Hezbollah’s hidden state

In Lebanon, Hezbollah’s power is not only measured in weapons. It is also embedded in paperwork: ministry contracts, charity registrations, public grants, procurement files and emergency aid programs. Behind the language of social assistance and reconstruction lies a more serious question: are public institutions helping finance, protect or legitimize networks linked to a sanctioned armed party?

The question is not rhetorical. Documents reviewed by The Beiruter, alongside official registration records and a structural analysis of Hezbollah’s network of affiliated organizations drawn from investigative sources, reveal a system in which publicly licensed associations, health institutions, and social service bodies serve simultaneously as welfare providers and as conduits for a sanctioned movement’s financial and political reach.

The architecture is methodical. Hezbollah has, over four decades, built a parallel state within Lebanon’s state one that mirrors official ministries in health, education, agriculture, reconstruction and emergency response, while remaining structurally connected to the party’s decision-making bodies. That parallel state does not merely coexist with Lebanon’s public administration: it intersects with it, at times managing facilities formally registered to the Ministry of Health, signing contracts with the Ministry of Labor, and receiving public-benefit designations that confer legal protections and access to government partnerships.

Hezbollah’s annual budget is estimated to exceed $1 billion, according to a study published in April 2026 by the Documentation Centre Political Islam, with approximately $700 million historically linked to Iranian funding and nearly 30 percent self-generated through illicit operations and civil society fronts. The remainder flows through a network of associations, religious charities, financial cooperatives, and affiliated municipalities many of them holding valid Lebanese government registrations.

The architecture of legitimate cover

The Beiruter’s investigative sources catalogue more than 200 Hezbollah-affiliated entities operating across Lebanon. They range from licensed charitable associations and medical centers to schools, scout troops, publishing houses, theater groups, and municipal bodies. A key distinction runs through the network: those entities formally licensed by Lebanon’s Ministry of Interior and Municipalities, and those operating without official registration a distinction that matters considerably when public funds are involved.

Among the licensed entities, the Islamic Health Authority stands out as the most institutionally penetrated. Established in 1984 as a field medical unit for Hezbollah fighters, it subsequently obtained an official NGO registration from the Ministry of Interior (permit No. 299/a.d., October 1988) and a public-benefit designation by ministerial decree in 1995. Today it operates more than 50 medical centers across Lebanon in Beirut, the south, the Bekaa Valley and the north and a fleet of over 240 ambulances, fire trucks and rescue vehicles.

What the directory makes explicit, and what Lebanese health records confirm, is that a significant portion of the Authority’s medical centers are formally classified as primary healthcare facilities belonging to the Ministry of Health. The Authority manages them. The ministry classifies them. The centers deliver services under a public mandate dispensing medication, many of them Iranian or Syrian in origin, free of charge while operating within an institutional structure that answers, organizationally, to Hezbollah’s Executive Council.

Multiple clinics operated by Hezbollah’s Islamic Health Authority are formally registered as Ministry of Health primary care facilities, according to the organization’s own internal directory.

Ragheb Harb Hospital in Toul, Nabatieh, illustrates the pattern with particular clarity. The facility was built under the direct auspices of Hezbollah’s Martyr Foundation, inaugurated with Iranian Revolutionary Guard financing, and contracted with Lebanon’s Ministry of Public Health, the Internal Security Forces, the Lebanese Army and the National Social Security Fund. It subsequently transferred ownership from the Martyr Foundation to the Islamic Health Authority, an intra-party transfer dressed in the language of institutional reorganization. It remains, on paper, a legitimate healthcare provider contracted by the Lebanese state.

A similar pattern governs the West Bekaa Hospital in Sahmour, originally established through the Supreme Islamic Shia Council, assumed by Hezbollah after 2000, completed and inaugurated in 2012, and contracted with the same public bodies. Salah Ghandour Hospital in Bint Jbeil was a Ministry of Health clinic built in 1978, developed under Israeli occupation, and seized by Hezbollah following the 2000 withdrawal. It now operates as a party-affiliated medical facility.

The budget: $1.1 billion and how it moves

The scale of the operation requires a precise baseline. Financial analysis drawing on international data and documented research estimates Hezbollah’s annual budget at approximately $1.1 billion. Iran provides roughly $700 million of that sum around 62 percent making Tehran’s contribution the structural backbone of the organization’s finances. A further $250 million is generated through what analysts describe as a parallel economy: smuggling networks, customs evasion, tax avoidance schemes and other illicit revenue streams. These flows represent a direct deduction from Lebanon’s legitimate economy.

On the expenditure side, the breakdown is instructive. Military spending absorbs the dominant share. Non-military operations social services, healthcare provision, educational institutions, media infrastructure and political administration account for an estimated $350 million annually. Salaries for fighters and reserve forces account for approximately $600 million per year, with monthly payments ranging between $400 and $800 depending on rank and responsibilities.

Hezbollah directly employs or financially supports between 70,000 and 80,000 individuals. Including their dependents, the total beneficiary base exceeds 400,000 people.

