is out on a limb, a particularly fragile place to be in today's Middle East. 

Hizballah's Gains 

All that said, Hizballah has also benefited from its involvement in the Syrian 

conflict Ten years ago, 1 was most worried about Hizballah's weapons. We saw during 

the summer 2006 war with Israel how Hizballah' s most destructive weapon in the 

conflict, Kornet anti-tank rockets, came from the Syrian Ministry of Defense, and other 

sophisticated materiel streamed from Iran, including the C-802 anti-ship cruise missile 

that damaged the INS Hanit. 10 

Now, l'm more concerned with the experience Hizballah has gained from the 

Syria conflict To be sure, it has come at a price. Nevertheless, before the Syria conflict, 

Hizballah was a capable military force good at a limited number of things. Now, as its 

portfolio has expanded dramatically, it has become a hardened force adept at facilitating 

Iranian power projection around the Middle East. Over the last six years, it has become 

an effective expeditionary force. It has learned how to command and control a 

complicated conflict in collaboration with a number of other actors. It has acquired 

substantial real-world fighting experience in diverse environments using increasingly 

sophistical materiel. And as the operating space in Syria becomes crowded and the U.S. 

7 Samia Nakhoul, '·Special Report: HeLbollalt Gambles All in Syria," Reuters. 26 September 2013. 8 Hmrin Ghaddar. "Economic Altematives Could Help Split Slriites from HeLbollal~" Poli<:J·1valch 2711. 18 

October 2016. 

'!Ibid. 

10 Adrian Blomfield. "Israel Humbled by Anus from Iran,'' The Daily Telegraph (London). 15 August 

2006. Frank Gardner. "Hezbollah Missile Threat Assessed." British Broadcasting Service. 3 August 2006. 

4 
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military deepens its direct involvement there, we could see inadvertent or deliberate 

interactions with Hizballah. 

These losses and gains should be monitored throughout the Syrian conflict. How 

this war ends is a matter of paramount importance for Hizballah. Any outcome short of 

Assad's survival is problematic. Continued fighting, a hardline Sunni regime, a brokered 

negotiation courtesy ofU.S.-Russian rapprochement-all pose ditierent and serious 

challenges for Hizballah. 

Lebanon's Military and Hizballah 

I'd now like to turn to Lebanon, Hezbollah's home base. While the situation in 

Lebanon appears surprisingly quiet, one should not be lured into thinking it is stable or 

that serious violence will not erupt. Now for a country of a few million-the exact figure 

hasn't been precise since the 1932 census-brimming with sizable populations oflongterm Palestinian refugees and more recent Syrian ones, and 18 or so different 

confessional groups, it's a miracle Lebanon still exists in any form at all. And that's 

important to remember: while the Lebanese state has institutions like a military, a 

judiciary, and a bureaucracy; these entities are extremely fragile. They do little in the 

way of actual governing, as we have seen time and time again, and are often beholden to 

non-state forces or external actors. 

Remedying the weakness of Lebanese government institutions has been a key 

focus area for the U.S. government, as this Committee's Members are well aware. After 

fanner Prime Minister Rati Hariri was assassinated more than ten years ago, the U.S. 

government sought to strengthen Lebanese government institutions, particularly the 

military, as a foundation to support a sovereign government that fulfills its basic 

responsibilities to its citizens. This is a long-term endeavor-and an often-unsatisfying 

one. 

Lebanon's Military 

Over the last decade, the Lebanese military has become one of the top recipients 

of U.S. security assistance. And as one of the architects of the U.S. effort to train and 

equip Lebanon's military, I am continually asked why the U.S. government is working so 

hard to build the forces. The answer is simple: it is in the U.S. interest for the Lebanese 

military to tight nefarious actors whenever it is willing, and without U.S. military 

assistance, its ability to do so is severely constrained. 

When I first began visiting Lebanon near! y 15 years ago, there was little sign of 

the Lebanese military. This was during the Syrian occupation and it was Syrian forces 

that I often saw out and about, not Lebanese. When the United States began building the 

Lebanese military after the Lebanese people pushed out Syria's military, the force was 

large, unwieldy, had a top-heavy and bloated force structure, lacked the most basic 

equipment, and spent 90% of its resources on personnel.ll 

11 International Institute for Strategic Studies. '/he Afilitarv Halance 200-1-2005 (London: International 

Institute for Strategic Studies. 2005). 129-JO. A ram Nerguizian. U.S. :\filitarv "~.1sistance to l.ehanon: A 

5 
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25730d-6.eps

Since then, it has deployed throughout much of Lebanese territory and begun 

taking important, albeit insufficient steps, to counter violent actors. It has deployed 

thousands of troops around the country, but especially to southern Lebanon since 2006. 

In 2007, we saw it successfully battle Fatah ai-Tslam (FAT) in a bloody urban wardespite Hizballah's Secretary-General arguing that any Lebanese military action would 

cross a red line. 12 U.S. support made this first big conflict a success, as the U.S. military 

raced more than forty planeloads of assets to Beirut. 13 It was in our interest then for the 

Lebanese military to counter FAT, just as it is in our interest today for it to counter radical 

Sunni groups in Lebanon like Nusra Front and ISIL 

But the 2007 fight is also indicative of the types of conflict the Lebanese military 

will engage in-those that involve largely consensus opponents. In 2007, a Sunni prime 

minister ordered a military led by a Maronite Christian to counter a Sunni Palestinian 

group. The Lebanese government and the Lebanese people supported these actions 

because they were fighting Palestinians. Today, there's a largely similar dynamic vis-avis radical Sunni groups like ISIL But to be clear, there is absolutely no way a similar 

level of support would be garnered if the Lebanese military had to take on a more 

domestic opponent. 

Lebanon's military is flawed, but it is nationally supported and well respectedin a country with few institutions that can be described as such. A military force is only 

as capable as its political leadership permits it to be. While Lebanon's military has 

grown increasingly capable and taken some meaningful steps for internal security, its 

government does not hold a monopoly on violence. The military is beholden to a fragile 

government that is easily manipulated by external parties, their proxies, and other nonstate actors; nevertheless, any meaningful attempts by the state's military to secure 

Lebanese territory and confront heinous actors are in U.S. national interest. 

Hizballah and the Lebanese Military 

1' d like to address head on the dynamic between Hizballah and Lebanon's 

military. There is no evidence, to my knowledge, that the Lebanese military has given 

Hizballah any materiel; indeed, it has an impeccable record of maintaining control over 

its weapons. 1 did not fully appreciate how thoroughly the military kept track of its 

materiel until the 2006lsrael-Hizballah war. When the Israel Defense Forces attacked a 

Lebanese military base, the LAF leadership wasted no time in providing the Defense 

Department with a list of the serial numbers of every item at the base. It was clear that 

Lebanon's military did not want its reputation tarnished if nefarious groups captured any 

of those weapons. 

Second, and let me be blunt here-Hizballah doesn't need the Lebanese military's 

assets. The weapons it receives from Iran via Syria are substantially more sophisticated 

than any materiel that the United States has given Lebanon's military to date. And as we 

NetAssessmenl and Jmplicationsjiw U.S. Policy (WashingtOil DC: Center for Strategic and International 

Studies. 20 10). 20: 23. 12 Nada Bakri and HassanM. Fattah, ·'J8 Dead in Lebanon as Army and Camp Militants Clash:' The Ne1t' 

York Times, 2 June 2007. 13 Eric Edelman and Mara Karlin. '"Fool me Twice: How the United States Lost Lebanon-Again," World 

Affairs (May/June 2011). 

6 
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have seen over the last few years-with spontaneous explosions erupting around 

Damascus, likely courtesy ofTsraei-Hizballah continues trying to improve its stockpiles. 

The return addresses are Tehran and Damascus- not the Lebanese Ministry of Defense. 

Hizballah poses the most potent threat to the Lebanese state's internal security. It turned 

its weapons on the Lebanese people in 2008 and will do so again if there are meaningful 

efforts to disarm it 

Implications for U.S. Policy: Questions to Consider 

Hizballah' s future matters because it is inextricably linked to the future oflran, Syria, 

Lebanon, and Israel, among others. As the Committee's Members seek to legislate further 

U.S. action against Hizballah, I would urge you to ask the following questions over the 

coming months: 

1) What's the Administration's strategy for the Levant? Is it focused on ISIL or 

does it include the Assad regime's demise, also? 

2) How are the regimes in Iran, Syria, and Russia adjusting their support for 

and/or collaboration with Hizballah in Syria? 

3) What points offriction exist between these regimes and Hizballah? And can 

they be exploited? What about between the Lebanese Shia community and 

Hizballah? 

4) Are any meaningful political or economic alternatives to Hizballah emerging 

among the Lebanese Shia community? If so, how are they displacing 

Hizballah's power? 

5) ln what ways is the new Administration regularly and rigorously assessing its 

program to strengthen the Lebanese military? Are current levels of security 

and foreign assistance sufficient and effective? 

6) How is the U.S. military accounting for the increased potential of U.S.-

Hizballah confrontation in and around Syria? 

7) What are the indicators and warnings that Hizballah may seek to reignite 

conflict with Israel? 

This Committee is rightly concerned about Hizballah and how to weaken it As I have 

outlined today, there are no simple remedies to the problem Hizballah poses. Anything 

short of a transfonnation in Iranian regional behavior means it will remain a threat 

regionally-and beyond-for the future. 

7 
51

Chairman ROYCE. Thank you. If I could just ask a question here 

on, I guess a striking lesson in life, which is the zeal for the deal 

which becomes eventually a deal at any cost, how people get caught 

up on that. In April, it was reported that the Justice and the State 

Departments in the Obama administration denied or delayed requests from prosecutors and agents to lure some key Iranian fugitives to friendly countries so that they could be arrested for procuring material for Iran’s nuclear program. This is something that 

Dr. David Albright spoke to before this committee, a former U.N. 

weapons inspector. He testified that out of a misplaced fear of negatively affecting the deal, the Obama administration also interfered 

in U.S. law enforcement efforts. 

So it is with interest to note Dr. Asher’s testimony this morning, 

because in that testimony, he says: ‘‘In narrow pursuit of the Iran 

nuclear agreement, the administration actively mitigated investigations and prosecutions needed to effectively dismantle Hezbollah in 

the Iran action network. Senior leadership presiding, directing, and 

overseeing various sections within the Department of Justice, the 

Department of Homeland Security, the Department of State, and 

portions of the U.S. intelligence community, systematically disbanded any action that threatened to derail the administration’s 

policy agenda focused on Iran.’’

So I was going to ask Dr. Asher what details you could give us 

on that and maybe ask Mr. Maltz your opinion as well. Dr. Asher? 

Mr. ASHER. Well, I had the unfortunate experience of being at 

the State Department coming back to work on the counter ISIL 

economic warfare plan as the coordinating under General Allen, so 

I saw a lot of this happening. This was after I departed the 

Hezbollah effort, largely because it was being defunded inside the 

DOD. And so I saw a lot of this directly, you know, we had money 

flowing, pallets and pallets of money flowing to Iran. There was a 

lot of stuff. Let’s recall, in fairness, the Bush administration 

stripped the Department of Justice of its authorities to indict the 

Government of North Korea, to pursue the North Korean nuclear 

program, which we had a very sophisticated plan to destroy. 

Chairman ROYCE. Another case of the zeal for the deal. 

Mr. ASHER. Another case of the zeal for the deal. I predicted to 

my colleagues that by the end of the Obama administration, we 

would see the same dynamics. This is a bipartisan syndrome, okay? 

It is not, you know, blame the Obama administration, blame the 

Bush administration. There is something about people wanting to 

have a deal at almost any cost. And in the case of the Iran deal, 

there are a lot of things around here talking about the nuclear negotiations, but there is no provision, as we discussed before, in 

outsourcing, even though they built a North Korea nuclear reactor 

in Syria right under the noses, right under the Six Party talk. 

There are a lot of holes in this cheese. Law enforcement didn’t have 

to be one of them. It doesn’t have to be one of them. People respect, 

including in Iran and Lebanon, when laws are enforced. The arrest 

recently of Kassim Tajideen, one of the most important super 

facilitators for Iran and Hezbollah, has sent a shock wave through 

the leadership of Hezbollah and the Iranian regime. The fact that 

we have him in prison here and that maybe he might cooperate, 

I am sure that has gotten their attention. 

