Harpoon Read online

  Copyright

  Copyright © 2017 by Nitsana Darshan-Leitner

  Cover design by Amanda Kain

  Cover copyright © 2017 by Hachette Book Group, Inc.

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  ISBN 978-0-316-39902-9

  E3-20171006-JV-PC

  CONTENTS

  COVER

  TITLE PAGE

  COPYRIGHT

  DEDICATION

  AUTHOR’S NOTE

  PREFACE

  PART I

  The Palestinians ONE: The Tourists from the Windy City

  TWO: Da’wa

  THREE: Closed Accounts

  FOUR: The Head of the Table

  FIVE: Khalas

  SIX: Money Kills

  SEVEN: Blood Money

  EIGHT: Operation Green Lantern

  NINE: The Letter of the Law

  TEN: The Higher Cost of Murder

  PART II

  The Party of God and the Devil’s Portfolio ELEVEN: The Party of God

  TWELVE: Greed

  THIRTEEN: The Cocaine Jihadis

  FOURTEEN: Follow the Money

  FIFTEEN: Malware and Moles

  SIXTEEN: Lawyers, Guns, and Money

  PART III

  Legacy SEVENTEEN: We Cannot Confirm or Deny

  EIGHTEEN: The Final Victories of an Old Soldier

  NINETEEN: Operation Pegasus

  TWENTY: Money in the Crosshairs

  Afterword

  Photos

  Acknowledgments

  Notes

  Newsletters

  For the victims of terror

  AUTHOR’S NOTE

  This is a story of a new and unconventional method of fighting terrorism—financial warfare against the extremist organizations, their leadership, and the rogue regimes that support them. It plays out in Israel’s cloak-and-dagger world of espionage and counterterrorism. The concept was initiated and developed by a small band of innovators—members of a secret unit in the intelligence services of Israel. As with any new start-up that seeks to disrupt, at first nobody believed that this new path could be effective, but today it has proven itself as one of the most potent means to fight terrorism globally. This book chronicles the close-knit relationship between Israeli intelligence and elements of the United States government as well as lawyers from the private sector that joined forces to fight the financial infrastructure that enabled terrorists to blow themselves up inside cafés and buses in the name of the Jihad.

  Like any good spy story, there are heroes in this tale, and there are villains. But this is also a recounting of an alliance forged by historical ties and inescapable necessity. Much of this story has remained secret until now. Operationally, as well as politically, secrecy was a requirement. It remains a requirement to this day. Even the name of the unit, Harpoon, was classified for nearly twenty years.*

  Israel’s lead in fighting terrorism on a financial front, as well as on the battlefield, established an operational precedent that the United States would follow in the aftermath of the September 11, 2001, attacks; other western nations, noting the nexus between money and bloodshed in their cities, would also use the Israeli example of financial warfare as a new dimension in which terrorism can be fought and vanquished.

  This new form of warfare was largely the vision of Meir Dagan, a legendary Israeli warrior and spymaster. Dagan spent most of his adult life with a weapon in his hand, and a dagger at his hip, fighting terrorists behind their lines in spectacular operations. He realized that money was the oxygen that allowed terror to breathe, and he wanted to use his experience and the forces he led to suffocate every dollar, dinar, and euro from the coffers of organizations that were dedicated to killing innocent civilians. We have had a front row seat in watching Dagan and his team of spies and commandos change the paradigm of the global war on terror. This is their story. **

  Nitsana Darshan-Leitner

  Samuel M. Katz

  July 2017

  PREFACE

  High-Value Targets

  The raiders came at night. They always did. The pilots from the U.S. Army’s ultrasecretive 160th Special Operations Aviation Regiment (Airborne) were experts at flying in the absolute black of night on missions of the highest strategic importance. The unit, known as Night Stalkers, flew multi-million-dollar MH-60 and MH-47 helicopters outfitted with the top-secret night-vision capabilities. The powerful rotors that provided lift and speed to these armored birds were designed to be silent; they whispered in flight. From Mogadishu to the Hindu Kush, the Night Stalkers had flown America’s tip-of-the-spear to targets deep inside the windswept valleys of the countries involved in the global war on terror. In late March 2016, the Night Stalkers were launched into the heart of the self-proclaimed Islamic State in Syria, ISIS, to ferry an as-yet-unnamed special operations unit on one such mission. The raiders’ target was Abd al-Rahman Mustafa al-Qaduli.

