Paraguay: Is Israel's latest 'best friend' also a Hezbollah haven?

#Hezbollah

Lebanese residents of Ciudad del Este, a smuggling and shopping hub on Paraguay's border with Brazil, say they live under 'constant surveillance'

Assad Barakat, pictured on his way to court in Asuncion in 2003, was identified by the US as Hassan Nasrallah's "primary liaison in South America" (AFP)
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Last update: 
Monday 28 May 2018 13:09 UTC
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CIUDAD DEL ESTE, Paraguay - The traffic jam started way before the Friendship Bridge linking the cities of Foz do Iguacu and Ciudad del Este, as cars, vans, buses and trucks queued to cross the Parana River, the natural border between eastern Paraguay and the southwestern corner of Brazil.

While women sell water and snacks under the blazing sun, only motorbikes move forward in between the congested lanes. Seeing the traffic, and the heat, I decided it was better to get off the bus and walk across the bridge.

Border formalities are just that: formalities. Trucks are checked, but most vehicles and pedestrians are lazily waved through. There is no need for an exit and entry visa for people who want to spend a day in Paraguay’s “city of the east”.

Although crossing the border turned out to be easy, I could not help feeling a little tense entering Ciudad del Este. What else to expect, following two decades of media reports about the “Wild West” city in Paraguay’s far east being a hotbed for Islamists, terrorists and hardened criminals?

On Monday, Paraguay became the third country in the world, after the US and Guatemala, to move its embassy in Israel to Jerusalem. Yet Ciudad del Este, Paraguay's second largest city after the capital Asuncion, has often been described as a bastion of Hezbollah, the Lebanese political and militant group that is among Israel’s bitterest enemies.

Claims vary from Lebanon’s “Party of God” running training camps in the rainforest and money laundering operations to planning an assault on US soil with the help of al-Qaeda and smuggling drugs in partnership with First Capital Command (PCC), Brazil’s most notorious criminal gang.

At first sight, however, there is no sign whatsoever of Hezbollah. No yellow and green party flags. No images of Hezbollah leader Hassan Nasrallah or Iran’s Supreme Leader Ali Khamenei. No posters of martyrs, no graffiti, tags or slogans.

Instead, I am greeted by a glitzy display of billboards and ads praising products and stores. Street vendors sell anything from fake Manchester United shirts and sunglasses to Viagra tablets.

Shopping malls, with names such as Paris, Madrid and Mona Lisa, sell all the big brands in terms of mobile phones, electronics, sportswear, musical instruments, makeup, perfume and alcohol.



Ciudad del Este, on Paraguay's border with Brazil, is one of South America's main shopping hubs (AFP)

While Foz do Iguacu (Foz) is one of South America’s main tourist attractions thanks to the nearby Iguazu waterfalls, its sister city across the bridge is the continent’s main supermarket. It is not hard to see why.

A professional Canon camera with lens costs $2,800. In Brazil it costs over $4,000 without the lens. The latest smartphone easily costs a few hundred dollars less, while a good bottle of whiskey costs about half.

“On average, you pay about 40 percent less compared to Brazil,” said the man behind behind the counter.

The Lebanese connection

So, how did this shopper’s paradise ever become known as a Hezbollah haven? Well, go around the many malls and you will notice that the language most spoken after Spanish and Portuguese is Arabic.

Ciudad del Este is home to numerous Egyptians, Syrians and Palestinians, but above all Lebanese.

Most visible are the well-groomed young men in jeans and trainers, seemingly just hanging and joking around.

“Chebab” (lads) they would be called in Lebanon. Most are in their twenties. Most are from South Lebanon and, to a lesser extent, the Bekaa Valley, Lebanon’s Shia heartland where Hezbollah traditionally enjoys a lot of support.

“There are about 5,000 Lebanese in Ciudad del Este and another 5,000 or so in Foz,” said Ali Farhat, a Lebanese journalist who has lived in the region for about 18 years.

“There used to be more, but quite a few have left due to the economic crisis in Brazil and the increased competition with the Bangladeshis, who are cheaper.”

