Viwed from As one of the most glitzy restaurants in Istanbul, the Bosphorus looks sublime. The center is a popular attraction for mandarins, businessmen, celebrities – and Hamas financiers. A man on whom America has imposed sanctions for funding the Islamic group describes his various board seats. “It’s ridiculous,” he says, of America’s accusation, but finally admits, “now, if you’re asking what our workers do with their own money, why would I know?”
Hamas has three sources of power: its physical force inside Gaza, the reach of its ideas and its income. Since Hamas attacked on October 7, Israel has killed more than 12,000 Palestinians in Gaza as they try to destroy the former. But Israel’s goal of destroying Hamas for good requires dismantling its financial base as well. Gaza has very little of this at all. Instead, it is abroad in friendly countries. Furnished with money laundering, mining companies and many others, Hamas’s financial empire is estimated to bring in more than $1bn a year. Having been carefully designed to avoid Western sanctions, it may be out of reach for Israel and its allies.
Hamas’s income pays for everything from teachers’ salaries to missiles. About $360m a year comes from import taxes on goods brought into Gaza from the West Bank or Egypt. This is the easiest source of money to strangle Israel. After withdrawing from the strip in 2005, he imposed strict restrictions on the movement of goods and people across the border. Now it stops even the basic needs from getting in.
A much larger stream of income, however, comes from abroad. Israeli officials estimate that this amounts to around $750m a year, making it the main source of funding for Hamas’ current stockpile of weapons and fuel. Some come from friendly governments, the biggest of which is Iran. America believes that the ayatollahs give $100m to Palestinian Islamic groups, mainly in military aid. The task for Hamas financiers is to move this money around without falling prey to American sanctions. In the past month alone, American officials have imposed three rounds of restrictions on people and companies that finance Hamas.
Avoiding American sanctions requires some ingenuity. Millions of dollars flow to Hamas through crypto markets. “You’d be surprised how much market activity comes back [Hamas],” says Firuze Segzin, an economist at Bilkent University. The US treasury department says Hamas has smuggled more than $20m through Redin, a money exchange full of tourist shops deep in Istanbul’s run-down Fatih district.
But the lion’s share of Hamas’ money – at least $500m a year, according to Israeli officials – comes from its investments, some of which are companies registered in countries across the Middle East. These are run by professionals from the Hamas investment office and employ its members. American officials say that the companies donate to charities which in turn give money to Hamas; Turkish officials say profits are sometimes taken directly. Unlocking these revenue streams is difficult for Western rulers. One such company built Afra Mall, the first shopping center in Sudan, and another is mining near Khartoum, its capital. The third built skyscrapers in Sharjah, in the United Arab Emirates (uae). Many of these companies boast of their business deals, but they deny connection with Hamas.
Will any remaining income streams of Hamas be choked off? That depends on the countries through which they flow. Since 1989, when Israel arrested a handful of top Hamas brass in Gaza and the West Bank, their bankers have been living abroad. Over time, however, geopolitical trends have forced them to keep moving. Hamas abandoned its first financial center, Amman, after Jordan’s ties to America became too close.
Today, while Hamas politicians for Doha, the capital of Qatar, and its companies go from Algeria and Sudan to UAE, his financiers live in Istanbul. Zaher Jabarin, who is accused by Israel of running the finances of Hamas (which he denies), is based there, as are several other people under American sanctions for financing the group. He is willing to gain regional influence by supporting the Palestinian cause, Recep Tayyip Erdogan, the president of Turkey, offers shelter. Israel says the Turkish government is issuing passports (which it denies) and allowing Hamas to maintain an office in the country.
At the same time, the Turkish banking system is helping Hamas to avoid American sanctions by making complex transactions around the world. A thriving, lightly regulated crypto market helps. Many of Turkey’s largest banks, including Kuveyt Turk, have been accused by Israel and America of knowingly storing Hamas funds. Some complain that Mr. Erdogan quietly agrees. In 2021, the Financial Action Task Force, a G7, put Turkey on the “grey list” of countries doing too little to freeze terrorist assets.
No one benefits more than Hamas businessmen. The tacit approval of the Turkish government “opens doors and makes things smooth in business”, says one of the group’s financial staff. Third GYO, an Istanbul-listed company that was sanctioned by America for sending money to Hamas, has won an official contract to build the Istanbul University of Commerce. Construction companies, which are heavily in the portfolio of Hamas, can quietly swallow large sums of money, and receive large loans regularly. All this allows Turkish officials to say that they are not lining directly in the pockets of Hamas.
So far, Hamas appears to be financially secure. Israel did little on its income or savings; The Turkish banks have been uncooperative. America’s multiple sanctions are less effective if their targets keep money outside their banking system. And Hamas hides its companies well. “Every time you think you have a big fish, it changes its name,” despairs one ex-Treasury official.
Of course, the risk is that Hamas’s finances will improve. As Israel escalates its attacks on Gaza, Western governments may grapple with the humanitarian horror. Countries with pro-Palestinian populations can make it even easier for Hamas to earn money. For months, rumors have circulated that some civil servants in Mr. Erdogan’s economic ministry are coordinating with Hamas’ finance office.
For Israel, Hamas getting richer despite the war would be a disaster. With wealth and complete financial roots, he – or a similar group – could prosper after the destruction. Gazans, meanwhile, have plunged into tragedy so that Israel can destroy a group whose money and power are safely tied up elsewhere. Compare the situation with the picture in Istanbul: eating lobster and looking at the Bosphorus. ■