  Abd al-Rahman Mustafa al-Qaduli was hard-core. Known by too many aliases to list, the fifty-nine-year-old physics teacher from Mosul had joined al-Qaeda in Iraq in 2004 and quickly clawed his way up the chain of command to serve as the terror group’s deputy commander. The Americans apprehended al-Qaduli in 2003, imprisoning him inside Camp Bucca, the U.S. military’s detention center in southern Iraq that was used to hold the most dangerous terrorists seized in the insurgency. But in 2012 al-Qaduli was released in the dust of the U.S. withdrawal from Iraq. He joined the nascent Islamic State, and became a trustworthy and capable deputy to the Caliphate’s head, Abu Bakr al-Baghdadi. Al-Qaduli was considered by many to be the most powerful man inside the Islamic State: He was ISIS’s finance minister.1

  As the individual who controlled the dollars and dinars, al-Qaduli decided how the ISIS billions in seized wealth, oil revenue, and Gulf money donations were spent. He was the chief bean counter who made sure that the fighters in Raqqa, the Caliphate’s capital, were paid their weekly stipends, and he parceled out cash so that local commanders could purchase the bullets and mortar rounds needed to keep the fight going. Al-Qaduli was in charge of budgeting funds that ISIS used to produce the slick Hollywood-inspired recruitment videos it used to attract fighters from around the world. The financier earmarked resources to ISIS sleeper cells inside Western Europe in order to make sure that the deep-cover operatives had the cash to acquire safe houses, vehicles, and weapons. Al-Qaduli was also responsible for managing ISIS’s provincial commands, to coordinate operations in Sinai and the rise of the Caliphate in the swirling chaos that was once Muammar Qaddafi’s Libya.2

  On May 14, 2014, the U.S. Department of the Treasury named al-Qad
uli as a Specially Designated Global Terrorist for acting for, or on behalf of, ISIS. The State Department’s Rewards for Justice had offered a seven-million-dollar bounty for information leading to al-Qaduli’s arrest.3 But the special operations forces ferried into Syria that black March night had not traveled to the Caliphate to issue an arrest warrant; they weren’t in Syria hoping to collect Foggy Bottom’s prize. The Pentagon mission was classified as “capture or kill.” The commanders who were responsible for carrying out America’s secret wars against terror, as well as their liaisons inside the Central Intelligence Agency, had hoped to be able to once again interrogate the wily money chief in order to further undermine ISIS. After all, previous raids against some of al-Qaduli’s subordinates had developed the matrix of intelligence that put them on his trail. The Americans were monitoring al-Qaduli’s phones and his messengers. His whereabouts, from safe house to safe house, were followed by drones and by satellites. The ISIS chief financial officer traveled with a large security package of men and vehicles. Once located, he was an easy target to track.

  The American assault team’s plan was: stop al-Qaduli’s convoy, eliminate the bodyguards, and subdue and secure the target so that he could be extracted and the helicopter flown back to base. But al-Qaduli likened himself to a warrior. He was often seen inspecting forces in Raqqa wearing the traditional pale green outfit, shalwar kameez, that barely contained a bloated belly, a relic of his days with al-Qaeda in Pakistan; his AK-74 assault rifle was always slung across his shoulder, and his load-bearing pouches were crammed with hand grenades just in case the Americans had any idea about taking him into custody again. He had no intention of being captured alive on a darkened stretch of a Caliphate side road.