In addition, Brazil is home to an estimated eight million people of Lebanese descent of whom about 50,000 live and work in Foz and Ciudad del Este.



A customer looks at a watch in a store in Ciudad del Este (Reuters)

The first Lebanese immigrants arrived in the late 19th century. Many more followed during and after the First World War, while the most recent wave occurred due to the Lebanese civil war and the Israeli occupation of southern Lebanon.

Most Lebanese in Ciudad del Este belong to the latter category.

“I had wanted to stay in Lebanon, but I couldn’t find a job, not even at Sukleen [as a garbage man],” said 42-year-old Yahya Awali, originally from Toulin, a small town in Lebanon’s south.

“My brother was already in Ciudad del Este and he suggested I come and give it a try.”

That is what Awali did and did very well. He started by working for a Chinese shopkeeper, kept his eyes and ears open and gradually worked his way up. Today, he owns an exclusive license for a Chinese brand of mobile phone repair tools.

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“In the 1990s, Ciudad was nothing like today,” said Awali, who speaks fluent Portuguese and Spanish.

“There were a few shops, but no high-rise buildings or malls. And it was mostly the Chinese who ran the show. Things started to change in 1994 when Brazil changed its national currency from the cruzeiro to the real, which was linked to the US dollar.

“Suddenly, Paraguay became a cheap destination for the average Brazilian and business boomed.”

Like many Lebanese, Awali works in Ciudad but lives in Foz, as it has a higher standard of living. “At first, most Lebanese worked for the Chinese who imported the goods,” he said. “But then they travelled to China themselves to buy goods and opened their own stores.”

According to Awali, there are today roughly four levels of Lebanese in Ciudad. First, there are the “chebab” who do the odd job within the city or go back and forth to Brazil to sell goods. Many struggle to make ends meet.

Secondly, there are the shop owners. Some have a small stall, others a big store. Thirdly, there are those who own an exclusive license and, finally, a few who own a whole mall.

“Legally, you’re allowed to return to Brazil with $350 worth of goods a month without having to pay import duties,” said Yahya.

“Anything more you should declare. Now, customs agents are not interested in you buying a phone or camera, but in people who buy wholesale. They either go over the bridge in the hope they are not checked. Or they cross the river by boat further upstream. If they get caught, they pay 70 percent import duties and a fine.”

Talking about Hezbollah

“Do you like Nasrallah?” one shopkeeper asked.

“He’s a clever politician, but that doesn’t mean I agree with everything he does,” I replied. “What about you?”

“I like him,” he said hesitantly. “But I don’t like war. I’m against war.”

Asked to elaborate, he quickly made clear he did not want to take the conversation any further.

Hezbollah is a sensitive subject in Ciudad del Este. Ask any of the “chebab” how they feel about Hezbollah and most will react suspiciously. Their reaction should come as no surprise knowing what happened to young Mustafa Khalil Meri.

“If he attacks Iran, in two minutes Bush is dead,” he told two NBC journalists in 2007.

“We are Muslims. I am Hezbollah. We are Muslims, and we will defend our countries at any time they are attacked.”

This one and only quote was enough for Meri to be labelled “a devoted Hezbollah militiaman” and potential “terrorist” who could infiltrate the US via Mexico. Seeing such journalistic liberties at play, small wonder people are afraid to talk.

Journalist Ali Farhat is not one of them. “I grew up in Beirut, but am originally from south Lebanon,” he said.

“Due to the Israeli occupation, we were not able to visit my family’s village until Hezbollah, and others, liberated it. For that reason, I say ‘thank you.’ If American soldiers had liberated my village, I would have said ‘thank you’ too. But they didn’t.”

For 22 years the Israeli army occupied about 10 percent of Lebanon’s territory, until in 2000 they were forced to retreat under pressure from an increasingly effective Hezbollah-led resistance.

You can agree with Hezbollah or not, but don’t tell me it is a terrorist organisation

- Ali Farhat, journalist

“But being grateful doesn’t mean I agree with every aspect of Hezbollah,” said Farhat, who like Awali lives in Foz.

