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Hamas’s Main Source of Funding Might Surprise You

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Nov 23, 2023, 1:15:23 PM11/23/23

Hamas’s Main Source of Funding Might Surprise You
Aki Peritz
Wed, November 22, 2023 at 3:00 AM PST·6 min read

Israeli Prime Minister Benjamin Netanyahu recently said Israel is “in
the midst of a fight for our existence” and that its invasion of the
Gaza Strip aims “to eliminate Hamas by destroying its military and
governance capabilities.”

That’s certainly a lofty goal. Unfortunately, the American experience in
Afghanistan over the past two decades indicates that it is almost
impossible to crush a nonstate actor if its leadership and finances are
protected in countries that one’s military will not, or cannot, attack.
Since Hamas’s leadership lives and its fundraising occurs outside of
Gaza, it’s unclear how Israel can truly fulfill its goal of destroying
the terrorist group.

One of this conflict’s greatest ironies is that Hamas has Netanyahu to
thank in part for its strength. For years, he has propped up Hamas in
Gaza in order to weaken the Fatah-led Palestinian Authority, or P.A., in
the West Bank, thereby dashing hopes for a two-state solution. He
reportedly admitted as much in 2019, in defending his decision to allow
Qatari funds to flow into Gaza.

Another irony is that while Hamas fully controls the institutions of
governance in Gaza, the P.A. is paying the lion’s share of the
international aid flowing into the area. For example, in 2021 alone, the
P.A. transferred $1.7 billion to Gaza, theoretically to pay the salaries
and pensions of tens of thousands of civil servants idled by Hamas’s
brutal takeover of Gaza in 2007. A similar phenomenon occurred in Iraq
when Baghdad for years effectively subsidized tens of thousands of
workers operating in Islamic State–controlled areas.

The P.A.—which Secretary of State Antony Blinken recently said should
take over Gaza once the war is over—reportedly transfers up to 30
percent of its annual budget to the Gaza Strip. The authority also
controversially pays a stipend to Palestinians in Gaza and elsewhere who
are imprisoned in Israeli jails, or to the families of Palestinians who
were killed while carrying out an attack. But here’s a further
conundrum: Israel collects the P.A.’s taxes and customs duties—which
make up 65 percent of the Palestinian budget—because the P.A. does not
have official statehood status. This means Israel can freeze or deduct
this money whenever it likes, which it did earlier this month.

Additional aid to Gaza comes from oil-rich Qatar (where many senior
Hamas leaders live and work in luxurious surroundings), which in 2021
provided $360 million for Hamas government salaries and cash handouts to
families—with Israel’s knowledge and approval. The United Nations funds
and runs schools and hospitals in Gaza and employs many workers,
teachers, and medical personnel, spending $600 million in 2020. These
are, of course, avenues for Hamas to extract money through taxes,
extortion, and black marketeering, despite the efforts of international
overseers, including Israel itself.

All this is to say that every dollar—or shekel, as the P.A. and Hamas
largely pay their employees in Israeli currency—that Hamas does not have
to spend on Gaza schools, hospitals, government salaries, and
governance, the group can instead spend on terrorist purposes. Hamas
imposes taxes and fees on the local population; that money is then spent
on Hamas’s end goals. It is unclear how much of the P.A. money is
skimmed by Hamas, but if the Islamic State’s financial management
structure in Mosul can serve as a rough guide, it could be up to 50 percent.

This is in addition to what other donors provide. Anonymous Western
officials speaking to The Wall Street Journal estimated that Iran
provides Hamas $100 million annually for military activities, while the
terrorist group generates $12 million to $15 million a month on smuggled
Egyptian goods, according to Gaza-based economist Mohammed Abu Jayab. A
recent analysis from Die Welt suggests Hamas sits upon a financial
empire worth $700 million.

Hamas has even experimented in recent years with using cryptocurrencies
to evade government surveillance. While the full extent of its efforts
is unknown, Israel as recently as mid-October continues to freeze
Hamas-linked crypto accounts.

