Dubai was by far the most bedazzling of the cities. The city, the emirate, was built on a geyser of financial wheeling and dealing. Billion-dollar real estate deals were consummated with a handshake and a glass full of sweet mint tea. Other deals were concluded over filet mignon at one of the many Michelin-rated restaurants in the city; some negotiations and celebrations were conducted at the clubs where Russian women entertained the locals with their generous charms.
Dubai had replaced Beirut in its glory days as the Middle East’s ground zero for bankers, investors, scammers, and spies. Everyone was eager but wary once they landed at DXB, the three-letter airport code for Dubai. The contacts that Ezzedine met with, promising a portfolio of opportunities, were all referred to by friends of a friend. Some introductions were made by SMS. Text messages were king, and any millionaire worth his dinars carried several cellular phones—one in the blazer pocket, one in the trouser pocket, and one, the newest, always held in hand. Nokia was the brand of choice.
Dubai was a city of spies, riches, and despicable souls—intelligence professionals, heiresses, and shady arms merchants were everywhere in search of a deal. DXB was accessible from anywhere and everywhere. The men from Langley, Virginia, could fly to Dubai in business-class comfort on direct flights from Dulles International Airport. It took six hours and fifty minutes to fly from London to Dubai; it was only five hours from Moscow’s Domodedovo International Airport; and it was a mere two hours and ten minutes from IKA, Imam Khomeini International Airport in Tehran, to the emirate city. Flying via Amman or Istanbul, it took half a day to get to Dubai from Israel’s Ben-Gurion International Airport. The travel time was much shorter on one of the many private jets that could be chartered between the two countries.
Israel and the United Arab Emirates did not maintain formal diplomatic relations. Israeli nationals were not permitted in Dubai; Israeli newlyweds did not honeymoon in one of the suites of the Burj Al Arab Jumeirah, the most luxurious hotel in the world. But Israeli military officers, security specialists, and intelligence agents were common visitors to the lavish city.12 Safeguarding the various emirates was big business, and Israelis with military-laced CVs were found anywhere in the world—even the Arab world—where there was money to be made. The Swiss-owned Asia Global Technologies, a company run by Israeli Mati Kochavi, was reported to have had extensive security contracts in the Persian Gulf emirates, including the safeguarding of key oil and other infrastructure locations. Kochavi ran another company called Logic, headquartered north of Tel Aviv near the Mediterranean coast. According to reports Logic hired Boeing 737s, painted all white, and flew engineers and technicians, many from Israel’s intelligence services, from Ben-Gurion International Airport, via Cyprus or Jordan, ultimately ending up in Abu Dhabi. The men were sequestered. They ate and slept together inside fortified compounds, doing everything in their power to conceal their Israeli identities.13 Other Israeli companies trained the local governments in counterterrorism and hostage rescue; some provided advanced security technology to the local intelligence services.14
It’s been reported that some Israeli companies, staffed by former high-ranking military and security service officers, pitched their special field and technological talents to the Kingdom of Saudi Arabia to manage overcrowding in Mecca. Some of the Israeli companies work on force protection, safeguarding infrastructure.15 Shmuel Bar, a former Israeli intelligence officer, was approached by Saudi officials because he developed a program that finds terrorist threats on social media.16
Former generals and spymasters were encouraged by the State of Israel—primarily by the Ministry of Defense—to do business in the Arab world. They were just reminded how unsafe it was.
But still Israelis, according to one American defense executive who travels to the Gulf regularly, were everywhere. Even former Mossad director Shabtai Shavit worked the area, though he and his firm did not disclose any details.17 Dubai was a city where, given the right documents and connections, it was easy to hide one’s nationality or true ambition.
It is not known exactly who Ezzedine met in Dubai and in his other sojourns to the Gulf,18 but he trusted the men whom he met. Greed had a funny way of making someone with cash grow accepting of strangers with wads of cash and generous tastes in the city’s finest eateries. These men from the Gulf had offices in high-rise buildings, complete with pretty secretaries. They drove cars that were expensive, but not too expensive. They were young and energetic, but respectful and religious. In Dubai there was no animosity between Sunni and Shiite Muslims—only a shared interest in profitable coexistence. Ezzedine was impressed with some of the men he met during the trip. Moreover, he liked the idea and the opportunity of branching out east. He trusted them enough to invest millions of dollars in a proposed fund that they had launched. The men who managed the fund convinced Ezzedine that it was a sure thing, and they promised hefty and immediate dividends—the earnings, they suggested, could be as high as 40 or 50 percent.
