Reported by Jo Becker and Justin Scheck

Israeli security officials scored a major intelligence coup in 2018: secret documents that laid out, in intricate detail, what amounted to a private equity fund that Hamas used to finance its operations.

The ledgers, pilfered from the computer of a senior Hamas official, listed assets worth hundreds of millions of dollars. Hamas controlled mining, chicken farming and road building companies in Sudan, twin skyscrapers in the United Arab Emirates, a property developer in Algeria, and a real estate firm listed on the Turkish stock exchange.

The documents, which The New York Times reviewed, were a potential road map for choking off Hamas’s money and thwarting its plans. The agents who obtained the records shared them inside their own government and in Washington.

Nothing happened.

For years, none of the companies named in the ledgers faced sanctions from the United States or Israel. Nobody publicly called out the companies or pressured Turkey, the hub of the financial network, to shut it down.

A Times investigation found that both senior Israeli and American officials failed to prioritize financial intelligence — which they had in hand — showing that tens of millions of dollars flowed from the companies to Hamas at the exact moment that it was buying new weapons and preparing an attack.

That money, American and Israeli officials now say, helped Hamas build up its military infrastructure and helped lay the groundwork for the Oct. 7 attacks.

“Everyone is talking about failures of intelligence on Oct. 7, but no one is talking about the failure to stop the money,” said Udi Levy, a former chief of Mossad’s economic warfare division. “It’s the money — the money — that allowed this.”

At its peak, Israeli and American officials now say, the portfolio had a value of roughly half a billion dollars.

Even after the Treasury Department finally levied sanctions against the network in 2022, records show, Hamas-linked figures were able to obtain millions of dollars by selling shares in a blacklisted company. The Treasury Department now fears that such money flows will allow Hamas to finance its continuing war with Israel and to rebuild when it is over.

“It’s something we are deeply worried about and expect to see given the financial stress Hamas is under,” said Brian Nelson, the Treasury Department’s under secretary for terrorism and financial intelligence. “What we are trying to do is disrupt that.”

That was what Israel’s terrorism-finance investigators hoped to do with their 2018 discovery. But at the top echelons of the Israeli and American governments, officials focused on putting together a series of financial sanctionsagainst Iran. Neither country prioritized Hamas.

Israeli leaders believed that Hamas was more interested in governing than fighting. By the time the agents discovered the ledgers in 2018, the prime minister, Benjamin Netanyahu, was encouraging the government of Qatar to deliver millions of dollars to the Gaza Strip. He gambled that the money would buy stability and peace.

Mr. Levy recalled briefing Mr. Netanyahu personally in 2015 about the Hamas portfolio.

“I can tell you for sure that I talked to him about this,” Mr. Levy said. “But he didn’t care that much about it.”

Mr. Netanyahu’s Mossad chief shut down Mr. Levy’s team, Task Force Harpoon, that focused on disrupting the money flowing to groups including Hamas.

Former Harpoon agents grew so frustrated with the inaction that they uploaded some documents to Facebook, hoping that companies and investors would find them and stop doing business with Hamas-linked companies.

In the years that followed the 2018 discovery, Hamas’s money network burrowed deeper into the mainstream financial system, records show.

The Turkish company at the heart of the operation had such a sheen of legitimacy that major American and European banks managed shares on behalf of clients. The Church of Jesus Christ of Latter-day Saints invested tens of thousands of dollars before the company was placed under sanction.

The Times reviewed previously undisclosed intelligence documents and corporate records and interviewed dozens of current officials from the United States, Israel, Turkey and Hamas’s financial network. Some spoke on the condition of anonymity to discuss intelligence matters.

2018: The Big Break

Exactly how Israeli intelligence obtained the ledgers — whether from an informant or a computer hack — remains unclear. But in 2018, the team got the proof it had been seeking.

The documents were created by Mahmoud Ghazal, a man whom the Israelis had identified as the Hamas portfolio’s bookkeeper.

The ledgers spanned 2012 to 2018 and contained entries and valuations for companies that the agents had been monitoring in Saudi Arabia, Sudan, Turkey and elsewhere. The records also contained familiar names, including Mr. Qafisheh and Mr. Al-Shawa.

The documents were hard evidence of what the Israelis had long suspected: Despite what public records said, Hamas was in control.

“It was a big breakthrough,” said one official involved in the investigation. “Hamas could hide behind frontmen and shareholders, but the money always talks.”

The ledgers also contained coded entries that puzzled investigators, but one document was a sort of Rosetta Stone: “QG” for instance, referred to Qitaa Ghaza, or the Gaza Strip. “D” referred to Daffa, or the West Bank. Beside each was a large dollar figure. From this, the Israelis deduced where Hamas was sending its money.

This discovery was quickly bolstered by intelligence from Saudi Arabia. In mid-2018, the Saudis arrested Mr. Ghazal, the Hamas accountant, and two other men who corporate records show held positions in 18 companies in the portfolio.

Under interrogation, Mr. Ghazal confessed that the portfolio existed to transfer money to Hamas, according to records related to the three men’s arrests that were viewed by The Times. He also said that, just as the Israelis had long suspected, Mr. Odeh directed where the money went.

The two other men told their interrogators that they were shareholders in name only. Their stakes were actually owned by Mr. Qafisheh, the goateed Jordanian who had also been on the Israeli radar screen for years. Mr. Qafisheh, the men said, was a Hamas operative.

The documents do not say what the Saudis did to elicit the confessions. The kingdom’s harsh interrogation techniques have earned it international condemnation.

The Saudis shared the materials with Washington, according to officials with direct knowledge of the matter, knowing that Washington would share them with its close ally Israel. The Saudi monarchy has no tolerance for Hamas and hoped that Washington would blacklist the companies, the officials said.

The Israeli team shared the ledgers and its intelligence with American officials in early 2019, hoping to encourage financial sanctions.

But then, nothing.

Read full report: https://www.nytimes.com/2023/12/16/world/europe/israel-hamas-money-finance-turkey-intelligence-attacks.html