By Samuel M. Katz
Read by Paul Boehmer
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ISIS boasted $2.4 billion of revenue in 2015, yet for too long the global war on terror overlooked financial warfare as an offensive strategy. “Harpoon,” the creation of Mossad legend Meir Dagan, directed spies, soldiers, and attorneys to disrupt and destroy money pipelines and financial institutions that paid for the bloodshed perpetrated by Hamas, Hezbollah, and other groups. Written by an attorney who worked with Harpoon and a bestselling journalist, Harpoon offers a gripping story of the Israeli-led effort, now joined by the Americans, to choke off the terrorists’ oxygen supply, money, via unconventional warfare.
This is a story of a new and unconventional method of fighting terrorism—financial warfare against the extremist organizations, their leadership, and the rogue regimes that support them. It plays out in Israel’s cloak-and-dagger world of espionage and counterterrorism. The concept was initiated and developed by a small band of innovators—members of a secret unit in the intelligence services of Israel. As with any new start-up that seeks to disrupt, at first nobody believed that this new path could be effective, but today it has proven itself as one of the most potent means to fight terrorism globally. This book chronicles the close-knit relationship between Israeli intelligence and elements of the United States government as well as lawyers from the private sector that joined forces to fight the financial infrastructure that enabled terrorists to blow themselves up inside cafés and buses in the name of the Jihad.
Like any good spy story, there are heroes in this tale, and there are villains. But this is also a recounting of an alliance forged by historical ties and inescapable necessity. Much of this story has remained secret until now. Operationally, as well as politically, secrecy was a requirement. It remains a requirement to this day. Even the name of the unit, Harpoon, was classified for nearly twenty years.*
Israel’s lead in fighting terrorism on a financial front, as well as on the battlefield, established an operational precedent that the United States would follow in the aftermath of the September 11, 2001, attacks; other western nations, noting the nexus between money and bloodshed in their cities, would also use the Israeli example of financial warfare as a new dimension in which terrorism can be fought and vanquished.
This new form of warfare was largely the vision of Meir Dagan, a legendary Israeli warrior and spymaster. Dagan spent most of his adult life with a weapon in his hand, and a dagger at his hip, fighting terrorists behind their lines in spectacular operations. He realized that money was the oxygen that allowed terror to breathe, and he wanted to use his experience and the forces he led to suffocate every dollar, dinar, and euro from the coffers of organizations that were dedicated to killing innocent civilians. We have had a front row seat in watching Dagan and his team of spies and commandos change the paradigm of the global war on terror. This is their story. **
Samuel M. Katz
The raiders came at night. They always did. The pilots from the U.S. Army’s ultrasecretive 160th Special Operations Aviation Regiment (Airborne) were experts at flying in the absolute black of night on missions of the highest strategic importance. The unit, known as Night Stalkers, flew multi-million-dollar MH-60 and MH-47 helicopters outfitted with the top-secret night-vision capabilities. The powerful rotors that provided lift and speed to these armored birds were designed to be silent; they whispered in flight. From Mogadishu to the Hindu Kush, the Night Stalkers had flown America’s tip-of-the-spear to targets deep inside the windswept valleys of the countries involved in the global war on terror. In late March 2016, the Night Stalkers were launched into the heart of the self-proclaimed Islamic State in Syria, ISIS, to ferry an as-yet-unnamed special operations unit on one such mission. The raiders’ target was Abd al-Rahman Mustafa al-Qaduli.
