Hamas had ‘almost half a billion dollars’ and Israel knew about it. Why did it not act?

Could Israel have averted the 7 October terror attack by Hamas? This is a question that will continue to haunt the Jewish nation for years to come.

The assault, the deadliest in the country in its 75-year history, is seen as a failure of Israel’s famed security and intelligence network. For years, Israel is said to have underestimated Hamas. It didn’t believe that the Palestinian militant group could launch such a dastardly and well-planned attack. But the Israeli government and intelligence also turned a blind eye to warning signs.

How Israel discovered secret documents on Hamas funding

The country was in the know-how about Hamas’ financing sources – that it was regularly receiving funds from nations like Qatar and other means. In 2018, Israeli security officials reportedly discovered secret documents that revealed details of what amounted to a private equity fund that was used by Hamas to finance its operations. The information stolen from the computer of a senior Hamas official listed assets worth millions of dollars, according to a report by The New York Times (NYT).

Hamas “controlled mining, chicken farming and road-building companies in Sudan, twin skyscrapers in the United Arab Emirates (UAE), a property developer in Algeria, and a real estate firm listed on the Turkish stock exchange”, the report says.

The Israeli officials shared the records with its government and the United States. But no action was taken to cut off the Palestinian group’s money and thus possibly thwart its plans.

No sanctions were imposed by Israel or the US on the companies, whose names surfaced in the ledgers. “Nobody publicly called out the companies or pressured Turkey, the hub of the financial network, to shut it down,” the NYT report says.

Millions of dollars from these companies were diverted to Hamas. This was at a time when it was purchasing new weapons and planning an attack on Israel. The funds were used by the militant organisation to boost its military infrastructure and helped them prepare for the 7 October terror attacks. The portfolio was once valued at approximately half a billion dollars, according to the report.

It was the US that took action in 2022, levying sanctions against the companies linked to Hamas. However, it was not enough as those involved made millions of dollars by selling shares in a blacklisted company. Now there is fear that this money will help the terrorist group finance the ongoing war with Israel and will be enough to help it rebuild once the conflict is over.

Brian Nelson, the US treasury department’s under-secretary for terrorism and financial intelligence, told NYT that they are “trying to disrupt” the money flows.

Israel had a chance to stifle the funds in 2018 but the country’s leadership failed to understand the gravity of the situation. It believed that Hamas was more interested in governing than fighting Israel. It’s why Prime Minister Benjamin encouraged Qatar to send millions of dollars in cash to Hamas, hoping that it would bring stability and peace.

Also read: Qatar sent millions to Hamas for years and Netanyahu encouraged it. Here’s why

Tracking the Hamas portfolio

According to Udi Levy, a former chief of Mossad’s economic warfare division, Netanyahu “did not care much” about the Hamas portfolio in 2015. Levy’s team, Task Force Harpoon, which focused on disrupting the money flowing to groups like Hamas was shut down, reports NYT. Fed up with the inaction, the agents on the team reportedly uploaded some documents on Facebook, hoping that investors and companies would stumble upon them and stop business with firms linked to Hamas.

But it did not hurt the Palestinian group. Its network of funds only strengthened after 2018 with links to the mainstream financial system, revealed records.

At the centre of the operations was a Turkish company. Big American and European banks managed shares on behalf of their clients, reports NYT.

Hamas’s links to legit businesses

While terror organisations like Al Qaeda and the Islamic State have used front companies to launder money, Hamas received its funds from a network of legitimate businesses which made real profits.

One of them was Ahmed Odeh, a Jordanian businessman. He received seed money from Hamas’s governing council to build and manage a portfolio of companies. Another was Hisham Qafisheh, a Jordanian who studied in Saudi Arabia. One of his companies won a $500 million highway contract in Sudan, Task Force Harpoon found out in 2015.

After the 2014 conflict with Israel, Hamas took a beating. It had depleted its resources and weaponry but was attempting to rebuild. By 2016, it was acquiring GPS jammers, drones and precision weapons and adding 6,000 operatives to its ranks with a plan to attack Israel and take hostages, Israeli intelligence found out, according to the NYT report.

But instead of cracking down on Hamas, Netanyahu thought allowing Qatar to send money to Gaza would help in containing the group. It would help in stabilising Hamas, which would lessen pressure on him to negotiate toward a Palestinian state.

Task Force Harpoon was disbanded and a new group of intelligence officials started tracking the money network.

Hamas was reportedly earning $10 to $15 million from the profits made by companies. It also made some $75 million by selling off the assets from the secret portfolio and directed it to rebuild the military infrastructure, the intelligence network learned, reports NYT.

However, Israel took no action against these companies. It turned to the US to shut the companies off the global financial system but that would take time.

Also read: The Business of Terror: Who funds Hamas, how does it get weapons?

Israeli intelligence’s big find in 2018

In 2018, Israeli intelligence got its hands on the ledgers which had information from 2012 onward about the companies and their valuations. They were based in Saudi Arabia, Turkey and Sudan, among others.

It revealed where Hamas was sending its money – to Gaza and the West Bank. Saudi intelligence backed this discovery. In mid-2018, Mahmoud Ghazal, the Hamas accountant, and two other men who held positions in companies from the portfolio were arrested. Ghazal confessed that the portfolio existed to transfer money to the group.

The Saudis shared the intelligence with the US and the Israel team shared information on the ledgers with it in 2019. But the Trump administration did nothing about it. The US treasury department said that issuing sanctions was time-consuming and Israel was more focused on Iran, the report says.

Turkey’s role in Hamas’s financial network

According to NYT, while the Hamas portfolio spanned many countries, Turkey played a key role. The businessmen Odeh and Qafisheh were in Turkey in 2019.

President Recep Tayyip Erdogan has been a Hamas sympathiser and did not restrict its activities. A company which was an important part of the portfolio was a real estate developer, Trend GYO.

Erdogan wanted to promote the building industry and the company took advantage of that. American and European banks held more than three per cent of the company’s publicly traded shares on behalf of clients, Turkish financial records show, the report says.

It was only in May 2022 that the US treasury department announced sanctions and Trend was blacklisted.

Last month, a treasury department official visited Turkey asking the government to stop sheltering Hamas money. But Erdogan is unlikely to act on the sanctions and Trend stocks continue to be traded on the Istanbul exchange, NYT reports. The firms associated with Hamas and those sanctioned continue to hold Turkish bank accounts in US dollars.

Tamir Pardo, a former Mossad chief, told NYT that Hamas had a lot of money. “… if someone would have chased the money and stopped it, we wouldn’t be seeing the results of what we see today.”

With inputs from The New York Times