One of the unforeseen ugly realities of Arafat’s cash grab following the Oslo Accords was that he would never have been able to accumulate his wealth and hide his criminal skim without the assistance of Israelis and Israeli banks. Arafat and his cronies required Israeli business partners who could establish legitimate venues by which goods and materials could reach Gaza and the West Bank. Those Israeli partners, because of their ability to work well inside Israel and inside the PA, had to be those who, in the past, were relatively high up in the security field.
One of the primary Israeli conduits for Arafat’s fortunes, Harpoon would learn, was Yossi Ginossar. Ginossar had spent a career in the service of the Shin Bet. Although he was born in Lithuania and arrived in Israel only at the age of eleven, Ginossar mastered a flawless Arabic and joined the ranks of the General Security Service in 1968, in the aftermath of the Six Day War. He quickly rose up the ranks; he served as an investigator in Gaza, and ran counterterrorism in southern Lebanon and security for Israeli installations in North America.14
Ginossar was forced to resign from the service in 1984, following an infamous incident where Shin Bet agents killed two Palestinian terrorists who were in custody following a bus hijacking. The Israelis were photographed leading the captured terrorists away, only to have them found dead shortly after. An ugly attempted cover-up resulting in a press scandal and criminal investigation erupted. Ginossar was in the middle of it.
Bespectacled, with a receding hairline and a middle-aged paunch, Ginossar was labeled by some as brilliant; others characterized him as explosively tempered, even unhinged. His gift was being able to develop a vast network of contacts regardless of an individual’s nationality or political persuasion. Ginossar went into private business after being forced out of the service. When the Oslo process commenced, Ginossar became a conduit to Arafat and his inner circle and a key player in multiple businesses and monopolies, ranging from imports to gas stations. When Prime Minister Rabin was assassinated, Ginossar helped to arrange Arafat’s condolence visit to Leah Rabin. The ex–Shin Bet officer was frequently used by Prime Minister Barak as a go-between with the Palestinian Authority.15 When Arafat needed someone to help manage his growing Swiss bank accounts—among the $1 to $3 billion in accounts dispersed throughout the world 16—he selected Ginossar and his business partner, Ozrad Lev, a former military intelligence officer. During the first year of the intifada, when Israelis were dying every day, approximately $300 million of money that should have been destined for the Palestinian people was transferred from a Swiss bank account belonging to Yasir Arafat and Mohammed Rashid, his trusted business partner and economic advisor. The money was held at Banque Lombard Odier, one of the oldest private banks in Geneva, Switzerland, and was administered by Ginossar and Lev.17 Lev later exposed Ginossar, revealing that the ex–Shin Bet agent had received a handsome cut from Arafat for fronting the account.
Dagan and the Harpoon roundtable were eager to go after Ginossar. He, a Harpoon member remembered, was viewed as a sinister character for his dealings with Arafat and the PA—dealings that made him incredibly wealthy. But targeting Ginossar was easier said than done. He was so entrenched in certain aspects of the peace process that it was virtually impossible to dislodge him from it. But Sharon had no use for Ginossar’s meddling, and the prime minister was certainly angered by the fact that Ginossar was making money while Israelis were being murdered by his business associates.
In the months to follow, an exposé in the Israeli daily Ma’ariv and a subsequent attorney general investigation of Ginossar failed to result in formal charges of impropriety being filed. He was a bereaved father—his son had been killed in a terrorist attack in the Gaza Strip in 1991—and that held great significance in Israel. Ginossar also knew everyone, on all sides of the political spectrum; he knew everyone’s secrets. Moreover, it was revealed that Ginossar was also terminally ill. “Because Yossi was very ill we decided, along with the police, not to investigate him any further,” Uri recalled.
Harpoon would have to find another way to get at his money.
