Hezbollah: The Global Footprint of Lebanon's Party of God

September 17, 2013

Introduction

JOANNE MYERS: Good afternoon. I'm Joanne Myers, and on behalf of the Carnegie Council I'd like to welcome our members and guests to this Public Affairs program.

Matt Levitt is our speaker, and I'm delighted to have him back at this podium, as his previous discussions on Hamas [this talk was off the record] and on finance and national security held our audience in rapt attention. I expect that to happen once again. His latest work, entitled Hezbollah: The Global Footprint of Lebanon's Party of God, provides a fascinating assessment of Hezbollah's worldwide operations. It is the first study of its kind to focus specifically on Hezbollah's clandestine and illicit activities.

While the world may be gripped by Obama's efforts to enforce a ban on chemical weapons in Syria, a book about an organization that not only has recently intervened in Syria in support of the Assad regime but is also one that both the U.S. government and the European Union consider a global terrorist threat to the world and a menace to Middle Eastern security could not have been published at a better time.

Although based in Lebanon, Hezbollah's outreach and influence has touched on almost every continent and continues to grow. It's important to note that Hezbollah would not have achieved its current stature without the assistance of its creator and chief sponsor, Iran. Since its founding in 1982, Iran has armed, funded, and trained the organization, transforming it into a potent terrorist and fighting force, which has sponsored terrorist attacks, including kidnappings and car bombings throughout the world. Yet, Hezbollah has not relied entirely on Iran to finance its operations. Instead, it has raised funds through criminal activities, including counterfeiting currencies and goods, credit card fraud, and money laundering.

Having gone to great lengths to conceal, subvert, and camouflage its activities, obtaining an accurate assessment of how much money Hezbollah receives and spends, along with the extent of its covert and unlawful operations, is difficult to know. That being said, our guest this afternoon, super-sleuth Matt Levitt, has done an excellent job in researching this multifaceted organization. From extensive interviews with policymakers and officials, to closely examining recently declassified CIA and FBI records, Matt has spent over 10 years in exhaustive and probing investigation. In the end, his impeccable research provides us not with not only a gripping account, but a warning of the danger, growing importance, and international reach of this group. What he has discovered may not only make you uncomfortable, but will no doubt alarm you, as it should.

Please join me in giving a very warm welcome to a very knowledgeable, very insightful Matt Levitt. Thank you for joining us, Matt.

Remarks

MATTHEW LEVITT: Thank you, Joanne. My boys—at some point some of them will watch this—are going to enjoy the super-sleuth part. That's a new one.

It's a pleasure to be back at this podium. In fact, the book was only launched last week. This is the inaugural book event for New York City. So I'm especially thrilled to be here and to be able to do this here this evening. Thank you very much.

There's a lot to talk about regarding Hezbollah in the here and now. Hezbollah is making all the difference on behalf of the Assad regime in Syria. In particular, its coming-out party, if you will, was the battle of Qusair. Until then, Hezbollah had denied that it was actively fighting on the ground.

Despite the fact that the U.S. government had issued a new set of designations, Hezbollah has been on the U.S. terrorism designation lists since those lists were created in the 1990s. This was a new designation specifically to publicize—name and shame—Hezbollah's activities in Syria, targeting not Israel, not "resistance" as Hezbollah would put it, not targeting Israeli occupation—not that the Israelis are occupying Lebanon anymore—not that at all, but rather militancy targeting fellow Muslims.

And Hezbollah now has a tremendous ideological and PR problem. They have spent a tremendous amount of time trying to paint themselves as a legitimate resistance organization—not a militia, not a terrorist group, not an international criminal enterprise—and now their activities belie that description.

They have spent a tremendous amount of time and effort trying to describe themselves at home in Lebanon as a group, as a party, that is Lebanese first and Shia second, supportive of Shia outside Lebanon only maybe third, and a proxy of Iran a distant fourth or fifth. But Hezbollah's activities today in Syria paint a very different picture. Nothing that Hezbollah is doing in Syria today can possibly be described as being in Lebanon's interest. Hezbollah is creating and dragging across the border a very, very nasty sectarian war.

And perhaps the most tangible example of just how desperate Hezbollah feels is one of the recent public statements, the media appearances of Hezbollah leader Hassan Nasrallah, who is a gifted orator, and somehow made the blunder of saying to fellow Lebanese, "Look, let's just agree to disagree. Over there in Syria, across the border, we'll kill each other. But not here in Lebanon." This he thought would make people feel better, that "I wouldn't bring the conflict across the border to Lebanon; we'll just kill each other there." This, as you can imagine, didn't resonate very well with fellow Lebanese.

There's plenty to talk about, as Joanne mentioned, regarding Hezbollah's global activities. The European Union recently designated Hezbollah's terrorist and military wings—not the whole of the organization but the military and terrorist wings—as an international terrorist organization. That's not quite what we here in the United States have done, or what the Canadians, Israelis, or the Dutch have done, but still an important step.

And it shouldn't surprise us that this happened because Hezbollah is now more active in international terrorism than it has been for years. And it's kind of interesting, because of Hezbollah's decision to roll back its actual terrorist operations, bombs and bullets, in favor of focusing on logistics, procuring arms for its militants in southern Lebanon in the Beqa'a valley, raising funds through criminal and other enterprises—all kinds of logistical activities.

The reason they decided to focus on that was because of a massive terrorist incident that had nothing to do with them, which was 9/11. Hezbollah made a conscious decision that it was not going to be caught in the crosshairs of this war on terrorism and they did not want to be portrayed as being the same thing as al-Qaeda. And yet, now, several years on, they are back in this business like never before.