“I do shake a woman’s hand, for example, and I’m not happy with Hezbollah’s role in Lebanese politics. They should have fought corruption. That is one reason I will not vote in the elections.”

Farhat was not the only one who chose not to vote in Lebanon’s parliamentary elections earlier this month, the country’s first since 2009.

Only 2,141 Lebanese in Brazil registered to vote, nearly all of whom resided in Sao Paolo. 

Farhat’s view on Hezbollah is not uncommon within Lebanon. Many people, even sympathisers, criticise Hezbollah for being too comfortable within a system deemed corrupt.

Others criticise its role in Syria, where Hezbollah fighters have played a key role supporting President Bashar al-Assad’s government. However, many Lebanese will agree Hezbollah has a role to play countering any renewed military adventurism by Israel.

“You can agree with Hezbollah or not, but don’t tell me it is a terrorist organisation.” said Farhat.

“Hezbollah is not ISIS [the Islamic State group] or al-Qaeda. It was not Hezbollah bombing Paris, Madrid or Brussels. Or Beirut! Two people from Foz died in the terrorist bombings of Beirut. They were on holiday. One was a 17-year-old girl.”

South American countries seem to agree with Farhat’s view, as none of them have listed Hezbollah as a terrorist organisation.

That includes Argentina, although US Secretary of State Rex Tillerson last February did discuss closer cooperation in fighting Hezbollah with his Argentinian counterpart Jorge Faurie. 

“With respect to Hezbollah, we also did speak (…) about how we must all jointly go after these transnational criminal organizations — narcotics trafficking, human trafficking, smuggling, money laundering — because we see the connections to terrorist financing organizations as well,” Tillerson told a press conference.

9/11 and the 'war on terror'

Accusations such as Tillerson’s first surfaced in the late 1990s, following the bombing of the Israeli embassy and the Argentine Israelite Mutual Association building in Buenos Aires in 1992 and 1994 respectively.

Israeli investigators claimed the Iranian-backed suspects had planned the attacks from Ciudad del Este. The two cases, however, were never solved and no one was ever arrested.  

The list of allegations rapidly grew after the 9/11 attacks by al-Qaeda on New York and Washington in 2001.

A flurry of articles and reports alleged that Iranian and Hezbollah operatives, as well as Egyptian and Palestinian Islamists and even al-Qaeda had carved out a presence in Ciudad del Este. They controlled the cross-border drug trade and planned to infiltrate the US, reports said.

Terrorism expert Jessica Stern in 2003 called the Tri-Border Area between Argentina, Brazil and Paraguay, with Ciudad del Este as its de facto capital, “the world's new Libya, a place where terrorists with widely disparate ideologies, Marxist Colombian rebels, American white supremacists, Hamas, Hezbollah, and others-meet to swap tradecraft.”

Things really changed for the worse after 9/11... Ever since, God knows how many US intelligence and Paraguayan operations we’ve seen

- Ali Farhan

As early as September 20, 2001, former Defense Undersecretary Douglas J. Feith even proposed to bomb the Tri-Border Area to "shock the enemy network, perhaps by hitting it where a US response was not expected."

“Things really changed for the worse after 9/11,” said Farhat. “Paraguayan police started raiding shops, accusing and arresting people. Ever since, God knows how many US intelligence and Paraguayan operations we’ve seen.

“The FBI has a permanent presence here and we all know our phones are tapped. But what have they found in all those years? Assad Barakat!”

The US Treasury in 2004 named Barakat the “primary liaison of Hassan Nasrallah in South America” accusing him of “strong-arm tactics,” while “running a financial network in support of Hezbollah".

Barakat was already behind bars by then. In 2002, Brazilian authorities had arrested and extradited him to Paraguay on similar charges. Farhat wrote a book on the case and is convinced Barakat was made a scapegoat in the burgeoning “War on Terror”.

“It all started in 1998 because of a conflict with another businessman who at some point accused Barakat of being Hezbollah,” said Farhat.

