Lebanon’s anti-corruption policies heed interests of Bassil, Hezbollah

Lebanese political sources say the probe of the Central Bank is actually part of an ongoing plan target Central Bank Governor Riad Salameh
Wednesday 22/07/2020
Lebanese President Michel Aoun, center, chairs a cabinet meeting, at the presidential palace, in Baabda, Lebanon, July 21. (AFP)
Lebanese President Michel Aoun, center, chairs a cabinet meeting, at the presidential palace, in Baabda, Lebanon, July 21. (AFP)

Beirut – Under the chairmanship of President Michel Aoun in Baabda Palace, the Lebanese Council of Ministers approved Tuesday the finance minister’s proposal to assign Alvarez & Marsal firm to conduct a forensic audit of the Central Bank.

Finance Minister Ghazi Wazni will have to submit the draft contract to the Council of Ministers for final approval within one week.

Prime Minister Hassan Diab noted that the government’s primary concern is containing the repercussions of the country’s social, living and economic crisis by tackling structural imbalances. He announced that the decision to conduct a forensic audit of the Central Bank will be fundamental to enacting reforms, adding that “this will be a historic decision in Lebanon, and it will constitute a fundamental shift in the course of exposing what happened on the financial level of waste and theft.”

Minister of the Displaced Ghada Shreim congratulated the Lebanese people on what she described as “a historic achievement.”

“Congratulations to Lebanon and the Lebanese Council of Ministers for the approval of the forensic audit,” she wrote on Twitter.

While those close to the government view the move as an important step to fight corruption and hold to account those responsible for the worsening economic, some political parties believe the move was merely an attempt by those in power to settle scores and divert blame.

Lebanese political sources say the probe of the Central Bank is actually part of an ongoing plan target Central Bank Governor Riad Salameh and paint him as solely responsible for the country’s economic downturn.

The same sources said authorities have also pushed several banks to declare bankruptcy ahead of efforts to restructure the Lebanese banking system by establishing five new banks loyal to Hezbollah and the Free Patriotic Movement led by Gebran Bassil.

This move comes after Judge Faisal Makki issued an order to freeze Salameh’s assets on Monday after a lawsuit was filed against him by lawyers who are part of  the activist group “The People want to reform the system.”

Salameh has been accused of undermining state finances by inciting people to withdraw deposits, selling state bonds, committing fraud and embezzlement and neglecting his duties.

Although many reports indicate that Hezbollah ministers have refused to back the audit, political sources believe that if the Shia party was really against the step, they would have blocked the cabinet from approving the finance ministry’s proposal.

Lebanese sources confirmed that the cabinet’s decision to green-light the Central Bank audit shows that the authorities, which are accused of being controlled by Hezbollah, are ignoring the electricity crisis that drove up public debt. Bassil has been accused of involvement in the crisis for some 12 years, either directly or through his allies.

Before approving the audit, a meeting between Parliament Speaker Nabih Berri and Bassil led to an agreement that a firm conducting forensic financial audits should be assigned to the bank.

Observers believe that the Diab government is taking steps in the wrong direction, overlooking the interests of Hezbollah and Bassil, who was present when it appointed a new board of directors to control the state-owned electricity company.

Diab was unable to fulfill his promises, especially after Hezbollah and the FPM saved Michel Aoun and Bassil with the cabinet’s approval of the Selaata (Bassil’s hometown) power plant project.

Bassil strongly insisted on securing the power plant. The Lebanese president, in turn, prioritised the issue given his desire to find stable funding for his party.

Lebanon’s cabinet also approved plans to increase measures to curb the spread of COVID-19 and address its economic impacts.

The council also approved mandatory vehicle and cargo inspections at Lebanese border facilities, but observers question whether it will do enough to curb Hezbollah’s smuggling.

Many observers said they were sceptical of the new measure’s efficacy because of recent developments, such as Hezbollah’s ability to recover the remains of seven members of its forces who fought in the Syrian war despite the official border closure, according to an investigation published on the US Atlantic Council’s website. One of the report’s sources stated that “Hezbollah uses an official crossing,” while another said they rode on “special routes” away from the border checkpoint.

It also noted that “four sources close to Hezbollah, including a fighter who returned from Syria in January, said the Lebanese border was not closed for the party’s use.”

“The borders are closed to you only,” said a Hezbollah fighter from Beirut.