52

We had the ability, I can’t comment on those two operations 

which I am aware of, that were essentially aborted, but we had 

many more that we were inhibited from acting on, for political reasons. We had operations that were denied overseas; we had funding 

that was cut. People were making a decision that the counterterrorism mission and the Iran nuclear deal was a central and all-important element, whereas containing Iran’s malevolent forces was 

less important. I think you can do both, and we have to do both. 

I don’t think it is an either/or. 

If the Iranians don’t like it, too bad, they blew up our Embassy 

twice, they killed hundreds of Marines. They went after us in Iraq 

when I was working with the Special Operations Task Force in 

support of them there, and killed nearly 800 Americans with explosively formed projectiles designed by Hezbollah. I have a beef 

against these people, obviously. And we have the tools, thanks to 

the great work of the DEA and other law enforcement agencies, to 

take them apart financially, economically, politically, and strategically, using law enforcement which the world will respect. 

Chairman ROYCE. And maybe also I will ask Mr. Maltz what 

steps do we need to take? What steps does Congress need to take 

to rebuild our enforcement capabilities there? 

Mr. MALTZ. Well, like I said, sir, the Special Operations division 

has a history of success. As a matter of fact, you were very, very 

supportive in the Viktor Bout case. The last time I was before you 

was when you supported the DEA on the extradition of Viktor 

Bout, so I will never forget that. Thank you. 

Chairman ROYCE. By the way it sends a powerful message to a 

lot of other miscreants on this globe, the fact that he is behind 

bars, and thank you very much for your success on that. 

Mr. MALTZ. So on that note, SOD had had this counter narco-terrorism operation center for the purpose of coordinating these type 

of investigations. We created that to provide a unity of effort. That 

is the purpose, because we are in this together. You cannot separate out the terrorist aspects and the criminal aspects, because at 

the end of the day, it is what is in the best interest of the U.S. Government. So I compliment some folks in the government in the Department of Justice and Admiral McRaven specifically, because we 

organized a U.S. Government interagency effort on this threat. And 

every agency that came to the table agreed that Hezbollah was a 

priority against the United States. So the idea was to put all the 

resources on the table. We went down to Florida for this big government meeting where the Attorney General, the Department of 

Homeland Security Director, and all these other officials were 

there. 

So the idea would be, let’s put the stuff on the table and work 

together. As soon as we left the meeting and as soon as Admiral 

McRaven retired, it fell apart, in my view. And I was the one in 

charge of the operation at SOD, so I could say that very clearly. 

And so for me, how the heck can you have an action against this 

organization running the Southern District of New York, the best 

in the country, and interagency did not come together and provide 

the necessary information to make it a more powerful action. So we 

had the right concept, but we didn’t complete the deal. You know 

how upset I was when I saw The Wall Street Journal article at the 

53

end of last year? Very much—very accurate article. The car parks 

are booming in west Africa because the business is booming. We 

had a chance to knock them dead, and we held back because of 

interagency cooperation. So we have to end it. 

Chairman ROYCE. We are going to return to that issue. I have 

to go to Mr. Deutch, and thank you. 

Mr. DEUTCH. Thank you, Mr. Chairman. And thank you to the 

witnesses for a really excellent presentation. 

Dr. Karlin, you said that Qassem Soleimani is now the decider 

of Hezbollah’s future, and you talked about using Hezbollah for Iranian power projection. My question is how that is done, and whether it is Iraq, or Yemen, Bahrain, UAE, Saudis, are you suggesting 

that Hezbollah, or can you speak to whether Hezbollah is more 

than a model for the terrorist groups looking to act in those countries, and is, in fact, playing an operational role. If so, how broadly? 

Ms. KARLIN. Thank you for that question, Mr. Deutch. Hezbollah 

is the best design model Iran could have really hoped for in a number of ways. And I think when you look at attempts to build a similar force, say, Iranian support to the Houthis, it is just not going 

to be equivalent for domestic Yemeni reasons, among others. But, 

I think, for those of us who spent so long looking at Hezbollah, it 

was always a question of, if Iran asked Hezbollah to get involved 

in circumstances that would be really problematic domestically, 

what would Hezbollah do? 

This was particularly thought of if there was some sort of entanglement between Israel and Iran, what would Hezbollah do if this 

ended up being a problem? And what we have seen is because 

Hezbollah can only play its singular role in Lebanon with Iran’s 

weapons, what is happening now is existential for it. 

And so this debate that used to occur doesn’t occur anymore. Indeed, any thoughts Nasrallah might have are immaterial. If someone like Qassem Soleimani needs Hezbollah to go bleed in Syria, 

he doesn’t really have a choice anymore, which is why you see not 

just the bleeding in Syria, which is obviously really problematic 

from a domestic and regional support perspective, but Hezbollah 

getting involved in training Houthis in Yemen, also not core to its 

interests really at all. 

It doesn’t have a whole lot of options here. And we have seen this 

ability so that when we put on, say, U.S. Defense Department hats, 

one worries about Iran’s conventional military, but it is the ability 

to build these violent nonstate actors like Hezbollah, and then deploy them in the various circumstances against their own interests 

in really problematic and lethal ways. 

Mr. DEUTCH. I appreciate that. Dr. Levitt, in 2012, a bipartisan 

group of members began sending letters to our EU partners, urging 

them to designate Hezbollah. In 2013, they declared Hezbollah’s 

military wing a terrorist organization. And as I mentioned earlier 

in my comments, the U.S. and others don’t make this distinction 

between political and military wings. What impact would a full 

designation from the EU have on Hezbollah’s ability to operate on 

the continent? And what more could the U.S. be doing now to encourage the EU to declare Hezbollah, in its entirety, a terrorist organization? 

54

Mr. LEVITT. Thank you for the question. When this was going on, 

my book on Hezbollah had just been finished and spent 8 months 

with Georgetown University press, God bless them, till it came out. 

That gave me an opportunity to make seven, eight, nine different 

trips to Europe, Brussels and most capitals at the time trying to 

push them on this issue. 

Some of their concerns were some of the concerns you heard earlier about reprisals, about who are we to ban an entity that is duly 

elected in Lebanon? For many of the governments, however, at the 

end of day, their decision to ban even part of Hezbollah, the military and terrorist wing, had nothing to do with what terrorism 

Hezbollah had carried out around the world, let alone in Europe, 

but had everything to do with Syria. And so, that provided us a 

real opportunity. 

What the legislation in Europe does already is it gives us an opportunity to go to the Europeans and get them to cooperate with 

us on Hezbollah investigations related to the terrorism and military activities, but Hezbollah is a large movement, and it doesn’t 

operate a Hezbollah terrorism incorporated. And so it is often very 

difficult to explain to the Europeans, or prove to the Europeans, in 

open source, in a way that they can go public with, that an entity 

we want to target with them is, in fact, related to the military and 

terrorist wing, and not just politics or social welfare. Banning all 

of Hezbollah would end that debate and discussion, and it would 

stop giving Hezbollah a pass in which it could just, through basic 

front organizations and money laundering, pretend that something 

is a legitimate actor, part of their ‘‘legitimate side of the house,’’ 

when, in fact, it is supporting, or also supporting the terrorist and 

military activities. 

If I may follow up also on the earlier question related to this. I 

don’t think we can just target Hezbollah anymore. We need to 

bring this into a larger picture in targeting the Iran threat or the 

Iran action network more broadly. In particular, the Shia militias 

that are now so active in Iraq and in Syria. I think the likelihood 

that we could see some direct conflict between U.S. forces and 

these, including Hezbollah in Tanf from southern Syria is very, 

very real. And what we need to realize is that many of these Shia 

militants are not going to go back to being pharmacists and farmers when the immediate conflict is over in Iraq or in Syria. 

And that means that we are seeing, right now, right before our 

eyes, the creation of an Iranian foreign legion of people who can go 

and do things for them in an asymmetric kind of way that Mara 

was talking about. It reminds me of Hezbollah and Iran’s proxies 

just a few years after the Iranian revolution, where Iran wanted 

attacks carried out against U.S. and other interests, say, for example, in Kuwait. And they sent Hezbollah operatives and they sent 

Iraqi Shia operatives. Some of the same people operating today, 

people like Hadeel Ammari, people like Abu Mahdi al-Muhandis, 

the very same people, these relationships go back 30 years. And we 

need to be targeting of course Hezbollah but not only Hezbollah. 

The Europeans as well. 

Chairman ROYCE. We will go to Ileana Ros-Lehtinen. 

Ms. ROS-LEHTINEN. Thank you so much, Mr. Chairman and the 

ranking member. 

55

Hezbollah is one of the most dangerous and formidable terror organizations in the world responsible for some of history’s most notorious terror attacks. As Dr. Karlin noted, Hezbollah is more than 

just a partner in the Iranian regime, it is an extension of Iran’s 

IRGC Quds Force and it is fulfilling Tehran’s every wish, including 

propping up the murderous Assad regime in Syria, a mission which 

has only increased Hezbollah’s sophistication, its stockpile, and its 

capabilities. We cannot ignore Hezbollah’s influence and control 

over the Lebanese state, and by extension, the Lebanese Armed 

Forces, or LAF. 

In your written testimony, Dr. Karlin, you state that the LAF is 

‘‘easily manipulated’’ and ‘‘only as capable as its political leadership 

permits.’’ So if the LAF is easily manipulated, and Hezbollah has 

such a large influence over Lebanese institutions, how can we, in 

the U.S., reconcile U.S. support for the LAF? And I would like to 

hear the other witnesses respond to that, also. 

And even with some of the safeguards that are in place, are we 

not running the risk of U.S. assistance to the LAF indirectly helping Hezbollah? 

Ms. KARLIN. Thank you for that question. If I might start with 

a little bit of history, the very first time I went to Lebanon was 

during the Syrian occupation——

Ms. ROS-LEHTINEN. Well, thank you, Dr. Karlin. I do appreciate 

history, but I only have 3 minutes. How can we reconcile? How can 

both things be true? It is, LAF is ‘‘easily manipulated, it is only as 

capable as the political leadership permits’’ and yet we support the 

LAF. It is confusing, yes? 

Ms. KARLIN. Ideally, we want the Lebanese Government to be 

able to secure its territory, right, to have a monopoly on violence. 

And the more that there are violent nonstate actors that exist and 

proliferate around Lebanon, whether it is groups like Hezbollah, or 

it is groups within the refugee camps, like we have seen with 

Fatah Islam historically, the more that we want the Lebanese military to be capable of trying to shrink that operating space. 

Ms. ROS-LEHTINEN. Thank you. And how about the other witnesses, if you care to comment? 

Mr. LEVITT. The other witnesses are all pointing to me. I would 

just say that you are absolutely right, it is complicated. The LAF 

has done some very good things in taking the fight to the Islamic 

State, for example, but the LAF is compromised, even as it is the 

most basic glue that holds the Lebanese state together. So I think 

what we need to do is try and have as much influence with the 

LAF as possible, and understand that our expectations need to be 

limited, and that explains why, sometimes, we are very careful 

with what weapon systems we provide. 

Ms. ROS-LEHTINEN. Thank you. Let me just get to one last question. The U.S. Government has issued an interagency report stating that there are links, as we have discussed, between cigarette 

smuggling and terrorist organizations, such as Hezbollah. Do you 

have any recommendations on what we can do in Congress or the 

administration should do to clamp down on this source of funding 

for Hezbollah and other terrorist groups? 

Mr. ASHER. I mean, there is no doubt that we saw, in many 

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tion networks as the cocaine. So one of the best ways to do this is 

a public-private partnership. I had a great opportunity when I was 

running the North Korea illicit activities initiative and actually 

partnered with the Secret Service and the Philip Morris Corporation. It actually worked. We let the people affected by the cigarettes underwrite some of the law enforcement activities and we 

got support from members. 

Ms. ROS-LEHTINEN. So you would recommend——

Mr. ASHER. I think we can do a lot together with the private sector to go after this, but we need to have a joint task force. This is 

the most important element, because these are polymorphic crimes. 

It is not just cocaine smuggling or Captagon. They are basically 

doing anything they can make a buck on, and cigarette smuggling 

is definitely one of them. 

