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December 5, 2016 / 5 Kislev, 5777

Posts Tagged ‘cash’

Has US Laundered $33 billion in Cash Deliveries to Iran since January 2014?

Monday, September 12th, 2016

{Originally posted to the Liberty Unyielding website}

Americans were startled to discover, at the beginning of August, that the release of frozen funds to Iran in January 2016, at the same time as a prisoner exchange, had been accomplished by money-laundering cash.

At the time, the public was told that $400 million of the $1.7 billion frozen-funds settlement had been paid out with pallets of cash, converted into foreign currencies and literally flown into Iran on an unmarked Iranian plane from Switzerland.

That was unsavory enough: running a “prisoner exchange” with Iran like a cartel drug deal.

Obama, naturally, mocked his critics for being upset about it:

Obama explained that pallets of cash were used in the exchange because the United States doesn’t have a banking relationship with Iran.

“[W]e couldn’t send them a check, and we could not wire the money,” he said during a press conference at the Pentagon today.

He insisted that the administration was transparent about the payments to Iran, even though the knowledge about the manner of the payment was not previously disclosed. But Obama mocked the notion that the new details made any difference.

“It is not at all clear to me why it is that cash, as opposed to a check or a wire transfer has made this into a new story,” he said. “Maybe because it kind of feels like some kind of spy novel or you know, some you know, crime novel because cash was exchanged.”

Earlier this week, the public learned that the entire $1.7 billion had been transferred to Iran by the same method, on 17 and 22 January and 5 February.  Instead of one cartel drug-deal drop, there were three.

A Treasury Department official offered this delightfully spun perspective:

The Treasury Department confirmed late Tuesday that the subsequent payments were also made in cash.

“The form of those principal and interest payments—made in non-U.S. currency, in cash—was necessitated by the effectiveness of U.S. and international sanctions regimes over the last several years in isolating Iran from the international financial system,” Treasury spokeswoman Dawn Selak said.

So, basically, we had isolated Iran so effectively that the only way for the U.S. government to do business with Iran was to make like “El Chapo” Guzman.

Reportedly, the cash deliveries were accomplished with the collusion of the central banks of Switzerland and the Netherlands.  Those banks would most likely have obtained at least some of the cash from big commercial banks.

If the foreign countries and/or banks did this on their own, they’d be in violation of the remaining, unlifted U.S. sanctions on Iran for terrorism sponsorship.  Our terrorism sanctions on Iran are separate from the nuclear-related sanctions.  And cash is untraceable, in terms of how Iran goes on to spend it.  The Iranians could well use any euro or other foreign note they get to buy more terrorism.  (They could use it for other dangerous things too, but it would very specifically violate the sanctions we are still supposedly enforcing, if the cash were used to pay for terror-related activities.)

The U.S. government could thus, under our law, go after the financial interests these foreign entities have in the United States, prosecuting them and potentially imposing fines or even jail time, especially for any Americans involved.  We could prohibit our businesses from doing business with them, as we have done numerous times in recent decades.

But the implication here is that, since it’s the U.S. government doing the cash-laundering, everything’s OK.

That does raise the question why – if it was so OK – Obama didn’t just explain to Congress and the American people that things were being done this way.  If this is all just fine because the government is doing it (and there are times it could be; see below), why all the coy secrecy?

But when did this start?

It now appears that that question will be overshadowed by the next one.  How long has the Obama administration been laundering cash to deliver to Iran, and how much has been processed that way?

The question has been raised in Congress this week, after the revelation that the entire $1.7 billion was paid to Iran in laundered cash.  Since January 2014, Iran has been allowed to receive $700 million per month in payment settlements for foreign oil and gas sales, under the terms of the initial “Joint Plan of Action” (JPA) agreed to in November 2013, as an interim step in the nuclear negotiations.  (The cash deliveries in January 2016 came with implementation of the more recent JCPOA, concluded in July 2015.)

Throughout that time, the terrorism sanctions on Iran have remained in place.  That means it has been illegal to transfer cash by any means to prohibited entities in Iran, including the banks.  It still is illegal, even though Obama has done it on three known occasions now.

Since transferring that $700 million a month in cash to Iranian banks would have been illegal under U.S. law, Congress wants to know how it was done.  And keep in mind, the Obama administration (a) hasn’t explained that, and (b) has so far demonstrated only the model of laundered-cash deliveries as a method.

