Hamas's blood-soaked billions: How does the terror group stay rich?
Israel and the US have tried to shut down the flow of money to Hamas. Has it worked? According to experts, Hamas seems financially bulletproof.
But some names on the list arouse puzzlement, disgust, and fury, such as Musa Abu Marzouk ($2.3 billion) and Khaled Mashaal ($2.6 billion).
Marzouk, senior Hamas leader, was named by the US Treasury as “Specially Designated Terrorist.” In 1995, he was arrested on charges of supporting terrorism and spent two years in a US prison. In 2001, in the aftermath of 9/11, it was found that he had transferred funds to some of the 21 Al-Qaeda operatives who carried out the murderous attacks.
Mashaal is a former head of Hamas. In December 2012, after Israel’s Pillar of Defense operation in Gaza, Mashaal addressed tens of thousands on Hamas’s 25th anniversary in Gaza City’s Katiba Square, near today’s Shifa Hospital. He vowed “Palestine from the river to the sea, from the north to the south,” a genocidal slogan embraced by supporters of Hamas at US colleges.
Mashaal has huge investments in Egyptian and Persian Gulf banks, along with real estate holdings.
How did they get their money? And how is it that under our noses, Hamas has an octopus-like financial empire that funds its terrorism – a network alive and well even today? How come Hamas has fabulous financial wealth, despite being legally defined as a terrorist organization by the US and the European Union, which together manage the major global financial markets and supposedly sanction terrorist groups?
Col. (res.) Moshe Elad was for a time a colleague of mine at the Neaman Institute. In the IDF, he served for 30 years in administrative roles in the West Bank and has for years researched Arab terrorist finances. In 2014, he explained to journalist Ela Levy-Weinrib in the business daily Globes that founders and leaders of Hamas were refugees or descendants of refugees. “They had no money at all. …The organization was nurtured by the Israeli military government, which fostered the Islamic associations working in the Gaza Strip as a counterweight to the PLO.”
So, how did they amass their incredible wealth? “From two directions. Legacies from the deceased. Money from charity funds,” Elad said. “Fundraisers began operating in the US to collect money for Hamas. Here, the Hamas leaders began to get their hands on really big money.”
Abu Marzouk was one of the big fundraisers, Elad noted. “He’s an amazing financier.”
Globes reported that a decade earlier, one of the leading Arab newspapers in the Mideast, Al-Awsat, observed that there are at least 600 millionaires in the Gaza Strip. Many of their villas were flattened by the IDF in the current Swords of Iron operation.
Elad explained that senior Hamas leaders charge a heavy 25% tax plus $2,000 on disassembled vehicles “imported” through smuggling tunnels from Egypt. Hamas taxes Gaza merchants on everything traded. Hamas seized Gaza land in prime areas, near the sea and near what were the Israeli settlements of Gush Katif.
“They were the cat guarding the cream,” Elad said. He described how Hamas invented names of fictitious workers abroad, whose wages went directly to Hamas from employers, knowingly.
“Shortly after [Hamas] got power [in June 2007], they took control of fuel, communications, and any other profitable sector … There are get-rich-quick schemes and corruption in Western society, too, but there, it’s done sophisticatedly with envelopes of money and complex structures of bribery…Among the Palestinians, they tell you straight out, ‘I want to get rich.’”
Sprawling financial empire
Perhaps the most detailed account of Hamas billions is found in the business daily The Economist’s November 30 report. “Hamas controls a sprawling financial empire that could bring in around $1 billion a year,” it states.The lion’s share of Hamas’s money, $500 million yearly, comes from its investments. “Turkey’s banking system helps Hamas dodge American sanctions…a booming, lightly regulated crypto market makes things even easier. Many of Turkey’s biggest banks have been accused by Israel and America of knowingly storing Hamas’s cash.”
Israel and the US have tried to shut down the flow of money to Hamas. Has it worked?
“Hamas seems financially bulletproof,” The Economist notes. “Israel has managed to inflict little harm on either its income or its savings. Turkey’s banks have been uncooperative. …Hamas hides its companies well. ‘Every time you think you’ve got a big fish, it changes its name,’ despairs one ex-Treasury official.
“In fact, the risk is that Hamas’s finances will improve. As Israel steps up its operations in Gaza, countries with pro-Palestinian populations may make life even easier for Hamas’s bankers. …Some civil servants in [Turkish President] Erdogan’s economic ministry are coordinating with Hamas’s finance office.
“For Israel, the prospect of Hamas growing richer despite the war would be a bitter failure. With its wealth and financial roots intact, Hamas – or a similar organization – might re-emerge and flourish anew from the destruction. While Gazans have been plunged into tragedy, Hamas’s money is safely ensconced elsewhere – and its financiers can eat lobster as they gaze across the Bosporus.”
