Seven Ways Iran Spends its Money in the Syrian War
Fighters run for cover as a tank shell explodes during heavy fighting in Syria. (Reuters)
“Get out of Syria! Think about our plight!” This was one of the slogans canted during last December’s nationwide protests in more than 100 Iranian cities.
Seven years ago when Iran started getting involved in the Syrian conflict the narrative promoted by the authorities was that Iran was going there to protect “the Shi’ite holy shrines” against attacks by “Sunni extremists”, a defensive strategy, and would not become involved in the broader struggle for power between regime leader Bashar al-Assad and his opponents. Falling victim to mission creep, however, Iran was quickly re-cast as the chief guarantor of the survival of the regime, an objective labeled as “vital” for Iran’s own security.
Russia’s involvement two years after the Syrian conflict had started, and President Vladimir Putin’s quick emergence as the key setter of agenda in Syria, punctured the myth of Iran as the key player in Syria. That, in turn, has inspired complaints, at first sotto voce, but more recently openly, about the reasons for what Islamic Majlis member Mahmoud Sadeqi in Tehran has dubbed “our Syrian adventure.”
President Hassan Rouhani has tried to re-tell the Syrian story by claiming that Iran was showing a high degree of altruism by helping “our Syrian brothers in need.”
“Even in harsh circumstances we cut our own needs in order to help our Syrian brothers,” he said last month.
With the high number of human losses sustained by Iran and “allies” including Lebanese, Pakistani and Afghan mercenaries admitted officially, the question that people now ask is focused on the financial cost of “our Syrian adventure.”
Iran’s financial commitments in Syria could be divided into seven categories.
The first consists of the value of arms and other military materiel supplied by Iran to forces supporting Assad. These include Iranian-made surface-to-surface missiles modeled on the Chinese Silkworms originally developed for use at sea. Another major item consists of armored cars of which Iran is reported to have delivered over 400 to replace losses sustained by Assad’s elite 4th Armored Division. According to estimates by researchers in Iran, Iran has also supplied Assad with over 500 pieces of Russian-made heavy artillery for use against urban centers.
Because of many of the arms supplied to Syria come from Iran’s own stocks, often dating back to years, it is hard to put a price on them. It is even possible that Iran has tried to recycle its old arms as part of a broader plan to renew its arsenal of weapons.
However, some analysts, including Reza Saberi, claim that arms supplied by Iran could be valued at around $1.2 billion.
The second item on Iran’s expenses’ list in Syria consists of delivery of oil and petroleum products to Assad forces. This is done in the context of a credit line that Iran has opened for Syria. The most credible figure cited by the Iranian media puts the size of that “line” at between $2-3 billion a year. The total “credit line” allows for up to $6 billion a year and includes food and medical supplies which Iranian Foreign Minister Mohammed Javad Zarif has put at around $2.5 billion a year.
The third item in Iran’s “Syria expenses” list consists of what the central Bank of Iran calls “transfer funds”. This means Iran exporting a certain quantity of its own oil on behalf of Syria with the understanding that Syria will repay in due course in an interest-free arrangement.
According to Jesse Shahin, spokesman for the office of Staffan de Mistura, the United Nations’ Special emissary on Syria, the “transfer funds” amounts to Iran giving the Assad regime an average of $6 billion a year, sums largely spent on paying civil servants and the forces still more or less loyal to the regime.
The fourth item in Iran’s expenses consists of “emergency funds” made in 2012 and 2103. According to Nadim Shehadah, professor at the Tufts University in the US, cited by BBC researcher Ali Qadimi, that amounted to $14-15 billion.
Tehran sources say the “emergency funds” were disbursed with the help of Austrian and Italian private banks over 30 months in tranches of $300 to $1.2 billion.
The fifth item of Iranian expense consist of funds needed to maintain several paramilitary forces made up of “volunteers for martyrdom” from Afghanistan, Pakistan and, in much smaller numbers, Iraq. The umbrella organ for these forces is the so-called Fatemiyoun Division, formerly a brigade, which was built up to 12,000 men in 2016.