We all know about the attack in Burgas, Bulgaria, which killed six individuals—five Israeli tourists and a Bulgarian bus driver, whose last-minute activities probably saved lives by moving the bus—and wounded many more. You are probably also aware that just a week and a half earlier an almost identical plot targeting Israeli tourists as they got off their airplane onto a tourist bus was thwarted in Cyprus. What you may not be aware is that that individual, Hossam Yaacoub, is a dual citizen, a Lebanese/Swedish citizen, a European Union citizen.

In fact, you may not be aware that he was the second European, in fact the second Swedish Hezbollah operative, to be arrested in six months. The other, Hussein Idris, is now on trial in Thailand. Other Hezbollah operatives are now on trial in Nigeria. And other operations didn't lead to people being captured and jailed and put on trial, but were thwarted in Turkey. There was surveillance of Jews at the airport in Johannesburg.

And in case it's unclear to you what Hezbollah's international terrorism is all about, let me make it clear. There are two distinct Hezbollah operational trends going on today as we speak.

One harks back to February 2008 and the assassination in Damascus of Imad Mughniyah, who until his death was the head of Hezbollah's Islamic jihad organization, the terrorist wing, the long arm of Hezbollah. After his assassination, Hassan Nasrallah, the head of Hezbollah, spoke at his funeral by video teleconference—he didn't come in person for fear that he might be the next victim—and said, "We believe that Israel carried out this assassination." "Israel, if you want," as he put it, "open war, let it be open war."

Now, it's interesting, by the way, that that wasn't made public until much later. Right after the assassination, both Iran and Hezbollah had immediate suspicions of who was behind Mughniyah's assassination, and it was not the Israelis. Their immediate suspicion was that it was the Syrians, and reportedly Mughniyah's wife still believes it was the Syrians. That's a tremendous story, and I'll leave you to read about it in the book. But the fact is Nasrallah said to the Israelis, "You want open war, let it be open war."

And the Israelis didn't have to wait very long before a plot was thwarted in Baku, Azerbaijan, targeting the Israeli ambassador. There was a side piece relating to a radar station. And it's interesting, because they were conducting surveillance at the embassy, which was not a standalone embassy but rather was a tall office building which also housed two other embassies, which didn't seem to bother them one bit.

A series of plots unfolded over the next several months, each and every one of them either foiled or failed. Some were practically foiled by counterterrorism agencies. Some we got lucky and they just failed.

And things came to a head in 2009. In late 2009, Hezbollah, having failed several times, reached out to Iran. Iran created Hezbollah, as Joanne mentioned, in the early 1980s, pulling together a variety of Lebanese Shia militant groups under the umbrella of Hezbollah, the Party of God. And here Hezbollah went to Iran and said, "Mughniyah was important to you too. In fact, we believe that by the time he was assassinated Mughniyah was double-hatted; he was the head of the Islamic [inaudible] and was also a commissioned officer in the Qods Force." And they said to Iran, "You need to give us more logistical support to carry out an attack to avenge Mughniyah's death."

And let me be clear, the attacks they were looking at were all focused on current or former senior Israeli officials. This had to be a person of stature to be equal to the prince of Hezbollah, to Mughniyah.

For this operation, Turkey, as it happened, did get much more logistical support than usual. And yet, this one, also targeting an Israeli consul general in Istanbul, was foiled.

Now you have a very, very rare occurrence, where Hezbollah and Iran, which the U.S. intelligence community now describe as being in a strategic partnership, intimately cooperating together, are yelling at each other, quite angry. Hezbollah is saying to Iran, "If you really cared, you'd provide us the support we really need to get this done. It was Mughniyah, after all." And Iran is saying, "You know what? You guys used to be really, really good, and now you're not."

As they're fighting in the end of 2009, the whole debate is put to rest—not because they come to an agreement, but because of a completely separate event in January 2010, the assassination with a sticky bomb, a magnetic bomb, that was put onto a car at rush hour in Tehran, the assassination of a key professor and nuclear scientist, Professor Mohammadi.

At this point, the Iranians are apoplectic. It's not just that they're losing key people in their nuclear program; it's the optics that they're unable to protect key people on their own home turf. They call in the Qods Force and they call in Hezbollah and they make it clear that the fighting is over and here's how it will be: "You, Qods Force, you will target Western diplomats, and every so often targets that are representative of Israel, or maybe the Jewish community." So there have been a whole variety of plots—you have probably heard of some—targeting mostly Israeli, but also Saudi, British, and American, diplomats around the world.

In terms of attacks on Americans, the one that was the scariest was when they came very close, and we watched them doing some very serious targeting and surveillance of U.S. diplomats again in Baku, Azerbaijan. In that case, it wasn't just the ambassador, it wasn't just other diplomats; it was their families as well.

For this they put together a dedicated Qods Force Unit 400. Unit 400, by the way, has still not had a success. The closest they had is when they attached a sticky bomb to the car of the wife of the Israeli defense attaché in India. She was wounded. She's okay. But it appears that they weren't actually targeting her. They gave up because the Israeli countermeasures were too good. They eventually said, "Forget it. Whatever the next car is that comes out of the embassy"—it could have been a journalist; it could have been anybody.

