Denny-- good find that! Glad to know that the chattering classes at the UN were wide of the mark.
Here's an angle on target selection that I hadn't seen before:
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Hezbollah banks under attack in Lebanon
Israel seeks to destroy group?s financial infrastructure
By Adam Ciralsky, Lisa Myers & the NBC News Investigative Unit
Updated: 11:25 a.m. MT July 25, 2006
WASHINGTON - Fifteen hundred times in the past two weeks, an Israeli jet has taken off with a load of bombs. But as NBC News has learned, the targets have not just been military.
Israeli intelligence sources tell NBC News that among the targets hit in Lebanon are as many as a dozen financial institutions ? part of a previously secret campaign to destroy Hezbollah's financial infrastructure. Some banks were demolished, others deliberately damaged but not destroyed. In one case, Israel also took out a bank manager's home.
In an exclusive interview, Israel's top counter-terror official says these attacks are a warning.
"The message is for all the Lebanese banks,? says Brig. Gen. Dani Arditi, advisor to the Israeli Prime Minister for Counterterrorism. ?Assistance to Hezbollah is direct assistance to terrorist organizations."
Among the targets: Eight offices of Hezbollah's unofficial treasury, called Beit el Mal. The Israelis claim the attacks caught Hezbollah by surprise.
"We know that they are looking for money. They are very desperate to have some cash and they don?t have [it],? Arditi says.
The Israelis say they also struck branches of two major banks ? Al Baraka and Fransabank ? which they claim help Hezbollah receive and move money around the world. A senior bank official at Al Baraka confirms one of his branches was bombed, and says several other nearby banks were hit, too. Arditi tells NBC News that a third bank ? the Middle East and Africa Bank ? also is on Israel's hit list.
All three banks deny any ties to Hezbollah.
"We have no relation to any organization like Hezbollah," says the Al Baraka official. The Fransabank General Manager tells NBC "We have no relationship with Hezbollah or any other political party anywhere. We don't have any relation and we refuse to have one." And the Administrative Manager for the Middle East and Africa Bank says someone tried to open a suspicious account with the bank, but no money was accepted and the bank employee involved has been fired.
But a fundraising appeal that aired last week on the Hezbollah-connected Al Manar television station asks that money for the Hezbollah resistance be sent a specific account at the Middle East and Africa Bank.
An Arabic speaking NBC News producer called the number listed on the television ad, and was told to go to any U.S. bank and wire the money. Our producer was advised to not tell anyone the money was meant for Hezbollah.
The Middle East Africa Bank has a relationship with the U.S. bank Wachovia. After NBC News informed Wachovia of the Hezbollah fundraising appeal, Wachovia immediately terminated the relationship.
In a statement, a Wachovia spokesman said, "Wachovia confirms that it has very stringent procedures and policies in place to monitor accounts and ensure compliance with the Patriot Act, including not conducting business with any organization identified by the U.S. government as a terrorist organization or supporting terrorism."
Later, NBC News called back the same number advertised on Al Manar and, this time, was provided with the name of a separate bank. Here's an edited transcript of that conversation:
NBC: I want to donate money to the Mujahideens [Hezbollah resistance], is this the right number?
Hezbollah Facilitator: You have to send to The Lebanese-French Bank.
NBC: Do you have the number?
Hezbollah Facilitator: There is an account number. You deposit the money and wire it to the Lebanese French Bank.
NBC: How can I know that this is accurate? I?m so worried to deposit the money, can you tell me and confirm that this money will be sent to the Mujahideen?
Hezbollah Facilitator: Yes, sure.
NBC: And where are you from? Are you from the bank or no?
Hezbollah Facilitator: No. I?m from the resistance.
NBC: How would we know? I?m so worried when I deposit the money it will reach Mujahideen.
Hezbollah Facilitator: You go to the bank and deposit the money, and they will wire it to the Lebanese French Bank. You have to go the bank. Where are you calling from?
NBC: I am from America.
Hezbollah Facilitator: You have to go to the bank ? any bank.
NBC: That for sure will reach the Mujahideen?
Hezbollah Facilitator: For sure. Do not mention resistance or anything like that. If you do, they won?t wire them.
NBC: Thank you - God be with you. Bye bye.
Hezbollah Facilitator: You are welcome. God be with you.
Tuesday, the head of the Corporate Banking Division of the Lebanese-French Bank (Banque Libano-Fran?aise) informed NBC News that it had closed the account that the Hezbollah facilitator had set up at his bank.