At the time, General Qasem Soleimani, Commander of the Quds Corps, the organ that is supposed to coordinate Iranian operations in Syria, claimed that “volunteers for martyrdom” received no more than $100 a month in cash.
However, several Majlis members, speaking on condition of anonymity, claim that the payment is closer to $1,000 a month as Quds Corps also pays “subsistence pay” to families of the “volunteers for martyrdom.” All in all, the Fatemiyoun Division and ancillaries cost Iran around $1 billion a year. That does not include the $800 million paid annually to the Lebanese branch of “Hezbollah” led by Hassan Nasrallah.
A sixth source of income to finance the war on Assad’s side is provided by what Tehran terms bilateral trade. Much of this, of course, is more in the nature of transit trade with Iranian companies selling Syria’s oil and gas and phosphate to third countries. According to General Yahya Rahim Safavi, a military adviser to “Supreme Guide” Ali Khamenei, in addition to that trade Iran has won a major mobile phone contract in Syria with the prospect of creating a major new source of income to finance the war.
A major source of income for Assad consisted of money spent by over 1.2 million Iranian pilgrims, who visited Syria each year prior to 2011. However, the flow of pilgrims has almost completely dried up with Iranians preferring to visit “holy shrines” in Iraq. Meanwhile, some of the infrastructure, including over 100 hotels, built with Iranian money have either been badly damaged or left abandoned in previously peaceful areas turned into battlefields.
According to some studies, Iran’s losses on that score could be put at over $2 billion as much of the infrastructure may no longer be recoverable.
A seventh source item of cost for the Syrian war is represented by what Iran spends on keeping around 13,000 of its own troops, often presented as advisers or technicians, in Syria. No official figures are available. But if Iranian troops in Syria receive the same treatment as comparable military ranks inside Iran itself the annual cost could be around $3 billion in salaries and upkeep, not taking into account the cost of weapons and materiel used. The most conservative estimate would see Iran spending an average of $12.7 billion a year in Syria of which less than $2 billion may be recovered in trade deals using Syrian energy and raw material.
According to Tehran sources, part of the funds needed is raised through a special one per cent tariff imposed on all car imports in Iran with the proceeds credited to a special “Resistance Account” controlled by the office of the “Supreme Guide”.
Another source of funds is provided by “voluntary donations” supposedly for the defense or rebuilding of “shrines ”. Under that scheme 26 of Iran’s 31 provinces are assigned quotas to fulfill by raising funds from local businesses and through donations collected at mosques and bazaars. Provinces with a Sunnis majority are excluded from the scheme. As these “donations” are collected by local Friday prayer leaders, it is hard to know what percentage is actually transferred to the central fund and how much is kept by the involved clerics themselves.
Tehran University Professor Sadeq Ziba-Kalam recently invited the leadership in Tehran to review involvement in Syria. He was rewarded with a prison sentence of 18 months.
Nevertheless, many Iranians are beginning to realize that Syria is a costly war, both in terms of human losses and financial burden. And that, some analysts, believe is already encouraging a re-think of what some Iranians regard as a losing strategy.
Behind the Dismantling of Hezbollah: Decades of Israeli Intelligencehttps://english.aawsat.com/features/5096354-behind-dismantling-hezbollah-decades-israeli-intelligence
A banner of Hezbollah leader Hassan Nasrallah near the rubble of a building destroyed by Israel in Beirut’s southern suburbs known as Dahiyeh. (dpa)
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Behind the Dismantling of Hezbollah: Decades of Israeli Intelligence
A banner of Hezbollah leader Hassan Nasrallah near the rubble of a building destroyed by Israel in Beirut’s southern suburbs known as Dahiyeh. (dpa)
Mark Mazzetti, Sheera Frenkel and Ronen Bergman
Right up until he was assassinated, Hassan Nasrallah did not believe that Israel would kill him.
As he hunkered inside a Hezbollah fortress 40 feet underground on Sept. 27, his aides urged him to go to a safer location. Nasrallah brushed it off, according to intelligence collected by Israel and shared later with Western allies. In his view, Israel had no interest in a full-scale war.
What he did not realize was that Israeli spy agencies were tracking his every movement — and had been doing so for years.
