Middle East Intelligence Bulletin

A monthly publication of the United States Committee for a Free Lebanon


  Vol. 1   No. 1

January 1999 


Lebanon Report
Lahoud Surrenders Lebanon's Defenses to Syria
Lebanese, Syrian Officials Reject Withdrawal Plan
Hariri Advisor Spied for Arafat
Dennis Ross: "The Taif Agreement Will Be Part of the Discussions"
The Hariri Government Legacy: An Economic Disaster
Market Intelligence: Beirut's Solidere Profits Way Down

Middle East Report
Suspicions of Iranian and Syrian Complicity in Lockerbie Bombing
Former UN Inspector Says Iraq Could Be Months Away from Nuclear Weapons
Egypt, Saudi Arabia Call for Removal of Saddam
Panel Cites Lax Security at U.S. Embassies
CIA Expands Activities in Self-Rule Areas
Bin Laden Network Uses Computer Technology to Plan Attacks

Middle East MEIB Main Page

Executive Director
Ziad K. Abdelnour

Editor
Gary C. Gambill

Advisory Board
Rachel Ehrenfeld
Gil Feiler
Murray Kahl
Daniel Nassif
Daniel Pipes
Gary P. Ratner
David P. Steinman

Lebanon Report

Lahoud Surrenders Lebanon's Defenses to Syria

Since his ascension to the Lebanese Presidency, Emile Lahoud has completely reorganized the military security apparatus of the country, appointing well-known allies of the Syrian government to important state security positions. According to most observers, power is slowly shifting from the warlords in the previous government to the heads of security and intelligence services.


Power is slowly shifting from the warlords in the previous government to the heads of security and intelligence services

"The current government resembles that of Damascus. Most of its members are directly linked to the head of the regime, and are insignificant to the people," says one source. "Real power now has shifted to the general directors, executive heads of the Mukhabarat (military intelligence), state security agency, and the general security agency. Those men who have power in these agencies, have power in Lebanon. And those men, appointed by Lahoud recently, are Syria's men. Now Lebanon is like Syria, it is a security component of Syria's security power."

The implications of these appointments are very clear: Important security files and archives which had previously been withheld from direct Syrian inspection are now being exhaustively studied by the staff of Syria's chief intelligence officer in Lebanon, Brigadier General Ghazi Kanaan. There is widespread apprehension in Lebanon about the consequences of this disturbing development.

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Lebanese, Syrian Officials Reject Withdrawal Plan

Lebanese and Syrian officials have rejected a four-point plan offered by Japanese Foreign Minister Masashiko Komura earlier this month to bring about an Israeli withdrawal from south Lebanon.

Komura presented the plan to leaders of six Arab countries during his extended tour of the Middle East from January 5 to 13. The main points in the plan:

The Komura plan met with strong Israeli approval. Israeli foreign minister Ariel Sharon said he was"very impressed by the Japanese proposal regarding a solution for Lebanon," after meeting with the Japanese envoy. However, Syrian officials strongly opposed the third point calling for negotiations between Israel and Lebanon. "I am afraid I can't say that the situation is optimistic," said Komura after discussions with Syrian President Hafez al-Asad.

Not surprisingly, Lebanese Prime Minister Salim al-Hoss followed the Syrian lead and rejected the proposal, saying that his government is "not prepared for any talks or negotiations nor security arrangements with Israel."

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Hariri Advisor Spied for Arafat

According to sources in Lebanon, the departure of Rafik Hariri as prime minister of Lebanon just days after Gen. Emile Lahoud was "elected" president was due partly to the so-called "Nohad al-Mashnouk affair." In October, the Syrians learned that al-Mashnouk, one of Hariri's leading advisers, had been working closely Col. Jibril Rajoub, head of the Preventive Security service for Arafat's Palestinian Authority (PA).

