Lebanon-Israel Tensions Create Dilemma for U.S. and France

By James M. Dorsey

World Politics Review

A covert Israeli-Lebanese intelligence war, combined with tension along the two countries' border and fears of renewed Lebanese civil strife, has created policy dilemmas for the United States and France as they seek to strengthen the Lebanese government while isolating Hezbollah. The Shiite militia-cum-political party, which the U.S. and France have both designated as a terrorist organization, occupies two cabinet posts in Lebanon's constitutionally mandated power-sharing arrangement.

The intelligence war as well as a recent Lebanese-Israeli border clash in which five people were killed have persuaded Lebanese President Michael Sulaiman and Prime Minister Saad Hariri to increase coordination between Lebanon's national armed forces and intelligence services and Hezbollah, which maintains its own armed militia. The goal is to thwart Israel's apparently extensive infiltration of Lebanon, to expand the presence of Lebanese regular forces along the largely Hezbollah-controlled Lebanese side of the border with Israel, and to prevent Lebanon from sliding into civil war. Expectations that a United Nations inquiry will implicate Hezbollah operatives in the 2005 assassination of Hariri's father, former Prime Minister Rafik Hariri, have fueled fears of renewed Lebanese civil strife.

Lebanon has compiled a list of 150 cases of Israeli espionage, which it intends to submit to the U.N. Security Council. Scores of alleged Israeli spies -- including government and army officials, phone company executives and a car dealer who allegedly sold Hezbollah SUVs equipped with tracking devices that allowed Israel to follow their movements -- have been arrested in the last two years. The Lebanese government has also helped Hezbollah bust alleged Israeli spy cells by granting it access to tools and tradecraft acquired from its U.S. and European allies. Just in the last month, Lebanese courts have charged an army colonel and telecom executive with spying for Israel and sentenced two men to death, bringing to five the number of people handed the death penalty in the past year for spying for Israel. Lebanese authorities also arrested a prominent politician and a retired general who had headed the army's counterterrorism and espionage unit.

The spy war and clash with the Israelis have left Hezbollah little choice but to welcome the closer intelligence and military cooperation, which is to some degree likely to curtail its freedom to operate independently. The militia is smaller than the Lebanese army in terms of men, but better-equipped and more battle-hardened. The stepped-up cooperation would reverse Lebanon's past policy of keeping its army away from the southern border due to concerns that it lacked firepower and could spark renewed sectarian fighting. The move also breaks with fears that the army -- which split during Lebanon's 15-year-long civil war and was reunited in 1990 to include Christians and Muslims -- could be torn apart again were it to be fully deployed along the Israeli border.

Closer cooperation between the army and Hezbollah could have potential benefits for Western nations as well as for Israel, by limiting Hezbollah's ability to retaliate for a U.S. or Israeli attack on Iran's nuclear facilities. Nonetheless, members of the U.S. Congress have forced the Obama administration to put a hold on $100 million in military aid for Humvees, small arms, and maintenance support to Lebanon -- the second-largest recipient of American military aid per capita after Israel -- pending a review of the Lebanese military's relationship with Hezbollah.

Lurking in the background of the review are concerns that Hezbollah is increasing its influence within the Lebanese military by inducting into the army Shiite fighters who have first served for two years in the militia. Israeli intelligence also asserts that Iranian intelligence and commando officers were allowed to tour the border area where Lebanese and Israeli forces had clashed, escorted by commanders of the Lebanese army unit involved in the incident. The Lebanese government called the U.S. hold on aid unwarranted. Iran, supported by Hezbollah leader Hassan Nasrallah, has offered to step in with military assistance.

Closer military and intelligence ties with Hezbollah also threaten to scuttle plans for a defense cooperation treaty with France that would increase French-Lebanese cooperation in combating organized crime, drug trafficking and money laundering, because of French fears that Hezbollah would benefit from the agreement. Those fears were fueled by Lebanese demands that the treaty adopt the Arab distinction between terrorism and resistance, which would have allowed Hezbollah to be classified as a legitimate movement. Hezbollah supporters in southern Lebanon have clashed in recent weeks with French members of the United Nations Interim Force in Lebanon (UNIFIL), after Hezbollah accused the peacekeeping force of gathering intelligence on Israel's behalf. French animosity to Hezbollah dates back to 1983, when Shiite suicide bombings in Beirut killed 242 U.S. and 58 French soldiers.