"With regard to the account referred to in your message, it appears that the said account belongs to an individual person and shows insignificant movements and balances. Following the information in your e-mail, our Compliance Unit has closed the said account," says Lebanese-French Bank official Maurice Iskandar.
He adds that the bank has strict anti-money-laundering policies and that the bank will not "open any account for, deal with, or transact on behalf of, any political or military organisation or their affiliated entities and/or known individuals."
The Lebanese-French Bank has a relationship with two prominent U.S. banks ? Citibank and the Bank of New York. A Bank of New York spokesman says: "We are aware of this situation and we have taken appropriate steps." A Citibank spokesman says, "Hezbollah has been designated by the U.S. government as a terrorist organization since 1995. If we received any payment from a correspondent bank that referenced Hezbollah it would be stopped and blocked."
U.S. intelligence officials confirm the Israeli bombing campaign against the banks. But how much difference can that really make?
"If they have a hard time moving money, they?ll have a hard time funding their operations,? says terrorism analyst Daniel Benjamin of the Center for Strategic and International Studies.
That means trouble paying fighters' salaries and providing services that engender support from the Lebanese people. The Israelis hope it also means more difficulty getting money from Iran.
URL:
http://www.msnbc.msn.com/id/14015377/ xxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Beirut bombshell
The assassination of a former Prime Minister may have been linked to the collapse of Lebanon's Bank al-Madina.
by Mitchell Prothero, FORTUNE Magazine
May 11, 2006: 12:00 PM EDT
(FORTUNE Magazine) - Last year, when Syrian intelligence operatives were implicated in the assassination of former Lebanese Prime Minister Rafik Hariri, their motive seemed clear: to neutralize a political opponent of Syria's three-decade occupation of Lebanon.
But United Nations investigators and other sources have told FORTUNE there may have been an additional reason for the hit. The February 2005 car bombing in Beirut, the sources say, may have been partly intended to cover up a corruption and bank fraud scandal that siphoned hundreds of millions of dollars to top Syrian and Lebanese officials.
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Bank documents, court filings, and interviews with investigators and other sources show that some of the officials were deeply involved from the late 1990s until early 2003 in a kickback scheme that supplied them with cash, real estate, cars, and jewelry in exchange for protecting and facilitating a multibillion-dollar money-laundering operation at Lebanon's Bank al-Madina that allowed terrorist organizations, peddlers of West African "blood diamonds," Saddam Hussein, and Russian gangsters to hide income and convert hot money into legitimate bank accounts around the world.
Despite efforts to cover up the details surrounding the bank's collapse in early 2003, these sources say, the Syrian and Lebanese officials allegedly involved in the fraud feared that Hariri could return to power and reveal their role in one of the biggest illegal banking operations in the Middle East since the Bank of Credit & Commerce International scandal in the early 1990s.
"Was the scandal part of the reason Hariri was killed?" asks Marwan Hamade, Lebanon's Minister of Telecommunications and a Hariri confidant who was himself the target of a car-bomb assassination attempt. "Absolutely. It was certainly one of the cumulative reasons. If he had been reelected, Hariri would have reopened the file, which we know goes directly to [Syrian President Bashar] Assad through the [Lebanese] presidential palace in Baabda."
UN investigators looking into Hariri's death, led by German prosecutor Detlev Mehlis, became interested in the link to al-Madina on the suspicion that money stolen from the bank helped fund the plot, says a Lebanese security source who helped investigate the bank's collapse and later worked with the UN team.
After reviewing some of the banking records of suspects in both Syria and Lebanon, says the source, who asked not to be identified as he isn't authorized to talk about the matter, the UN team started looking into whether at least some of the plotters were motivated by a desire to obscure their roles in the al-Madina affair. "It goes all the way to the top people in Syria," the source says.
Mehlis's reports on the assassination make reference to financial fraud as a possible motive. "Fraud, corruption, and money laundering could have been motives for individuals to participate in the operation that ended with the assassination of Mr. Hariri," Mehlis wrote last December in his second report, referring specifically to the collapse of al-Madina.
Mehlis, who would not be interviewed, also mentioned in his report a taped conversation in which General Rustom Ghazali, Syria's top military official in Lebanon, accused Hariri of discussing Syrian corruption in a newspaper interview, apparently in violation of an agreement to remain quiet on the matter. In late April, noting UN findings, President George W. Bush ordered a freeze on assets held in the U.S. by anyone involved in the assassination, though the order did not cite names.
