Israel Found the Hamas Money Machine Years Ago. Nobody Turned It Off.

Israeli safety officers scored a significant intelligence coup in 2018: secret paperwork that laid out, in intricate element, what amounted to a non-public fairness fund that Hamas used to finance its operations.

The ledgers, pilfered from the pc of a senior Hamas official, listed property price a whole bunch of tens of millions of {dollars}. Hamas managed mining, rooster farming and street constructing firms in Sudan, twin skyscrapers within the United Arab Emirates, a property developer in Algeria, and an actual property agency listed on the Turkish inventory change.

The paperwork, which The New York Instances reviewed, had been a possible street map for choking off Hamas’s cash and thwarting its plans. The brokers who obtained the information shared them inside their very own authorities and in Washington.

Nothing occurred.

For years, not one of the firms named within the ledgers confronted sanctions from the USA or Israel for years. No person publicly referred to as out the businesses or pressured Turkey, the hub of the monetary community, to close it down.

A Instances investigation discovered that each senior Israeli and American officers did not prioritize monetary intelligence — which they’d in hand — exhibiting that tens of tens of millions of {dollars} flowed from the businesses to Hamas on the actual second that it was shopping for new weapons and making ready an assault.

That cash, American and Israeli officers now say, helped Hamas construct up its army infrastructure and helped lay the groundwork for the Oct. 7 assaults.

“Everyone seems to be speaking about failures of intelligence on Oct. 7, however nobody is speaking concerning the failure to cease the cash,” mentioned Udi Levy, a former chief of Mossad’s financial warfare division. “It’s the cash — the cash — that allowed this.”

At its peak, Israeli and American officers now say, the portfolio had a price of roughly half a billion {dollars}.

Even after the Treasury Division lastly levied sanctions in opposition to the community in 2022, information present, Hamas-linked figures had been capable of receive tens of millions of {dollars} by promoting shares in a blacklisted firm. The Treasury Division now fears that such cash flows will enable Hamas to finance its persevering with struggle with Israel and to rebuild when it’s over.

“It’s one thing we’re deeply fearful about and anticipate to see given the monetary stress Hamas is underneath,” mentioned Brian Nelson, the Treasury Division’s underneath secretary for terrorism and monetary intelligence. “What we are attempting to do is disrupt that.”

That was what Israel’s terrorism-finance investigators hoped to do with their 2018 discovery. However on the high echelons of the Israeli and American governments, officers targeted on placing collectively a collection of economic sanctions in opposition to Iran. Neither nation prioritized Hamas.

Israeli leaders believed that Hamas was extra fascinated about governing than preventing. By the point the brokers found the ledgers in 2018, the prime minister, Benjamin Netanyahu, was encouraging the federal government of Qatar to ship tens of millions of {dollars} to the Gaza Strip. He gambled that the cash would purchase stability and peace.

Mr. Levy recalled briefing Mr. Netanyahu personally in 2015 concerning the Hamas portfolio.

“I can let you know for positive that I talked to him about this,” Mr. Levy mentioned. “However he didn’t care that a lot about it.”

Mr. Netanyahu’s Mossad chief shut down Mr. Levy’s crew, Process Drive Harpoon, that targeted on disrupting the cash flowing to teams together with Hamas.

Former Harpoon brokers grew so pissed off with the inaction that they uploaded some paperwork to Fb, hoping that firms and buyers would discover them and cease doing enterprise with Hamas-linked firms.

Within the years that adopted the 2018 discovery, Hamas’s cash community burrowed deeper into the mainstream monetary system, information present.

The Turkish firm on the coronary heart of the operation had such a sheen of legitimacy that main American and European banks managed shares on behalf of purchasers. The Church of Jesus Christ of Latter-day Saints invested tens of 1000’s of {dollars} earlier than the corporate was positioned underneath sanction.

