One of the first things that Israel did on the morning of October 8 was to bomb the Hamas-owned National Islamic Bank in Gaza.
Following the October 7 slaughter of more than 1,200 people and the seizure of around 240 hostages, Israel vowed to destroy Hamas. But killing Hamas military fighters and their commanders on the ground is only one part of the challenge.
Destroying Hamas means obliterating its financial pipelines—as money is the “oxygen” that Hamas, and all terror groups, need to survive. It took 10/7 for Israel to see the light.
Incredibly, while Israel started off pioneering the global fight against terror financing, it ended up facilitating the funding of Hamas—and the biggest terror attack in Israel’s 75-year history.
From its informal start, in 1996, an elite, secret Israeli task force, code-named “Harpoon,” fought terror financing around the world, cowboy-style, targeting banks and financiers, and even seizing and blowing up cash destined for terror groups. After 9/11, Harpoon’s powers grew, thanks to Prime Minister Ariel Sharon and his Mossad director, Meir Dagan, who tapped Udi Levy to lead the task force. According to Israeli and U.S. intelligence experts, it became a blueprint for America’s financial war on terror.
But, in 2015, Benjamin Netanyahu was back in power and losing interest in Harpoon as his focus shifted to Iran. In 2017, Netanyahu’s man at Mossad, Yossi Cohen, disbanded Harpoon despite its success. No clear reason was given—that may come in 9/11-style inquiries—but it was around the time that Netanyahu shifted strategies from fighting Hamas’s terror financing to appeasing Hamas by facilitating and expanding its funding.
By then, Qatar—with Israel’s knowledge—was sending Hamas $15 million a month in cash-stuffed suitcases that soon ballooned to $30 million a month, ostensibly to pay for state salaries and fuel, leaving many critics in the intelligence community aghast, not least because there were no controls to see where the money was going. Prime Minister Naftali Bennett stopped the cash payments for a few months in 2021, following an 11-day war. Then they resumed.
One of the first things that Israel did on the morning of October 8 was to bomb the Hamas-owned National Islamic Bank in Gaza.
Some Israelis and Americans thought the payments would keep Gaza stable and allow Hamas to focus on governance, not terror. There was also a political argument: payments would strengthen Hamas as a counterweight against the Palestinian Authority in the West Bank—and divided leadership meant Netanyahu would have no one to negotiate with for peace.
Many in the counter-terrorism-financing world disagreed. “Of course I was frustrated. Israel turned from a country that fights terror financing to one that allows it,” says Nitsana Darshan-Leitner, a lawyer and former Harpoon associate, who co-wrote Harpoon: Inside the Covert War Against Terrorism’s Money Masters, with journalist Samuel M. Katz. Darshan-Leitner is also the president of Shurat HaDin-Israel Law Center, which she founded in 2002.
Since October 7, Darshan-Leitner has been working on lawsuits she plans to file—including some in the United States—on behalf of American terror victims and their families against the financiers of the 10/7 attacks. Targets include Qatar and the Qatar Foundation. Overall, Qatar funneled around $1 billion into Gaza over the past decade or so, according to reports.
“What Hamas did hurt us all. I was hurt. I was humiliated. I was invaded. There is no one in the country who will tell you otherwise. We are all united to finish Hamas once and for all, and my role in this war is to dismantle them financially,” Darshan-Leitner says.
As the founder of Shurat HaDin, which she modeled on the Southern Poverty Law Center, Darshan-Leitner has been filing similar lawsuits, and winning many of them, against state sponsors of terror, the terror groups, and the banks they use, on behalf of hundreds of terror victims and their families.
That’s how Harpoon found her.
Since its founding, Shurat HaDin—whose motto is “Bankrupting Terrorism — One Lawsuit at a Time!”—has won $2 billion in lawsuits and collected $300 million for terror victims and their families, according to its Web site. The civil suits have been against Hamas, Islamic Jihad, the P.L.O., the Palestinian Authority, Hezbollah, Iran, Syria, Egypt, North Korea, UBS, the Bank of China, and the Lebanese Canadian Bank.
Overall, Qatar funneled around $1 billion into Gaza over the past decade or so, according to reports.
Her targets have grown to include Ben & Jerry’s and Airbnb, for their B.D.S. stance against Israel in Palestinian territories; Airbnb now lists Jewish homes in the West Bank, and Unilever sold its Ben & Jerry’s ice-cream business in Israel to its Israeli licensee. She is also taking on social-media companies for allowing terrorists to incite violence and has filed war-crimes complaints against Hamas and P.L.O. leaders in the International Criminal Court.