Ezzedine never bothered to launch a thorough investigation into the men he met in Dubai before doing business with them. Suspicion was a Lebanese trait, but the promise of money and the subsequent wire transfers from the Gulf overrode any worry. He never wondered if the men he had met were from Doha or from Tel Aviv. Ezzedine simply couldn’t believe his eyes when the returns on his investment came in. The quick turnaround on his capital investment was above and beyond what was promised—a universe beyond what he could have ever expected. His partners in the Gulf vowed bigger and better things to come. More investments from the Lebanese businessman soon followed. The money swiftly flowed back in and then some. Millions of dollars were flowing in and the money showed no sign of drying up.
Salah Haj Ezzedine, the good Shiite Muslim and the good friend of Hezbollah, wanted to share this new investment fund with his friends inside the organization. In early 2007 he founded al-Mustathmir, described as a financial institution that focused on money management.19 At first, Ezzedine offered senior commanders access to al-Mustathmir. He promised returns, both short-and long-term, ranging from 40 to 50 percent. The lines of men eager to invest in his funds stretched outside his office in the south Beirut suburb of Dahieh. It is believed that Sheikh Hassan Nasrallah invested hundreds of millions of dollars of his own wealth with Ezzedine, most of it funds coming straight from Hezbollah’s coffers.
Few ever bothered to ask Ezzedine where he invested the money. Those who did heard explanations that were as varied as they were suspect: steel, diamonds, titanium, zirconium, gold mines in Iran, oil in Eastern Europe, oil in Africa, iron in the Gambia, shoes and leather in China, used clothing for the Third World, scrap metal, construction projects in the Gulf, and even beef and poultry in Brazil.20 Thoughtfully for the Hezbollah investors, there was very little paperwork involved with al-Mustathmir. There were no contracts, no monthly statements, no minimum balances; there was none of the bureaucracy that coincided with investing in the stock market or in a retirement account.21 All that Ezzedine provided was a check for the amount of the initial investment. The check, drawn on Ezzedine’s al-Mustathmir corporation, could be cashed at any time if someone wanted to withdraw from the fund. Few did. The dividends were sometimes as high as 60 percent of the initial investment. Those who joined the fund included many of the top clerics in Hezbollah, who were pleased that all of Ezzedine’s investments were halal, acceptable according to strict Islamic law; money in Islam is viewed purely as a medium of exchange.
The profits flowed in through Ezzedine’s al-Mustathmir holding company. Hezbollah was grateful, even giddy. Salah Ezzedine suddenly found himself the guest of honor at many Hezbollah functions, seated on the dais next to the organization’s top leadership.22 As news of his financial prowess and fame spread, Ezzedine was also asked to handle investments for members of the Iranian Islamic Revolutionary Guard Corps, and clients in the Kingdom of Saudi Arabia, Kuwait, Qatar, and the United Arab Emirates. According to some reports, Ezzedine also handled money from some less-than-stell
ar individuals from the former Soviet Union.23
Many people thought that Ezzedine was Hezbollah’s official financier, an investor said,24 and they wanted in. The businessman did little to dissuade that impression. Shiites throughout the country—primarily in the south—borrowed, begged, and stole to invest their money in al-Mustathmir. Ezzedine was considered to be as close to a sure thing as anyone.
Many southerners viewed Ezzedine’s interest in their welfare as an investment in a part of Lebanon that had traditionally been neglected, forgotten, and used as a battlefield. But there was newfound wealth coming into the south. Many Shiite residents traveled overseas to seek their fortunes, forsaking the slums of Beirut as the next best thing and venturing to South America, the United States and Canada, and even West Africa in search of a better life. These young men sent money home, sometimes a lot of it. Families suddenly had some cash to play around with. Peasants bought homes, and those teetering on middle class bought luxury cars. Restaurants and cafés began to open throughout southern Lebanon. The cash that Hezbollah doled out following the 2006 War also became a source of wealth. Businesses rose out of the destruction—architects, contractors, stone cutters, landscapers, electricians, and plumbers suddenly had more work than they knew what to do with. Much of that money went to Ezzedine and al-Mustathmir. The greed was infectious.
