The secret backstory of how Obama let Hezbollah off the hook
An ambitious U.S. task force targeting Hezbollah's billion-dollar criminal enterprise ran headlong into the White House's desire for a nuclear deal with Iran.Part I
A global threat emerges
How Hezbollah turned to trafficking cocaine and laundering money through used cars to finance its expansion.
In
its determination to secure a nuclear deal with Iran, the Obama
administration derailed an ambitious law enforcement campaign targeting
drug trafficking by the Iranian-backed terrorist group Hezbollah, even
as it was funneling cocaine into the United States, according to a
POLITICO investigation.
The
campaign, dubbed Project Cassandra, was launched in 2008 after the Drug
Enforcement Administration amassed evidence that Hezbollah had
transformed itself from a Middle East-focused military and political
organization into an international crime syndicate that some
investigators believed was collecting $1 billion a year from drug and
weapons trafficking, money laundering and other criminal activities.
Over
the next eight years, agents working out of a top-secret DEA facility
in Chantilly, Virginia, used wiretaps, undercover operations and
informants to map Hezbollah’s illicit networks, with the help of 30 U.S.
and foreign security agencies.
They
followed cocaine shipments, some from Latin America to West Africa and
on to Europe and the Middle East, and others through Venezuela and
Mexico to the United States. They tracked the river of dirty cash as it
was laundered by, among other tactics, buying American used cars and
shipping them to Africa. And with the help of some key cooperating
witnesses, the agents traced the conspiracy, they believed, to the
innermost circle of Hezbollah and its state sponsors in Iran.
They followed cocaine shipments, tracked a river of dirty cash,
and traced what they believed to be the innermost circle of Hezbollah
and its state sponsors in Iran.
But as Project
Cassandra reached higher into the hierarchy of the conspiracy, Obama
administration officials threw an increasingly insurmountable series of
roadblocks in its way, according to interviews with dozens of
participants who in many cases spoke for the first time about events
shrouded in secrecy, and a review of government documents and court
records. When Project Cassandra leaders sought approval for some
significant investigations, prosecutions, arrests and financial
sanctions, officials at the Justice and Treasury departments delayed,
hindered or rejected their requests.
The
Justice Department declined requests by Project Cassandra and other
authorities to file criminal charges against major players such as
Hezbollah’s high-profile envoy to Iran, a Lebanese bank that allegedly
laundered billions in alleged drug profits, and a central player in a
U.S.-based cell of the Iranian paramilitary Quds force. And the State
Department rejected requests to lure high-value targets to countries
where they could be arrested.
“This was a policy decision, it was a systematic decision,” said David AsherDavid AsherVeteran U.S. illicit finance expert sent from Pentagon to Project Cassandra to attack the alleged Hezbollah criminal enterprise.,
who helped establish and oversee Project Cassandra as a Defense
Department illicit finance analyst. “They serially ripped apart this
entire effort that was very well supported and resourced, and it was
done from the top down.”
The untold story of Project
Cassandra illustrates the immense difficulty in mapping and countering
illicit networks in an age where global terrorism, drug trafficking and
organized crime have merged, but also the extent to which competing
agendas among government agencies — and shifting priorities at the
highest levels — can set back years of progress.
And
while the pursuit may be shadowed in secrecy, from Latin American
luxury hotels to car parks in Africa to the banks and battlefields of
the Middle East, the impact is not: In this case, multi-ton loads of
cocaine entering the United States, and hundreds of millions of dollars
going to a U.S.-designated terrorist organization with vast reach.
Obama
had entered office in 2009 promising to improve relations with Iran as
part of a broader rapprochement with the Muslim world. On the campaign
trail, he had asserted repeatedly that the Bush administration’s policy
of pressuring Iran to stop its illicit nuclear program wasn’t working,
and that he would reach out to Tehran to reduce tensions.
The man who would become Obama’s top counterterrorism adviser and then CIA director, John BrennanJohn BrennanObama's White House counterterrorism adviser, who became CIA director in 2013., went further. He recommended in a policy paper
that “the next president has the opportunity to set a new course for
relations between the two countries” through not only a direct dialogue,
but “greater assimilation of Hezbollah into Lebanon’s political
system.”
Barack Obama
John Brennan
Former U.S. president
Former CIA director
By May 2010, Brennan, then
assistant to the president for homeland security and counterterrorism,
confirmed in a speech that the administration was looking for ways to
build up “moderate elements” within Hezbollah.