The connection was uncovered during a recent session of the UN General Assembly, when Syrian foreign minister Farouq al-Shara met with Hariri and Mashnouk in the Syrian delegation's office in New York to coordinate the speeches that Lebanese and Syrian representatives were scheduled to give before the plenary session. The Syrians later alleged that Mashnouk had revealing what had been said to the Palestinians, who apparently tipped off Israeli prime minister Benjamin Netanyahu, enabling him to modify his own speech at the last minute to refute Syrian and Lebanese claims.

Upon his return to Beirut, Mashnouk came under strong Syrian pressure and Hariri reportedly advised him to leave the country for Egypt. After boarding an aircraft bound for Cairo at Beirut airport, he was arrested by plain-clothes Lebanon intelligence agents (apparently at the behest of the Syrians). Hariri intervened to secure his release and Mashnouk was able to leave the following day under the protection of Hariri's personal bodyguards. He now resides in Paris with his family.

Mashnouk was born into a Sunni family in Beirut in 1950. During the early 1980's, he worked as a journalist for the left-wing daily As-Safir which at that time was financed by Libya and the PLO. Due to his close links with the PLO, he was forced to leave Beirut after the Israeli invasion. Mashnouk began working for Hariri in 1992, in charge of overseeing Lebanese media that Hariri secretly financed. Over the years, he apparently kept Arafat to abreast of the Syrian position regarding the peace process and Hezbollah.

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Dennis Ross : "The Taif Agreement Will Be Part of the Discussions"

Photo of Dennis Ross
Dennis Ross
During a private luncheon organized on January 20th by the Middle East Forum and attended by over 200 journalists, activists and financiers in the New York Metropolitan area at the Manhattan headquarters of the Republic National Bank of NY, Special U.S. Middle East Envoy Dennis Ross spoke about the evolving Palestinian-Israeli peace track and how the Clinton Administration is handling the process.

When it came to the Lebanese-Syrian-Israeli peace track, Ross assured USCFL President Ziad Abdelnour and a number of other Lebanese American activists attending the gathering that though he realizes that"peace cannot be imposed on either Syria or Israel, the Taif Agreement will be part of the discussions." Mr. Ross further elaborated that he hopes that "Lebanon will not be the last Middle East country who will sign a peace treaty with Israel" and that the U.S. Administration "is committed to a strong, independent and sovereign Lebanon."

"We are ready to talk to whomever comes out with solid alternatives for Lebanon and welcome to see more Lebanese involved in the process, whether from the government, the opposition or the Diaspora," added Ross. Analysts say that this specific reference to opening a dialogue with the Lebanese opposition could mark a significant change in American policy.

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The Hariri Government Legacy: An Economic Disaster

After parting ways with billionaire prime minister Rafiq Hariri, Lebanon is now trying to depart from his high-gloss, high-debt strategy for repairing the nation's economy following its 17-year civil war.

So far, the central bank has had little trouble keeping the Lebanese pound steady against the dollar. Still, investors for the moment aren't showing much interest in long-term debt, according to a local Lebanese investment banker, and if the government falters in its economic program this year, "anything goes," because there is enough debt denominated in Lebanese pounds to wipe out the central bank's reserves if converted to dollars.

"Lebanon could not get back to where it was 15 years ago, even if there was peace" with Israel, because other Arab capitals have raced ahead, says George Corm, an economics professor turned finance minister, as a jackhammer buzzes outside his window in Beirut's new downtown, with its recently opened pedestrian walkways and antique shops. "The fact that you can get from here to the airport in five or six minutes is great, but we need to look at the productive sector, the real economy. Now we're stuck with a lot of luxury buildings that are unsellable," a legacy of the Hariri era building boom.

Lebanon is also stuck with a huge pile of bills from the outgoing Hariri government that "should have been paid" last month, Dr. Corm says. He says the bills, for medical disbursements and the like, total around $400 million. That, plus pre-approved pay raises, could add as much as $1 billion to this year's spending -- $300 for every Lebanese citizen.