Parallel to its offer of increased cooperation, the Lebanese government last week reaffirmed its new resolve by announcing that it had formed a commission to tackle arms possession in a country where ethno-sectarian militias remain prevalent. "From now on, the military and security forces, the army and internal security forces, will assume the responsibility of controlling security, and will track down anyone who may provoke problems in this country," Hariri said in a statement. The decision followed clashes in a Beirut neighborhood between Hezbollah and the pro-Syrian Sunni group, Al-Ahbash, killing at least three people. Rocket-propelled grenades and heavy machine guns were used in the skirmish, the worst since sectarian fighting in May 2008 that killed at least 80 people.

Too weak to intervene in the 2008 fighting, the Lebanese army watched from its Western-made armored vehicles as Hezbollah and pro-Syrian forces humiliated the more Western-leaning militias loyal to Hariri. Now, with Hariri moderating his positions toward Hezbollah as well as Syria, the refusal by the U.S. and France to give the Lebanese military what it needs to position itself as a symbol of national unity could wind up undermining Western interests in Lebanon more than Hariri's unavoidable cooperation with Hezbollah.

Scandals Spur Push to Curtail European Defense Offset Deals

By James M. Dorsey

JustAnti-Corruption

August 31, 2010

Two probes of European defense contractors have lead to calls to restrict "offset agreements" that are made as part of arms deals.

Read further at JustAnti-Corruption

Peru Appoints Special Prosecutor to Track Millions Hidden by Corrupt Officials

By James M. Dorsey

JustAnti-Corruption

August 30, 2010

Peru has appointed a special prosecutor to track down $323 million stashed away by some 90 former officials in the government of former President Alberto Fujimori convicted in recent years on charges of corruption.

Read further at JustAnti-Corruption

Oil Companies Mull Options After Losing Out in Murky Congo Deal

By James M. Dorsey

JustAnti-Corruption

August 26th, 2010

Two oil companies companies came up short in an episode that seems to demonstrate the importance of having friends in Congo in high places

Read story at JustAnti-Corruption

Russia Commits to Fighting Central Asian Drugs and Terrorism

The Obama administration has welcomed Russia’s revived interest in influencing developments in Central Asia as the United States looks to next year withdraw its forces from Afghanistan. Admitting that the United States was unable to meet the needs of nations like Afghanistan and Pakistan, US Assistant Secretary of State Philip J. Crowley said agreements reach at this month’s summit in the Black Sea resort of Sochi between Russian President Dmitry Medvedev and Central Asian leaders focused on stabilizing the region and combating terrorism and drugs trafficking contributed to US strategy in the region.

Medvedev’s talks with the leaders of Afghanistan, Pakistan and Tajikistan come two months after Russia launched an international effort at a forum in Moscow to combat drugs trafficking in Afghanistan. During the Sochi summit Medvedev promised to deepen economic ties with Central Asian nations, revive Soviet-era energy and social development project, significantly increase flood-aid to Pakistan and accelerate and expand Russian helicopter production, especially of the Mi-17 and Mi-35 for export to the region. Russia is already refurbishing some 140 Soviet-era installations in Afghanistan, such as hydroelectric stations, bridges, wells, and irrigation systems in deals valued at more than $1-billion.

Medvedev further announced in Sochi that Russia would spearhead a World Bank-sponsored program to expand hydro-electric dams in Tajikistan and Kyrgyzstan that would supply surplus electricity to Afghanistan and Pakistan. The four presidents agreed to link Central Asia to the CIS railway system by building a railroad and highway that will connect Pakistan and Tajikistan.

US officials say renewed Russian involvement in Central Asia is fueled by concern in Moscow that regional terrorism and drugs trafficking will fuel separatism in the Black Sea basin. Russia’s renewed commitment comes two decades after Soviet troops fought a 10-year bloody war in the country that lies in many ways at the root of Afghanistan’s current problems.

US and EU struggle to make Iran sanctions watertight

by James M. Dorsey

Deutsche Welle

The US has designated three Maltese companies owned by an Iranian shipping company for violation of its sanctions regime to restrict the Islamic republic’s ability to import what the US terms as dangerous cargoes.

The focus on shipping is being closely coordinated with the European Union and US Treasury officials say the emphasis on shipping compliments their earlier focus on Iran's banking and energy sectors that forced European banks accused of violating the sanctions regime, including Credit Suisse and Lloyd's, to pay hefty fines.
Barclay's Bank recently agreed to pay $298 million (236 million euros) in penalties for hiding transactions with banks in Iran and other countries sanctioned or embargoed by the US.

"Commerce with Iran requires extraordinary vigilance. Iran has used channels of legitimate commerce, by which I mean banking, shipping, transshipment. They have used all these facially legitimate methods to facilitate illicit conduct," said the treasury's undersecretary for terrorism and financial intelligence, Stuart Levey, at the beginning of a Middle East tour to ensure adherence to the sanctions by key Iranian trading partners, foremost among them the United Arab Emirates.