Mark Dubowitz of the Foundation for Defense of Democracies framed the question for Congress in testimony to the House Financial Services Committee this week.  (His formal statement is here.)

Lawmakers and others are now pressing the administration to disclose how a slew of other payments to Iran were made in the years leading up to the final nuclear accord.

“In July, the Associated Press cited U.S. officials who estimated that Iran ‘brought home less than $20 billion.’ [I.e., from the earlier monthly payments allowed under the JPA, along with access to some other funds authorized by the 2013 agreement. – J.E.] Were these funds repatriated to Tehran in cash or in gold and precious metals? Through the formal financial system? Or through some combination?” Dubowitz asked in his testimony before the House Financial Services Committee.

“The administration should also clarify if the $20 billion dollars is inclusive of the $11.9 billion in [Joint Plan of Action] funds, or if the $20 billion was in addition to the $11.9 billion,” he said. “Either way, it is important to understand how funds were sent. The worst-case scenario here is that Iran may have received as much as $33.6 billion in cash or in gold and other precious metals.”

Dubowitz’s points alone highlight how vague the Obama administration has been about the whole situation.  We literally don’t know if the total amount was $20 billion, or if it was over 50% more than that.  We don’t know how much was in readily spendable cash, and could have gone into things like arming Hamas to attack Israel in 2014, arming the Houthi insurgency in Yemen, attacking U.S.-backed forces in Syria, and funding the S-300 air defense system and Iran’s own weapons development efforts.

Plus – bonus! – we don’t know if the administration has been complicit in laundering the monthly payments in a manner similar to the drug-deal drops in 2016.  From Adam Kredo at WFB again:

The cash payment of $1.7 billion earlier this year was the easiest way to ensure Iran got immediate access to the money, according to [Obama administration] officials.

“Iran had to have it in cash,” Paul Ahern, assistant general counsel for enforcement and intelligence at the Treasury Department, told lawmakers. “Iran was very aware of the difficulties it would face in accessing and using the funds if they were in any other form than cash, even after the lifting of sanctions.”

A cash delivery “was the most reliable way that they received the funds in a timely manner and it was the manner preferred by the relative foreign banks,” Ahren said.

Given the situation, it is likely that the multiple past payments to Iran were conducted in a similar fashion, according to Dubowitz.

The alternatives we had

(1) In political, or policy, terms, the obvious alternative to just paying out $700 million a month to the Iranians starting in January 2014 was to make payments contingent on performance.  The same applies to the $1.7 billion laundered separately in 2016.  The terrorism sanctions have never been lifted.  If we weren’t going to lift them, then compliance with their terms should have been demanded before those funds transfers were made to Iran.

Yes, that almost certainly would have meant either a substantially different agreement in November 2013, or no agreement at all.   But since Iran basically ignored the 2013 JPA and continued to advance her nuclear weapons capability throughout the period November 2013-July 2015, it would be highly misleading to suggest that we’d have lost much that way.  (See here, here, here, and here for starters.)

(2) In terms of mere instrumentality, Mark Dubowitz points out, meanwhile – and several congressmen noted they were fully aware – that a mechanism exists already under U.S. law for transferring funds to Iran for limited purposes, including, specifically, the payment of claims under the Iran-U.S. Claims Tribunal.  The $1.7 billion was paid under those auspices, since it related to a longstanding Iranian claim from before 1979.

The Obama administration has argued that it had no means other than pallets of cash to make the $1.7 billion in payments.  But Dubowitz believes otherwise (FDD research memo, Sep 2016, p. 5):

The administration’s argument is undercut by the sanctions regulations it supposedly relies upon. Individuals and entities (including U.S. and foreign banks) involved in facilitating these transfers are likely not exposed to sanctions-violation risks because all transactions necessary for settling claims under the Iran-United States Claims Tribunal are permitted according to the Iranian Transactions and Sanctions Regulations.  In fact, this license allows direct transactions between the U.S. and Iranian financial systems for the purposes of Claims Tribunal settlements. Under this provision, Washington did not need to transfer the funds to Iran via a foreign bank, nor did the funds need to be transferred in cash. Washington can legally execute the payment without needing to circumvent the sanctions architecture, as administration officials implied was necessary.

And there’s more, directly from Dubowitz’s testimony (p. 4).

