The urgent appeal secretary general Hassan Nasrallah addressed to Iran's spiritual ruler Ayatollah Ali Khamenei for a handout to save his Hizballah from bankruptcy met with a partial response, DEBKA-Net-Weekly's Iranian and intelligence sources report. The $300 million in cash sent by Tehran did not entirely cover the radical Shiite organization's huge deficit.
In his wire to Tehran, Nasrallah reported a crisis of confidence between his organization and Lebanon's Shiite community because Hizballah had run out of funds for meeting its financial obligations to its supporters.
According to our sources, Hizballah leaders were caught short after spending their entire 2010 budget in late 2009 and early 2010. The lion's share of $150 million was laid out to prepare the militia for war with Israel. Tunnels were dug across Lebanon to house the medium-range surface missiles and rockets Iran had just delivered and outposts thrown up to hold up advancing Israeli tanks in the event of war.
That was how Nasrallah accounted for the shortfall.
DEBKA-Net-Weekly's sources say that this is not the whole story.
In September 2009, most of Hizballah's budget vanished in a billion-dollar pyramid scheme. Its mastermind, a businessman called Salah Ezzedine, who was dubbed the "Lebanese Bernie Madoff," was later charged with running the biggest fraud scheme of its kind the country had ever seen.
The huge losses attracted less attention in Beirut than Ezzedine’s close ties with Hizballah. Many of his investors — mostly high profile Shiite members living in Beirut and southern villages – risked their hard-earned savings with a man they knew and trusted and, above all, offered 40 and 50 percent returns on their investments, although he never showed them any paperwork.
The huge interest payments bought Mughniyeh top-level Hizballah backing
Our counter-terrorism sources explain that Ezzedine was in a position to back his proposition because he was the secret money man of Hizballah's late commander, Imad Mughniyeh, who was assassinated in Damascus on February 12, 2008. His job was to funnel large amounts of cash into the pockets of Hizballah's top echelon to ensure their backing for his master.
Some of the money came form Mughniyeh's sponsors in Tehran; some from a chain of investment ventures and charities he ran in West Africa, where well-off Lebanese control much of the commercial and service industries.
The largest communities of Lebanese Shiite expats are to be found in the Ivory Coast, where they own supermarket chains and stores selling electrical goods, cars and telephones, and Sierra Leone, Mali, Burkina Faso and Western Nigeria, where they control franchises for supplying the oil majors with transport, food, and other services.
Mughniyeh found additional sources of revenue in Brazil, Paraguay, and Argentina.
His assassination broke up the financial set-up which subsisted on his network of personal contacts. Its managers refused to work with Salah Ezzedine whom they did not trust.
After Nasrallah had spent the best part of two years mending the damaged fund-raising empire and starting to compensate Hizballah high-ups for some of their losses, disaster struck again.
West Africa is back online…and, boom! Off again
On January 25, an Ethiopian Air airliner blew up minutes after takeoff from Beirut airport for Addis Ababa.
All 92 passengers and crew died in the explosion. Hizballah strongly denied the rumors going around Beirut that the airliner was sabotaged because it was supposed to have had a large, important delegation aboard.
But DEBKA-Net-Weekly's intelligence and counter-terrorism sources reveal that three of Hizballah's senior financial agents in West Africa were indeed travelling on the doomed flight. They had come to Beirut to report to Nasrallah on their good progress in rebuilding Mughniyeh's fund-raising setup in West Africa and assure him that revenue was up and would soon reach the volume he had achieved.
But the three agents' deaths shut down the Hizballah's key supply of funding for the second time in two months.
In the third week of February, our Iranian sources report an urgent conference took place in Khamenei's chambers to discuss Nasrallah's appeal for funds. It was attended by President Mahmoud Ahmadinejad, Finance Minister Shamseddin Hosseini and al-Quds Brigades commander, Gen. Wassim Suleimani, who is directly responsible for running the Lebanese Shiite group. They decided that since the president would be travelling to Damascus on Feb. 25 to clinch Iranian-Syrian military cooperation, he would carry $300 million in cash for bailing out the cash-strapped Hizballah.
Nasrallah, who never leaves his Beirut bunker for fear of assassins, decided to make the trip to Damascus and attend the banquet Assad had thrown in his Iranian guest's honor that night.
After collecting the money, he returned home in a heavily guarded convoy, with a temporary lease of life.