The Instances reviewed beforehand undisclosed intelligence paperwork and company information and interviewed dozens of present officers from the USA, Israel, Turkey and Hamas’s monetary community. Some spoke on the situation of anonymity to debate intelligence issues.

Israeli intelligence and safety businesses have apologized for the failings that led as much as the Oct. 7 assaults.

Mr. Netanyahu has acknowledged that his authorities failed to guard its individuals and mentioned that he would face, and reply, robust questions after the struggle. He has denied, although, that he took his eye off Hamas. However he declined to reply questions from The Instances concerning the ledgers or the hunt for Hamas’s cash.

2015: Process Drive Harpoon

Israeli safety and intelligence officers, working from a safe compound exterior Tel Aviv, spent years monitoring Hamas’s cash. By 2015, they had been on to what they referred to as Hamas’s “secret funding portfolio.”

Terrorist organizations like Al Qaeda and the Islamic State typically use entrance firms to launder cash. However right here, Israeli brokers noticed one thing totally different, extra bold: a multinational community of actual companies churning out actual earnings.

On paper, they seemed like unrelated firms. However again and again, the Israelis mentioned they recognized the identical Hamas-linked figures as shareholders, executives and board members.

There have been individuals like Hisham Qafisheh, a white-goateed Jordanian who studied in Saudi Arabia and had a knack for locating political help. One in all his firms received a $500 million freeway contract in Sudan.

Then there was Amer Al-Shawa, a Turkish man of Palestinian descent who studied electrical engineering in Ohio and extra lately spent 5 months underneath interrogation in an Emirati jail on suspicion of funding Hamas.

On the high was Ahmed Odeh, a heavyset Jordanian businessman with years of expertise in Saudi Arabia. The Israelis realized — and the Individuals now say a lot of this publicly — that Hamas’s governing Shura Council had given Mr. Odeh seed cash to construct and handle a portfolio of firms.

Hamas, the de facto governing physique of Gaza, relied principally on Iran to fund its army wing. However Hamas wished its personal funding stream, too.

The Israeli safety companies operated a terrorism-finance investigative crew on the time referred to as Process Drive Harpoon. It put individuals from throughout counterterrorism — spies, troopers, law enforcement officials, accountants, legal professionals — underneath the identical umbrella and gave them a direct report back to the prime minister. The duty pressure even had an financial warfare unit inside the Mossad intelligence company that would covertly act on the intelligence it had gathered.

“We didn’t have any rivalries,” Tamir Pardo, the Mossad chief on the time, mentioned in an interview. “Nobody received credit score for anyone operation. It simply labored.”

Harpoon, he mentioned, was “one of the vital vital instruments the Mossad had.” It churned out intelligence to monetary regulators, legislation enforcement businesses, politicians and allies in Washington, serving to Israel win monetary sanctions concentrating on Iran and its proxy, Hezbollah.

Mr. Levy, who ran Harpoon and its devoted financial warfare unit, recalled the primary time he heard about Hamas’s portfolio.

“One of many guys on my crew, a Mossad man, confirmed it to me,” Mr. Levy mentioned. “What we understood then was that they’d these firms to make a bit of bit of cash and to make use of them as a authorized platform to switch cash from place to put.”

Again then, the consensus amongst Israeli officers was that Iran was the larger risk. It had nuclear ambitions and armed each Hamas and the Hezbollah militia in Lebanon. So the majority of the duty pressure’s consideration remained targeted there.

Nonetheless, Mr. Levy mentioned the invention was sufficient of a “crimson flag” that he instructed Mr. Netanyahu about it.

2016: Shut Down

A 2014 struggle between Israel and Hamas had left Hamas’s fortifications in ruins and its arsenal depleted.

Hamas, although, was capable of rebuild. In 2016, Israeli intelligence officers famous that the group was acquiring GPS jammers, drones and precision weapons, based on a army doc reviewed by The Instances.

Hamas had added about 6,000 operatives to its ranks because the struggle ended, and the army had realized that Hamas was creating plans to storm Israeli communities and take hostages.

