Israel’s Financial War on Terror Led to Global Shift in Targeting Money

Israel’s Financial War on Terror Led to Global Shift in Targeting Money, Washington Free Beacon, November 6, 2017

Former director of the Mossad, and leader of Harpoon, Gen. Meir Dagan / Getty Images

Israel’s government waged financial warfare on terror groups like Hamas and Hezbollah, which became a model for most states battling terrorism today, according to members of a once secret Israeli task force called Harpoon.

The operations ranged from financial operations that caused terrorist groups to lose tens of millions from bad investments, to commando raids on banks linked to the funding of suicide bombings, to targeted assassinations of terror group financiers.

“Harpoon showed the world that there must constantly be new angles to attack terrorist groups and infrastructure,” said Nitsana Darshan-Leitner, coauthor with Samuel M. Katz of a new book, Harpoon: Inside the Covert War Against Terrorism’s Money Masters, to be published Tuesday.

“The Israeli task force realized ahead of everyone else that money was the oxygen for the terrorist networks and you could badly damage them by choking it off,” she said.

Beginning in the late 1990s and early 2000s, Israel, led by Gen. Meir Dagan, a commando veteran who later headed the Mossad intelligence service for nine years, combined old and new spy methods to squeeze the finances of terror groups like Hamas and Hezbollah and the regimes and paymasters behind them. The operations greatly reduced the deadly suicide and rocket attacks used by both groups against the Jewish state.

Dagan advocated targeting terrorist financing as a top priority. He died of cancer last year, and the book highlights the major role he played in leading Israel’s covert war against terrorists and supporters like Iran.

Harpoon was first formed in the early 2000s and was a task force made up of spies, bankers, lawyers, tax officials, and others who used new and innovative ways, along with many traditional intelligence techniques, to attack terrorists’ financial networks.

The task force also worked with nongovernment organizations to bring lawsuits against Middle East banks linked to deadly terror attacks.

A former Harpoon member said in an interview the task force proved to doubters that financial counterterrorism can be a strategic weapon in the fight against terrorism. Harpoon was one Dagan’s many significant legacies, said the former official who spoke on condition of anonymity.

One of Harpoon’s early operations involved a covert raid on the residence of a Palestinian moneychanger in the West Bank city of Ramallah in 2003. Operatives obtained the Palestinian financier’s laptop and records that revealed extensive links to terror groups. The Israelis would learn that most of the well-organized terrorist groups like Hamas, Palestinian Islamic Jihad, and Hezbollah had set up intricate financing and funding systems for their operations.

The West Bank operation was followed a year later by Operation Green Lantern, one of Harpoon’s most successful operations. Israeli spies and commandos raided a Palestinian branch of the Arab Bank, one of the largest financial institutions in the Middle East, and obtained account information on 390 accounts linked to terror funding for Hamas and Palestinian Islamic Jihad.

At the time, Israel was being rocked by a wave of deadly suicide bombings. The Arab Bank would eventually be linked by Israeli intelligence to a dozen suicide bombings and terrorist attacks.

Other financial intelligence exposed a money trail from Iran to Hezbollah, the Lebanese-based terrorist group that was used to fund a series of suicide bus bombings in Jerusalem.

“Dagan wanted terrorists to look for money instead of targets,” the authors wrote. “Dagan didn’t give a damn about the international outcry; he knew that American outrage would dissipate.”

The George W. Bush administration at first opposed the financial attacks, fearing it would destabilize the Palestinian and Lebanese economies. Eventually, however, both the Bush and Obama administrations adopted their own aggressive methods to target and stop terrorist funding streams.

Against Hezbollah, financial warfare played a major role in Israel’s 2006 summer war in southern Lebanon. Harpoon identified an unspecified number of banks that were being used to fund Hezbollah’s forces. The banks were hit with 500-pound bombs dropped by Israeli air force F-16s and F-15s in secret raids.

The raids proved very effective tools for putting the bank buildings into ruins and destroying an estimated $100 million in currency, along with damaging banking computers. “Two weeks after the IAF’s targeting of the banks, Hezbollah sued for a cease-fire. They had run out of cash,” Darshan-Leitner and Katz wrote.

