“Show me the money”: Behind the scenes of Israel’s economic fight against terrorism
Ways to persuade Palestinian bankers to cooperate, the cold response of Arab bankers and the terrorist attack that prompted Americans to cooperate. A glimpse into Israel’s secret war on terrorist funds. Chapter from the book “Harpon” published by Yedioth Books
Adnan ran a small but successful bank. The bank was located in the West Bank, but had interests throughout the Arab world. The bank was not an important financial institution, by any means, and yet was a mainstay of the Palestinian Authority and some smaller towns in Area B, the area over which Israel controlled security, but the Palestinians had political sovereignty and a law enforcement system. Adnan lives in a huge villa in Area A. A red tiled roof covered the villa, and the garage in the yard was large enough to accommodate a fleet of new Mardzas-Benz cars. His wife and children lived to a high standard; His adult children attended universities abroad. A satellite dish received television from around the world. The family lived in Europe and the United States.
Adnan was a good Muslim. He donated to the poor and prayed five times a day. He was also a good Palestinian. When asked, he always helped the national liberation movements, and always made sure that Arafat’s aides received gifts. Accounts of wanted persons were kept in his bank. The sums of money that flowed into these accounts were large, but not surprising. Adnan was sure that the Israelis wanted to talk to him about these funds. After all, he did business with Israeli banks, and even in the midst of the intifada, he moved between the Palestinian Authority and Israel almost without difficulty. He knew he had to get to the meeting.
The man who called Adnan and summoned him to a meeting was called Shai Y. (pseudonym). He engaged in emotional manipulations. He was called the “Master of Illusions.” All good spies knew how to manipulate people and control their minds and impulses. Shai worked for about 20 years in the Shin Bet and went into the heads of several special and dangerous human targets. The humble and thin Shai was an experienced field man; he spent most of his nights ambushing across enemy lines with a semi-automatic Bertha pistol. Shai excelled at recruiting and manipulating important agents. He had an understanding and sympathetic relationship with the terror suspects, nurtured their confidence and took advantage of their fears so that he convinced them to reveal to him everything they knew.Described him as a nice and charming man.
Shai was appointed head of operations in the Harpoon unit. His name came from afar, and when Dagan sought to expand the power of the financial war on terror and sought out people who thought and acted like him, he turned to him. But Shay had added value: he brought with him a fresh and courageous approach, both as to espionage and as to the diplomatic missions that Dagan and his emissaries had planned. Although he was very different from Maori in style, temperament and background, but they became partners, and eventually friends. They were known as the cute duo. They were both going to have lunch with Adnan.
Uri and Shai planned their meeting well; Their manipulative thinking would put a smile on George Smiley’s face. They chose a restaurant where you could sit outside, and the meeting was scheduled for noon, when the sun was shining brightly. Uri was cheerful and friendly, but his broad chest and large arms looked menacing. He planned to sit close to Adnan.
Uri brought some folders laden with paperwork; It was his doctoral research, but Adnan did not know it. The two Israelis arrived first. For security reasons, the Shin Beit tracked the Palestinian from the moment he entered Israel to make sure he came alone, without escorts. Adnan arrived on time, but the Israelis saw he was stressed. He parked his new Mercedes in the parking lot, as if he was on a driving test. Adnan arrived in a jacket and tie. He looked nervously around to make sure they were not being followed.
Uri and Shai sat him down in front of the dazzling light of the sun. The Israelis spoke Arabic in a friendly tone, but let him understand that they were in control of the situation. They both talked about family, and how the meeting would help his wife and children. Uri and Shai explained to him that bad people whose intentions were violent had transferred money through his bank, and how dangerous this arrangement was. The danger is not good for a person who lives a good life, Adnan was told. It threatens his wealth and the safety of his family.