Ms. ROS-LEHTINEN. Thank you. 

Any other comments? 

Mr. MALTZ. I would say that, in my experience, one of the last 

cases that I was involved with at the SOD was another very disturbing trend, groups from Yemen operating all over the United 

States, involved with cigarette, unpacked cigarettes, K2 and spice, 

EBT fraud counterfeit goods and sending millions and millions of 

dollars right back to Yemen. So we have these global trade-based 

schemes going on from America back to these countries. So we 

have to step up the efforts. 

Ms. ROS-LEHTINEN. Thank you so much. Mr. Schneider? 

Chairman ROYCE. I think Mr. Brad Schneider is next. 

Mr. SCHNEIDER. Thank you. And I, again, want to thank the 

committee for calling this hearing, the witnesses for your testimony, but also for your long and dedicated work on this issue. We 

talked, in this hearing, quite a bit about the link between Iran and 

Hezbollah, Hezbollah’s international activity, and the impact of 

Syria. Dr. Karlin, I think you said it very well, what I would look 

for, and I am anxious to understand better, is the administration’s 

strategy for the Levant and how we take that on. I only have 5 

minutes, so I am going to say I want to see it and we can talk 

about it later. 

I would like to bring an issue that we haven’t talked about here, 

and that is Russia’s involvement with Hezbollah. To what extent—

maybe I will turn it to you, Dr. Karlin—to what extent have you 

seen Russian cooperation with Hezbollah and Syria? 

Ms. KARLIN. Thank you. At a tactical and operational level we 

have seen Russian air cover for Hezbollah ground movement, we 

have seen the likelihood of joint operating centers, that is worrisome. What worries me a lot more is that Russia’s military, if you 

follow its modernization over the years, has gotten pretty good. 

And I worry about Hezbollah learning about things, like how to use 

cyber warfare, how to use electronic warfare. It is worth noting, 

however, that strategically, this is a relationship of convenience. 

This conflict is existential for Hezbollah and Syria, it is not for the 

Russians. 

Mr. SCHNEIDER. But I know it was reported last year in the 

Daily Beast, I believe, that Russia was providing Hezbollah longrange tactical missiles and other material. Have you seen that, and 

57

is there any evidence that the relationship is going to outlast the 

Syrian conflict? 

Ms. KARLIN. I have not seen evidence of that beyond those reports which I have also read. Russia has its own problems with 

groups like Hezbollah, which is why I still see this as a relationship of convenience rather than an actual partnership or alliance. 

And indeed, it is conceivable that the Russians will want to come 

to a serious negotiation on Syria way before Hezbollah will, because it is just not in their interest for a Syrian conflict to turn out 

any other way than Assad remaining in power. 

Mr. SCHNEIDER. Great, thank you. I am going to turn to Dr. 

Levitt in a little different direction. You talked a fair amount about 

the Hezbollah International Financing Prevention Act. Thank you 

for your help with that. A broader question—what metric should 

we be using to determine whether or not it is working, and what 

steps we should take further to push forward? 

Mr. LEVITT. First of all, let me thank you for your leadership on 

the Hezbollah International Financial Prevention Act. You were involved in this in the very, very beginning before many others were. 

I think there are so many tools here, that we were using some of 

them as you heard, and then we all but stopped. And in order to 

have a real effect, you have to have some continuity. There were 

prosecutions that were put on ice. There were designations that 

didn’t happen. The fact that Kassim Tajideen was—we worked 

with the Moroccans, he was arrested in Morocco, he was extradited 

to the United States. He is now here in Washington, DC, in custody, been indicted. That I think is a very, very, positive sign, but 

there is a lot more that has to happen, across the interagency. The 

type of interagency cooperation that we have had in the past and 

we now need to have looking forward that you heard from myself 

and from my colleagues. 

I also think we lost a real opportunity under the original HIFPA, 

the decision on whether or not to designate Hezbollah as a 

transnational organized criminal enterprise was given not to law 

enforcement, but to the DNI. And that decision was largely politicized and didn’t move forward. It really boggled the mind. I wrote 

about it at the time. There may be reasons to decide not to move 

forward with it that I would disagree with, but there is no question 

that Hezbollah operates as a transnational organized criminal enterprise, and to designate them as such would really not only tar 

and feather them, but give us even more opportunities to target 

them. 

Again, I think that Mara Karlin is right, that Qassem Soleimani 

is calling the shots more than anybody else. And the reason for 

that is because Hezbollah is so incredibly beholden to Iran for 

funds and weapons, and its position, which means that we need to 

be targeting not only Hezbollah operatives, but also the Iranian 

operatives and entities that are overseeing this relationship, which 

means getting comfortable with the idea of holding Iran’s feet to 

the fire for its support for terrorism in particular, leaving the 

human rights and ballistic missiles aside, which we should be 

doing as well in the context of the Iran deal. This does not undermine or cross the Iran deal. 

58

Mr. SCHNEIDER. Thank you. I am almost out of time. So let me 

just reiterate: I agree with you. I think we have to hold Iran to account for its activities, not just support of terrorism throughout the 

world, but also its activities within the region and its human rights 

activities at home. And I agree with what you said earlier; I don’t 

think that threatens the JCPOA. 

So, again, thank you to the witnesses, 

And, with that, I yield back. 

Chairman ROYCE. We go to Mr. Dan Rohrabacher of California. 

Mr. ROHRABACHER. Thank you very much, Mr. Chairman, and 

thank you for your leadership on, again, another really important 

issue for the safety of our country. 

Let me ask some fundamental questions. Is Hezbollah, the people 

who make up Hezbollah, are they all Palestinians? 

Mr. ASHER. No. 

Mr. ROHRABACHER. Tell me what Hezbollah is made up of then. 

Mr. LEVITT. Hezbollah is a Lebanese group. It is not a Palestinian group——

Mr. ROHRABACHER. Okay. But——

Mr. LEVITT [continuing]. Comprised primarily of Lebanese Shiites. 

Mr. ROHRABACHER. I guess the reason I was asking that is that 

we know that large numbers of Palestinians went to Lebanon, and 

I assumed that that was the group that eventually became 

Hezbollah. That is not correct? 

Mr. LEVITT. No. When it was founded, it got support from Fatah 

and other Palestinian groups to be sure and Imad Mughniyah and 

others. It does also see other sub-units. There is a Sunni sub-unit 

that includes some Palestinians called the Resistance Brigades, but 

that is not Hezbollah. 

Mr. ROHRABACHER. So they are Lebanese? 

Mr. LEVITT. Yes. 

Mr. ASHER. Mr. Rohrabacher, I can assure you that Imad 

Mughniyah himself studied at the financial feet of Yasser Arafat, 

and it is an interesting—and operationally and financially, we have 

a very substantial relationship between Palestinian Islamic jihad 

financiers and Hezbollah’s Islamic jihad organization, i.e., the terrorist wing. 

So it is a very interesting question, and they are based around 

a place called Burj al-Barajneh, which is near the airport. That was 

the historical base of the Palestinian Islamist jihad. It is interesting that there is so much of the Hezbollah terrorist and military 

wing activity right there, as well. 

Ms. KARLIN. Sir, if I might add, I have been to Burj al-Barajneh, 

and it is worth noting that actually traditionally the relationship 

between Hezbollah and the Palestinians in Lebanon is quite 

fraught because the Palestinians in Lebanon are Sunni. Hezbollah 

is Shia. And when the Palestinian refugees came to Lebanon, they 

threw off a very delicate confessional balance. So it is a very complicated thing, sir. 

Mr. ROHRABACHER. Yes, it is very complicated, and that is the 

reason why I asked that question. I have always been under the 

assumption that, yes, they were from Lebanon, but they were basiVerDate 0ct 09 2002 16:44 Aug 16, 2017 Jkt 000000 PO 00000 Frm 00062 Fmt 6633 Sfmt 6633 Z:\WORK\_FULL\060817\25730 SHIRL
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cally Palestinian refugees that are now Lebanese. So thank you for 

clarifying that. 

What is the budget for Hezbollah? Do we have an overall budget? 

Anybody? 

Mr. LEVITT. No. 

Mr. ROHRABACHER. No? 

Mr. LEVITT. Hundreds of millions at a minimum, but I have seen 

no open-source and—I mean, no open-source numbers——

Mr. ROHRABACHER [continuing]. Do they put those hundreds of 

millions in a bank somewhere? 

Mr. LEVITT. Pardon? 

Mr. ROHRABACHER. Do they put those hundreds of millions in a 

bank? Do they have bank accounts, because I thought this is what 

this was all about today. 

Mr. LEVITT. So, when we got inside the Lebanese Canadian 

Bank, which we did one way or another, we observed billions of 

dollars that were under the control both of the Lebanese Hezbollah, 

which we knew which accounts they were and how much money 

was in them through unclassified means, as well as Iranian money, 

and it was billions of dollars, too. 

Mr. ROHRABACHER. What banks were those again? 

Mr. ASHER. The Lebanese Canadian Bank, but there were many 

others that were part of a network. Everything we saw was larger 

than anyone expected. 

And the other thing was that the connection to money laundering 

and drug trafficking proceeds were much greater than we ever expected. 

Mr. ROHRABACHER. Okay. So, if we know they have billions of 

dollars or hundreds of millions of dollars in these banks, can’t we 

do something about that? Aren’t we just—if nothing else, I mean, 

we could use our ability to hack into systems and destroy their 

bank accounts. 

Mr. MALTZ. Sir, like I said before, we did identify $150 million 

sitting in a bank, Banque Libano-Francaise, and we did—because 

of the great work in the U.S. with the Southern District of New 

York—seize $150 million. They transferred the money to the U.S. 

Marshals’ account from Lebanon, and we forfeited $102 million. 

Mr. ROHRABACHER. Congratulations on that. 

Mr. MALTZ. But there is a lot more. 

Mr. ROHRABACHER. Why aren’t we doing more of it then? They 

are still there. 

Mr. MALTZ. Well, if we get the interagency task force together 

and we enforce some accountability on the folks involved, then we 

can do a lot more. 

Mr. ROHRABACHER. Okay. 

I have just a couple more seconds here. Let me just note that we 

have recently seen an attack on Iran and the Iranian Government. 

The mullahs believe the Sunni forces have attacked them. This 

may signal a ratcheting up of certain commitments by the United 

States of America. And as far as I am concerned—I just want to 

make this point and see what you think—isn’t it a good thing for 

us to have the United States finally backing up Sunnis who will 

attack Hezbollah and the Shiite threat to us? Isn’t that a good 

thing? And if so, maybe it is a Trump strategy of actually supVerDate 0ct 09 2002 16:44 Aug 16, 2017 Jkt 000000 PO 00000 Frm 00063 Fmt 6633 Sfmt 6633 Z:\WORK\_FULL\060817\25730 SHIRL
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porting one group against another, considering that you have two 

terrorist organizations. 

Mr. LEVITT. Those attacks were claimed by the Islamic State. It 

is never in our interest to support a terrorist group like the Islamic 

State. We should condemn the attacks in Iran, as——

Mr. ROHRABACHER. Even——

Mr. LEVITT [continuing]. We should condemn any act of terrorism, even as we hold Iran accountable for its sponsorship of terrorism. 

Mr. ROHRABACHER. So that is like Joe Stalin was a horrible guy; 

we must never associate with horrible guys like that, even to get 

Hitler. And so maybe it is a good idea to have radical Muslim terrorists fighting each other. I will leave it at that. Thank you. 

Mr. ASHER. I mean, having coordinated the economic warfare 

plan against the Islamic State, I would not condone an attack by 

the Islamic State, much like Matt. I would be determined to destroy them financially——

Mr. ROHRABACHER [continuing]. Hezbollah——

Chairman ROYCE. I think we need to go to Joaquin Castro here 

from Texas for his time. 

Mr. CASTRO. Thank you, Chairman. 

And thank you, the witnesses, for being here today and for your 

testimony. 

Dr. Karlin, I wanted to follow up on a point that you were making or ask a question based on a point that you made. We know 

that Russia has assisted and helped Hezbollah. And, of course, we 

have been dealing in our Nation with the prowess of Russia’s cyber 

capabilities and their abilities for cyber malfeasance. 

