The secret backstory of how Obama let Hezbollah off the hook 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.
By Josh Meyer
PART IA GLOBAL THREAT EMERGESHow 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.
[ Why aren't Republicans making noise about this scandal? Maybe because it reflects badly on President Blowshard's Russian boss. So this major scandal is unknown. ]
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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, 2014Indictment of Ali FayadThe 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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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.”
February 16, 2017Katherine Bauer testimony to the House Committee on Foreign AffairsFormer Treasury official criticizes the Obama administration.
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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?”
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As the task force investigators intensified their focus on Safieddine, they were contacted out of the blue by AsherDavid AsherVeteran U.S. illicit finance expert sent from Pentagon to Project Cassandra to attack the alleged Hezbollah criminal enterprise., the Defense Department official, who was at Special Operations Command tracking the money used to provide ragtag Iraqi Shiite militias with sophisticated weapons for use against U.S. troops, including the new and lethal IED known as the “Explosively Formed Penetrator.” The armor-piercing charges were so powerful that they were ripping M1 Abrams tanks in half.
“Nobody had seen weapons like these,” Asher told POLITICO. “They could blow the side off a building.”
Asher’s curiosity had been piqued by evidence linking the IED network to phone numbers intercepted in the Colombia investigation. Before long, he traced the unusual alliance to a number allegedly used by Safieddine in Iran.
“I had no clue who he was,” Asher recalled. “But this guy was sending money into Iraq, to kill American soldiers.”
“I had no clue who he was. But this guy was sending money into Iraq, to kill American soldiers.”
— David Asher on Abdallah Safieddine.
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Task force agents hoped those cases would win them the political support needed to attack the Hezbollah criminal network and its patrons in Tehran. Instead, the opposite appeared to be happening.
DEA officials weren’t included in the Justice and FBI news conference on the assassination plot, and claim it was because the Obama White House wanted to downplay the drug-terror connection. And Joumaa’s indictment didn’t mention Hezbollah once, despite DEA evidence of his connections to the group dating back to 1997.
By the end of 2012, senior officials at the Justice Department’s National Security and Criminal divisions, and at the State Department and National Security Council, had shut down, derailed or delayed numerous other Hezbollah-related cases with little or no explanation, according to Asher, Kelly, Maltz and other current and former participating officials.
Agents discovered “an entire Quds force network” in the U.S., laundering money, moving drugs and illegally smuggling Bell helicopters, night-vision goggles and other items for Iran, Asher said.
“We crashed to indict” the elite Iranian unit, and while some operatives were eventually prosecuted, other critically important indictments “were rejected despite the fact that we had excellent evidence and testifying witnesses,” said Asher, who helped lead the investigation.
In Philadelphia, the FBI-led task force had spent two years bolstering its case claiming that Safieddine had overseen an effort to purchase 1,200 military-grade assault rifles bound for Lebanon, with the help of Kelly and the special narcoterrorism prosecutors in New York.
Now, they had two key eyewitnesses. One would identify SafieddineAbdallah SafieddineHezbollah’s longtime envoy to Iran who allegedly oversaw the group's “Business Affairs Component” involved in international drug trafficking. as the Hezbollah official sitting behind a smoked-glass barricade who approved the assault weapons deal. And an agent and prosecutor had flown to a remote Asian hotel and spent four days persuading another eyewitness to testify about Safieddine’s role in an even bigger weapons and drugs conspiracy, multiple former law enforcement officials confirmed to POLITICO.
Convinced they had a strong case, the New York prosecutors sent a formal prosecution request to senior Justice Department lawyers in Washington, as required in such high-profile cases. The Justice Department rejected it, and the FBI and DEA agents were never told why, those former officials said.
Justice Department officials declined to comment on the case.
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STANDING DOWN ON HEZBOLLAH
After Obama won reelection in November 2012, the administration’s pushback on Hezbollah drug cases became more overt, and now seemed to be emanating directly from the White House, according to task force members, some former U.S. officials and other observers.
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For their part, task force agents said they tried to work around the obstacles presented by the Justice and State Departments and the White House. Often, they chose to build relatively simple drug and weapons cases against suspects rather than the ambitious narcoterrorism prosecutions that required the approval of senior Justice Department lawyers, interviews and records show.