As Uri spoke, Shay looked into Adnan’s eyes in supreme concentration. When Shai spoke, and especially when he mentioned the names of Hamas commanders and Islamic Jihad who received money through the bank, Uri flipped through his folders as if flipping through confidential files. Adnan sweated. When the sweat stained his shirt, Shai asked the waitress to bring a jar of lemonade with mint leaves. “Our friend is hot,” Uri told the young woman. “Bring a particularly cold lemonade.” The Israelis drank coffee slowly.
Uri and Shai played the good cop and the good cop. They told Adnan how much they wanted to help him, make sure his business was clean and not involved in terrorism. Adnan asked if he could go to the bathroom; The lemonade acted quickly. The Israelis did not let him go until his bladder almost exploded.
The banker returned from the toilets completely pale. His hands trembled. It stuttered like a scratched record. He was so tense that he took a kiwi from a bowl of fruit on the table and began to eat it like an apple, with the peel. In the worst case, Hamas will kill him. The Israelis may dismantle the estate he established in gold and dollars. The man realized that he had no choice but to work with the Israelis. Uri and Shai received the information they wanted.
The most problematic bank in the war on terror
The information provided by the banker about the terrorists’ accounts in his bank was very helpful to the Harpoon unit. But larger Palestinian banks operated in the West Bank and Gaza Strip, and local Islamic banks also served the community; And banks throughout the Arab world had very active branches in the West Bank and Gaza Strip. Of all the banks, the Arab bank headquartered in Amman was the largest, and when it came to Israel’s war on terror, it was also the most problematic.
The Arab Bank was established in Jerusalem in 1930, during the British Mandate, and was the first bank in the Arab world to turn to the private sector. The bank was founded by ‘Abd al-Hamid Shuman’, who was born in 1890 in Beit Hanina, a village located between Jerusalem and Ramallah. Schumann immigrated to the United States in 1911 and earned his fortune in the textile business in New York. He became an avid Arab nationalist and returned to the Middle East. He opened his bank for 15,000 pounds from Eretz Israel.
The Bank ceased operations in Jerusalem, Haifa and Jaffa in 1948, following Israel’s victory in the War of Independence. Schumann compensated the account holders who saved in those branches, thereby buying the affection of the Palestinians and many others in the Arab world. Even in times of political violence and revolutions, the financial institution boasted that it never missed a single payment to its customers. With the establishment of the state, the Arab Bank moved its headquarters to the Jordanian capital, where it flourished. As oil prospered in the region, the bank expanded its markets and yields increased. The bank oversaw huge-scale construction plans, and the funding it offered allowed many projects to materialize. From the Persian Gulf to the sands of North Africa, the blueprints were slowly becoming gleaming skyscrapers, thanks to the steadily flowing oil profits.
Schumann was a religious man and instilled Islam in a large part of his business. The World Center of the Arab Bank, located on Prince Shaker Street at the corner of Queen Nur Street, was designed to look like the Kaaba in Mecca with a black glass cube based on a desert-colored stone. Schumann continued to work at the bank until his death in 1974. He was brought for burial at the Al-Aqsa Mosque in Jerusalem.
The day-to-day management of the bank remains in the hands of his eldest son, ‘Abd al-Majid Shouman’. Abd al-Majid was born in 1911, met his father at the age of 14 in New York and joined the bank in 1936. Like his father, he was also a Palestinian nationalist, and he also later managed the Palestinian National Fund. ‘Abd al-Majid took advantage of the Oslo Accords to strengthen his bank business in the West Bank and Gaza Strip. He was Arafat’s private banker and managed all the investments and holdings of the Palestinian Authority chairman. Arafat rewarded him by allowing his bank to operate without restriction in the West Bank and Gaza Strip.
The Arab Bank has opened 22 branches in 15 Palestinian cities. Abd al-Majid was eager to take part in the expected prosperity with the arrival of peace, and to become the largest financial institution in the Palestinian Authority. But the economic prosperity that the peace process promised never came; On the contrary, the bank lent Arafat money so that it could pay the PA’s salaries. The loans, the size of which is unknown, were a small part of the Arab Empire’s global empire. The bank, established in the 1930s for Palestinian Arabs and their national welfare, eventually opened 278 branches in 27 countries around the world, and its assets are estimated at more than $ 35 billion.