As part of the power struggle that ensued after Assad extended the term of Lebanese President and Syrian ally Emile Lahoud in 2004, Hariri resigned as Prime Minister with the intention of running for Parliament on an anti-Syrian platform. Hariri confidants say that, once returned to power, he planned to reopen the investigation into the bank's collapse. The case file and a trove of supporting documents were sealed in the vault of Lebanon's Central Bank in 2003 after threats by Ghazali, who appears to have made millions of dollars from the scheme himself.
The Syrian occupation of Lebanon from 1976 to 2005 has long been viewed as a geopolitical move designed to stabilize its smaller neighbor after decades of civil war and create a bargaining chip in the Arab-Israeli conflict. But over time, the occupation turned into a moneymaking operation for Syrian elites and their Lebanese allies.
"When the Syrians came to Lebanon," says Adnan Araki, a former Lebanese member of Parliament and Syrian loyalist, "they wanted the Golan Heights back and considered Lebanon and Hezbollah something to bargain with. We had to teach them how to steal."
Investigators looking into the looting at Bank al-Madina got a break in March, when Brazilian police arrested Rana Koleilat, al-Madina's former executive secretary. Koleilat, who jumped bail in Lebanon last year and eluded an international manhunt, is believed to have played a key role in the bank scandal.
She is alleged in lawsuits brought by the bank's owners to have used false withdrawals and bogus loans to enrich her family and pay off authorities. Even as al-Madina failed, she is said by investigators to have extracted millions of dollars from owner Adnan Abou Ayyash, a construction magnate who lives in Saudi Arabia, through a series of wire transfers and check exchanges. Koleilat denied the charges after her capture and said that the bank's owners had authorized all withdrawals and that Ghazali had blackmailed her into paying him for protection.
When the dust settled in the summer of 2003, after depositors were paid and assets liquidated, the Abou Ayyash family found itself about $1.5 billion poorer, a stunning turn of events for a Lebanese family that controlled a vast business empire. But as Koleilat and the Abou Ayyash brothers sued and countersued and the Central Bank grabbed whatever money was left to pay depositors, it became clear that no investigation would be forthcoming. The money was gone, and only questions remained, questions whose answers were locked away in a vault in the Central Bank.
In an interview last year, Central Bank governor Riad Salameh didn't deny reports that Ghazali had threatened him into closing the investigation. The general's family, records produced by the bank appear to show, got more than $32 million from al-Madina via transfers approved by Koleilat. But with a pro-Syrian Parliament and Justice Minister in place, then--Prime Minister Hariri was unable to force an investigation beyond the initial 2003 fraud claims.
It is only recently, a year after the departure of Syrian troops, that the bank files have been transferred to the Ministry of Justice for a proper investigation into how the money was stolen and who benefited from the bribes. Just a handful of bank documents have emerged, but they detail an impressive pattern of corruption and fraud on the part of Syrian political and security officials and their Lebanese allies.
Critical evidence of the extent of the money-laundering operation was unintentionally revealed during an investigation by the U.S. Federal Bureau of Investigation to ensnare an arms dealer with ties to the Islamic resistance movement Hezbollah, based in Lebanon, which the U.S. and several other governments consider a terrorist organization.
In 2004, U.S. prosecutors charged Naji Antoine Abi Khalil with attempting to purchase and ship night-vision goggles and other military equipment from the U.S. to Hezbollah. Khalil's ties to al-Madina's money-laundering operations came to light when he bragged to agents and informants that he traveled the world picking up cash to be delivered to the bank on behalf of Hezbollah and Russian mobsters. According to court papers, Khalil, who has since pleaded guilty, accepted $100,000 to launder from agents as part of a sting and told them the single biggest delivery he had made to the bank was $160 million in cash.
But those amounts pale when compared to the piles of cash laundered by Iraqi officials and their partners in illegally gaming the UN's oil-for-food program. Designed for humanitarian reasons to allow Iraq to sell oil through vouchers that could be used to purchase food and medicine, the program became a hotbed of corruption that Saddam and his loyalists used to earn illegal money.