  When the assault force swooped in from the air, al-Qaduli’s men responded with a fusillade of machine-gun fire that illuminated the thick black sky. The battle was one-sided and brief. Within minutes of the first shot being fired, al-Qaduli and his bodyguards were dead; the Toyota 4×4s they drove had been chewed to pieces by armor-piercing rounds and shrapnel. The American operators rushed into the flames and twisted metal to retrieve cell phones and other personnel effects of the ISIS operatives. The material was spirited back to the analysts and the spymasters for examination.

  At the Pentagon, Defense Secretary Ash Carter and U.S. Marine Corps Major General Joseph Dunford, the chairman of the Joint Chiefs of Staff, discussed the raid with the press, careful not to disclose details of the covert operation. “We are systematically eliminating [ISIS’s] cabinet. Indeed, the U.S. military killed several key [ISIS] terrorists this week including, we believe, Haji Imam [a nom de guerre for al-Qaduli] who was an [ISIS] senior leader, serving as a finance minister and who is also responsible for some external affairs and plots,” Ash explained. The removal of al-Qaduli as leader was presented as a severe blow to ISIS’s ability to conduct operations both inside and outside of Iraq and Syria.”4

  The termination of the financier was a major blow to ISIS. Al-Qaduli knew where the bank accounts were and what the balances were and the interest rates; he knew the PIN codes and the passwords to access ISIS’s portfolios. Al-Qaduli was the number cruncher who divvied up the profits from oil and the sex trade. The money that he managed enabled ISIS to threaten much of the Middle East and target Europe and even the United States. The intelligence that led to him had been assembled, in large part, by previous operations that had targeted money changers, bankers, and the men responsible for turning the oil that flowed underneath the Caliphate into hard currency.

  One operation that yielded a gold mine of actionable data in May 2015, a raid by some twenty-four members of the famed and ultrasecretive Delta Force, had targeted Abu Sayyaf, the man in charge of ISIS’s oil revenues. The raid, carried out in the heart of ISIS-controlled Syria close to one hundred miles southeast of Raqqa, resulted in Abu Sayyaf’s death. But the Delta Force had also seized computers and mobile phones, along with the dead man’s notebooks and personal effects. The American operators had also captured Abu Sayyaf’s Iraqi-born wife. When questioned, she provided an in-depth insight into the secret world of ISIS revenue. The Abu Sayyaf operation, like the raid that targeted al-Qaduli, had been ordered at the direction of President Barack Obama.5

  The raids in Syria were a clear indication that the strategic emphasis of the United States’ war against ISIS—and other transnational Islamic fundamentalist terrorist groups—had shifted like seismic plates moving underneath a troubled earth. Financiers were never considered priority targets—the men who handled the money were never marked for death. The distinction of being on a kill list was for those who ordered and ran operations. But now the money men were not only high-value targets, they were considered the highest value. There were no longer any white-collar jobs in the terrorist organization. The U.S.-led war on ISIS had become one of follow the money, devalue the money, seize the money, and kill the money. America, well into its second decade in the global war on terror, had learned that one of the most effective and long-lasting counterterrorism tactics was to suffocate the funds that were used to buy weapons, pay for explosives, rent safe houses, train recruits, and orchestrate and market catastrophic destruction on a global stage.

  The new emphasis targeting terror money did not originate in the West Wing of the White House, though. The blueprint for this war plan was drawn up in the West Bank of the Jordan River some twenty years earlier. Well into the fourth decade of its own global war on terror, one man inside Israel’s security hierarchy came to realize that the phenomenon of Palestinian Islamic fundamentalist, a wave of suicide bombings and death that combined nationalistic aspirations and religious fervor, was fueled and financed by a complex underground economy that had a global outreach. Stop the money, the idea followed, and the oxygen that stoked the fires of terror could be suffocated. The individual responsible for popularizing that notion was a man named Meir Dagan.

