Prime Minister Olmert convened an emergency meeting for his security cabinet shortly after the war’s eruption. Unlike many of the other prime ministers before him, Olmert knew little about war; he worked as a military journalist during his mandatory IDF service. Olmert was a professional politician. His platform was status quo, possibly peace, and not a new war in Lebanon. Olmert’s defense minister, Amir Peretz, had reached the rank of captain in the military, but he was a labor organizer and union chief. In an infamous photograph, widely circulated during his tenure, Peretz was snapped looking out across a battlefield with the protective caps still on the field glasses. Olmert and Peretz, as the pair at the helm of Israel’s war machine, did little to instill confidence in the nation. Moreover, IDF Chief of Staff Lieutenant General Dan Halutz had come from the air force and had very little ground combat experience. The IDF had spent the last six years fighting suicide bombers and was caught off guard by the audacity and ferocity of the Hezbollah attack.
Olmert’s security cabinet, the ministers and the generals wearing a rainbow of different berets tucked under their epaulettes who sat around the conference table, knew that dislodging Hezbollah from Lebanon’s south would be a difficult task—even for a military as mighty as the IDF. There were no lightning victories foreseen, no waving the Star of David atop a hill in southern Lebanon that would signal an end to hostilities. Hezbollah vowed to fight to the death, and the IDF would have to remove the Party of God fighters from their heavily fortified villages and caves; the Iranians wouldn’t stand for anything less.
There was no singular target, no head of the snake, that the might of the Israel Air Force could strike that would decisively render Hezbollah rudderless and ineffective. Local commanders were battle experienced and disciplined. Some had undergone advanced commander courses in Syria and Iran. The organization was rigidly constructed with a hierarchy of structure, with both military and political wings dedicated to power and might. Still, Sheikh Nasrallah conveniently went into hiding hours before the kidnapping operation, reportedly bivouacked in an underground bunker dug deep under a building in south Beirut that had been prepared for the eventuality.
There were no illusions—either in Israel or in the west—that the Hezbollah strike was anything but a war by proxy green-lit by the Islamic Republic of Iran. The kidnap operation was seen as an attempt by Tehran to deflect attention at the G-8 Summit away from talks about Iranian nuclear aspirations. Prime Minister Olmert knew that in eradicating Hezbollah from southern Lebanon, Israel wasn’t alone. Publicly, U.S. President George W. Bush supported the Israeli military response. “Israel has the right to defend herself,” the president stated as he prepared to fly from Germany to Russia for the G-8. “There are a group of terrorists who want to stop the advance of peace. The soldiers need to be returned.”8
All over Israel, men between the ages of twenty and early forties closed their businesses and grabbed worn-out olive uniforms from cellars and closets. They said tearful good-byes to their wives and children and headed toward assembly points throughout the country for transports heading north so that they could join their units. The IDF was a citizens’ army dependent on its reserve divisions. The conscripts were already fighting and dying in Lebanon. Israeli forces met stiff resistance inside Lebanon. Rockets, sometimes in barrages of hundreds at a time, continued to fall all over Israel’s north. As Israel contemplated a strategy and a response, tens of thousands of Israeli families headed to their bomb shelters where one night under fire would soon turn into a destructive and agonizing month under siege. Over the course of the next few days more than one million Israelis, one-seventh of the nation’s population, had to stay near or in bomb shelters or security rooms. Nearly a quarter of a million men, women, and children, had to be evacuated away from the northern population centers.9
Many of Hezbollah’s rockets, especially those that came in from Iran and as far afield as North Korea, were assembled in Syria, in a village called al-Hameh, located in a valley northwest of the capital of Damascus. Under the cover of darkness, the assembled Katyusha rockets were loaded onto trucks bearing no markings and nothing distinguishable from the ground or air. The trucks traveled only at night. The convoys moved slowly and cautiously, across the Beirut-Damascus Highway into Lebanon and then through the Beka’a Valley toward Hezbollah-controlled lines. Before dawn’s first light, Hezbollah operatives unloaded the trucks and stored the rockets in a network of residential buildings all across the Shiite towns and villages of the south.