By 2016, Mr. Netanyahu’s authorities had begun pursuing a technique to include Hamas by permitting the Qataris to ship cash to Gaza. Mr. Netanyahu says that cash was humanitarian support. Privately, he instructed others that stabilizing Hamas would reduce strain on him to barter towards a Palestinian state.

That very same 12 months, the brand new Mossad chief, Yossi Cohen, dismantled Harpoon as a part of an company reorganization, based on Mr. Levy and others.

Mr. Levy left authorities that 12 months. A brand new group of intelligence brokers and specialists from a number of different businesses stored chasing the cash, solely with out the organizational construction and direct entry to senior policymakers.

This new group quickly made one other alarming discovery.

Up till that time, members of the crew instructed The Instances, they’d estimated that Hamas was taking about $10 million to $15 million yearly from their firms’ earnings.

Then they realized, based mostly on sources and different intelligence, that Hamas had bought off among the secret portfolio’s property, elevating greater than $75 million. That cash, based on an Israeli intelligence evaluation, was despatched to Gaza, the place it was used to rebuild Hamas’s army infrastructure.

The Israeli authorities have now concluded that this inflow of cash not solely helped Hamas put together for the Oct. 7 assaults, however gave leaders confidence that they’d have the cash to rebuild afterward, based on 5 Israeli safety officers.

Precisely how important that cash was to the Oct. 7 assaults is unknown. Israeli officers have promised an inquiry into the intelligence failures that led as much as the assaults, and new particulars could emerge.

However what is evident is that the Israeli authorities took no public motion in opposition to the Hamas-linked firms. As an alternative, it determined to construct a case to get the USA authorities to close the businesses off from the worldwide monetary system. However that will take time, and extra proof.

2018: The Large Break

Precisely how Israeli intelligence obtained the ledgers — whether or not from an informant or a pc hack — stays unclear. However in 2018, the crew received the proof it had been searching for.

The paperwork had been created by Mahmoud Ghazal, a person whom the Israelis had recognized because the Hamas portfolio’s bookkeeper.

The ledgers spanned 2012 to 2018 and contained entries and valuations for firms that the brokers had been monitoring in Saudi Arabia, Sudan, Turkey and elsewhere. The information additionally contained acquainted names, together with Mr. Qafisheh and Mr. Al-Shawa.

The paperwork had been arduous proof of what the Israelis had lengthy suspected: Regardless of what public information mentioned, Hamas was in management.

“It was a giant breakthrough,” mentioned one official concerned within the investigation. “Hamas may cover behind frontmen and shareholders, however the cash at all times talks.”

The ledgers additionally contained coded entries that puzzled investigators, however one doc was a form of Rosetta Stone: “QG” as an example, referred to Qitaa Ghaza, or the Gaza Strip. “D” referred to Daffa, or the West Financial institution. Beside every was a big greenback determine. From this, the Israelis deduced the place Hamas was sending its cash.

This discovery was shortly bolstered by intelligence from Saudi Arabia. In mid-2018, the Saudis arrested Mr. Ghazal, the Hamas accountant, and two different males who company information present held positions in 18 firms within the portfolio.

Beneath interrogation, Mr. Ghazal confessed that the portfolio existed to switch cash to Hamas, based on information associated to the three males’s arrests that had been seen by The Instances. He additionally mentioned that, simply because the Israelis had lengthy suspected, Mr. Odeh directed the place the cash went.

The 2 different males instructed their interrogators that they had been shareholders in identify solely. Their stakes had been truly owned by Mr. Qafisheh, the goateed Jordanian who had additionally been on the Israeli radar display for years. Mr. Qafisheh, the lads mentioned, was a Hamas operative.

The paperwork don’t say what the Saudis did to elicit the confessions. The dominion’s harsh interrogation strategies have earned it worldwide condemnation.

