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Ismail Haniyeh Photo: Reuters
Ismail Haniyeh Photo: Reuters
 
 

Hamas got rich as Gaza was plunged into poverty

With multi-million-dollar land deals, luxury villas and black market fuel from Egypt, Gaza's rulers made billions while the rest of the population struggled with 38-percent poverty and 40-percent unemployment.

Doron Peskin
Published: 07.15.14, 16:12 / Israel Business

While the fighting is only expected to worsen the distress of the residents of Gaza, the Strip's economic outlook for the Strip was never good. The unemployment rate in Gaza stood at approximately 40% before the latest conflict, with a similar proportion being classed as living under the poverty line.

 

 

But while most of the Gaza population tries to deal with the difficulties of daily life, it seems that one sector at least has had few worries about their livelihoods - Hamas leaders and their associates.

 

 

Multi-million-dollar deal

Someone who has benefitted financially is the former Hamas prime minister in Gaza, Ismail Haniyeh. Before 2006 and Hamas' shocking electoral win and subsequent dominance of the Palestinian government , 51-year-old Haniyeh was not considered a senior figure in Hamas in the Gaza Strip. But according to reports in the past few years, Haniyeh's new-found senior status has allowed him to become a millionaire. This is an unusual feat, given that he was born to a refugee family in the al-Shati refugee camp in northern Gaza.

 

In 2010, Egyptian magazine Rose al-Yusuf reported that Haniyeh paid for $4 million for a 2,500msq parcel of land area in Rimal, a tony beachfront neighborhood of Gaza City. To avoid embarrassment, the land was registered in the name of the husband of Haniyeh's daughter. Since then, there have been reports that Haniyeh has purchased several homes in the Gaza Strip, registered in the names of his children - no hardship, as he has 13 of them.

 

At least with regards to his eldest son, it seems that the apple does not fall far from the tree, given his arrest on the Egyptian side of the Rafah border crossing with millions of dollars in cash in possession, which he intended to take into Gaza.

 

Subsidized fuel sold for profit

According to sources in Gaza, Haniyeh's wealth, like others high up in Hamas, came primarily from the flourishing tunnel industry. Senior Hamas figures, Haniyeh included, would levy 20 percent taxation on all of the trade passing through the tunnels.

 

Hamas's heyday came after the overthrow of former Egyptian president Hosni Mubarak, as its parent organization the Muslim Brotherhood was growing in popularity in Egypt.

 

In those days, Hamas leaders and their associates were not afraid to show off their ostentatious wealth. Gaza's market for luxury villas costing at least a million dollars was booming, most purchased by people associated with the establishment of Hamas. A Gazan familiar with the real estate market summed it up at the time with a quip about a Hamas crony who had recently acquired a luxury villa: "Two years ago, he couldn’t afford a packet of cigarettes."

 

At the same time, Khairat a-Shater, a senior member of the Muslim Brotherhood in Egypt who headed his own business empire, made sure to personally transfer tens of millions in cash to senior administration officials in Gaza as well as to commanders from the Hamas military wing.

 

There were senior Hamas members who preferred that the money be kept in a safer place than the Gaza Strip, and invested it in various Egyptian assets, often through business partnerships with Muslim Brotherhood officials. In some cases, the man conducting the deals on behalf of Hamas officials, who ensured that they received their dividends in cash, was Ayman Taha, a Hamas founder once considered one of its key spokesmen. In 2011, Taha himself paid $700,000 for a luxury three-floor villa in the central Gaza Strip; a year ago, he was charged with being an agent for Egypt.

 

The Egyptian street has become inflamed with anger directed against Hamas over the last three years, partly due to what appears to be its financial gains at the expense of the Egyptian people. The tunnels in Rafah, the town straddling the Gaza-Egypt border, for example, saw a flourishing fuel-smuggling industry from Sinai. The fuel subsidized by the Egyptian government was entering Gaza at a low price, but being sold for eight times that. Those who made the greatest profits from the sale of the fuel were Hamas members, even as Egypt often reported shortages for its own people.

 

Hamas, says Professor Ahmed Karima of Al-Azhar University in Egypt, has long become a movement of millionaires. According to Karima, the organization can count no less than 1,200 millionaires among its members. He did not, however, specify the source of this information.

 

Mashal's mall

It was not only Hamas members in Gaza who became rich. It appears that political leader Khaled Mashal is another member of the organization who used Hamas funds to his own ends. In 2012, a Jordanian website reported that Mashal had control of a massive $2.6 billion, in large part deposited in Qatari and Egyptian banks. This is likely Hamas' accumulated assets from years through donations, as well as its investments in various projects in the Arab and Muslim world. It is also known that, among other things, Hamas has invested in real estate projects in Saudi Arabia, Syria and Dubai. And, according to reports, Mashal did not always separate Hamas money and his own.

 

Hamas' expulsion from Syria was a severe financial blow for the movement. In 2011, before the start of the Syrian conflict, Hamas's assets in the country had reached a value of $550 million. Apart from its real estate holdings, Hamas invested in various commercial companies, including a cargo company registered to a Syrian businessman close to Moussa Abu Marzook, Mashal's deputy.

 

As with other areas, in its financial dealings Hamas leaders keep their cards close to their chest and maintain a high level of secrecy. Investments are made through front companies, using family and associates. Companies linked to Mashal in Qatar are registered to his wife and daughter.

 

Once he was forced to close his office in Damascus (after falling out with the Assad regime over its oppressive response to the conflict), Mashal declared that his place was in Qatar. There, he claimed that $12 million he had stored in his safe in his Damascus office had been lost. Not many accepted this story, and to this day believe that Mashal kept the money, transferring it to his own personal accounts.

 

Reliable sources claim that a project by the Fadil real estate firm in Qatar is linked to Mashal, his son and his son's wife. The prestigious project in Doha, the Qatari capital, includes the construction of four towers of more than 27,000 square meters, including office and commercial space attached to a mall with an area of ​​10,000 square meters. The company has never disclosed the source of its funding.

 

According to a World Bank report released in November of last year, the Gaza Strip ranks third in the Arab region in terms of poverty, ranking above only Sudan and Yemen. The report stated that the poverty rate in Gaza stands at 38 percent. Furthermore, of the 144 countries included in the report, Gaza was the 44th poorest, with most of the countries with a higher poverty rate being located in Africa. 

 

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