“After 9/11 the Paraguayan media picked up on it and published hundreds of articles accusing Barakat of being a Hezbollah leader. But the police evidence, which included a Hezbollah video Barakat had downloaded from the Internet, was so thin that eventually he was convicted on tax evasion.”

Since his release, Barakat has continued to live in Foz with his Brazilian wife and three sons.

“I’ve tried to make him talk about his experience, but he just wants to be left alone.” said Farhat.



Moussa Hamdan was set up by an undercover FBI agent and extradited to the US (Reuters)

There have been other cases. In 2008, for example, Nemr Zhayter was arrested in Paraguay and extradited for allegedly trying to smuggle cocaine into the US.

In 2010, Paraguay arrested Moussa Ali Hamdan for providing material support to Hezbollah by selling counterfeit goods, money and passports. Hamdan was set up by an undercover FBI agent and was extradited to the US.

In 2013, Wassim Fadel was arrested in Ciudad del Este. He had sent a 21-year-old Paraguayan girl as a “drug mule” to Europe, where she was caught with 1.1 kilos of cocaine in her stomach.

According to Paraguayan police, Fadel transferred the money he made from both narco-trafficking and the pirating of CDs and DVDs into accounts owned by people connected to Hezbollah at banks in Turkey and Syria.

While it seems clear Zhayter, Hamdan and Fadel were guilty of criminal acts, there is little hard evidence of a clear link with Hezbollah. Were they indeed Hezbollah operatives or rather petty criminals with Hezbollah sympathies?

“Look, I’m not saying nothing is happening in Ciudad del Este,” said Farhat.

“Maybe there is. I know there have been Lebanese involved in smuggling drugs. A few have died trying. But fact is that in all those years there has been very little hard evidence of Hezbollah, while we live under constant surveillance.”

The 'sleepiest of sleeper cells'

Farhat is not alone in his judgement. Greg Grandin, a historian at New York University, has ridiculed the continuous attempts by right-wing pundits to depict South America as an Islamist threat to the US.

Summing up a series of accusations, Latin America must have the “sleepiest of sleeper cells,” he concluded in The Nation newspaper. 

“The idea that the Tri-Border Area is a hotbed of terrorism training camps has been around for decades, yet has also been consistently debunked,” wrote Christopher Sabatini, South America expert at Columbia University and in Editor in Chief of the Americas Quarterly journal, in January 2017.

“Numerous State Department, Central Intelligence Agency, and embassy investigations have scoured the area so much that it must be one of the most studied areas by the US intelligence community in the Western Hemisphere,” he added.

The idea that the Tri-Border Area is a hotbed of terrorism training camps has been around for decades, yet has been consistently debunked

- Christopher Sabatini

Even the US embassy in Asuncion, the Paraguayan capital, seems aware that the Hezbollah threat in Ciudad del Este is exaggerated.

A Wikileaks page containing a 2007 US diplomatic cable states that illicit activities, such as trafficking in drugs and counterfeit goods, as well money laundering, are taking place.

The cable suspects five extended families, including Barakat’s, to be among the main actors in drugs trafficking and other major crimes.

Yet it also states: “Hezbollah has a small direct, non-operational presence on the ground, but most Lebanese in the TBA are Hezbollah sympathisers, if not financial supporters.”

Regarding the latter, it points at the fact that hats go around for contributions at the Friday sermons at the Shia Mosque of the Prophet, parts of which may be sent to Lebanon and end up in Hezbollah’s pockets.

Financial gains and political games

Nevertheless, the allegations of an Islamic threat in South America and the Tri-Border Area just do not seem to go away. Numerous media and think tank reports continue to make the wildest claims about Hezbollah’s, and Iran’s, alleged presence not only in Paraguay, but also in Cuba, Venezuela and Colombia.

The reasons for talking up the danger vary. Sabatini quite bluntly claims that many experts operating in Washington political circles are fishing for grants or jobs by inflating the issues people higher up the ladder want to hear. 

He singled out a recent Foreign Policy piece by Emanuele Ottolenghi and John Hannah, saying: “The only way the article could have been a more craven call for attention from those in charge of government appointments would have been if the opening sentence had said: ‘Look at us. We have managed to link all of this administration’s concerns. We await your nomination.’”



