Israeli safety officers scored a significant intelligence coup in 2018: secret paperwork that laid out, in intricate element, what amounted to a non-public fairness fund that Hamas used to finance its operations.
The ledgers, pilfered from the pc of a senior Hamas official, listed property value tons of of hundreds of thousands of {dollars}. Hamas managed mining, rooster farming and street constructing firms in Sudan, twin skyscrapers within the United Arab Emirates, a property developer in Algeria, and an actual property agency listed on the Turkish inventory trade.
The paperwork, which The New York Times reviewed, have been a possible street map for choking off Hamas’s cash and thwarting its plans. The brokers who obtained the information shared them inside their very own authorities and in Washington.
Nothing occurred.
For years, not one of the firms named within the ledgers confronted sanctions from the United States or Israel. Nobody publicly known as out the businesses or pressured Turkey, the hub of the monetary community, to close it down.
A Times investigation discovered that each senior Israeli and American officers did not prioritize monetary intelligence — which that they had in hand — displaying that tens of hundreds of thousands of {dollars} flowed from the businesses to Hamas on the precise second that it was shopping for new weapons and making ready an assault.
That cash, American and Israeli officers now say, helped Hamas construct up its navy infrastructure and helped lay the groundwork for the Oct. 7 assaults.
“Everyone is talking about failures of intelligence on Oct. 7, but no one is talking about the failure to stop the money,” stated Udi Levy, a former chief of Mossad’s financial warfare division. “It’s the money — the money — that allowed this.”
At its peak, Israeli and American officers now say, the portfolio had a price of roughly half a billion {dollars}.
Even after the Treasury Department lastly levied sanctions towards the community in 2022, information present, Hamas-linked figures have been capable of receive hundreds of thousands of {dollars} by promoting shares in a blacklisted firm. The Treasury Department now fears that such cash flows will permit Hamas to finance its persevering with warfare with Israel and to rebuild when it’s over.
“It’s something we are deeply worried about and expect to see given the financial stress Hamas is under,” stated Brian Nelson, the Treasury Department’s below secretary for terrorism and monetary intelligence. “What we are trying to do is disrupt that.”
That was what Israel’s terrorism-finance investigators hoped to do with their 2018 discovery. But on the high echelons of the Israeli and American governments, officers centered on placing collectively a collection of economic sanctions towards Iran. Neither nation prioritized Hamas.
Israeli leaders believed that Hamas was extra occupied with governing than preventing. By the time the brokers found the ledgers in 2018, the prime minister, Benjamin Netanyahu, was encouraging the federal government of Qatar to ship hundreds of thousands of {dollars} to the Gaza Strip. He gambled that the cash would purchase stability and peace.
Mr. Levy recalled briefing Mr. Netanyahu personally in 2015 concerning the Hamas portfolio.
“I can tell you for sure that I talked to him about this,” Mr. Levy stated. “But he didn’t care that much about it.”
Mr. Netanyahu’s Mossad chief shut down Mr. Levy’s group, Task Force Harpoon, that centered on disrupting the cash flowing to teams together with Hamas.
Former Harpoon brokers grew so pissed off with the inaction that they uploaded some paperwork to Facebook, hoping that firms and traders would discover them and cease doing business with Hamas-linked firms.
In the years that adopted the 2018 discovery, Hamas’s cash community burrowed deeper into the mainstream monetary system, information present.
The Turkish firm on the coronary heart of the operation had such a sheen of legitimacy that main American and European banks managed shares on behalf of shoppers. The Church of Jesus Christ of Latter-day Saints invested tens of 1000’s of {dollars} earlier than the corporate was positioned below sanction.
The Times reviewed beforehand undisclosed intelligence paperwork and company information and interviewed dozens of present officers from the United States, Israel, Turkey and Hamas’s monetary community. Some spoke on the situation of anonymity to debate intelligence issues.
Israeli intelligence and safety businesses have apologized for the failings that led as much as the Oct. 7 assaults.
Mr. Netanyahu has acknowledged that his authorities failed to guard its folks and stated that he would face, and reply, powerful questions after the warfare. He has denied, although, that he took his eye off Hamas. But he declined to reply questions from The Times concerning the ledgers or the hunt for Hamas’s cash.
2015: Task Force Harpoon
Israeli safety and intelligence officers, working from a safe compound exterior Tel Aviv, spent years monitoring Hamas’s cash. By 2015, they have been on to what they known as Hamas’s “secret investment portfolio.”
Terrorist organizations like Al Qaeda and the Islamic State usually use entrance firms to launder cash. But right here, Israeli brokers noticed one thing totally different, extra bold: a multinational community of actual companies churning out actual earnings.