"You, Hezbollah," said Iran, "you're going to target Israeli tourists, soft targets. And before you do, you are going to take a break, because you've got to get your act together, and you will recruit the crème de la crème from the Islamic Resistance Militia, and you will teach them the dark arts, and, if you need, we will help teach them the dark arts. You've lost Mughniyah as the quarterback for your terrorist operations. His brother-in-law, Mustafa Badreddine, is now in his place. Mughniyah was a much more capable person. Badreddine is reportedly a lot less stable. And you need to train these people up."

And that's what they did. Then, when they were ready, they went and they carried out Burgas, they went and they tried to carry out Cyprus, and a whole bunch of other operations.

Not much really new for some time. And then, only when the public court documents came out of the Cyprus case, did we learn that Hezbollah was plotting these types of operations even before Mughniyah was killed in 2008, and certainly before the shadow war between Iran and the West really started picking up pace in 2008, 2009, and 2010.

How do we know this? Hossam Yaacoub, the Hezbollah operative who was arrested, tried, and convicted, and is now serving four years in jail in Cyprus, initially insisted to his Cypriot police interrogators that he had nothing to do with Hezbollah. Eventually, when they kept showing him evidence to the contrary, he said, "I've never been to the airport carrying out surveillance of Israeli tourists." So they showed him the pictures that they had.

"Well, I never wrote down the license plate numbers." So they showed him the notes that they seized from his hotel room.

Eventually he said, "Okay, okay, I'm Hezbollah."

But, sort of in an effort to save it—but it's not really terrorism, it's not really so bad—what does he say? He says, "Look, I'm Hezbollah. I was just carrying out surveillance of the Jews. This is what my organization does all over the world." He did not say "Israelis." He didn't even say "Zionists." He said "Jews."

Let's be clear. While his primary mission appears to have been carrying out the surveillance that he actually did do of Israeli tourists getting off their airplane and getting on the buses, he was also tasked with carrying out other surveillance—and we're not really sure why—of two different hotels, one of which he couldn't surveil because it was under reconstruction; the other a specific parking lot that's in between the parking police and a hospital, and they wanted to know more about the parking lot—do you leave your keys, do you not leave your keys, do you get a receipt, how does the parking lot work? And he was also specifically asked to find out if there are any restaurants in Cyprus that serve kosher food, which, amusingly, he didn't know what it was and he had to look it up. But I can tell you there are none. [Laughter]

The fact of the matter is that between their efforts to avenge Mughniyah's death on the one hand, and to play their role in Iran's shadow war with the West on the other, Hezbollah is very, very busy.

Now, it's interesting. When all this was going on but we didn't know about all of it in open source yet, Nasrallah gave an interview to a Kuwaiti newspaper. At this point, we already knew that Hezbollah was trying to avenge the death of Mughniyah. The newspaper journalist—who's either very, very smart or very, very brave or very, very dumb, or maybe a little bit of all—says to Nasrallah, "So, Nasrallah, you don't really care about Mughniyah, do you, because you haven't avenged his death?"

Nasrallah says, "No, we care about him very much, thank you."

"Well then, you're not very good, are you, because you haven't avenged his death?"

Nasrallah says something that is a very healthy attitude on life, it's good for your blood pressure: "No, no, no, it's not a question of whether we're good or bad, capable or not. It's all a question of whether God wants it to be. We do our best, and our best will succeed if God wants it to succeed; and if not, we won't yet succeed."

Then he added something unsolicited, that at the time I and everybody else didn't pay any attention to, because we didn't yet know that Hezbollah was on a tear surveilling and soon trying to assassinate Israeli tourists. He said, unsolicited, "By the way, let me be clear. If we wanted to hit some Israeli tourists here or there, we could do that anytime. That's not for Mughniyah. For Mughniyah it's got to be someone serious."

The big question today is: As events continue to develop and crumble in Syria, if there were to be at some point the United States or anybody else conducting air strikes, how might Hezbollah retaliate? To my mind there's very little doubt but that they would, because Hezbollah and Iran both are all in. Why are they willing to put themselves at such risk, their whole standing in Lebanon, in the region?

They have been exposed in these plots around the world. Mustafa Badreddine, the head of the terrorist wing himself, and three others are currently indicted by the UN's Special Tribunal for Lebanon for the assassination of former Lebanese Prime Minister Rafic Hariri. The Shia militia in Lebanon, which claims to be about Lebanon and Lebanon first, has been charged with assassinating the beloved former leader and de facto head of the Sunni community. It doesn't get more sectarian than that. They are already on the ropes.

There are multiple reasons. But the most simple—without meaning to be simplistic or pithy—but the most simple and honest is that Iran asked them to.

I quote a very senior Hezbollah official in the book, where he says, "Look, the bottom line is this: If you don't appreciate the fact that we sincerely believe in the principle of Velayat-e faqih, the rule of the jurisprudence, then you don't understand who we are."

Most people, myself included, assess that when Mughniyah was alive, if Iran said, "We need you to do something right now," he could kind of put out his arm, and say, "Not quite yet. Give me a little space."

Iran had that much faith in him. He's gone. There's no such faith in his brother-in-law and successor, Mustafa Badreddine. They are now in a strategic partnership, and Iran is reportedly—The New York Times even reported on this recently in an article talking about Iraqi Shia militants and others from the region who are coming in—putting this to its proxies, Iraqi, Lebanese, and others, in terms of very simple fundamental religious terms: "Are you with the Shia fighting good against evil or not?"