Schumann was careful to visit Palestinians injured in the intifada and transferred to hospitals in Amman. He also imposed a tax on the salaries of Arab Bank employees called “Support for the Al-Aqsa Intifada.” The tax was five percent of the salary, and was transferred to the Palestinian Authority, or Hamas, and also to the intifada support funds. The sums were large. But the largest amount the bank handled for the intifada came from external sources.
The Arab Bank was the favorite bank of many of Israel’s enemies, especially of governments that wanted to fund the intifada. The Saudi Committee for Supporting the Al-Quds Intifada used the bank’s accounts to channel large sums of money. It did so through charitable foundations and recognized terrorists in the West Bank and Gaza Strip who were linked to Hamas, Islamic Jihad and other groups responsible for the violence. Since December 2000, and during years of violence, some 200,000 transfers, totaling more than $ 90 million, have been made to many accounts at the Arab Bank. The bank claimed the funds were intended for the unemployed and the sick; The donations were supposed to help Palestinians who were harmed by the IDF.
But in fact, the money flowed into allowances, insurance payments and support for the families of suicide bombers, activists killed in clashes with the IDF, and Palestinians detained in Israeli prisons. Dean al-Masri, the suicide bomber who destroyed the Sbarro pizzeria in Jerusalem, received payments through Arab Bank accounts.
“Everything focuses on tracking money”
Both the Shin Beit and the IDF Intelligence Division have developed a unique skill in deciphering the human composition of terrorist organizations, from senior political leaders to the cell commanders and thugs they employed. Arabic-speaking analysts followed flow charts linking men to other men, who were linked to behind-the-scenes planners. They examined family ties, cell phone records and even connections between schools and mosques. Dagan attended meetings of Harpoon alongside representatives from the Shin Beit, the IDF and even the Prison Service, and ordered analyzes to be conducted and detailed charts drawn up that would link the commanders of the terrorist organizations and their sources of income.
Dagan wanted to try new ideas, including fighting extortion and corruption, as the U.S. Department of Justice fought organized crime and profits from illegal businesses. During his tenure as chief of staff for the fight against terrorism, Dagan visited the FBI offices and other federal authorities that believe in law enforcement and enjoyed hearing how organized crime and other dubious businesses were eliminated due to financial irregularities. “Everything focused on tracking the money,” Uri recalled. “In the war on terror, the Arab bank was like the solar system – every solar system we discovered led to new stars, new planets and new universes. Money was the basis of everything.”
Investigative analysts and accountants, along with some of the best investigators in the Israeli intelligence service, have created a chart of the most dangerous people in Hamas, the funds that have come to them, and the terrorist attacks that these funds have funded. It turned out that the Arab Bank is the common denominator. Until the fall of 2002, investigators linked accounts at the bank’s branches to dozens of suicide bombings and other attacks, including the attacks on the Dolphinarium, Sabaru restaurant and the Park Hotel in Netanya.
The attack that convinced Dagan to act
One of the accounts belonged to Ibrahim Hamed. Hamed, born in 1965, was a relative of both Hamas leader Khaled Mashaal and Hamas commander Ramallah. He has been on Israel’s most wanted list since 1998. The arrogant and condescending Hamed refused to be photographed and was responsible for planning many suicide bombings during the intifada, including the attack on Cafe Moment in Jerusalem and the suicide bombing at the Snooker Club in Rishon Lezion, in which 15 people were killed. Hamed planned to ignite the fuel reservoir at the ‘mouth of Glilot’ site, close to Tel Aviv. Such an attempted extermination, so close to a densely populated city, would have resulted in the deaths of hundreds of people, and perhaps more.
