“I am personally completely shocked,” a Western diplomat told Al Jazeera on Friday.
In a telephone interview with Al Jazeera, Wazni said that A&M informed him on Friday that he had lost confidence that he would ever receive the documents he needed from the central bank in about two months. and a half after signing a contract to start the audit.
Two weeks earlier, Wazni announced a three-month extension to BDL’s deadline to provide A&M with all the information it needed. BDL answered less than half of A&M’s questions, citing Lebanese bank secrecy laws.
I am surprised by their decision
Lebanese Acting Minister of Finance Ghazi Wazni
« [A&M] said they were sure that during these three months they would not get the documents to do their job and demanded the termination of the contract, ”Wazni told Al Jazeera. “They should have waited because there were proposals underway to lift bank secrecy laws. I am surprised by their decision.
Nasser Saidi, former vice-governor of the central bank, said the decision was likely based on considerations of A&M’s image.
“Incredibly, this company cares more about its own reputation than Lebanon cares about its reputation,” Saidi told Al Jazeera. “They are professionals, they wanted to do professional work, they were prevented from doing it and now we are back to square one.”
He said that the fact that BDL relies on bank secrecy laws to withhold information was “a pretext” and that neither the central bank nor the finance ministry had “any willingness to undertake the audit. forensic ”.
now we are back to square one
Nasser Saidi, fmr vice governor, Banque du Liban
The BDL’s claims have also been discredited by senior political and judicial officials, including the Prime Minister, the Minister of Justice and the prestigious Beirut Bar Association.
“I think the laws are good,” Acting Justice Minister Marie-Claude Najm told Al Jazeera at the end of October. “We are talking about the money of the people and the state – if you can’t investigate it, what can you do in a country? This would mean that there are institutions above the law and the accountability. ”
Najm and Acting Prime Minister Hassan Diab accused central bank governor Riad Salameh, who has held the post since 1993, of obstructing the audit to protect the interests of the country’s political and financial elite .
“Riad and the big boys behind him [killed the forensic audit]. As long as it’s there, it protects the system, ”a financial source with first-hand knowledge of the process told Al Jazeera.
Too big to care
Lebanon’s deep financial crisis has its roots in decades of alleged corruption and mismanagement by a group of armed businessmen and faction leaders who entered government after the country’s civil war ended in 1990.
In October 2019, the country was swept away by massive protests calling for the withdrawal of this ruling class, fueled by the collapse of the country’s economy which caused the currency to decouple from the peg of the two-year old US dollar. decades.
The Lebanese pound has since lost more than 80% of its value against the greenback. Half of the population fell below the poverty line.
Yet despite this downward spiral, repeated attempts by the Diab government to meet the conditions set by the international community have been defeated.
An attempt to approve capital controls limiting money transfers abroad – in effect an attempt to legalize measures already implemented by private banks at their own discretion – failed when Wazni withdrew the draft. law under the direction of President Nabih Berri, who appointed him.
Berri, who heads the Amal movement, which holds the most Shia seats in parliament, is a leading figure in the country’s old guard who has held his post since 1992.
The cabinet’s financial bailout – which aimed to shift the losses of the financial system onto banks and large depositors, rather than small depositors – was delayed by a so-called parliamentary “investigative” committee of MPs representing the elite, many of whom risked losing out on their own.
The plan was never implemented.
Now, it looks like forensic auditing is taking a similar route.
It has been facing hurdles since April, when it was approved by the cabinet. As of July, no contract had been signed, in which case Wazni admitted his backers – a reference to Berri – were against the audit.
Wazni then said the issue was related to alleged Israeli ties to Kroll, the renowned forensic audit firm that the firm decided to retain for the post. Kroll was therefore fired, and at the end of July the firm again agreed to perform the audit, this time with A&M, a company not specializing in forensic auditing.
Wazni then signed the contract with A&M in September.
The outgoing finance minister told Al Jazeera he believed “70%” of the contract could be implemented without an amendment to Lebanese bank secrecy laws – a staggering admission.
The company will now be paid $ 150,000 for the services rendered. Wazni said he would meet with the president and prime minister on Saturday to decide on the way forward.
Mike Azar, senior financial advisor and expert on the Lebanese financial crisis, believes that the audit would not only have revealed potential crimes and frauds committed over the decades, but enabled a detailed diagnosis of what went wrong in the financial system Lebanese.
“The loss of the audit is a loss not only in terms of fighting corruption and potential crimes that people deserve to know about… but also a very important part of any effective and optimal financial recovery plan for them. to ensure that the problems of the past do not happen again, and to strengthen institutions, ”Azar told Al Jazeera.
Saidi said: “We can still save Lebanon, but what is incredible is that despite the willingness of the international community to help, and despite the willingness of the IMF and the World Bank to help, the leaders Lebanese have effectively refused this aid.
UN Special Coordinator for Lebanon Jan Kubis said Friday in a tweet: “Why it seems [sic] that foreigners are more concerned about the well-being and fate of Lebanon and its people, more alarmed by lack of action and procrastination than the country’s political elites?
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