Now, Hezbollah has other reasons as well. Hezbollah, it is believed, have about 60,000 rockets. That's a lot of rockets. But if I gave you $100 right now and told you, "I'll be back and give you another $100 tomorrow," you'll probably spend that $100. If I give you $100 and tell you, "I'm not going to be back for six months," you're not going to spend it so quickly. If Hezbollah doesn't believe that it is going to be able to get resupply of rockets and money and other things, it may not be quite as willing to spend those munitions if it doesn't believe it's going to be able to get new ones.

Right now they don't have a way to get new ones. They can't simply fly things from Tehran to Damascus and then have them driven across Syria and across the border into Lebanon with Syrian military escorts. That doesn't happen anymore. Hezbollah is very, very desperate to see either that Assad wins, so that route is resumed, or, at a minimum, that the Alawites maintain control over the Alawites' traditional areas along the coast and they can continue to get shipment to places like Latakia.

Now, I want to leave plenty of time for questions and answers, but I also don't want to leave you with the misimpression that Hezbollah's activities are only in places that are far away—in Syria, in Thailand, in Cyprus, in Bulgaria. There are two chapters in the book on Hezbollah North America.

One of the take-aways on those chapters is that Hezbollah is not only in the big cities; Hezbollah activity happens in some places that you absolutely would not have thought of. And yet, Hezbollah is in the big cities, and in particular in this city. That shouldn't surprise. The city is a melting pot of everybody. For most people who fly into the country, this is one of the most likely places you'll fly into. But the number of times New York comes up in the investigation that ended up being this book really blew my mind.

There's a connection that comes back to all of this, including to Imad Mughniyah. You're probably aware of the 1992 bombing of the Israeli embassy in Buenos Aires, the 1994 bombing, not two years later, of the AMIA [Asociación Mutual Israelita Argentina] Jewish community center in Buenos Aires. What you may not be aware of is the New York City connection to the 1994 bombing.

Iran and Hezbollah teamed up for those operations. Sometimes their communications back to Iranian or Hezbollah masters was pretty sophisticated. And sometimes not; sometimes they simply picked up a pay phone and made a direct call, sometimes pretty sloppy. The Argentinean investigators were able to determine sometimes who made the call, because a person would call his sister, and then he'd call his brother, and then he'd call Hezbollah headquarters, and then he'd call the other brother, and the sequence of phone calls makes it pretty clear that it was probably that particular individual.

Other times they made calls through a switchboard that they thought was secure at the Iranian embassy, but which apparently the [Argentinians? Americans?] knew about and had penetrated.

And in at least some instances they used a cutout—not an actual switchboard, but someone sitting here in New York operating as a switchboard, routing calls that were made from South America to New York and then routing those calls onward to Lebanon.

There are many, many more examples. But at the same time, in 1994, the FBI wrote a report talking about their concern about Hezbollah supporters here in New York and the counter-surveillance activities that they were doing and their security consciousness here in New York.

But when they started carrying out attacks targeting Western, not only Israeli, interests beyond, one of the first big cases was the case of Bassam Makki in Germany. Investigators didn't understand why was he constantly writing to people in Lebanon about various models of Mercedes cars and BMW cars. When they finally raided his home and found his codebook—I forget which was which, Mercedes or BMW—one referred to Israeli targets, one referred to American targets. He was arrested, served time, and eventually deported to Syria, but then later turns up—yes—in New York City, where a couple of his brothers were living. That's another long story.

But the one I want to leave you with is this, to bring it a little closer to today. Imad Mughniyah was assassinated in February 2008 in Damascus. As any professional intelligence organization, government or otherwise, would do after this happened, Hezbollah started doing after-action damage assessment to try and figure out where was the leak, where is the gap, and fill the gap. They were looking into many, many different ways—and I have to admit that, as the former deputy assistant secretary for intelligence at the U.S. Treasury Department, I love this story. They were very concerned that we were following the money and would follow it right back to them.

As it happens, there was a particular pot of money worth following. It starts with an individual in Brooklyn, a low-level Hezbollah guy who was involved in small-scale criminal enterprises—stolen cell phones, stolen Play Stations, knock-off Nikes, this type of stuff—and blossomed into an effort to procure weapons and to sell massive amounts of counterfeit currency.

To make a long story short, this individual meets someone who he thinks is a foot soldier for the Philadelphia mafia. Unfortunately for him, because their relationship developed and blossomed, he was an FBI source. The individual develops a relationship.

And, eventually, this person, who had lived in Brooklyn—at this point is already living, I believe, in Cherry [Cobble?] Hill—says, "I'll tell you what. Forget the small-scale cell phones and Play Stations. Let's do real business. We could make some real money. My buddies, my family, who are higher up in Hezbollah than I am, they have access to massive high-quality counterfeit that Hezbollah produces in the Beqa'a valley. We could be doing millions. Why don't I see if my guys in Lebanon would be willing to have you come to Lebanon and they'll kind of interview you. If they like you, then we'll go ahead. We'll do some great business."

So this source of the FBI's goes to Lebanon. He apparently impresses, because they say to him, "I'll tell you what, we're now going to take you around Beirut, show you some of the tourist sites for a couple of days, and we'll take pictures of you touring around. We won't be in the pictures, of course, that wouldn't be good operational security, but you'll be in the pictures. A couple of weeks after you get home we'll send you a photo album of your touring of Lebanon."

The guy's thinking to himself, "Why would—"

And as he's thinking this, they said, "And then, when you get the album, rip off the front cover, and hidden in there we will stick two samples of our best hundred-dollar-bill counterfeit, so good you will not be able to tell the difference."

Two weeks go by. He gets an album, lots of pictures of him touring around Lebanon. He rips off the front cover—two brand-new crisp bills.

