by Neville Teller
Lebanon is in the midst of a long-standing political impasse. It has a caretaker government and no head of state. In addition, its economy is close to collapse, while a corrupt political class is clinging to the power and influence it has exercised for generations. On top of all that, a financial scandal that had been simmering away for months has suddenly boiled over. A judicial delegation from France, Germany and Luxembourg are investigating accusations against the Governor of Lebanon’s central bank, Riad Salameh, who is accused of embezzling bank assets, money laundering and mismanaging public funds. On April 25, on the delegation’s third visit to the country, Lebanese judicial authorities agreed to cooperate with them.
It was in July 2020 that a group of Lebanese lawyers launched a formal accusation against Riad Salameh and his brother Raja of allegedly defrauding the central bank of more than $300 million (over NIS 1,000,000,000). The 72-year-old governor is accused of charging bond buyers a commission, described as a fee, and transferring the funds to a company owned by Raja which then laundered them across at least five European countries. Both Salameh brothers deny wrongdoing.
The European delegation had returned to Lebanon to interrogate suspects and witnesses. On April 25 Raja, the governor’s brother, claiming to be ill, failed to attend a scheduled hearing. It was this that apparently led Lebanese judicial officials and the European delegation to agree to amalgamate their separate investigations.
Reporting the affair, Reuters say that French court documents indicate that money from Raja’s company was used to make numerous real estate purchases across Europe and the UK. The Salameh brothers and an assistant, Marianne Houayek, have been charged with financial crimes in two separate cases in Lebanon, but have not yet been formally charged in the investigating European countries.
This financial scandal can only strengthen the persistent public accusations of corruption at the highest levels of Lebanese public life. With Hezbollah a major force in Lebanon’s political structure, they are scarcely surprising. For example, there continues to be no substantive progress in the inquiry into responsibility for the August 4, 2020 Beirut port explosion. Hezbollah and Hezbollah-allied individuals were fingered early in the investigation, but have been successful so far in blocking it.
The first investigating judge, who soon had named individuals in his sights, was removed, to be replaced by judge Tarek Bitar in February 2021. Like his predecessor, he was immediately faced with a series of legal challenges and complaints filed by some of the officials he intended to question. As a result, the investigation was suspended in December 2021. On January 23, 2023 Bitar attempted to restart the inquiry, and issued charges against current and former senior officials, including the public prosecutor at the Court of Cassation, Ghassan Oueidat.
On January 25, Oueidat imposed a travel ban on Bitar and charged him with “rebelling against the judiciary, and usurping power”. In early February, Bitar postponed the hearings he had scheduled for that month, reportedly until the dispute with Oueidat was resolved. In response to these developments, Amnesty International and Human Rights Watch repeated previous calls for the Human Rights Council (HRC) to establish an impartial international fact-finding mission into the port explosion.
Meanwhile nothing is being done to tackle Lebanon’s crumbling economy. The International Monetary Fund has offered a $3 billion bailout package, conditional on a host of structural and financial changes. But with the country lacking both a president and a fully empowered Cabinet, no progress has been made on reforms that could help remedy the situation. Without a political solution on the horizon, the Lebanese pound continues to depreciate – and with it the salaries and pensions of the country’s security personnel, public sector workers and military. On March 22, hundreds of soldiers and army pensioners mounted an unprecedented protest outside the prime minister’s headquarters.
The political impasse seems equally insoluble. Lebanon has had no effective government since Hassan Diab resigned as prime minister in August 2020, days after Beirut’s massive blast. It has had no head of state since President Michel Aoun’s term ended on October 31, 2022. The country is being run by way of a caretaker administration headed by Najib Mikati, Lebanon’s richest man. He was appointed prime minister by Aoun in September 2021, as the country struggled with a collapsing economy and the failure to achieve political reform.
One reason for Lebanon’s political crisis is that Hezbollah has infiltrated deep into Lebanon’s body politic and its administrative structure. Acting at the behest of its Iranian sponsors, Hezbollah’s influence on Lebanon has been, and remains, dire. One prime example is how it involved Lebanon in the Syrian civil war in support of Iran’s Islamic Revolutionary Guard Corps (IRGC). Upholding Bashar al-Assad’s regime was in Iran’s interest, never in Lebanon’s, yet its young men fought and died there.
Hezbollah is key to frustrating any agreement on Aoun’s replacement as president. Hezbollah and the Amal Movement party, which together constitute Lebanon’s Shia base, support politician Sleiman Frangieh. Despite Hezbollah’s best efforts on his behalf, vehement opposition from the majority of the country’s Christian, Sunni and Druze political blocs has left Frangieh short of the 65 votes required to be elected. Frangieh, whose grandfather served as president in the 1970s, is heir to an old Lebanese Christian political dynasty and a friend of Syria’s Assad.
Lebanon is without a proper government because it is without a president. After the parliamentary elections in May 2022, prime minister Mikati failed to form an administration that met with President Aoun’s approval, a constitutional requirement. When Aoun’s own franchise ran out without a resolution, the existing government went into caretaker mode.
A fair number of outside interests are trying to devise ways of extricating the country from its most pressing difficulties. Yet to succeed the impetus for change and reform must come from Lebanon itself. Somehow the power and self-interest of the old establishment has to be overcome.