The negotiations taking place in Vienna to revive the Iranian nuclear deal have made Udi Levy go back in time to July 2015. That year world powers signed the original agreement with Tehran, eliminating "Project Cassandra" – the pinnacle of Levy's security career – in the process.
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Back then, Levy headed a secret Mossad unit that specialized in economic warfare. It worked together with the Israel Police and the United States Drug Enforcement Administration to undercut Hezbollah funding from drug running.
For almost a decade, from 2006 to 2015, American agents – with the help of Israeli intelligence – conducted drug busts, confiscated billions of dollars, arrested senior Hezbollah members, and seized the terrorist organization's cash pipeline.
But then China, France, Russia, Britain, and Germany – led by the US – reached an agreement with the ayatollahs, and in order not to upset Iran – Hezbollah's "mentor" – decided to end "Project Cassandra."
"To this day, it hurts me, because I believe that in modern times, economic warfare is the ultimate weapon," Levy, 59, told Israel Hayom. "We wanted to continue at full speed, but the Americans said, 'There is an agreement with the Iranians, it will hurt [then-US President Barack] Obama.' Politics. And you'd think that Israel would get involved. 'If Americans don't want this, then we are moving on.'"
Israel filmmaker Duki Dror has recently created a documentary about "Project Cassandra" for Kan 11, which will air on March 16. But in order to understand the world of economic warfare, one must first understand Levy.
He began his career in the Israel Defense Force's elite 8200 intelligence unit. Immediately after the First Intifada, which ended in 1993, Levy was recruited by the Civil Administration in Judea and Samaria, where he became an Arab affairs adviser under the Defense Ministry.
"This function was created after the Defense Ministry, the military and the government learned the lessons. They understood that the Shin Bet [security agency] deals with counter-terrorism in the field and the military deals with intelligence gathering, and there should be a function that deals with the Palestinian population. The idea was that if something was developing, we would be able to tell in the early stages."
During his work for the Judea and Samaria Civil Administration, Levy studied the Hamas terrorist organization, particularly their Modus operandi.
Q: Is this when you began to specialize in economic warfare and terrorism?
"You cannot build such a mechanism unless you have millions of dollars, and Hamas has built a huge mechanism of funds. Today, it has companies abroad that generate about $500 million annually. Legitimate companies that deal with real estate, pharmaceuticals, and trade, among other things. And you, as an Israeli, can't take it unless you prevent the madness.
"The common perception is that suicide bombers need to be stopped, but these are the easiest people to recruit. They are told, 'In your death, you will find glory and your family will be taken care of.' If we want the fighting to stop, we must stop the people who make such promises.
"I discovered that Hamas was getting millions of dollars that enabled it to build its vast infrastructure. I presented the data to those in charge at the time, and they were intrigued. We met with Shin Bet, and the late Gideon Ezra, who was the deputy head of the agency, said at the time, 'I am not interested now in dealing with associations, clinics, and schools. I want to thwart the [terrorist] groups.
"I was a young IDF major at the time and replied, 'You do not understand that this system will constantly produce people, and you will have to constantly fight them. Let's fight the infrastructure.' But the Shin Bet said, 'If the Civil Administration and the Coordinator of Government Activities in the Territories feel like dealing with this, then they should do so."

In 1993, the Civil Administration operation "Biur Chametz" ("Burning the Chametz", a reference to the removal of leavened foods carried out ahead of the festival of Passover) aimed at addressing, confiscating, or closing Hamas' assets that within the civilian infrastructure: mosques, associations, schools, and welfare institutions.
The legendary Meir Dagan, who was head of the General Staff's Operations Directorate at the time, heard about the young officer in the Civil Administration and asked to be briefed.
"Dagan, as much as he was a warrior, was also an extraordinarily open person," Levy recalled. "He understood that the IDF had a faulty concept. That infrastructure must be fought, otherwise, it will keep creating new soldiers for Hamas.
"When he was appointed adviser to the head of the Operations Directorate, he called me and said, 'I want you to come and brief the Deputy Chief of Staff Matan Vilnai on your work.' When I arrived, Vilnai told me, 'You are a young man, and I was a major general in the Southern Command. I think I know everything there is to know about Hamas. You have 20 minutes to convince me that there is something new to learn.' We ended up speaking for three hours.
"At the end of the meeting, he, 'I ask you to come every week for a briefing that I have with the Shin Bet and the Military Intelligence Directorate on Hamas.' At the time, I was not on good terms with Shin Bet. I said that hundreds of millions of dollars were funneled into Hamas, while the agency claimed it was only several million. I told Vilnai, 'You should know that if I attend the briefings, the Shin Bet will oppose me with all its might.' And that is exactly what happened.