The Saudis shared the supplies with Washington, based on officers with direct information of the matter, figuring out that Washington would share them with its shut ally Israel. The Saudi monarchy has no tolerance for Hamas and hoped that Washington would blacklist the businesses, the officers mentioned.

The Israeli crew shared the ledgers and its intelligence with American officers in early 2019, hoping to encourage monetary sanctions.

However then, nothing.

The Trump administration didn’t act. Treasury Division officers mentioned that they didn’t delay any selections. Issuing sanctions, they mentioned, is a sophisticated course of. And Israel, which was extra targeted on getting the Individuals to situation Iranian sanctions, didn’t press for extra pressing actions, each Israeli and American officers say.

“We now have nice individuals nonetheless who’re making an attempt to do that work,” Mr. Levy mentioned. “But when nobody at a excessive stage is placing this as a precedence, what can they do?”

2019: Turkey

Although the funding portfolio spanned many nations, Turkey was key.

The Saudis had made clear with their arrests that Hamas was not welcome. And the financiers had misplaced a lot of their Sudanese revenue with the autumn of the autocratic chief Omar al-Bashir.

Turkey underneath President Recep Tayyip Erdogan, nonetheless, has not criminalized Hamas nor has it clearly restricted Hamas’s actions in Turkey.

By 2019, Mr. Odeh was in Turkey, as was Mr. Qafisheh.

Mr. Al-Shawa, the Ohio-educated engineer who had been in Israel’s sights for years, spent 135 days in Emirati jails earlier than being launched in 2015 — with out clarification “and with out breakfast,” he instructed The Instances in an interview. He returned to Turkey.

Mr. Erdogan was a significant proponent of the nation’s constructing business, which was excellent news for the corporate on the heart of the Hamas portfolio: an actual property developer named Pattern GYO.

Pattern took benefit of Mr. Erdogan’s constructing growth. It introduced in an investor, Hamid Al Ahmar, with ties to the president. And it reorganized itself as an actual property funding belief, which had Turkish tax benefits, and went public.

Pattern’s basic supervisor, Mr. Al-Shawa, mentioned he had no actual energy on the firm. The board, he mentioned, made the entire selections. He denied being concerned with Hamas, however he mentioned that he suspected others at Pattern had been.

“Do I’ve proof? No. However generally you simply have a sense,” he mentioned. “I actually didn’t care. Why ought to I? I used to be there to generate profits.”

Mr. Odeh and Mr. Al Ahmar declined to remark by intermediaries. Pattern wouldn’t move messages searching for remark to Mr. Qafisheh, and a spokeswoman mentioned he and Mr. Al Ahmar had been now not concerned with the corporate. The spokeswoman mentioned the query of whether or not Hamas owned the corporate was “ridiculous and meaningless.” She mentioned Pattern was interesting its Treasury designation. Hamas, by its media workplace in Lebanon, declined to remark.

International buyers piled in. In 2019, whereas Washington sat on the ledgers, American and European banks held greater than 3 % of the corporate’s publicly traded shares on behalf of purchasers, Turkish monetary information present. The Church of Jesus Christ of Latter-day Saints’s funding arm, Ensign Peak Advisors, purchased greater than 200,000 shares.

There is no such thing as a indication that the church or the Western banks knew about any Hamas ties on the time. A church spokesman mentioned {that a} U.S.-based funding adviser, Acadian Asset Administration, purchased the shares on its behalf. An Acadian spokesman mentioned the corporate had “complied with all related legal guidelines.”

Whereas the sanctions proposal languished, Israeli and American officers now say, Hamas appointed a brand new funding chief, Musa Dudin. Not like his predecessors, he was a well known Hamas army operative who had spent 18 years in an Israeli jail for his position in lethal assaults.

Mr. Dudin, too, has resettled in Turkey. Mr. Dudin declined to remark by an middleman.

In the meantime, Hamas-linked house owners started cashing out. In 2019, Mr. Qafisheh bought greater than $500,000 price of inventory, company filings present. In 2020, Mr. Al Ahmar bought shares price $1.6 million.