  Using ledger books and bank accounts as a weapon in the battle against terror was out of character for Dagan. He had spent a military career serving the State of Israel in the up-close-and-personal world of deadly special operations. From the alleys of the Gaza Strip to the sweeping hills of southern Lebanon, Dagan had left his mark—and the bodies of his enemies—on the battlefield. He realized that heroics and daring were essential in the day-to-day fight against terror, but Israel needed an outside-the-box solution with long-term and game-changing results. As a major general and as the prime minister of Israel’s advisor on counterterrorism, Dagan pursued and targeted terror financing as a course of national policy, creating a special task force of intrepid spies, accountants, experts, and military officers, as well as attorneys who were able to mobilize the resources of all Israel’s security and intelligence services in the effort to bankrupt the terrorist organizations that threatened Israel. Later, as the director of the Mossad, Israel’s famed espionage service, Dagan turned this task force into a global team of hand-picked agents who traveled the world to dry up the funding for the bullets and bombs that, over the course of the Palestinian intifada, killed more than one thousand Israelis and maimed more than five thousand.

  Meir Dagan dispatched his operatives on daring missions around the world in the effort to fight terror money. But Dagan’s most effective weapon was the close-knit alliance his team built with the highest reaches of the U.S. government, primarily in the Department of the Treasury. This alliance used espionage tradecraft and the overwhelming power of seizures and sanctions to coordinate full-fledged assaults against the banking systems that enabled Hezbollah to launder its narcotics profits and Iranian stipends and pay for the largest terrorist army the Middle East had ever seen. Dagan’s asymmetrical form of financial warfare was ultimately used to target the Islamic Republic of Iran in order to prevent Tehran from realizing its nuclear ambitions.

  The task force that Dagan created was called Harpoon.6 This is the remarkable and untold story of this secret unit and how they redefined the way that Israel—and the United States—wa
ged war on terror.

  PART I

  THE PALESTINIANS

  CHAPTER ONE

  The Tourists from the Windy City

  All beginnings are difficult.

  —Rabbi Shlomo Yitzhaki (Rashi), Mekhilta de-Rabbi Ishmael, on Exodus 19:5

  It was roughly 4:00 AM on December 13, 1992, when Nissim Toledano walked into his young son’s room to softly kiss the two-year-old on the forehead. The kiss, and the proud gaze that focused so lovingly on his young son, was routine for the twenty-nine-year-old sergeant in the Border Guard, the paramilitary arm of the Israel National Police. Nissim lived and worked in Lod, a mixed Jewish and Arab town near Ben-Gurion International Airport. He made the twenty-minute stroll to the Border Guard headquarters every morning, and often walked home in time for dinner. The young father felt blessed to be able to go home every night and spend time with his family.

  Toledano walked briskly in the morning cold, an hour before the winter sun would appear. The morning’s first traffic whizzed by him as those forced to be up at such an ungodly hour made the most of the mostly empty thoroughfares, and Toledano didn’t notice the 1973 red Subaru sedan with Israeli license plates inching up behind him. As Toledeno crossed the street the car sped up and knocked him to the ground. Four young Palestinian men, all in their early twenties, emerged from the vehicle, beating the young sergeant, and then gagging him. They took his gun, handcuffed him, and threw him into their vehicle. The car sped toward Jerusalem.

  The policemen who worked with Toledano knew that something was wrong when the always punctual officer failed to arrive for morning inspection. Repeated calls to his pager went unanswered. A patrol car was dispatched to look for him. The General Security Service, Israel’s domestic counterintelligence and counterterrorism agency known as the Sherut Ha’Bitachon Ha’Klali, or Shin Bet for short, was also alerted. Toledano’s disappearance bore the telltale signs of foul play. Hamas, the Palestinian Islamic Resistance Movement, had kidnapped soldiers in the past and buried their victims in unmarked graves, never telling the Israeli authorities where the slain soldiers lay.