The Ghost of Snapped Shot

Or, welcome to my low-maintenance heck.

Mike Hornbrook from CBC: Hezbullah Cash is REAL

Mike Hornbrook, a CBC journalist on the ground in Lebanon, has popped in here at Snapped Shot, and informs us (unofficially—this is not a statement endorsed by the CBC) from on the ground in Lebanon, that there are no indications that Hezbullah is handing out counterfeit money:

With all respect to bloggers who sometimes discover things missed by mainstream media, this story about Hezbollah handing out counterfeit $100 bills is completely insane!

Unlike any of them, I am on the ground in Beirut reporting for CBC News and have checked it out. We could not find a single person complaining about phony money. Furthermore, the very idea shows a profound ignorance of Lebanon and Hezbollah. Lebanon is a major banking center, every bank has counterfeit scanners and other tools for detecting counterfeits. Not just the banks either, every money-changer and supermarket also has a scanner next to the cash register. From personal experience I can tell you they check out $100 USD bills very very carefully, phonies would be detected in an instant. This would bring outraged complaints from people in desperate circumstances that would be a huge embarassment to Hezbollah. No such scandal has emerged because the phony money story is itself phony. The people circulating the story are doing it for their own reasons, but as a journalist I can tell you they are absolutely, totally wrong.

UPDATE 12:03 EST: Sticky Notes informs us via e-mail that Myrtus notes that Hezbullah doesn't seem to be getting this cash from banks. This might be significant, or it might not—I can easily imagine private Saudi-owned jets ferrying suitcases full of cash around the Middle East. Plus, as Myrtus notes, Hezbullah is not designated a terrorist organization by Europe, so you know Euro-dollars are flowing there pretty freely. Sorry, SN, but I don't see anything in here that would support the counterfeiting story...

(In a brief update shortly thereafter, Sticky Notes directed us to the actual article, which says that, "[t]he money is widely believed to have come from Iran, the main backer of the group, but Salameh said Hizbollah's action did not violate Lebanon's laws, adding that the central bank was ready to answer any international inquiries.")

UPDATE 13:06 EST: Just noticed Sticky Notes' excellent article on Korean supernotes. Food for thought.

Keep on reading the full article for my take on the story, if it does turn out that these are real bills.

UPDATE 14:11 EST: Got a followup e-mail from Mike. He wants to make sure we're aware that he's not speaking officially for the CBC, so let me duly note that up front. He also says that he was investigating the story after reading about it in David Frum's article. Check out the full article for details.

UPDATE 1-SEP-2006 15:21 EST: Sticky Notes has continued to do an excellent job tracking "supernotes" and the Axis of Evil. Here's a good Lebanese blog that's tracking the progress of this story, with good background on Hezbullah's activities. To date, nobody but Allahpundit has really acknowledged our information from Mike Hornbrook. I'll do my best to follow up with Mike on everyone's questions in the mean time.As one of "the bloggers" circulating this story, I've done my best to couch everything in terms of this being an intriguing possibility, and may have made some emotional comments towards the implications of it being true, but have otherwise not found any conclusive evidence to support my claims.

I can't make it clear enough: The facts of the matter are in no way clear on whether or not the bills are counterfeit, from sitting at a desk here in Virginia. If you look back at my original thread on the topic, you'll note that each and every one of my "proofs" of the money being counterfeit, based on the wire photo evidence, were quickly and summarily dismissed.

Well, in light of the evidence, it's pretty clear that I might have another "Foiled Again!" on the way. I really am on a roll this week!

So where does that leave us? Well, if the "major banking center(s)" in Lebanon are accepting these hundred-dollar bills, then there's little doubt that the money is, in fact, quite real. (Or, at the least, that it's too good a counterfeit to be detected—not to stoke the flames of controversy, though!) With that in mind, the debate now needs to move in the direction of identifying the source of Hezbullah's fortune.

Iran? We've heard repeatedly that they are fully supportive of Hezbullah, and have been sending cash to Lebanon.

Saudi Arabia? No word on any connection there, but it wouldn't surprise me to see a wealthy cousin of the Royal Family pouring money into an anti-Israeli organization.

International Charities? Well, the U.S. Treasury has frozen the funds of one of 'em, so that's always an option.

As always, I'm interested in hearing what you, the Reader, think of these new developments. And I'm eagerly awaiting further input from Mike, who's certainly a valuable resource I haven't had in the past: A source on the ground.

I'll keep you posted as this new twist in the story develops!

UPDATE 11:50 EST: Mike Hornbrook, in the news:

UPDATE 14:15 EST: Mike has written us back. Here're some of the most relevant parts of his e-mail:

I decided to check out the counterfeit story after one of my editors forwarded a column by David Frum (fmr Bush speechwriter who coined the phrase "axis of evil"). Frum keyed on your speculation and that of other bloggers to suggest reporters were being suckered by Hezbollah's 'counterfeit' generosity. I respect Frum and read his columns whenever I see them, but knew he was way off the mark this time. As I mentioned earlier, such a fraud would be detected instantly in a place like Beirut and it would discredit Hezbollah. It's not their style.

Now, where does the money come from? I haven't poked around extensively on this but a professor of banking in Beirut, with good contacts in the industry, told me there's no doubt it comes from Iran. With oil at $70/barrel, the mullahs are swimming in cash and can afford to fund a guerrilla war in another country.

How does it get in? Some of it arrives the same way the weapons do—across the Syrian border in suitcases stuffed with $100 bills. But there are other, murkier, ways to get money to Hezbollah. I've been told the Iranian Saradar Bank may have a hand in it (surprise!). Also, money can be transferred from abroad to companies that are owned by Hezbollah or their supporters. Lebanon has strict bank confidentiality rules—stricter than the Swiss, I'm told—so pinning down this stuff is very difficult if not impossible. With Lebanon's dysfunctional political culture even the US government wouldn't get much help pressuring the banks to open their books.