Even with these diversified income streams, the money itself never has
to touch Gaza. Hamas and its allies, like most sophisticated terrorist
groups, have built a complicated web of global money-laundering streams
with the assistance of the Iranians. It is probably impossible for
forensic accountants to unravel completely Hamas’s financial dealings.
The U.S. Treasury Department is playing financial whack-a-mole; last
month, it sanctioned several Hamas investment portfolio managers living
in the West Bank, Sudan, Turkey, Algeria, and Qatar. A further wrinkle
is that if, say, Israel cuts off the P.A.’s $1.7 billion to Gaza, it
will negatively impact the very people who would serve as the governing
backbone of a potential post-Hamas Gaza.

It also doesn’t really cost that much to carry out a terrorist attack.
The September 11, 2001, attacks cost Al Qaeda under half a million
dollars, according to the 9/11 Commission—with the hijackers even
returning $26,000 to an Emirati facilitator right before the strike
because they didn’t need it. While it remains unclear how much it cost
Hamas financially for its October 7 attack on Israel, the terrorist
group almost certainly has enough flexibility to weather whatever
financial penalties are coming. And if not, their funders have more than
enough money to compensate them for their losses.

Terrorism is political theater; the terrorists want the public to watch
their horrific acts and to fear what’s coming next. That’s likely why so
many Hamas attackers wore GoPro cameras and videotaped their murderous
behavior. But their monstrous activities were in service of a political
goal—to force an overreaction by Israel that causes misery for a
civilian population where Hamas hides and operates. This can generate
new recruits, propaganda, and support—diplomatic and financial—from
allies in the region and further abroad.

Hamas must be destroyed or at least neutered as a terrorist organization
for this conflict to conclude. Sadly, without eliminating Hamas’s
leadership outside of Gaza and cutting off its regional financial
lifelines, the goal of decisively crushing the group once and for all
will remain out of reach. After this round of war ends, there will
remain aggrieved Gazans looking to commit violence against Israel,
buttressed by an Islamist ideology to justify murderous actions. There
will also continue to be enough money and direction from outside of the
Strip. Thus, the conflict in Gaza will likely burn on, ebbing and
flowing as it has done for years, no matter the outcome of Israel’s
current military operation.

View comments (127)

Daniel Clair
19 hours ago
The wrap up up of the US Mission in Afgahnistan is the ultimate example
of the US Military Strategy over the 75 years. The Military planners in
the Pentagon have no intention of ever ending any conflict the US gets
involved in with a victory. We have been engaged in wars somewhere in
the world ever since we entered WW2. Of the wars we have been engaged
in we have won exactly one and that was the brief incursion in Grenada
under Reagan. Every time we have gotten close to a victory the
Establishment begins to whine and whisper about justifications and
humanity etc. Korea, Truman decided to take a loss rather than allow
Macarthur to win the war that would have eliminated the Communist Korean
army and much of the Communist Chinese army. There was never any
serious attempt to win in Viet Nam, Desert Storm we were just days away
from total control over that country yet the Establishment demanded that
Bush pull the troupes. out of the fight allowing that cesspool to
fester, we are still there in a worse position than before, going on
would be quite possible but trying to convince the true believers in the
Establishment is pointless. The Establishment are nothing but War
Profiteers heavily invested in the Military Industrial Complex they need
the sacrifice of America's youth to feed their family and buy their
luxury live stye.

23 hours ago
"the conflict in Gaza will likely burn on, ebbing and flowing as it has
done for years, no matter the outcome of Israel’s current military

I'm sure this is true but that doesn't mean that the fanatical Humas
fighters won't be entirely eliminated from Gaza for at least until the
Israeli military leaves.

3 replies

1 day ago

The question is not if Israel can or cannot , because it certainly can.
The question is if the divided international community is ready to
stomach what it takes to have Hamas eradicated. It is a psychological
issue of two main factors, the first is to accept that Hamas consists of
far more than only 40.000 terrorists and the second is to realize that
the altruistic human rights equations the west is so worshipful upon
cannot be implemented for such society which is riddled with Hate, Crime
and fundamentalist Islamic doctrine. The second is extremely hard to
dislodge in western psyche for it lazily for decays concentrated on
defining principles of right and wrong as opposed to looking at
situations and people for what they are. The universe is made in such
way that any thing that becomes too stiff is bent or destroyed and those
same values that where once brave and virtuous will be the making of
ones own grave if held onto in later periods.

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