Unfortunately for Hezbollah, this was a source. So he went to the Joint Terrorism Task Force, which includes the Secret Service. The Secret Service takes a look at these bills and comes back and says, "I've got good news and bad news, and it's one and the same. It's not counterfeit. And it gets worse: we've run the numbers, the serial numbers, and these two bills are actual U.S. currency that came from a large batch of U.S. government funds delivered to Iraq as reconstruction, your taxpayer dollars and my taxpayer dollars sent to reconstruct Iraq that somehow Hezbollah has stolen."

They've got our attention now. So the instructions to the source are: go back to your Hezbollah contact, pretending to be a foot soldier for the Philadelphia mob, and read them the riot act: "Do you think we in the mob don't know counterfeit from not counterfeit, badda bing, badda bing," and yelling and screaming.

The color drains from the person's face. He says, "We've already arranged for my boss from Lebanon to come here to the United States and meet your boss, the mafia boss. We'll explain it all then."

My feeling is that Hezbollah simply watches too many episodes of The Sopranos, and they were given what they wanted, which is a rent-a-MacMansion in Miami, where an undercover agent posing as a mafia boss wined and dined this Hezbollah person that we allowed in the country so that we could record all of the conversations. It was an absolutely textbook, beautiful, almost out-of-the-movies penetration of Hezbollah—sending people there, drawing their people here.

Talking into microphones he didn't know existed, the guy says over and over, "Don't tell anybody. This is just between us, but . . ."—talking about Hezbollah's access, for example, to Iranian satellites for use in targeting Israeli communities with those 60,000 rockets; talking about the counterfeit machines that are running in the Beqa'a valley 18 hours a day and the various types of bills, whatever bill you want, they can make counterfeit; and explaining what happened: "About that little to-do where we told you it was counterfeit and it really wasn't, listen. We had a problem. Somebody assassinated Mughniyah, whose nickname was ‘the fox,' the man who never sleeps. Three different times Western intelligence tried and failed to get Mughniyah. Who got him now?"

So one of their theories in their after-action damage assessment was maybe they followed the money. What money? He explains, "We, Hezbollah, have had for years an operation going on throughout the world, where our guys, whenever they have an opportunity to steal real money, steal real money. Send it to Iran, it sits, it cools off, and in time it's sent through Syria or Turkey back to Lebanon. The purpose of this real money is for operations. When you're doing operations, you want good operational security. You don't want to use counterfeit. You don't want to bring additional law enforcement scrutiny to yourself. So for the real deal, for bullets and bombs, we use real cash, stolen but real cash." This was Mughniyah's terrorist slush fund.

The source says, "In case we're not so sharp, this is Hezbollah, terrorism Hezbollah? This is not Hezbollah's social welfare?"—and Hezbollah, by the way, does provide social welfare in Lebanon—"This is not Hezbollah politics, and of course Hezbollah is a political party in Lebanon. Not Hezbollah militia activity? Hezbollah, terrorism Hezbollah?"

And they're afraid that we followed this money right to Nasrallah's backdoor. So they're trying to get rid of it. I mean it's good money; you can't just burn the money, right? But if they pass it off as counterfeit, maybe they can still make 40, 50, 60 cents on the dollar.

It's an amazing story that most people are unaware of on Mughniyah's death that comes right back to Brooklyn, New York.

I had a lot of fun writing this book—chapters on South East Asia and Africa, things that I never thought I would find.

There is one case in the 1980s, where a Hezbollah operative gets on three different planes, eventually to get on the Air Afrique flight that he does ultimately hijack. And how does he do this, in the mid-1980s, well before airport security we have now? What is the great operational security he uses to get his weapons on the plane in the first instance? He puts them in a box of pastries, because no one checks pastries; and if they do, you just offer them one, and they let you right on the plane. The next plane he puts them in a gym bag, which I can only assume had dirty socks in it—maybe not—and walks right on the plane. And then, the third plane he loses all creativity and just bribes the individual and walks right on the plane.

My favorite story in the entire book involves the Blue Diamond Affair, where a Thai foreign worker employed at a Saudi prince's palace gets access to a safe and walks away with fistfuls of egg-sized gems, rubies, and diamonds, including a purported blue diamond, which, if it exists, is larger than the Hope Diamond. He puts them in the vacuum cleaner bag, walks out of the palace, mails them home to himself in Thailand, and flees the country.

The Saudis immediately see what happened. They get very angry. They ask the Thai government to get the gems back. The Thais assign a senior officer to investigate.

Meanwhile, the thief is not the sharpest spoon in the drawer and he's selling these things for, you know, $20, $30 a pop—an investment opportunity you and I missed out on. [Laughter]

This is creating all kinds of waves in the black market, as you can imagine. The police officer, senior though he was, says, "You know what? I want in." Instead of investigating and solving the crime, he kills some of the crook's family in an effort to get all of the gems for himself.

Fast-forward—by the way, you can't make this up; Hollywood wouldn't buy the script; it's not believable—this guy ends up on death row in a Thai prison, where he becomes an Elvis impersonator. I kid you not. [Laughter]

Meanwhile, the Saudis decide that they can't rely on the Thais to do this investigation. Saudi-Thai relations rupture. Thai foreign workers are deported. It's costing the Thai government millions in lost foreign remittances. They send three intelligence operatives under diplomatic cover to investigate the case for themselves. There's no evidence Hezbollah knew that these guys were intelligence operatives. They probably had no idea about the Blue Diamond Affair at all. But as it happens, Saudi Hezbollah, Lebanese Hezbollah's sister entity—very, very tight together—was on a tear, assassinating Saudi diplomats around the world because of a long story that you can read about in the book. Among the people that they killed were these three Saudi diplomats in Thailand. You cannot make this stuff up.