The Bedouin village of Arab al-Aramsa was situated just inside the Israeli side of the northern border with Lebanon. Because of its close proximity to the Lebanese frontier, it was subjected to endless warning sirens during the summer war that had erupted between Hezbollah and Israel. Each time Hezbollah terrorists fired one of their rockets toward Israel the alarms would begin to blare, and everyone in the village would scramble. While most of the missiles flew far overhead, some impacted nearby. Not everybody ran to the shelters once the red alert sounded, however. Many could not believe that Hezbollah would deliberately aim their weapons against their Arab brothers and sisters. The Jumaa family was extra cautious. They had built a special security room in their house—as Israeli law now required in all new construction—to protect them from the fall of the missiles coming from the Hezbollah positions a mere mile or two away.
On the evening of August 5, 2006, the family ran to their security room when the alarm sounded. They crowded into the small reinforced bunker. Fadia, the sixty-year-old family matriarch, was at home with her two daughters: Sultana, thirty-one, and Samira, thirty-three. They waited the full ten minutes, as is required, until they felt the danger had passed and it was safe to emerge from the shelter. They were careful not to take any chances, especially when the family’s patriarch, Harush, was not home. It was a Saturday, a day off in Israel, so the three women stepped out to sit on their balcony to get some fresh air after the nerve-racking ordeal of squeezing together in that small, cramped room.
The moment the women sat down, however, another missile was fired from Lebanon. This time no alert was sounded. The rocket exploded right on the balcony of their modest home and killed the three of them on the spot.
Word spread quickly throughout the small village that the Jumaa family home had been hit by a Hezbollah missile. Harush, who was visiting a friend nearby, heard the rocket’s impact, as well, and rushed to his house fearful of what he would find. He frantically dug through the rubble for an hour that seemed endless, hysterically yelling the names of his wife and daughters. “Where are you, Samira? Where are you, Sultana?” Harush screamed, his voice caked with indescribable grief and horror.
Sultana’s fiancé, a neighbor, rushed over as well. When he saw the damage inflicted to the home, he was paralyzed by anguish. Tears rolled down his cheeks as his lips quivered in sorrow. “Sultana visited me just this morning and told me how much she loved you,” a neighbor told the young man. The words seemed to make everything even worse. The rocket from al-Hameh had destroyed a family’s world completely. Hezbollah’s war was far more than a conflict for the political pleasure of the Party of God’s patrons in Iran. Nasrallah’s campaign was an all-out total war, one specifically targeting civilians, and it was killing men, women, and children, of all faiths.
There was fierce debate inside Israel as to its endgame in Lebanon. Some politicians and generals feared that Nasrallah was laying a trap for Israel, hoping to lure the IDF into another bloody quagmire, and warned that the Israeli response should be tempered. Others viewed the Hezbollah provocation and an opportunity to once and for all eradicate the Party of God, or at least dismantle its military infrastructure for a generation. Israeli generals and politicians concurred on one thing: that Israel would have a limited time to carry out its mission before American political backing came to an end and international pressure, already demanding a cease-fire, obstructed their hand.
Of all the men who made the decision as to how Israel could
and would prosecute its war against Hezbollah, Meir Dagan was one man who understood just how dangerous and completely volatile the Lebanese battlefield was. Dagan knew the country as a military commander who led columns of tanks inside the country and as the man who ran agents inside Lebanon—both during his time as liaison commander during the 1990s and now as Mossad director. Dagan wanted to spearhead Israel’s response with Harpoon tactics in the conventional fight against the Shiite militants. During heated conversations—sometimes yelling matches—inside Olmert’s security cabinet, Dagan demanded that the IAF bomb Lebanon’s banks. Dagan called for the specific targeting of financial institutions that were used by Iran and Hezbollah.