Not a dime has gone to Gaza!
The German newspaper Die Welt reported recently on documents detailing Hamas wealth. As reported by the UK Jewish News, “Its secret terror portfolio includes between 30 to 40 companies operating mainly in the construction and real estate sectors…located in Turkey, Qatar, Algeria, United Arab Emirates, and Sudan.”A financial investigator noted to Die Welt, “This is the golden safety net for the Hamas leadership and their families… Not a dime of it has gone to Gaza.”
Die Welt found that “the Hamas leadership has dozens of accounts in Turkish banks…Correspondent banks in Munich and Frankfurt [Deutsche Bank, Citibank Europe] make transfers to Europe for the Turkish branches.”
The financial wizard behind Hamas billions is Zaher Ali Moussa Jabarin, one of the more than 1,000 terrorists exchanged for Gilad Schalit in 2011 (among them, Hamas leader Yahya Sinwar). Jabarin lives in Turkey, has a Qatari passport, and serves as Hamas’s liaison to Iran. Jabarin reports to Salesh al-Arouri, the deputy head of Hamas’s political bureau, who now lives in Lebanon. Al-Arouri said recently that Hamas’s war against Israel “hasn’t even really begun.”
Find and fight the money?
Writing in the Israeli daily Haaretz, David Rosenberg reports that “a new task force, comprising the US and eleven other countries, has been established…Its stated job is to ‘enhance financial intelligence on terrorist-financing related matters, discuss best practices, lessons learned and opportunities for additional actions… It is a critical front in the war against Hamas and its peers.”What are the odds that the flow of Hamas’s billions from abroad can be halted or curtailed? Probably rather low.
“There are enough friends of Hamas, such as Turkish President Erdogan, with the means to undermine the crackdown effort. Turkish officials have given Hamas free rein, if not actual support,” Rosenberg says. “New domiciles, like Russia, friendly toward Hamas, may emerge. Not to mention the mountains of cash that oil-rich Arab countries have, and Iran.” Rosenberg believes that some host countries like Qatar and UAE “may now be having second thoughts about playing home to Hamas businesses.” That remains to be seen.
How Hamas sold Israel short
This recent Haaretz headline by Ido Baum left me stunned: “Did Hamas make millions betting against Israeli shares before October 7 massacre?”You could not make this up.
According to a scholarly research paper by Robert Jackson (NYU) and Joshua Mitts (Columbia University), published on December 4, “We document a significant spike in short selling in the principal Israeli-company exchange traded fund days before the October 7 Hamas attack.”
Short selling means you borrow shares and sell them at a high price, then buy them back at a low price and repay the loan when their price falls. If you know in advance that the share price will fall, there is no risk involved. Jackson is a former commissioner of the US Securities and Exchange Commission. Mitts is an expert on short selling and is familiar with the Israeli market.
It appears that traders who were fed advance information by Hamas sold Israeli shares short, anticipating they would drop precipitously; when they did, they bought back the shares and profited the difference. Many millions. IDF Intelligence was unaware of what financial traders knew. It boggles the mind.
Moreover, Hamas has apparently done this before – sold Israeli shares short, just before a bout of rocket firings and ensuing combat. Jackson and Mitts found that “We identify increases in short selling before the [October 7] attack in dozens of Israeli companies traded in Tel Aviv. For one Israeli company, 4.43 million new shares sold short over the September 14 to October 5 period yielded profits of nearly $900 million on that additional short selling for one out of hundreds of securities traded on the Tel Aviv Stock Exchange… We do identify a sharp and unusual increase, just before the attacks, in trading in risky short-dated options on these companies expiring just after the attacks. We identify similar patterns in the Israeli Exchange Traded Funds at times when it was reported that Hamas was planning to execute a similar attack in October. Our findings suggest that traders informed about the coming attacks profited from these tragic events.”
In Haaretz, Baum noted that “Jackson and Mitts do not claim that the information originated in Hamas. But the information they collated suggests as much. Hamas had planned the attack for months, and its leader Yahya Sinwar seems to have planned not just the tactical aspect but logistical and financial aspects as well.” We were asleep.
On December 5, President Isaac Herzog received the diplomatic credentials of incoming US Ambassador to Israel, Jacob J. Lew. He is a former US secretary of the Treasury and expert on the sanctioning of terrorist organizations.
“I was raised with a deep appreciation of the importance of Israel, and I worked during my career in government to deepen the US-Israel relationship to meet critical immediate security needs,” he said.
I hope and trust that Lew will provide valuable wisdom and experience to Israel in slashing the Hamas lifeline of blood-soaked money. ■
The writer heads the Zvi Griliches Research Data Center at S. Neaman Institute, Technion. He blogs at www.timnovate.wordpress.com.
