Where Does Funding for Hamas Come From?
JACK CAFFERTY, HOST: Welcome to IN THE MONEY. I'm Jack Cafferty. Coming up on today's program, we're going to talk about blood money. Money is the biggest part of what keeps terrorism operating in the Middle East. And terrorism is the major roadblock on the road map to peace. We're going to find out where the cash that funds Hamas is coming from and talk to a man who knows how to maybe go about cutting it off. Plus, heavy lifting. Some top companies out to cut costs, boast productivity by pushing workers to lose weight. We'll check on the price tag of those extra pounds. Plus green magic. The kid wizard Harry Potter turns books into billions with the latest Potter installment getting the blockbuster treatment. We'll find out whether publishers are going Hollywood. Good afternoon. Welcome to the program. For the next hour or so, my friend, Susan Lisovicz, from CNN Financial News will be here along with Andy Serwer, "Fortune" magazine editor at large. And before we plunge into the menu of today's events, the Fed meeting next week, two days, a lot of speculation on not whether they're going to cut rates. That seems to be a foregone conclusion, but how much they're going to cut. Why is there a debate. And after 12 rate cuts, why does there have to be another one?</s>ANDY SERWER, FORTUNE MAGAZINE: Well, the fed's concerned, Jack, about whether the economy is really picking up or not. I mean, we do seem to have some movement here. You have to believe that the economy looks stronger now than it did six months ago. But is it strong enough? Then you have the fact of the election coming up. The Bush administration concerned about that.</s>SUSAN LISOVICZ, CNN FINANCIAL NEWS CORRESPONDENT: This is a very nervous time right now in the economy. There's this whole leap of faith rally that's been taking place for the last three months. It's completely contingent on the economy improving in the second half. Everybody's trying to do everything they can to make that, in fact, a fact. I think the federal cut -- I'm going to go on the record as saying a quarter.</s>CAFFERTY: I have to agree with Susan. I hate to not have a debate here, but I'm saying because you've got the limbo economy here, you know, how low can it go, I think they want to save a little powder for next time. What about you?</s>SERWER: Well, we'll have a debate. I think they'll cut 50. And the reason I think they'll cut 50 is the three month rally on Wall Street you talked about predicated on the fact that once the war in Iraq was over, and that uncertainty was cleared up, the economy would take off like a bottle rocket. Well, it hasn't. It's still staggering and stumbling and kind of sputtering forward. Yes, it's getting better. But not perhaps at this point better fast enough to justify the kind of gains we've seen in the stock market in the last 90 days. And there's a guy at 1600 Pennsylvania Avenue who doesn't want to see those gains go anywhere but higher. So I bet they cut 50 basis points.</s>LISOVICZ: And the markets want it. They certainly hope...</s>SERWER: Yes. That's the other thing.</s>LISOVICZ: ...</s>SERWER: The markets, I think, expect it, right?</s>CAFFERTY: Yes.</s>SERWER: So if they'd only cut 25, you might wind up with a big sell off on the streets.</s>CAFFERTY: Well, that's true.</s>SERWER: Yes.</s>CAFFERTY: All right. Well, we shall see. A two day meeting they'll announce on Wednesday, two o'clock.</s>LISOVICZ: Two fifteen.</s>CAFFERTY: All right. One of the biggest challenges on the road map to peace in the Middle East is what to do about the ongoing suicide bombing attacks. The words were hardly out of the mouths of Messers. Sharon, Abbas and Bush that they were going to agree to do some cooperating when Hamas, the terrorist group, said it's not going to happen. There'll be no peace. We fully intend to continue to kill Jews. And they have. Wolf Blitzer joins us now from Jerusalem with an update on where the talk of a possible truce, a possible cease fire stands and what Colin Powell is thought to have accomplished on his visit there. Hi, Wolf. Thanks for being with us.