Not long after, Israeli F-15 jets dropped thousands of pounds of explosives, obliterating the bunker in a blast that buried Nasrallah and other top Hezbollah commanders. The next day, Nasrallah’s body with a top Iranian general based in Lebanon. Both men died of suffocation, the intelligence found, according to several people with knowledge of it.
The death of Nasrallah, who for decades commanded Hezbollah in its fight against the Israeli state, was the culmination of a two-week offensive. The campaign combined covert technological wizardry with brute military force, including remotely detonating explosives hidden in thousands of pagers and walkie-talkies used by Hezbollah, as well as a withering aerial bombardment with the aim of destroying thousands of missiles and rockets capable of hitting Israel.
It was also the result of two decades of methodical intelligence work in preparation for an all-out war that many expected would eventually come.
A New York Times investigation, based on interviews with more than two dozen current and former Israeli, American and European officials who spoke on the condition of anonymity to discuss classified operations, reveals just how extensively Israeli spies had penetrated Hezbollah. They recruited people to plant listening devices in Hezbollah bunkers, tracked meetings between one top commander and his four mistresses, and had near constant visibility into the movements of the group’s leaders.
It is a story of breakthroughs, as in 2012 when Israel’s Unit 8200 — the country’s equivalent of the National Security Agency — stole a trove of information, including specifics of the leaders’ secret hide-outs and the group’s arsenal of missiles and rockets.
There were stumbles, as in late 2023 when a Hezbollah technician got suspicious about the batteries in the walkie-talkies.
And there were scrambles to save their efforts, as in September, when Unit 8200 collected intelligence that Hezbollah operatives were concerned enough about the pagers that they were sending some of them to Iran for inspection.
Lebanese soldiers outside a hospital where injured people were being taken after a wave of pager explosions in September in Beirut, the Lebanese capital. (EPA)
Worried that the operation would be exposed, top intelligence officials persuaded Prime Minister Benjamin Netanyahu of Israel to give the order to detonate them, setting in motion the campaign that culminated in the assassination of Nasrallah.
Israel’s decimation of Hezbollah was a significant victory for a country that, one year earlier, had suffered the greatest intelligence failure in its history, when Hamas-led fighters invaded it on Oct. 7, 2023, killed more than 1,200 people and took 250 hostages.
The Hezbollah campaign, part of a broader war that has killed thousands of people in Lebanon and displaced more than a million, defanged one of Israel’s greatest adversaries and dealt a blow to Iran’s regional strategy of arming and funding paramilitary groups bent on Israel’s destruction. The weakening of the Iran-led axis reshaped the dynamics in the Middle East, contributing to the fall of Bashar al-Assad's regime in Syria.
The contrast between Israel’s approaches to Hezbollah and to Hamas is also stark and devastating. The intense intelligence focus on Hezbollah shows that the country’s leaders believed that the Lebanese group posed the greatest imminent threat to Israel. And yet it was Hamas in the Gaza Strip, a group Israeli intelligence believed had neither the interest nor the abilities to attack Israel, that launched a surprise attack and caught the nation unprepared.
Israel was in a standoff with Nasrallah and his top commanders of Hezbollah for decades, and Israeli intelligence assessments have concluded that it will take years, possibly more than a decade, for the group to rebuild after their deaths. The group of leaders now in charge has far less combat experience than the earlier generation.
And yet the new leaders, like Hezbollah’s founders, are driven by a central animating principle: conflict with Israel.
“Hezbollah can’t continue to get support and funding from Iran without being in a war against Israel. That’s the raison d’être for Hezbollah,” said Brig. Gen. Shimon Shapira, a former military secretary for Netanyahu and the author of “Hezbollah: Between Iran and Lebanon.”
“They will rearm and rebuild,” he said. “It’s only a matter of time.”
Building a Network of Sources
The 2006 war between Israel and Hezbollah was a bloody stalemate. Israel withdrew from Lebanon after 34 days of fighting, which began after Hezbollah kidnapped and killed two Israeli soldiers. The war, which did not achieve Israel’s objectives, had been something of a humiliation, forcing an investigation panel, resignations of top generals and a reckoning inside Israel’s security apparatus about the quality of its intelligence.