“Hezbollah
is a very interesting organization,” Brennan told a Washington
conference, saying it had evolved from “purely a terrorist organization”
to a militia and, ultimately, a political party with representatives in
the Lebanese Parliament and Cabinet, according to a Reuters report.
“There
is certainly the elements of Hezbollah that are truly a concern to us
what they’re doing,” Brennan said. “And what we need to do is to find
ways to diminish their influence within the organization and to try to
build up the more moderate elements.”
In
practice, the administration’s willingness to envision a new role for
Hezbollah in the Middle East, combined with its desire for a negotiated
settlement to Iran’s nuclear program, translated into a reluctance to
move aggressively against the top Hezbollah operatives, according to
Project Cassandra members and others.
Lebanese arms dealer Ali FayadAli Fayad(aka Fayyad). Ukraine-based arms merchant suspected of being a Hezbollah operative moving large amounts of weapons to Syria.
, a suspected top Hezbollah operative whom agents believed reported to
Russian President Vladimir Putin as a key supplier of weapons to Syria
and Iraq, was arrested in Prague in the spring of 2014. But for the
nearly two years Fayad was in custody, top Obama administration
officials declined to apply serious pressure on the Czech government to
extradite him to the United States, even as Putin was lobbying
aggressively against it.
Fayad,
who had been indicted in U.S. courts on charges of planning the murders
of U.S. government employees, attempting to provide material support to a
terrorist organization and attempting to acquire, transfer and use
anti-aircraft missiles, was ultimately sent to Beirut. He is now
believed by U.S. officials to be back in business, and helping to arm
militants in Syria and elsewhere with Russian heavy weapons.
Project
Cassandra members say administration officials also blocked or
undermined their efforts to go after other top Hezbollah operatives
including one nicknamed the ‘GhostThe GhostOne
of the most mysterious alleged associates of Safieddine, secretly
indicted by the U.S., linked to multi-ton U.S.-bound cocaine loads and
weapons shipments to Middle East.,” allowing them to
remain active despite being under sealed U.S. indictment for years.
People familiar with his case say the Ghost has been one of the world’s
biggest cocaine traffickers, including to the U.S., as well as a major
supplier of conventional and chemical weapons for use by Syrian President Bashar Assad against his people.
And when Project Cassandra agents and other investigators sought repeatedly to investigate and prosecute Abdallah SafieddineAbdallah SafieddineHezbollah’s longtime envoy to Iran who allegedly oversaw the group's “Business Affairs Component” involved in international drug trafficking.,
Hezbollah’s longtime envoy to Iran, whom they considered the linchpin
of Hezbollah’s criminal network, the Justice Department refused,
according to four former officials with direct knowledge of the cases.
The
administration also rejected repeated efforts by Project Cassandra
members to charge Hezbollah’s military wing as an ongoing criminal
enterprise under a federal Mafia-style racketeering statute, task force
members say. And they allege that administration officials declined to
designate Hezbollah a “significant transnational criminal organization”
and blocked other strategic initiatives that would have given the task
force additional legal tools, money and manpower to fight it.
Former
Obama administration officials declined to comment on individual cases,
but noted that the State Department condemned the Czech decision not to
hand over Fayad. Several of them, speaking on condition of anonymity,
said they were guided by broader policy objectives, including
de-escalating the conflict with Iran, curbing its nuclear weapons
program and freeing at least four American prisoners held by Tehran, and
that some law enforcement efforts were undoubtedly constrained by those
concerns.
But the former officials denied that they derailed any actions against Hezbollah or its Iranian allies for political reasons.
“There
has been a consistent pattern of actions taken against Hezbollah, both
through tough sanctions and law enforcement actions before and after the
Iran deal,” said Kevin Lewis, an Obama spokesman who worked at both the
White House and Justice Department in the administration.
Lewis,
speaking for the Obama administration, provided a list of eight arrests
and prosecutions as proof. He made special note of a February 2016
operation in which European authorities arrested an undisclosed number
of alleged members of a special Hezbollah business affairs unit that the
DEA says oversees its drug trafficking and other criminal money-making
enterprises.
Project
Cassandra officials, however, noted that the European arrests occurred
after the negotiations with Iran were over, and said the task force
initiated the multinational partnerships on its own, after years of
seeing their cases shot down by the Justice and State departments and
other U.S. agencies.
The
Justice Department, they pointed out, never filed corresponding U.S.
criminal charges against the suspects arrested in Europe, including one
prominent Lebanese businessman formally designated by the Treasury
Department for using his “direct ties to Hezbollah commercial and
terrorist elements” to launder bulk shipments of illicit cash for the
organization throughout Asia, Europe and the Middle East.
