In June 2021, President Joe Biden made fighting global corruption an official priority, directing the National Security Council to conduct an interagency review and promulgate an all-of-government anti-corruption strategy. In December of that year, the Biden White House published its Strategy on Countering Global Corruption, and for the first time in history, fighting global corruption became a “core United States national security interest.” This is commendable, but it would be more effective if the fight against global corruption also highlighted—and targeted—the symbiotic relationship between organized crime, terror finance, and corruption.
The president already has, by virtue of legislation and executive orders enacted by his predecessors, a panoply of tools to go after transnational organized crime and terror finance networks. And the Biden White House also expanded its toolkit in 2021, appointing a State Department coordinator to fight global corruption, establishing the U.S. Council on Transnational Crime, and issuing an executive order to impose sanctions on foreign persons involved in the global illicit drug trade. Yet what’s missing is an integrated approach based on an understanding of how these threats intersect, which targets them simultaneously. It is not enough to prioritize corruption. The Biden anti-corruption strategy must go after both bribers and bribed. Hezbollah is a perfect candidate.
On April 18, 2023, the U.S. Department of Justice (DOJ) indicted Nazem Said Ahmad and eight associates for their alleged role in a fraudulent transaction involving artwork, luxury goods, and precious stones, many of them purchased in the United States. Contemporaneously, the Treasury Department sanctioned Ahmad’s international network, expanding its 2019 designation against him and his companies. Ahmad, Treasury asserts, is a Hezbollah financier and an associate of Hezbollah financier Mohammad Bazzi, whom Treasury designated in 2018. (Romanian authorities arrested Bazzi in Bucharest last February, and he is awaiting extradition to the United States.)
These actions, as well as past DOJ and Treasury actions, show Hezbollah’s global reach as a terrorist organization funded through criminal activities by its members, associates, and sympathizers. Less evident, though no less important, is something else these cases all have in common: corruption. The Ahmad network, the Treasury designation states, leveraged “Hizballah’s influence at … ports of entry to move assets into Lebanon without paying the applicable taxes and duties”—a likely reference to immigration, security, and customs officials in Hezbollah’s payroll. Bazzi, for his part, leveraged his connection with Yahya Jammeh, then dictator of Gambia, buttressing local corruption in exchange for the ability to run illicit businesses that ultimately financed Hezbollah.
Outside of Lebanon, Hezbollah buys impunity from local scrutiny and prosecution for its illicit networks through bribery and corruption at the highest levels of government and local public administration. In Lebanon, it uses its influence and political power to buy impunity—through bribes—for those running illicit businesses. Such extensive corruption contributes to the erosion of good governance, weakens democratic institutions, undermines the rule of law, and empowers corrupt officials and politicians.
Corruption, then, is a critical tool in Hezbollah’s strategy to self-fund through illicit activities, which has been underscored by previous Treasury designations against Hezbollah operations in the Gambia, Guinea, and Paraguay. Since it is also a top foreign policy priority for the Biden White House, the president should recognize that corruption is an integral element of Hezbollah’s modus operandi, and target, through designations, both sides of the corruption equation. Why not, for example, sanction the corrupt Lebanese officials who facilitated the recently sanctioned Ahmad network’s operations?
Terror organizations like Hezbollah self-finance by engaging in extensive transnational criminal activities, often in close cooperation with international criminal syndicates. The crime-terror finance nexus is nothing new. Across the span of history and geography, terrorism has been self-financed, at least in part, through criminal activities. The Bolsheviks in tsarist Russia funded their subversive activities through crime—which catapulted a young Joseph Stalin to center stage in the party machine. More recently, Ireland’s Irish Republican Army, the Italian Red Brigades, the Basque ETA, Colombia’s FARC, the Taliban, Al Qaeda, and the Islamic State all engaged in criminal activities to fundraise—including the illicit drug trade, human trafficking and organ harvesting, and trafficking in antiquities. Hezbollah continues to be involved in a multiplicity of criminal activities, including, critically, money laundering on behalf of international criminal syndicates. The Trump administration designated Hezbollah as a transnational criminal organization for its involvement in global criminal activities.
Trafficking and laundering depend on the ability of terror groups to establish working relations with crime syndicates, which can evolve into symbiotic partnerships. Criminals and terror financiers depend on one another for the supply of illicit merchandise and the transport, distribution, and laundering of the proceeds from sales.