Abd al-Rahman Mustafa al-Qaduli was hard-core. Known by too many aliases to list, the fifty-nine-year-old physics teacher from Mosul had joined al-Qaeda in Iraq in 2004 and quickly clawed his way up the chain of command to serve as the terror group’s deputy commander. The Americans apprehended al-Qaduli in 2003, imprisoning him inside Camp Bucca, the U.S. military’s detention center in southern Iraq that was used to hold the most dangerous terrorists seized in the insurgency. But in 2012 al-Qaduli was released in the dust of the U.S. withdrawal from Iraq. He joined the nascent Islamic State, and became a trustworthy and capable deputy to the Caliphate’s head, Abu Bakr al-Baghdadi. Al-Qaduli was considered by many to be the most powerful man inside the Islamic State: He was ISIS’s finance minister.1
As the individual who controlled the dollars and dinars, al-Qaduli decided how the ISIS billions in seized wealth, oil revenue, and Gulf money donations were spent. He was the chief bean counter who made sure that the fighters in Raqqa, the Caliphate’s capital, were paid their weekly stipends, and he parceled out cash so that local commanders could purchase the bullets and mortar rounds needed to keep the fight going. Al-Qaduli was in charge of budgeting funds that ISIS used to produce the slick Hollywood-inspired recruitment videos it used to attract fighters from around the world. The financier earmarked resources to ISIS sleeper cells inside Western Europe in order to make sure that the deep-cover operatives had the cash to acquire safe houses, vehicles, and weapons. Al-Qaduli was also responsible for managing ISIS’s provincial commands, to coordinate operations in Sinai and the rise of the Caliphate in the swirling chaos that was once Muammar Qaddafi’s Libya.2
On May 14, 2014, the U.S. Department of the Treasury named al-Qaduli as a Specially Designated Global Terrorist for acting for, or on behalf of, ISIS. The State Department’s Rewards for Justice had offered a seven-million-dollar bounty for information leading to al-Qaduli’s arrest.3 But the special operations forces ferried into Syria that black March night had not traveled to the Caliphate to issue an arrest warrant; they weren’t in Syria hoping to collect Foggy Bottom’s prize. The Pentagon mission was classified as “capture or kill.” The commanders who were responsible for carrying out America’s secret wars against terror, as well as their liaisons inside the Central Intelligence Agency, had hoped to be able to once again interrogate the wily money chief in order to further undermine ISIS. After all, previous raids against some of al-Qaduli’s subordinates had developed the matrix of intelligence that put them on his trail. The Americans were monitoring al-Qaduli’s phones and his messengers. His whereabouts, from safe house to safe house, were followed by drones and by satellites. The ISIS chief financial officer traveled with a large security package of men and vehicles. Once located, he was an easy target to track.
The American assault team’s plan was: stop al-Qaduli’s convoy, eliminate the bodyguards, and subdue and secure the target so that he could be extracted and the helicopter flown back to base. But al-Qaduli likened himself to a warrior. He was often seen inspecting forces in Raqqa wearing the traditional pale green outfit, shalwar kameez, that barely contained a bloated belly, a relic of his days with al-Qaeda in Pakistan; his AK-74 assault rifle was always slung across his shoulder, and his load-bearing pouches were crammed with hand grenades just in case the Americans had any idea about taking him into custody again. He had no intention of being captured alive on a darkened stretch of a Caliphate side road.
When the assault force swooped in from the air, al-Qaduli’s men responded with a fusillade of machine-gun fire that illuminated the thick black sky. The battle was one-sided and brief. Within minutes of the first shot being fired, al-Qaduli and his bodyguards were dead; the Toyota 4×4s they drove had been chewed to pieces by armor-piercing rounds and shrapnel. The American operators rushed into the flames and twisted metal to retrieve cell phones and other personnel effects of the ISIS operatives. The material was spirited back to the analysts and the spymasters for examination.
At the Pentagon, Defense Secretary Ash Carter and U.S. Marine Corps Major General Joseph Dunford, the chairman of the Joint Chiefs of Staff, discussed the raid with the press, careful not to disclose details of the covert operation. “We are systematically eliminating [ISIS’s] cabinet. Indeed, the U.S. military killed several key [ISIS] terrorists this week including, we believe, Haji Imam [a nom de guerre for al-Qaduli] who was an [ISIS] senior leader, serving as a finance minister and who is also responsible for some external affairs and plots,” Ash explained. The removal of al-Qaduli as leader was presented as a severe blow to ISIS’s ability to conduct operations both inside and outside of Iraq and Syria.”4
The termination of the financier was a major blow to ISIS. Al-Qaduli knew where the bank accounts were and what the balances were and the interest rates; he knew the PIN codes and the passwords to access ISIS’s portfolios. Al-Qaduli was the number cruncher who divvied up the profits from oil and the sex trade. The money that he managed enabled ISIS to threaten much of the Middle East and target Europe and even the United States. The intelligence that led to him had been assembled, in large part, by previous operations that had targeted money changers, bankers, and the men responsible for turning the oil that flowed underneath the Caliphate into hard currency.
