Experts worry that terrorist organizations are setting up criminal rackets in South America and funneling the funds to the Middle East.
The recent arrest of a suspected Lebanese-American Hezbollah financier in Paraguay provides new evidence that Islamist terrorist organizations are using the lawless area in South America where the borders of Argentina, Brazil, and Paraguay meet—known as the tri-border area (TBA)—to run criminal rackets and funnel the profits back to the Middle East. The case also shows that their fundraising activities stretch into the United States.
Moussa Ali Hamdan, a 38-year-old naturalized U.S. citizen from Lebanon, fled the United States sometime in 2009 as U.S. federal prosecutors prepared a warrant for his arrest. He was apprehended this June by Paraguayan authorities in the TBA town of Ciudad del Este.
National security experts and government investigators have warned for more than a decade that terrorist financiers use the area’s Shiite Lebanese diaspora community to remit significant funds back to Lebanon and into the coffers of Hezbollah, the Iranian-supported Shiite terrorist organization created after Israel’s invasion of the country in 1982.
Multiple U.S. agencies—including the departments of Homeland Security, Justice, State, and Treasury—have brought their expertise, resources, and training to deal with the problem of terrorist financing in the TBA, Justice Department spokesman Dean Boyd tells Security Management. As far back as 2002, the United States joined Argentina, Brazil, and Paraguay in the 3 + 1 Group on Tri-Border Area Security to fight cross-border crime, money laundering, and terrorist financing activity.
But concerns persisted. A 2004 U.S. Naval War College paper estimated that Hezbollah raised 10 percent of its $100 million annual operating budget in Paraguay. The Treasury Department was sufficiently convinced of the connection that it named as specially designated terrorist 10 individuals and four businesses from the TBA linked to supporting Hezbollah in two actions in 2004 and 2006. The designation bars U.S. citizens from doing business with those individuals and entities.
Hamdan’s arrest provides insight into how financiers probably generate the funds they send to Hezbollah. The Justice Department’s criminal complaint alleges Hamdan and three other individuals sold fraudulent passports and counterfeit money to support Hezbollah.
According to the indictment, two of the four individuals, but not Hamdan, then used such funds to try to purchase 1,200 machine guns for Hezbollah from a government informant. Hamdan was indicted for transporting stolen goods, trafficking in counterfeit goods, and making false statements to government officials. Between January 2008 and November 2009, Hamdan allegedly trafficked approximately $154,000 in sporting goods, consumer electronics and automobiles from the informant.
“The allegations contained in this complaint demonstrate how terrorist organizations rely on a variety of underlying criminal activities to fund and arm themselves,” said David Kris, Department of Justice assistant attorney general for national security, in a statement announcing the indictment.
The United States has requested Hamdan’s extradition from Paraguay. “We are hopeful that he will be extradited,” said Boyd, adding “we will be closely tracking the legal proceedings there.”
It’s not only civilian government agencies that express concern about terrorist fundraising activities in the region. During a strategy forum at the Center for Strategic and International Studies in late July, Gen. Douglas M. Fraser, commander of U.S. Southern Command, told the audience that he keeps his eye on fundraising operations in Latin America that support both Hezbollah and the Sunni terrorist organization Hamas. “I don’t see any ops,” he said. “But…the amount of illicit trafficking that happens throughout the region—the ability to move people, goods, capability across the border of the United States—makes it a concern that I will continue to monitor.”
In August, the State Department agreed with Fraser’s assessment in its annual Country Reports on Terrorism 2009, stating “No corroborated information showed that Hezbollah, Hamas, or other Islamic extremist groups used the [TBA] for military-type training or planning of terrorist operations, but the United States remained concerned that these groups use the region as a safe haven to raise funds.”
Some national security experts believe Hezbollah’s activities in the TBA cast an Iranian shadow, especially given the country’s continued diplomatic efforts in the region, most notably in Bolivia and Venezuela. Douglas Farah, president of IBI Consultants and a senior fellow at the International Assessment and Strategy Center, tells Security Management that through Hezbollah, Iran could exploit smuggling pipelines in the TBA and across Latin America to deliver whatever they wanted into the United States.
Ray Walser, a senior policy analyst with The Heritage Foundation, agrees that Hezbollah activity in the TBA could represent Iranian troublemaking, adding that Hezbollah activity in the TBA could be a contingency plan if the United States or Israel attacked Iran to stop its nuclear program. What Hezbollah would do in that event, Walser doesn’t know.
Going forward, Farah sees the United States continuing to rely on multilateral efforts to combat terrorist financing in the TBA because of the federal budget crisis and more pressing national security issues. And that means the United States will be constrained by its Argentinian, Brazilian, and Paraguayan partners because those nations will not support policies that harm commerce in the TBA, an economic hotspot for all three countries.
Yet Farah says the issue is getting more attention. “I think there’s some feeling that we should be keeping more of an eye on it, that we should begin asking the question, ‘Why is this anomalous activity happening in the region?’ and try to figure out what it means.”