Can you talk about your concern, if you have a concern, that they 

are sharing this information or this ability, capabilities, with 

groups like Hezbollah, and do we have an assessment of what 

Hezbollah’s cyber capabilities are right now and terrorists groups 

like them? 

Ms. KARLIN. Thank you for that question. I have not seen an unclassified assessment of Hezbollah’s cyber capabilities. 

What I might say on the Russian military front, and my most recent job as the Deputy Assistant Secretary for Strategy and Force 

Development meant I spend a lot of time thinking about Russian 

military modernization and the trajectory that it is on, and it is 

pretty worrisome because not only do we see Russian investments 

in kind of weapons like its nuclear stockpile, but we also see some 

worrisome doctrine. 

So the Russians have what is known as the Gerasimov Doctrine: 

Escalate to deescalate. The idea is that if I punch you, you should 

punch me a whole lot harder so that I give up. That is a pretty 

dangerous doctrine to play around with, and I worry about 

Hezbollah not necessarily getting the weapons from Russia, but I 

worry about them watching how Russia uses its doctrine, employs 

its doctrine, and then maybe starting to use it itself, say, vis—vis 

Israel. 

Mr. CASTRO. But certainly they could be trained in some of these 

essential capabilities? 

Ms. KARLIN. Oh, absolutely conceivable. 

61

Mr. CASTRO. Sure. And then it is interesting: Obviously, we consider Hezbollah a terrorist organization, but they also have some 

measure of political control in municipal governments in Lebanon, 

Parliament seats, which makes them almost a hybrid of a state 

actor and a nonstate actor, you know, versus ISIS, right, which 

doesn’t seek to elect people, at least as far as we can tell, in the 

same way in politics. 

So let me ask you guys, what do you see them as? Do you see 

them as a state actor or as a nonstate actor? I open that up to the 

panel. 

Mr. LEVITT. Thanks for the question. You are right: They are 

both. But we need to see them as a nonstate actor in terms of the 

explicitly illicit conduct that they are conducting around the world 

as a transnational criminal organization, as a terrorist organization, and as a militia independent of Lebanon. 

They are able to do that function even as they run for municipal 

government and they run for Parliament and they hold ministerial 

positions, because we allow it. If you allow an organization that, 

independent of the country, does all these other things, then, also, 

by the way, has people run for office, then it can pretend to have 

more legitimacy than it does. 

But I think Mara Karlin was right: The greatest threat to Lebanon, on so many levels—financial, stability—is Hezbollah. And I 

think it is in part our fault, the international community’s fault, 

as Mr. Deutch suggested, for failing to see Hezbollah holistically as 

a group that, whatever else it is involved in, it is very much involved in a whole host of explicitly illicit activities, as Mara pointed 

out, that have nothing to do with the interests of Lebanon, even 

its interests as a party in Lebanon. 

So, ultimately, it is a nonstate actor that engages in some state 

activities because it benefits them to do so. 

Ms. KARLIN. Mr. Castro, I couldn’t agree more with Matt’s comments. I might just add that the weaker the Lebanese state is, the 

better it is for Hezbollah. 

Mr. ASHER. Just if I could add, we identified publicly in DEA the 

business affairs component of the Islamist jihad terrorist wing of 

Hezbollah, the military wing of Hezbollah, as at the center of the 

narcotrafficking, money laundering conspiracy that involved the 

Lebanese Canadian Bank, a massive number of cells in Europe distributing cocaine, cocaine coming into the United States. So there 

is no doubt—and I am not trying to say we shouldn’t go after the 

entire organization, designate the entire organization—but the case 

that could be made most directly from a law enforcement perspective just following the facts would tie the terrorist wing under Imad 

Mughniyah, who died, and his successor and his business manager 

Adham Tabaja, who he designated, to the cocaine money laundering. 

So there is a strategy that could be pursued where we go after 

the business affairs component of Islamist jihad, charge Islamist 

jihad for having blown up our Embassies and killed our people, and 

we leave the rest of Hezbollah sort of off to the side. That is an 

option that some prosecutors have advocated, but I am not sure 

that that is necessarily really comporting with the facts fully. 

62

Mr. LEVITT. I will just add to that. This is where people get most 

uncomfortable, right? If you really dig down to the information, you 

will find time and again that the ‘‘political’’ or ‘‘social welfare leadership’’ is involved in all of this illicit activity. The business affairs 

component was directly tied to Abdallah Safieddine. Safieddine is 

a political senior Hezbollah official. 

And so, for those who are uncomfortable recognizing that 

Hezbollah actually is one holistic entity, for those who are uncomfortable with the consequences of having to follow the evidence to 

where it leads, that may explain why some people are hesitant to 

do so. It is inexcusable. We should be following the evidence where 

it takes us, whether it is in a murder case or a bank robbery case 

or a terrorism case. 

Mr. CASTRO. Thank you. 

I yield back, Mr. Chairman. 

Chairman ROYCE. Mr. Perry. 

Mr. PERRY. Thanks, Mr. Chairman. 

Thanks to the panel. 

Generally speaking, maybe it is Dr. Levitt and Dr. Asher, why 

shouldn’t the U.S. Treasury Department sanction the Central Bank 

of Lebanon? 

Mr. LEVITT. The simple answer is because they are actually very 

good partners. The Central Bank of Lebanon put out a circular 

making sure that the Lebanese financial system would enforce 

things like HIFPA and did a very good job of doing so. 

As Mara said before, completely destabilizing Lebanon, destabilizing the financial system there is not in our interest, and of the 

partners we have, they are one of the best. 

Mr. PERRY. Are they facilitating payments that benefit 

Hezbollah? 

Mr. LEVITT. I can’t answer that question in any specificity. Because Hezbollah has such a large footprint in the Lebanese economy, it is likely that that happens at some point. Would you, by 

targeting the Lebanese Central Bank, at the end of the day have 

a net benefit? No. 

Mr. PERRY. Okay. Why shouldn’t the Department sanction Iranian banks for which sanctions were lifted under the JCPOA? Anybody? 

Mr. LEVITT. My colleagues keep looking at me. That is fine. 

I think that we need to be careful that banks that were delisted, 

when we look at them for relisting or we look at other banks, we 

are very, very careful and specific to make sure that we are doing 

these under the authorities that still exist, and they do exist. There 

will be people who will tell you that you can’t redesignate an Iranian entity that was taken off the list, but if it was taken off a proliferation list and it is still today involved, for example, in sponsorship of terrorism, it absolutely can and should be——

Mr. PERRY. And should be, right? 

Mr. LEVITT [continuing]. Considered for designation. 

Mr. PERRY. Okay. 

Mr. ASHER. We are legally mandated, essentially, to do this. That 

is something, from your oversight perspective, Mr. Perry, that you 

can remind people. We have a legal responsibility to enforce this 

63

act, and we can’t willfully ignore the facts. I, unfortunately, have 

seen a lot of willful ignorance in my career as——

Mr. PERRY. You can’t use the JCPOA to be derelict in your duty, 

right? 

Mr. ASHER. That is right. 

Mr. PERRY. And that is what is happening in this case——

Mr. ASHER. And it is happening. 

Mr. PERRY. Considering they are intensifying international criminal activities, is there any reason the administration shouldn’t consider designating Hezbollah as a transnational criminal organization? 

Mr. LEVITT. They absolutely should. As I said in my testimony 

and get into more detail in the written testimony, we should revisit 

this immediately. 

Mr. PERRY. Is there any disagreement among the panel? 

Some of the most lucrative activities happen in the TBA, the TriBorder Area. Can any of you talk about the current measures and 

what additional measures should be included regarding their criminal syndicate activities in Latin America, et cetera? Anybody? 

Mr. MALTZ. All I can say, sir, is that, when I was the head of 

the SOD, we saw a lot of cocaine leaving the TBA, going all over 

to the world, working closely with folks in Venezuela, connected to 

the highest levels of the government in Venezuela, but as far as 

currently, I can’t give you an accurate assessment of what they are 

seeing in the TBA now. 

Mr. PERRY. And what is your recommendation for continued or 

further action in that regard? 

Mr. MALTZ. Again, like I have said all along, the best recommendation I can give to this committee: It has to start with information sharing. Let’s stop pushing it under the rug. Get the experts together in a room, designate these as priorities. Every agency should be mandated to put the information on the table and 

then focus on the targets, and that is not happening. 

Mr. ASHER. If I could just say, I think the most powerful current 

way for the Department of Justice to impose a huge legal penalty 

against Lebanese Hezbollah, including its terrorist wing, would be 

to actively prosecute the government of Nicolas Maduro and his associates, including Tareck El Aissami, his executive vice president, 

for their involvement and complicity and active conduct in cooperating with Hezbollah in narcotrafficking money laundering on an 

international scale. 

Mr. PERRY. Okay. 

Mr. LEVITT. If I can add one last thing here. 

Mr. PERRY. Sure. 

Mr. LEVITT. Again, under HIFPA, we can apply secondary sanctions—and as I described in my testimony at length, so I won’t describe it now—we can and should be looking for secondary sanctions, financial institutions with which we can hit secondary sanctions, in particular in South America and, after the Waked Money 

Laundering Organization was shut down, we saw a lot of that 

movement interest the Tri-Border Area, Paraguay in particular. 

There are no shortage of targets. 

Mr. PERRY. Okay. 

64

Dr. Asher, Dr. Levitt, and Mr. Maltz, and I guess Dr. Karlin, as 

well, I did some time in Iraq. I just want, if you can in the few moments that are remaining, to assess the role of Iraqi financial institutions and businesses in enabling Hezbollah in Iran. 

Mr. LEVITT. We do know that, in the wake of the original HIFPA 

legislation, some Hezbollah money was moved out of Lebanon for 

fear that it wasn’t quite as safe there as it once might have been, 

and some of it was moved, we understand, to places like Dubai and 

to Iraq. 

The first order of business is to try and pressure the Iraqi Government to work as closely with us as possible in ways that they 

already have, for example, on countering the Islamic State financing, exchange houses, et cetera. Then, short of that, if there are illicit banks that are still providing these types of services knowingly, then we should consider the secondary sanctions option. But 

that doesn’t need to be our first choice. But we definitely need to 

be working further on the financial system as it relates to these 

threats. 

Mr. ASHER. Very quickly, based on open-source commercial 

records, you can see a very significant movement of Hezbollah financial operatives tied to the business affairs component of 

Islamist jihad into Iraq in the last few years. They have established a whole string of businesses in the south in partnership with 

Iraqi militant groups. It is obviously part of some sort of strategy 

that they are executing for their Iranian friends. 

Mr. PERRY. Just for clarification, in the south, do you mean in 

places like Basra and Nasiriyah? 

Mr. ASHER. Yes, but also into the southern belts of Baghdad as 

well, so you see it in some of the mixed areas. They have an economic action plan that they are executing to infiltrate the Iraqi 

economy, with the Lebanese playing a much more significant role. 

Chairman ROYCE. We go now to Dan Donovan from New York. 

Mr. DONOVAN. Thank you, Mr. Chairman. 

Dr. Levitt, during your testimony, you talked about how we 

should again sanction Iran. Last year, the United States Government paid Iran $1.7 billion to their government. The official purpose of that was a payment for $400 million for a contract for military weapons from decades ago. The remaining $1.3 billion was the 

interest that was collected on that $400 million while it remained 

in the United States. If we are going to sanction countries, if we 

are going to sanction entities, what kind of message do we send 

them when they are receiving a benefit for us freezing their assets 

in the United States, that $1.3 billion that they gained in interest? 

Mr. LEVITT. So that action was, I believe, an unfortunate but a 

technical action in terms of the interest. Interest was there. Whether that had to be done or not is another discussion for another 

time. My feeling is we are where we are. That happened. There is 

no undoing that. And what we need to do, I believe in keeping with 

the Iran deal, whether you like the Iran deal or not, whether I like 

the Iran deal or not, is to hold Iran’s feet to the fire on its continuing illicit conduct because that was how the deal was sold to 

us. 

We were told by the previous administration’s officials time and 

again that we would continue to hold their feet to the fire on these 

65

issues. We need to. It does not violate the deal to do so. The problem is, because we didn’t do anything, Iran has been emboldened. 