But operations during the war, based on Israeli intelligence gathering, formed the foundation for the country’s later approach. One operation planted tracking devices on Hezbollah’s Fajr missiles that gave Israel information about munitions hidden inside secret military bases, civilian storage facilities and private homes, according to three former Israeli officials. In the 2006 war, the Israeli Air Force bombed the sites, destroying the missiles.
In the years after the war, Nasrallah projected confidence that Hezbollah could win another conflict against Israel, likening the nation to a spider web — menacing from afar but a threat that could be easily brushed aside.
As Hezbollah rebuilt, the Mossad, Israel’s foreign intelligence service, expanded a network of human sources inside the party, according to 10 current and former American and Israeli officials.
Specifically, the Mossad recruited people in Lebanon to help Hezbollah build secret facilities after the war. The Mossad sources fed the Israelis information about the locations of hide-outs and assisted in monitoring them, two officials said.
The Israelis generally shared Hezbollah intelligence with the United States and European allies.
A significant moment came in 2012, when Unit 8200 obtained a trove of information about the specific whereabouts of Hezbollah leaders, their hide-outs and the group’s batteries of missiles and rockets, according to five current and former Israeli defense and European officials.
That operation raised confidence within Israeli intelligence agencies that — should Netanyahu make good on threats to attack Iran’s nuclear sites — the Israeli military could help neuter Hezbollah’s ability to retaliate.
Netanyahu visited the Tel Aviv headquarters of Unit 8200 shortly after the operation. During the visit, the head of Unit 8200 made a show by printing out the trove of information, producing a tall stack of paper. Standing next to the material, he told Netanyahu, “You can now attack Iran,” according to two current and former Israeli defense officials with knowledge of the meeting.
Israel did not attack.
During the years that followed, Israeli spy agencies worked to refine the intelligence gathered from the earlier operation to produce information that could be used in the event of a war with Hezbollah.
According to two Israeli defense officials with knowledge of the intelligence, when the 2006 war ended, Israel had “target portfolios” for just under 200 Hezbollah leaders, operatives, weapons caches and missile locations. By the time Israel launched its campaign in September, it was tens of thousands.
A photo taken on September 18, 2024, in Beirut's southern suburbs shows the remains of exploded pagers on display at an undisclosed location. (AFP/Getty Images)
Turning Pagers into Deadly Devices
To gain an advantage in an eventual war with Hezbollah, Israel also developed plans to sabotage the militia from within. Israel’s Unit 8200 and Mossad championed a plan to supply Hezbollah with booby-trapped devices that could be detonated at a future date, according to six current and former Israeli defense officials.
Within the Israeli intelligence community, the devices were known as “buttons” that could be activated at Israel’s moment of choosing.
Designing and producing the buttons was relatively straightforward. Israeli engineers mastered placing PETN explosives within the batteries of electronic devices, turning them into small bombs.
The more difficult operation fell to the Mossad, which for nearly a decade tricked the group into buying military equipment and telecommunication devices from Israeli shell companies.
In 2014, Israel seized an opportunity when the Japanese technology company iCOM stopped producing its popular IC-V82 walkie-talkies. The devices, originally assembled in Osaka, Japan, were so popular that replicas were already being made across Asia and sold in online forums and in black market deals.
Unit 8200 discovered that Hezbollah was specifically searching for the same device to equip all of its frontline forces, according to seven Israeli and European officials. They had even designed a special vest for their troops with a chest pocket tailored for the device.
Israel began manufacturing its own replicas of the walkie-talkies with small modifications, including packing explosive material into their batteries, according to eight current and former Israeli and American officials. The first Israeli-made replicas arrived in Lebanon in 2015 — and more than 15,000 were eventually shipped, some of the officials said.
In 2018, a female Israeli Mossad intelligence officer drafted a plan that would use a similar technique to implant explosive material into a pager battery. Israeli intelligence commanders reviewed the plan, but determined that Hezbollah’s use of pagers was not widespread enough, according to three officials. The plan was shelved.