One operation that yielded a gold mine of actionable data in May 2015, a raid by some twenty-four members of the famed and ultrasecretive Delta Force, had targeted Abu Sayyaf, the man in charge of ISIS’s oil revenues. The raid, carried out in the heart of ISIS-controlled Syria close to one hundred miles southeast of Raqqa, resulted in Abu Sayyaf’s death. But the Delta Force had also seized computers and mobile phones, along with the dead man’s notebooks and personal effects. The American operators had also captured Abu Sayyaf’s Iraqi-born wife. When questioned, she provided an in-depth insight into the secret world of ISIS revenue. The Abu Sayyaf operation, like the raid that targeted al-Qaduli, had been ordered at the direction of President Barack Obama.5
The raids in Syria were a clear indication that the strategic emphasis of the United States’ war against ISIS—and other transnational Islamic fundamentalist terrorist groups—had shifted like seismic plates moving underneath a troubled earth. Financiers were never considered priority targets—the men who handled the money were never marked for death. The distinction of being on a kill list was for those who ordered and ran operations. But now the money men were not only high-value targets, they were considered the highest value. There were no longer any white-collar jobs in the terrorist organization. The U.S.-led war on ISIS had become one of follow the money, devalue the money, seize the money, and kill the money. America, well into its second decade in the global war on terror, had learned that one of the most effective and long-lasting counterterrorism tactics was to suffocate the funds that were used to buy weapons, pay for explosives, rent safe houses, train recruits, and orchestrate and market catastrophic destruction on a global stage.
The new emphasis targeting terror money did not originate in the West Wing of the White House, though. The blueprint for this war plan was drawn up in the West Bank of the Jordan River some twenty years earlier. Well into the fourth decade of its own global war on terror, one man inside Israel’s security hierarchy came to realize that the phenomenon of Palestinian Islamic fundamentalist, a wave of suicide bombings and death that combined nationalistic aspirations and religious fervor, was fueled and financed by a complex underground economy that had a global outreach. Stop the money, the idea followed, and the oxygen that stoked the fires of terror could be suffocated. The individual responsible for popularizing that notion was a man named Meir Dagan.
Using ledger books and bank accounts as a weapon in the battle against terror was out of character for Dagan. He had spent a military career serving the State of Israel in the up-close-and-personal world of deadly special operations. From the alleys of the Gaza Strip to the sweeping hills of southern Lebanon, Dagan had left his mark—and the bodies of his enemies—on the battlefield. He realized that heroics and daring were essential in the day-to-day fight against terror, but Israel needed an outside-the-box solution with long-term and game-changing results. As a major general and as the prime minister of Israel’s advisor on counterterrorism, Dagan pursued and targeted terror financing as a course of national policy, creating a special task force of intrepid spies, accountants, experts, and military officers, as well as attorneys who were able to mobilize the resources of all Israel’s security and intelligence services in the effort to bankrupt the terrorist organizations that threatened Israel. Later, as the director of the Mossad, Israel’s famed espionage service, Dagan turned this task force into a global team of hand-picked agents who traveled the world to dry up the funding for the bullets and bombs that, over the course of the Palestinian intifada, killed more than one thousand Israelis and maimed more than five thousand.
Meir Dagan dispatched his operatives on daring missions around the world in the effort to fight terror money. But Dagan’s most effective weapon was the close-knit alliance his team built with the highest reaches of the U.S. government, primarily in the Department of the Treasury. This alliance used espionage tradecraft and the overwhelming power of seizures and sanctions to coordinate full-fledged assaults against the banking systems that enabled Hezbollah to launder its narcotics profits and Iranian stipends and pay for the largest terrorist army the Middle East had ever seen. Dagan’s asymmetrical form of financial warfare was ultimately used to target the Islamic Republic of Iran in order to prevent Tehran from realizing its nuclear ambitions.