There are other reasons at play. Ottolenghi and Hannah work for the Foundation for Defense of Democracies (FDD).

Funded by Las Vegas billionaire Sheldon Adelson, it is one of the most aggressive pro-Israeli think tanks, all of which have a vested interest in depicting Hezbollah and Iran in the darkest possible way.

Financial motives may play a role as well. “Paraguay is paid millions of dollars a year for its anti-terrorism cooperation with the US,” said Farhat.

“It would not want that source of income to dry up, and so it will have to come with allegations from time to time.”

Paraguay is part of the US State Department’s Antiterrorism Assistance program and the Latin America’s Financial Action Task Force. It has passed counterterrorist financing legislation, which  allows it to freeze and confiscate terrorist assets without delay.

According to the last available US Embassy update, however, “there were no terrorist financing convictions or actions to freeze in 2016.”

Yet, Paraguayan police may use such sweeping powers in different ways. “I know of at least one case in which the police threatened to accuse a Lebanese businessman of terrorism links,” said Farhat. “He paid $50,000 for the allegations to go away.”  

Paraguay ranked 130th out of 168 on the 2016 Transparency International Corruption Perceptions Index, which stated that police officers are known to extort businesses and citizens for “protection money.”

“One day Paraguayan police accompanied by a man from the US embassy entered my store,” said a Lebanese man who wished to stay anonymous.

“They wanted to see if I sold counterfeit products, which I didn’t. Then the embassy guy wanted to have a word in private. He asked me to keep my eyes and ears open, and gave me a phone number. In case of something suspicious, I should call.

“The man didn’t offer me money, but in return could make sure the authorities would not bother me. I never called. But I know there are hundreds of people who do to make sure the police stay off their back.”

'Intelligence cooperation' with Israel

It is not just the Americans and Paraguayans keeping an eye on Ciudad del Este. In 2016, an official of the Israeli Foreign Ministry told the Jerusalem Post that they had been involved in “intelligence cooperation” in the Tri-Border Area for years.

Even Saudi Arabia, which has just completed building Ciudad del Este’s biggest mosque, is in on the game.

“When I returned from the Hajj I was looking for a job,” said a Sunni Lebanese friend in Sao Paolo, who preferred to stay anonymous.

“I still lived in Foz back then. An employee of the Islamic centre put me in touch with the Saudi embassy. They flew me to Brasilia and offered me $200 a month to keep an eye on the Shia community.” 

We need to make sure every form and piece of paper is filled in 100 percent correct, because the tiniest mistake can get us in a lot of trouble

- Yahya Awali, business owner

The continuous allegations, the presence of informers, policemen and possibly foreign agents in Ciudad del Este has created an atmosphere of fear and suspicion, in which everyone seem to be looking at everyone and in which mistakes can prove costly.

“We need to make sure every form and piece of paper is filled in 100 percent correct, because the tiniest mistake can get us in a lot of trouble,” said Awali.

“Since a year or so, we are only allowed to transfer $1,000 a month abroad, which used to be $7,000 a day. That is only the case for us Lebanese.”



Paraguayan President Horatio Cartes (L), with Israeli Prime Minister Benjamin Netanyahu in Jerusalem on Monday (AFP)

But the Paraguayan government may now have another reason to inflate the threat posed by Hezbollah.

In 2007, a US embassy cable reported that 80 percent of money laundering in Paraguay was thought to be moved through Banco Amambay, owned by a multimillionaire who also owns stretches of land along the Parana river.

The man’s name is Horacio Cartes, the current president of Paraguay and one of the US’s and Israel’s closest allies in South America today.

On Monday, Cartes stood alongside Benjamin Netanyahu at a ceremony in the new Paraguayan embassy in Jerusalem.

“We remember our friends. We have no better friends than you,” Netanyahu said at the ceremony.

“Thank you, Horacio. Thank you, Paraguay."

This article is available in French on Middle East Eye French edition.