Experts trace the financial backing of rising Middle East militiants

A house destroyed by Hamas’ rockets in Israel in 2014.

By Rachel Brooks

May 13, 2021 

Experts cite the rising security risks in the Middle East as a direct result of western policy failure.

Jason Meister, political strategist, and Trump 2020 advisory board member, traced the escalations in the Middle East back to a “weak” policy from the Biden administration. 

“It’s not a coincidence that foreign adversaries are closing in on US allies in the first few months of Biden’s presidency. Biden is weak and weakness always emboldens bad actors,” said Meister.

The Biden presidency also stands up under the scrutiny of its political opposition for its financial aid to the extremist militia Hamas which, together with al-Fatah, steers the Arab conflict with Israel. Hamas and al-Fatah are the joint political governing faction of the Palestinian Authority in the West Bank, lead by Mahmoud Abbas. 

“President Biden funded the Palestinian Authority with $235 million of aid less than one month ago which was a direct reversal of Trump’s policy in the Middle East. Trump withdrew funding for Palestinians and began a peace process through strength,” said Meister. 

Donald Trump, by contrast, had exercised a “maximum pressure” campaign against proxy militias of the IRGC governing party of Iran. Hamas, mentored directly by Lebanese Hezbollah, is financed by the IRGC. It is one of many IRGC-backed proxies in the Middle East and North Africa. Another notorious name on that list is the al-Houthi Ansar Allah movement that brought about the human disaster of Yemen. Rather than send financial aid to these groups, the Trump administration had sanctioned them and had classified Ansar Allah as a terrorist organization. The Biden administration has reversed many of these policies in its early days of operation. 

Jason Meister linked the growing tensions in the Middle East directly to these whiplash policy reversals. 

“This is Biden’s Israel Crisis,” he said. 

Ellie Cohanim, a former U.S. special deputy envoy to the State Department on Combat AntiSemitism, recently took to social media to propose a solution to Biden’s policy failure. 

“President Biden can easily end the Hamas attacks on Israel and restore calm by confronting Hamas financial backer and rocket supplier Iran,” wrote Cohanim. 

“It’s time for the U.S. to walk out of the Vienna Talks and stand by our ally Israel.” 

Yet, even without the direct assistance of the U.S. or the IRGC, the financial lifeblood of the Gulf militias will still flow. This is due to the prolonged knowledge-sharing of the IRGC with its regional partner, the Lebanese Hezbollah. 

In a recent Republic Underground panel, data analyst and expert in Lebanon’s current political crisis, Charbel Hage, broke down the system of money laundering that Hezbollah uses to finance its schemes. He noted that Lebanon had developed a banking system that was decentralized, and completely unregulated by any financial institution. This, he noted, was due to the fact that Lebanon had rejected the “banks” license to operate. The bank continues to operate as such, even without the license. Without regulation, the Ponzi scheme model runs unchecked. 

“Someone has to regulate, to see if it is not a Ponzi scheme,” Charbel Hage, on Lebanon’s “money laundering” bank. The Ponzi scheme operates on money laundering from massive cash pools from Latin America, drugs sold in Israel, Iraq, etc. This “under-the-table” money is then sent back to Iran. 

Hage explained how Lebanon’s laundering scheme works on a system of percentages. Hezbollah gives citizens secured loans in exchange for their gold. 

“People will go give Hezbollah their gold and will get a percentage of the value. So, if the value of some gold I want to deposit is valued at 100 dollars, Hezbollah will value that 100 at 50 percent and will give me a 100% loan against the value of that gold. So, what’s happening is that Hezbollah, sucking up all of the gold of the Shia community in Lebanon, and then returning 50 percent of the value of that gold in loans.”

Hage explained that the Shia community had attempted to get its gold back, but that was not possible. The gold was worth around $1Bn. Hezbollah had no intention of ever restoring the finances of the people of Lebanon through this elaborate scheme. 

In the same Republic Underground panel, former IDF intelligence officer Eric Schorr noted an enhanced cooperation and knowledge share between Hezbollah and drug cartels of Latin America. The root of the schematics runs deep, and the arm of Hezbollah stretches over a vast network.