Terrorism: Hizballah's Brand is Tarnished

By Jonathan Spyer*

September 24, 2009

A famous Hizbullah marching song, "Hizbullah ya ayuni" (Hizbullah - my eyes), contains the following verse: "And today through the blood of the brave, the merciful creator has given us victory, and the whole world and all people have begun to speak of our glory." Unfortunately for the Lebanese Shi'ite Islamist movement, the main world news story in which it currently features concerns matters of a distinctly inglorious type, with which it would undoubtedly prefer not to be associated.

The revelations concerning the activities of the so-called Lebanese Bernie Madoff - Salah Ezz el-Din of the south Lebanese village of Ma'aroub - are serving to tarnish the image of selflessness and idealism in which Hizbullah likes to present itself. The movement has long sought to differentiate itself from the notoriously corrupt, distinctly nonidealistic political and financial practices with which Lebanon is often associated. Ezz el-Din's activities suggest that on close observation, Hizbullah may be less different from its surroundings than its admirers (especially in the west) like to think.

Ezz el-Din, a Lebanese Shi'ite in his 50s, is accused of embezzlement and defrauding investors of hundreds of millions of dollars. The means by which he chose to part his victims from their money are familiar. He promised quick returns on investments in what he claimed were construction, oil and gas projects outside of Lebanon. He is reported to have guaranteed investors 20 percent-25% profits within 100 days on certain investments.

It now appears that Ezz el-Din was running a Ponzi scheme - paying clients with funds gleaned from newer investors. The sums involved are large - though nowhere near Madoff-like proportions. He is believed to have defrauded investors of around $500 million.

But Ezz el-Din was no ordinary financier. Rather, he enjoyed close links to Hizbullah. He ran a variety of enterprises associated with the group - most importantly the Dar al-Hadi Publishing House - named after Hadi Nasrallah. Hadi Nasrallah was the son of Hizbullah leader Hassan Nasrallah who was killed fighting the IDF in southern Lebanon, and is somewhere near the top of the movement's pantheon of "martyrs." The publishing house which bore his name was responsible for the publication of a number of books by senior Hizbullah officials.

THE PERCEPTION of Hizbullah patronage was a major factor in encouraging investors to place their trust in Ezz el-Din. As one disappointed client put it, "people put money with him because he was wearing the Hizbullah cloak." The presence of people like him does not fit with the puritanical image of Hizbullah. But it is not especially out of place with the broader pattern of the movement's activities.
As a major Lebanese political force, Hizbullah offers patronage to powerful families and individuals from the Lebanese Shi'ite community. The organization effectively operates a state within a state. Its areas are off limits to the army and police. This is particularly useful for individuals close to the movement engaged in criminal activities.

The lucrative hashish trade in the movement's heartland in the Bekaa Valley in eastern Lebanon offers an example of this patronage. Families engaged in this trade receive the protection of Hizbullah, ensuring that neither the authorities nor their rivals interfere with their activities. In return, Hizbullah takes a generous helping of the considerable profits.

The movement controls 13,000 acres in the Bekaa, which produce at least 300 tons of hashish annually. Hizbullah is reckoned to rake in profits of $180 million annually from this trade.

Most of the hashish is exported to Europe. Not all, though. The problem of drug abuse among residents in the Hizbullah-controlled Dahiyeh area of south Beirut is well known in Lebanon. Not all residents of the Dahiyeh are Shi'ite puritans.

Hizbullah is not reinventing the wheel. Rather, it is behaving in the manner of other Lebanese political forces. These activities are not particularly demonic - though the less powerful members of the various Lebanese communities are most likely to be hurt by them. But they serve to indicate the extent to which Hizbullah's pose of purity and incorruptibility and standing above the base practices of its rivals is largely a product of good public relations, rather than any observable reality.

The gradual tarnishing of the Hizbullah brand is, of course, good news for Israel. With past enemies - Arab nationalist regimes, the Yasser Arafat-led PLO - it was in the end the unbridgeable gap between proclamations and reality which served to initiate their slow decay and decline more than any single military defeat.

In this regard, another explanation for the Ezz al-Din affair is predictably doing the rounds in southern Lebanon. Haj Kamal Shour, who lost $1.03 million investing with the financier told reporters that he was sure that the "Israeli Mossad and Zionist lobby" were in some unaccountable way behind it all.

The reliable Zionist foe is enlisted to explain away failures and corruption scandals. But wasn't that exactly the political style that Hizbullah, with its selfless martyrs and its blood-curdling marching songs, was supposed to be doing away with? As Lebanon's former colonial governors might have put it - the more things change, the more they stay the same.