Pls don't take what I've said as definitive. I haven't done enough research to write a story on this. I'm passing along the thrust of conversations I've had with two locals who know a few a few things about what goes on in Lebanon.

Even with the disclaimer, this is quite a bit of good information to go on. It seems that I may have guessed correctly when I speculated that they're shipping cash across the border in suitcases, though the additional information Mike provides us on Lebanon's banking industry certainly implies that more complex transactions might also be taking place here. Once again, my sincerest thanks to Mike for sharing these insights with us!

For those of you new to the story, here's a recap of my stories leading up to this one. Other blogs are linked within, so be sure to check out what everyone else is saying:

Cash-bollah—Charity via Counterfeit?
A sudden lack of context (The story that started it all!)
The Salvation Army (of Terrorists)
The latest on the Funny Money Scandal
More Money Shots
Mike Hornbrook from the CBC: The Cash Is Real! NEW 31-AUG-2006

 Tags: cashbollah mike hornbrook cbc #Israel/Lebanon War 2006


#1 John 31-Aug-2006
I'll start by admitting international finance is not one of my strong suits. Which leads to a question I haven't seen addressed anywhere -Why is Hezbullah handing out US money? Did they run out of Shekels?

Seriously, I intrigued by their use of "The Great Satan's" money as a handout.
#2 Raphael 31-Aug-2006
I don't know why he assumes we all bought it. All the sites I've seen taking lead on this question treated as such, a question.

The writer does introduce a new thread for me. And that is why Lebanenese banks may have better confidentiality in terms of law enforcing than Swiss banks. If there is to ever be a solution to ending Lebanon as a long time home to terrorist groups, I guess part of it would be to not have banks for them.
#3 Brian 31-Aug-2006
Probably for propaganda reasons. "Look, we're using The Great Satan's money for Allah's purposes," or something to that effect.

Excellent question—I'll be sure to pass that along too, and will post any replies, if I get any.
#4 Old War Dogs 31-Aug-2006
Today's mini-posts, newest items at the top:
#5 Danny 04-Sep-2006
John, first of all the Shekel is an Israeli denomination for money. We (I am Lebanese) have the Lebanese Lira if you want to pronounce it in Arabic or Lebanese Pounds in english. Second, we are a dollarized country because throughout the war, the Lira was in constant ups and downs not allowing us to rely on it with trust. For example, my dad worked in KSA in the 70's when it was still in its high boom. He was a contractor and build many castles for royalties, of which an 500Kms road in the middle of the desert and a huge castle at the end of it. He returned to Lebanon with what is worth of 5 million US$, exchanged them to Lebanese Lira (Stupid move) and then the worthiness of the Lebanese lira just dropped suddenly in terms of an hour or two and he just lost all of them...
The same happened to all Lebanese, this is why we became a heavy relier of US $
#6 Danny 04-Sep-2006
Raphael, I was a banker for 3 years where I became in charge of the Operations of 24 branches before I quit and now working for a telecom company as a chief collections expert. I am currently now wrapping my MBA in finance and I am studying the banking system of Switzerland especially concerning money laundering. Well all that I can say is that Lebanon is far far better than Switzerland in banking practices. Switzerland is facing lots of pressure currently and will eventually become a mamber of the EU, meaning banking secrecy will no longer exist as before.
In Lebanese banking, secrecy is everything. employees are not allowed to say who are their customers, even from inside the bank or in the outside life. We fight money laundering fiercely, we impose the same 10K$ limit as in US banks (stating and investigating the source of the funds). I have resigned two years now, and I still keep banking secrecy to this day because I have sworn an oath to it.

As for the part of terrorists, raph you should know the difference between a terrorist fighter and a freedom fighter. The 1983 case of the 241 marines is a debatable case, from the point of view of Hezballah, the US was (and still) helping Israel with arms and funding to destroy Lebanon, so how was it coming "in peace" to help Lebanese at that time?? Hezballah thought he was being taken for a ride, and because at that time he had no way to retaliate except with suicide bombing, this is why he did what he did.
I am 100% against what he did at that time, in the end I am Christian and my religion goes against killings. But see what Hezballah became now? a pure Freedom Fighter in its sense. Couldn't he just point some katyuchas on the US embassy in Lebanon in this Lebanese/Israeli conflict and destroy it? Couldn't he just capture some US tourists and go for demands? Not every muslim with gun is a terrorist, you should know the distinction between terrorist people like Al Quaeda and freedom fighters groups like Hezballah.
Anyways, I am currently posting on another forums, and I promised them a full writeup about Hezballah now and this war.
If the moderators allow me here I will post it gladly
#7 Jeha 05-Sep-2006
The story remains worth tracking.

Bearing in mind the sophisitication of the Lebanese banking system, it is unlikely that the extent of the counterfeiting be too big. And even a large mass of fake bills can be discreetly absorbed; the secrecy and sophistication described by Danny is such that money can be easily absorbed.

And I know for a fact that the 10K limit applies to many, but not all; it's a useless hindrance to business in the eyes of many...

But it remains, and is likely to grow bigger; Hezb's strength comes from not challenging, or even protecting some powerful crime families. As part of of the price they pay for the destruction of Lebanon, they have to let those guys do more of what they do, inclduding fake currency...

The extent will not be apparent right now. If it does not appear in Lebanon, watch Syria, as workers go back over the coming few months with their pay.

Syria, with its rudimentary banking system, could not absorb even a limited counterfeiting...
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