Harpoon

by Nitsana Darshan-Leitner

  For years Harpoon tried to convince the U.S. Department of the Treasury to take action. In fact, Harpoon tried to convince everyone and anyone in the U.S. government that both the Bayt al-Mal and Yousser were used to cover much of the facilitated terrorism, including Iranian money that flooded into the Party of God, as well as into various Palestinian terrorist groups, from Hamas and the PIJ, to the Syrian proxy, the Popular Front for the Liberation of Palestine General Command. But the State Department feared that going after these financial houses would impact the overall Lebanese economy and harm American efforts to stabilize a nation that was very unstable.

  In the fall of 2006, following the summer’s Israeli-Hezbollah war, Stuart Levey, the Under Secretary of the Treasury for Terrorism and Financial Intelligence, finally placed both the Bayt al-Mal and the Yousser Company for Finance and Investment on the U.S. Office of Foreign Assets Control, or OFAC, blacklist. An OFAC designation was a true legal quarantine of entities posing a threat to national security goals. It was used against foreign countries and regimes, terrorists, international narcotics traffickers, anyone engaged in activities related to the proliferation of weapons of mass destruction, and any other threats to the national security, foreign policy, or economy of the United States.5 Business, banks, and organizations under OFAC sanction could have their assets frozen. It was illegal for any U.S. business to interact with them in any way.

  Levey’s move angered many in Beirut. Hezbollah supporters claimed that both institutions were apolitical, and by no means involved in any untoward activities. But several months after the OFAC edit, a freighter ostensibly transporting refrigerators to Beirut under an import license from the Yousser Company was impounded when the “refrigerators” were discovered to be actually a cargo of eighteen antiaircraft radar systems, along with vehicles mounting specialized military capabilities.6

  The OFAC step forced Hezbollah to move transactions it had once concealed and openly engage with well-established banks and financial institutions in Lebanon. Hezbollah’s preferred bank, the Israelis and the DEA learned, had traditionally been the Lebanese Canadian Bank. The Beirut-based institution was originally formed in 1960 when it was called the Banque des Activities Economiques SAL, and it operated as a subsidiary of the Royal Bank of Canada’s Middle Eastern operations. The bank was an empire, with a global reach and thirty-five branches throughout Lebanon, and a North American office in Montreal. Its total assets had a net value of nearly $5 billion.7

  Harpoon was pleased when Hezbollah was forced to deal directly with Lebanon’s banks. It made the multi-billion-dollar institutions vulnerable. And the Israelis already had an asset* inside the Lebanese banking system.

  Israel’s man inside Lebanon’s banking apparatus was not someone working at the top of the corporate food chain. “The notion that a spy, in order to be valuable, had to be someone very high up in an organization was faulty,” a former Israeli intelligence officer with knowledge of Harpoon’s operations explained. “Sometimes all you needed was someone knee-deep in the bureaucracy, perhaps bitter over not being considered for promotion, or perhaps angry that he was undergoing a divorce, and he wanted some measure of peace of mind. Sometimes that person just wanted to do the right thing. He or she wanted to do the patriotic thing.”8 A minor bureaucrat could have invaluable intelligence at their fingertips such as salaries, debts, secret deals; minor things, like interoffice affairs, especially affairs between office workers of the same sex and different ethnic and religious groups, could be of great value to a case officer running an agent inside an institution like a Lebanese bank. Such manipulations were classic tradecraft techniques. Identifying the vulnerabilities of targeted individuals was Lesson One in any service’s spy school.

