Treasury official says US pushes Lebanon to crack down on Hezbollah funding ahead of elections

BEIRUT (AP) – A high-ranking U.S. Treasury official said during a visit to Beirut Monday that Washington is pushing Lebanese officials to crack down on the flow of funding to Hezbollah before next year’s parliamentary elections and to prosecute people involved in a quasi-bank affiliated with the group.

Under Secretary for Terrorism and Financial Intelligence John K. Hurley, who came with a delegation of Treasury and the National Security Council officials, said the U.S. believes that the Lebanese militant group is trying to bring $1 billion into the country by the end of the year, but “exactly how many dollars they have brought in, we don’t know.”

Hurley said that Lebanese authorities have made “great progress” in cracking down on illicit flows of funds but that the U.S. wants them to do more.

He denied that Washington had imposed any deadlines, but said, “We were very frank with the president, the prime minister and the other senior officials that there’s a window right now, particularly the window between now and the election.”

The parliamentary election is scheduled for May 2026, although some are pushing to postpone it amid a debate over the voting system for the large Lebanese diaspora.

Hezbollah and its allies made a strong showing in municipal elections earlier this year in the group’s traditional political strongholds, which the group is hoping to translate into gains in the parliamentary polling.

Since last year’s war between Israel and Hezbollah, Lebanon has implemented more stringent screening procedures at its sole international airport, and direct flights from Iran – Hezbollah’s main backer – have been stopped.

Hurley said funds for Hezbollah continue to come in as cash and gold carried in suitcases. Before arriving in Lebanon, the U.S. delegation visited the United Arab Emirates and Turkey, both of which have been transit points for funds coming from Iran to Lebanon, and urged them to choke off the flow. Hezbollah has also moved money through cryptocurrency.

But Hurley said given the scale of funds involved, “we’re confident that somewhere there are banks that are either knowingly or unknowingly facilitating getting money into the country.”

He added that exchange houses are “a major part of the problem.” The Treasury recently announced new sanctions that it said target financial operatives who channel funds to Hezbollah through exchange shops.

The U.S. has also urged Lebanon to go after al-Qard al-Hasan, a Hezbollah-affiliated organization that is officially a nonprofit charity institution operating outside the Lebanese financial system but functions as a quasi-bank.

In addition to its military wing, Hezbollah has branches that run schools, hospitals, low-price grocery stores, as well as al-Qard al-Hasan, which offers interest-free loans and savings accounts and was a lifeline for many people after the country’s 2019 financial collapse. The U.S. says Hezbollah is using the institution to evade sanctions.

“There should be prosecutions of people who are violating Lebanese law, who are violating sanctions, using that entity to fund Hezbollah,” Hurley said. “And so we are encouraging (Lebanese officials) to to take action.”

The latest Israel-Hezbollah conflict began the day after the Oct. 7, 2023, Hamas-led attack on Israel triggered the war in Gaza. Hezbollah began firing rockets into Israel in support of Hamas and the Palestinians.

Israel responded with airstrikes and shelling. The low-level conflict escalated into full-scale war in September 2024.

A U.S.-brokered ceasefire agreement nominally halted the hostilities last November, but Israel has continued to launch near-daily airstrikes in Lebanon and to occupy several strategic points on the Lebanese side of the border. It says it aims to keep Hezbollah from regrouping. Hezbollah has claimed one attack on Israel since the ceasefire.

Meanwhile, international funding for reconstruction in war-battered southern Lebanon has been largely on hold, contingent on Hezbollah giving up its remaining weapons, which the group has refused to do while Israeli strikes continue.