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.
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.
December 15, 2011
Hezbollah is linked to a $483,142,568 laundering scheme
The money, allegedly laundered through the Lebanese Canadian Bank and two exchange houses, involved approximately 30 U.S. car buyers.
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“This was a policy decision, it was a systematic decision,” said David Asher (David Asher: Veteran 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 Brennan (John Brennan, Obama’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.”
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 Fayad (Ali 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.
March 26, 2014
Indictment of Ali Fayad
The indictment alleges Fayad, along with his co-conspirators, agreed to provide the FARC with weapons to kill U.S. and Colombian officials.
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Project Cassandra members say administration officials also blocked or undermined their efforts to go after other top Hezbollah operatives including one nicknamed the ‘Ghost (The Ghost, One 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 Safieddine (Abdallah Safieddine, Hezbollah’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.”
Katherine Bauer testimony to the House Committee on Foreign Affairs
Former Treasury official criticizes the Obama administration.
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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.
Asher (David 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 Kelly (John “Jack” Kelly, DEA 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.
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?”
May, 31, 2017
Indictment of Samer El Debek
From roughly 2008 to 2015, Debek allegedly received military training from training in surveillance, explosives and firearms.
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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 Maltz (Derek Maltz, Senior 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 Titan (Operation Titan, A 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 Mughniyeh (Imad Mughniyeh, A 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 attackWestern, 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 Bout (Viktor Anatolyevich Bout, Vladimir 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 Maltz (Derek Maltz: Senior 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 Titan (Operation Titan: A 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.