  Useful bureaucrats might also be those responsible for purchasing equipment, including mobile phones, servers, mainframes, and computers. Access to those financial computers was critical. It is known that somehow, a malware cousin of what became known as Stuxnet and Flame targeted Lebanon’s banks.9 Dubbed “Gauss,” the malware was discovered years after it was inserted into systems in Lebanon’s banking sector; according to reports, it infected as many as 2,500 computers. The malware was strikingly similar to the worm that the world would come to know as Stuxnet, which was used against Iran’s centrifuges at its Nantanz plant; according to reports, the worm was a joint operation between the CIA, the National Security Agency, and U.S. Cyber Command; the Iran Desk at Britain’s Government Communications Headquarters; and, in Israel, the Mossad using the technology perfected by Unit 8200.10

  Gauss collected configuration information of an infected machine, such as network interfaces, drives, and BIOS information. The true payload Gauss delivered was encrypted using a key derived from the information it collected from the infected machine.11 The software gathered log-in information, allowing others to then infiltrate the accounts and monitor what was going on inside the world of electronic bank transfers and withdrawals. It was the first time that a nation-state, cyber security experts assessed, had targeted banks with malware.12 The use of such tools underscored a line from John le Carré’s novel A Perfect Spy that some members of Harpoon liked to quote: “In every operation there is an above the line and a below the line. Above the line is what you do by the book. Below the line is how you do the job.”

  The electronic insight was invaluable. But men like Dagan, old-timers who remembered typing reports on aged manual machines, often preferred the more traditional elements of espionage tradecraft: human intelligence—the art of a man observing and using his guts, instincts, and sometimes sense of honor and patriotism, in the performance of the age-old craft of espionage.

  Israeli intelligence fielded an invaluable asset inside the LCB. Little has been reported about the man other than that he went by the name of Munir Z.13 He was described as handsome yet unassuming, believed to be in his early forties and from a proud Christian family with a history of service to Lebanon. Many of the men in the family, including Munir’s brother, served in the Lebanese Armed Forces, and made the military their careers. Although Lebanon had been carved to pieces by ethnic divides and then chewed up by internecine carnage, there were many in the country who viewed their allegiance solely to the flag of their nation. Munir Z. was one such individual who placed country first.

  An accountant by trade, Munir Z. had been a banking bureaucrat for years, working in office branches and crunching numbers. His specialty was fraud detection. This skill set was in high demand, given U.S. Department of Treasury interests in Middle Eastern banking in the wake of the September 11 attacks and the emergence of Harpoon. Although many of the Middle Eastern financial institutions had suspicious clientele moving hundreds of millions of dollars through questionable accounts, the banks were compelled to hire money-laundering specialists to placate international audits. “It was always an issue of covering their asses,” a veteran Israeli intelligence officer reflected. “The appearance of due diligence was often as important as the performance of due diligence.”14

  Munir Z. was a relatively high-ranking auditor in the bank’s Beirut headquarters. Munir reviewed accounts, transactions, and a mile-long paper trail that implicated the bank in suspicious activities, a paper trail that linked it to known charities and front groups involved in supporting Hezbollah terrorist operations around the world. One such group was the Hayat al-Dam Lil-Muqawama al-Islamiya—the Islamic Resistance Support Organization, or IRSO. The IRSO raised money for Hezbollah by soliciting donations from Shiites all over the world. They pitched for the donations on Hezbollah’s al-Manar television station, promising that monies raised would, according to a U.S. Department of the Treasury memo, be used to “purchase sophisticated weapons and conduct operations. Indeed, donors can choose from a series of projects to contribute to, including supporting and equipping fighters and purchasing rockets and ammunition.”15

  It isn’t known if Munir was recruited by Israeli intelligence headhunters seeking someone who could be useful, or if the
Lebanese accountant was what is known in the industry as a walk-in—someone who expressed a willingness to spy and volunteered his services. The information he provided, however, was of unprecedented value, in particular in exposing LBC as a main conduit of monies from all sorts of illegal enterprises—like drug dealing and criminal activities in the United States, Europe, South America, and West Africa—as well as the dispensing of those funds to the personal accounts of Hezbollah commanders or accounts used by Palestinian groups.