The treasury officials say the Islamic Republic of Iran Shipping Lines (IRISL), Iran's national shipper, which owns the Maltese companies - Marble Shipping Limited, Bushehr Shipping Company and ISI Maritime Limited -, is a prime carrier of cargoes related to Iran's missile and other military programs as well as of arms shipments to Hezbollah, the Lebanese militia-cum-political party designated by the US and some European countries as terrorist.

The treasury designated IRISL in 2008, but is now seeking to ensure that its sanctions are effective and prevent the company from circumventing restrictions by renaming and reflagging its vessels or chartering third-party ships. The renewed focus is also designed to make it more difficult for IRISL to obtain insurance and services. In line with the US effort, the EU last month expanded its restrictions on shipping to Iran to include all shipping companies and vessels as well as air transport rather than only IRISL or other Iranian shippers and vessels.

Prosecutors in the southwestern German city of Karlsruhe this month charged a German and an Iranian national with violating the arms embargo and the EU's export ban on dual-use equipment by shipping to Iran a vacuum sintering furnace in July 2007 worth 850,000 euros ($1.1 million). The prosecutors charge that the furnace needed to construct parts for a missile's guidance system and warheads, falls under the embargo because long-range missiles could carry weapons of mass destruction in their payload.
Britain's Lord Chancellor Ken Clarke is investigating claims made by a BBC documentary and The New York Times that Isle of Man shipping companies set up as shells by IRISL are busting sanctions by shipping arms to Iran. The Isle of Man government has denied the allegations. The BBC documentary said Israeli navy commandos seized a cache of arms off the coast of Cyprus last November. The weapons were packed in crates marked IRISL on an Isle of Man-registered vessel, the Visea, that had set sail from Iran to Egypt, the BBC said.

Levey warned that "some of Iran's most dangerous cargo continues to come and go from Iran's ports, so we must redouble our vigilance over both their domestic shipping lines, and attempts to use third-country shippers and freight forwarders for illicit cargo." Levey's concern is particularly true for freewheeling Dubai and Ras al Khaimah (RAK), the two UAE emirates that operate as major Iranian transshipment nodes. Iran does $12 billion-a-year worth of trade with the UAE, on which it relies for the import of goods, many of which fall under UN or US sanctions.

The UAE recently restricted Iranian use of Dubai's port and its central bank froze accounts of 40 entities and an individual blacklisted by the UN for assisting Iran's nuclear and missile programs. Ras al Khaimah's free zone, home to some 200 Iranian firms, has stopped issuing licenses to new Iranian companies, according to the zone's CEO, Oussama el Omari. "RAK was looking to offer benefits to attract Iranian companies in the past. Now perhaps it's not in their favor to do so due to sanctions so they have changed their viewpoint," said Morteza Masoumzadeh, the head of the Iranian Business Council in Dubai.

The UAE's apparent renewed commitment to the sanctions regime follows the disclosure via satellite imagery of Iranian military installations on Abu Musa, the largest of three islands at the entrance of the Strait of Hormuz occupied by Iran. The installations included three missile launch pads, an elaborate underground market, and a sports field with the words "Persian Gulf" emblazoned on it - a provocative reminder of Iran's hegemonic view of a region the Gulf states describe as the Arab Gulf. UAE Foreign Minister Sheikh Abdullah Bin Zayed Al Nahayan recently stopped short of comparing Iran's occupation of the islands to Israel's occupation of Palestinian territory. "Iran refuses to allow us to send teachers, doctors and nurses. I am not comparing Iran to Israel, but Iran should be more careful than others," Al Nahayan said.

Ensuring that the sanctions against Iran are watertight is proving difficult despite the stepped up commitment from countries like the UAE. China, Russia, India and Turkey, in response to the latest US and EU sanctions, have moved to capitalize on investment opportunities. The four nations have reiterated their adherence to weaker sanctions imposed on Iran in June by the UN Security Council, but say they are not obliged to follow the recently announced more stringent US and EU rules.

In violation of petroleum-related deals with Iran, China and Turkey recently sold gasoline to Tehran while Russian officials say they will ship gasoline by the end of this month. The four countries are also signing deals to invest billions of dollars in Iran's oil and gas fields, petrochemical plants and pipelines. "Sanctions will not hinder us in our joint cooperation," Russian Energy Minister Sergei Shmatko said at the signing in July in Moscow of an energy partnership agreement with Iran.