At the same time, though, they redoubled efforts to build a RICORICO caseThe Racketeer Influenced and Corrupt Organizations Act increases the severity of penalties for crimes committed in as part of organized crime. case and gain Justice Department support for it.
Their ace in the hole, Kelly and Asher said they told Justice officials, wasn’t some dramatic drug bust, but thousands of individual financial transactions, each of which constituted an overt criminal act under RICO. Much of this evidence grew out of the Lebanese Canadian Bank investigation, including details of how an army of couriers for years had been transporting billions of dollars in dirty U.S. cash from West African car dealerships to friendly banks in Beirut.
The couriers would begin their journeys at a four-star hotel in Lome, Togo, lugging suitcases stuffed with as much as $2 million each, Kelly said. And the task force was on the tail of every one of them, he said, thanks to an enterprising DEA agent who had found a way to get all of their cellphone numbers. “They had no idea what we were doing,” Kelly said. “But that alone gave us all the slam-dunk evidence we needed” for a RICO case against everyone involved in the conspiracy, including Hezbollah.
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In Venezuela, President Hugo Chavez was personally working with then-Iranian president, Mahmoud Ahmadinejad, and Hezbollah on drug trafficking and other activities aimed at undermining U.S. influence in the region, according to interviews and documents.
Within a few years, Venezuelan cocaine exports skyrocketed from 50 tons a year to 250, much of it bound for American cities, United Nations Office of Drugs and Crime statistics show.
And beginning in 2007, DEA agents watched as a commercial jetliner from Venezuela’s state-run Conviasa airline flew from Caracas to Tehran via Damascus, Syria, every week with a cargo-hold full of drugs and cash. They nicknamed it “Aeroterror,” they said, because the return flight often carried weapons and was packed with Hezbollah and Iranian operatives whom the Venezuelan government would provide with fake identities and travel documents on their arrival.
From there, the operatives spread throughout the subcontinent and set up shop in the many recently opened Iranian consulates, businesses and mosques, former Project Cassandra agents said.
But when the Obama administration had opportunities to secure the extradition of two of the biggest players in that conspiracy, it failed to press hard enough to get them extradited to the United States, where they would face charges, task force officials told POLITICO.
One was Syrian-born Venezuelan businessman Walid Makled, alias the “king of kingpins,” who was arrested in Colombia in 2010 on charges of shipping 10 tons of cocaine a month to the United States. While in custody, Makled claimed to have 40 Venezuelan generals on his payroll and evidence implicating dozens of top Venezuelan officials in drug trafficking and other crimes. He pleaded to be sent to New York as a protected, cooperating witness, but Colombia — a staunch U.S. ally — extradited him to Venezuela instead.
The other, retired Venezuelan general and former chief of intelligence Hugo Carvajal, was arrested in Aruba on U.S. drug charges. Carvajal “was the main man between Venezuela and Iran, the Quds force, Hezbollah and the cocaine trafficking,” Kelly said. “If we had gotten our hands on either of them, we could have taken down the entire network.”
"If we had gotten our hands on either of them, we could have taken down the entire network."
— Kelly on the extradition of a top Venezuelan official and a drug kingpin.
Instead, Venezuela was now the primary pipeline for U.S.-bound cocaine, thanks in part to the DEA’s success in neighboring Colombia. It had also become a strategically invaluable staging area for Hezbollah and Iran in the United States’ backyard, including camps they established to train Shiite militias.
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And despite the DEA’s creation of a multi-agency “Iran-Hezbollah Super Facilitator Initiative” in 2013, Kelly said, only the Department of Homeland Security’s Customs and Border Patrol was sharing information and resources.
“The FBI and other parts of the USG [U.S. government] provide a little or no assistance during our investigations,” Kelly wrote in the email. “The USG lack of action on this issue has allowed [Hezbollah] to become one of the biggest transnational organized crime groups in the world.”
Around this time, people outside Project Cassandra began noting that senior administration officials were increasingly suspicious of it.
Subject: Email subject unknown
July 29, 2014
FROM: Jack Kelly
TO: DEA officials
… The USG lack of action on this issue has allowed Hizballah to become one of the biggest Transnational Organized Crime groups in the world. As we have shown in our investigations the Super Facilitator network uses this criminal activity to provide massive support to the Iranian Hizballah Threat Network and other terror groups helping fuel conflict in some of the most sensitive regions in the world.