Because we didn’t do anything and Iran went around the world, including the Governor of the Central Bank who came here and 

spoke in Washington, DC, at the Council on Foreign Relations and 

elsewhere and said the era of sanctions is over, people started buying that narrative. That narrative is false. And so the first thing 

we need to do is push back on that narrative with our European 

and Asian allies, make them understand—I hope, because we are 

where we are—that we will hold up to the letter of the Iran deal, 

which means enforcing terrorism, ballistic missile, and human 

rights sanctions. 

Mr. ASHER. So I have on my cell phone some pictures that were 

sent to me by a financial source who is not a U.S. Government 

source. I do some work for financial institutions on anti-money 

laundering sanctions compliance, and that source sent me pictures 

of $1 billion in two pallets of shrink-wrapped U.S. Federal Reserve 

$100 bill notes that were moved through a European country into 

West Africa and into a South American country by Iranian agents, 

it appears, to set up some sort of port-to-port scheme, perhaps involving narcotics trafficking. Whether the money is the money that 

was given by my State Department colleagues, unfortunately, in 

my mind, or not—you don’t see $1 billion in palletized cash with 

Federal Reserve Bank of New York symbols on them, the wrappers, 

every day—the fact is that money is being moved around for operational and devious reasons. I don’t think it contributed whatsoever 

to creating a more peaceful relationship with the Iranian people. 

Mr. DONOVAN. You know, I always ask witnesses when they testify before us that we are lawmakers, and, you know, we create 

laws, and we have to ask experts like you, what laws would you 

like to see Congress create that would achieve the goals that we 

all have here? 

Would each of you be able to just tell me for a moment what you 

would think about a law that would prohibit a terrorist organization or a state terrorist organization from receiving a benefit from 

having their assets in a United States bank? 

Mr. ASHER. I say I think we need to demand, sir, if you could 

and your members, colleagues, that the RICO, Racketeer Influenced and Corrupt Organizations Act, which terrorism is a predicate for RICO, be used assiduously against the major terrorist organizations to go after their members, their money, and their facilities, knowing that we can use long-arm statutes like we did against 

this Banque Libano-Francaise to go after their money and correspondent bank accounts here, even if we can’t get to it in Lebanon or Iran or somewhere in the Middle East. 

So RICO is an absolutely central feature. It doesn’t need to be 

legislated, but you could encourage its use. It has never been used 

in a large way, other than against the FARC, and that was quite 

successful. 

Mr. DONOVAN. And as Dr. Levitt had said earlier, if we designate 

Hezbollah as a criminal enterprise, RICO then would be available 

to us. 

Mr. LEVITT. RICO is available anyway. That would provide other 

benefits, but we could do RICO yesterday. 

66

Mr. DONOVAN. Thank you. 

Mr. Chairman, I yield back the remainder of my time. 

Chairman ROYCE. Mr. Garrett? 

Mr. GARRETT. Thank you, Mr. Chairman. 

With the risk of—let me see how gentle I can be. I think we have 

missed the target here. As we discuss in this very meaningful and 

worthwhile hearing attacking Hezbollah’s financial network tangentially, certainly we have discussed Iran, but I have a rather 

convoluted line chart here that I have done that shows Iran giving 

what is estimated to be, depending upon your source: Open source, 

$60 million to $200 million a year to Hezbollah; the IRGC controlling the entire black economy in Iran and big, large portions of the 

above-ground economy in Iran; and, just in the black economy side, 

controlling revenue between $25 billion and $50 billion a year and 

them supporting Iran. We have drug ops in Lebanon supporting 

Hezbollah, but the drug ops in Lebanon really took off after the 

Syrian civil war escalated, creating a vacuum. And when the LAF 

stopped patrolling the fields in the areas in the Beqaa Valley, we 

saw a skyrocketing production of drugs. So that was caused largely 

by Iran, who now has coopted the LAF to the point now where I 

recently read an article that said, ‘‘The distinction between 

Hezbollah and the Lebanese state is meaningless.’’

In fact, the Lebanese President is a Hezbollah ally, and the Lebanese were the only nation not to sign the resolution condemning 

the attacks on the Saudi consulate and Embassy in Iran, and so 

what we see here is we are talking about Hezbollah, but that is a 

branch on a tree. The tree should be called Iran. The roots of the 

tree should be called the IRGC. And if you want to solve the longterm problem, we need to take on the IRGC. 

One of these gentlemen—and I apologize because I was copiously 

taking notes, so I don’t know which of you it was—said we need 

to hold up to the agreement of the JCPOA, which I not jokingly referred to as the JCPOS—you can figure that one out—which means 

enforcing ballistic missile sanctions and, I quote: ‘‘Hold up to the 

agreements of the JCPOA, which means enforcing ballistic missile 

sanctions.’’

I wish—and I don’t know how to do this because I am new 

here—that I could have read into the record an article from, of all 

places, NPR, which points out that the JCPOA is so tragically 

flawed that the lawyers that wrote it should be disbarred. Let me 

read to you from the U.N. Security Council Resolution 1929, which 

requires ‘‘Iran shall not undertake any activity related to ballistic 

missiles.’’

Fast forward to the JCPOA—if anybody knows this nod along 

with me—which reads: ‘‘Iran is called upon not to undertake any 

activity regarding ballistic missiles.’’

I am not that good a lawyer, but I know the difference between 

‘‘shall not’’ and ‘‘called upon not to.’’ And so we either intentionally 

sent really bad lawyers to negotiate a deal that puts Iran on a 

glidepath, not only to destroy sanctity and peace and stability in 

the region; we either intentionally did that or we hired the worst 

possible negotiators, who don’t know the difference between ‘‘may’’ 

and ‘‘shall,’’ which you learn as a first-year law student. 

67

No enmity intended toward anyone in the room and particularly 

not the lady and gentlemen on the committee—I had to look, Dr. 

Karlin, to make sure—but would you not agree that the root of the 

problem with Hezbollah is Iran and that the root of the problem 

in Iran is the IRGC and that the root of the IRGC is Quds, if I 

want to walk this dog farther down the trail? 

I mean, if we really want to attack the source of this, do we not 

look to the IRGC in returning peace and stability and functionality 

to Iran, whose people want it but whose people can’t have it when 

the Quds Forces are willing to shoot student protestors in the head, 

right, with impunity, and the United States does nothing. 

I apologize. I pride myself not on doing soliloquies and diatribes 

in these things, but I am frustrated because I think we are 

mistargeting. Would any one of you gentlemen or lady, is the root 

of the Hezbollah problem not Iran? 

Mr. ASHER. Absolutely. 

Mr. GARRETT. And is the root of the Iran problem——

Mr. ASHER. The IRGC, of course. And I worked to build a plan 

at CENTCOM where we went after the Iranians on various levels 

for various things that they did, including the IRGC, of which, unfortunately, much was abandoned as we got closer to the JCPOA. 

Whether you advocate a regime change or not, we don’t accept the 

regime and its activities, and there is no way to divorce the IRGC 

from the Iranian economy and from the Lebanese state, in effect. 

Mr. GARRETT. I am a big fan of peace and stability, and I advocate loud and vociferously on behalf of regime change. I don’t think 

it needs to be done at the point of a gun, but I do think that we 

created circumstances in the JCPOA, and we have not pursued our 

allies, particularly in Europe, who do business with the IRGC, and 

we can do this with open sources documented to make them pick 

who they want to do business with. 

Yes, sir? 

Mr. LEVITT. Let me just put some meat on this bone, for example. The Financial Action Task Force gave Iran a year, a year that 

ends this month, to improve its behaviors on money laundering terror finance. Among the many things it is supposed to do are some 

very technical things and some very broad things. One of the 

things Iran has said it will not do is delete the cutout that it has 

for anything it describes as a resistance organization, i.e., 

Hezbollah. And it doesn’t appear they are going to change that. 

That is this month, and we need to make sure that the administration makes its position very, very clear this is unacceptable for us 

because you will probably not get Iran off the FATF blacklist for 

special measures right now, but you will probably get them a little 

bit of an extension to see if they can do more. 

Mr. GARRETT. Mr. Chairman, I am over time. 

I wanted to say, in conclusion, we can have a regime change if 

we will strictly enforce sanctions. We have never been willing to do 

that. Hopefully this administration will change that. Thank you. 

Chairman ROYCE. Thank you, Mr. Garrett. 

We go now to, I think, Mr. Ted Yoho—oh, Mr. Gerry Connolly is 

here. 

Mr. CONNOLLY. Thank you, Mr. Chairman. 

Sorry, Ted. 

68

Mr. YOHO. I yield. 

Mr. CONNOLLY. I thank my friend from Florida. 

Welcome, to the panel. 

Dr. Karlin, are you familiar with the JCPOA? 

Ms. KARLIN. Yes, sir, I am. 

Mr. CONNOLLY. Was it an all-comprehensive agreement that covered all of Iranian behavior and our concerns? 

Ms. KARLIN. I did not work on the JCPOA as an Obama administration official. My understanding is that it is primarily focused on 

the nuclear piece. 

Mr. CONNOLLY. Correct. Can you think of a treaty governing an 

adversary that was all comprehensive in history? 

Ms. KARLIN. Not off the top of my head. 

Mr. CONNOLLY. Right. So, when President Kennedy, for example, 

negotiated the first Nuclear Test Ban Treaty to ban atmospheric 

testing of nuclear weapons with then Nikita Khrushchev and it 

was widely lauded as a peaceful measure, it didn’t address other 

Soviet behaviors. Is that not correct? 

Ms. KARLIN. Indeed. Usually, one——

Mr. CONNOLLY. Right. And when one looks at the JCPOA in 

terms of metrics, based on the fact that it was designed to curb 

and, in fact, reverse aspects of the nuclear development program 

in Iran, have those metrics been met, or is it widely agreed that 

Iran has, in fact, cheated and violated the terms of the agreement? 

Ms. KARLIN. I think it is a complicated picture, and I am probably not the best person to address it. 

Mr. CONNOLLY. I don’t think it is complicated. By and large, all 

of the specific metrics with respect to the Iranian nuclear development program have, in fact, been met, which may be why we are 

trying to——

Mr. ASHER. Could I just make one interjection? 

Mr. CONNOLLY. Excuse me, sir. No, please. And that may be why 

we want to divert attention sometimes in this hearing to other aspects of the Iranian behavior that indeed are to be decried and, to 

the best of our ability, sanctioned. 

I take enormous exception to my colleague from Virginia asserting that maybe this administration will get serious about sanctions 

when the previous one did not. It was precisely because sanctions 

were working in the Group of 5, holding it together, that brought 

Iran to the table for the first time. 

Ms. KARLIN. I couldn’t agree more, sir. 

Mr. CONNOLLY. And we don’t get to rewrite history. You don’t 

have to like it, but you don’t get to rewrite it, and I think the 

record needed to be corrected. 

So, maybe, Dr. Levitt or Dr. Karlin, but I am intrigued by 

Hezbollah’s expanding role in the Syrian civil war, particularly, 

where they have been exposed. What is your sense, Dr. Levitt, of 

the cost? I mean, they have lost thousands of fighters. They have 

lost leadership. Has it weakened Hezbollah, or have they been able 

to use the exposure in Syria to their advantage in terms of 

strengthening the organization and its capabilities? 

Mr. LEVITT. And the honest answer to that question is yes. 

Mr. CONNOLLY. Yes, it has weakened them? 

69

Mr. LEVITT. Yes, it has weakened them, and yes, it has strengthened them both. I thought Mara addressed this well in her remarks. Hezbollah had lost more people killed and more people 

wounded in this so far fairly brief conflict than in all the wars with 

Israel. It is costing Hezbollah a tremendous amount of money. The 

fighting in Syria is still getting the funds, but not everything in 

Lebanon that Hezbollah traditionally does—some of the other social welfare, political things are not. Again, showing the ties between military terrorism activities and political, social welfare activities, it is having an impact in terms of their supporters as well 

as some people’s families are getting more money than other people, depending on how long you fought. The fact that they are now 

having to put up banners on the streets in Lebanon saying, ‘‘Well, 

if you don’t really want to fight, you can make about a $1,000 donation and get out of it,’’ it is like people are trying to get out of 

the forced conscription in Russia or Turkey back in the day. 

Mr. CONNOLLY. Right. 

