In times of trouble Hamas Inc. reverts to rockets

The Islamic terror organization is also a huge business, with a billion-dollar annual turnover in graft.

Hamas terror organization is also a huge business, with a billion-dollar annual turnover in graft (photo credit: AHMED JADALLAH / REUTERS)
Hamas terror organization is also a huge business, with a billion-dollar annual turnover in graft
(photo credit: AHMED JADALLAH / REUTERS)
Hamas is a terrorist organization. Its 1988 Charter (Article 7) speaks about the “Day of Judgment,” when “the stones and trees will say O Moslems... there is a Jew behind me, come and kill him.” Article 22 blames the Zionists for the French and Russian revolutions, colonialism and both world wars. I expect they may soon add global warming. Article 32 cites the Protocols of the Elders of Zion – long proved to be a forgery.
What is less widely known is that Hamas is also a huge business – a corrupt, failing one, with a billion-dollar annual turnover in graft, Mafia tycoons, and massive money laundering.
A direct cause of Hamas rocket attacks against Israel in July was the massive collapse of Hamas Inc.’s business. At the same time, it was Hamas’s money machine, and the countries and people that fed it, which made possible the incredible spider web of tunnels, rocket factories and rocket arsenal.
They bear some responsibility, at least, for the tragic toll of dead and wounded on both sides of the Gaza border.
When Lehman Brothers filed for bankruptcy on September 15, 2008, its boss Richard Fuld fired off angry words because US Treasury officials refused to bail out the company. Hamas, in contrast, fired rockets.
And, predictably, Hamas’s backers in Qatar, Turkey and Iran whipped out their check-books. It works almost every time.
IDF intelligence says intercepted Hamas communications spoke of the “July War” for months before it occurred. War or bankruptcy. They chose war.
I usually try to disagree when someone says, “It’s all about money,” because, often, it isn’t. But in this case, it really is. Here is why.
What caused Hamas’s severe cash-flow crisis? It was what economists call an “external shock” – an unexpected and severe change in the business climate.
First, Hamas lost the warm embrace and support of former Egyptian president Mohamed Morsi, an Islamist, deposed a year ago by defense minister (now President) Abdel Fattah el-Sisi. Egypt systematically began to destroy Hamas’s smuggling tunnels between Sinai and Gaza, a major source of Hamas revenue.
Second, Hamas support of Syrian Isla - mist rebels cost them funding from Iran, which supports Syrian President Bashar Assad. Some 80 percent of Iranian financial aid went straight to the Hamas military wing until 2011 when Iran closed its checkbook. Qatar and Turkey picked up some of the slack – more about that later.
Hamas fell deeply into the red. Its payroll of 40,000, of which 60 percent is comprised of police and soldiers, remained, but the money to meet it evaporated. After the Palestinian unity government of Fatah and Hamas was sworn in June 2, Palestinian Authority (PA) President Mahmoud Abbas made sure that only the 70,000 PA workers in Gaza were paid, not the 40,000 Hamas workers. He did this mainly due to American pressure.
The result: Major unrest, including a violent ATM episode in which Hamas workers (with overdrawn accounts) fought armed guards, who opened fire, killing several.
Hamas was broke. It desperately needed something to fill its empty coffers. According to several sources, at its peak Hamas Inc. spent almost $1 billion a year. Then the money dried up. Hamas had a huge $700 million hole in its bucket. So, how about a nice little war? Casualties? Hamas military leadership was safe and sound, deep underground, while its political leadership lived in the lap of luxury in Doha, Qatar and Cairo.
Until its cash-flow crisis, how did Hamas Inc. pay its soldiers and police, and fund its rocket factories and tunnel building? HAMAS RAN a huge and profitable business in Gaza, until its collapse. According to Shuki Sadeh, writing in the business daily The Marker, “In its 27-year history, Hamas has shown as much expertise in finance as in fighting.” I would say, probably a lot more.
Hamas violently took power in Gaza from the PLO in 2007. Hamas Inc.’s annual budget, then only $150 million, grew to nearly $1 billion in just five years. That is a 46 percent annual average growth rate. Even Lehman Brothers never matched that. It’s worth a Harvard Business Review case study.
Hamas collected taxes “on anything that moved” – from import duties on smuggled cars (25 percent) to falafel stands. Hamas taxed water, store signs and bus transportation. Until President Sisi moved to destroy them, Hamas ran some 1,200 smuggling tunnels under the border with Egypt. Its annual profit from the tunnels alone was 600 million shekels (about $175 million).