Even in the absence of this explicit license in the Iranian Transactions and Sanctions Regulations, the president has authority under the International Emergency Economic Powers Act to authorize banks to facilitate these transactions. Indeed, nearly 3,000 special licenses are granted every year for sales of food, medicine, and other humanitarian-related goods into Iran. Thus, the transfer of funds in cash on pallets to Iran was legally unnecessary. In fact, as the Associated Press reports, there is no precedent for the transfer of such a large quantity of cash in modern American history.

Using this authority openly could actually have been an exact fit for waiving the $700 million monthly settlements under the JPA.  Foreign banks could have handled the transactions without fear of triggering a U.S. Treasury response.

And yet still there’s more, on page 5.

There is, however, a clear precedent for using the formal financial system to transfer money pursuant to claims after the 1979 Iranian revolution. One example is the resolution of the case surrounding the accidentally downed Iran Air Flight 655 in July 1988.  According to the Associated Press, although it ultimately took until 1996 for the U.S. to reach a settlement with Iran, “$61 million was deposited in a Swiss bank account that was jointly held by the New York Federal Reserve and the Iranian Central Bank.” Why was the $1.7-billion settlement different from previous Tribunal-related payments?

Why didn’t Obama use one of these above-board approaches to handling funds transfers to Iran?

What a question that is.

At this point, it’s worth mentioning the additional revelation from last week that a series of secret exemptions given to Iran has basically nullified much of her compliance with the JCPOA.  For nearly three years now, the U.S.-led West has been acting as an ATM for cash withdrawals by Iran.  Yet the goal Obama touted in his political sale of the JCPOA to America in 2015 – that his “deal” would lengthen Iran’s breakout time to a year, throughout the life of the agreement – has been invalidated by those secret exemptions.  At the most conservative estimate, the breakout time at this point would be as little as five months, if Iran pulled out of the “deal” today.  (Iran frequently threatens to do that.)

It could be less.  The longer this goes on, the less sense it makes to treat this whole sequence of events as “a deal on Iran’s nuclear program.”  That’s just not really what it is.

obama-chamberlain

J. E. Dyer

Israel: Hamas Dominates World Vision Christian Charity, Usurping Cash, Provisions, Permits [video]

Thursday, August 4th, 2016

On Wednesday, Christian Today reported that Mohammad El Halabi, an employee of World Vision (WV), the world’s largest evangelical Christian charity, had been detained on June 15 at the Erez crossing “on his way home from routine meetings” and was being held “without access to legal counsel or family visits,” which is normal fare in Israel with regards to security prisoners.

Last Friday, when El Halabi’s detention had been extended until August Tuesday, Aug. 2, WV’s eastern Jerusalem office released a statement saying, “World Vision stands by Mohammad who is a widely respected and well-regarded humanitarian, field manager and trusted colleague of over a decade. He has displayed compassionate leadership on behalf of the children and communities of Gaza through difficult and challenging times, and has always worked diligently and professionally in fulfilling his duties.”

It should be interesting to see the charity’s response to the charges submitted against El Halabi by the Southern District Prosecution in Beer Sheva District Court Thursday, describing him as Hamas activist who has been using his high position in the charity organization to systematically divert millions of dollars to the military arm of Hamas, financing, among other things, the digging of terror tunnels. The monies, according to Thursday’s indictment, was taken out of funds and resources that had been dedicated to humanitarian assistance to Gaza Strip residents. The indictment includes 12 counts of security violations of passing information to the enemy, membership in a terror organization, funding terrorism, participation in an unlawful association, and contact with foreign agents.

The facts included in the indictment describe El Halabi as having a master’s degree in engineering. A member of Hamas since 1995, in 2004 he joined the Izz ad-Din al-Qassam Brigades, the military arm of Hamas. In 2005 he was hired by WV to carry out administrative assignments at the charity’s Gaza branch. His job provided him with an entry permit into Israel. El Halabi exploited his visits to Israel to locate and mark [via GPS] sites near the Erez Crossing that potentially could be used as egress points for Hamas attack tunnels.

Carrying out his assignments, according to the prosecution, El Halabi usurped millions of dollars in donations that arrived from foreign countries such as the US, Australia, Germany and the UK, and were slated for humanitarian needs, agricultural, education, and psychological support.

