Hezbollah’s Role in Iran’s Global Illicit Networks

On October 3, FDD hosted a panel discussion titled “Hezbollah’s Role in Iran’s Global Illicit Networks.” Hosted by Joyce Karam, Washington correspondent for Al-Hayat Newspaper. The panel featured experts who analyzed the extent of Hezbollah’s influence among the Lebanese diaspora and various Latin American countries.

Rep. Ed Royce, Chairman of the House Foreign Affairs Committee; Rep. Eliot Engel, Ranking Member of the House Foreign Affairs Committee; Derek Maltz, former DEA official who served as Special Agent in charge of DOJ, DEA, and the Special Operations Division; Jonathan Schanzer, FDD Senior Vice President; and Yaya Fanusie, Director of Analysis for FDD’s Center on Sanctions and Illicit Finance (CSIF) all offered their expert opinions on Hezbollah’s finance mechanisms and the need for evolving sanctions against the organization in light of the expected passage of of HIFPAA, the Hezbollah International Financing Prevention Amendments Act.

Schanzer touched on Hezbollah’s rapid growth over the years and noted that while Hezbollah has been sanctioned for several decades now, with the advent of treasury sanctions tools, it was easier to go after specific companies, people, and illicit business that Hezbollah controlled. Schanzer called for increased efforts to stop Iranian funds from flowing to Hezbollah. He warned that failure to do so would only aid Iran’s attempts to establish regional hegemony in the Middle East.

Schanzer called for the United States to target Hezbollah strongholds in Lebanon with strong financial sanctions through Section 311 of the PATRIOT Act. This would constitute a creative but legal way of using the law while protecting those actors in Lebanon that seek to counter Hezbollah. Summing up his recent Foreign Affairs piece co-authored with FDD’s Orde Kittrie and Alex Entz, he asserted that the measure would be tantamount to “chemotherapy for Lebanon, which suffers from a cancerous Hezbollah.”

Fanusie referenced three primary sources of Hezbollah’s funding, citing his Financial Assessment on Hezbollah, coauthored with FDD’s Alex Entz: Iran, criminal enterprises, and donations. Fanusie pointed out that the key word to understanding Hezbollah is “leverage.” Hezbollah has leveraged international criminal networks to transport cash and drugs to various parts of the world allowing it to withstand pressure from sanctions throughout the years. Fanusie echoed Schanzer’s sentiments on the importance of going after Iran and stated, “If you’re going to go against the Cleveland Cavaliers, you have to attack their players…but you’re not going to get anywhere if you don’t deal with LeBron James…In this analogy, LeBron James would be Iran.”

In his Financial Assessment, Fanusie details the financial strategy of Iran’s funding to Hezbollah. “[Iran] provides funding predominantly off the books through parastatals and charitable organizations that are controlled by Iran’s supreme leader.”

Maltz called for “a lot more action and a lot less words” when fighting Hezbollah’s vast finances. He argued for a whole of government approach to combat the growing number of terrorists that turn to criminal networks for funding. In order to combat such activity, Maltz emphasized that there must be consequences for countries that do not cooperate.

Chairman Ed Royce agreed with Maltz that the U.S. effort has until now been insufficient, but argued that the current HIFPAA legislation would aid in closing up loopholes and slowing Hezbollah’s ability to access cash. “We have to enforce the hell out of every single sanctions provision we have and on every agreement we have vis-à-vis Hezbollah and Iran,” he said.

Ranking Member Elliott Engel lamented that the US was “missing in action when we could have gotten rid of Assad,” the embattled leader of Syria, for whom Hezbollah is currently deployed in Syria. Engel listed three points to keep in mind going forward: military action alone would not solve the crisis, senior diplomats must drive policies that could lead to a solution, and the US must go after the Assad regime in full force.

All of the panelists agreed it was important to put more pressure on Hezbollah, to mitigate Hezbollah’s increasing influence in the Lebanese government and to continue to shed light on the group’s international criminal enterprise.

Click here to watch video of the full event.

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