The task force that Dagan created was called Harpoon.6 This is the remarkable and untold story of this secret unit and how they redefined the way that Israel—and the United States—waged war on terror.
The Tourists from the Windy City
All beginnings are difficult.
—Rabbi Shlomo Yitzhaki (Rashi), Mekhilta de-Rabbi Ishmael, on Exodus 19:5
It was roughly 4:00 AM on December 13, 1992, when Nissim Toledano walked into his young son’s room to softly kiss the two-year-old on the forehead. The kiss, and the proud gaze that focused so lovingly on his young son, was routine for the twenty-nine-year-old sergeant in the Border Guard, the paramilitary arm of the Israel National Police. Nissim lived and worked in Lod, a mixed Jewish and Arab town near Ben-Gurion International Airport. He made the twenty-minute stroll to the Border Guard headquarters every morning, and often walked home in time for dinner. The young father felt blessed to be able to go home every night and spend time with his family.
Toledano walked briskly in the morning cold, an hour before the winter sun would appear. The morning’s first traffic whizzed by him as those forced to be up at such an ungodly hour made the most of the mostly empty thoroughfares, and Toledano didn’t notice the 1973 red Subaru sedan with Israeli license plates inching up behind him. As Toledeno crossed the street the car sped up and knocked him to the ground. Four young Palestinian men, all in their early twenties, emerged from the vehicle, beating the young sergeant, and then gagging him. They took his gun, handcuffed him, and threw him into their vehicle. The car sped toward Jerusalem.
The policemen who worked with Toledano knew that something was wrong when the always punctual officer failed to arrive for morning inspection. Repeated calls to his pager went unanswered. A patrol car was dispatched to look for him. The General Security Service, Israel’s domestic counterintelligence and counterterrorism agency known as the Sherut Ha’Bitachon Ha’Klali, or Shin Bet for short, was also alerted. Toledano’s disappearance bore the telltale signs of foul play. Hamas, the Palestinian Islamic Resistance Movement, had kidnapped soldiers in the past and buried their victims in unmarked graves, never telling the Israeli authorities where the slain soldiers lay.
The four young men who kidnapped Toledano called themselves the “Secret Squad.”1 They carried out the operation in order to prove their worth to a local Hamas commander, hoping that the deed would be enough to earn acceptance into the group’s military wing. The kidnapping was done completely on spec: The perpetrators even pooled their savings to purchase their getaway car. The four planned to carry out an operation in the capital, but Jerusalem’s streets were too well protected. They chose the city of Lod instead. Toledano was targeted at random.2
The Shin Bet received confirmation of Toledano’s abduction shortly before noon. Two of the kidnappers, their faces concealed by kefiyyehs, or Arab headdresses, walked into the Red Crescent office in the West Bank town of El-Bireh and handed over a copy of Toledano’s police identity card, along with a pledge that the sergeant would be killed at 9:00 that night unless Hamas founder Sheikh Ahmed Yassin was freed from an Israeli prison. “Our group kidnapped one of the officers of the occupation on Dec. 13, 1992,” the communiqué proclaimed. “We are demanding the occupation authorities and Israeli leaders release Sheik Ahmed Yassin in exchange for releasing this officer.”3
Sheikh Yassin was a quadriplegic Islamic scholar who had created a Palestinian version of Egypt’s Muslim Brotherhood in Gaza and the West Bank, an organization that would become known to the world as Hamas. The Israelis imprisoned Yassin in 1984 for stockpiling weapons in his home, but he was released a year later as part of an exchange of 1,500 Palestinian prisoners for three Israeli POWs captured in Lebanon. He was arrested again in 1989 and sentenced to two life terms for ordering the kidnapping and murder of two Israeli soldiers, and attempting to use the bodies as leverage to free Hamas terrorists jailed by Israel.4 Yassin was also convicted for approving the torture and murder of an Arab man suspected of collaborating with Israeli security forces in Gaza.