A
former senior national security official of the Obama administration,
who played a role in the Iran nuclear negotiations, suggested that
Project Cassandra members were merely speculating that their cases were
being blocked for political reasons. Other factors, including a lack of
evidence or concerns about interfering with intelligence operations
could have been in play.
“What if the CIA
or the Mossad had an intelligence operation ongoing inside Hezbollah and
they were trying to pursue someone . . . against whom we had impeccable
[intelligence] collection and the DEA is not going to know that?” the
official said. “I get the feeling people who don’t know what’s going on
in the broader universe are grasping at straws.”
The
official added: “The world is a lot more complicated than viewed
through the narrow lens of drug trafficking. So you’re not going to let
CIA rule the roost, but you’re also certainly not going to let DEA do it
either. Your approach to anything as complicated as Hezbollah is going
to have to involve the interagency [process], because the State
Department has a piece of the pie, the intelligence community does,
Treasury does, DOD does.”
Nonetheless,
other sources independent of Project Cassandra confirmed many of the
allegations in interviews with POLITICO, and in some cases, in public
comments.
One
Obama-era Treasury official, Katherine Bauer, in little-noticed written
testimony presented last February to the House Committee on Foreign
Affairs, acknowledged that “under the Obama administration … these
[Hezbollah-related] investigations were tamped down for fear of rocking
the boat with Iran and jeopardizing the nuclear deal.”
As a result, some Hezbollah
operatives were not pursued via arrests, indictments, or Treasury
designations that would have blocked their access to U.S. financial
markets, according to Bauer, a career Treasury official, who served
briefly in its Office of Terrorist Financing as a senior policy adviser
for Iran before leaving in late 2015. And other “Hezbollah facilitators” arrested in France, Colombia, Lithuania have not been extradited — or indicted — in the U.S., she wrote.
Bauer, in an interview, declined to elaborate on her testimony.
AsherDavid AsherVeteran U.S. illicit finance expert sent from Pentagon to Project Cassandra to attack the alleged Hezbollah criminal enterprise.,
for one, said Obama administration officials expressed concerns to him
about alienating Tehran before, during and after the Iran nuclear deal
negotiations. This was, he said, part of an effort to “defang, defund
and undermine the investigations that were involving Iran and
Hezbollah,” he said.
“The closer we got
to the [Iran deal], the more these activities went away,” Asher said.
“So much of the capability, whether it was special operations, whether
it was law enforcement, whether it was [Treasury] designations — even
the capacity, the personnel assigned to this mission — it was
assiduously drained, almost to the last drop, by the end of the Obama
administration.”
With much
fanfare, Obama announced the final agreement on implementation of the
Iran deal on Jan. 17, 2016, in which Tehran promised to shelve efforts
to build a nuclear weapons program in exchange for being released from
crippling international economic sanctions.
Within months, task force officials said, Project Cassandra was all but dead. Some of its most senior officials, including Jack KellyJohn “Jack” KellyDEA
agent overseeing Hezbollah cases at Special Operations Division, who
named task force Project Cassandra after clashes with other U.S.
agencies about Hezbollah drug-terror links., the veteran
DEA supervisory agent who created and led the task force, were
transferred to other assignments. And Asher himself left the task force
long before that, after the Defense Department said his contract would
not be renewed.
As a result, the U.S.
government lost insight into not only drug trafficking and other
criminal activity worldwide, but also into Hezbollah’s illicit
conspiracies with top officials in the Iranian, Syrian, Venezuelan and
Russian governments — all the way up to presidents Nicolas Maduro, Assad
and Putin, according to former task force members and other current and
former U.S. officials.
Nicolas Maduro
Vladimir Putin
Bashar Assad
Venezuela
Russia
Syria
The derailment of
Project Cassandra also has undermined U.S. efforts to determine how much
cocaine from the various Hezbollah-affiliated networks is coming into
the United States, especially from Venezuela, where dozens of top
civilian and military officials have been under investigation for more
than a decade. Recently, the Trump administration designated the
country’s vice president, a close ally of Hezbollah and of
Lebanese-Syrian descent, as a global narcotics kingpin.
Meanwhile,
Hezbollah — in league with Iran — continues to undermine U.S. interests
in Iraq, Syria and throughout wide swaths of Latin America and Africa,
including providing weapons and training to anti-American Shiite
militias. And Safieddine, the Ghost and other associates continue to
play central roles in the trafficking of drugs and weapons, current and
former U.S. officials believe.