Over the next three years, Israel’s increasing ability to hack into cellphones left Hezbollah, Iran and their allies increasingly wary of using smartphones. Israeli officers from Unit 8200 helped fuel the fear, using bots on social media to push Arabic-language news reports on Israel’s ability to hack into phones, according to two officers in the agency.
Worried about smartphones being compromised, Hezbollah’s leadership decided to expand its use of pagers. Such devices allowed them to send out messages to fighters but did not reveal location data nor have cameras and microphones that could be hacked.
As it did, Hezbollah began looking for pagers hardy enough for combat conditions, according to eight current and former Israeli officials. Israeli intelligence officers reconsidered the pager operation, and worked to build a network of shell companies to hide their origins and sell the products to the militia.
Israeli intelligence officers targeted the Taiwanese brand Gold Apollo, well known for pagers.
In May 2022, a company called BAC Consulting was registered in Budapest. One month later, in Sofia, Bulgaria, a company called Norta Global Ltd. was registered to a Norwegian citizen named Rinson Jose.
BAC Consulting bought a licensing agreement from Gold Apollo to manufacture a new pager model known as the AR-924 Rugged. It was bulkier than the existing Gold Apollo pagers, but it was promoted as waterproof and with a longer-lasting battery life than competitors’ devices.
The Mossad oversaw production of the pagers in Israel, according to Israeli officials. Working through intermediaries, Mossad agents began marketing the pagers to Hezbollah buyers and offered a discounted price for a bulk purchase.
The Mossad presented the gadget, one without any hidden explosives, to Netanyahu during a meeting in March 2023, according to two people with knowledge of the meeting. The prime minister was skeptical about their durability, and asked David Barnea, the Mossad chief, how easily they might break. Barnea assured him they were sturdy.
Not convinced, Netanyahu abruptly stood up and threw the device against the wall of his office. The wall cracked, but the pager did not.
The Mossad front company shipped the first batch of pagers to Hezbollah that fall.
Israel's Prime Minister Benjamin Netanyahu addresses the 79th United Nations General Assembly at UN headquarters in New York, US, September 27, 2024. (Reuters)
Conducting War Games
The pager operation was not fully in place in October 2023, when the Hamas-led attacks ignited a fierce debate within the Israeli government about whether Israel should launch a full-scale war against Hezbollah.
Some, including Defense Minister Yoav Gallant, argued for striking at Hezbollah, which began launching missiles at Israel on Oct. 8 in solidarity with Hamas. It was an opportunity, he said, to deal with the “hard enemy” of Hezbollah before turning to what he considered the less difficult enemy of Hamas, according to five Israeli officials familiar with the meetings.
After a phone call with President Joe Biden on Oct. 11, 2023, Netanyahu, along with his newly formed war cabinet, decided for the time being against opening another front with Hezbollah, effectively ending high-level debate about the topic for months.
Even as Israel focused on Hamas, military and intelligence officials continued to refine plans for an eventual war with Hezbollah.
Israeli intelligence analysts, who were constantly monitoring the use of the devices, discovered a potential problem with the operation. At least one Hezbollah technician began to suspect that the walkie-talkies might contain hidden explosives, according to three Israeli defense officials. Israel dealt with it swiftly this year, killing the technician with an airstrike.
For nearly a year, Israeli intelligence and the air force also ran roughly 40 war games built around killing Nasrallah and other senior Hezbollah leaders, said two Israeli officials. They wanted to be able to target them at the same time, even if they were not in the same place.
Along the way, Israel collected mundane and intimate details about Hezbollah commanders, including the identities of the four mistresses of Fuad Shukr, a founding member of Hezbollah long ago identified by the US government as one of the planners of the 1983 bombing of the barracks in Beirut, Lebanon, that killed 241 American Marines.
At one point this year, apparently feeling uncomfortable about his situation, Shukr sought assistance from Hezbollah’s highest religious cleric to marry all four women, according to two Israeli officials and a European official. The cleric, Hashem Safieddine, arranged four separate phone-based wedding ceremonies for Shukr.