According to El Halabi, the humanitarian aid donated for the residents of the Gaza Strip was in actual fact given almost exclusively to Hamas terrorists and their families. Non-Hamas members almost never received any benefit from the aid, despite their relative level of need. Needless to say, this is in contradiction to the accepted practice of the humanitarian aid organizations. Every month, El Halabi distributed thousands of packages of food, basic commodities and medical supplies to Hamas terrorists and their families, commodities that World Vision had intended to go to the needy.

Over his many years working for WV, El Halabi transferred to Hamas’s possession thousands of tons of iron rods, digging equipment and plastic hoses, originally intended for agricultural use but in reality utilized by the Hamas tunnel builders and for building military bases such as the “Palestine” military base which was built in 2015 entirely from British aid money. Some of the money went to pay the salaries of Hamas terrorists and, in some cases, senior Hamas terrorists took large sums of money for their own personal use. During the war of 2014, Hamas terrorists received WV food packages to sustain them above and below ground, including in terror tunnels.

El Halabi also provided plastic sheets bearing the WV emblem to cover the openings of tunnels, making them look like agricultural hothouses.

According to the indictment, around the year 2012, El Halabi was engaged by Hamas to initiate a greenhouse project, to use greenhouses to hide the sites where terror tunnels were being dug. In addition, a project for the rehabilitation of (fictitious) fishermen was actually used to provide motor boats and diving suits for Hamas’s military marine unit.

The Shabak investigation revealed that the main method El Halabi used to divert money to Hamas was to put out fictitious tenders for WV-sponsored projects in the Gaza Strip. The “winning” company was simply informed that 60% of the project’s funds were to be designated for Hamas.

El Halabi told his interrogators that a regular method of acquiring equipment for Hamas was to disguise Hamas warehouses as WV warehouses. Trucks bringing supplies to the Kerem Shalom Crossing between Israel and Gaza would then unload their goods at Hamas warehouses instead of legitimate WV warehouses. Hamas operatives would pick up the supplies in the dead of night.

According to Shabak, the El Halabi investigation revealed much information concerning additional figures in the Gaza Strip who exploited their work for humanitarian aid organizations and UN institutions, on behalf of Hamas. El Halabi’s statements portray a troubling picture in which UN institutions in Gaza are in fact controlled by Hamas.

How the Money Was Transferred to Hamas

Some of the money raised to support injured children in Gaza was diverted to the families of Hamas terrorists, by fraudulently listing their children as wounded.

Money designated for psychological support, education and health in Gaza ($2 million/year) was used to pay the families of Hamas terrorists.

Part of the WV donations was transferred in cash and recorded fraudulently as aid to needy children.

Monies were paid out as salaries to Hamas terrorists and activists, who were registered as employees of the aid organization when in fact they never worked for WV.

Costs for legitimate infrastructure projects were inflated, with the difference going to Hamas.

Straw companies — two farmers’ associations and a fake charity for the benefit of the injured — were established with false registers to launder money.

Unemployment payments were diverted to Hamas terrorists. El Halabi arranged for one-third of the allowances WV transfers to Gaza for the unemployed to go to members of the Izz ad-Din al-Qassam Brigades. The terrorists received a larger allowance ($392 instead of $300).

Using lists of fictitious beneficiaries, $2 million a year were designated as aid for farmers and diverted to Hamas activists. El Halabi reported a larger sum than what was actually transferred to the farmers to World Vision. The difference was diverted to Hamas.

Project costs were inflated. For example, WV invested in the construction of 500 greenhouses and the preparation of land (495 acres) for agriculture. El Halabi reported to the charity that the cost was $1,000 per quarter acre, while the real cost was $700. The difference – $300 per quarter acre – was transferred to Hamas.

In their 2014 report titled “Filling in the Blanks — Documenting Missing Dimensions in UN and NGO Investigations of the Gaza Conflict,” NGO Monitor and UN Watch have cautioned: “The willingness of World Vision workers to openly discuss these issues is exceptional; however, the answers leave little doubt as to World Vision’s willingness to negotiate and coordinate with armed groups. This raises questions as to whether the group would prevent components of its aid from being misappropriated by terrorist organizations, if it felt that taking a stand would jeopardize the organization’s ability to continue its operations in a given area.”

Now we know.

JNi.Media

Killing Cash

Tuesday, May 27th, 2014

The Israeli government hopes to put the kabash on cash transactions, starting with a plan that places a ceiling on the amounts starting in fiscal 2015 budget.