“They
were a paramilitary organization with strategic importance in the
Middle East, and we watched them become an international criminal
conglomerate generating billions of dollars for the world’s most
dangerous activities, including chemical and nuclear weapons programs
and armies that believe America is their sworn enemy,” said Kelly, the
supervisory DEA agent and lead coordinator of its Hezbollah cases.
“If they are violating U.S. statutes,” he asked, “why can’t we bring them to justice?”
Kelly and Asher are among the
officials involved in Project Cassandra who have been quietly contacted
by the Trump administration and congressional Republicans, who said a
special POLITICO report April 24 on Barack Obama’s hidden Iran deal
concessions raised urgent questions about the need to resurrect key law
enforcement programs to counter Iran.
That
won’t be easy, according to former Project Cassandra members, even with
President Donald Trump’s recent vow to crack down on Iran and
Hezbollah. They said they tried to keep the project on life support, in
hopes that it would be revived by the next administration, but the loss
of key personnel, budget cuts and dropped investigations are only a few
of many challenges made worse by the passage of nearly a year since
Trump took office.
“You can’t let
these things disintegrate,” said Kelly. “Sources evaporate. Who knows if
we can find all of the people willing to testify?”
Derek MaltzDerek MaltzSenior DEA official who as head of Special Operations Division lobbied for support for Project Cassandra and its investigations.,
who oversaw Project Cassandra as the head of the DEA’s Special
Operations Division for nine years ending in July 2014, put it this way:
“Certainly there are targets that people feel that could have been
indicted and weren’t. There is certainly an argument to be made that if
tomorrow all the agencies were ordered to come together and sit in a
room and put all the evidence on the table against all these bad guys,
that there could be a hell of a lot of indictments.”
But Maltz said the damage wrought by years of political interference will be hard to repair.
“There’s no doubt in my mind now that the focus was this Iran deal and our initiative was kind of like a fly in the soup,” Maltz said. “We were the train that went off the tracks.”
Project
Cassandra had its origins in a series of investigations launched in the
years after the 9/11 attacks which all led, via their own twisted
paths, to Hezbollah as a suspected global criminal enterprise.
Operation TitanOperation TitanA joint investigation with
Colombian authorities into a global money-laundering and
drug-trafficking alliance between Latin American traffickers and
Lebanese operatives., in which the DEA worked with
Colombian authorities to explore a global alliance between Lebanese
money launderers and Colombian drug trafficking conglomerates, was one.
Operation Perseus, targeting Venezuelan syndicates, was another. At the
same time, DEA agents in West Africa were investigating the suspicious
flow of thousands of used cars from U.S. dealerships to car parks in
Benin.
Meanwhile, in Iraq, the U.S.
military was probing the role of Iran in outfitting Shiite militias with
high-tech improvised explosive devices known as Explosively Formed
Penetrators, or EFPs, that had already killed hundreds of U.S. soldiers.
All of these paths eventually converged on Hezbollah.
This
wasn’t entirely a surprise, agents say. For decades, Hezbollah — in
close cooperation with Iranian intelligence and Revolutionary Guard —
had worked with supporters in Lebanese communities around the world to
create a web of businesses that were long suspected of being fronts for
black-market trading. Along the same routes that carried frozen chicken
and consumer electronics, these businesses moved weapons, laundered
money and even procured parts for Iran’s illicit nuclear and ballistic
missile programs.
As
they pursued their investigations, the DEA agents found that Hezbollah
was redoubling all of these efforts, working urgently to raise cash, and
lots of it, to rebuild its south Lebanon stronghold after a 2006 war
with Israel had reduced it to rubble.
Dating
back to its inception in the early 1980s, Hezbollah, which translates
to “Party of God,” had also engaged in “narcoterrorism,” collecting a
tariff from drug dealers and other black-market suppliers who operated
in territory it controlled in Lebanon and elsewhere. Now, based on the
DEA’s extensive network of informants, undercover operatives and
wiretaps, it looked like Hezbollah had shifted tactics, and gotten
directly involved in the global cocaine trade, according to interviews
and documents, including a confidential DEA assessment.
“It
was like they flipped a switch,” Kelly told POLITICO. “All of a sudden,
they reversed the flow of all of the black-market activity they had
been taxing for years, and took control of the operation.”
Operating like an
organized crime family, Hezbollah operatives would identify businesses
that might be profitable and useful as covers for cocaine trafficking
and buy financial stakes in them, Kelly and others said. “And if the
business was successful and suited their current needs,” Kelly said,
“they went from partial owners to majority owners to full partnership or
takeover.”
