The Real Connection between Iran and Hamas

By Matthew Levitt

Iran’s active state sponsorship of Middle East terrorist groups is well documented, from terrorist
and insurgent groups in Iraq and Afghanistan to Hizballah in Lebanon and Hamas and PIJ in the West Bank and Gaza. The Iranian regime has been described by U.S. officials as the “central banker of terrorism” and has a nine-digit line item in its budget to support terrorism, sending hundreds of millions of dollars to terrorist groups annually. Illustrating how the support
for terrorism is part of an official government policy, Iran has used its state-owned financial institutions to dole out these funds.

For most, this is not news. Even the technocratic Financial Action Task Force (FATF), a multilateral body that operates by consensus and includes Russia and China, has issued a series of warnings about Iran’s deceptive financial practices, including its money laundering and terror financing. That’s why I was surprised when NPR asked me to talk about "The Real Connection between Iran and Hamas" for a point-counterpoint style piece debating whether Iran really does finance Hamas. The story, on this weekend’s NPR Weekend Edition, featured me highlighting Iranian financial and material support for Hamas and Hillary Mann Leverett, a former Foreign Service officer who is CEO of Stratega, a political risk consulting firm, arguing that while Iran would surely like to support Hamas it does not.

That’s right. According to Mann Leverett in all her time in government she came across no hard evidence of Iran financial or material support for Hamas. Since U.S. officials regularly cite evidence to the contrary, one wonders how Mann Leverett missed the memo. She proceeds to suggest that the idea that Iran could get arms to Hamas is “implausible,” suggesting she is unaware of such well documented examples as the Iranian-funded Karine-A weapons smuggling ship, the traditional weapons smuggling routes that cut across Yemen into East Africa and up through Sudan and Egypt, and alternative means of moving funds through trade-based and other money laundering schemes.

Mann Leverett suggests that Hamas efforts to smuggle cash in suitcases highlights how useless banks are in funding Hamas and how impractical arguments are that Iran may use banks or find more creative means of funneling money to Hamas. In fact, Hamas recetly attempted to set up its own bank in Gaza and has used the local Post Office to facilitate basic banking transactions as well. Banks also send money to Hamas leaders outside Gaza, who then smuggle the cash into the Strip. Most bizarre, Mann Leverett seems to suggest that it may be al Qaeda-related cells in the Sinai who are funding and arming Hamas – a suggestion that indicates a complete unfamiliarity with the phenomena of salafist groups operating in Sinai and Gaza.

So, to set the record straight for Mann Leverett and other readers who may not be aware, here are just a few snippets of information with which Mann Leverett should become familiar (for sources for these examples see “The Money Trail”):

* In March 2007, Khaled Mashal, the leader of the Hamas political bureau based in Damascus, visited Iran and stated that Iran had been providing financial support for Hamas since it took office in 2006. Mashal indicated that funding from Iran would continue, although he did not provide any specific amount

* Iran engages in a variety of deceptive financial practices to conceal the nature of its sponsorship of terrorist groups. Iran has used Bank Saderat as a preferred means of transferring funds to terrorist organizations such as Hizballah, Hamas, PIJ, and the Popular Front for the Liberation of Palestine–General Command. The Treasury Department revealed one case in which Iran sent $50 million to a Hizballah-controlled organization between 2001 and 2006.

* In March 2008, the Treasury Department followed up one of the FATF warnings noted above by issuing a broad alert to the financial sector about the problems with Iran’s anti–money laundering efforts, noting that Iran “disguises its involvement in proliferation and terrorism activities through an array of deceptive practices specifically designed to evade detection.”

* A particularly effective method Iran has used to hide illicit transactions under the cover of legitimate business is by engaging in money laundering through trade. A prominent example of suspected trade-based money laundering reportedly involves the Committee for Palestinian Welfare and Aid (CBSP), a French charity designated as a Hamas front organization by the United States. Officials suspect Iran provided the funding for these transactions—funding that was passed either directly or indirectly along to terrorists through a trade-based money laundering scheme. Abu Aker has been involved in a number of other suspicious transactions in which foodstuffs or money either reached or was intercepted en route to Palestinian Islamic Jihad (PIJ) through the El Ehssan Charitable Association, one of the PIJ’s charities. In one case, Israel blocked the passage of five containers of vegetable oil paid for by European charities and sent to the Palestinian territories by a Turkish firm. According to Israeli officials, Iran leveraged a connection between an Iranian company and its European partners to initiate the scheme, while Abu Aker was reportedly in direct contact with PIJ officials in Damascus who pointed him to these same companies.

* In addition to providing financial support, Iran has been training members of the Hamas military wing in sniping and other technical capabilities. Iranian trainers reportedly have taught Hamas bomb makers how to use household items and everyday materials to fashion explosives for its homemade mortars and Qassam rockets. Additionally, Grad-type Katushya rockets bearing Iranian serial numbers, Farsi lettering, and Iranian paint have been spotted in the Gaza Strip. Iranian engineers reportedly have designed and manufactured a version of the Grad rocket that disassembles into several pieces so that it is easier to transport through the underground system of smuggling tunnels between Egypt and Gaza.

* According to a December 2000 Palestinian intelligence report confiscated by Israeli authorities, Iran had transferred $400,000 directly to Hamas’s Qassam Brigades specifically to support “the
Hamas military arm in Israel and [encourage] suicide operations,” and another $700,000 to Islamic organizations opposed to the PA. A confiscated Palestinian document describes a May 19, 2000, meeting between the Iranian ambassador and Hamas, PIJ, and Hizballah at the Iranian embassy in Damascus. According to the report, “During the meeting the Iranian ambassador demanded that the abovementioned persons carry out military operations in Palestine without taking responsibility for these operations.”

* While estimates of Iran’s financial assistance to Hamas vary, there is consensus that the sum is significant. According to Israeli estimates, Iran contributes around $3 million a year in direct aid to Hamas. Canadian intelligence cites Canadian Secret Intelligence Service (CSIS) assessments that Iran transfers somewhere between $3 million to $18 million a year to Hamas. According to the CSIS report, “in February 1999, it was reported that Palestinian police had discovered documents that attest to the transfer of $35 million to Hamas from the Iranian Intelligence Service (MOIS), money reportedly meant to finance terrorist activities against Israeli targets.” Palestinian sources estimate Iranian assistance to Hamas “at tens of millions of dollars.” According to experts testifying in the case of Diana Campuzano et al v. The Islamic Republic of Iran, Iranian financial support to Hamas in 1995 totaled $30 million and ranged from $20 million to $50 million annually between 1990 and 2000. According to expert testimony in another case involving a Hamas attack and Iranian support for Hamas, Susan Weinstein et al v. The Islamic Republic of Iran et al, “the Islamic Republic of Iran gave the organization at least $25-50 million in 1995 and 1996, and also provided other groups with tens of millions of dollars to engage in terrorist activities. In total, Iran gave terrorist organizations, such as Hamas, between $100 and $200 million per year during this period.”

In short, as I stated in the interview, Iranian support for Hamas is extremely significant – to the point that Hamas could not function as it does today were it not for Iranian financial and material support. I expected Mann Leverett to argue that while Iran does support Hamas it could be convinced to terminate such support if the right incentives were offered. I think that unlikely, but at least that would have been grounded in reality.

The broadcast of "The Real Connection between Iran and Hamas" on NPR Weekend Edition can be heard here.