  Munir wasn’t alone. There were, reportedly, other intelligence assets working in fields that connected Lebanon’s banks with the outside world. One asset, according to published accounts, was a software engineer whose main clients were banks. He helped set up DSL networks in Lebanon and was recruited, apparently without knowing that the people he was helping were actually Israeli, to complete a case study of the banking communication networks in the country.16

  Displaying the diversity of the intelligence effort, another operative was Nasser al-Waer, a German-Lebanese citizen and an air-conditioning technician by profession. He was recruited in Europe and sent to Nabatieh, in the heart of the terrorists’ zone in South Lebanon. Once situated, he found work at a Hezbollah-run hospital in town. During one of the briefings he received from his handlers in Europe, al-Waer was instructed to penetrate the IRSO, which he did successfully shortly after arriving through his connections at the hospital. The technician provided Harpoon’s team with intelligence regarding money transfers and donations that were originated worldwide and transferred to Lebanon to support Hezbollah’s activities.17

  Other men recruited, the reports continued, worked for one of the country’s two main cellular phone providers, a company called Alfa.18 The data given to Harpoon was also sent to the U.S. Department of the Treasury. A month after the 2006 war, Stuart Levey’s TFI office designated the IRSO as a key Hezbollah fund-raising operation.* Harpoon was delighted: Dagan wanted to use the IRSO as proof that the LCB had to be dismembered and removed from the monetary battlefield. The LCB, in Dagan’s eyes, personified the evil of the terrorist financiers. The banks made record profits handling money that was dripping in blood, misery, and suffering. Rogue financial institutions like the LCB legitimized organizations like Hezbollah. The banks—and their executives—became bespoke suits of armor that shielded Hezbollah’s money from the long arm of international law enforcement. Dagan wanted to make an example of the LCB, and to amputate it from Hezbollah’s clutches once and for all.

  The case for toppling the LCB was the most pressing topic when Israeli intelligence representatives met in America’s capital with their counterparts from the Departments of the Treasury and Justice in 2007 and 2008. The intelligence from the compromised computers and industrious human assets was sanitized before it was printed out and placed in neat vinyl folders. But even heavily redacted, Dagan thought that the evidence provided to the U.S. government about the bank was more than sufficient for Washington to join the offensive and take decisive action against the LCB and other financial institutions involved in bankrolling the Hezbollah apparatus. Treasury and Justice both agreed; the DEA, after all, had invested serious resources to track the cocaine superhighway spreading South American narcotics to the four corners of the world, bringing millions in profits into Hezbollah’s coffers. Even the CIA agreed that something had to be done in Lebanon. Unbeknownst to the Israeli delegation, the CIA had its own human assets operating in the shadows of Beirut, collecting intelligence on Hezbollah.19

  But even though the Treasury and Justice Departments were on board, the State Department and the Department of Defense disagreed.

  Long before the term “too big to fail” entered the international vernacular, the U.S. State Department maintained, or virtually demanded, that Israel and the U.S. branches of law enforcement would not attack any financial, political, or social institutions in Lebanon that could lead the nation to the brink of collapse. “The diplomats, who we referred to as the Bow Ties, in Foggy Bottom never understood the security implications of some of their actions and the policies they pursued,” recalled a retired special agent with the U.S. Diplomatic Security Service, the men and women responsible for safety at embassies around the world. “It was all about handshakes and smiles. Others had to pick up the bodies later.”20

  The U.S. Department of Defense, or DoD, wanted Lebanon to remain stable and free from a major banking disruption. It sought to reinstate Lebanon to the list of nations receiving U.S. military aid—everything from M4 assault rifles to eavesdropping counterintelligence gear for the Lebanese Armed Forces’ military intelligence service, the Muchabarat-al Jaish. The DoD initiative assumed greater imperative in May 2008 when Hezbollah forces in Beirut openly clashed with the poorly trained and inadequately equipped army garrison protecting the Lebanese capital.21

  In the end the Bow Ties and the generals won the argument, and the LCB was temporarily removed from the American law enforcement crosshairs. But Dagan was undeterred. Munir Z.’s information was too good to be wasted in the infighting of the Washington, D.C., Beltway. Sitting behind his cluttered desk at Mossad HQ, smoking his pipe, and sipping his black tea with lemon, Dagan instructed Uri L. to reach out to the lawyers once again.

