Wednesday, September 02, 2009

Has Hizbollah lost $680m to fraud?

Last week in Lebanon, a well-known Shiite businessman who was "close to Hizbollah" was arrested on suspicion of fraud, allegedly heading a Ponzi-style scheme worth some $1.3 billion. Inevitably, Salah Ezzedine is already being called the "Lebanese Madoff" (although he has not yet been charged - it is still unclear whether he is a fraudster or just a bad businessman...).

So just how "close to Hizbollah" was he? According to a Kuwaiti paper, cited in Yediot, close enough to have lost them $683 million - almost half the money that he allegedly embezzled.

That's pretty close.

According to the report, the money came from Iran, and Hizbollah leader Hassan Nasrallah wanted it invested in Europe and the US.

Yediot comments (my translation):

"It is a financial blow for Hizbollah, which in any case was in a difficult financial situation following the Second Lebanon War and because of the tremendous sums it had to spend reconstructing southern Lebanon, its military capabilities and the last election campaign in Lebanon."

A financial blow, to be sure, but not a knockout one. Before the elections this year, alone, Iran was rumoured to have smuggled into Lebanon more than $1billion in cash to help the organisation win the vote. A few years ago, it was receiving up to $200 million a year from Iran.

So $683 million is a lot of money, but probably nothing Iran can't replace, if it so desires.

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