Hezbollah even
created a special financial unit that, translated into English, means
“Business Affairs Component,” to oversee the sprawling criminal
operation, and it was run by the world’s most wanted terrorist after
Osama bin Laden, a notoriously vicious Hezbollah military commander named Imad MughniyehImad MughniyehA Hezbollah mastermind who
oversaw its international operations and, the DEA says, its drug
trafficking, as head of its military wing, the Islamic Jihad
Organization., according to DEA interviews and documents.
Mughniyeh
had for decades been the public face of terrorism for Americans,
orchestrating the infamous attack that killed 241 U.S. Marines in 1983
in their barracks in Lebanon, and dozens more Americans in attacks on
the U.S. Embassy in Beirut that year and an annex the year after. When President Ronald Reagan
responded to the attacks by withdrawing peacekeeping troops from
Lebanon, Hezbollah claimed a major victory and vaulted to the forefront
of the Islamist resistance movement against the West.
Over the next 25 years, Iran’s financial and military support
for Hezbollah enabled it to amass an army with tens of thousands of
foot soldiers, more heavy armaments than most nation-states and
approximately 120,000 rockets and ballistic missiles that could strike
Israel and U.S. interests in the region with devastating precision.
Hezbollah
became an expert in soft power, as well. It provided food, medical care
and other social services for starving refugees in war-torn Lebanon,
winning credibility on the ground. It then evolved further into a
powerful political
party, casting itself as the defender of poor, mostly Shiite Lebanese
against Christian and Sunni Muslim elites.
But even as Hezbollah was moving into the mainstream of Lebanese
politics, Mughniyeh was overseeing a secret expansion of its terrorist
wing, the Islamic Jihad Organization. Working with Iranian intelligence
agents, Islamic Jihad continued to attack Western, Israeli and Jewish targets around the world, and to conduct surveillance on others — including in the United States — in preparation for future attacks.
Hezbollah
mostly left the United States alone, in what was clearly a strategic
decision to avoid U.S. retaliation. But by 2008, the Bush administration
came to believe that Islamic Jihad was the most dangerous terrorist
organization in the world, capable of launching instantaneous attacks,
possibly with chemical, biological or low-grade nuclear weapons, that
would dwarf those on 9/11.
By funding terrorism
and military operations through global drug trafficking and organized
crime, Mughniyeh’s business affairs unit within Islamic Jihad had become
the embodiment of the kind of threat the United States was struggling
to address in the post-9/11 world.
The
DEA believed that it was the logical U.S. national security agency to
lead the interagency effort to go after Mughniyeh’s drug trafficking
networks. But within the multipronged U.S. national security apparatus,
this was both a questionable and problematic assertion.
Established by President Richard Nixon in 1973
to bring together the various anti-drug programs under the Department
of Justice, the DEA was among the youngest of the U.S. national security
agencies.
And while the DEA had
quickly proven itself adept at working on the global stage — especially
in partnerships with drug-infested countries desperate for U.S. help
like Colombia — few people within the U.S. government thought of it as a
legitimate counterterrorism force.
In
the final years of the Bush administration, though, the DEA had won the
support of top officials for taking down two major international arms
dealers, a Syrian named Monzer al-Kassar and the Russian “Lord of War,” Viktor BoutViktor Anatolyevich BoutVladimir
Putin's arms dealer, known as the "Lord of War." Convicted of
conspiracy to sell millions of dollars worth of weapons to Colombian
narcoterrorists.. And thanks to supportive Republicans in Congress, it had become the beneficiary of a new federal law that empowered its globe-trotting cadre of assault-weapon-toting Special Operations agents.
The
statute allowed DEA agents to operate virtually anywhere, without
permission required from other U.S. agencies. All they needed to do was
connect drug suspects to terrorism, and they could arrest them, haul
them back to the United States and flip them in an effort to penetrate
“the highest levels of the world’s most significant and notorious
criminal organizations,” as then-Special Operations chief MaltzDerek MaltzSenior DEA official who as head of Special Operations Division lobbied for support for Project Cassandra and its investigations. told Congress in November 2011.
As they crunched the massive amounts of intel streaming into the DEA’s Counter Narco-Terrorism Operations Center in Chantilly, Virginia, the agents on Operation TitanOperation TitanA joint investigation with
Colombian authorities into a global money-laundering and
drug-trafficking alliance between Latin American traffickers and
Lebanese operatives., Perseus and the other cases began to connect the dots and map the contours of one overarching criminal enterprise.
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