"When I arrived at the first briefing, and the Shin Bet officers asked me what I was doing there, Vilnai said, 'This is the new adviser.' By the way, shortly after meeting with Vilnai, Dagan also took me to then-Prime Minister Yitzhak Rabin and asked me to brief him as well."
In 1995, Dagan retired from the IDF after 32 years of service and a year later began to work in the Counterterrorism Bureau.
"He called me in 1996 and asked, 'What are your plans?' I told him that I was already a lieutenant colonel, on route to becoming a colonel. But he asked me, 'Do you want to join the Counterterrorism Bureau, and continue building on your vision?' Sometimes in life, we make decisions based on our gut feeling, without thinking, and they turn out to be life-changing. I immediately said 'yes,' and began a two-fold job: as Dagan's personal assistant and the secret missions we conducted together – about which I cannot, of course, tell you – as well as the economic warfare I led against terrorist organizations."
Dagan resigned in 1999 due to a disagreement with then-Prime Minister Ehud Barak. Disappointed, Levy wanted to leave as well but was asked by Dagan to stay.
The two kept in touch and Dagan asked Levy to prepare documents on the war on terror, economic warfare, and Palestinian Authority policy for Ariel Sharon, who was running for premiership at the time.
In March 2011, Sharon was elected prime minister and decided to establish a special unit that focused on targeting terrorists' economic infrastructures. It was headed by Dagan and Levy was his righthand man. The unit originally reported directly to the prime minister and eventually became part of the Mossad intelligence agency.
"A few weeks ago, Israel was shocked by the NSO police spying scandal, but that's nothing compared to the powers Sharon gave the unit," Levy said. "We were allowed to get information from banks and all authorities in the country. We were allowed to use the authorities. We were allowed to act vis-à-vis any authority in the world. We only reported to Sharon, he was the only one to approve the activities, and the unit was clandestine.
"In the beginning, the defense establishment wanted us to fail. They didn't agree with our views. But slowly-slowly we built a concept. I brought in the Tax Authority, the Justice Ministry, the police, the Prison Service. These didn't want to talk with those, and those didn't want to meet with these. Civilian institutions have a lot of information, but no intelligence. Intelligence institutions have a lot of intelligence, but don't know what to do with it at all."

Sharon and Dagan's motivation, he explained was "to fight terrorism funding, but also their abhorrent hatred toward [then-PLO chairman] Yasser Arafat. Their goal was to destroy Arafat economically. Not the authority, but Arafat himself. We knew he had $6 million in Europe, the Arab countries, and Africa. That was the goal. You should have seen their faces when they spoke about Arafat, it was like speaking about Hitler."
In 2002, Sharon appointed Dagan as head of the Mossad, and he quickly drafted Levy to the agency's ranks, where he would head a new unit.
"The new unit dealt with economic warfare against terrorist organizations and countries that sponsor terrorism. We started with Iran. We expanded our work scope significantly. Meir wanted to add the economic aspect to everything, but the Mossad didn't understand, because the Mossad knows how to recruit and kill. But we produced results."
Q: Can you give us an example?
"We did tons of things, and it was all a secret. There were days when I felt like James Bond. We added as much as possible to the economic warfare mechanism. We filed lawsuits against entities that helped terrorist organizations transfer money, mainly banks around the globe. We released the dogs into the forest, gave them intelligence, and on behalf of the victims of terrorism, began to sue.
"Meir used to say, 'What is intelligence worth if you don't use it? Give it to lawyers to file lawsuits. Get on a plane and see the bank manager, show him these papers so that he will freeze [the bank accounts].' The unit gathered various information, and our approach was that we don't need to kill, [we] need to stop the money.
"For example, when Ehud Olmert became prime minister in April 2006, he was very devoted to this cause. There were days when I would sit in his office and he would ask me, 'How can I help you today?' I would tell him, 'I need you to connect me with this or that bank manager.' He would make a phone call to that person, and I would get on the plane with all kinds of intelligence information, sit with CEOs of banks all over the world and show them the material. At the end of the meeting, they would hug me and say, 'You've saved us.' Two days later, they would freeze the Iranians' assets.
"This is how deterrence should be done. Without killing, without being killed, without the world turning on us, and without IDF officers being investigated by the International Criminal Court."
After the 2006 Lebanon War, the Isreal Police provided the unit with intelligence that Hezbollah was funding its expansion from illicit drug sources, which paved the way for new operations and partnerships.