The corporate’s house owners received cash out of the corporate one other approach, too. Mr. Al-Shawa, in his interview, mentioned that the board pushed him to award Pattern contracts to a building firm that Mr. Qafisheh owned with two different Pattern shareholders.

Firm information present that Pattern paid that firm greater than $7.5 million from 2018 to 2022 — one instance of how Hamas-linked figures pulled money from the portfolio.

Pattern, in a written assertion, mentioned it had paid the development firm “in accordance with industrial practices and authorized guidelines” and now not has a relationship with the corporate.

The Israeli brokers understood that Iranian sanctions would take priority over Hamas however had been pissed off by the delays. At their wits’ finish, former Process Drive Harpoon members took a determined step. In June 2021, they uploaded among the Hamas monetary information to Fb. The paperwork revealed a number of nodes of the key community, together with Pattern. It’s unclear whether or not that was licensed.

The objective was to create a path of on-line breadcrumbs for journalists, monetary investigators and others to observe. The Fb publish generated a smattering of stories protection.

“There wasn’t any approach to make use of the intelligence we had,” mentioned Uzi Shawa, a former Mossad agent and Harpoon member. “It was virtually finished as a final resort.”

Lastly, in Could 2022, the Treasury Division introduced monetary sanctions in opposition to what it referred to as an expansive Hamas funding community. Mr. Odeh and Mr. Qafisheh had been named as financiers.

“The US is dedicated to denying Hamas the flexibility to generate and transfer funds and to holding Hamas accountable for its position in selling and finishing up violence,” the division mentioned.

Pattern was financially blacklisted, as had been a number of different related firms.

All had been named within the ledgers that the Israeli crew had given the Individuals three years earlier.

2023: Aftermath

Late final month, Mr. Nelson, the Treasury Division official, flew to Turkey to induce the Turkish authorities to cease sheltering Hamas’s cash.

“It’s the very best precedence in our constructing,” he mentioned in an interview this month. The division lately added Mr. Dudin, Mr. Al-Shawa and others to the monetary blacklist. Mr. Al-Shawa mentioned he was interesting the choice.

Mr. Erdogan has given no indication that he intends to acknowledge these sanctions. After the Oct. 7 assaults, he declared that Hamas was not a terrorist group, however a “liberation group.”

Individuals “are the one ones who set the legislation on the planet and all others observe,” Hasan Turan, a minister from Mr. Erdogan’s governing get together, mentioned in a current interview. “It’s not acceptable.”

Mr. Turan even met with Mr. Al Ahmar, the previous Pattern investor, final month to debate methods to help the Palestinians.

The worth of Pattern’s inventory, which continues to be traded on the Istanbul change, has greater than doubled because it was added to the sanctions listing. Throughout that very same interval, two Pattern shareholders now underneath sanction bought $4.3 million in inventory, company filings present. Requested if that cash went to Hamas, the corporate’s chairman mentioned he didn’t know and it will be inappropriate to ask.

And as lately as this 12 months, Hamas-tied firms and other people underneath sanction had been nonetheless capable of maintain Turkish financial institution accounts in U.S. {dollars}, banking information reviewed by The Instances present, regardless of ostensibly being reduce off from the American monetary system.

Mr. Pardo, the previous Mossad chief, mentioned he didn’t know what occurred after he left in 2016. However “from the outcomes,” he mentioned, “you’ll be able to choose that they’d some huge cash.”

“I consider that if somebody would have chased the cash and stopped it,” he added, “we wouldn’t be seeing the outcomes of what we see in the present day.”

Mr. Levy, the previous Harpoon deputy, grows emotional when he talks concerning the Hamas cash. “I need to do all the things we will to forestall struggle,” he mentioned. “I actually believed that we may try this by going after the monetary infrastructure of terrorist teams. However we now have to be critical.”

Ronen Bergman contributed reporting from Tel Aviv, and Patrick Kingsley from Jerusalem.