Hezbollah is estimated to directly employ or financially support between 70,000 and 80,000 individuals. When the dependents of those individuals are included, the total beneficiary base rises above 400,000 people a figure that analysts identify as a significant structural factor in explaining the party’s electoral durability. The social and financial apparatus does not merely serve its constituency; it binds that constituency to the organization through economic dependency.

The financial logic of disarmament, as documented research frames it, would be devastating to the network: full integration into the Lebanese state would eliminate the bulk of Iranian military funding and a substantial portion of the parallel-economy revenues. That $950 million, analysts argue, could flow instead into Lebanon’s formal economy. The inverse of that argument is equally precise: as long as Hezbollah’s weapons remain, Lebanon’s treasury is competing against an externally financed welfare state operating inside its own borders one whose non-military budget alone exceeds the operational capacity of the Ministry of Social Affairs.

Contracts, grants and the ministry signature

Beyond the health sector, the investigative question extends to ministries overseeing social affairs, public works, agriculture, education and displaced-person assistance. The Jihad al-Binaa Development Foundation among Hezbollah’s oldest affiliated institutions, founded by Iranian interests and receiving a public-benefit designation from the Ministry of Social Affairs in October 2000 (Decree No. 4277, signed by Minister Michel Moussa) built its operations on reconstruction, water, electricity and road services. It held formal contracts and managed projects in Hezbollah-controlled areas, including the Waad reconstruction project in the southern Dahieh following the 2006 war.

Jihad al-Binaa was placed on the U.S. Treasury sanctions list in October 2017. Its agricultural training arm, the “Shatla w Hirfeh” (Seedling and Craft) initiative, was subsequently launched in explicit response to those sanctions, migrating the organization’s training programs to online platforms while preserving operational continuity. Its director, engineer Mohammad Khanssa, continues in post. Its municipal partnerships, including signed cooperation agreements with Lebanon’s Ministry of Labor—formalized through its affiliated “Baraka Association” (permit No. 866, May 2012)—remained active after the parent organization’s designation.

The Baraka Association’s founding members included the director of Jihad al-Binaa’s Beirut operations and its agricultural engineer. Its cooperation agreement with the Ministry of Labor was signed after the sanctions designation.

The Baraka Association’s founding documents, filed with the Ministry of Interior, list as co-founders the director of Jihad al-Binaa’s Beirut and Mount Lebanon division, its development and cooperatives manager, and its agricultural engineer. The association’s representative to the government, Ali Zaatar, also serves as director of Jihad al-Binaa’s “Ardi” market in the Rouais complex and as coordinator of the Shatla w Hirfeh platform. The cooperation agreement with the Ministry of Labor was signed after the U.S. sanctions designation of Jihad al-Binaa itself.

This is the mechanism the investigation identifies as most legally exposed. When a Lebanese ministry signs a contract or cooperation agreement with an association whose founding leadership is drawn from a U.S.-designated entity, and when that association’s operational activities serve as a continuation of the designated entity’s programs, Lebanon is exposed to potential secondary sanctions risk under U.S. law and to reputational consequences with international financial institutions and donor states.

Al-Mabarrat and the ministry of social affairs

The Chatham House research institution has reported that Lebanon’s Ministry of Social Affairs funded Al-Mabarrat Charity Association, describing it as having come under Hezbollah control following the death of its founder, Grand Ayatollah Mohammad Hussein Fadlallah. Al-Mabarrat’s assets were frozen in Lebanese banks as of 2016 following a U.S. sanctions designation. The ministry’s continued financial relationship with Al-Mabarrat, if uninterrupted after that date, would represent a direct instance of public funds reaching an entity under active American sanctions—precisely the exposure this investigation examines.

A second case involves the Banin Charitable Association, which recent reporting alleges was assigned by a Lebanese ministry to manage a major displaced-person aid center in Beirut. If confirmed, the arrangement would raise comparable questions about the distribution of aid through Hezbollah-linked networks at a moment when Lebanon’s handling of displacement and the conditions attached to international humanitarian funding is under heightened international scrutiny.

The financial infrastructure: Qard Al Hasan and the party bank

Hezbollah’s financial parallel state extends beyond charitable associations into a quasi-banking system. The Qard al-Hassan Association formally registered with the Ministry of Interior since December 1987 (permit No. 217/a.d., signed by Interior Minister Abdullah al-Rassi), granted public-benefit status in 1994 (Decree No. 5829, signed by Social Affairs Minister Shahi Barsoumian) functions as the party’s primary lending institution. By its own figures, it has issued approximately 1.9 million loans since its founding, with cumulative disbursements exceeding $4 billion.

The association offers gold-secured loans, membership-based lending, ATM services, and a mobile banking application. It operates its own credit card system. Its executive director, Adel Mansour, leads what amounts to an unlicensed bank operating under Lebanese nonprofit laBanque du Liban has closed its accounts at licensed commercial bankswhile continuing to receive deposits from Hezbollah supporters and diaspora donors through a dedicated account number (1-0-32-814 in Qard al-Hassan’s system, as listed in association registration documents). The U.S. Treasury sanctioned the institution in May 2021.