By the late 1990s proceeds flooded the Middle East as favored allies of the regime received coupons good for oil purchases at lower-than-market prices. Investigations into the program found rampant corruption on the part of UN officials, Middle Eastern government officials, and oil companies. The son of Lebanese President Lahoud was implicated, as were other prominent Lebanese and Syrian officials and businessmen. And al-Madina served as a place for them to hide the proceeds.
Several sources, including one alleged conspirator in the oil-for-food scandal, who refuses to let his name be used for legal and safety reasons, put the amount transferred and laundered through al-Madina at more than $1 billion, with a 25% commission going to Syrian officials and their Lebanese allies. The source says that among the recipients of this money were Bashar Assad's brother Maher and the head of military intelligence in Lebanon at the time, Ghazi Kanaan. (Kanaan committed suicide last October after Mehlis questioned him about the plot to kill Hariri.)
To protect this operation, Koleilat had developed a network of graft that shocked even a Lebanese society comfortable with questionable business dealings. She threw dinners where guests received Rolex watches, and she gave luxury cars to friends and officials.
The graft was so widespread that one security official described the parking lot of his office during that era as a "Mercedes dealership." Some bank records point to 155 pieces of real estate--villas, apartments, hotels, and condos--purchased or distributed by Koleilat and her brothers. The Koleilats also had five luxury yachts and as many as 194 cars and motorcycles, not including the gifts to friends, associates, and greedy officials.
Koleilat and the al-Madina plotters needed protection and sought out high-level officials who could help them, says a former employee of the Koleilat family who witnessed many of their dealings. The source, who requested anonymity because the matter is still considered dangerous to discuss in Lebanon, says one of those was Jamil Sayeed, a former director of Lebanese internal security, since arrested on suspicion of plotting Hariri's murder. (Sayeed refused to comment.)
"Rustom Ghazali would receive money, cars, jewels, and hunting trips," the source says. "People used to come and wait in the office. The big shots would get checks; the lower people, like generals and officers, would get cash. This situation went much higher than Ghazali. It was a way for Maher Assad and others to profit from Lebanon and from the Iraq factor."
Several Syrian officials mentioned in the Mehlis reports can be tied to money from al-Madina by documents supplied to FORTUNE by the bank's owners. Ghazali's three brothers were issued four ATM cards linked to a fake account with a $2,000 daily limit for withdrawals, which they made each day from December 2002 to January 2003, according to one document. One of the four cards had a total yearly cash withdrawal of $8 million.
Ghazali's brother Mohammed also received a money transfer for $1,091,000 from the bank on Jan. 20, 2003. Investigators and lawyers for the bank's owners say that during these final months, Ghazali and other top officials decided that the bank's failure was inevitable and acted quickly to drain the remaining monies. One bank employee says that he witnessed Rustom Ghazali demanding a $300,000 payment just after the bank had been put under Central Bank management, a payment approved by regulators.
Among the 155 suspicious real estate transactions flagged by investigators is the transfer of an apartment valued at $2.5 million from the Koleilat family to a friend of Maher Assad's office manager--a transfer the bank's lawyers say they believe was intended to put it under Maher Assad's control. Lebanese political and security officials say that the sealed documents show far more money and property transferred to Maher.
"The entire file on Madina is now at the Ministry of Justice, except for the key parts that implicate Maher Assad, which are still being held in the Central Bank, because people are afraid of being killed over it," says Hamade, the Telecommunications Minister. "While there is not the same level of threats, the Syrian presence remains, and judges are very cautious about this case." (Efforts to reach Maher Assad and the Ghazalis for comment through several Syrian government agencies were unsuccessful.)
Other documents show transfers or transactions made by the bank to the benefit of Lahoud's son--allegations he refused to comment on--and to Lebanese security officials, including the four generals arrested last year on suspicion of participating in the plot to kill Hariri. Current Finance Minister Jihad Azour, a friend of Hariri's, insists that only today, with Syrian troops out of the country, can Lebanon commit to a full investigation. And he believes fear of such an investigation drove some of the murderers. "The risk of reopening the file could have led to this murder," Azour says. "Al-Madina reached the biggest people in Lebanon and Syria."
Azour says Hariri wanted to pursue an investigation into al-Madina and other cases of corruption and would have gone forward, even knowing the danger. "Hariri wanted this file to reach its conclusion," Azour says. "He was concerned about the scandal's ramifications. It has a very negative impact on the status of the Lebanese banking system. And it's important that the case be treated in an extreme way to fix this perception."
From the May 15, 2006 issue