Critically, both rely, for the success of their criminal endeavors, on their ability to infiltrate state institutions at all levels—police, customs, border guards, port workers, the judiciary, and elected officials—and to put these people on their payroll to protect their commercial enterprise.
Hezbollah is no exception. As Marshall Billingslea, then assistant secretary for Treasury’s Office of Terrorism and Financial Intelligence, said in a speech at the Atlantic Council in September 2019, “Hizballah supplements its income by using businessmen to operate a wide range of companies, using political relationships to gain favored contracts and even monopolies in prominent sectors … Hizballah also benefits from various international criminal schemes, including money laundering, drug trafficking and counterfeiting, operated by its supporters, sympathizers, and members.”
Examples abound of Hezbollah’s systematic reliance on corruption to grease the wheels of its complex criminal enterprises. Take Paraguay, one of the most corrupt countries in Latin America, ranked 137 out of 180 in the Transparency International 2022 corruption index, whose systemic corruption makes it a gangster’s paradise. While historically a hub for smuggling, in recent years, Paraguay has been turned by international crime syndicates into a key transit point for narcotrafficking. The U.S. Department of State’s 2022 annual International Narcotics Control Strategy Report (Volume II) noted that crime syndicates in Paraguay, especially in the tri-border area it shares with Brazil and Argentina, often rely on “the assistance of co-opted government officials” for their trafficking. The corruption of politicians and public officials has deep roots in the local political culture, and criminals, including Hezbollah, exploit this.
Last January, the U.S. Treasury Department sanctioned Paraguay’s past president, Horacio Cartes, and its current vice president, Hugo Velazquez, “for their involvement in the rampant corruption that undermines democratic institutions in Paraguay.” (Cartes’s attorney dismissed the allegations as politically tainted; Velazquez announced, through his attorney, that he will challenge them in a U.S. court.) But according to Treasury, both politicians have ties with members of Hezbollah, which, Treasury explained, “has regularly held private events in Paraguay where politicians make agreements for favors, sell state contracts, and discuss law enforcement efforts in exchange for bribes. Representatives of both Cartes and Velazquez have collected bribes at these meetings.” If confirmed, this situation—in which Hezbollah representatives buy off Paraguayan politicians in exchange for favors, state contracts, and information on law enforcement efforts, presumably against their interest—calls for U.S. sanctions not only against those Paraguayan officials who were bribed, but also the Hezbollah emissaries who put money in their pockets.
This is not the first time the United States has tied Hezbollah’s illicit finance to corruption in Paraguay. In 2021, Treasury sanctioned Kassem Mohamad Hijazi, a Lebanese-Brazilian dual national who was subsequently extradited to the United States and indicted, for buying off law enforcement officials in order to guarantee protection for a trade-based money laundering network.
Although sanctioned for corruption and indicted on money laundering charges, Hijazi is, according to leaked classified State Department cables from 2005, a Hezbollah fundraiser and supporter. Paraguayan media have reported that Hijazi, to derail the extradition proceedings, allegedly paid a bribe to a family member of a Paraguayan Supreme Court judge, who has denied any involvement. This, then, is a case where U.S. authorities targeted an alleged Hezbollah briber, but not the beneficiaries of his bribes.
As goes Paraguay, so go other countries with high rates of corruption. Guinea, in West Africa, ranks even worse than Paraguay in the annual Transparency International Corruption Index. Unsurprisingly, Hezbollah has exploited political connections in that country to facilitate illicit activities. In 2022, Treasury sanctioned two Guinean-Lebanese dual nationals, accusing them of buying off airport authorities to facilitate the transit of suitcases filled with cash, destined for Hezbollah in Lebanon. The two, well-established businessmen in that country, were charged, according to Treasury, with collecting financial support for Hezbollah and transferring the funds to Lebanon. Facilitating contacts and good relations with the highest authorities in the country allegedly helped them smooth and promote commercial and financial activities for Hezbollah’s benefit. Both enjoyed diplomatic status as honorary consuls and both had close relations with the former president of Guinea, Alpha Condé, whom the State Department recently sanctioned for his role in human rights violations. The two were sanctioned for financing terrorism, not corruption. Those they presumably bought off were not sanctioned on corruption grounds.