There were hundreds of bank accounts that belonged to Arafat that the Israelis could not locate. One very tempting holding, however, was situated only a brisk walk from the Ministry of Defense in the heart of Tel Aviv. Yasir Arafat held a private bank account, number 80-219000 to be exact, in the Bank Leumi branch located on Ha’Hashmona’im Street; Arafat also maintained one of these private accounts in a Ramallah branch of the Jordanian-based Arab Bank.18 There were all sorts of codicils to the Oslo Accords concerning monies that had to be exchanged between the State of Israel and the PA and into which accounts they should go. Some of this money included tax refunds from the Israeli government to the Palestinian Authority for duties that were placed on imports destined for the PA; these imports had to enter and be processed through Israel’s three seaports and one major international airport.19 Arafat’s “economics advisor” Mohammed Rashid asked Israel to pay the Palestinian’s fuel taxes into the private Bank Leumi account that had been opened in 1994. Only Mr. Rashid and Arafat had signing authority on that one; Arafat used to identify himself at the bank with his Palestinian passport that was numbered “One.”
The Tel Aviv account should have been an easy target for the Harpoon task force. Politically, though, the private account was a trip wire. Arafat, in the spring of 2001, was still considered the sole option for a peace process between Israel and the Palestinian people—even as the fires of the intifada engulfed the horizon. The bank account handled money coming in from the European Union and the United States. If Harpoon were to seize the account, the outcry from Brussels and Washington would have been loud. The account was in an Israeli bank and, from the perspective of the Israeli legal system, completely legal. Bank Leumi was one of the oldest and most powerful financial institutions in Israel, with branches around Israel and throughout the world. They had powerful friends in government and did not want to see a client, even if it was Arafat, be forced by the political powers that still negotiated with the PA, to pull his hundreds of millions of dollars out of their ledgers.
Dagan and Uri realized that it would be difficult to dislodge Arafat’s account from its safe perch in Tel Aviv. They also realized that an overt Israeli effort to take away the Palestinian leader’s money could have harsh blowback on the front lines of the intifada, especially if Arafat could convey the message to his forces that the Israelis were responsible for them not being paid and for their families not being able to buy groceries. For the time being Arafat’s money was safe.
Dagan also began to pay close attention to something new that was taking place in the war on terror: lawsuits filed by private attorneys on behalf of terror victims and their families. This strategy had a two-fold benefit: on a political level, on a moral level, and on a public relations level, high-profile lawsuits could once again equate Arafat with the by-product of his work—suffering and death. For Harpoon’s mission specifically, making Arafat pay personally—in punitive damages and for the hiring of very expensive legal representation—would drain his account in Tel Aviv and his accounts around the world better than Dagan and his roundtable could ever hope to achieve. Perhaps if terror cost Arafat money, rather than earned it for him, the violence would diminish.
Uri discussed the dilemma of Arafat and his money with the Americans on many occasions, but as long as Arafat was considered vital he couldn’t be touched. One of the men responsible for combating terror finances in the United States with Uri was Juan Zarate. A former prosecutor in the Department of Justice’s Terrorism and Violent Crime Section, Zarate was appointed after 9/11 by President George W. Bush as assistant secretary of the Treasury for Terrorist Financing and Financial Crimes.20
Dagan and Uri thought of what could be done to expedite the campaign against Arafat. Harpoon was a creature that existed in name only. Harpoon didn’t have a physical headquarters; the creation of the task force didn’t require that the Israeli intelligence and military commands dedicate
even one penny to the acquisition of a plot of land or the construction of a building. There were no recruitment flyers printed seeking young and talented trigger fingers to join this new and mysterious force. No weapons were acquired, no new infrastructure put in place. Harpoon, from a structural level, consisted of Dagan and Uri and one or two clerical workers in the National Security Council.
From an operational level, though, Harpoon encompassed every agency, service, authority, and command of the Israeli government. Each of the agencies represented in Harpoon were ordered to be on the lookout for any blip on their radar that had something to do with terrorist money. Dagan wanted to know anything and everything involving the finances of the terrorists Israel was battling. He wanted the representatives of the agencies assigned to the task force to report when they met and he wanted operations designed around what was happening in the field.
