Since 2023, the Counter Extremism Project released a series of reports highlighting key aspects of the Houthi terrorist group’s operational structure: a structure that allows the organization to procure weapons and ammunition, suppress women, journalists, and religious minorities, systematically divert humanitarian aid, and exploit Yemen’s telecommunication infrastructure as a source of revenue and intelligence. This new blog series on the Houthi movement highlights the key points of CEP’s larger analysis,  beginning with the misuse of spyware by the Houthis, targeting humanitarian organizations in Yemen.

This second entry looks at the effects of the first successful drone attack of the Houthis on the city of Tel Aviv, Israel and the sources of funding which enable the Houthis to procure and develop their long-range strike capabilities.

The Recent Houthi Attack on Israel

The deadly Houthi drone attack on Tel Aviv on July 19th 2024 was an unprecedented event. Until this point, the Yemeni terrorist group had only struck Israeli territory once, when they hit an open area near Israel’s southernmost city of Eilat, a single very minor success after more than 200 attempts. Yet the long range Houthi drone that struck Tel Aviv, causing a fatality and several injuries, did not set off any warning sirens despite having to fly a significant distance over Israeli airspace. Was this the beginning of a new phase in Houthi attacks on Israel?

If the IDF had been unable to detect this UAV due to new stealth capabilities, there would be cause for more serious concern. However, according to the Israeli military’s statements, the modifications to the Sammad-3 UAV  which prevented its detection consisted of minor adjustments to expand the platform’s range. By charting a new and more circuitous flight path—one that required a range that Houthi UAVs were not previously known to possess—the Houthis were able to disguise the UAV as benign and penetrate Israeli defenses. 

While the loss caused by the strike is tragic, the attack did not indicate a major technological leap forward that would enable the group to launch additional successful strikes on Tel Aviv. The Houthis may try to develop new ways to surprise Israel, but this particular surprise should be considered a one-off. 

Of course, this may not provide much consolation to citizens or military personnel from the U.S., UK, Germany, Israel, Saudi Arabia, UAE, and Bahrain, who are under constant threat of Houthi drone and missile attack.

Houthi Procurement

Militant and terrorist groups around the globe possess small arms, improvised explosives, and short-range unguided rockets, but what makes the Iran-backed terrorist groups throughout the Middle East uniquely dangerous are their advanced arsenals. Tehran has provided the Houthis and other radical Shia terrorist groups like Hezbollah with stockpiles of long-range ordnances, some of which are precision-guided or capable of carrying explosive payloads of more than 500 kg. This class of weapons was previously the exclusive domain of a small number of nation-states. 

While the Houthis claim these platforms as their own and likely have a growing domestic military-industrial base thanks to support and guidance from Tehran and Lebanese Hezbollah, it is also clear that these weapons systems are replicas of Iranian platforms and that the Houthis are still dependent on Iran to deliver some of their most complex components. As CENTCOM commander Gen. Erik Kurilla noted in his testimony earlier this year, “we're basically fighting the Iranian weapons through the hands of the Houthis.” The Houthis utilize their procurement networks, which work in close coordination with their IRGC-QF suppliers, to smuggle Iranian weapons into Yemen.

Houthi Military Budget and Humanitarian Assistance

This begs the question, how does an organization like the Houthis that is ruling over 20 million Yemenis who have a GDP per capita below $500 also manage to afford advanced long-range weapons which can cost millions of dollars per unit? 

A major source of revenue for the Houthi organization, which prioritizes its war machine over the wellbeing of the people under its rule, is the massive international humanitarian aid effort dedicated to helping Yemenis. At around $2 billion per year, international assistance to Yemen likely accounts for more than 10% of Yemen’s total annual GDP of $17 billion (including both those areas controlled by the Houthis and those controlled by the internationally recognized government of Yemen as of 2024). Approximately three-quarters of this amount is directed to Houthi-controlled areas, in proportion with the percentage of the Yemeni population living under their control.

However, humanitarian aid organizations’ lack of adequate transparency and oversight means that there is minimal, if any, reliable information indicating that aid reaches Yemen’s neediest. Meanwhile, the Houthi regime does all it can to monitor, control, disrupt and divert aid projects to line the pockets of regime officials and fund its own operations. Although a few top Houthi officials have been sanctioned for terrorizing aid workers and extorting humanitarian aid organizations, the fundamental problem of delivering aid in Yemen – lack of transparency and oversight – remains unaddressed.

Indeed, some of the funds being raised by humanitarian organizations are in fact subsidizing Houthi attacks on the donor countries. For example, the U.S. spends hundreds of millions of dollars per year to support the activities of the UN and international humanitarian organizations. However, in their annual reports and audits, some of these same organizations minimize the fact that their evaluation and monitoring mechanisms for the delivery of aid in Yemen are largely dysfunctional. What this means in practice is that most (if not all) humanitarian organizations operating in Yemen cannot provide estimates for how much aid was diverted by the Houthi terrorist group. In CEP’s recent report, we documented that the UK’s Foreign, Commonwealth and Development Office was unable to lower the diversion for its quarter-billion dollar aid program to its stated aim of 20% while in Saada province the diversion rate for WFP aid reached 80%.

While one might argue that it would be difficult to repurpose aid to fund the Houthi cause, it is important to note that the vast majority of aid delivered in Yemen takes the form of unconditional resource transfers. Resource transfers are intended to provide cash or essentials to Yemenis on the brink of disaster but are also at significant risk of being redirected towards Houthi aims, as cash can be used directly and essentials can be easily and quietly sold off to generate cash. Such highly fungible assets make up the majority of aid delivered to Yemen.

How then can we ensure that taxpayer dollars of U.S., UK, and German citizens are not ultimately subsidizing the increasingly dangerous Houthi weapons program? The answer is much greater transparency by UN and international humanitarian organizations regarding the problem of aid diversion in Yemen. If the humanitarian organizations cannot or will not provide the relevant information, donor countries should reconsider whether their funds are doing more harm than good when they flow out of sight and into Houthi-controlled areas of Yemen.