In the summer of 2002, a proposal was made in one of Hamed’s terrorist cells – a gang of thieves from Silwan in East Jerusalem known as the “Death Gang” – to blow up the Hebrew University. Sometime earlier, Hamed’s cell had received a gift from the Palestinian Authority – the arbitrary release of Abdullah Barghouti, Hamas’ major bomb maker. The Palestinian Authority arrested Barghouti at the request of the United States and Israel for his part in the Sabaru attack. But Arafat was angry with the Israelis, and decided to release Barghouti, the explosives expert. Hamed’s cell received the bomb prepared by Barghouti and withdrew money from his account at the Arab Bank to carry out an attack on the Hebrew University of Jerusalem.
On July 31, 2002, shortly after one o’clock in the afternoon, a violent explosion terrified the crowded student buffet in the Frank Sinatra building at the Hebrew University of Jerusalem. The bomb, which consisted of homemade explosives, nails and screwdrivers, was hidden in a bag placed on a table, and was activated by remote control. Most of the students who came for lunch were foreign students who signed up for Hebrew classes before the beginning of the semester, and were unfamiliar with the advertising campaign that the Israel Police had circulated for years on television, radio, on bulletin boards and buses:
The explosion turned the sideboard upside down, and after the fiery thump and scattering of the sharp shards rose black smoke, suffocating and stinging. “At the force of the explosion, windows and glass doors were shattered and panels were torn from the ceiling. A strong smell of smoke and charred flesh hovered in the air,” one witness recalled.
Nine people were killed and 100 were injured in the attack. Five American citizens were among the dead: Marla Bennett of San Diego, a 24-year-old enthusiastic young woman who fell in love with the State of Israel; Benjamin Bluestein, a 25-year-old hip-hop DJ who studied teaching; And David Gritz, a 25-year-old philosophy student. Two Hebrew University workers were also killed: 36-year-old Janice Coulter of Massachusetts and 38-year-old Dina Carter of North Carolina. Carter’s father was forced to identify his daughter by her fingerprints. 85 people were injured in the blast.
The attack, which was added to a growing list of bloody attacks against Israeli citizens, convinced Meir Dagan of the need for determined action against the Arab bank.
“Go to hell”
Meir Dagan always hoped to treat the Schumann family with gentle “silk gloves” and not with an iron fist, even before he was appointed head of the Mossad. The Schumann family’s bank was a pillar of the Jordanian economy, and Jordan was in many ways a strategic and regional ally of Israel. On a daily basis, Israel was required to do everything in its power to stop the attacks, but it also had long-term interests with Jordan, and they were more important than the day-to-day reality. Sometimes the Harpoon unit had difficulty finding a balance between the various interests.
The direct diplomatic connection between Harpoon and the Arab Bank began with simple one-on-one meetings in 2003 and 2004. Uri and Shai were sent to meet with Arab Bank executives at West Bank and Gaza Strip branches, just as they were sent to meet Adnan the banker. The meetings were cordial, but serious. They were conducted in Arabic. The Israelis explained to the people they met that the situation was unbearable, and that a bank that does business with the Palestinian Authority and Israeli banks in all kinds of routine and innocent transactions, could not continue to do business with terrorists responsible for bloodshed.
Some of the branch managers showed sympathy, but explained that they could not do anything; After all, management dictates bank policy. Other managers did not sympathize with the Israelis’ coercive attempts. The response received by the ring’s emissaries from the bank’s senior executives could be summed up in the words, “Go to hell.”
A similar response was received from Salam Fayyad, the Palestinian Authority’s finance minister. Fayyad, who studied at the American University in Beirut and earned a doctorate in economics from the University of Texas at Austin, previously worked as the regional director of the Arab Bank in the West Bank and Gaza Strip. Fayyad knew very well what Arafat’s financial situation was; He was also well acquainted with the Hamas accounts held at his bank.
“Show me the money”
In many ways, the attack on the Hebrew University was a turning point in Harpoon unit’s campaign against the Arab Bank. US President George W. Bush condemned the attack in a rage and declared: “Obviously there are murderers who hate the idea of peace, so they are willing to spread their hatred in all sorts of places.” But most importantly, the massacre that also affected Americans, allowed a new tactic in the war on terrorist funds: a fight to finance terrorism through the American legal system.