On paper, they appeared like unrelated firms. But again and again, the Israelis stated they recognized the identical Hamas-linked figures as shareholders, executives and board members.
There have been folks like Hisham Qafisheh, a white-goateed Jordanian who studied in Saudi Arabia and had a knack for locating political assist. One of his firms received a $500 million freeway contract in Sudan.
Then there was Amer Al-Shawa, a Turkish man of Palestinian descent who studied electrical engineering in Ohio and extra just lately spent 5 months below interrogation in an Emirati jail on suspicion of funding Hamas.
At the highest was Ahmed Odeh, a heavyset Jordanian businessman with years of expertise in Saudi Arabia. The Israelis discovered — and the Americans now say a lot of this publicly — that Hamas’s governing Shura Council had given Mr. Odeh seed cash to construct and handle a portfolio of firms.
Hamas, the de facto governing physique of Gaza, relied principally on Iran to fund its navy wing. But Hamas needed its personal funding stream, too.
The Israeli safety companies operated a terrorism-finance investigative group on the time known as Task Force Harpoon. It put folks from throughout counterterrorism — spies, troopers, law enforcement officials, accountants, legal professionals — below the identical umbrella and gave them a direct report back to the prime minister. The process pressure even had an financial warfare unit throughout the Mossad intelligence company that would covertly act on the intelligence it had gathered.
“We didn’t have any rivalries,” Tamir Pardo, the Mossad chief on the time, stated in an interview. “No one got credit for any one operation. It just worked.”
Harpoon, he stated, was “one of the most important tools the Mossad had.” It churned out intelligence to monetary regulators, regulation enforcement businesses, politicians and allies in Washington, serving to Israel win monetary sanctions concentrating on Iran and its proxy, Hezbollah.
Mr. Levy, who ran Harpoon and its devoted financial warfare unit, recalled the primary time he heard about Hamas’s portfolio.
“One of the guys on my team, a Mossad guy, showed it to me,” Mr. Levy stated. “What we understood then was that they had these companies to make a little bit of money and to use them as a legal platform to transfer money from place to place.”
Back then, the consensus amongst Israeli officers was that Iran was the larger menace. It had nuclear ambitions and armed each Hamas and the Hezbollah militia in Lebanon. So the majority of the duty pressure’s consideration remained centered there.
Still, Mr. Levy stated the invention was sufficient of a “red flag” that he informed Mr. Netanyahu about it.
2016: Shut Down
A 2014 warfare between Israel and Hamas had left Hamas’s fortifications in ruins and its arsenal depleted.
Hamas, although, was capable of rebuild. In 2016, Israeli intelligence officers famous that the group was acquiring GPS jammers, drones and precision weapons, in keeping with a navy doc reviewed by The Times.
Hamas had added about 6,000 operatives to its ranks for the reason that warfare ended, and the navy had discovered that Hamas was growing plans to storm Israeli communities and take hostages.
By 2016, Mr. Netanyahu’s authorities had begun pursuing a method to comprise Hamas by permitting the Qataris to ship cash to Gaza. Mr. Netanyahu says that cash was humanitarian assist. Privately, he informed others that stabilizing Hamas would reduce strain on him to barter towards a Palestinian state.
That similar yr, the brand new Mossad chief, Yossi Cohen, dismantled Harpoon as a part of an company reorganization, in keeping with Mr. Levy and others.
Mr. Levy left authorities that yr. A brand new group of intelligence brokers and specialists from just a few different businesses stored chasing the cash, solely with out the organizational construction and direct entry to senior policymakers.
This new group quickly made one other alarming discovery.
Up till that time, members of the group informed The Times, that they had estimated that Hamas was taking about $10 million to $15 million yearly from their firms’ earnings.
Then they discovered, primarily based on sources and different intelligence, that Hamas had offered off among the secret portfolio’s property, elevating greater than $75 million. That cash, in keeping with an Israeli intelligence evaluation, was despatched to Gaza, the place it was used to rebuild Hamas’s navy infrastructure.
The Israeli authorities have now concluded that this inflow of cash not solely helped Hamas put together for the Oct. 7 assaults, however gave leaders confidence that they’d have the cash to rebuild afterward, in keeping with 5 Israeli safety officers.
Exactly how vital that cash was to the Oct. 7 assaults is unknown. Israeli officers have promised an inquiry into the intelligence failures that led as much as the assaults, and new particulars could emerge.
But what is obvious is that the Israeli authorities took no public motion towards the Hamas-linked firms. Instead, it determined to construct a case to get the United States authorities to close the businesses off from the worldwide monetary system. But that may take time, and extra proof.
2018: The Big Break
Exactly how Israeli intelligence obtained the ledgers — whether or not from an informant or a pc hack — stays unclear. But in 2018, the group received the proof it had been looking for.
