For the entire 26 years of its existence, Hamas has always found creative ways of financing its death industry. From an insignificant small-time charitable organization, with little influence or support, in the first intifada Hamas became the most influential and popular force in Palestinian society. From being an opposition movement to the Palestine Liberation Organization, Hamas became the strongest organization in the Palestinian Authority. It developed welfare mechanisms alongside a trained military wing. Both wings grew to huge dimensions, bringing together hundreds of charitable societies and hundreds of thousands of members. Hamas needs tens of millions of dollars to support these two wings. In the first years of the second intifada, it managed this quite easily. Charities such as CAIR and HLF (Holy Land Foundation) in the US, Interpal in the UK, and CBSP in France, raised millions of dollars for it. This money, together with money raised in Syria and Saudi Arabia, was transferred freely to the West Bank and the Gaza Strip through Jordanian and European banks.
In Operation Defensive Shield in 2002, documents testifying to these cash transfers fell into the hands of the IDF. The documents showed that many charities were raising millions of dollars for Hamas and for the families of the martyrs (that is, suicide bombers), and were transferring the money to the Gaza Strip and the West Bank via the Arab Bank and other banks. In February 2004, IDF forces entered banks on the West Bank and confiscated from their safes $40 million that belonged to Hamas activists and Hamas-sponsored charities. Most of the branches that the IDF raided were of the Arab Bank. At the same time, victims of terrorism filed huge lawsuits against the Arab Bank and European banks operating in New York, citing the fundraising and the transfer of money to Hamas. These lawsuits caused far-reaching shocks in the global banking system. Because of them, no bank would agree to provide banking services to Hamas or to the charities associated with it. Many banks, such as Lloyds and Barclays in London, closed bank accounts of charities where there was a suspicion that they were assisting families of martyrs in the West Bank.
All the international banks closed their branches in the Gaza Strip, for fear that their money would serve Hamas in Gaza and would be channeled to financing terror. So the Gaza Strip was left without an international banking system, that is to say, without a means of bringing money in.
Buying the people
This matter had to be dealt with immediately, and obliged Hamas to find alternative ways of bringing money into Gaza. These were found in the shape of banks that did not see themselves as bound by the West's rules forbidding money laundering and forbidding the financing of terror. The Bank of China, for example. When the money transfer route via the Arab Bank or European banks was blocked, the heads of Hamas approached money changers in Lebanon and Jordan, and asked them to transfer millions of dollars to accounts at the Bank of China that were opened especially for this purpose. The money would be received from Hamas's representatives in Syria and transferred to the Bank of China, from where it was supposed to be transferred to the Gaza Strip. Since the money could not be transferred directly to banks there, they would buy goods with it, and export the goods to the Gaza Strip. There, Hamas activists would sell the goods and obtain the cash to finance terrorism. Huge lawsuits were filed in New York by terror victims against the Bank of China as well, but the bank refused to cut off the money transfer route to Hamas, on the grounds that Hamas had not been declared a terrorist organization in China, and so it was committing no crime under Chinese law. The bank has continued to provide banking services to Hamas and aid in financing Hamas, possibly to this day, and certainly until 2012.
There was also another way, the way of the tunnels. In 2006, after Israel bowed to US pressure and abandoned the border between the Gaza Strip and Egypt, the tunnel industry burgeoned, and by this means Hamas smuggled millions of dollars into the Gaza Strip. This money was earmarked first and foremost for supporting the needs of the population "from the cradle to the grave". Hamas provides free education, health, welfare and religious services to the Palestinians in the Gaza Strip. This is intended to buy their loyalty, so that it can continue firing on Israel from their lounge rooms and schoolyards and mosques. This money was also intended for buying tens of thousands of long-range rockets and military equipment, for constructing hundreds of concrete-lined subterranean tunnels that, in their safety and sophistication, would not shame developed western countries, and for paying wages to tens of thousands of its people.
Egypt closes its gates
In 2011, the ground stared to shake under Hamas's offices in Syria. Khaled Mashaal, the head of Hamas's political bureau, looked for somewhere else to go. He invited the Emir of Qatar to visit the Gaza Strip. The Emir came, and offered Hamas billions of dollars for rehabilitating the Gaza Strip, in exchange for Hamas moving its offices to Qatar. The organization welcomed the offer with open arms. Qatar became its main, and eventually its only, financer. The hundreds of millions of dollars that Qatar transferred did not go to the rehabilitation of Gaza, but to the construction of a concrete-floored underground city and to the smuggling of thousands of rockets and military equipment into the Gaza Strip. Hamas had never felt better.
Two months ago, the party ended. With the election of General Sisi as president of Egypt, following the deposing of President Morsi, darling of the Muslim Brotherhood movement, the Muslim Brotherhood was outlawed. The movement was declared a terrorist organization, and its heads were put on trial, and sentenced to death. Hamas, a protégé of the Muslim Brotherhood, became a bitter enemy. Egypt closed all access from its territory to the Gaza Strip. Hamas was left with no way of transferring goods and cash into Gaza. Qatar saw Hamas's distress and was prepared to send tens of millions of dollars, but it had no way of doing so. The Arab Bank, via which money had been transferred, was requested by the US, under pressure from Israel, to stop. Qatar turned to the UN, and sought the assistance of UN envoy to the Middle East Robert Serry in transferring at least $20 million to pay Hamas activists their wages. Serry tried various ways of transferring the money, but failed. He also earned a sharp rebuke from Israel in the wake of this affair. In its distress, Hamas turned to Palestinian Authority President Mahmoud Abbas (Abu Mazen), arguing that now, since Hamas is part of the Palestinian unity government, the Palestinian Authority ought to pay the wages of its workers, who are now Palestinian Authority employees. Abu Mazen flatly refused. The last thing he would think of doing would be to strengthen Hamas.
So Hamas was under economic siege. This is why most of its cease-fire demands are to open access points: from Egypt to open the Rafah crossing, and from Israel to enable it to build an airport and a seaport, so that it will obtain free passage for money into the Gaza Strip. Otherwise, it will collapse.
This should be Israel's goal. Hamas is currently much weakened, on the brink of economic collapse. This is an opportunity to topple it completely. In addition to IDF operations designed to damage Hamas's infrastructure and kill its commanders, Israel should exert heavier economic pressure on Hamas in order to bring about its elimination. Unfortunately, Europe and the US have already started to open their check books with the aim of rehabilitating the Gaza Strip. But, as in the past, this money will fall into the hands of Hamas terrorists and will revive them. There is no way of ensuring that the money will not be used for the purposes of terrorism. This money will encourage Hamas to continue fighting, now and in the future, and it will continue to murder Israelis.
The rockets fired from the Gaza Strip led the Israeli government to make the terrible decision to order a ground operation, incurring heavy loss of life. This is the time for the Israeli government to use the additional weapon in its arsenal, and to act in every way possible to hit Hamas economically. Israel should insist that banks in China, Turkey and Qatar must not continue to finance Hamas; that governments such as that of Qatar, which have friendly relations with Israel and the US, must not pour hundreds of millions of dollars like gasoline on the flames. Just as the Israel Air Force cannot do all the work by itself, and Israel was compelled to launch a ground operation, so the ground assault cannot do all the work by itself. The only way of completely eradicating Hamas is through a critical blow to its financing. Operation Protective Edge must enter the economic arena.