Hamas made a fortune smuggling gasoline from Egypt, where gas is heavily subsidized and costs only 1.6 shekels a liter.
So, Hamas bought fuel in Egypt, smuggled it into Gaza, and taxed each liter at least 3 shekels. The only alternative was imported Israeli gasoline, unaffordable, at 7.60 shekels a liter. A handful of Hamas tycoons grew rich in this business alone. claims, Gaza contractors refused to con - tinue building because the cement quality was so poor. I sometimes wonder whether the enormous destruction caused to Gaza buildings in the current fighting was in part due to that low-grade cement.
What was Qatar’s role? Two years ago, Israel agreed to allow Qatar to fund a $400 million reconstruction project in Gaza. Part of the deal allowed Egypt to send cement to Gaza from one of its biggest contractors.
Once the cement entered Gaza, Hamas grabbed it. Qatar’s building project in Gaza has stalled for lack of cement even though official records show more than enough cement was shipped into Gaza by Egypt, specifically for this project. Where did the cement go? It is not hard to guess.
This story vividly illustrates Israel’s dilemma – how to enable Gaza to rebuild without Hamas diverting the resources to carry out murderous attacks.
How does America unwittingly help finance Hamas and other terrorism? The largest Muslim Brotherhood-Hamas front group (according to the US Justice Department) in America is the Council on American-Islamic Relations (CAIR), based in Washington. CAIR Foundation Inc. won an IRS-approved status as a charitable organization (since withdrawn). CAIR ran an alleged criminal global money-laundering scheme that funneled charitable tax- deductible contributions to Hamas and other terrorist groups.
LAST YEAR, a smuggling ring was uncovered in New York City linked to the terrorist Omar Abdel-Rahman, now serving a life sentence for conspiring to blow up New York City landmarks. More than a million cartons of untaxed cigarettes were smuggled into the city with the illicit proceeds funneled to terrorist groups, according to law-enforcement authorities quoted in The Huffington Post.
China seems to be involved, as well. The Israel Security Agency (Shin Bet) revealed, in March 2012, that cash transferred to Bank of China accounts eventually found its way to West Bank Hamas activists as payment for having served jail time. A lawsuit filed against the Bank of China by a New York Jewish family whose son was killed in a Hamas terrorist attack in Tel Aviv, in 2006, has stalled because, reportedly, Israeli officials were told not to testify to avoid embarrassing China.
Why and how does Qatar support Hamas? On July 26, US Secretary of State John Kerry met in Paris with the foreign ministers of France, Germany, Britain, Turkey, and Qatar. Kerry thought Turkey and Qatar, Hamas’s main backers, might influence Hamas’s military wing and help end the bloodshed. They didn’t, but Kerry did manage to unite Israel, Egypt and the Palestinian Authority, none of whom were invited, in anger at the inept snub. I’d love to ask former secretary of state Henry Kissinger how he would rate Kerry’s peace-making skills.
Divine Providence has played a huge joke on the world. It has given the world’s biggest natural-gas reserves to the three worst trouble-making countries: Russia, Iran and Qatar (only North Korea lacks gas). Under a power-hungry leader, Russia is destabilizing Ukraine and ruining Ukraine’s economy (and Russia’s) in the process. Iran, under its “Supreme Leader,” has decimated its economy through its nuclear ambitions and ensuing international sanctions, and by actively engaging in and funding global terrorism. And Qatar? Hamas Inc. has a powerful strategic ally in Qatar. This tiny country, with half the land area of pre-1967 Israel, has only 278,000 citizens who enjoy per-capita Gross Domestic Product of $100,000 (the highest in the world), as well as 1.5 million foreign workers who work under near-slavery conditions, some of whom earn as little as 85 cents a day. But Qatar punches far above its weight, with sly adeptness.
“Qatar is the world’s largest funder of terror,” former president Shimon Peres said recently. “It should not provide money that is used for rockets and tunnels meant to kill civilians.”
Qatar has only 12,000 soldiers. It owns one-seventh of the world’s proven gas reserves, 896 trillion cubic feet – worth $2.4 trillion at current depressed gas prices, and three times that at the peak prices of 2008.
With Arab Spring revolts breaking out all around it, the example of Saddam Hussein’s violent attempt to grab nearby Kuwait and its oil, restive foreign workers outnumber - ing Qataris five to one, and a medieval des - pot ruler defying the global shift to democracy, no one should sell Qatar life insurance.