The paperwork have been created by Mahmoud Ghazal, a person whom the Israelis had recognized because the Hamas portfolio’s bookkeeper.
The ledgers spanned 2012 to 2018 and contained entries and valuations for firms that the brokers had been monitoring in Saudi Arabia, Sudan, Turkey and elsewhere. The information additionally contained acquainted names, together with Mr. Qafisheh and Mr. Al-Shawa.
The paperwork have been laborious proof of what the Israelis had lengthy suspected: Despite what public information stated, Hamas was in management.
“It was a big breakthrough,” stated one official concerned within the investigation. “Hamas could hide behind frontmen and shareholders, but the money always talks.”
The ledgers additionally contained coded entries that puzzled investigators, however one doc was a type of Rosetta Stone: “QG” as an illustration, referred to Qitaa Ghaza, or the Gaza Strip. “D” referred to Daffa, or the West Bank. Beside every was a big greenback determine. From this, the Israelis deduced the place Hamas was sending its cash.
This discovery was rapidly bolstered by intelligence from Saudi Arabia. In mid-2018, the Saudis arrested Mr. Ghazal, the Hamas accountant, and two different males who company information present held positions in 18 firms within the portfolio.
Under interrogation, Mr. Ghazal confessed that the portfolio existed to switch cash to Hamas, in keeping with information associated to the three males’s arrests that have been considered by The Times. He additionally stated that, simply because the Israelis had lengthy suspected, Mr. Odeh directed the place the cash went.
The two different males informed their interrogators that they have been shareholders in title solely. Their stakes have been really owned by Mr. Qafisheh, the goateed Jordanian who had additionally been on the Israeli radar display screen for years. Mr. Qafisheh, the boys stated, was a Hamas operative.
The paperwork don’t say what the Saudis did to elicit the confessions. The kingdom’s harsh interrogation strategies have earned it worldwide condemnation.
The Saudis shared the supplies with Washington, in keeping with officers with direct data of the matter, realizing that Washington would share them with its shut ally Israel. The Saudi monarchy has no tolerance for Hamas and hoped that Washington would blacklist the businesses, the officers stated.
The Israeli group shared the ledgers and its intelligence with American officers in early 2019, hoping to encourage monetary sanctions.
But then, nothing.
The Trump administration didn’t act. Treasury Department officers stated that they didn’t delay any selections. Issuing sanctions, they stated, is a sophisticated course of. And Israel, which was extra centered on getting the Americans to challenge Iranian sanctions, didn’t press for extra pressing actions, each Israeli and American officers say.
“We have great people still who are trying to do this work,” Mr. Levy stated. “But if no one at a high level is putting this as a priority, what can they do?”
2019: Turkey
Though the funding portfolio spanned many nations, Turkey was key.
The Saudis had made clear with their arrests that Hamas was not welcome. And the financiers had misplaced a lot of their Sudanese earnings with the autumn of the autocratic chief Omar al-Bashir.
Turkey below President Recep Tayyip Erdogan, nonetheless, has not criminalized Hamas nor has it clearly restricted Hamas’s actions in Turkey.
By 2019, Mr. Odeh was in Turkey, as was Mr. Qafisheh.
Mr. Al-Shawa, the Ohio-educated engineer who had been in Israel’s sights for years, spent 135 days in Emirati jails earlier than being launched in 2015 — with out rationalization “and without breakfast,” he informed The Times in an interview. He returned to Turkey.
Mr. Erdogan was a significant proponent of the nation’s constructing trade, which was good news for the corporate on the middle of the Hamas portfolio: an actual property developer named Trend GYO.
Trend took benefit of Mr. Erdogan’s constructing increase. It introduced in an investor, Hamid Al Ahmar, with ties to the president. And it reorganized itself as an actual property funding belief, which had Turkish tax benefits, and went public.
Trend’s common supervisor, Mr. Al-Shawa, stated he had no actual energy on the firm. The board, he stated, made the entire selections. He denied being concerned with Hamas, however he stated that he suspected others at Trend have been.
“Do I have proof? No. But sometimes you just have a feeling,” he stated. “I really didn’t care. Why should I? I was there to make money.”
Mr. Odeh and Mr. Al Ahmar declined to remark by intermediaries. Trend wouldn’t go messages looking for remark to Mr. Qafisheh, and a spokeswoman stated he and Mr. Al Ahmar have been now not concerned with the corporate. The spokeswoman stated the query of whether or not Hamas owned the corporate was “ridiculous and meaningless.” She stated Trend was interesting its Treasury designation. Hamas, by its media workplace in Lebanon, declined to remark.