Toledano’s kidnapping sparked a political crisis in Israel. Prime Minister Yitzhak Rabin convened an emergency security cabinet session, demanding action. Israel had just endured close to five years of bloody violence during the Palestinian intifada, or uprising. Hamas, along with the Iranian-funded Palestinian Islamic Jihad (PIJ), had successfully injected the zeal of fanatical Islamic fundamentalism into Palestinian nationalism, making the most of a thirst for catastrophic bloodshed. Israel was at the time involved in delicate and covert talks with the Palestine Liberation Organization. The abduction of Nissim Toledano was a brazen attempt by Hamas to disrupt those tenuous negotiations and trigger a wave of rage and violence.
Rabin had no intention of negotiating with Hamas for Toledano. The prime minister realized that Toledano was probably already dead, and he understood the political ramifications of terrorists kidnapping a police officer off the streets of an Israeli city and murdering him in cold blood. Rabin was a seasoned politician, but his background was military, and he knew that a decisive battlefield statement was needed to send a clear message that there would be consequences for Hamas. Like many of Israel’s commanders at the time, Rabin was a chain smoker, and a cloud of smoke engulfed the stormy cabinet meeting of angry strategizing. Rabin had vowed to break the bones of Palestinian protesters during the intifada, and now he wanted to break the back of Hamas. A no-holds-barred measure was required, the prime minister explained. He ordered the heads of the intelligence services, and the commanders of the Israel Defense Forces (IDF) to take immediate action.
Led by the Shin Bet, IDF special ops units and Border Guard counterterrorist teams raided multiple locations throughout the West Bank and the Gaza Strip. The raids yielded high-ranking operatives from Hamas and the PIJ. These men ran the Hamas and PIJ political wings, controlling the charitable funds that were the groups’ financial lifeline; they were also all active commanders in terror operations against Israeli civilians. The detained men included doctors, lawyers, and engineers; some were even American green card holders. In all, some 1,200 were arrested and detained. Prime Minister Rabin wanted to sever Hamas’s civilian spine, which fueled and provided safe haven for its military component. He wanted the terrorists relocated far from the territories. Rabin ordered that the top leadership of the two terror organizations, 415 operatives in all, be deported to the no-man’s-land of southern Lebanon. Lawyers for the deportees took the matter to the Israeli Supreme Court to plead for the expulsions to be halted.
On the morning of December 16, 1992, as the Israeli justices wrangled with the legalities of expelling the suspected terrorists, Fatma Abu Dahuk, a twenty-five-year-old Bedouin girl, made a grisly discovery in the West Bank. Fatma set out from her family tent near Kfar Adumim, halfway between Jerusalem and Jericho, to search for a lost camel that had strayed during the night. The desert hills and wadis were deep and cavernous but easy terrain for an experienced Bedouin. As she walked through the steep valleys, in a ravine made colorful by winter flowers, Fatma stumbled upon the badly mutilated body of a man clad in military olive, his face covered by a matching green parka. His hands were bound high behind his back and he had been stabbed repeatedly. It was Toledano. Investigators believe that he was savagely tortured and murdered shortly after his capture.
News of Toledano’s murder sparked riots in his hometown of Lod. Jewish protesters marched toward the Arab neighborhoods screaming “Death to Arabs.” The fate of the 415 was sealed.
At a little past midnight on December 17, the 415 Hamas and PIJ leaders were ushered from their holding facilities throughout Israel. They were blindfolded and placed on buses, the windows of the vehicles covered by blankets to prevent the prisoners from knowing their destination. The buses drove north, toward the Lebanese border. Israel occupied a security zone inside southern Lebanon, and the buses pushed deep into Lebanese territory, until they reached lines patrolled by the Lebanese military. The deportees were ordered off the buses and told to make their way to the nearby village of Marj al-Zuhur, several miles from the Israeli lines.
Rabin’s move drew international condemnation. Even U.S. President-elect Bill Clinton saw the deportations as counterproductive to the success of the ongoing negotiations. But the men forced into a tent encampment inside the freezing wasteland of southern Lebanon were the brains, muscle, and—most important—the accountants of the Hamas underground. These men knew the intricate details required to keep an illegal and covert organization functioning on a daily basis. It was a severe hit to the terror groups. While the 415 shivered around their South Lebanon campfires, assault rifles weren’t being purchased on the West Bank black market; terrorists’ widows weren’t receiving their stipends; and there was no money to rent Gaza safe houses. Hamas operations in the Palestinian territories had come to a dead halt.