So, in order to survive, to stay on the good side of dangerous Islamic terrorists who could easily destabilize it, Qatar has cleverly devised a 3-M survival strategy: Media, Money, Mediation.
Media : Qatari-funded Al Jazeera broad - casts pro-Islamic news worldwide, including some US cable networks. Recently, an Israeli government spokesperson was interviewed in Arabic on Al Jazeera. At one point in the interview, he asked a particularly rabid journalist, who screamed at him, whether she spoke as a journalist or as a Hamas member.
Last March, Qatar’s neighbors Saudi Arabia, United Arab Emirates and Bahrain withdrew their ambassadors from Qatar, a very strong act of protest, claiming Qatar was supporting Muslim Brotherhood movements in their countries, partly through Al Jazeera, which loves to praise pro-democracy movements in other Arab countries, but conveniently neglects to do so in its own home base. Qatar has been ruled by a single family, Al Thani, for 150 years. In 2013, Qatar’s despot Emir Hamad bin Al Thani abdicated in favor of his son, Tamim, much like a father handing over to his son the keys to the family car.
Money : As the world’s largest exporter of liquid natural gas, and with a tiny population, Qatar has infinite financial reserves.
The Qatar Investment Authority controls close to $200 billion. Its tentacles have spread everywhere, including investments in Sainsbury’s, Harrods (London), Total, Porsche, Volkswagen, Paris Saint-Germain football club, and FC Barcelona.
Days before Israeli soldiers went into Gaza to destroy tunnels, Qatar spent $11 billion to purchase weapons (Apache helicopters and Patriot anti-aircraft missiles) from the US.
Qatar hosts America’s biggest military base in the Mideast, just a few miles from the hotel where Hamas leader Mashaal lives. No wonder Kerry loves Qatar.
Mediation : Qatar’s foreign policy is agile and opportunistic. Qatar was among the main causes of Muammar Qaddafi’s fall in Libya. World Trade Organization negotia - tions are currently held in Doha. Qatar even won a competition to be the venue of the 2022 World Cup in football, despite 40-degree July temperatures, allegedly through massive bribes.
If money is a part of the problem in the latest round of Gaza fighting, is there some way to make money a part of the solution? There is, but sadly it may be too late.
Many mistakes have been made.
Former prime minister Ariel Sharon decided in 2006 that Israel would purchase natural gas from Egypt, but never from Gaza. Had Israel helped British Gas to develop the vast fields of gas off Gaza’s shores by signing purchase contracts, the money could have funded Hamas tunnels and rockets, or it might have raised Gazans’ standard of living and given them much to lose from war – we’ll never know for sure. In any event, Jihadists based in Sinai blew up Egypt’s gas pipeline to Israel several times until Egypt just gave up fixing it. Ironically, Israel may soon export gas from its Mediterranean fields to Egypt.
Gaza is a welfare basket case living off handouts from UNRWA (United Nations Relief and Works Agency for Palestine Refugees). UNRWA freely admits that many of its employees are Hamas members. Unemployment rates among Gaza youth are above 40 percent – no wonder Hamas has an infinite labor supply for digging tunnels and recruiting Hamas militants. Had Israel found a way to employ thousands of young Gazans in construction and agriculture, as it once did, things might be different.
Israel definitely must share part of the blame for the murderous extremism now endemic in Gaza. But so do America, Europe, Qatar, Turkey, Iran, and thousands of soft-hearted people who believe they are contributing money to the long-suffering Gazans rather than enriching the coffers of Hamas Inc.
In his 1776 book “Wealth of Nations,” the capitalist bible, Adam Smith explained that human behavior is driven by passions and interests. The Mideast is battered by fiery passions that, from time to time, are unleashed with murderous result. Three young Israeli boys are kidnapped and murdered and there is enormous, justified fury.
A 16-year-old Arab is murdered in vengeance and there is justified outrage.
Hamas fired 2,672 rockets and mortars at Israel from July 7 through August 1, according to the IDF. Israel’s Iron Dome anti-missile system intercepted 528 of the rockets headed for populated areas.
But, in addition to these passions, there are interests, huge money interests. Without those interests, the violent passions might be constrained.
Perhaps little can be done about the pas - sions. But, I wonder, can we do more to re - strain the money that fuels them? Can we divert those huge sums from obscene things that bring death to those that enrich and prolong life? Can people of good will everywhere rack their brains to find new creative options? Continuing as we have until now and ex - pecting different results is, as Einstein once said, insanity.
 The writer is a senior research fellow at the S. Neaman Institute, Technion