On the one hand, Hezbollah is an extremely capable terrorist organization, and it is today, increasingly, an international organized criminal syndicate as well.

But it is also not 10 feet tall. They carried out successfully the Burgas, Bulgaria, bombing, it's true. But even in that case they made all kinds of mistakes that investigators are putting together now. But in all the other cases—and there have been many—they have failed and failed and failed again.

In the real world, outside of television and the movies, it's not the case that these guys are unstoppable. And yet, it still is the case that they only have to succeed once and we have to succeed every single day.

The purpose of this book was to initiate a discussion about Hezbollah with an understanding of all of Hezbollah. There is a tremendous literature out there on Hezbollah in Lebanon—as a political party, which it is; as a social welfare provider, which it is; as a standing militia larger, better armed, better trained, more disciplined than the Lebanese armed forces, which it is.

And almost none of those books talk about Hezbollah's global footprint—not its terrorist activities; not its arms procurement; not its illicit financial activities; not its abuse of charity; not its increasingly large participation in narcotics, not producing narcotics but moving product and laundering the proceeds of product—not one. So this book is meant to fill that gap.

Hopefully, now we can have a serious debate and discussion.

I want to thank Carnegie, and I want to thank Joanne, in particular, one more time for hosting me. It is always a pleasure to be here. I look forward to your questions.

Questions

QUESTION: James Starkman.

There seem to be two global wars going on, which overlap to some extent. One is radical Islam against Israel and the West, and the other is Shia against Sunni. If one were to use as a metric the level of violence, certainly the Shia-Sunni seems to be over the top right now, in terms of the level of violence. If one were to use a metric of foiled plots, one might be somewhat more optimistic in the achievements that you have cited here today. How would you summarize our position? Are we winning or losing the war on terror?

MATTHEW LEVITT: We are, I believe, a lot safer than we were on 9/10, 9/11, or 9/12. Cards on the table, I was at the FBI on 9/11 and I led the analytical team for Flight 175 out of headquarters at the time. But the world is non-static. Our adversaries are non-static. This is an evolutionary issue, and it changes, and we need to change with it. The nature of the threat has changed.

The nature of the threat from al-Qaeda, which was at one point very much related to the core, and is now related not only to the core—Ayman al-Zawahri just issued a new statement reminding people of the need not only to carry out attacks somewhere else but here in the homeland as well—but of the affiliate groups, and not only the formal affiliate groups, but those wannabe groups, for example the ones that are developing now in the Sinai.

Syria has the potential to be a brand-new impetus of oxygen into both sides of the Sunni and Shia extremist environments. You need to remember that for Sunni extremists—and for Muslims in general, good people—Syria is much more central to their history than Iraq ever was. We have potential now for real blowback. There are Americans who are in Syria fighting—and not on the side of the good guys, by which I don't mean one side or the other; there are bad guys on all sides of this conflict—and there are many, many Europeans. And the Europeans are particularly concerned, because these people are going to come home maybe with their passports, and they have rights, and what will they do?

I don't think it's accurate to put it as one or the other. We have to deal with all of these threats at the same time.

But one of the most interesting things to me is whether or not what's happening in Syria will lead to a division between the extremists, the radicals on the Sunni and Shia side, which will make it so that they won't work together, as they sometimes have in the past.

Don't get me wrong. They don't like each other. For many of the most radical Sunnis, they have a phrase that basically says, "The Shia are even worse than the Jews, even worse than the Jews."

But as it happens, for example, when al-Qaeda wanted to blow up our embassies in east Africa in 1998, they didn't have the techniques at the time for massive truck bombs. So they reached out to Hezbollah and to Iran and they got training in Iran and in Lebanon so that they could carry out those operations.

What's happening now may lead them to be so angry at each other that those types of cooperation may not be possible, which might make them a little less dangerous in one way, but in many other ways more so. This is an ongoing threat.

But I think we have done a lot to make ourselves safer. We have done a lot to be able to understand the nature of the threat a lot better. But we can't sit back on our laurels and say, "Okay, we're done." This is something we're going to be dealing with for a while.

QUESTION: David Hunt.

First of all, who did kill Imad Mughniyah? I'll buy the book, but I'd love to hear it from you.

Secondly, would you explain the importance to you, having been a beneficiary of the NSA's [National Security Agency] capabilities, in terms of telephones and things like that?

MATTHEW LEVITT: I can't answer the first one because I don't have access to NSA or any other intelligence anymore of any kind. It appears that most people think the Israelis did it. I think the Israelis are quite comfortable letting everybody think that they did it. They certainly had a beef with Imad Mughniyah.

So did we. He was directly involved in assassinating Americans, including brutally assassinating, we believe personally, CIA station chief Buckley back in the day. There's a generation of CIA officers who have been working this threat for whom Mughniyah was a lifelong career vendetta. It was very, very personal.

But we don't know publicly. There is more information provided in the book, but still the book can only answer those questions it can answer.

We are all beneficiaries of the intelligence community's efforts to collect information to make us safer. That's the case.

At the same time, there is nothing wrong at all with wanting to have a debate about limits, protections, privacy rights. Those are things that are very important to us as Americans as well.

I was once approached by someone who said basically, "Could you tell us how un-American it is to question NSA?"