The Imam Khomeini Supply Foundation—registered as the “Islamic Charitable Committee for Supply” (permit No. 85/a.d., March 1988; public-benefit designation October 1994) distributes food subsidies, medical assistance, orphan support and housing aid to Hezbollah’s constituency through what is internally described as a “Sajjad card,” a subsidized consumer credit instrument named after a Shia imam. Banque du Liban closed its commercial banking accounts. It is currently headed by former member of parliament Mohammad Birjawi.

Unit 900 and the coordination of state penetration

The structural analysis of Hezbollah’s military-security apparatus, as documented in The Beiruter’s investigative sources, contains a unit whose mandate bears directly on the investigation’s core question. Unit 900described as a specialized security group whose members carry identity cards issued by an official security body affiliated with the party is identified as the unit responsible for coordinating Hezbollah’s activities within Lebanese state institutions. It is led by Khader Youssef Nader, known by the operational alias “Azz al-Din.”

Its existence suggests that the penetration of Lebanese ministries, procurement committees and public bodies is not incidental but structured a deliberate operational function assigned to a named security unit within the party’s military council. The implications for the central investigative question—who signs the files, and who coordinates the approvals are significant.

Unit 900 is identified in The Beiruter’s investigative sources as responsible for coordinating Hezbollah’s activities within Lebanese state administrations.

The oversight failure: Lebanon's court of audit

Lebanon’s Court of Audit bears legal responsibility for overseeing public expenditure and the transfer of treasury funds. Its mandate covers precisely the category of transactions this investigation examines: grants to registered associations, ministry contracts with NGOs, and the disbursement of emergency aid through third-party bodies. That mandate has not been consistently enforced.

The Court of Audit’s structural limitations are well documented: inadequate staffing, incomplete access to ministerial data, and in the view of governance analysts—a political environment in which asserting jurisdiction over Hezbollah-adjacent entities carries institutional risk. Lebanon’s Anti-Money Laundering and Counter-Terrorist Financing enforcement framework has been repeatedly cited by the Financial Action Task Force for deficiencies. As the Khatib-Visser study published by the Documentation Centre Political Islam in April 2026 observes, once funds reach Lebanon through its weak AML/CFT environment, tracing them becomes extremely difficult.

This is the final layer of the architecture: a sanctioned party, a network of licensed associations, ministry contracts signed by named officials, a quasi-banking system operating outside commercial regulation, and a judicial oversight body that has not systematically investigated the intersection. The paperwork, meanwhile, accumulates.

Mahdi scouts:The licensing of indoctrinatiom

Not all public penetration is financial. The Mahdi Scouts, Hezbollah’s paramilitary youth organization, received formal state recognition through a decree signed by Minister of Education Zaki Mzbodi in September 1992 (Decree No. 563). A companion women’s scout association received its license in 2005 from then-Minister of Youth and Sport Ahmad Fatfat (License No. 112/1/2005). A professional training school for the scouts was formally authorized by Decree No. 3248, dated April 2016, signed by all ministers of the Tammam Salam government in the absence of a sitting president.

The scouts currently claim approximately 75,000 registered members, 40 percent female. Their organizational head, Sheikh Nazih Fayyad, answers to the same Executive Council structure that oversees Hezbollah’s financial, military and political operations. The state’s licensing of the scouts constitutes a formal public endorsement of a Hezbollah institution one whose membership pipeline feeds directly into the party’s mobilization and recruitment apparatus.

The Islamic Religious Education Association (permit No. 68/a.d., amended in 1988) publishes religious textbooks used in official Lebanese state schools in Shia-majority areas, under the direct supervision of Hezbollah deputy secretary-general Sheikh Naim Qassem. The state distributes curricula whose doctrinal content is approved by a sanctioned organization’s second-in-command.

What the files would show

The central evidentiary task this investigation has outlined and which public-record access, judicial file requests and parliamentary interrogation could confirm or refute—is whether ministry-level disbursements have reached the entities described above, and on whose signature.

The identities of relevant officials are traceable. The Hezbollah organizational directory names, for each affiliated body, its founding ministers, the ministers who granted public-benefit status, and the decree numbers under which those designations were issued. Minister Abdullah al-Rassi signed founding permits for the Islamic Health Authority, Qard al-Hassan, the Martyr Foundation, and the Imam Khomeini Supply Foundation in the late 1980s. Minister Michel Moussa signed the public-benefit designation for Jihad al-Binaa in 2000, the same year he served as Minister of Social Affairs.

Whether subsequent ministers and the directors-general and financial controllers who countersigned disbursement orders were aware of the sanctioned status of these entities’ successors and affiliates when processing payments is a question the Court of Audit is equipped to answer. Whether it has done so is a question this investigation will pursue.