</s>WOLF BLITZER, CNN ANCHOR: Hi. Thanks very much, Jack. So far, not much at least on the surface, not much that we can see. The prime minister of the Palestinian Authority, Mahmoud Abbas saying he's still highly confident he can find some sort of truce or cease fire arrangement with Hamas, with the Islamic Jihad, with the Al-Aqsa Martyrs' Brigade. But that hasn't happened yet despite three days of this personal negotiations with them in Gaza, despite two days earlier top Egyptian mediators had gone into Gaza. A lot of effort underway, but still no bottom line, still no truce, still no cease fire. These groups still demanding the right to go after Israeli civilians, Israeli targets. So we'll see if something happens. In the meantime, there seems to be a readiness on the part of the Israelis even in advance of some sort of cease fire to withdraw from at least a portion of Northern Gaza, perhaps a part of the area around Bethlehem and give the Palestinian Authority their security services an opportunity to show that they can control the situation there, they can get the job done. But a lot of this is so tenuous. And as you correctly point out, there are enemies of peace who will do whatever they can to undermine the so-called road map that President Bush has put forward.</s>CAFFERTY: All right, Wolf. Appreciate you joining us. Thanks very much. Wolf Blitzer joining us from Jerusalem.</s>LISOVICZ: By most accounts, cracking down on Hamas is key to peace efforts in the Middle East. But it's not going to be easy. Not only is the group ruthless, but Hamas is also rich. The Council on Foreign Relations estimates that Hamas has an annual budget of $70 million. And while Hamas claims the bulk of that money pays for hospitals and schools, the U.S. government says a lot of the cash goes to fund terror operations.</s>CAFFERTY: To help us understand where the money comes from, we're joined now from Washington by Matthew Levitt. He is a former FBI analyst and currently a senior fellow at the Washington Institute for Near East Policy. And he's the author of the book, "Targeting Terror." Matthew, nice to have you with us. Thanks for joining us.</s>MATTHEW LEVITT, WASHINGTON INSTITUTE FOR NEAR EAST POLICY: Pleasure.</s>CAFFERTY: We'll start at the beginning. Where do they get the money?</s>LEVITT: They get the money from three main sources. The first is from Iran. But unlike Hezbollah and Palestinian Islamic Jihad, which get almost all their money from Iran, Hamas likes to remain independent. It only gets a few million dollars from Iran, let's say 10 to 20.</s>CAFFERTY: Where does the rest of it come from?</s>LEVITT: The second source is Saudi Arabia, both official government sources and Saudi charities and members of the Saudi elite who are allowed and tolerated to fund Hamas and other terrorist groups. And there, too, we're talking about the low tens of millions of dollars. And the third source is charities operating internationally, in the Middle East as well, but primarily in Western Europe and the United States, which are perceived as cash cows. In the United States, the government has shut down the Holy Land Foundation for Relief and Development back in December, 2001. In its last year of operation, it alone raised $13 million for Hamas.</s>CAFFERTY: Matthew, I want to ask you to take a step back and answer a question that I've always wanted to have answered. And that is how out in the open is Hamas? Where is Hamas headquarters? Is there a building that has the name Hamas on it? You know, can they be tracked down? Where are these people?</s>LEVITT: Hamas is very open. But the question is which part of Hamas. Hamas does have a military wing and a political wing and a social welfare wing. Now arguing that these are disparate wings is sophistry. Each of these wings feed the terrorist operations that Hamas conducts. There's no office that says Izzedine al-Kassem brigades, which is the name of the military or terrorist wing. But everybody knows where the Hamas offices are in Damascus. Everybody knows where the Hamas institutions are in the West Bank and Gaza. It's difficult to knock on a door and find the covert infrastructure that is training suicide bombers and building bombs. When the Israelis had that information, they used to pass it on to the Palestinians who every so often would act on it. And now, when the Palestinians aren't, they usually send an Apache helicopter and send in a bomb to take out the bomb factory or sometimes the operative.</s>LISOVICZ: One of the huge problems, Matthew, though, with Hamas is that it does good stuff for the Palestinian people. So is one of the answers more aid for the Palestinians to make Hamas' good work less relevant?