My answer was, "No, not un-American in the least. In fact, it's very American. We should have these debates."

I remember when the USA Patriot Act was first being debated, about a year after it was passed. Some people were very angry that we were debating whether or not all of the measures in the USA Patriot Act needed to be continued. In the end, there were some that did not need to be continued.

My concern is not with that. My concern is with the fact that, by definition, those of us, myself included now, who are not in the intelligence community and don't have access to the whole picture—by definition, we are given these, not 3D, not 2D, but one-dimensional perspectives on things. Snowden, for example, was not in a position to have all the answers and understand.

Now, that means that there are things that have appeared on the front pages of our newspapers that I think that our adversaries—terrorists, foreign intelligence services, and others—are thrilled to have, even if everybody else in the world has it now too. That's a concern to me. So there is a balance on that side too.

Intelligence matters. Without intelligence, we can't protect our people. So we need that. And sometimes, because of the nature of this globalized world, that is going to mean focusing our intelligence on things that are within our borders. If someone is calling someone abroad, to someone else abroad, and that call is routed through the United States, I don't think that should have the same type of protections as if an American here is calling another American down the street.

These are things we should discuss. But I think we need to do it in an honest way. Part of the honesty includes recognizing that just because you read an article in The New York Times or The Washington Post or somewhere else doesn't mean that you're now an expert in understanding all things NSA.

QUESTION: Sondra Stein.

Imagining for a minute that things improve between us and Iran and some rapprochement happens—

MATTHEW LEVITT: From your mouth to God's ears.

QUESTIONER: —and a broad-based one, not just dealing with sanctions but a broad base to improve relations, and Iran stopped supporting Hezbollah as much. Is Hezbollah self-sustaining without Iran?

MATTHEW LEVITT: It is an excellent question. The answer, simply put, is at face value, no. Without Iran, Hezbollah is yet another annoying radical extremist terrorist group that thinks it's okay to kill people to achieve its political goals.

What makes Hezbollah so dangerous is that it was given tens of thousands of rockets, many, many, many thousands more rockets than most sovereign countries. There are a lot of rockets in Lebanon. The government of Lebanon has very, very few. Hezbollah's got about 60,000.

What makes Hezbollah so dangerous is the intelligence training, the operations training, the logistical support that they get from Iran. Without that, they are nowhere near as capable as they otherwise are.

Unfortunately—and, honestly, it wasn't meant to be a pithy statement—I would love for that scenario to occur. But I believe that there is zero chance that it will, because I believe that the nature of this Islamic Republic of Iran is one in which Hezbollah is central to its world view, to its ability to extend its arm beyond its borders.

At various times of its existence, the idea of exporting the revolution has been more central or more immediate than other times, but at all times it was there. The idea of this Islamic revolution was never meant to stop at Iran's borders, and for one to say so would be heretical within the leadership of the country.

At the end of the day, even if the new president Rouhani turns out to be moderate on domestic issues, which I think he probably will, and even if he ends up being somewhat moderate on some of the nuclear issues, which there is some discussion that maybe he will be, and perhaps the Supreme Leader is allowing him to be, I don't think that this going to necessarily—I think in fact it's very unlikely—have a trickle-down effect to Iran's support for terrorism, not only because Iran's support for terrorism is so cost-effective—it costs very little financially and it costs very, very little politically. Iran has engaged in directly and supported through proxies acts of terrorism throughout many, many, many years. I challenge anyone to show me a single instance where there has been a serious repercussion. There has not yet been.

Among the declassified intelligence that I collected for the book was some that pertained more to Iran than to Hezbollah, so I didn't include it in the book. But I wrote a piece, a policy brief, that's on the Washington Institute's website, several week ago about kind of the precedent of what happens when Iran elects "moderate" presidents. The two presidents, of course, are Rafsanjani and Khatami.

I just looked at some of the declassified CIA reports from the time when Rafsanjani came to power and Khatami came to power. What they are reporting at the time is that, despite all of their public statements for moderation on things at home and abroad, it wasn't translating in the least into a tamping down of support for terrorism. Quite the opposite. So while you had moderate presidents in power, you had Iran and Saudi Hezbollah, Lebanese Hezbollah, targeting Khobar Towers, U.S. Air Force personnel who were in their beds at the time at the Khobar Towers barracks in the eastern province of Saudi Arabia—U.S. soldiers who, ironically, were there to protect fellow Iraqi Shia from Saddam Hussein at the time—but no tamping down.

What they conclude with is that, on top of that, it's not just that it was clear that they didn't want to tamp down their support for terrorism, but that, even if they did want to, this portfolio does not sit with the president. This portfolio sits with the Supreme Leader, and they would not have the authority to do so on their own unless the Supreme Leader went along.

I don't mean to rain on the parade. I just think we need to go into this realistically. For years, across both political parties, in this country and in Europe, the West in general, not only have we been extremely risk-averse when it comes to dealing with Iran and Hezbollah, whereas they are by nature aggressive, we also tend to be extremely optimistic in our assessments.

How many people from both parties over the past few years said things like, "Wouldn't it be great if"—and, by the way, that's a terrible way to start a policy discussion—"wouldn't it be great if we could break Syria away from Iran, and then they wouldn't be able to send their weapons to Hezbollah and Hezbollah would be isolated?" You start with a "wouldn't it be great if"—not if there's likelihood, not if it's possible—then say all the great things that would happen if.

