Eitan Arusy served in the Intelligence Branch of the Israel Defense Forces and went on to set up the Arab desk in the IDF Spokesman's Office. Five years ago he retired from the military and, thanks to his American citizenship, was hired by the New York County District Attorney's Office as an intelligence analyst, specializing in the financing of governments and organizations in the Middle East. Two years later he was appointed director for strategic intelligence and research of business strategic consultancy RJI Capital. He continues to cooperate with the district attorney's office against the Iranian financial network. Arusy launched an investigation into how big international banks circumvent U.S. economic sanctions on Iran (and other states, including Cuba and Sudan ) and help Iranian banks move large amounts of money around the world.
Last week U.S. media outlets reported that three of the world's largest banks - Barclays PLC and Lloyds Banking Group, of London, and Zurich's Credit Suisse Group - each agreed to pay between $300 million and $536 million in a settlement in order to continue to operate in the United States.
Eitan Arusy, could economic action against Iran replace military action?
"At the end of the day it all depends on what political decision is made. I can say that [economic] action injures them, but it's not a fatal injury. It makes their life a lot harder but it's very hard to force them to completely stop their diabolic activities. In the meantime they must be hurt in every possible place. Certainly in the United States, where they have the capability to do these things. Here we could uncover these banks in their criminal activity."
Why do some of the most important banks in the world cooperate with the Iranian government?
"In that league, the banks see one thing: the dollar sign at the end, and their profits. I don't want to say that the people who worked in those banks are themselves terrorists, but I can say that at Lloyds, for example, there were very senior people who knew they were working for the Iranians."
How is it that in a field with such close supervision the banks nonetheless violate the law in order to work with the Iranians?
"The regulatory laws are rewritten and changed constantly, because the criminals and the terrorists are much more flexible and creative so the regulation generally comes in response to what has already happened."
To what extent are the actions of the U.S. prosecution affecting the Iranian government?
"It's difficult to assess, but it does hurt them to a certain extent because it makes it more difficult for them to carry out simple actions that had been easy. Now they have to find straw men and straw companies in Europe and Asia to act on their behalf, and this can cost them a great deal of money and effort. The most-traded currency around the world is the dollar, and to make regular purchases in order to buy even simple materials becomes very difficult for that bank. In the cases of Lloyds and Barclays the money transfers were to Bank Melli, the Iranian government bank, which the United States and the United Nations have identified as aiding the Iranian missile project."
How widespread is illegal assistance of this kind to Iran in the international banking system?
"I know of more than six other banks that are in the firing line for similar offenses. They are all in the same league as the banks that came to light."
What crimes did these banks commit? After all, they're not American banks.
"In my opinion, their crimes were less violating their own countries' laws than and more aiding the Iranians to escape detection [of their violations of] the sanctions of the Americans. In Europe, this problem exists to a lesser extent, and it is mainly a problem from the American point of view. So far most of the violations have involved dollar transactions; dollar transfers, even from Jerusalem to Tel Aviv, must comply with U.S. law. If a bank helps a country to circumvent sanctions it's a serious problem because it means they don't respect American jurisdiction. It means the United States can prosecute them criminally, which can end their business in the United States. In the three cases so far the banks realized they'd been caught and had no choice but to reach a settlement, to cooperate, to turn over all their information and to promise not to repeat the offenses. They were also forced to pay heavy fines."
The U.S. media reported that it all started with you noticing suspicious money transfers from an Iranian charity operating in New York. How did you manage to get wind of this when others had failed?
"Only because of my curiosity and what in the army is called staying on target. I worked for a government agency with the authority to examine all the transfers of these banks. It must be remembered that the investigation I conducted took place three years ago. The American authorities have only now finished negotiating with the banks that were caught."
The Iranians probably won't stop trying to transfer money for their own purposes. So what's the next target?
"Primarily straw companies and straw men they use as a front for all kinds of activities and business programs throughout the world. It's not just purchases for their missile and nuclear programs. They have political interests in places all over the world. They're really big in Latin America and in Africa. These transfers are also part of their funding for Hamas and Hezbollah."
Exactly how determined is the U.S. administration to fight Iran using these means? After all, these banks have a great deal of influence and power.
"When they commit illegal actions, very [determined]. They violated American sovereignty, they deceived the administration and broke the law, and rightfully the Americans are not willing to simply forgive let this go by.
To what extent is Israel a partner in the fight against the Iranian financial network?
"You'd have to ask the Israeli government about that."
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