BEIRUT (AP) — Israel’s military has launched a wave of airstrikes on branches of a financial institution linked to Lebanese Hezbollah, saying the quasi-banking system is being used to finance the militant group’s military wing.

The strikes destroyed more than a dozen branches of al-Qard al-Hasan across Lebanon on Sunday evening, and two weeks after an airstrike killed the man many called Hezbollah’s “finance minister.”

Following the assassination of most of Hezbollah’s top political and military commanders, including the group’s longtime leader Sayyed Hassan NasrallahIsrael, which has been bombarding its communities with devastating airstrikes, now says it is going after the Shiite group’s backers and financial institutions in an effort to further disrupt it and its support base.

Hezbollah began attacking Israeli military posts along the border with Lebanon a day after Hamas’ October 7, 2023 attack on southern Israel, which killed about 1,200 people and took about 250 hostage. Hezbollah said it was supporting its Hamas allies in the Gaza Strip by launching attacks along the Lebanon-Israel border.

What is al-Qard al-Hasan and who benefits from it?

Al-Qard al-Hasan is officially a non-profit charity that operates outside the Lebanese financial system, and one of the tools through which Hezbollah consolidates its support among the country’s Shia population.

In addition to its military wing, Hezbollah has branches that run schools, hospitals, cheap supermarkets and Al-Qard al-Hasan, benefiting hundreds of thousands of supporters.

Israel says the institution finances weapons purchases and is used to pay Hezbollah fighters. The U.S. Treasury Department has imposed sanctions on the country since 2007, saying it is “used by Hezbollah as a front” to manage the militant group’s financial activities “and gain access to the international financial system.”

The association, whose name means “the benevolent loan” in Arabic, was founded four decades ago, shortly after the founding of Hezbollah, and offers interest-free loans and allows people to deposit gold as collateral in exchange for the credit, allowing them to pay their school fees. and weddings, buy a car or open a small business. People can also open savings accounts.

Al-Qard al-Hasan has more than 30 branches in Lebanon. Following Lebanon’s financial collapse in 2019, the institution provided a lifeline for many Lebanese. Unlike banks across the country that imposed limits on how much people could withdraw from their bank accounts, people with deposits at al-Qard al-Hasan could still withdraw their money.

In 2021, the U.S. Treasury Department’s Office of Foreign Assets Control imposed sanctions on seven individuals linked to Hezbollah and al-Qard al-Hasan. A year later, the Biden administration imposed terrorism sanctions on two others, including al-Qard al-Hasan director Adel Mansour, and two companies in Lebanon for providing financial services to Hezbollah.

Mansour did not leave messages for comment by The Associated Press. After being sanctioned for two years, he told the AP: “I am proud and this is a medal of honor for me.”

A senior central bank official in Beirut declined to comment on the Israeli attacks on al-Qard al-Hasan branches when contacted by the AP on Monday.

David Asher, an expert on illicit financing who has worked at the U.S. Department of Defense and State Department and is now a senior fellow at the Hudson Institute, said the Israeli attacks were “a big problem.”

“Al-Qard al-Hasan is part of Hezbollah’s central financial unit,” which is related to Hezbollah’s treasury, he said.

Faysal Abdul-Sater, a Lebanese political analyst who closely follows Hezbollah’s affairs, said the militant group is not funded through al-Qard al-Hasan. He said the money deposited at the institution belongs to individuals and companies, and the system benefits low-income people.

“This is a symbolic attack,” Abdul-Sater said of the attack on Al-Qard al-Hasan.

How harmful are the Israeli attacks?

The systematic destruction of al-Qard al-Hasan branches, which follows assassinations that eliminated nearly all of Hezbollah’s top leadership and displaced hundreds of thousands of the group’s supporters, will undoubtedly add to the chaos and fear within its support base from Hezbollah.

But experts say it is unlikely to harm Hezbollah’s finances on its own.

Al-Qard al-Hasan sought to reassure customers, saying in a statement late Sunday that it had evacuated all its branches and moved gold and other supplies to safe areas.

Lebanese economist Louis Hobeika said destroying al-Qard al-Hasan branches will have no effect on Hezbollah’s financing as the money comes from Iran and wealthy supporters around the world. The group’s salaries are known to be paid in cash in dollars.

“As long as Iran’s allies and Hezbollah fund the group, it will not be affected,” Hobeika said, adding that the flow of “bags of cash” from abroad will continue as in the past.

Lina Khatib, an associate fellow at Chatham House who focuses on the Middle East, said al-Qard al-Hasan clients remain confident that “Hezbollah will be able to compensate them for their losses.”

Khatib noted that al-Qard al-Hasan’s activities, like those of any financial institution, are not limited to the physical assets targeted by the attacks.

A Lebanese woman who gave only her first name, Zahraa, for security reasons, said she needed cash and earlier this year deposited a gold chain and several rings in exchange for an $800 loan. The woman said she could get it in monthly installments of $50 refunded.

“I don’t care if I get the gold or not, at a time when men are sacrificing their souls in southern Lebanon,” Zahraa said, referring to Hezbollah gunmen fighting invading Israeli forces.

Who was the murdered Hezbollah financier?

Israel began going after Hezbollah’s finances earlier this month when an Israeli airstrike destroyed the top two floors of a building in southern Beirut, killing Mohammed Jaafar Qassir, who was charged by the US Treasury Department and Israel was accused of transferring hundreds of millions of dollars from Iran to Hezbollah over the course of the month. year. The US had offered $10 million for information that would lead to the disruption of Hezbollah’s financial mechanisms.

The U.S. Treasury Department said Qassir provided financing for Hezbollah operations through a number of “illegal smuggling and procurement activities and other criminal enterprises.”

It added that Qassir was also a crucial conduit for financial payments from the powerful Quds Force branch of Iran’s paramilitary Revolutionary Guards, which are used to finance Hezbollah’s activities.

The Israeli military said Qassir was in charge of Hezbollah’s Unit 4400, which ships weapons from Iran to Lebanon, and oversaw Hezbollah’s development of precision-guided missiles.

Hezbollah made no comment on Qassir’s killing.

Days after Qassir was killed in Beirut, an airstrike in Damascus, Syria, blamed on Israel, killed his brother Hasan, who was married to Nasrallah’s daughter, Zeinab.

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Associated Press writers Adam Schreck in Jerusalem and Mohammad Zaatari in Sidon, Lebanon, contributed to this report.