</s>LEVITT: That's a great point. You know, the Palestinians live in dire circumstances. But when Hamas or any other organization muddies the waters by combining support for terrorism with otherwise good works, they delegitimize what is otherwise an important and legitimate function. The international community, together with Salam Fayad, the new Palestinian Finance Minister, need to get together and provide with oversight and financial oversight, provide for the needs of the Palestinian people. The fact that there's such a need, and that the Palestinian Authority since 1993 has been so corrupt and simply not able and willing to provide these services has provided Hamas an opportunity that it eagerly exploits. I'd say that approximately 80 or more percent of the people who when polled say that they support Hamas really don't support Hamas' theology. They support the fact that Hamas feeds them and puts shoes on their children's feet, gives their children a place to go to school and gives them free health care.</s>CAFFERTY: Let me ask you a question about President Bush's road map to peace in the Middle East. One of the things that he insists that the newly elected Palestinian Prime Minister Mahmoud Abbas must do is crack down on Hamas and stop the violence.</s>LEVITT: Yes.</s>CAFFERTY: Now if you know that Iran and Saudi Arabia are funneling tens of millions of dollars to the terrorist group Hamas, presumably the White House also knows it. Put this statement in context when the president stands there and lays all the responsibility for stopping the problems between the Israelis and the Palestinians at the feet of Mahmoud Abbas, the newly elected prime minister who by all definitions has very limited power, particularly when it comes to terrorist groups.</s>LEVITT: You raise a great point. Hamas is not the only problem. The new prime minister in the Palestinian Authority is competing with Yasser Arafat who is not making his life any easier. The fact is that the U.S. administration, however, recognizes that these finances are coming in from all these different areas and has taken very aggressive action to stop it. The administration has demolished half of Europe over the past week, getting France in particular to recognize that Hamas is what needs to be shut down, not just the Kassem Brigades.</s>CAFFERTY: Does France give money to Hamas, too?</s>LEVITT: It's not that France gives money to Hamas. But France does not recognize the social welfare wing of Hamas as a terrorist entity. And therefore, when Hamas fronts organizations in France or elsewhere in Europe -- because for the European Union to take action, it has to be unanimous. When these front organization funnel money to a charity committee in the West Bank that the United States and the European Union and the Israelis and others have tied to Hamas, France and much of the European Union won't take action against them. You know, several European countries joined the United States about two weeks ago in shutting down the Al-Aqsa International Foundation which was a front organization for Hamas. Individual European countries did, not the European Union, because the European Union only lists the Izzedine al-Kassem Brigades, not the rest of Hamas.</s>CAFFERTY: I don't mean this to sound cynical, and I'm almost out of time, but is it realistic to expect these people can be stopped? I mean, this sounds like a tremendously complex situation with all kinds of political people involved. And I'm beginning to wonder if just based on what I'm hearing you say if it's doable.</s>LEVITT: It is absolutely doable. We just have to get proactive. We need to shut down the financing to create a situation on the ground when Abbas and others can start providing for Palestinians. The Israelis can start coming through on their responsibilities in the road map as well. And this 80 percent or more of the people that are currently supporting Hamas suddenly will stop. This is imminently doable.</s>CAFFERTY: It's fascinating stuff, Matthew. Thank you very much for joining us today on IN THE MONEY. I appreciate it.</s>LEVITT: My pleasure.</s>CAFFERTY: Matthew Levitt, senior fellow of the Washington Institute for Near East Policy and the author of the book, "Targeting Terror," joining us from Washington, D.C. Coming up, companies where less is more. Some top firms are teaming up to get their workers to lose a few pounds. Find out why your boss may soon be watching your weight. And paging Hillary Clinton. The former first lady's autobiography is one of the summer's smash hits. Who'd have thunk it? We'll look at how the publishing business is using blockbuster marketing to get you to go into the bookstore. And from CEO to convict with some of America's top executives out to dodge some time behind bars. Humorist Andy Borowitz will be along to look at greed, cunning and plain old fashioned stupidity. Now you don't want to miss that.