In his talks with Lebanese leaders, Levey, according to well-placed Lebanese sources, raised US and EU concerns about a mysterious twice-monthly Iran Air flight from Tehran to the Venezuelan capital of Caracas with intermediary stops in Damascus and Beirut. Current and former EU, US and Israeli intelligence officials assert that Iran Air flight 877 ferries people and weapons to Latin America in advance of possible retaliatory attacks against the US should the US or Israel strike at Iranian nuclear sites. They also say the flight may be ferrying back to Iran sanctioned items for Iran's military programs. Although flight 877 is publicly announced, would-be travelers seeking a reservation are invariably told by Iran Air that no seats are available, Western intelligence sources say.

Former CIA Direct Michael J. Hayden concedes that Western intelligence services are unable to substantially monitor the flights or understand their precise purpose. Hayden says the flights are a concern because they constitute a direct and uncontrolled Iranian link into the Western Hemisphere. "I can tell you that we're really interested in that direct flight… It is something that we are sensitive to," Hayden said. The State Department declined comment on the flight, saying in a statement that "nations have the right to enter into cooperative relationships with other nations."

Release of Spanish Hostages: Questions and Insights

This week’s release of two Spanish hostages by an Al Qaeda affiliate in North Africa raises questions about the steadfastness of the refusal by Western nations to negotiate with terrorists. It also constitutes a victory for the group’s Algerian faction focused more on kidnapping of foreigners as a business than on achieving political goals.

In a statement to Spanish newspaper El Pais, Al Qaeda in the Islamic Maghreb (AQIM), an Al Qaeda affiliate that operates primarily in Algeria, Mauritainia, Mali and Niger suggested that Spain had met its demand for payment of a $5 million ransom for the hostages. The Spanish government has declined to comment on whether it had cut a deal with the militants. The hostages were kidnapped in Mauritania in November while riding in a convoy delivering supplies to poor villages.

It became apparent that the two hostages, Albert Vilalta and Roque Pascual, were about to be released after Mauritania last week threw the jihadists a bone by extraditing to Mali a key Malian AQIM operative, Omar Sid'Ahmed Ould Hamma. Hamma had been convicted to 12 years in prison for kidnapping the two Spaniards as well as Alicia Gomez, a third Spaniard who was released in March. His release had been part of AQIM’s demands.

Spain's ransom payment and Hamma's release would not be the first time European and West African authorities have entered into negotiations with AQIM. Mali released four Islamists earlier this year in an apparent swap for French hostage Pierre Camatte, freed by AQIM in February. The release soured its relations with Algeria, Mauritania and Niger who accused Mali of being soft on terrorism.

The group, which grew out of the Salafist movement in Algeria and has since shifted south into the vast and lawless Sahel, also killed British captive Edwin Dyer last year after London refused to give in to its demands.


Analysts and Malian officials say Hamma’s release was as much designed to achieve the release of the remaining hostages as it was to deepen divisions within the Al Qaeda affiliate and complicate its relations with allied rebel Tuareg tribesmen. The Tuareg accuse the Malian government of failing to implement a 2008 agreement that was supposed to end their tribal insurgency and grant the Tuareg greater rights.

Relations between Al Qaeda and the Tuareg became strained last month when an AQIM commander, Abdelhamid (Hamidu) Abu Zaid, accused the Tuareg of assisting a French-Mauritainian attack that last month failed to liberate 78-year old French hostage Michel Germaneau and killed six jihadists. Abu Zaid charged that the Tuareg had pinpointed the whereabouts of the AQIM operatives. In retaliation, Abu Zaid abducted and killed Mirzag Ag El Housseini, a Tuareg customs officer whose brother is senior commander in the Malian army. In a statement, AQIM’s leader in Mauritania, Abu Anas al-Shanqiti, warned that his group would retaliate against the “traitorous apostates, children and agents of Christian France” who had cooperated in the raid. The French Foreign Ministry says its forces are “fully mobilized” to counter “threats uttered by assassins.”

Abu Zaid had been urging the commander of AQIM’s wing in Algeria, Mokhtar Belmokhtar, under whose control the Spaniards were, to execute them in retaliation for the French-Mauritanian raid. Mali had been quietly negotiating the release of the Spanish hostages with Belmokhtar. Malian officials say that the extradition of Hamma enabled Belmokhtar to cut a deal and claim political success. Hamma’s extradition contrasts starkly with Mauritania’s participation in the French-led raid and its past refusal to negotiate with the jihadists.

In its statement, AQIM said the release of the hostages demonstrated to France that "it was possible to deal rationally with the Mujahedeen (Islamic fighters). It was possible to avoid the aggravation, irritation and anger that led to the killing of their national."