Insight: U.S. and allies target Hezbollah financing, ties in Africa

By David Lewis DAKAR (Reuters) - The United States and its allies are clamping down on suspected Hezbollah activity in West Africa, which Washington says is a major source of cash for the Lebanese group as its patron Iran feels the pinch of sanctions. The push coincides with Hezbollah's deepening role in Syria, where it has dispatched thousands of fighters to back President Bashar al-Assad. It also comes in the wake of attacks outside Lebanon linked to Hezbollah that Western experts say are part of global campaign that could soon include Africa. Critics, however, argue that Washington and its allies may be exaggerating the threat and failing to distinguish between different forms of support for various elements of the Shi'ite Islamist guerrilla and political movement, which was founded with Iran's help after Israel's invasion of Lebanon in 1982. U.S. officials say that while most Lebanese in West Africa have few links to the group, Washington's financial sanctions have reduced an annual flow of millions of dollars which Hezbollah receives from people and businesses in the region. Iran remains the main sponsor and armourer of a group which fought Israel with missiles in a month-long war in 2006. But Western sanctions imposed on Tehran over its nuclear plans add significance to Hezbollah's other income, U.S. officials say. "(West Africa) is more important in the sense that what they're getting from Iran is squeezed. Iran's capacity to fund Hezbollah has been impaired," said David Cohen, U.S. treasury undersecretary for terrorism and financial intelligence. "There's reason to think Hezbollah is not just collecting money but it is also using these outposts as places where they can plan and conduct activities," he added. Nigeria, with support from Israel, says it has uncovered a Hezbollah cell and arms cache and arrested has locals it accuses of spying for Iran. A resource-rich but poorly policed part of the world, which already sees al Qaeda-linked activity, could see future Hezbollah attacks, some Western experts say. While there are disputes over the scale of the support Hezbollah receives from West Africa, there is little doubt over how important Lebanese businesses are to the region. With interests ranging from mobile phones, import-export and heavy industry to street stalls and fast-food joints, Lebanese-owned businesses are present at every level of the economy. But Western security officials and Lebanese businessmen say common use of cash and informal transfers by such enterprises makes it hard to detect whether any engage in money laundering. Businesses move money across borders through friends and family rather than banks. Some may even send cash by the suitcase load. Individuals targeted in the most recent wave of U.S. sanctions have denied the accusations and complain Washington is penalising charity and family ties with Shi'ite areas of Lebanon where Hezbollah plays a major social and political role. Rudy Atallah, a former Africa Counterterrorism Director in the U.S. Defense Department said the United States viewed Hezbollah as "the linchpin in all sort of activities - money laundering, drug trafficking and weapons". "They feel if they can clamp down on them in West Africa it would have some sort of impact on them back home," added Atallah, who now is now a private security consultant. Representatives of Hezbollah in Beirut did not respond to requests for comment. The group gives no detail on its financial arrangements. It has elected members in parliament but its leadership, facing a permanent threat of Israeli attack, generally stays undercover and limits public comment. MONEY TRAIL West Africa has for a century or more been home to Lebanese communities built around trade. Many also retain close ties to Lebanon and especially to the Shi'ite heartlands of the south. Senegal alone has some 30,000 Lebanese. Their businesses account for 70 percent of domestic industry, according Abdul Monem El Zein, the senior figure in the Shi'ite community, which he says make up around 90 percent of all Lebanese in Senegal. Washington fears that some funds generated in these weak and often unregulated economies are channelled back to Hezbollah. Magnus Ranstorp, a Hezbollah expert at the Swedish National Defence College, said West Africa's lack of regulations had offered the group a "free run", but Washington was catching up. "There is a greater activity in listing individuals and getting at the financial assets," he said of U.S. efforts to clamp down on those it saw as organising funding for Hezbollah. U.S. investigations led to a 2011 criminal case in New York accusing Hezbollah of involvement in a money laundering network that funnelled hundreds of millions of dollars to Lebanon through a web of banks, used car businesses and drug traffickers in the United States, Latin America, West Africa and Lebanon. Cohen said the network was not run by Hezbollah but was a web that the group was able to tap into. He declined to say how much Hezbollah received but called it "not insubstantial". In June this year, the Beirut-based Lebanese Canadian Bank agreed to pay $102 million to settle the case. Hezbollah members in Lebanon have said the movement does not promote activities contrary to Islamic teaching, like drugs and money laundering. Some observers say the movement may not run such crime gangs but may use its power within Lebanon to help enable some activities and it may accept payments from criminals. The U.S. Treasury accuses some African Lebanese of actively raising funds for Hezbollah. It imposed sanctions in June this year on four Lebanese citizens, living in Senegal, Gambia, Sierra Leone and Ivory Coast, accusing them of being involved in operations to raise money and recruit members in the region. The main thrust of such sanctions is to deny their targets access to U.S. banks, effectively blacklisting