Tuesday, September 3, 2024

How Crypto and U.S. Allies Ensure Hamas Remains Well-Funded

Jim Geraghty

Tuesday, September 03, 2024

 

About two weeks ago, Jonathan Polin and Rachel Goldberg-Polin, parents of 23-year-old Israeli-American hostage Hersh Goldberg-Polin, gave a speech on the third night of the Democratic National Convention in Chicago:

 

Among the hostages are eight American citizens. One of those Americans is our only son. His name is Hersh. He’s 23 years old, and like Vice President Kamala Harris, Hersh was born in Oakland, California.

 

On Oct. 7, Hersh and his best friend, Honor, went to a music festival in the south of Israel. It was advertised as celebrating peace, love, and unity. They also went to celebrate Hersh’s 23rd birthday. As rockets began to fall, Hersh, Honor, and 27 other young festival-goers took refuge in a 5-foot-by-8-foot bomb shelter. Terrorists began to throw grenades into the shelter.

 

Hersh’s left forearm — his dominant arm — was blown off before he was loaded onto a pick-up truck and stolen from his life, and me, and Jon, into Gaza. And that was 320 days ago.

 

Last Thursday night, the Democratic presidential nominee briefly addressed the ongoing crisis in the Middle East, and emphasized that no matter what, “We have got to get a deal done”:

 

BASH: President Biden has tried unsuccessfully to end the war between Israel and Hamas in Gaza. He’s been doing it for months and months, along with you. Would you do anything differently? For example, would you withhold some U.S. weapons shipments to Israel? That’s what a lot of people on the progressive left want you to do.

 

HARRIS: Let me be very clear. I’m unequivocal and — and unwavering in my commitment to Israel’s defense and its ability to defend itself. And that’s not gonna change. But let’s take a step back. October 7, 1,200 people are massacred, many young people who are simply attending a musical festival. Women were horribly raped. As I said then, I say today, Israel had a right — has a right to defend itself. We would. And how it does so matters. Far too many innocent Palestinians have been killed. And we have got to get a deal done. We — we were in Doha. We have to get a deal done. This war must end—

 

BASH: And in the meantime—

 

HARRIS: And we must get a deal that is about getting the hostages out. I’ve met with the families of the American hostages. Let’s get the hostages out. Let’s get the ceasefire done.

 

BASH: But no change in policy in terms of arms and — and so forth?

 

HARRIS: No. I — we have to get a deal done. Dan — Dana, we have to get a deal done. When you look at the significance of this to the families, to the people who are living in that region — it — a deal is not only the right thing to do to end this war but will unlock so much of what must happen next. I remain committed since I’ve been on October 8 to what we must do to work toward a two-state solution where Israel is secure and in equal measure the Palestin — the Palestinians have security and self-determination and — and dignity.

 

That interview was taped Thursday afternoon and aired that evening. Sometime between Thursday and Friday, Hamas took six of the hostages, including Hersh Goldberg-Polin, and executed them “using multiple close-range gunshots,” according to Israel’s Ministry of Health. A Hamas spokesman said that in the aftermath of a successful hostage rescue in Nuseirat, “new instructions were issued to the Mujahideen assigned to guard the prisoners regarding dealing with them if the occupation army approached their place of detention.” In other words, if Hamas operatives believe a rescue attempt is imminent, they are instructed to execute the hostages.

 

“I’ve worked tirelessly to bring Hersh home,” President Biden said in a released statement from his Rehoboth Beach house.

 

Harris’s released statement Saturday was better and angrier, a quiet call for regime change in the Gaza Strip:

 

Hamas is an evil terrorist organization. With these murders, Hamas has even more American blood on its hands. I strongly condemn Hamas’ continued brutality, and so must the entire world. From its massacre of 1,200 people to sexual violence, taking of hostages, and these murders, Hamas’ depravity is evident and horrifying. The threat Hamas poses to the people of Israel — and American citizens in Israel — must be eliminated and Hamas cannot control Gaza. The Palestinian people too have suffered under Hamas’ rule for nearly two decades.

 

The administration’s position is that “Hamas must be eliminated” and “Hamas cannot control Gaza,” but Israeli military forces must not enter Rafah and the administration has been negotiating with Hamas, fruitlessly, since the beginning of the year. Apparently, the idea is that the Palestinian people in Gaza are supposed to desire new leadership, while the U.S. pressures Israel to give Hamas a better deal. Why would the Palestinians want to get rid of Hamas, when Hamas has figured out how to get the Biden administration to act as its agent, negotiating on its behalf with Israel?

 

There is no deal to be reached with Hamas.

 

I don’t doubt that Biden and Harris want the hostages released. But they have this blind faith that some combination of incentives and Israeli concessions will get the leaders of Hamas to see reason and release the hostages. They imagine a Hamas leadership that is full of rational, good-faith negotiators.

 

The evidence that we have indicates that the leaders of Hamas are sadistic maniacs who cannot be cajoled into ceasing barbaric behavior that comes as naturally to them as breathing.

 

Hamas runs, in significant part, on foreign money — some from Iran that is difficult to block, but also some from donors in other countries, some knowingly, some unknowingly financing terrorism.