The Harpoon representatives sat down together inside a secure conference room of the NSC. The roundtable resembled a sales meeting inside a corporate boardroom. The representatives, some in uniform, others who had spent a life in civil service and who had never dreamed that they would be participating in an action vital to their nation’s defense, sat around a large wooden conference table; cookies and fruit were strategically positioned near the chairs and the coffee flowed freely. The names of the attendees were written on six-inch-wide cardboard placards. Dagan spoke in the low-key cadence that was common for many military men. He smoked a pipe during the meeting. The perfumed plume of his tobacco filled the closed-door session.
Dagan had the authority to, should he see fit, empower the Mossad, the Shin Bet, and the tax office to work together. Dagan could draft and activate civilians, such as attorneys, travel agents, businessmen, and subject matter experts. In many ways—and with Prime Minister Sharon in his corner—Dagan could initiate multiagency operations both in Israel and anywhere else in the world. Representatives from the Tax Authority and the Attorney General’s Office loved the skullduggery and secrecy of the roundtable. It was so much more exciting than their usual mundane assignments. Dagan treated each one of these men and women as if they were warriors in a special operations commando unit. Some of the best ideas for what Harpoon could and should do came from people with no espionage experience at all.
Some in the Harpoon roundtable wanted to hit Arafat with a truly outside-the-box operation, one involving a way to defraud him of millions. Others thought of trying to seize the money that came through Israel from around the world that was destined for the PA president. The approach that Dagan settled on was to assemble intelligence and prepare a case, as if going to trial, that the Israeli prime minister could use in discussions with President Bush or when giving a speech at the United Nations. Arafat’s corruption had to be documented thoroughly, Dagan realized. Exposing the theft of international good will toward the Palestinian people, good will that ended up in private bank accounts around the world, was a potent tool in Israel’s propaganda campaign. Exposing Arafat to be a false prophet, one who embezzled the well-being of his people, was a weapon in Israel’s counterterrorism arsenal.
Perhaps the task force’s initial operations lacked the explosive, James Bond–ish flair that Dagan was famous for, but Harpoon was slowly but surely taking shape and redefining the way the security services operated. Dagan was able to steer the Shin Bet and the army to focus on the money and to view financial intelligence with the same imperative as the spies, and the soldiers looked at names, addresses, and phone numbers. If a safe house was raided by Israeli special operations units, Dagan wanted the intelligence officers to treat any item connected with money with the same imperative that they would when reviewing information pertaining to weapons or explosives. A terror suspect’s bank account was just as important a thread to the fibers of how a specific cell and network operated as were text messages and notes scribbled in code. Dagan was determined to change the paradigm as to how Israel’s frontline troops, and especially the intelligence officers and analysts who selected their targets and then reviewed the outcome of those missions, looked at the battlefield.
On an early, rainy morning, at a meeting of Harpoon in an NSC conference room, the representatives removed their jackets and hurried to take their seats around the table, getting ready for the day’s briefings and discussions. They knew something big was on the agenda from the excited body language of the NSC director. Dagan started with the biblical phrase “that one who steals from a thief is exempt from punishment.” As the plot was explained to them and incorporated into the concept, the assembled group sat riveted. The plot required highly intricate planning and preparation.
The scheme was risky. But all schemes were. This one, though, had two possibilities of reaping enormous dividends. As such, the enticing opportunity was brought to Arafat’s personal financier, Mohammed Rashid, by a Palestinian businessman who lived in Latin America. Rashid, with the businessman as a partner, traveled to “the” country in Latin America where he was taken to the plush downtown offices of the investment company. The office was crowded with young and beautiful secretaries, which made concentrating on the matters at hand most difficult. The conference room was ornate and lavish. The managers of the firm were eager to display their profits to the eager investor. Rashid was convinced that the revenues of any investment would be enormous. And of course, he himself was promised a hefty finder’s fee for assisting in the project.
After three days of Latin American hospitality, Rashid bid his hosts farewell. He boarded a flight back to Jordan, and he then traveled on to Ramallah by town car. He enthusiastically convinced Arafat to invest in the project. Initially, of course, the investment yielded impressive returns, even more than was promised. Rashid and Arafat’s confidence in their new partners as well as their appetites began to grow. Arafat green-lit larger amounts of money to be invested with the company. Soon the Palestinian leader’s stake in the venture had hazardously ballooned.