Those extra outlays will come on top of a huge structural deficit in the state's finances. Lebanon finances its growing debt at 15% interest. Because the returns are so good for the institutions that hold the country's debt, it isn't surprising that Lebanese banks do very little industrial lending.

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Market Intelligence: Beirut's Solidere Profits Way Down

Despite all the huge public relations campaign undertaken by Solidere, Lebanon's biggest company during the Hariri era, the real estate publicly traded entity showed a substantial drop in profits during 1998.

The latest report of a Beirut based brokerage firm , issued early this month, showed that Solidere, which is rebuilding the center of the capital devastated during the 1975-90 civil war, made around $66 million in net income last year compared to $78 million in 1997.

The firm said cancellation of real estate contracts resulted in Solidere falling short of a widely circulated $81 million forecast."They were relying on some contracts with the government that did not come through because of the austerity policy and need to control the budget deficit," said Nabil Aoun, President of Fidus.

Solidere executives could not be reached for comment. On the Beirut bourse A shares (SOLA.BY) closed down $0.12 at $10.50 and B shares(SOLB.BY) rose the same amount to $11.00. In London, the Solidere GDR (SOLAq.L) was up $.20 in afternoon trade. Solidere results released in November showed that net income in the first six months of 1998 fell to $2.02 million from $12.4 million in the corresponding period the year before.

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Middle East Report

Suspicions of Iranian and Syrian Complicity in Lockerbie Bombing

In an interview with Reuters news agency last month, the father of one of the 270 victims who perished in the December 1988 explosion of Pan Am flight 103 over Lockerbie, Scotland expressed suspicion that Iran and Syria played the primary role in orchestrating the bombing.

Photo of the Lockerbie crash site
The crash site on December 22, 1988 (AP)

Jim Swire has assiduously monitored developments in the case since the death of his 24-year-old daughter Flora ten years ago, and recently met with British Prime Minister Tony Blair to discuss what he believes to be "serious difficulties" with the Lockerbie investigation. Among these, Swire cites the testimony of former Iranian intelligence agent Abolghasem Meshabi. Meshabi told German investigators in 1997 that the bomb was brought in by an Iranian aircraft and transferred to the Pan Am plane at Heathrow airport. Swire said that Iran also had a strong motive for the bombing. Six months prior to the Lockerbie bombing, an American warship, the USS Vincennes, accidentally shot shot down an Iranian airliner over the Persian Gulf. "Libya [also] had a motive." said Swire, "but Iran's motive was fresher and stronger."

Until 1991, when investigators singled out Libya as the sole perpetrator of the bombing, Iranian and Syrian involvement in the tragedy was widely assumed in the Western media .1 Swire suggests this sudden change may have occurred as a result of Syria's participation in the 1991 Gulf War and and Iran's decision to remain neutral during the conflict. He noted that the remaining American hostages held by Iranian and Syrian-backed guerrillas in Lebanon were released within weeks of the 1991 indictments. "The question is, was there a deal done between the United States and Iran?"

1 On November 5, 1989, The Sunday Times published a lengthy report on the Lockerbie bombing naming seven members of the Syrian-aligned Popular Front for the Liberation of Palestine--General Command (PFLP-GC) as prime suspects in the investigation by Scottish police.

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Former UN Inspector Says Iraq Could Be Months Away from Nuclear Weapons

The regime of Saddam Hussein is rapidly seeking to develop nuclear weapons and could be months away from completing one unless inspectors are allowed free access in Iraq, a former U.N. inspector said.

David Albright
David Albright
David Albright, president of the Institute for Science and International Security in Washington and the first non-government inspector in Iraq, told a conference sponsored by the Carnegie Endowment Nonproliferation Conference that "if steps are not taken soon, Iraq may emerge in a relatively short period of time, with weapons of mass destruction, including nuclear weapons."

