Shadow Diplomats: Hezbollah’s Money-Smuggling Route Exposed

An international investigation by ICIJ, ProPublica, and 45 media outlets including Shomrim as the Israeli partner, exposes how the Lebanese terror organization used honorary consuls to fund its activity.

An international investigation by ICIJ, ProPublica, and 45 media outlets including Shomrim as the Israeli partner, exposes how the Lebanese terror organization used honorary consuls to fund its activity.

An international investigation by ICIJ, ProPublica, and 45 media outlets including Shomrim as the Israeli partner, exposes how the Lebanese terror organization used honorary consuls to fund its activity.

Uri Blau and Daniel Dolev

Photos: ICIJ, Reuters

November 14, 2022

Summary

This is a translated extract from the full Hebrew project, which includes three articles on the subject

According to a joint international investigation published by dozens of media outlets worldwide, the Hezbollah terrorist organization used honorary consuls to smuggle and launder money. Officials from the United States’ intelligence services who investigated the organization’s financial network say that the use of honorary consuls was planned and well-organized and that, until recently, it had been largely overlooked by global intelligence agencies. As far as can be ascertained, it was only in March of this year that steps were taken for the very first time against businesspeople of Lebanese extraction who had been living in Guinea and were suspected of smuggling funds for Hezbollah using diplomatic passports.

The investigation, known as “Shadow Diplomats,” was launched by American investigative outlet ProPublica in conjunction with the International Consortium of Investigative Journalists (ICIJ) and 45 media outlets from across the globe. Shomrim – and reporters Uri Blau and Daniel Dolev – was the Israeli partner in the project. The international investigation revealed that convicted drug dealers, arms dealers, terrorists, sex offenders, and swindlers were appointed honorary consuls in various countries and that, as honorary consuls, they served the interests of some of the most corrupt governments in the world, including  North Korea, Syria and South Sudan.

Shadow Diplomats Summary

According to the investigation, at least 500 honorary consuls have officially been charged with criminal offenses, some of them very serious crimes. These figures are almost certainly an underestimate of the real numbers since no international agency keeps tabs on honorary consuls, and many governments do not publish the names of the honorary consuls they appoint.

Among other things, the investigation reveals the extent to which Russia uses the institution of honorary consuls. On the list of sanctions imposed by the United States, for example, the names of 30 honorary consuls appear, among them some members of Russian President Vladimir Putin’s inner circle. Elsewhere in the world, the investigation reveals a series of serious crimes committed by honorary consuls. One honorary consul in Myanmar, for example, who enjoyed diplomatic immunity from the United States, took advantage of his connections to help provide weapons to a brutal military junta that conducted a killing spree against ethnic minorities in the country. In Guinea, an honorary consul representing Canada raped a 12-year-old girl. In Egypt, an honorary consul representing Italy was caught trying to smuggle more than 21,000 archaeological artifacts out of the country in a diplomatic container.

Vladimir Putin. Photo: Reuters

The central discovery of the investigation, however, is that nine honorary consuls across the world have been identified as having direct ties with terrorist organizations – the vast majority of them with Hezbollah. In every case, the honorary consul in question is a Lebanese national who lives abroad and, in most cases, worked within the financial arm of the organization. In this case, too, according to intelligence experts, the terrorist organization’s use of honorary consuls is apparently far more widespread than the investigation proves.

“Hezbollah has realized that if they use these honorary consuls … they can basically move stuff with impunity and no one is ever going to bust them — you flash your diplomatic passport, no questions asked,” said David Asher, a former senior counterterrorism finance adviser for the Department of Defense assigned in 2008 to help oversee a federal investigation of Hezbollah’s criminal network. “It’s a huge seam in our international law enforcement capabilities sweep.”

The full investigation focuses on five honorary consuls who operated, according to suspicions, directly for Hezbollah. In all these cases, the honorary consuls were Lebanese nationals residing in other countries, where they enjoyed the partial diplomatic immunity that comes with the title. One of them was convicted in a U.S. court of dealing in weapons, three others, according to suspicions, smuggled and laundered money for the organization and the fifth honorary consul allegedly funded terrorist activity in the Middle East.

Honorary in Israel

The Israeli angle of the investigation reveals that around 170 honorary consuls from various foreign countries serve in Israel. Compared to other countries, Israel offers only minimal perks to honorary consuls on its territory: diplomatic license plates, parking arrangements and a Foreign Ministry-issued certificate confirming that the bearer is a diplomat.

Benjamin Netanyahu. Photo: Reuters

Among the honorary consuls serving in Israel are some people with ties to Benjamin Netanyahu. Gil Sheffer, for example, served as Netanyahu’s bureau chief and is now Japan’s honorary consul in Israel. Another person with close ties to Netanyahu, who currently serves as honorary consul for Austria, is attorney Yitzhak Molcho, whose law partner is Netanyahu’s cousin, David Shimron, and who was once used by Netanyahu as a special political envoy. Netanyahu’s personal physician, Zvi Berkowitz, also appears on the list since he serves as the Romanian honorary consul in Israel.

The list also includes some of the top executives in Israel’s biggest companies and conglomerates: Dan Propper, chairman of the board of Osem, is the Czech honorary consul; Michael Federmann, who holds a controlling interest in Elbit and the Dan Hotels Group, represents the interests of Côte d'Ivoire in Israel; and David Fattal, who owns an eponymous chain of hotels, is also the honorary consul for Denmark.

Aaron Frenkel, an international entrepreneur and investor who is involved in real estate, civil aviation, insurance and the defense industries, also found time to serve as the Croatian honorary consul in Israel – even though, as he has revealed in interviews over the years, he actually resides in Monaco. Businessman Assaf Tuchmeir represents the Dominican Republic, contractor Shimon Tuvul is an honorary consul for Moldova, while lobbyist Boris Krasny represents Serbia and public relations mogul Rani Rahav is an honorary consul for the Marshall Islands. Current and former celebrities also appear on the list of honorary consuls. For example, singer Yehoram Gaon is honorary consul for Honduras, and the recently deceased king of Israeli pop, Svika Pick, was an honorary consul for Poland.

This is a summary of shomrim's story published in Hebrew.
To read the full story click here.