"Hezbollah recruited IDF officers – mostly Bedouins, but Jews as well – and gave them drugs in return for intelligence," Levy said. "The police, which busted the officers and the drugs, was the first one to discover this. The Israeli intelligence community insisted that this was incorrect, but I unequivocally said that Hezbollah had become a major global criminal organization, and Dagan agreed with me."
Levy interrogated Hezbollah prisoners jailed in Israel. The scop of the drug operation that unfolded, he said, was monstrous.
"Hezbollah was involved in drug trafficking globally. It gave us an idea of the money that they had access to. Hundreds of millions of dollars." He then contacted US Drug Enforcement Administration. "As it turns out, the DEA had a lot of information about drug smuggling that they hadn't linked to Hezbollah, and by us, it was the opposite. That's how we began working on the project together."
And thus "Project Cassandra" – named for the Trojan priestess in Greek mythology cursed to utter true prophecies but never to be believed – began.
"There was a need for such a project, because the world didn't treat Hezbollah as a terrorist organization, and we had a hard time dealing with its finances. We thought that if we could show everyone that it was a massive criminal organization, it would be a win-win situation. But to do this, we entered a very complex game in the US, where the FBI and the CIA are in charge of fighting the terrorists, and the DEA, a completely different body, is responsible for the war on drugs. The Mossad cooperated on the project with the FBI, CIA, and other agencies."

"The problem with Hamas was that for years, they only fought the organization's military wing, and no one touched the infrastructure, and today, Hezbollah has hundreds of companies abroad that make them money. It is insane how they planned it."
Q: Was Hezbollah concerned?
"Very, and first and foremost due to the financial aspect. It also completely undermined the organization's legitimacy in the West. It weakened it.
"At the time, Hezbollah was in quite the predicament. On the one hand, money from the Iranians dropped dramatically because of the sanctions and then began the campaign to undercut their drug revenues. The organization was in a crisis. Maintaining such an army, population, and global systems require hundreds of millions of dollars, as well as managing their fight against Israel. Unfortunately, our efforts were halted. Instead of suffocating Hezbollah's economic lifeline completely, it is now alive and kicking."
In January 2011, when Dagan resigned from the Mossad, Levy also asked to leave. But Tamir Pardo, who took over the agency, convinced him to stay.
As Iran and the powers were approaching a nuclear deal in 2015, "Project Cassandra" began to unravel.
"People who were involved in the project began to get hints from the US administration that they should stop," Levy said. "DEA officials were, told 'not to bother,' and the cooperation decreased. I am not allowed to visit the US to this day. They are very angry and claim that I acted against [President] Obama."
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The project might have remained as a file in the Mossad archives if not for Dror, who based his documentary series on it after reading a Politico article by Josh Meyer, who investigated how the Obama administration "let Hezbollah off the hook" when it came to drug trafficking and money laundering.
"I was convinced that 'Project Cassandra' had already been made into a movie and that lots of articles were written about it," Dror told Israel Hayom. "I got in touch with Meyer, a veteran and trustworthy journalist, who told me that after his article was published in 2017, he was accused of criticizing the Obama administration. Although [Donald] Trump was already president by then, the media opposed the story and it did not take off.
"I think the story has great public significance. It not only covers decision-making processes during the [original] Iran nuclear deal, but also the damage some of these decisions caused, enabling drug trade, terrorism, and international crimes. Americans invested millions in the project, hundreds of people and agents achieved great success and all of a sudden they were told to stop. This is something that must be exposed. To understand that some things that are truly important are deflected for the sake of politics, and the repercussions could be long-term."
The story of "Project Cassandra" may be over, as the lion's share of its operations is now headed by a special division in the Counterterrorism Bureau. Levy currently lectures at Bar Ilan University, in a program that focuses on radical Islam.
But what if the project was resurrected? "I meet people all over the world because I have accumulated a lot of knowledge on this issue," he said. "I wouldn't go back to that position because there is a lot of infighting, But I will always be willing to help."
Levy also believes the state has to up the stakes in terms of economic warfare.
"Look at all the different sting operations in the world, and think about what could happen if a state did that. The state should use all the tools at its disposal to defend itself. It should not be restricted by one concept. You'll see what happens once the Americans sign another deal with Iran – we will be left without tools. I can't see any prime minister launching any kind of operation, so the only way to significantly disrupt aid to Hezbollah and Hamas is through economic warfare.
"Everyone is using this language now, except Israel. There is no organization that you cannot topple and you can't convince me otherwise – the fact is that we've done it."