Albright said that Iraq is probably using the absence of U.N. inspectors to resume its nuclear weapons program. "Within a few months to a few years, Iraq could have nuclear weapons," he said. "And under the current situation with no inspections and weakened sanctions, detection of such a reconstituted nuclear weapons program is unlikely."

Albright further said that Iraq could still be stopped from completing a nuclear weapon. But this would require what he called "unprecedented and unexpected" steps supported by the international community.

The physicist said that the recent air strikes by the United States and Britain have "had limited effect, at least as far as I can tell, and that future ones could be very costly politically.

"U.S. hopes that it can detect weapons of mass destruction programs, I believe, are not credible," Albright said. "I would cite past experience. And more importantly, even if they are detectable, garnering the evidence to present to other nations to justify actions has proven to be extremely difficult, as most of us in the nonproliferation community have learned over the years."

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Egypt, Saudi Arabia Call for Removal of Saddam

In perhaps the most stunning shift in Arab world relations with Iraq since the 1990-1991 Gulf War, Saudi Arabia and Egypt began to explicitly call for the ouster of Iraqi President Saddam Hussein earlier this month. This new stance appears to have been a reaction to a speech by Saddam encouraging Arabs to rise up against rulers "who boast of friendship with the United States."

In an interview with The Berliner Kurier newspaper, Egyptian Foreign Minister Amr Moussa said that the Iraqi leader is "shaming the entire Arab region through his politics" and called for the Iraqi people to revolt against him.

On January 7, Riyadh Al-Riyadh, the leading newspaper in Saudi Arabia published a scathing editorial which stated:

"The eternal remedy for Iraq is the removal of Saddam and this is an undisputed fact. How can this be achieved? The matter will be determined in the race against time between the ruler and his subjects--the Iraqi people alone hold the key to the future and must act accordingly."

Secretary of State Madeleine Albright is scheduled to travel to Egypt and Saudi Arabia on January 28 to assess this policy shift. It appears. though, that other Arab states have already begun to gravitate towards the new Egyptian/Saudi policy of confronting Saddam. On January 24, the Arab League issued a statement calling upon Iraq to refrain from "provocative actions" against its neighbors and comply with UN resolutions.

The new "anti-Saddam" consensus in the Arab world has important implications for American policy. Last month, Congress passed the Iraq Liberation Act, which allocated $97 million worth of surplus military equipment to seven Iraqi opposition groups. Analysts say that the new attitude toward Saddam could generate support in the region for creating an armed force of Iraqi exiles in countries adjacent to Iraq--a prospect that seemed unthinkable only a month ago.

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Panel Cites Lax Security at U.S. Embassies

An official panel that investigated the U.S. embassy bombings in Africa reports that a "collective failure" by successive administrations and Congress over the years has left American diplomatic missions abroad extremely vulnerable to terrorist threats. The panel, known as the Accountability Review Board, also accused the State Department and other agencies of giving low priority to embassy security.

The board was convened after the nearly simultaneous bombings at U.S. embassies in Kenya and Tanzania last August. Twelve Americans were among the 224 people killed in the bombings. The panel was directed by retired Adm. William Crowe, a former chairman of the Joint Chiefs of Staff.

The report found no evidence that any employee of the U.S. government, including the armed services, failed to fulfill his or her duty. "However," the report said, "we believe there was a collective failure by several administrations and congresses over the past decades to invest adequate efforts and resources to reduce vulnerability of diplomatic missions around the world to terrorist attack."

CBS News, which broke the story, said the report depicts a mindset in which senior officials were more concerned about budgets than lives. Crowe gave an account of the report to reporters at the State Department. The report said responsibility for the security failures must be shared broadly, including by the secretary of state. Secretary of State Madeleine Albright, also appearing before reporters, accepted that responsibility. "It reminds us all that no matter how much we care, no matter how much we do, we can always do more when the lives of our people are on the line," she said.

