How ‘investors’ in Gaza enabled Hamas’s growth - opinion

In the ongoing aftermath of the Hamas-led October 7 terrorist attacks, the international community continues to turn a blind eye to arguably its most damning and damaging failure: willful blindness toward those who built and enabled Hamas’s terror infrastructure while posing as partners for peace and development.

For more than a decade, Western governments, international organizations, and investment funds have desperately chased the myth of moderation in Gaza: the belief that so-called “moderate Palestinian investors” could foster economic growth independent of Hamas’s influence.

This search led them to figures like Bashar Masri, a Palestinian-American billionaire whose companies received substantial funding from the US Agency for International Development, the World Bank, the EU, and private investors to develop Gaza’s infrastructure.

But as we’ve seen in the devastation of October 7, the myth collapsed, revealing a calculated deception that enabled terror under the guise of economic development.

As detailed in a new lawsuit that Osen LLC filed together with three other prominent law firms on behalf of dozens of families of American victims of the October 7 attacks, this facade of legitimate business concealed a far darker reality.

Bashar Masri

Masri and his companies allegedly worked hand-in-glove with Hamas to facilitate their massive tunnel network – the same “Gaza Metro” system that played a central role in the deadliest attack in Israel’s history and the largest massacre of Jews in a single day since the Holocaust.

Masri has since resigned from the board of Harvard University’s Kennedy School of Government in the immediate aftermath of the lawsuit’s filing, an important first step toward holding him and his companies accountable for their alleged role in supporting Hamas’s Gaza tunnel infrastructure.

The tunnels beneath Gaza are not the improvised escape routes depicted in classic films like The Great Escape. They are sophisticated, concrete-reinforced structures designed to house fighters and weapons for extended periods. These engineering marvels require electricity, ventilation, and careful coordination with the residents of the buildings above them.

Without proper engineering integration, Hamas tunnels constructed in dense urban areas can compromise the structural integrity of the buildings overhead and collapse the passageways below. Such elaborate networks could often not exist without the cooperation of Gaza’s major property owners and developers, including Masri’s companies.

According to the lawsuit, the Gaza Industrial Estate – originally funded by USAID as an economic development initiative adjacent to the Karni Crossing not far from Kibbutz Nahal Oz – became a crucial Hamas operations hub. Evidence in the complaint suggests that while the GIE housed legitimate businesses, Hamas also used it to develop underground attack tunnels.

Hamas even burrowed one such terror tunnel under the border with Israel before it was discovered and disabled by the IDF in 2018.

Not long afterward, the lawsuit alleges that Masri secured funding for a “green energy” solar panel project at the GIE paid for by the World Bank’s investment arm known as the International Finance Corporation, but it ended up powering Hamas’s underground terror network below the GIE.

When Israel cut power during the conflict, these supposedly humanitarian solar installations initially kept the tunnels operational.

In May 2022, Masri personally presided over the signing of a joint venture agreement with Hamas officials to rebuild parts of the Gaza Industrial Estate – an event consistent with what the complaint alleges was a longstanding pattern of using the very hotels and businesses celebrated as signs of progress in Gaza as cover for Hamas’s terror infrastructure.

The uncomfortable truth is that there is no way to do business in a territory controlled by a terrorist organization without becoming complicit in its terrorist activities, and those willing to invest in Gaza under Hamas rule are often willing accomplices to its efforts.

The international community’s fantasy that it can foster economic development in Gaza while it is controlled by Hamas is not just naive; it has proven dangerously counterproductive.

Both the Trump administration (and the Biden administration before it) repeatedly stated that Hamas should not be allowed to play any role in governing Gaza in the future. But how would this be accomplished without relying upon local contractors who have been complicit in assisting Hamas for decades?

The case against Masri and his companies is not just about seeking justice for American victims of October 7; it is about exposing the mechanisms through which seemingly legitimate businesses became instruments of terror.

Masri – who benefits from investments from the Soros Economic Development Fund, the US International Development Finance Corporation, and the United Church of Christ Pension Board – represents precisely the kind of figure the international community has long championed as a partner for peace.

But the lawsuit tells a different story. His PADICO-owned hotels hosted key Hamas events and served as venues for Hamas leaders, including Yahya Sinwar, to meet foreign dignitaries. Meanwhile, the supposedly legitimate businesses operating in his industrial zone allegedly provided cover for Hamas’s attack tunnel infrastructure.

For years, Israel has struggled to balance its security concerns with the recognized need to provide humanitarian assistance to the Palestinian territories. Accordingly, Israeli policy has been to seek ways to improve Palestinian economic conditions, including issuing work permits, permitting international investments, and even encouraging green energy initiatives that reduced Palestinian reliance on Israeli electricity.

In addition to fostering greater Palestinian economic development, most Israeli policymakers believed before October 7 that Hamas was largely deterred and was instead focused on governance and improving Gaza’s economy.

But the reality was clearly the opposite, and as leaders debate Gaza’s future, they need to face a critical reality: Pouring money into Gaza’s reconstruction without first completely destroying Hamas will only lead to the same outcome as before. Whether it funds tunnels, rockets, or other weaponry, international aid under Hamas’s watch inevitably strengthens its grip on power and enables future terrorism.

Those who have actively helped Hamas are not “moderates” – if that term is to retain any meaning – and they need to be held accountable. The myth of moderation that once cloaked these actors can no longer be allowed to obscure the truth or excuse complicity.

The US Congress passed an amendment to the Anti-Terrorism Act to provide American victims of international terrorism with “the broadest possible basis… to seek relief against persons, entities, and foreign countries… that have provided material support, directly or indirectly, to foreign organizations or persons that engage in terrorist activities against the United States.”

That is what the October 7 families who have joined this lawsuit intend to do – follow the evidence and demand accountability – in the hopes that the international community does not return to its pre-October 7 mindset and unintentionally pave the way for the next catastrophe.

Now, Western governments, international development organizations, and investors must confront the uncomfortable truth: Economic development in Gaza cannot be entrusted to those who were complicit in building Hamas’s terror infrastructure.

We also need a full accounting of who received international aid, where it went, and what role it played. Scrutiny must replace wishful thinking. Accountability must replace appeasement. And justice – for the victims of October 7 – must be non-negotiable.

The writer is the managing partner at Osen LLC, a law firm that focuses on counterterrorism litigation. He serves as counsel for American families of October 7 victims in their lawsuit against Bashar Masri and his companies.