See below string of emails for an example of how long DOJ has been under-performing on this issue to the detriment of national security...
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The Obama team “really, really, really wanted the deal.”
— Former CIA officer on how intelligence operations were also impacted by negotiations with Iran.
As a result, “We were making concessions that had never been made before, which is outrageous to anyone in the agency,” the former intelligence officer said, adding that the orders from Washington especially infuriated CIA officers in the field who knew that Hezbollah “was still doing assassinations and other terrorist activities.”
That allegation was contested vehemently by the former senior Obama national security official who played a role in the Iran nuclear negotiations. “That the Iranians would ask for a favor in this realm and that we would acquiesce is ludicrous,” he said.
Nonetheless, feeling that he had few options left, Asher went public with his concerns at a congressional hearing in May 2015 saying, “the Department of Justice should seek to indict and prosecute” Hezbollah’s Islamic Jihad Organization as an international conspiracy using the RICORICO caseThe Racketeer Influenced and Corrupt Organizations Act increases the severity of penalties for crimes committed in as part of organized crime. statute. That was the only way, he testified, for U.S. officials to “defeat narcoterrorism financing, including that running right through the heart of the American financial system,” as Hezbollah was doing with the used-cars scheme.
The nuclear deal was signed in July 2015, and formally implemented on Jan. 17, 2016. A week later, almost two years after his arrest, Czech officials finally released Fayad to Lebanon in exchange for five Czech citizens that Hezbollah operatives had kidnapped as bargaining chips.
Unlike in the case of BoutViktor Anatolyevich BoutVladimir Putin's arms dealer, known as the "Lord of War." Convicted of conspiracy to sell millions of dollars worth of weapons to Colombian narcoterrorists., the former arms trafficker for Putin, neither Obama nor other senior White House officials made personal pleas for the extradition of Fayad, task force officials said. Afterward, the U.S. Embassy in the Czech Republic issued a statement saying, “We are dismayed by the Czech government’s decision.”
For the task force, Fayad’s release was one of the biggest blows yet. Some agents told POLITICO that Fayad’s relationships with Hezbollah, Latin American drug cartels and the governments of Iran, Syria and Russia made him a critically important witness in any RICO prosecution and in virtually all of their ongoing investigations.
“He is one of the very few people who could describe for us the workings of the operation at the highest levels,” Kelly said. “And the administration didn’t lift a finger to get him back here.”
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Ironically, many senior career intelligence officials now freely acknowledge that the task force was right all along about Hezbollah’s operational involvement in drug trafficking. “It dates back many years,” said one senior Directorate of National Intelligence official.
Meanwhile, Hezbollah — in league with Iran, Russia and the Assad regime — has all but overwhelmed the opposition groups in Syria, including those backed by the United States. Hezbollah continues to help train Shiite militants in other hotspots and to undermine U.S. efforts in Iraq, according to U.S. officials. It also continues its expansion in Latin America and, DEA officials said, its role in trafficking cocaine and other drugs into the United States. And it is believed to be the biggest trafficker of the powerful stimulant drug Captagon that is being used by fighters in Syria on all sides.
Progress has been made on other investigations and prosecutions, current and former officials said. But after an initial flurry of interest in resurrecting Project Cassandra, the Trump administration has been silent on the matter. In all of the Trump administration’s public condemnations of Hezbollah and Iran, the subject of drug trafficking hasn’t come up.
In West Africa, satellite imagery has documented that the Hezbollah used-car money-laundering operation is bigger than ever, Asher told lawmakers in recent testimony before the House Foreign Affairs Committee.
And Hezbollah continues to scout potential U.S. targets for attack if it decides Washington has crossed some red line against it or Iran. On June 1, federal authorities arrested two alleged Hezbollah operatives who were conducting “pre-operational surveillance” on possible targets for attack, including the FBI headquarters in New York and the U.S. and Israeli embassies in Panama.
June 2017Working under pseudonyms, Hezbollah operatives carried out pre-operational surveillance in the U.S.From at least 2009, Ali Mohamad Kourani aka "Jacob Lewis" and "Daniel," allegedly staked out New York City airports to support anticipated terrorist attacks.
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