Crowe said the board recommended a sustained investment of $1.5 billion per year over the next decade to upgrade security at embassies. "A quick fix is out of the question," Crowe said. "We're going to have a lot of embassies in harm's way for a long time."

The study said the government relies too heavily on prior warnings of terrorist attacks instead of assuming that the most vulnerable targets are most likely to be struck. To improve security in the future, the administration will have to provide "adequate and sustained" funding for diplomatic missions.

After the August bombings, the State Department surveyed all 260 diplomatic posts abroad and found that only 40 were fully secure. Congress since has provided funds to upgrade security at the unsafe posts. Twelve people have been indicted in the two bombings, believed to have been masterminded by Osama bin Laden, a Saudi who is said be living in Afghanistan.

The two East African bombings occurred within minutes of each other on Aug. 7. Eleven people were killed at the U.S. Embassy in Dar es Salaam. A much more deadly explosion outside the U.S. Embassy in Nairobi killed 213 people and injured more than 5,000. U.S. forces retaliated 13 days later, launching cruise missile strikes against alleged terrorist camps in Afghanistan and a chemical plant in Sudan.

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CIA Expands Activities in Self-Rule Areas

Israeli radio has said that the United States' Central Intelligence Agency has intensified its activities in the Palestinian self-rule area and opened offices for itself in Gaza, Hebron and Nablus.

Israeli radio added that the CIA also intends to open representative offices in all the cities of the West Bank and the Gaza Strip. The radio continued that the CIA informed the Palestinian government of its intention to employ Palestinians among those who speak both Arabic and English. Palestinian security officials were reportedly fearful of such expanded activities in the self-rule areas.

The CIA played a key role in the negotiations between Israel and the Palestinian government and took part in reaching an Israeli - Palestinian security agreement which ensures the US role as "supervisor and mediator."

The Wye River accord provides for a role to be played by the CIA in implementing the agreement, especially in investigating members of Palestinian terrorist groups opposed to the Peace Process.

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Bin Laden Network Uses Computer Technology to Plan Attacks

Senior U.S. counter-terrorism officials have learned that Saudi dissident Osama bin Laden relies upon computer technology to communicate with members of his Al Qaeda terror network around the world in planning attacks.

The primary means of communications is relatively low-tech: the floppy disk. Couriers carry disks containing his orders out of Afghanistan to couriers in other countries where his terrorist cells are located.

Osama bin Laden
Osama bin Laden

"It takes them time to get their stuff together as a result," said one official. Recently, however, the physical transfer of such information has grown increasingly difficult due to the close scrutiny of his network by American intelligence and his supporters have begun using email and fax technology.

According to US counterterrorism officials, the Al Qaeda terror network now operates in 50 countries with training camps in 20 nations. It is believed that Saudi expatriate Khaled Al Fawwaz may be the principal courier for transmitting information to Al Qaeda members inside the U.S. The Advice and Reformation Committee (ARC), a London-based organization headed by Al Fawwaz, has sent a number of faxes to 10 US cities containing Bin Laden's orders to murder American citizens.

The FBI's international terrorism division has sought to monitor the communications of the Al Qaeda terror network since January 1995, when Philippine police arrested Al Qaeda member Ramzi Youssef in connection with a plan attempt to bomb the motorcade of Pope John Paul II during his visit to Manila. Officials say that Youssef's laptop computer contained detailed plans for bombing 11 US airliners over the Pacific and a plot to kill President Clinton during his 1996 visit to the Philippines.

In effort to step up the pressure, the U.S. recently issued wanted posters in several languages which offer a $5 million reward for information leading to Bin Laden's arrest. The posters, which will be distributed to all US diplomatic missions abroad, offer "absolute confidentiality" and possible relocation for informers. "This reward offer has already generated leads that are being investigated," said State Department spokesman James Rubin. "We will vigorously advertise this offer around the world. We will advertise it on the Internet, where we can reach over 100 million subscribers," he added.

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