  Dagan despised intelligence that was not utilized operationally—especially when it was paid for in blood. Some of the intelligence and surveillance equipment that the United States provided to the Lebanese Armed Forces ultimately made its way into the hands of Hezbollah. In addition, Tehran sent counterintelligence experts to Lebanon to assist Hezbollah in its round-the-clock hunt for Israeli and American spies. Scores of men were rounded up, arrested, and interrogated by Hezbollah specialists, many of whom had trained in Iran. In May 2009, Lebanese security agents displayed some of the alleged Mossad spy gear for the press; the Lebanese spy hunters wore black balaclavas to conceal their identities. Hezbollah officials—not the Lebanese government—vowed that there would be more arrests.

  Apparently Munir Z. was one of those seized and physically abused in the sweep; it is not known how he was discovered or betrayed. Little has been publicly said about his fate other than that he was executed by Hezbollah agents. He would have been tortured for information, brutally beaten, and then summarily shot in the back of the head. In some cases Hezbollah liked to make an example of traitors, stringing up the condemned men on electricity poles. But Israeli spies, to the Party of God, were the lowest form of life and not worthy of public spectacle. In all likelihood, Munir’s body was thrown in a ditch by the side of some nondescript road and left there to rot.

  According to Lebanese reports, members of Munir’s extended family were eventually brought safely to Israel.22 There was, after all, honor among spies.

  CHAPTER SIXTEEN

  Lawyers, Guns, and Money

  There is a higher court than courts of justice and that is the court of conscience. It supersedes all other courts.

  —Mahatma Mohandas Gandhi

  In the early spring the windows could still be found open in the Tel Aviv offices of Shurat HaDin. Summer’s oven-like heat had yet to arrive, and the soothing winds left over from Israel’s brief winter still blow through. The office had grown to include steady staffers and interns, many of them law school students and volunteers, who helped keep the wheels of the legal proceedings spinning on all cylinders. The year 2009 had started off as a busy year for Shurat HaDin; there were ongoing lawsuits against Hamas, Iran, Syria, the PLO, the Palestinian Authority, and some banks. They often received help with tips and guidance from Harpoon. Other law firms in the United States were bringing suits against financial institutions, too.

  In Israel, the impact of nearly a decade of incessant violence, suicide bombings, and Hezbollah rockets was only beginning to sink in to the minds of many who had lived through it. Few nations had ever been forced to endure such a relentless wave of terror and bloodshed and still function as a society. People went to work during the years of violence; children went to school; the cinemas
and nightclubs remained open. Those whose lives were impacted by the bloodshed tried as best they could to persevere and continue. It was hardest around the holidays—especially the Jewish New Year.

  Nitsana Darshan-Leitner was in her office one day after the holidays reviewing depositions and scheduling speaking engagements around North America. Phones were always ringing in the office, making it sound more like a telephone switchboard. One call was meant for Nitsana. “Pick up on line two,” the secretary yelled to Nitsana, “I think it’s the U2s.”

  Uri L. and Shai U. were affectionately known around the Shurat HaDin office as the U2s. They usually worked in tandem—where there was one, there was the other. Uri was on the phone, requesting a sit-down. He said it was urgent.

  Meetings with the U2s were always in a public place, always where food and drinks were served, and always where a back table secured a modicum of privacy. The establishments had to be certified kosher, though food was never ordered. Uri came with a manila filing folder, some redacted paperwork, and a question. “How is the case going against the Lebanese Canadian Bank?” he asked Nitsana, hoping that the answer was good. The bank was a major conduit for Hezbollah activities, and it had financed much of the destruction that happened here two summers ago. Harpoon was pleased that the bank was in the spotlight of the legal crosshairs. The two continued to talk. What was supposed to have been a brief chat soon became a lengthy conversation. Harpoon’s interest intrigued the lawyer. Taking the LCB to an American court, though, had not been easy.