The simmering conflict boiled over this summer, when a Hezbollah rocket attack in July killed a dozen Israelis, including schoolchildren, in Majdal Shams, a town in the Golan Heights.
Israel responded days later with an airstrike in Beirut that killed Shukr. It was a provocative step to take, to assassinate a top commander of Hezbollah’s forces.
‘Use it or Lose it’
After the back-and-forth attacks, the debate renewed inside Israel’s government about opening a “northern front” against Hezbollah. The Israeli military and the Mossad drew up different strategies for a campaign against Hezbollah, according to four Israeli officials.
In late August, Barnea, the Mossad chief, wrote a secret letter to Netanyahu, according to a senior Israeli defense official. The letter advocated a two-to-three-week campaign that included eliminating more than half of the group’s missile abilities and destroying installations within about six miles of the Israeli border. At the same time, senior military officials began their own effort to lobby Netanyahu to intensify a campaign against Hezbollah.
New intelligence disrupted the planning. Hezbollah operatives had become suspicious that the pagers might be sabotaged, according to several officials.
On Sept. 11, intelligence showed that Hezbollah was sending some of the pagers to Iran for examination, and Israeli officials knew it was only a matter of time before the covert operation would be blown.
On Sept. 16, Netanyahu met with top security chiefs to weigh whether to detonate the pagers in a “use it or lose it” operation, according to four Israeli security officials. Some opposed it, saying it might prompt a full Hezbollah counterattack and possibly a strike by Iran.
Netanyahu ordered the operation. The following day, at 3:30 p.m. local time, the Mossad ordered an encrypted message to be sent to thousands of the pagers. Seconds later, the pagers detonated.
At the time the pagers exploded, Jose, the Norwegian who was the head of one of the Mossad front companies, was attending a technology conference in Boston.
Within days, Jose was identified in news articles as a participant in the operation, and the Norwegian government announced that it wanted him back in Norway for questioning.
Israeli officials secretly pressured the Biden administration to ensure that Jose could leave the United States without going back to Norway, according to one Israeli and one American official.
Israeli officials would not disclose Jose’s location. One senior Israeli defense official said only that he was in a “safe place.”
Approving an Assassination
After the pager operation, the Netanyahu government, with the support of high-ranking defense officials, opted for all-out war, a campaign marked by a series of escalations.
The day after detonating the pagers, the Mossad blew up the walkie-talkies, most of which were still in storage because Hezbollah leaders had not yet mobilized fighters for a battle against Israel.
In all, dozens of people were killed by the pager and walkie-talkie explosions, including several children, and thousands were wounded. Most of the casualties were Hezbollah operatives, sowing chaos among the top ranks of the group.
Days after, on Sept. 20, Israeli jets struck a building in Beirut where commanders of Hezbollah’s elite Radwan Force were meeting in a bunker, killing several of them along with Ibrahim Aqeel, the head of Hezbollah’s military operations.
On Sept. 23, the Israeli Air Force conducted a major campaign, hitting more than 2,000 targets aimed at Hezbollah’s stores of medium and long-range missiles.
The most consequential decision remained: whether or not to kill Nasrallah.
As senior Israeli officials debated, intelligence agencies received new information that Nasrallah planned to move to a different bunker, one that would be far more difficult to hit, according to two Israeli defense officials and a Western official.
On Sept. 26, with Netanyahu set to fly to New York for a meeting of the United Nations General Assembly, the prime minister gathered with his top political, intelligence and military advisers to discuss approving the assassination. They also had to decide whether to tell the Americans in advance.
Netanyahu and other top advisers opposed notifying the Biden administration. They believed that US officials would push back against the strike, but that regardless, the United States would come to Israel’s defense in case Iran retaliated.
They agreed to keep the Americans in the dark.
Netanyahu approved the assassination the next day, after he landed in New York and only hours before standing at the podium at the United Nations.
In his speech, he spoke about the grip that Hezbollah had over Lebanon. “Don’t let Nasrallah drag Lebanon into the abyss,” he told the presidents and prime ministers gathered.
Soon after, the Israeli F-15 jets above Beirut dropped thousands of pounds of explosives.