Mohammed Shour was one such investor. Shour, a young man with four children and a widowed mother, invested his family’s entire life savings, roughly $45,000, with Ezzedine. Ezzedine promised the Shour family, who ran a small supermarket in southern Lebanon, a return of 25 percent on their money. Mohammed wanted to use the proceeds to purchase an orchard. “Everyone was investing,” Mohammed Shour told al-Jazeera. “The man was supposed to be religious. Walk up and down this village and you’ll see that everyone invested money with him. Some people mortgaged their homes to invest with him.”25 The investors thought that their money was safe. After all, investing in Ezzedine was almost the same as investing in Hezbollah. Hezbollah, these people believed, would secure their life savings.26
For generations the Shiites of south Beirut and southern Lebanon had lived liked poor outcasts, the lowest class in a country where they constituted the largest of the many ethnic groups. They were traditionally discarded and minimized—a schism in Islam that dated back to the founding of the religion, when Mohammed’s followers split into two competing factions. Mohammed had never appointed a successor. The majority, what would become the Sunni branch, chose Abu Bakr, Mohammed’s father-in-law and the first to convert to Islam, as their caliph, or leader. Another faction insisted that Mohammed’s son-in-law, Ali ibn Ali Talib, lead the religion; those would become the Shiite branch. Ali was assassinated in 661 AD, and the two branches of the religion have been at odds—and sometimes at war—ever since.
The Shiites comprise only 10 percent of the world’s Islamic population, but in Lebanon they outnumbered the Sunnis. Still, the Shiites were the underclass. They were called rubbish collectors; the other Lebanese religious groups routinely referred to them as the mitweleh, a derogatory racial slur. And now an angel had appeared promising riches. Thousands of people invested in the Shiite superstar Ezzedine. People, believing that a windfall was imminent, began spending their earnings before they arrived. As if overnight, beat-up sedans were replaced by brand-new BMW X5s or Cadillac Escalades.27
And then one day, just as fast as it began, the fantasy came to a crashing finale. The end came in August 2009. Ezzedine had written a check for roughly $200,000 to Hussein Haj Hassan, one of Hassan Nasrallah’s closest confidants and political advisors—a check to match his investment. Hussein Haj Hassan was a Hezbollah member of the Lebanese parliament. Hassan was horrified when he learned that Ezzedine’s check had bounced. His partners in the Gulf had simply emptied the accounts. Hundreds of millions of dollars simply disappeared into thin air.
Ezzedine was devastated by the discovery. Devastation soon turned to panic. His partners were nowhere to be found; their mobile phones, the BlackBerries, iPhones, and Nokias they displayed so proudly, no longer accepted calls. Panic soon turned to horror. Ezzedine feared for his life. The men who lost their money with him were not known to be tolerant of failure, especially if the cause of that failure turned out to be operatives from another country eager to harm the Shiites of Lebanon and Hezbollah in particular. Ezzedine soon realized that he had been the victim of a diabolical scam perpetrated by highly sophisticated players who had had millions of dollars at their disposal.
Hezbollah’s commanders and the Shiite poor were in no position to suffer a humiliating financial meltdown. Ezzedine attempted to localize the devastation and minimize the monetary carnage. He desperately tried to borrow some money from a millionaire friend, a stopgap to plug up the astronomical losses, so that those with the most money inside the portfolio and those who were in a position to inflict punishment upon him personally could be made whole, but the word was already out. Then, in fear for his own safety, he attempted to flee. Using foreign SIM cards to camouflage his location, Ezzedine tried to negotiate his way out of the mess. He showed remorse. He was destroyed by the folly he had allowed to happen.
Ezzedine tried to summon his network of friends for help. He desperately tried to stem the tide of catastrophe with loans and gifts. But news that his fund was empty spread like a brushfire. There was a rush on the banks by the desperate and panic-stricken. But there was no money to withdraw. The banks refused to honor any of Ezzedine’s checks. Al-Mustathmir had no funds, and soon Ezzedine was nowhere to be found. Hundreds of people’s life savings had simply disappeared.