It didn't happen, it wasn't going to happen, and we see how close the relationship has become over time between Iran, Hezbollah, and Syria in terms of what's happening right now. Iran and Hezbollah are all-in on the side of the Assad regime.

Think about this. For Iran, for example, despite the fact that all the evidence is clear that the Assad regime gassed his own people, Iran has a very painful history of its own with chemical weapons that Iraq used against the Iranians during their war. And yet this hasn't tempered Iran's support for the Assad regime in the least.

QUESTION: Allen Young.

What in your opinion would trigger the use by Hezbollah of the 60,000 rockets against Israel? And specifically, if in fact there had been strikes by the United States against Syria because of the chemical warfare, do you think that could have resulted in the use of rockets against Israel?

MATTHEW LEVITT: Yes, I think that if there were attacks on Syria, given that Hezbollah is all-in and Hezbollah now sees the fall of the Assad regime as a direct hit to itself—and it would be—I think that Hezbollah would have been very likely to have retaliated, and likely would have been the retaliation tool of choice for its patron in Iran as well.

But it all would have depended on the nature of the strikes. If it was a broader set of strikes, which it doesn't appear it ever was going to be, that really might have ended the Assad regime, I think there's no question there would have been rockets on Israel and there probably would have been asymmetric terrorist attacks of the type that Hezbollah is already trying to carry out for those other two reasons we discussed, avenging Mughniyah's death and playing its part in Iran's shadow war with the West over the nuclear program.

But if the attacks had been more limited and if they hadn't done severe damage to the Assad regime's ability to continue to exist, I think that they would have been very, very limited, maybe even wouldn't have happened at all. I could see Iran and Syria both saying, "Be restrained, because our take-away from this at the end of the day is there was big debate. They barely decided to do strikes"—using the hypothesis that there were strikes and they were limited at the end of the day—"so the lesson to us is we can't use chemical weapons but we can do anything else we want. We can live with that."

The bottom line is this: both Iran and Hezbollah are very rational actors. Too many people make the mistake of thinking that they're irrational crazies. They are not. They are very rational. But they don't use the same calculus that you and I do as Americans or as Westerners. It's no less rational, it's no less legitimate a calculus, but they come to a different solution to the calculation than you or I might, which helps explain in part why we are risk-averse and they are not.

At the end of the day, we assessed, however, that if there were to be retaliation beyond missiles targeting Israel, that that would have been targeting our interests in the region. The U.S. government issued warnings to Americans in Iraq and Lebanon, in the days leading up to what was thought was going to be "the strike that didn't happen," warning them.

In general—and this is consistent across the declassified intelligence over years and years that I collected for the book—the assessment was, and appears to continue to be, that Hezbollah will not use its assets here—and it has assets here and has done pre-operational surveillance, not to do things right then and there, but to have off-the-shelf planning should it ever want to do something—it would only do something here in this country if it felt that we, the United States, were directly involved in doing things that would undermine its existence or the existence of its patron in Iran.

My concern is that at least some within Hezbollah, I believe, are at that point. They believe that we, the United States, are the reason that the UN Tribunal indicted their terrorist leader. They believe that we are behind all of this in Syria.

That poses some interesting questions, especially when compounded with the bizarre but very, very real plot of Manssor Arbabsiar, the Iranian-American used-car salesman in Texas who was tasked by his cousin, who turned out to be a Qods Force general, with blowing up the Saudi ambassador to Washington at a very posh and popular Washington, D.C. restaurant known to be frequented by U.S. senators on a daily basis. That incident changed the U.S. intelligence community's calculus of under what circumstances Iran, either on its own or perhaps through proxies, might try and do something pretty spectacular in this country.

QUESTION: Edith Everett.

I gather from what you've said there's practically no likelihood or any possibility of a diplomatic solution to any of this. If that's the case, if that's the given, what's next?

MATTHEW LEVITT: It's not the given. Diplomacy is not a four-letter word, it's not a word of weakness, and it plays a critical—perhaps the most critical—role in our toolkit. I believe this very, very strongly.

This deal that has been hammered our between the secretary of state and the Russian foreign minister may turn out to be a good thing. I don't think it's going to be enough. I think this is going to be a very tough sell to make it work. But it could be very, very effective.

And by the way, it's not just us. I was at a conference in Israel last week, and Israeli authorities, who are right there in the front lines, they are not saying this is a terrible thing. They're saying, "Okay, if Assad doesn't have his chemical weapons anymore, that's a good thing for everybody concerned."

But it does mean that this is something we are going to be dealing with for a while. And I do believe that, as much as diplomacy is a critical—maybe the critical—tool in our toolkit, it is only as effective as it is empowered.

When you're not dealing with nice people, you need to carry a big stick. You don't need to whack it all the time, but you have to have a credible option.

I will tell you my biggest concern with, not the chemical weapons deal that has been reached, but the way this process went about, is that we, the United States, are having a credibility problem right now. I don't know if you're aware, but the Asssad regime's gassing of his own people with chemical weapons came on the one-year anniversary to the day of the president's red-line warning. That's very much "in your face." The fact that we now have not actually done something serious in response concerns me.

I'm not convinced at the end of the day that the mullahs in Tehran believed that when we said all options are on the table regarding Iran's nuclear program. I do believe that the administration says it and means it, but I don't think that the leaders in Tehran believe it. But if they did then, I can't imagine that they do now. And that's a big problem that undermines our diplomacy that we are going to have to work very, very hard to rebuild.

JOANNE MYERS: That being said, thank you for this discussion.

MATTHEW LEVITT: Thank you.

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