In August 2022, Darshan-Leitner won a large judgment against Iran and Syria from a U.S. District of Columbia court. She was representing the family of Taylor Force, a West Point graduate and business student who was stabbed to death by a Hamas terrorist in Tel Aviv in 2016, and two other families who lost loved ones to Hamas terrorists. There is now a Taylor Force Act, which was passed by Congress to stop American economic aid to the Palestinian Authority until its so-called Martyrs Fund stops paying stipends to terrorists and the families of dead terrorists.
She has been included on an annual list of the 50 most influential Israelis five times. “She’s definitely a force of nature,” says one former U.S. counter-terror-financing official who worked with her.
Darshan-Leitner is also a mother of six, including triplets. There is a deep irony embedded in her marriage to her American-born husband, Aviel Leitner, who also works at Shurat HaDin. In 1984, Leitner—then a 24-year-old Pace University law student—was one of four Americans and an Israeli convicted in connection with an armed assault on a bus carrying Arab workers in Ramallah that left six people injured, and other attacks.
Back then, Leitner was a member of Rabbi Meir Kahane’s militant group Terror Against Terror and associated with Kach, a radical Orthodox Jewish political party founded in 1971 that was disbanded in 1994 after party supporter Baruch Goldstein killed 29 Palestinians at a mosque. Leitner has since given up violence for lawfare. Neither Darshan-Leitner nor her husband have commented on his conviction.
Darshan-Leitner started filing lawsuits against Islamic terrorists and their organizations as a private lawyer during the beginning of the second intifada. “I saw there was a way to sue to block their funding, and I also felt and believed that the Palestinians can’t keep killing us without paying a price,” she says. “After two years, when I scored large victories—judgments of millions of dollars and liens on terrorist assets—I was approached by Harpoon. They asked if I could expand my activity.”
After Israel disbanded Harpoon, it continued to track terror financing but no longer from a centralized task force, and—most shockingly—it no longer tried to stop the money flow to terrorists.
Despite Harpoon’s success, it was shut down, which begs the question: Why? “Israel will need a 9/11-style commission to find out why,” says one expert interviewed by Air Mail.
Incredibly, while Israel started off pioneering the global fight against terror financing, it ended up facilitating the funding of Hamas.
Some intelligence experts speculate that Netanyahu put his political interests—maintaining relative quiet and thwarting negotiations for a Palestinian state—above Israel’s national-security interests. Israel also underestimated Hamas’s military threat and believed Hamas’s claims that its goals had shifted from killing Israelis to governing Palestinians.
Darshan-Leitner and others accuse the Israeli government of “kicking the can down the road”—a phrase that U.S. counter-terrorism-financing experts also use.
Was it complicity or incompetence? That’s something Israeli investigations into the country’s greatest intelligence failure may explore at a later date.
In any case, U.S. and international anti-money-laundering legislation—known as “AML”—failed big-time.
“You would have thought, of all the situations in the world where AML enforcement could have worked to deprive a terrorist group of financing, this would have been it,” says financial secrecy/money-laundering expert James S. Henry, a lawyer, economist, and Yale global-justice professor.
“The enclave is totally cordoned off. It can’t trade or do orthodox banking. It’s completely walled off from the world. We have a lot of problems and traditional drug-dealing cartels doing fancy things with crypto, and the Chinese moving money and classic run-of-the-mill kleptocrats. But this is an authentic and, by all accounts, pretty outrageous group, and you have some apologists for the Palestinian movement, but I think no one would defend what Hamas did.”
Netanyahu thought his government had Hamas under control. At the same time, the Americans were overwhelmed with right-wing extremists, neo-Nazi groups, and the Islamic State. “Gaza was farther down the priorities list,” says Matthew Levitt, a director of the Counterterrorism and Intelligence program at the Washington Institute for Near East Policy and a former deputy assistant secretary for intelligence and analysis at the Department of the Treasury.
Still, anti-terror-financing work continued.
By May 2022, the U.S. Treasury Department had sanctioned some “individuals and companies that Hamas uses to conceal and launder funds,” said Elizabeth Rosenberg, assistant secretary of the Treasury for terrorist financing and financial crimes, at the time.
That was the first time the U.S. mentioned the Hamas “secret investment portfolio.”