The Sept. 11 attacks led to the creation of new legal measures to combat terrorism, including the 2001 Patriot Act, which expanded the federal government’s ability to monitor the financial activities of criminals under the 1978 Foreign Intelligence Collection Act. The new legislation is intended to prevent banks from serving as a channel for money laundering and their distribution to well-known terrorist entities. Terrorists are prohibited from opening accounts with or within the United States.
The operation, dubbed “Show Me the Money,” focused on gathering information on bank accounts and transferring funds from Lebanon, Syria and Iran to the West Bank and Gaza Strip. Experts analyzed the information collected, and connected the dots. They found that the money had been transferred to the Arab Bank of the Islamic Republic of Iran. The Arab Bank was an accomplice to the crime. He assisted in the murder of Americans and Israelis.
Notwithstanding this, he violated American laws when he managed the accounts of 11 well-known terrorists and terrorist organizations around the world, including Hamas founder Sheikh Ahmad Yassin, Hamas spokesman Osama Hamdan, the Holy Land Foundation, the Al-Aqsa Foundation in Germany, the Al-Salah Islamic Association and Interpal in the UK.
Of all the seniors, Uri was the one who accumulated the most flight hours. Initially when the unit operated under the auspices of the Counter-Terrorism Headquarters, and later under the auspices of the National Security Council, Uri was chosen to make contacts with the Americans. He was often sent to Washington to meet with senior government officials and turn off the tap, meaning to prevent the flow of hundreds of thousands of dollars a month from the Holy Land Fund in Texas to the West Bank and Gaza Strip, funds intended for Hamas military operations. The number of transatlantic flights has increased after the Anti-Terrorism Act was enacted. The presidential decree greatly expanded the ability of the U.S. Treasury Department to pursue terrorist funds, and it froze the U.S. financial assets of known terrorists and banned transactions with organizations, individuals, corporations, nonprofits, and banks that were in contact with terrorist organizations.
Shortly after the order was issued, the Deputy Minister of Finance for Terrorism and Economic Intelligence, Jimmy Guroliy, began blocking suspected money in connection with terrorism. But in the reciprocal meetings, the talks on the Arab bank were the top priority.
Dagan thought of two goals when he raised the Arab bank’s target. First, he hoped to persuade bank executives and his board of directors not to allow world-renowned terrorist organizations to hold bank accounts.
The second goal was to increase the cost of money transfers. If transfers through the bank – in fact access to the bank – are blocked to terrorist organizations, the money will inevitably flow through other channels – smuggling, money laundering and crime. These methods of transferring large sums of money from point A to point B were effective, but very expensive; The exchangers, of course, would require a larger surcharge to transfer a million dollars, if they knew the customer had no other options.
Dagan knew that risk would cost the whole thing. Also, the transfer of funds by these means alone has not always been successful. Corrupt border guards in Jordan and Egypt confiscated funds; Some of the boycotts were the responsibility of the Arab intelligence services that received information about it from Israel. Egyptian border guards noticed increased smuggling attempts along the border with Gaza in 2002, after Israel closed the accounts of some Hamas commanders.
IDF soldiers sometimes confiscated large packages of cash coming from the other side of the border. It was dangerous to cross the border with such sums. Dagan wanted the million dollars that a wealthy Saudi sheikh donated to Hamas, intended for terrorists, to be lost when they crossed borders and battle zones. Less violence.
Harpoon’s failure to prevent the Arab Bank’s implicit support for Hamas and other Palestinian terrorist organizations forced Dagan to think of other options. When discussing these possibilities he used to quote the well-known proverb: “If the mountain does not come to Muhammad, Muhammad will come to the mountain.”
Chapter from the book “Harpon” published by Yedioth Books.
By Nitzana Darshan-Leitner (Hebrew), December 12, 2020, published on Ynet