Mohammed al-Hamid Khalil Salah was one of the thousands of passengers landing at Israel’s Ben-Gurion International Airport on the afternoon of January 15, 1993. Salah, a Palestinian native, was a naturalized U.S. citizen who sold cars for a living in Chicago. He appeared nervous as he stepped onto the tarmac after his flight from London. Plain-clothed Israeli security officers were everywhere, conspicuous in their safari jackets and mirrored sunglasses. These young men were designed to be a visual deterrence, and they kept an eye on anything out of the norm as travelers entered Israel. The security services had received information that a Hamas operative would arrive from the United States, although they did not know his identity or his mission. Salah found himself under the gaze of border policemen patrolling around the aircraft; the shuttle from the tarmac to the arrivals hall provided little relief. The Chicago resident readied his American passport for the inevitable scrutiny. It wasn’t easy for West Bank natives to return to the region, and especially not through Ben-Gurion.
Salah was nervous when he handed over his passport. “I am here to visit family and friends,” he said in a soft and shaky voice when the young customs official asked what the purpose of his visit was. His travel documents were studied. The entry process took much longer than usual. Men in uniform, and some Arabic speakers in plainclothes, questioned Salah intensely. Finally, after a very long delay, Salah’s passport was stamped. His suitcases were the last ones rotating on the baggage carousel.
Salah hurried outside from the arrivals hall and into the winter’s cold in search of a taxi. Agents from the Shin Bet were already on him. Salah’s name was not on any terrorist watch list, but he sparked some curiosity and the agents at the airport decided to follow him. The Shin Bet had tossed Salah back into the sea, hoping to catch bigger fish.
Salah traveled the forty minutes up the twisting Highway One toward Jerusalem. The Israeli capital had been cut in two in the armistice agreement that ended hostilities in 1949 between Israel and Jordan. The western half of the city was Jewish, and the eastern part, including the Old City, had been held by Jordan until Israel captured it in the 1967 Six Day War. Salah headed to the eastern section of the city, to the YMCA, a sprawling complex that occupied a city block on the Nablus Road just outside the walls of the Old City. A room had been prepared for him. Salah kept to himself, barely leaving his accommodation.
The Shin Bet maintained close surveillance on the YMCA, and additional resources were provided for the operation. The security services even summoned the assistance of Unit 33, a secretive undercover police unit assigned to the Jerusalem District. Unit 33 fielded policemen from all backgrounds, speaking a Tower of Babel of languages and using a variety of disguises as they blended into the Jerusalem landscape. Salah had no idea that a large-scale surveillance operation was monitoring his every move.
A few days after his arrival, Salah was joined by a friend from Chicago. Mohammed Jarad was a thirty-six-year-old Palestinian green grocer from the Windy City’s Albany Park neighborhood. His arrival worried the Shin Bet. Were the two men sent to Israel on a terrorist mission? Did their bags hold weapons or explosives? Shin Bet Director Ya’akov Peri, a veteran of the terror wars inside the Palestinian areas, ordered his agents to seize the two men. On January 25, Unit 33 received its orders to apprehend the suspects.
- "It's a cliché after Watergate that the key investigation in most circumstances is to 'follow the money' (in the words of Deep Throat). This is the story of how Mossad led this movement and substantially effected investigations of terrorism and similarly important matters and how this influenced the CIA's later work in the same field. Bravo Mossad! Thanks for leading the way."—R. James Woolsey, CIA Director (1993-95)
- "The riveting and untold story of the intelligence task force that launched a dynamic new front in the war on terror. A thrill ride with one of the most important Israeli start-ups of them all."—Tamir Pardo, Director of the Mossad (2011-1016)
- "Money drives terrorism. If funding is cut, terrorism is reduced. A groundbreaking look at how spies, soldiers, statesmen, and lawyers waged a relentless campaign to dry up the financial streams that funded terrorism against Israel and the United States. A great read about a compelling issue."—Professor AlanDershowitz, leading civil rights attorney
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- Nov 7, 2017
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