 

From the Treasury Department’s assessment of foreign terrorism financing, published in February:

 

The group’s primary external funding comes from Iran, which has provided it roughly $100 million per year. Hamas also generates of revenue from an expansive and sophisticated international investment portfolio, previously estimated to be worth at least $500 million. This investment portfolio has invested in companies and assets located across the world, including in Algeria, Saudi Arabia, Sudan, Türkiye, and the UAE, and is managed by Hamas’ Investment Office In addition, Hamas relies on a global fundraising network to raise funds for its nefarious activities. Hamas is prolific in soliciting donations from witting and unwitting donors worldwide in both fiat and virtual assets.

 

Hamas facilitators have used numerous methods to collect and transfer funds into the Gaza Strip. These include crowdfunding websites and sham charities, where in some cases, the destination of the funds was concealed under the guise of humanitarian efforts. In other cases, they solicited funds directly for their cause from sympathetic donors. Hamas has also used complicit VASPs [virtual asset service providers – basically, digital asset banks] and money transmitters throughout the globe to move funds. In the aftermath of the October 7, 2023, terrorist attacks, Treasury designated a Gaza-based VASP called Buy Cash Money and Money Transfer Company for serving as a key node in Hamas’s virtual asset fundraising schemes. The same entity has also been identified as being involved with funds transfers on behalf of other terrorist groups.

 

Hamas’s global financial footprint and use of the regulated international financial system means that its facilitators likely have access to the U.S. financial system, particularly as Hamas has sought to raise funds from international supporters. U.S. persons have been convicted of providing or conspiring to provide material support to Hamas from the United States in recent years. After the October 2023 terrorist attacks, Hamas supporters around the world mobilized global fundraising efforts on behalf of the group. These online fundraisers took various forms, often seeking to collect money on crowdfunding sites under the guise of charitable donations for Gaza.

 

Hamas is not designated a terrorist group in Switzerland, the United Arab Emirates, the Kingdom of Saudi Arabia, Bahrain, Turkey, or the United Nations. This gives the group quite a few banking and financial options. (In case you’re wondering if this is part of Switzerland’s longstanding neutrality, note that the country does designate al-Qaeda, ISIS, and Palestinian Islamic Jihad as terrorist organizations.) The Gulf Cooperation Council (GCC) countries (Saudi Arabia, Qatar, Kuwait, Oman, Bahrain, and the UAE) also do not consider Hamas a terrorist organization, but back in 2016, the GCC countries did designate Hezbollah as a terrorist group.

 

The Biden administration could do some more arm-twisting of these allies, pointing out that they’re willing to classify Hezbollah and Palestinian Islamic Jihad as terrorists, but not Hamas.

 

In particular, The Economist noted last November that one of the key countries for financing Hamas’s operations is our NATO ally, Turkey:

 

Israel’s declared goal of destroying Hamas for good requires its financial base to be dismantled, too. Very little of this sits in Gaza. Instead, it is overseas in friendly countries. Furnished with money-launderers, mining companies and much else, Hamas’s financial empire is reckoned to bring in more than $1bn a year. Having been painstakingly crafted to avoid Western sanctions, it may be out of reach for Israel and its allies. . . .

 

Today, while Hamas’s politicians favor Doha, the capital of Qatar, and its companies range from Algeria and Sudan to the UAE, its financiers live in Istanbul. Zaher Jabarin, accused by Israel of running Hamas’s finances (which he denies), is based there, as are several other individuals under sanctions by America for funding the organization. Eager to garner regional influence by supporting the Palestinian cause, Recep Tayyip Erdogan, Turkey’s president, offers shelter. Israel says that the Turkish government hands out passports (which it denies) and lets Hamas keep an office in the country.

 

Meanwhile, Turkey’s banking system helps Hamas dodge American sanctions by conducting complex transactions across the world. A booming, lightly regulated crypto market makes things even easier. Many of Turkey’s biggest banks, including Kuveyt Turk, have been accused by Israel and America of knowingly storing Hamas’s cash. Some murmur that Mr Erdogan quietly approves. In 2021 the Financial Action Task Force, a G7 watchdog, placed Turkey on its “grey list” of countries doing too little to freeze terrorists’ assets.

 

Last year, the U.S provided $196 million in assistance to Turkey, mostly humanitarian assistance. This is separate from the $23 billion sale of new F-16s and upgrades to existing jets that also went to Turkey.

 

In April, Turkish president Recep Tayyip Erdoğan addressed his country’s parliament and declared, “While everyone else remained silent, we defined Hamas as a resistance movement, not a terror group.” The audience responded with chants of “death to Israel.”

 

President Biden invited Erdoğan to the White House this spring, but the visit was postponed. At the NATO summit in July, Biden greeted Erdoğan, and was effusive about the Turkish government dropping its opposition to admitting Sweden to NATO:

 

Mr. President, it’s good to see you again — delighted to be with you. And, you know, we’re at this historic summit meeting. We’re resolving a lot of things, I hope.

 

And you made — you made all the more historic by the agreement you reached yesterday in the admission of Sweden and how you’re going to proceed. I want to thank you for your diplomacy and your courage to take that on. And I want to thank you for your leadership, Mr. President.

 

Also in July, in an interview with Newsweek at the NATO summit, Erdoğan accused the U.S. of being complicit in Israeli human-rights violations.

 

Turkey has always been a complicated U.S. ally, but its ability to encompass so many contradictions — to be the home base of Hamas’s financiers and to get nine-figure sums in foreign aid and to denounce the U.S. as complicit in genocide and to get sweet U.S arms-sales deals is amazing.

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