Mr. ASHER. And so they are facing those types of problems. They 

have, however, had the benefit of the Islamic State rising to be 

such a threat that there has been a circling of the wagons in Lebanon—and elsewhere too, but we will focus on Lebanon—where the 

people say: I don’t like Hezbollah, but Hezbollah is effectively defending me against the Islamic State, and so I don’t have the luxury of still being angry at them for dragging my country, Lebanon, 

into the civil war. 

Mr. CONNOLLY. Do you believe that the costs are hurting them 

back in Lebanon, either in terms of credibility, ability to recruit, or, 

for that matter, participate in whatever governance they participate in? 

Mr. LEVITT. It is hurting them in terms of their ability to run 

their programs and their ability to recruit. There is dissension 

within the ranks among their supporters, but they are getting by 

just fine. And we need, therefore, right now to take the financial 

measures that will further undermine them. 

All of your comments on the JCPOA I understand. Under the 

JCPOA, we were told these other things were going to continue. It 

is a fact that some of these were halted a little bit because some 

people felt they didn’t want to shake the deal. I don’t mean to 

make a statement about the deal there. 

Now, we are where we are. Now is the opportunity to get back 

on the saddle here because we do have an opportunity to further 

exacerbate those financial tensions for Hezbollah. 

Mr. CONNOLLY. Yes. And this is a test of a new administration, 

whether its close ties to Russia can be put to our advantage in 

terms of curbing the behavior of Hezbollah and the Iranian Revolutionary Guard in areas we care about: Syria and Iraq. And maybe 

it is time to now put that question to the new administration. 

Thank you. My time is up. 

Chairman ROYCE. Thank you. 

We go now to Mr. Ted Yoho. 

Mr. YOHO. Thank you, Mr. Chairman. 

And I appreciate the panel being here. 

I read an article about Hezbollah about a month ago and how it 

said that it has become a force of over 100,000 very well armed, 

70

very well trained, one of the top fighting forces in the world. And 

I am going to ask the panel—who wants to weigh in on this—was 

that possible before the JCPOA and the release of the money that 

Iran got, or did that benefit Hezbollah to become that strong of a 

force? Dr. Karlin? 

Ms. KARLIN. Thank you for that question. That number is a little 

larger than I have heard, but the concept, I think, is absolutely 

spot on, that Hezbollah has grown. It has grown more capable 

quantitatively and qualitatively. 

But we have seen it on this trajectory for a while now. Back in 

2010 or so, my former boss Secretary Gates noted that Hezbollah 

had more missiles and rockets than most governments in the 

world. I would say the money has been useful, but it is the Syria 

conflict that has been determinative. 

Mr. YOHO. Right. And that is where it was; it was in Syria, was 

the report I read. And they are not affiliated with a nation as far 

as a national government. They are kind of a proxy group, correct? 

Ms. KARLIN. Hezbollah does serve in the Lebanese Government. 

Mr. YOHO. Okay. And then, Mr. Levitt, I want to get clarification. Did you say that Iran should be redesignated as a state sponsor of terror? 

Mr. LEVITT. Iran is designated a state sponsor of terror. There 

is no redesignation then. 

Mr. YOHO. That is what I thought, and I misheard you then. 

Mr. LEVITT. It was a response to a question about whether the 

context of redesignating Iranian entities that may have been taken 

off lists under the JCPOA and my argument that it would be in 

no way a violation of the JCPOA if they were relisted under still 

existing sanctions authorities like counterterrorism, which need to 

be very, very clear and show that evidence, that this is not simply 

just putting an entity back on the list for proliferation purposes. 

Mr. YOHO. Okay. 

And then, Dr. Asher, you had a comment you wanted to talk to 

Mr. Connolly about, and I will give you about 30 seconds if you 

want to add to it. 

Mr. ASHER. So I respect Mr. Connolly’s points about the JCPOA 

as a former negotiator in the Six Party Talks of North Korea and 

also working on North—Iran nuclear at one stage, but I am very 

concerned about outsourcing. 

The thing we learned with North Korea in 2002 with the Al 

Kibar agreement was that countries can outsource. In 2002, there 

was an agreement between North Korea and Syria to build Al 

Kibar, the nuclear reactor for the nuclear weapons program with 

Syria. That broke ground in October 2003, according to unclassified 

information you can get on the internet. That is exactly when the 

NIE—the CIA—or the National Intelligence Council said the Iranians put their weapons program on hold. The idea that they could 

have outsourced it has always bothered me personally as an official 

at the time. 

And then, in 2012, the Iranians and the North Koreans signed 

a science technology agreement that is almost exactly the same as 

what they signed with Syria between North Korea and Syria in 

2002, and at the signing ceremony was Fereydoun Abbasi-Davani, 

the head of the Iranian nuclear weapons program. He just didn’t 

71

show up very often to meetings. The question is, what is going on? 

And is it possible that Iran has outsourced? There is no provision 

in JCPOA over outsourcing, and it does worry me. 

Mr. YOHO. All right. 

And, Dr. Karlin, I want to come back to you. Is there continued 

production of heavy water in Iran, and does that come from nuclear 

activity? 

Ms. KARLIN. I am not aware of that, sir. 

Mr. YOHO. All right. I believe the answer is yes. Is the volume 

beyond what the JCPOA allows for, which, again, we have read the 

reports—they are producing more than they should be—and then 

is that production and value in violation of JCPOA? If they are 

doing that, would you say that was in violation? 

Ms. KARLIN. If that were happening, that is beyond my expertise, 

sir. 

Mr. YOHO. Can anybody else answer that? 

All right. Mr. Maltz, I am going to go to you because the work 

you have done I find very interesting, and I don’t know if it was 

you or Dr. Asher talking about the combination of the terrorist 

groups with the narcotrafficking. And do you see that increasing in 

the future? 

Mr. MALTZ. Absolutely. I mean, everyone in government says 

that terrorists are increasingly turning to crime and criminal networks for funding because the U.S. Government and our allied 

forces have done such a great job at shutting down their funding 

streams. They need funds to operate, and one of the biggest things 

that I saw that is really disturbing is the corruption factor. You 

can’t pay off a general in West Africa with a Visa and a 

Mastercard. You need a suitcase of cash. 

Mr. YOHO. Right. 

Mr. MALTZ. So the cash that is being generated from drug trafficking, the U.N. estimated, what, about $400 billion? So it is just 

common sense that they are going to get involved in drug trafficking and other illicit activity to be able to carry out their agenda. 

So, yes, I am very concerned, and it is evolving as far, as I am concerned. 

Mr. YOHO. Do any of you believe that Hezbollah has been involved in the most recent Iranian kidnapping of the U.S. citizens 

or U.S. legal permanent residents? And if I don’t have the time, 

Mr. Chairman, if they could submit that. 

Chairman ROYCE. Is that a nod yes or a nod no? Pardon? 

Mr. LEVITT. I have seen no evidence to that effect. 

Mr. YOHO. Okay. Thank you. 

Chairman ROYCE. All right. Thank you. 

We go to Ann Wagner of Missouri. Ambassador. 

Mrs. WAGNER. Thank you, Mr. Chairman, for hosting this hearing. 

Hezbollah is obviously a constant violent threat to our allies and 

to us. The joint statement released by the U.S. and Saudi Arabia 

last month expressed the importance of supporting the Lebanese 

state in order to disarm Hezbollah. But I, along with many of my 

colleagues, are concerned that financial support to Lebanon may 

mean empowering Hezbollah. 

72

Dr. Asher and Mr. Maltz, kind of as a follow-on to Congressman 

Yoho’s questioning, it is well known that Syrian women and children are at risk of being trafficked in Lebanon. We also know that 

Hezbollah generates revenue from drug trafficking and, allegedly, 

human trafficking in the Americas. 

Can you please discuss Hezbollah’s involvement in human trafficking in Lebanon, Syria, and globally? 

Mr. ASHER. I mean, I have one specific case I can’t discuss, but 

I am aware of one of the top-tier targets; we call them super 

facilitators. We actually had a thing called the Iran-Hezbollah 

super facilitators initiative targeting key functional financiers for 

the Hezbollah-Iran network globally. 

And I am aware of one very significant case of Syrian children 

being trafficked all the way into West Africa by an individual, and 

it was a very painful case for us because the U.S. Government was 

well aware of it, and we did nothing. And it still haunts me that 

these poor children—and they were like young girls and boys—

were sent to a heinous country in West Africa probably to their 

death because the guy in charge seemed to like torturing children. 

So, you know, that is one case, and he was definitely a Hezbollah 

senior functional official also tied to the Iranians. 

Mrs. WAGNER. Disturbing, but thank you, Dr. Asher. 

Dr. Karlin, your testimony on Iran-Hezbollah relations was fascinating. Can Lebanon or other actors help fill a void with the Lebanese Shia who are dependent on Hezbollah, as your testimony laid 

out, in terms of political representation and economic opportunities? And could you also maybe flesh out for me the factors preventing these opportunities? 

Ms. KARLIN. Thank you very much for that question. I am delighted that that was useful. 

There are ways to fill this void, particularly if you look at 

strengthening Lebanon economically. 

So what we have seen, because of the Syria conflict, is people 

who are joining Hezbollah because they don’t have job opportunities and Hezbollah pays, obviously. So, to the extent you can look 

at microloans or other types of assistance so that, when you go into 

these areas where Hezbollah is strong, you actually see other entities there. 

What I find most interesting on political representation, ma’am, 

is that you do hear some alternative voices to Hezbollah, but in 

particular, over the last few years, there were fewer and fewer people in Lebanon defending Hezbollah, and that quiet is meaningful 

and notable. 

Mrs. WAGNER. Interesting. Well, Dr. Karlin, I will just stay with 

you for a moment. On Tuesday, we witnessed U.S.-led air strikes 

near al-Tanf and on the Iranian-backed militias in Syria. How 

interconnected are Hezbollah and these militias, and do you believe 

that economic sanctions on these militias could help stem 

Hezbollah’s financing? 

Ms. KARLIN. Thank you for that question. I, too, am really concerned about what is happening right now around al-Tanf. We see 

U.S. military getting more involved here, and it is very conceivable 

something could happen with these militias or with Hezbollah. 

73

I think the Hezbollah-militia relationship is extremely tight. 

They are very much looking to one another. I defer to my colleagues regarding the financial piece, but my instinct is, if you can 

help weaken one, that is largely beneficial. 

Mrs. WAGNER. Anyone else? 

Mr. LEVITT. I will just add on two points, both of which are in 

my written testimony. One is, absolutely, we need to be targeting 

not just Hezbollah but the other Shia militias with which it is 

partnering very, very closely and, to get to some of the earlier questions, both of them together with Iranian soldiers and operatives 

on the ground in Syria. Al-Tanf is something we need to look at 

very, very closely. In the wake of that strike that you mentioned, 

Hezbollah issued a kind of veiled warning to the U.S. not to cross 

its—Hezbollah’s—red lines in the area. 

Mrs. WAGNER. Uh-huh. 

Mr. LEVITT. And the other thing regarding Dr. Asher’s comment 

on the super facilitators, I mentioned briefly in my oral remarks 

the need to target these key networks, and my written testimony 

gets into detail that we should be targeting, among those, the 

super facilitators, some of whom, I think including the one that Dr. 

Asher was referring to, are really—they are Hezbollah people. Others are not. Others, they are not Hezbollah operatives. They are 

criminals. They are super facilitators who will help Hezbollah 

today and some other criminal enterprise tomorrow, but they play 

these mission critical roles, whether it is money laundering or accessing banks. And we should be targeting them as well, even if 

they are not card-carrying Hezbollah members, because they are 

providing mission critical, particularly logistic and financial, support to Hezbollah. 

Mrs. WAGNER. I thank you all. 

And I thank you, Mr. Chairman. I believe I am out of time, and 

I will yield back. 

Chairman ROYCE. We are out of time, but thank you very much, 

Ambassador Wagner. 

We appreciate the time, the service, and the expertise of our witnesses here this morning. And as we have heard, there is much 

work to be done to rebuild our law enforcement capabilities to tackle Hezbollah, and we look forward to working with our witnesses 

as we press the administration to do just that. 

Thank you very much. We stand adjourned. 

[Whereupon, at 11:54 a.m., the committee was adjourned.] 