Foreign traders piled in. In 2019, whereas Washington sat on the ledgers, American and European banks held greater than 3 % of the corporate’s publicly traded shares on behalf of shoppers, Turkish monetary information present. The Church of Jesus Christ of Latter-day Saints’s funding arm, Ensign Peak Advisors, purchased greater than 200,000 shares.
There is not any indication that the church or the Western banks knew about any Hamas ties on the time. A church spokesman stated {that a} U.S.-based funding adviser, Acadian Asset Management, purchased the shares on its behalf. An Acadian spokesman stated the corporate had “complied with all relevant laws.”
While the sanctions proposal languished, Israeli and American officers now say, Hamas appointed a brand new funding chief, Musa Dudin. Unlike his predecessors, he was a well known Hamas navy operative who had spent 18 years in an Israeli jail for his function in lethal assaults.
Mr. Dudin, too, has resettled in Turkey. Mr. Dudin declined to remark by an middleman.
Meanwhile, Hamas-linked house owners started cashing out. In 2019, Mr. Qafisheh offered greater than $500,000 value of inventory, company filings present. In 2020, Mr. Al Ahmar offered shares value $1.6 million.
The firm’s house owners received cash out of the corporate one other method, too. Mr. Al-Shawa, in his interview, stated that the board pushed him to award Trend contracts to a building firm that Mr. Qafisheh owned with two different Trend shareholders.
Company information present that Trend paid that firm greater than $7.5 million from 2018 to 2022 — one instance of how Hamas-linked figures pulled money from the portfolio.
Trend, in a written assertion, stated it had paid the development firm “in accordance with commercial practices and legal rules” and now not has a relationship with the corporate.
The Israeli brokers understood that Iranian sanctions would take priority over Hamas however have been pissed off by the delays. At their wits’ finish, former Task Force Harpoon members took a determined step. In June 2021, they uploaded among the Hamas monetary information to Facebook. The paperwork revealed just a few nodes of the key community, together with Trend. It is unclear whether or not that was licensed.
The aim was to create a path of on-line breadcrumbs for journalists, monetary investigators and others to observe. The Facebook publish generated a smattering of news protection.
“There wasn’t any way to use the intelligence we had,” stated Uzi Shawa, a former Mossad agent and Harpoon member. “It was almost done as a last resort.”
Finally, in May 2022, the Treasury Department introduced monetary sanctions towards what it known as an expansive Hamas funding community. Mr. Odeh and Mr. Qafisheh have been named as financiers.
“The United States is committed to denying Hamas the ability to generate and move funds and to holding Hamas accountable for its role in promoting and carrying out violence,” the division stated.
Trend was financially blacklisted, as have been a number of different related firms.
All had been named within the ledgers that the Israeli group had given the Americans three years earlier.
2023: Aftermath
Late final month, Mr. Nelson, the Treasury Department official, flew to Turkey to induce the Turkish authorities to cease sheltering Hamas’s cash.
“It’s the highest priority in our building,” he stated in an interview this month. The division just lately added Mr. Dudin, Mr. Al-Shawa and others to the monetary blacklist. Mr. Al-Shawa stated he was interesting the choice.
Mr. Erdogan has given no indication that he intends to acknowledge these sanctions. After the Oct. 7 assaults, he declared that Hamas was not a terrorist group, however a “liberation group.”
Americans “are the only ones who set the law in the world and all others follow,” Hasan Turan, a minister from Mr. Erdogan’s governing social gathering, stated in a latest interview. “It is not acceptable.”
Mr. Turan even met with Mr. Al Ahmar, the previous Trend investor, final month to debate methods to assist the Palestinians.
The worth of Trend’s inventory, which continues to be traded on the Istanbul trade, has greater than doubled because it was added to the sanctions listing. During that very same interval, two Trend shareholders now below sanction offered $4.3 million in inventory, company filings present. Asked if that cash went to Hamas, the corporate’s chairman stated he didn’t know and it will be inappropriate to ask.
And as just lately as this yr, Hamas-tied firms and folks below sanction have been nonetheless capable of maintain Turkish financial institution accounts in U.S. {dollars}, banking information reviewed by The Times present, regardless of ostensibly being minimize off from the American monetary system.
Mr. Pardo, the previous Mossad chief, stated he didn’t know what occurred after he left in 2016. But “from the results,” he stated, “you can judge that they had a lot of money.”
“I believe that if someone would have chased the money and stopped it,” he added, “we wouldn’t be seeing the results of what we see today.”
Mr. Levy, the previous Harpoon deputy, grows emotional when he talks concerning the Hamas cash. “I want to do everything we can to prevent war,” he stated. “I really believed that we could do that by going after the financial infrastructure of terrorist groups. But we have to be serious.”
Ronen Bergman contributed reporting from Tel Aviv, and Patrick Kingsley from Jerusalem.
Source: www.nytimes.com