One day, though, the investments suddenly crashed. All the accumulated profit, as well as the principal, was instantly wiped out. The company’s plush offices were quickly shuttered and left without a trace. The exact amount of the take is classified. It is believed, however, that Arafat lost more than $100 million in the scheme.
It was a prolific start for Harpoon, but the terror continued.
There was a period in the spring of 2001 when it seemed as if there was some sort of terror attack every day. There were drive-by shootings and there were stabbing attacks; on May 9, 2001, two Israeli teenagers were bludgeoned to death in a cave. Bombs were set off by remote control, and a suicide bomber blew himself up inside a crowded mall in the city of Netanya. There were endless funerals and grieving. Every time Israelis heard an ambulance, they stood motionless, paralyzed by fear, wondering what had happened now. There was a sense of national foreboding the likes of which had never been felt before in Israel. The intifada was in its eighth month and the intelligence services, the army, and the police were overwhelmed and exhausted. Meir Dagan realized that even Israel had a breaking point. It was time to stop strategizing and start making a difference. He pledged to turn the unit operational and ramp up its efforts, throwing everything at his disposal into the mix.
Dagan headed home from his office on the morning of June 1, 2001, looking forward to a peaceful weekend at home with his wife and family. He was tired and frustrated. The Palestinians were waging a total war against Israel’s civilian population, and the effort to stem the violence was moving too slowly; the terrorists were well entrenched, heavily armed, and flush with money. The enemy was highly secretive, and the notion of following the money was more complex and moved slower than Dagan wanted. As he left his office, he wished his secretary Shabbat Shalom, a peaceful Sabbath. It is what all Israelis say and pray for.
Friday nights in Tel Aviv, the secular capital of Israel, were for partying. The night of June 1, 2001, was no different. The restaurants and the pubs were full of people of all ages enjoying a late meal and a pint
of the local lager. Young couples strolled hand in hand into the warm, humid night; older couples, some walking their dogs, walked up and down the seaside promenade listening to the soothing sounds of the Mediterranean surf. And then the first radio calls came in on the police and emergency medical service frequencies. It was 11:27 PM.
One hot spot was the Dolphinarium Discothèque, located along the coastal road in south Tel Aviv overlooking the Mediterranean Sea. The disco had become a favorite hangout for teenagers who had recently arrived from the former Soviet Union; the club, specializing in Russian as well as techno music, offered free admission to girls until midnight.21 Just before 11:30 PM, a sixteen-year-old suicide bomber had walked into a crowd of teenagers outside the disco entrance before detonating the payload of explosives and shrapnel he carried on him. The blast chewed through the crowd, hurling body parts into the night. The cries of the wounded and maimed, many screaming in Russian, were haunting. First responders, even veterans of previous attacks, were shocked by the devastation. The death toll was horrific. Twenty-one were killed and sixty-eight were critically wounded; nearly all the victims were teenagers.
The bombing was the first catastrophic attack of the intifada. The second catastrophic attack came two months later.
It was hot in Jerusalem on the afternoon of August 9, 2001. The streets of the Israeli capital were crowded; traffic was snarled. Unbeknownst to the throngs of shoppers and tourists seeking shade from the harsh summer sun was the fact that Jerusalem was on the highest state of alert that afternoon. The Shin Bet had learned of a Hamas plot to send a suicide bomber into the city that day, and police units scoured the area for anything and anyone that looked suspicious. Izzedine al-Masri, the twenty-two-year-old son of a well-to-do restaurateur and Ahlam Tamimi, a twenty-year-old university student, passed through at a checkpoint separating the eastern and western halves of the city. Tamimi wore revealing western-style clothes, disguised to look like a young Israeli woman. Al-Masri was dressed like a hippie, one of the many college-aged visitors who flocked to Jerusalem in the summer months. He carried a guitar case slung over his shoulder. The two spoke English to one another and tried to blend into the frenetic, bustling city landscape as they walked toward the center of the downtown area and the Sbarro Pizza restaurant located at the very heart of Jerusalem on the corner of King George Street and the Jaffa Road.
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