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MATERIAL SUBMITTED FOR THE RECORD

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FULL COMMITTEE HEARING NOTICE 

COMMITTEE ON FOREIGN AFFAIRS 

US HOUSE OF REPRESENTATIVES 

WASHINGTON. DC 20515-6128 

Edward R. Royce (R-CA), Chairman 

June 8. 2017 

TO: MEMBERS OF THE COMMITTEE ON FOREIGN AFFAIRS 

You arc respectfully requested to attend an OPEN hearing of the Committee on Foreign Affairs. to be held 

m Room 2172 of the Rayburn House Otl1ce Building (and available live on the Committee website at 

b-ttp:/h\ \VW .Forcigp:\ffgirs.housc .gQl.): 

DATE: 

TIME: 

SUBJECT: 

WITNESSES: 

Thursday, June X. 2017 

10:00 a.m. 

Attacking Hezbollah·s Financial Net\\ork: Policy Options 

Matthew Levitt, Ph.D. 

Director and Fromer-Wexler FellmY 

Stein Program on Counterterrorism and Intelligence 

The "W'ashington Institute for Ncar East Policy 

David Asher. Ph.D. 

Member 

Board of Directors 

Center on Sanctions and T11icit Finance 

Foundation for Defense of Democracies 

Mr. Derek Maltz 

E'\:ccutivc Director 

Govenunental Relations 

Pen-Link. Ltd. 

Mara Karlin. Ph.D. 

Associate Professor of Practice and Associate Director of Strategic Studies 

School for Advanced lntemational Studies 

Jolms Hopkins University 

By Direction of the Chairman 
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COMMITTEE ON FOREIGN AFFAIRS 

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Attacking Hezbollah 's Financial Nehvork: Policy Options 

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TIME SCHEDULED TO RECONVENE----

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PRESEXT 

X 

X 

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HOUSE COMMITTEE ON FOREIGN AFFAIRS 

Fuu CoMMJTTFJi HF.ARTNG 

ME\ JEER PRESEVT ME\JBER 

Edward R. Royce, C A Eliot L. Engel, NY 

Christopher H. Smith, NJ Brad Sherman, CA 

Ileana Ros-Lehtinen, FL Gregory W. Meeks, NY 

Dana Rohrabacher, CA Albio Sires, NJ 

Steve Chabot, OH X Gerald E. Connolly, VA 

Joe Wilson, SC X Theodore E. Deutch, FL 

Michael T. McCaul, TX Karen Bass, C A 

Ted Poe, TX X W illiarn Keating, MA 

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Dan Donovan, NY X Adriano Espaillat, NY 

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7!11!2017 Did Iran's Ballistic Missile Test Violate A U.N. Resolution?. Parallels. NPR 

In the days leading up to today's announcement of additional U.S. sanctions on Iran, 

the U.S. and Iran have made claims and counter-claims as to whether Iran's ballistic 

missile test on Sunday violated a U.N. Security Council resolution and the 2015 

nuclear deal between Iran and six world powers, including the U.S. 

U.S. Treasury Department Announces New Sanctions On Iran 

"Iran is playing with fire," President Trump tweeted Friday morning before the 

sanctions were announced. Trump's National Security Adviser, Lt. Gen. Mike Flynn, 

earlier said the missile test was "in defiance of' U.N. Security Council Resolution 2231 

endorsing the Iran nuclear deal. White House Press Secretary Sean Spicer called the 

test an outright "violation." 

Iran's foreign minister, Mohammad Javad Zarif, meanwhile tweeted that Iran is 

"unmoved" by U.S. threats and has the right to defend itself. 

So did Iran violate the agreement or not? 

Iran unmoved by threats as we derive security from our people. We'll 

never initiate war, but vve can only rely on our own means of defense. 

6·48 AM Feb 2047 

4,024 9,739 

http //www npr.org/sectlons/parallels/2017/02/03/513229839/did-lrans-balllstlc-mlsslle-test-vlolate-a-u-n-resolutlon 2!11 
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7!11!2017 Did Iran's Ballistic Missile Test Violate A U.N. Resolution?. Parallels. NPR 

Most nonproliferation experts would say Iran certainly defied the spirit of the U.N. 

resolution, but technically didn't violate it - because it contains no prohibition against 

such testing, as one of its predecessors, passed in 2010, specifically did. 

Here's what the two resolutions say on the subject, with highlighting added: 

U.N. Security Council Resolution 1929, from 2010, says the Security Council "decides 

that Iran shall not undertake any activity related to ballistic missiles capable of 

delivering nuclear weapons, including launches using ballistic missile technology, and 

that States shall take all necessary measures to prevent the transfer of technology or 

technical assistance to Iran related to such activities." 

In Resolution 2231, passed in 2015, the Security Council endorsed the nuclear deal, 

known formally as the Joint Comprehensive Plan of Action or J CPOA. It terminated 

the provisions of the 2010 resolution and added language deep in one of the annexes 

saying: "Iran is called upon not to undertake any activity related to ballistic 

missiles designed to be capable of delivering nuclear weapons, including launches 

using such ballistic missile technology, until the date eight years after the JCPOA 

Adoption Day or until the date on which the IAEA submits a report confirming the 

Broader Conclusion, whichever is earlier." 

As diplomatic terms of art, "shall not" -which appeared in the 2010 resolutionrepresents a clear and enforceable prohibition, whereas being "called upon" not to do 

something is more ambiguous. 

Here's one way to look at it: When Iran tested ballistic missiles in the fall of 2015, 

while Resolution 1929 was still in effect, it was doubtless in violation of a Security 

Council stricture. But when it tested its missile on Sunday, under the new Resolution 

2231, Iran was essentially ignoring the Security Council's advice - not violating a 

directive. 

Conservative critics of the nuclear agreement argued strongly against the language 

change, calling it a dangerous watering-down of the international position on Iran's 

ballistic missile program. 

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7!11!2017 Did Iran's Ballistic Missile Test Violate A U.N. Resolution?. Parallels. NPR 

Iran has long maintained that its missile tests don't violate Security Council 

resolutions because there are no nuclear warheads involved and Iran's conventional 

defenses are its own business. But both the 2010 and 2015 resolutions do warn against 

testing missiles that "could be capable" of carrying a nuclear warhead. 

"For its part, Iran says it never agreed to missile restrictions in the JCPOA and claims 

its missile tests do not violate Security Council resolutions because they are not 

designed to carry nuclear warheads. This is absurd," former CIA analyst Fred Fleitz 

argued in The National Review last year. "Iran's missile program is widely believed to 

be a delivery system for nuclear warheads. If Iran were telling the truth, it would be 

the only nation in history without a nuclear-weapons program that nonetheless 

developed missiles with a range of 2,000 kilometers or more. Iran is not building longrange missiles to carry warheads full of dynamite or to fire monkeys into space." 

In fact, the Obama administration had argued for keeping in place the stronger 

prohibitory language of Resolution 1929, but it lost that argument when its negotiating 

partners wouldn't back the Americans up. 

"When Mr. Obama sought to include a prohibition on ballistic missiles in the Iran 

deal, or at least extend a previous Security Council resolution banning them, not just 

Russia and China but even our European allies in the nuclear negotiations refused," 

former Obama White House official Philip Gordon explained this week in the New 

York Times. "They argued that the ballistic missile ban was put in place in 2010 only to 

pressure Iran to reach a nuclear deal, and they refused to extend it once that deal had 

been concluded." 

The question remains, what next? In a short briefing paper on Iran's missile testing, 

analysts at the Iran Project, a non-governmental group including former diplomats say 

the challenge for President Trump is to "constrain Iran's missile testing while 

maintaining the U.S. and Iranian commitment to the JCPOA, the most assured way to 

prevent Iran from acquiring a nuclear weapon." 

The Security Council scheduled "urgent consultations" on Iran's missile test earlier 

this week. 

http //www npr.org/sectlons/parallels/2017/02/03/513229839/did-lrans-balllstlc-mlsslle-test-vlolate-a-u-n-resolutlon 4!11 
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7!11!2017 Did Iran's Ballistic Missile Test Violate A U.N. Resolution?. Parallels. NPR 

Gordon, the former White House official, noted that Iranian presidential elections this 

spring will likely prompt hardliners to stake out a position of defiance in the missile 

dispute. The stage would seem to be set for tough rhetoric to escalate, he wrote, 

including the possibility of terrorist attacks on Americans in the Mideast. 

missile test united nations iran 

Get The Stories That Grabbed Us This Week 

Delivered to your in box every Sunday, these are the NPR stories that keep us 

scrolling. 

What's your email? 

By subscribing, you agree to NPR's terms of use and privacy policy. 

More Stories From NPR 

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MATERIAL SUBMITTED FOR THE RECORD BY THE HONORABLE THEODORE E. DEUTCH, 

A REPRESENTATIVE IN CONGRESS FROM THE STATE OF FLORIDA


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• Applying secondary sanctions to financial enllt]e...., connected to Hczbollah and/or its 

associates,. 

• ldenlil'ying, designating, and Sffilctioning more individuals belonging to the 

organization's leadership cadre, 

• Highlighting Iran's role in fir.ancing Hezbollah and a'"essing W>t)'S to stem the cash 

and arms How from Tehran, 

Investigating and expo~ing intelligence flnd logistical support networks in the Latin 

American region. Despite the public exposure of Iranian and Hezbol\ah operatives in 

the deadly 1994 bombing ofthc A;\ilA Jewish conmumity center in Buenos Aires, 

Argentina, l-lezbo!lah continues to enjoy financial benefit through relations with 

regional-based transnmional crirninal orgffilizations, 

We appreciate the opportunity to provide our views to the Committee on this issue of high 

primity to our organization. Please do not hesitate to contact us if\vc can provide 

addltionalinformationor if we can he ofassi~Lance in any way a., the Conurrittec 

considers further action agah1St this dangerous, potent threat to US interests in the Middle 

East 

Sincerely, 

tte,_.( 11 '"+r. " ~-r" \ 

Kenneth J acitb_w,J 

Deputy National Director 

Anti-Defamation T,eague 
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Statement for the Record 

Submitted by Mr. Connolly of Virginia 

Hezbollah is a multifaceted terrorist organization that has been deeply embedded in Lebanese 

society for decades. Iran's Islamic Revolutionary Guard Corps is directly responsible for the 

group's creation and continues to be its primary source of arms and funding. Hezbollah has been 

a significant force in Lebanese politics since the early 1990s, and currently holds twelve seats in 

Parliament and two cabinet posts. Hezbollah supported the candidacy of Lebanese President 

Michel Aoun, who was elected on October 31, 2016. President Aoun's Free Patriotic Movement 

declared an alliance with Hezbollah in 2006 and Aoun has come under fire for comments 

supporting Hezbollah's armament during his short presidency. Since its founding, Hezbollah has 

engaged in terrorism and other destabilizing activities that threaten the security interests of the 

United States and our allies, especially Israel. 

I remember vividly the bombings of the U.S. Embassy and Marine barracks in Beirut in I 983. 

The attack on our embassy killed 63 people and more than 240 American military personnel 

perished in the suicide bombing at the barracks just a few months later. The attack on the 

barracks especially was a shock to the nation's security psyche, and it ushered in a new, grim era 

of international terrorist attacks. 

Israel and Hezbollah have fought several wars, including one in 2006 in which Hezbollah killed 

160 Israelis and launched 4,000 missiles into Israel. To this day, the group maintains a missile 

arsenal that can strike any corner of Israel. To counter these missile-borne threats and other 

security challenges, last year the Obama Administration made the largest single pledge of 

military assistance in U.S. history. Under the new Memorandum of Understanding (MOU) with 

Israel, the United States will provide $33 billion in Foreign Military Financing and $5 billion in 

missile defense assistance over the next ten years, a significant increase over the previous MOU. 

The U.S. commitment to Israel's security rests, in part, on a determined effort to support Israel's 

ability to defend itself against attacks from Hezbollah. 