them throughout much of the global financial system due to the central role the U.S. dollar plays in all international banking transactions. Money that is found can also be frozen or seized. While some effects can be mitigated - for example, by having transactions handled by associates - financial sanctions have hit income and trade for governments including Hezbollah allies Iran and Syria. Also in June, Gambia expelled Husayn Tajideen, one of three Lebanese brothers who control large stakes in the local economy and, through interests reaching as far as Angola and Democratic Republic of Congo, were accused in a previous U.S. investigation of being among Hezbollah's top financiers in Africa. Gambia accused Husayn, a major food importer, of profiteering. But Cohen said he believed the expulsion of Tajideen was linked to U.S. sanctions. The governments of Angola and Nigeria have also investigated the brothers, he added. The Tajideens could not be reached for comment. Cohen said pressure on the network had reduced their annual contributions to Hezbollah to below $10 million, down from tens of millions of dollars before. DENIALS The European Union put Hezbollah's "military wing" on its terrorism blacklist in July due to concerns over its involvement in Syria, where EU governments back rebels against Assad, and a bus bombing in Bulgaria last year that killed Israeli tourists. Other elements of the movement are not under EU sanctions. The United States and Israel make no such distinction between parts of Hezbollah, arguing that its welfare services and elected political role in the government of Lebanon are part and parcel of a project to destroy the Jewish state. Ranstorp in Stockholm said such divisions were artificial. "The terrorism unit is controlled entirely by the top," he said. "All these three dimensions are pistons in an engine." Individuals complain this means they are wrongly targeted. Ali Ibrahim al-Watfa, one of the four Lebanese in West Africa barred by Washington in June from access to U.S. dollars and the U.S. banking system, denied having any role for the group in Sierra Leone, where the United States accused him of being a permanent liaison and coordinator of cash transfers. "This is a big surprise to me," he told Reuters at his home on a busy market street in the capital, Freetown. Ibrahim, secretary general of the local Lebanese community organisation, suggested that he had been set up: "Maybe there is someone who doesn't like me, who put this on me?" In Senegal, El Zein, for 30 years the leading Shi'ite figure in the country, said the U.S. charges had no foundation: "I have never heard of there being a Hezbollah group here in Senegal," he said at his Islamic Social Institution, which runs a mosque, health clinics and a network of religious schools. A retired Israeli intelligence official who has access to current assessments also played down the importance of African cash to Hezbollah, calling diaspora contributions "negligible". The official estimated Iran accounted for 70-90 percent of an annual Hezbollah income of $800 million to $1 billion. The U.S. approach is questioned by academics like Augustus Richard Norton. He says that the reality is muddied by those raising cash for Hezbollah and many Lebanese sending money to communities at home using the same informal money networks. "If a person is found to have given one dollar to a designated terrorist, the entire sum is poisoned," Norton, a professor at Boston University who has written extensively on Hezbollah, said of the U.S. legal view of sanctioned funds. NEW FRONT? Along with dispatching fighters to the frontline in Syria, Hezbollah has been linked to plots to attack Israelis in Thailand and Cyprus as well as in the Bulgarian city of Burgas. Matthew Levitt, a former U.S. counter-terrorism official who has written a book on Hezbollah, says this is a sign that Hezbollah and Iran's Islamic Revolutionary Guards Corps (IRGC) are embarking on a new wave of violence targeting the interests of Israel, the United States and other Western states. U.S. attacks on Syria, or on Iran's nuclear sites, could trigger further Hezbollah action abroad, Levitt believes. Other security experts question the extent of a threat in Africa, though Nigeria this year said it uncovered a Hezbollah cell in the northern city of Kano and charged two Nigerians with helping Iranians plan attacks on Israeli targets. Western governments fear their enemies have found a haven and security sources say Israel is countering efforts by Hezbollah to build contacts with impoverished West African governments by offering its own security training and equipment. "It is very easy to operate in Africa. Money can buy anything," said a diplomat in the region, adding that the Kano seizure indicated that Hezbollah was in a position to carry out attacks in Nigeria. "They will wait for the right moment." Few Lebanese discuss openly with outsiders any support for Hezbollah. A quick glance at Facebook profiles of some living in the region reveals many images of its yellow, Kalashnikov-emblazoned flag and of Sayyed Hassan Nasrallah, its leader. But El Zein said Lebanese in Senegal see Hezbollah, as it portrays itself, as a humanitarian organisation and opponent of U.S. and Israeli policy; they do not consider that charitable giving to the movement is funding aggressive guerrilla warfare. "There may be ten, a hundred, even a thousand people in these communities who support orphanages in Lebanon - orphanages for children whose parents were killed by weapons the West gave Israel," El Zein said. "But to think that the community in Senegal can buy weapons and send money back to Hezbollah is crazy." (Additional reporting by Warren Strobel and Anna Yukhananov in Washington, Tim Cocks in Lagos, Tommy Trenchard in Freetown, Alastair Macdonald in London, Dan Williams in Jerusalem and Elise Knutsen in Dakar; Editing by Daniel Flynn and Alastair Macdonald)