Hezbollah Financial Scandal: From Mughniyeh to Madoff
By Aaron Mannes
Salah Ezzedine, a leading Lebanese businessman, turned himself in to Lebanese authorities last week when his large-scale Ponzi scheme collapsed and he declared bankruptcy. This is could be a major blow to Hezbollah, which has already had a very bad year.
Ezzedine was closely tied to Hezbollah and several top Hezbollah leaders personally lost money in investments with him. Now referred to as Hezbollah’s Madoff, he had once been known as the Mughniyeh of money (in reference to Hezbollah’s long-time operations chief Imad Mughniyeh who was killed in a car-bombing in February 2008.)
Ezzedine was well known in Lebanon as a businessman and philanthropist. He ran an organization that arranged trips to Mecca and owned Dar al-Hadi, an Islamic publishing house that published books by senior Hezbollah figures and was visited by former Iranian Foreign Minister Ali Akbar Velayati in 2004.
Ezzedine’s companies took major losses when the price of oil began to fall and he reportedly sought to cover these losses by bringing in more investors. His investors not only included major Gulf businessmen (hence the extensive coverage of the case in the Gulf) but also thousands of modest Lebanese Shia. Reportedly people mortgage
their house to invest with Ezzedine and take advantage of his promised high returns.
Implications
This is a double-hit on Hezbollah. First it appears that they have lost a great deal of money (some reports are that it was over $600 million). What’s more, they will be challenged in replacing these lost funds as donors become more wary of donating or investing with Hezbollah.
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