Hezbollah's violence extends beyond Lebanon and Israel. Since at least 2013, Hezbollah has 

conducted military operations in Syria where it reportedly maintains between 4,000 and 8,000 

fighters on behalf of President Bashar al-Assad. Last year, Hezbollah field commanders stated 

that Russia is supplying them with long-range tactical missiles, laser-guided rockets, and antitank weapons in exchange for intelligence and assistance in target selection. Hezbollah personnel 

have played a significant role in efforts to control land transportation routes between Iran and 

Lebanon, in addition to key battles such as the recapture of Aleppo from opposition control. This 

has not come without a cost. The group has reportedly suffered more than a thousand casualties, 

including several senior leaders, and invited the enmity of many Arab countries that oppose the 

Assad regime. 

Last year, the member countries of the Arab League and Gulf Cooperation Council joined the 

United States, Canada, the Netherlands, and Israel in designating Hezbollah in its entirety as a 

terrorist organization. However, the European Union continues to distinguish between the 

"military" and "political" wings ofHezbollah and has only added the military wing to its terrorist 

list. More must be done to drive an international consensus regarding Hezbollah if we hope to 
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counter the destabilizing role it plays in the region. In an effort to do just that, 1 have 

cosponsored H. Res. 359, introduced by my colleague Rep. Ted Deutch, which would urge the 

European Union to designate Hezbollah in its entirety as a terrorist organization and increase 

pressure on the group. 

In December 2015, Congress passed and the President enacted into law legislation authored by 

Chairman Royce and Ranking Member Engel- the Hezbollah International Financing 

Prevention Act of201 5 (PL I I 4- I 02). The authorities included in the legislation have enhanced 

the ability of the Treasury Department to target entities that provide the group with financial 

support as well as entities that conduct transactions with foreign financial institutions that work 

with Hezbollah. 

As a result of these and other international sanctions, Hezbollah is undergoing a financial crisis 

that has prompted the party to seek additional support through fundraising campaigns to equip its 

fighters. In addition to the funding it receives from Iran, Hezbollah has developed a global 

criminal network from the Balkans, to Southwest Asia, to South America, and Africa. 

Hezbollah's criminal enterprises include drug trafficking, procuring false passports, money 

laundering, and corporate front organizations. T look forward to hearing from our witnesses 

regarding the ways in which Congress can disrupt Hezbollah's sprawling financial network while 

ensuring that we do not destabilize Lebanon. 

2 
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Questions for the Record 

Rep. Chris Smith 

HF AC Full Committee Hearing 

"AIIacking He:::hollah 's Financial Network: Policy Options" 

.June 8, 2017 

1. Do Hezbollah and other Shia terrorist groups ascribe to any general doctrinal guidelines 

concerning the treatment of hostages and their release for ransom? How does this 

approach compare and contrast with that of Sunni jihadist groups, such as lSlS, Jabhat 

Fatah ai-Sham, and ai-Qa'eda0 Does Hezbollah have a practice of beheading or otherwise 

executing prisoners, even in cases in which ransom is paid" Are there doctrinal or tactical 

disagreements among Shia terrorist groups and the IRGC concerning the taking of 

hostages, their treatment, and release for ransom" 

What does the Lebanese hostage crisis of I 982-1992, including the death of ClA Station 

Chief William Francis Buckley, say about the organization's approach and how it may or 

may not have evolved over time? 

Asher: Hezbollah has become a much more advanced and sophisticated criminal terrorist 

organization. Wanton killing ala Chief of Station Buckley is old school for them. Today they are 

a Warfighting group that is the most advanced form of mafia mixed with military. Evolution for 

them is devolution for us, hence why we can't understand what they do today as "beyond 

terrorism." 

2. Based on your understanding of how Hezbollah collects and disburses money, what 

additional measures do you recommend that the United States take to staunch the growth 

of Shia terrorist groups in Bahrain" Are there any measures we can take to get ahead of 

the curve of the development of these groups into even more threatening organizations? 

Asher: The US needs to realize that Hezbollah is impregnated into every Lebanese financial 

institution as well into Bahrain and Qatar. The Linchpin are leftover elements of the PLO. They 

are all designated terrorist groups and networks but are not easy to pin down for the simple 

minded who don't believe there is such a thing as Sunni and Shia crossover on revolution. 
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Questions for the Record 

Rep. Michael McCaul 

HF AC Full Committee Hearing 

"Attacking Hezbollah's Financial Network: Policy Options" 

JLme 8, 2017 

Iran and Hezbollah 

The TRGC is responsible for the creation of Hezbollah and has been the main entity funding, 

training, and equipping this terror organization. As you know, on December 18, 2015, the 

President signed into law the Hizbollah International Financing Prevention Act of2015. This law 

targets parties that facilitate financial transactions for Hezbollah's benefit. 

1. How effective has this law been in disrupting Hezbollah's financial network and what 

more can the U.S. Government do to crack down on IRGC support to Hezbollah? 

Levitt: Hundreds of Hezbollah-linked bank accounts have been closed since Congress passed 

HIPFA in 2015. However, Hezbollah continues to bypass the legislation by storing funds outside 

of Lebanon, in Dubai and Iraq, for example. Evidently, Hezbollah is able to collect sufficient 

funds to maintain a significant militia in Lebanon and Syria, send smaller operative groups to 

Iraq and Yemen, and operate an international terrorist network. 

The United States must lead an international effort to target the group's illicit financial conduct 

both at home in Lebanon and around the world. These efTorts are not intended to undermine the 

Lebanese economy, rather, to shield it from exposure to the criminal and money laundering 

enterprises that Hezbollah continues to exploit. 

In order to counter IRGC support to Hezbollah, the U.S. may, without undermining the JCPOA, 

sanction state sponsors of terror, such as the IRGC. In February 2017, Treasury designated 

Hasan Dehghan Ebrahimi, an IRGC atliliate in Beirut. This was a good start and the US should 

continue to sanction individuals and organizations affiliated with Iranian sponsors of state terror. 

Asher: The IRGC operates via Hezbollah's Islamic Jihad organization. It is an appendage of 

Tehran more than Beirut and needs to be treated as such. Efforts to treat them separately are 

bound to fail and up to now we have failed to have an impact, simply put....Our legal efTorts have 

been grossly ineffective at hitting them organizationally for decades. Our counter terrorist 

whackamole has been tactically effective but not strategic. 

Impact of Gulf Crisis on Hezbollah 

In March, the Gulf Cooperation Council (GCC) and the Arab League classified Hezbollah, a 

Lebanese Islamist political and military organization, as a terrorist group. The GCC - comprised 

of Saudi Arabia, Qatar, the United Arab Emirates, Oman, Bahrain, and Kuwait - made the 

decision on March 2, accusing Hezbollah of "incitement in Syria, Yemen. and in Iraq." This was 

the first instance of a regional grouping designating Hezbollah in its entirety as a terrorist 

organization. 
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2. How does the most recent rift in relations between members of the GCC and the Qatari 

Government impact cooperation on this front? 

Levitt: The ongoing tension between Qatar and other GCC states is unlikely to impact the GCC 

designation of Hezbollah as such, but it may distract GCC focus from the issue of Hezbollah and 

the lran Threat Network. While Hezbollah has a history of carrying out attacks in countries such 

as Kuwait and Saudi Arabia, Hezbollah has not had a large presence in Qatar. Additionally, Qatar 

played a minimal role in the March 2016 decision to designate Hezbollah as a terrorist 

organization. Therefore, in contrast to other GCC members, Qatar has less at stake in the 2016 

designation and it is unlikely that the current Gulf rift will affect the GCC designation. 

Asher: Iran has set Hezbollah on a course of subversion and destruction with Qatar. Qatar needs 

to abandon a model of doing business with the highest bidder and most coercive player in the 

mob and approach business on the basis of strategic alliances. lf they think Iran and Hezbollah 

are true allies then we have a real problem on our hands .. 

3. How do you expect Hezbollah may attempt to capitalize on the instability between GCC 

countries and the rest of the Arab world" 

Levitt: 1t is possible for Hezbollah to take advantage of the ongoing instability and rift in the Gulf 

region right now. Since June, Saudi Arabia and the rest of the GCC block have been preoccupied 

with the ongoing blockade against Qatar. They are likely distracted from dealing with threats 

from Hezbollah. 

This could be an issue for the GCC, considering that the Syrian war has shifted Hezbollah's focus 

from battling Israel to engaging in new, regional, pan-Shi' a focused conflicts. Hezbollah has also 

become more aggressive in the Gulf as a result of the sustained geopolitical and sectarian tensions 

between Saudi Arabia and lran. 

With the notable exception of Syria, Hezbollah's regional reorientation is most obvious in its 

increased presence in the Gulf Tn 2013, a Hezbollah sleeper cell was busted in the United Arab 

Emirates. In 2015, Hezbollah members were arrested in Bahrain, and that same year, Kuwaiti 

authorities raided a terrorist cell of 26 Shi' a Kuwaitis with links to Iran and Hezbollah. Tn light of 

these and other threats, as well as the fact that the Gulf block is distracted with the GCC rift, 

Hezbollah could attempt to take advantage of the ongoing instability in the Gulf 

Asher: Iran is in the driver's seat. Hezbollah is a willing pawn. Expect more instability since this 

is what Tehran wants. They will fight to the last Lebanese. Witness Syria .. 

TCO-Terrorism Nexus 

Tn recent years, we have seen terrorist organizations and transnational criminal organizations 

interact in similar and significant ways. This includes shared tactics such as money laundering, 

undetected cross-border movements, illegal weapons acquisition, and the exploitation of corrupt 

government officials. 
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In the case of terrorism, I think their increased resiliency is due in part to their combination of 

state support as well as their expansion into profitable illicit activities; similar to those of a 

transnational criminal organization. 

Mr. Asher - in your opening statement you laid out a somewhat specific blueprint on how in 

2008, the U.S. government integrated its efforts to spearhead the implementation of a strategy to 

pursue Hezbollah's web of illicit activities and finances. 

4. How do you all distinguish between the efforts we employ to attack a terror organization 

like Hezbollah's financial network from the efforts deployed to combat transnational 

criminal organizations? 

Levitt: Hezbollah is not designated by most of the world as a terrorist organization. Therefore, 

demonstrating that Hezbollah is engaging in criminal activities, in addition to terrorism, may be a 

powerful means of building international cooperation to target Hezbollah. Furthermore, 

designating Hezbollah as a transnational criminal organization (TCO) enables the U.S. and others 

to target Hezbollah without having to prove that they were buying weapons or engaging in 

explicitly terrorist related activities. Classifying Hezbollah as a TCO recognizes the reality that 

Hezbollah's activities extend beyond the realm of terrorism. 

The State Department, Department of Defense, and the Department of Justice have worked to 

address the criminal aspects of terrorist organizations, as seen in the creation of the 

Counterterrorism Partnership Fund (CTPF) in 2014. One strength of the CTFP was how it raised 

awareness about Iran's and Hezbollah's broad ranges of terrorist and criminal activities around 

the world and increased law enforcement cooperation and coordination among a wide range of 

countries to disrupt these activities. This is one example of how to address CT and criminal group 

issues in tandem. 

Lastly, designating Hezbollah as a TCO affects their domestic and international reputation. 

Hezbollah is very sensitive to being portrayed at home in Lebanon as well as in the international 

area as illegitimate or criminal, and is concerned with Lebanon's and other countries' willingness 

to take action against them. This is why it is critical to name and shame Hezbollah and its 

operatives for the criminal enterprise they have become. 

Asher: There should be no fundamental difference The statues that applied to AI Capone, apply 

to Hezbollah, except that we have extraordinary and exigent statues like 959, 960, and 981 (k) 

that supersede and traverse. Our government is deficient in seeking results versus sound bites .. 

5. What authorities do agencies currently have to go after terrorist organizations that don't 

exist when we are pursuing transnational criminal organizations? 

Levitt: The authorities that intelligence agencies currently have to go after terrorist organization 

would complement the authorities they have to pursue transnational criminal organizations. A key 

benefit would be to enable agencies to target those criminal entities that serve as facilitators for 

terrorist groups. Furthermore, counterterrorism efforts are by no means undermined by 
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complimenting them with efforts tailored to counter criminal activities. When such efforts are 

properly coordinated, measures to counter criminal activities of a criminal organization should in 

no way impede ongoing intelligence collection or operations. 

Asher: In a word, RICO. RICO is our most powerful and productive tool against terrorists but 

we don't seem to have to resolve to apply it.