People who could not afford a financial setback suddenly found themselves penniless and destitute. The anger and the outrage of the masses began to amplify. Because Ezzedine was so closely associated with many of Hezbollah’s top leaders, the scandal became a political crisis for the Party of God. It is believed that ten thousand Lebanese Shiites invested with Ezzedine. “I inherited $100,000 from my father to continue my studies. I invested them with Ezzeddine, and now all my dreams are destroyed,” a resident of southern Lebanon told Time. “I don’t know what I was thinking when I invested with him.”28
In the Lebanese press, people began to label Ezzedine as “Abu Madoff,” in reference to Bernie Madoff and the multi-billion-dollar Ponzi scheme swindle he engineered in the United States, which was still reverberating in America. Al-Jazeera reported that the Ezzedine scandal had resulted in losses well over one billion dollars.29 The damage was so significant that even Hezbollah threats and intimidation of local media outlets couldn’t keep the story under wraps.
Hezbollah counterintelligence agents arrested Ezzedine as he attempted to flee the country. Officially, Hezbollah attempted to distance itself from the toxic reality of what had just transpired. The Party of God issued communiqués stating that Ezzedine was never a member of the organization and that he held no official title or capacity. It was, of course, a first stab at damage control. And an attempt doomed to fail. Ezzedine was publicly recognized as an inner-circle man who could not be erased by decree or a sermon from the mosque. It was impossible to deny the man’s connection to the Party of God when nearly half the money lost belonged to Sheikh Nasrallah himself.
The Ezzedine affair quickly metastasized into Stage Three political cancer for Hezbollah. The Shiites who had been poor all their lives and who suddenly lost their life savings as a result of the scheme pointed angry fingers at Hezbollah’s once untouchable leadership. They insisted upon answers and they demanded blood. Frustration and heartbreak quickly turned into furious accusations. People openly wondered why the villagers, the immaterial mitweleh, had once again lost and suffered while those connected to party leadership drove around in brand-new SUVs and ate in the finest restaurants in Beirut; the parking lots at these five-star eateries were packed with Mercedes-Benzes and Range Rovers. A scandal even erupted over the $300 designer head scarves that many of the Hezbollah wives were known to wear. The Arab street, th
e litmus test of mood and rage, demanded answers. NOW Lebanon, a news website backed by figures close to the governing March 14 alliance, put it succinctly: “Ezzedine Shows Hezbollah’s Moral Bankruptcy.”30
Even pro-Hezbollah media outlets were critical of the Party of God on television commentaries and in newspaper editorials. “Hezbollah is not the first revolutionary movement to be corrupted by money,” said Sateh Noureddine in the pro-Hezbollah newspaper As-Safir, “and it won’t be the last.”31 Other Lebanon watchers wrote that Hezbollah had finally succumbed to the “PLO Flu,” a Lebanese term used to describe the Palestine Liberation Organization’s indulgence of wealth and luxury during the Lebanese civil war and the corrupt abandonment of its revolutionary principles.
Iran realized that if Hezbollah were to lose the support of many Shiites, they would be seen as nothing more than a heavily armed criminal gang working on behalf of their own interests. And that worried Hezbollah’s bosses in Iran as well. The noose was tightening around Iran: the United States and Israel, together, had begun to focus great espionage service and financial agency efforts against Iran and its nuclear ambitions, including harsh economic sanctions and diplomatic isolation. Iran needed Hezbollah to be ready and willing to embark on another war against Israel should the joint American and Israeli campaign reach a coordinated moment of critical mass that threatened the Islamic Republic. Hezbollah, after all, was one of the key weapons in Iran’s arsenal. The Iranians, even though suffering from sanctions against their own failing economy, vowed to assist Hezbollah in making the Ezzedine fiasco right.32 Iran pledged to assist in compensating the victims of Ezzedine’s Ponzi scheme.
Meanwhile, in the wake of the scandal Nasrallah had to kick his own efforts at damage control into high gear to tamp down the outrage of the Lebanese street. Iranian support for Hezbollah was always downplayed by the Party of God’s leadership. Lebanon’s Shiites were Arabs, not Persians, and the Farsi invasion never sat well with many of Hezbollah’s supporters who viewed the emissaries from Tehran as arrogant and meddlesome. It was important for Nasrallah to show his political base that the wars and the destruction that Lebanon had endured were not because Hezbollah was a puppet of the mullahs and Revolutionary Guard commanders in Iran.
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