Among the many disclosures of Israeli intelligence activities in the book, which the authors say were reviewed by Israeli security services prior to publication, are:

  • A Harpoon undercover operation caused Palestine Liberation Organization chief Yasser Arafat to lose $100 million in an Israeli-directed investment scheme. The PLO chief who died in 2004 was found to have embezzled some $326 million from the PLO.
  • Master Hezbollah terrorist Imad Mughniyeh, responsible for killing scores of Americans, was blown up in a secret operation in 2008 using a bomb planted in the headrest of a vehicle bomb in Damascus, Syria.
  • A Hezbollah financier in Lebanon, Salah Ezzedine, lost some $1 billion in an intelligence operation that caused a major financial disruption for Hezbollah.
  • The U.S. Drug Enforcement Agency worked with Harpoon to counter Hezbollah drug trafficking in South America.
  • Harpoon-provided intelligence to the Treasury Department led to sanctions imposed on Hezbollah’s financing entities in 2006.
  • Israel ran an agent inside a bank used by Hezbollah, the Lebanese Canadian Bank, until the agent was uncovered by Iranian-trained counterspies.
  • Israeli agents conducted a hit on Hamas financier Mahmoud al Mabhouh in Dubai in 2010 that sent a message to the terror group that its financiers were a major target.
  • Mossad planned but never carried out an operation to discredit former International Atomic Energy Agency director Mohamed El Baradei that would have planted money in his bank account that appeared to come from Iran.

Former CIA director Michael Hayden said Dagan’s Harpoon served as a model for U.S. counterterrorism financing programs.

“Meir was a wonderful intelligence partner, incredibly creative in learning about and dealing with threats to Israel,” Hayden said. “We here in the United States also learned the great power of financial steps to disable and dissuade our adversaries.”

Dagan faced bureaucratic resistance to making financial counterterrorism a top priority. Officials within both the Israeli military and intelligence communities opposed a heavy reliance on financial warfare, preferring more traditional spy and military means to kill terrorists and their leaders.

The Poland-born Dagan overcame the opposition through both the force of his personality and his ties to senior Israeli leaders, including the late Ariel Sharon.

“The issue was do you follow the money or obstruct the money,” the former Israeli official said of the innovative approach.

Under Dagan, the Israelis succeeded in learning about the financial support networks that are needed for nearly all terrorist operations.

For example, Hamas suicide bombers were being recruited for attacks with promises of lifelong payments to their families. Harpoon operations were able to disrupt those payments and in so doing undermined Hamas’s ability to find people willing to blow themselves in attacks.

Darshan-Leitner, who worked with some Harpoon officials in a legal group in Tel Aviv called Shurat HaDin, said Harpoon sent the message that there would be no safe, white-collar jobs in terror groups. “If you helped finance the attacks, you were going to become every bit as big of a target as the bomb makers and gunmen themselves,” she said in an email.

Harpoon operations placed intense pressure on the international finance systems that in turn sent the message that anyone taking part in the terror funding pipeline at any stage and place would be targeted.

“In time, every western state came to adopt Harpoon’s strategy in the field of counterterrorism,” Darshan-Leitner said. “It really proved to be one of the most successful and disruptive Israeli start-ups of them all.”

Aggressive financial counterterrorism was highlighted in March 2016 by the U.S. special operations raid that killed ISIS finance minister Abd al-Rahman Mustafa al Qaduli. The Pentagon said his death was a severe blow to the terror group’s ability to conduct operations both inside and outside of Iraq and Syria.

The former Harpoon team member said if Dagan were still heading Mossad his new focus would be on applying similar innovative ways to target terrorists’ use of new social media. “People will complain about violating First Amendment rights but this is an arena that is being used to create terrorists,” he said.

Darshan-Leitner agrees. For example, new means are needed to thwart the recent trend in terror attacks, like the vehicle ramming attacks, highlighted by the deadly terrorist ramming in New York that killed six people.

Western security services must become more effective at countering terror attacks using innovative methods, novel technologies, and creative strategies like those of the Harpoon task force, said Darshan-Leitner. “Israel’s security services, operating on the frontline constantly, were compelled to innovate new tactics like targeting terror finances and eliminating the money men.”

“Just as the terror groups continue to adapt, to transform and to surprise, Western intelligence agencies and law enforcement need to evolve, startle and innovate at a fast pace right along with them.”

After Dagan retired in 2011, he spoke out against using military force against Iran as a way to stop Tehran’s nuclear program. As Mossad chief, however, Dagan likely oversaw the aggressive operation that resulted in the mysterious murders of several Iranian nuclear scientists who were assassinated in daring operations inside Iran. The operations are presumed to be targeted Israeli covert operations although the government has denied any links to the attacks.

Explore posts in the same categories: Financial warfare, Gen. Meir Dagan, Harpoon, Israeli security

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