Along with building tunnels under Gaza, Hamas-controlled companies built a shopping mall in Sudan and developed skyscrapers in the United Arab Emirates. There’s a Hamas-controlled, revenue-generating private-equity fund as well as real-estate and construction companies in Turkey, cyber-currency funding, and more, as recently reported in The New York Times.
Shockingly, the Israeli government knew all about it—and did nothing.
More sanctions came after 10/7. But according to reports, Hamas-controlled firms are still operating—including building luxury condos in Turkey, even after October 7.
Part of the problem, Henry says, is that funding and staff for anti-money-laundering enforcement in the U.S. is limited.
“They are utterly inundated, and banks and other financial institutions are going through the motions of spending money on compliance. And Treasury didn’t even add Hamas crypto managers to its sanctions list until after October 7,” Henry says.
Jonathan Schanzer, a former Treasury Department official now working at the Foundation for Defense of Democracies, agrees. “We lost the scent,” he says.
In addition, AML laws, “for whatever reason, are just not working,” Henry says. “It’s a global problem. There are all kinds of bad actors using the financial system with impunity. Globalization at the end of the day has not produced democracy but has undermined democratic regimes.”
Hamas also gets financing through traditional hawala exchanges and from crowd-sourcing online.
At the same time, even if Hamas is kicked out of Gaza, its state patrons—especially Iran—will continue to fund the group wherever it is based, Schanzer said, adding that Iran is still the “primary contributor of arms, training, and other material assistance” to the terror group and others.
“It’s part of Iran’s broader ‘ring of fire’ strategy to arm proxies surrounding Israel,” Schanzer says.
In addition, “The Qataris made an argument to Israel and the U.S. that the best way to maintain calm would be to pay the salaries of Hamas, with Israeli permission,” Schanzer said.
And so it began—the payoff for “quiet,” not peace, that lasted until October 7.
“The crazy thing is that it didn’t buy calm. There was a major war in 2021. The money also went towards the construction of tunnels and to buying rockets and all the weaponry. The Israelis were just kicking the can down the road,” Schanzer said.
In addition, the Qatar payments were never enough. “It became an extortion racket,” Schanzer says. “In my view, the U.S. got played like fiddles.”
There’s a Hamas-controlled, revenue-generating private-equity fund as well as real-estate and construction companies in Turkey.
Turkey also played a large role, hosting Hamas businesses and financiers. Malaysia is another center of gravity for Hamas activists and financiers, along with Kuwait, and there are reports that Hamas is preparing to migrate to Algeria.
The West mostly ignored Hamas financing, especially when the money was funneled to the group by purported American allies such as Turkey and Qatar, and the decision not to prosecute them for financially supporting Hamas was viewed as tacit approval. Schanzer calls it “counter-terrorism-finance malpractice” across the board.
In addition, the U.S. decision to give Iran sanctions relief in exchange for nuclear concessions contributed significantly to Hamas’s ability to move funds over the years. “That’s probably the biggest loophole that was exploited,” Schanzer says. “Giving Iran money was a recipe for funding its proxies. The U.S. insisted repeatedly they were monitoring the money and knew where it was going.”
But they didn’t.
“It was a disaster of epic proportions that still has yet to be reckoned with in the U.S. There is still no acknowledgment of the sheer amount of money that transited Iran to the Houthis and Shiite militias attacking the U.S. right now, and to Hamas,” Schanzer says.
He estimates that more than $150 billion and perhaps much more—due to lax enforcement of sanctions—gave Iran the ability to sell oil to China and Russia and remove sanctions on individuals and businesses as part of the Iran deal. “I don’t know if anyone has ever done a proper accounting of how much financial damage was done, but in my view the Iran deal is the original and continuing sin. You can’t continue to fund the primary patron of Hamas, Hezbollah, and the Houthis and expect that these groups will suffer,” Schanzer says.
As for the banks that Israel bombed in Gaza following 10/7, that is straight out of the U.S. playbook for fighting ISIS.
“We bombed warehouses full of cash controlled by the Islamic State, burning hundreds of millions of dollars. It’s one of the easiest ways to cut off a clear channel of finance,” Schanzer says.
Today, post-10/7, if the U.S. is serious about dismantling Hamas and its financial infrastructure, it must stop Hamas’s top three patrons—Iran, Qatar, and Turkey—from “operating with impunity,” Schanzer says. “Hamas can’t resume control in Gaza, because when you have a safe haven, financial structure, and tax system, it only serves to benefit the terror group.”
Jennifer Gould is a columnist at the New York Post whose coverage includes real estate, money laundering, and global corruption