The director-general of the Prime Minister’s Office, Harel Locker told journalists in a briefing at the beginning of this week the government plans to limit cash transactions between businesses to NIS 5,000 after a one-year period, with the initial phase to begin at just NIS 7,500. Private citizens will be allowed cash transactions of up to NIS 15,000. But if the legislation goes through, the use of checks will also be restricted.

The initiative is aimed at ending the “black economy” that operates in much of the country, Locker explained, adding that  money laundering has risen over the past two years. He pointed to some three million cash transactions, each of which was more than NIS 5,000, that totaled some NIS 273 billion since 2012, as proof that things have to change.

The government, said Locker, has instead decided to take a leaf from the American notebook and is recommending that banks issue debit cards, rather than the VISA and MasterCard credit cards they currently use.

Most Israelis do not carry out transactions for more than NIS 5,000, Locker contended, thus he said it is expected the new plan will not cause difficulties for most of the population.

Nice and tidy — but that may not be the case: newlyweds who are buying furniture and other necessities for new homes often make their purchases with the cash gifts they receive at their wedding. Those shopping sprees are seldom carried out for less than NIS 10,000 and often involve the use of cash for extra bonus points or discount savings.

Other special events and holiday sales also often involve cash purchases as well – a fact the government seems not to be taking into account. Although Locker said he expects approval of the new law by the end of 2014, it is likely there will be more than a few bumps along the way – probably after his colleagues’ spouses find they find they can no longer go shopping without the government getting in the way.

But mostly, this is about too much government intrusion into the private lives and transactions of its citizens, by a government which wants to, invasively, be able to more easily track its citizens down to the smallest detail.

What’s next? Our biometric data on file with the government?

 

Jewish Press Staff

An Even More Centralized Israel: Cashless and Criminal

Wednesday, September 18th, 2013

Centralization in Israel is a two-headed coin (or perhaps a two-headed monster).

There’s no doubt, that so many bureaucratic activities go much smoother in Israel than they do in America, because we have ID numbers and our cards are inter-linked to everything. Of course, sometimes that doubles the frustration when obvious things need to be manually duplicated over and over for no reason.

On the other hand, that centralization provides no flexibility or a safety net. Having problems with one government office can easily spill over to an unrelated one, since you’re linked together everywhere on record.

Then there is the basic issue of personal privacy and civil liberties.

And now, the Israeli government is attempting to implement two extreme decisions that threaten civil liberties more than ever.

They’re testing a biometric ID system. God forbid that should ever become mandatory.

Right now, even though your personal bio-data is out there with different organizations, there is still some semblance of privacy and protection because of the separation that naturally exists between your health fund, the army, the government, and so on.

But once that goes away, there goes your privacy. You will have no control over your personal information at all, and you’re reliant on the government, which as we know, is not the most effective of protectors of personal data.

The other move is even scarier.

The Israeli government is actually considering trying to find a way to abolish cash.

There was a unanimous cabinet decision to explore how to do that (Hey Naftali Bennett, I didn’t vote for you to lose my civil liberties – remember that come election time).

They want to get rid of cash, and give everyone rechargeable “cash cards” that will allow the government to track every single transaction you do. EVERY. SINGLE. TRANSACTION.

I can’t even begin to describe the civil liberties and privacy violations that implementing this system will create.

And if they actually believe this will get rid of cash, or the black market, they’re even stupider than I thought.

Bitcoin, gold, barter… you name it. Smart (and dumb) people will find their way around it. Not to do illegal transactions, mind you, but simply to protect their privacy away from the government’s snooping eyes.

And then we’ll all be criminals, because of a dangerous legislation which is an intrusive attempt to suck more tax money out of us and spy on us, and not just spy directly, but with data mining too, to study our purchase and transaction behavior, and find every last penny they can suck out of us and understand what we do with it.

I guarantee one thing. If this legislation passes, if the party I voted for, and the ones I didn’t, don’t stop this in its tracks, I will do everything (legal) to make sure those people do not get elected again, and be replaced with people who do care and understand the importance of civil liberties and fear the tyranny of government.

JoeSettler

Printed from: http://www.jewishpress.com/blogs/muqata/an-even-more-centralized-israel-cashless-and-criminal/2013/09/18/

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