Nothing illustrates the dual nature of Hezbollah as a terrorist organization and political party more than their connection to Al-Qard al-Hasan, a financial association and bank whose branches serve thousands of ordinary Lebanese.
The bank also serves as the middleman for terrorists who attack Israel and other targets across the Middle East. On Sunday, the Israeli air force hit every branch of Al-Qard al-Hasan in Lebanon, leaving nothing but piles of rubble.
While Hezbollah assets are no doubt protected, most of the depositors will lose everything. No FDIC in Lebanon.
Israelis have been trying to drive a wedge between Hezbollah and ordinary Lebanese for years. Most of the people in Lebanon — including the Shiite community — are resentful of Hezbollah's hold on the country. But the terrorists have the guns and until that changes, Hezbollah rules.
As has been their custom, the IDF announced several hours before the attack that it was coming. This set off a panic.
"Everybody was on the streets," said Beirut resident Wafaa Ezeldinne after she fled her home. "Even displaced people left locations that were close to Al-Qard Al-Hasan. Streets at night were jammed with cars, people."
The financial organization has about 30 branches across Lebanon, including in the Dahiya, a densely packed area adjoining Beirut where Hezbollah holds sway.
Israel, the United States and others say that the group, despite its stated aims, serves as a front for Hezbollah financing. The group “purports to serve the Lebanese people” but in practice “illicitly moves funds through shell accounts and facilitators,” the Treasury Department said in 2021 when it was sanctioning individuals involved in what it called Hezbollah’s “shadow banking” network.
“In the coming days, we will reveal how Iran funds Hezbollah’s terror activities by using civilian institutions, associations, and NGOs that act as fronts for terrorism,” Rear Adm. Daniel Hagari, the Israeli military’s chief spokesman, said in a statement on Sunday evening.
Al-Qard Al-Hasan, or AQAH, has been under U.S. sanctions since 2007. The U.S. Treasury Department describes it "as a cover to manage the terrorist group's financial activities" and to "gain access to the international financial system."
Recently, Treasury reiterated its charge that the bank "abuse(s) the Lebanese financial sector and drain(s) Lebanon's financial resources at an already dire time." Lebanon is an international basket case.
Parliament has failed to elect a president since the 2022 elections. The office, reserved for Christians in Lebanon, has been empty as disputes over a loan by the International Monetary Fund (IMF) that Lebanon desperately needs have paralyzed the country.
"Central Bank data states that total deposits in Lebanon's 15 largest commercial banks amounted to approximately $99.6 billion (87.3 percent of the sector's total) as of the end of 2023. However, as of April 2024, Lebanon's banks are insolvent, having accumulated more than $72 billion in losses," according to the U.S. Department of State.
Critics of the group say the organization allows Hezbollah to build up its influence with citizens in Lebanon while hobbling the state and putting Lebanon’s banks at risk of foreign sanctions.
A senior Israeli official speaking on condition of anonymity to discuss sensitive matters said that Israel aims to disrupt Hezbollah’s day-to-day financial operations, including paying salaries of Hezbollah’s operatives, which all run through Al-Qard al-Hasan, and to undermine the trust between Hezbollah and the many Lebanese Shiite Muslims who use the branches as an alternative banking service.
AQAH is Hezbollah's piggy bank. They raid it often to keep their terror operation running. Meanwhile, it's the ordinary Lebanese who suffer the consequences.
"These strikes don't actually target Hezbollah's finances or Iran's funding, but the economic lifeline of over 300,000 Lebanese who not only deposit their savings with the non-profit NGO but also rely on it for interest-free loans," Hezbollah scholar Amal Saad said on X.
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"While Iran helped establish the organization in the 1980s, it is now entirely self-funded, overwhelmingly by Lebanon's Shia (Shiite) community" which represents 85% of its client base, she said.
Hezbollah and the Lebanese state are joined at the hip. But it's the ordinary Lebanese who are propping Hezbollah up and keeping them viable. Destroying their life savings may be a cruel thing, but Israel sees it as absolutely necessary to achieve its war aims.