Israel had never bombed an Arab bank from the air: not in the 1948 War of Independence, not in 1956, and not even in 1967 when Israel’s air force destroyed targets as far away as the Iraqi desert and the Egyptian Nile Delta. Even in the 1973 War, when Defense Minister Moshe Dayan—who, fearing that the unstoppable charge of Syrian tanks atop the Golan would lead to Israel’s destruction, suggested that Israel display its nuclear weapons potential10—didn’t target financial institutions in the Arab capitals. Israeli ground forces never targeted Arab banks with artillery barrages or tank fire.
The generals, including Chief of Staff Halutz, would have none of Dagan’s argument. The aircraft were needed for tactical targets in support of IDF ground operations and the effort to eradicate the Hezbollah missiles; hundreds of sorties were flown to destroy medium-range Fajr rocket launching sites throughout the south of the country, as well as long-range Zelzal-2 missiles that could hit Israel’s heavily populated areas in the central part of the country. Hitting the banks was considered superfluous, too wasteful. More than one hundred Hezbollah rockets hit Israel’s towns and cities every day.
Prime Minister Olmert had to personally approve any IAF sortie on a Lebanese bank. Olmert was reluctant to give Chief of Staff Halutz the green light to redirect the aircraft on nonessential strikes, especially since President Bush warned Israel not to focus on targets that could “weaken the government in Lebanon.”11
Dagan despised decisions with far-reaching national security implications based solely on political pandering. The argument was made that the American president was one of the last people who could or should lecture Israel on how it responded to a terrorist declaration of war. The American president, after all, wasn’t hunkered down inside a bomb shelter in the basement of a Haifa apartment building. Lebanese institutions that funded the Hezbollah war machine were legitimate military targets. But Dagan’s argument was precisely that in order to turn Hezbollah into a pariah that the Christians and Sunnis of Lebanon could rally against, as well as Shiites who did not want the Iranian brand of Shia Islam crammed down their throats, impacting the Lebanese economy was a strategic objective that the State of Israel had to achieve. “Targeting the money,” a Harpoon operative remembered Dagan arguing, “would cripple Hezbollah’s ability to wage war, and it would also send a message to the Lebanese that the fate of their economy depended on reining in the Party of God.”12
Dagan refused to take no for an answer. He was emboldened by the intelligence that the war was already pressing Hezbollah’s cash reserves; the fighting, and the destruction, had cost Nasrallah more than he originally calculated. “Hezbollah’s frontline soldiers had to be paid, and ADP didn’t have the contract with the Party of God,” a Harpoon operative said. “These men were paid in cash. The landlords whose buildings were hit by Israeli air raids and shelling had to be paid in cash. The families of the fallen needed cold, hard cash to pay for the funerals. Hezbollah was a pure cash and carry enterprise.”13
Dagan persisted vociferously, refusing to let up. He pressed the generals to support his line of thinking and lobbied the ones who disagreed. Ultimately, Dagan convinced everyone. As was often the case in matters of Israeli national security, Dagan managed to be incredibly persuasive.
On July 25, two weeks into the war, IAF fighter bombers from bases “somewhere” in central and northern Israel were prepped for sorties classified for missions of the highest national importance with 500-lb. and 1,000-lb. bombs. Harpoon, along with the various air force and squadron intelligence commands, identified the targets: a list of banks that financed Hezbollah’s war. The targets included a dozen offices of Beit al-Mal, Hezbollah’s unofficial treasury office; the offices, some occupying considerable real estate, were located in six cities including Beirut. The IAF also bombed branches of Al Baraka and Fransabank throughout Beirut and Lebanon’s largest cities, as well as the Middle East Africa Bank, a key conduit in Hezbollah’s pipeline of money.
