Lebanon's political and banking systems under mounting pressure

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2023-04-12 | 04:48
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Lebanon's political and banking systems under mounting pressure
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Lebanon's political and banking systems under mounting pressure

Lebanon's political and banking system is under mounting pressure to confront a crisis that has been ongoing for over three years.

The system has been in a state of denial, but now it must try to control the torrent of allegations related to the case of Riad Salameh, the Governor of Lebanon's Central Bank, and the scandals that are beginning to emerge involving names from the ruling political system.

This article was originally published in and translated from Lebanese newspaper Nidaa al-Watan. 
The French judiciary's accusation of Marwan Kheireddine, former Minister and the head of  Al-Mawarid Bank, is not just an external judicial detail.

An informed source indicated to Nidaa al-Watan that the proximity of the official accusation against "the Governor" is the beginning of a loud condemnation of a system that has nurtured and protected Salameh, using depositors' money to sustain its corrupt practices, squandering $100 billion on political and banking corruption, the scandals of which are beginning to spill out in Europe.

Meanwhile, during his recent visit to Washington, the US Treasury informed Deputy Speaker Elias Bou Saab about enough evidence of banking corruption.

It is known that the Treasury has complete files on the intersection of politicians' and bankers' interests and how it has come at the expense of the deposits of the Lebanese.

However, the Americans are waiting to see the outcome of the European investigations.

Furthermore, the name of caretaker Finance Minister Youssef Khalil mentioned in the allegations, if confirmed, would be unprecedented in Lebanon's history. Khalil could be accused of covering up suspicions of embezzlement, money laundering, and obstructing justice to protect Salameh and others.

On a related note, investigations into the disclosures of operations, accounts, and transfers reveal a transfer from Mikati company to a company owned by the Salameh family, and the reason for this transfer is currently unknown.

Suspicions surrounding the prices of some deals, most of which were staged at the Bank Audi, have arisen. The bank has become known due to the numerous intersections between bankers and politicians in operations that are being gradually revealed.

Furthermore, this comes to complete the exposure of this bank's role in the country, especially abroad, where it manages funds for top-tier politicians and partnerships with individuals such as the son of Riad Salameh and the son of a former high-ranking security official. Other banks associated with political families, such as the Bankmed and the Hariri family, are also named in the investigations.

Moreover, the judicial system in Lebanon is no longer immune to external measures against it after European investigators found that judges, who are supposed to serve justice, pledge to serve the safety of Salameh and the system that protects him.

Some sources also add that "condemnation of the Lebanese judiciary has also appeared in the indictment of Kheireddine, who was found to have connections to a senior judge who tried to protect him in one way or another," according to legal sources in Paris. 

The same sources mentioned that the expected European allegations would confirm other condemnations of the Lebanese judiciary, whose judges are maneuvering to avoid embarrassing politicians and bankers involved in the crisis that has led to the loss of Lebanese deposits and destroyed the savings of an entire generation.

It is worth mentioning that the European investigators who are expected to arrive in Beirut by the end of April have requested to hear from Raja Salameh, Marian Houwayek, Youssef Khalil, Raja Bou Oussayli, Walid Naqfour of Ernst & Young, and Nada Maalouf of Deloitte, as both companies are involved in the permanent auditing of the Central Bank of Lebanon.

On another note, Berri called the parliamentary committees to hold a session on Wednesday, with eight proposals on their agenda, the most prominent of which is "the proposal of a law aimed at opening a new credit in the 2022 budget worth 1.5 trillion Lebanese pounds (15 million dollars) to cover the expenses of the municipal and mukhtars' elections for 2023.

But where does the caretaker cabinet stand on conducting these elections?
 
Some sources stated that the meeting between caretaker Prime Minister Najib Mikati and Interior Minister Bassam Mawlawi tackled the election preparations.

Additionally, Mawlawi had previously stressed that the ministry is ready to conduct these elections.

Regarding the cost of the elections, Mawlawi clarified that "the state will provide some funding, while some money comes from the UNDP, and the state should secure the rest through special drawing rights (SDR) from the International Monetary Fund (IMF)."

Whoever spent 5 billion dollars since taking over the government in early September 2021 will not be burdened with 15 million dollars if they did not want to instruct the Central Bank to finance these elections.

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