Dagan was not satisfied with merely bombing the bank buildings and incinerating the money. He wanted to send a big message; he wanted to make it personal. At his insistence, the IAF also bombed the home of one of Lebanon’s most prominent banking families.14 The bank manager lived on the type of palatial compound one would expect for a man who handled hundreds of millions of dollars for Lebanon’s most heavily armed clients in the terror and narcotics trades. The residence, large enough to house an army, had servant quarters and a garage where a fleet of Mercedes-Benzes and Range Rovers were polished around the clock. Part of the intelligence that Harpoon gathered—and that was gathered for Harpoon—prior to the operation was to find a time of the day when the house would be empty. Dagan didn’t want the IAF to kill the banker—just to obliterate everything that was near and dear to him. The pilots were told to be precise and obliterate the house and property. Dagan was determined to send a message: Handle Hezbollah’s money and the IAF would handle you.
In some of the sorties mounted against the banks, IAF F-16 and F-15 pilots were ordered to damage, but not destroy, the banks. Sometimes a warning was given so that those inside would have time to clear out, in order to minimize Lebanese casualties. Dagan wanted to wreak havoc and destruction on the bundles of cash that fueled the war against Israel. The Lebanese took great stock in the security of their money inside the country’s banks. Men like Dagan knew that the Lebanese would be devastated to see their money obliterated in clouds of black smoke and fire. They knew that even Shiites who supported Hezbollah would demand an end to the fighting once they saw their financial institutions destroyed.
The IAF strikes were incredibly effective. Brand-new banks were rendered to smoldering heaps of rubble. Most important, close to $100 million in currency was incinerated in the Israeli raids; bank computing centers, as well as remote backup facilities and data centers, were also targeted.
The IDF went to great lengths to publicize its focus on the Lebanese—and Hezbollah—economies. “The message is for all the Lebanese banks,” Brigadier General Danny Arditi, the prime minister’s counterterrorism advisor, commented to NBC in an exclusive interview. “Assistance to Hezbollah is direct assistance to terrorist organizations. We know that they are looking for money. They are very desperate to have some cash and they don’t have it.”15
Israel’s counterattack, fought inside the villages-turned-into-fortresses by Hezbollah fighters and IEDs, progressed slowly. Territory that took hours to conquer in 1982 now took days and weeks. Some battles, like the 1st Golani Infantry Brigade’s 51st Battalion fight for the village of Bint Jbail, personified the courage and resolve of the Israeli soldier, but were costly in the number of dead and wounded. But for two weeks, the IAF continued its aerial offensive on Hezbollah missile batteries, fortifications, and financial institutions.
The banks that the IAF targeted all denied involvement in financing Hezbollah’s operations. A spokesman for Al Baraka said that “We have no relation to any organization like Hezbollah.” A spokesman for Fransabank said, “We have no relationship with Hezbollah or any other political party anywhere. We don’t have any relation and we refuse to have one.” The denials were cookie-cutter and untrue. Tellingly, Hezbollah’s own television station, al-Manar, aired a telethon for the terrorist group a week before the banks were bombed, urging people to donate for the war against Isra
el. Donors were prompted to call a Beirut number and to send funds into a Middle East Africa Bank account. An NBC News producer, posing as someone overseas who wanted to help the Party of God cause, phoned a Hezbollah operative, and they were told to wire funds into an account of the Banque Libano-Française; the caller was warned not to say that the funds were heading for the resistance because otherwise the transaction would be red-flagged.
What concerned Dagan and the Harpoon staff—as well as key directors of the U.S. Department of the Treasury’s counterterrorism division—were the relationships that the targeted Lebanese banks maintained with their corresponding banks in the United States. The Banque Libano-Française had a relationship with two prominent U.S. banks—Citibank and the Bank of New York; the Middle East Africa Bank had a relationship with Wachovia. Hezbollah has been designated by the U.S. government as a foreign terrorist organization since 1995. It was a charter member of the Treasury’s list. As such, it was illegal for U.S. businesses and financial institutions to do business with designated terrorist organizations; any payment going through such an entity toward Hezbollah would have been flagged, frozen, and reported to the Department of the Treasury. Matters were made more difficult for the transfer of terror funds following 9/11 and the establishment of the PATRIOT Act.
Two weeks after the IAF’s targeting of the banks, Hezbollah sued for a cease-fire. They had run out of cash.
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