Threats to the central bank include imposing sanctions, according to Western officials, a rare move that the United States often imposes on its enemies in North Korea, Iran and Venezuela. Usually the financial audit examines and scrutinizes for evidence of fraud and other activities that could be used in the judiciary. Washington is using Lebanon’s need for urgent financial aid to obtain scrutiny and shed light on the central bank’s shadowy operations, one official said.
The audit efforts were unsuccessful this month when the agency that commissioned the process decided to withdraw due to what it said was not having access to the central bank’s records. Caretaker Prime Minister Hassan Diab said, “Today they thwarted a criminal audit,” after the Ministry of Finance announced on November 20 that the New York-based financial audit firm Alvarez & Marsal had withdrawn from work, citing unspecified parties in the country. “The wall of corruption is too thick and too high to be repaired,” Diab said. Current and former Western Lebanese officials said, “Political and economic influencing parties in Lebanon have obstructed international efforts to subject the Bank of Lebanon to a review from the top down.”
Among those obstructing the audit are the governor of the Banque du Liban and the Lebanese officials who oversee financial organizations who have ties to Hezbollah in a way that makes them vulnerable to US sanctions and America’s allies.
On a visit to Assistant Secretary of State for Political Affairs David Hale in August, he expressed his concern, saying: “There is a need for great focus on the central bank and a need to audit the central bank accounts so that we can understand exactly what happened there.”
The newspaper pointed out that “the Beirut port explosion, in which more than 178 people were killed, caused the ignition of the ammonium nitrate stored for a long time in one of its warehouses, which made the urgent need for urgent financial assistance.”
After months of wrangling over the central bank’s scrutiny that led to the failure of talks with the International Monetary Fund to provide a bailout for Lebanon. A former Finance Ministry official said, “A complete review is not in place as long as the bank’s governor, Riad Salameh, remains in his position for three decades. Salameh refused to comment on the newspaper’s questions, but denied the accusations about his relationship with corruption and Hezbollah.”
The bank remained vulnerable to protests, the most recent of which was last month when demonstrators tried to enter it after the collapse of the Lebanese pound.
US officials and their allies said, “The weak oversight at the Bank of Lebanon has helped spread the corruption mentioned in a series of US sanctions.”
At the beginning of this month, the US Treasury imposed sanctions on former Foreign Minister Gebran Bassil.
She said it represents rampant corruption within the Lebanese political system. Bassil replied that “the accusations are unfounded,” and considered “the sanctions as retaliation because he refused to comply with certain American demands.”
The officials said, “The Banque du Liban was pivotal in financing the group classified as terrorist in America, Hezbollah, including attacks against America’s allies, and there is evidence fueled concern by documents reviewed by the newspaper that reveal that the Banque du Liban allowed known accounts of Hezbollah in a private bank that remained in effect even after The United States requested to close it. ”
The party’s secretary general, Hassan Nasrallah, said in May that “Salameh is aware of the party’s financial activities, which he has permitted because of America’s classification of the party.”
He said, “Go and check and ask the cashier, the bank, and the governor of the Central Bank, and they know that we are bringing dollars into the country.”
Current and former officials have expressed concern about Hezbollah’s ability to conduct financial activity in a way that would enable it to finance operations against US allies and support its ally Iran. US officials claim that “most of Hezbollah’s financial activities abroad come from illegal activities, including drug smuggling.”
US officials say Salameh closed some Hezbollah accounts at their request, but the party’s ability to access the financial system made it prosper.
“The Lebanon crisis provides an opportunity to do what they fought for in the past, which is to use financial diplomacy to limit Hezbollah’s influence and reform the corrupt political system,” Lebanese officials say.
US officials say there is no rescue package without comprehensive scrutiny and implementation of the policies requested by the International Monetary Fund.
The current and former officials believe that “without comprehensive scrutiny, the Lebanese financial problems cannot be assessed, including knowing whether the Bank of Lebanon has foreign currency reserves to prevent the Lebanese currency from collapsing and thus increasing inflation.”
The newspaper says, “Targeted sanctions give America the ability to link Hezbollah representatives in the government. US Assistant Secretary of State for Near Eastern Affairs David Schenker refused to comment at the beginning of this year on possible sanctions targets, but generally said:” We have always said that we will target Hezbollah allies. .
America is also targeting, according to people familiar with the matter, Ahmed Ibrahim Safa, who left his position as a member of the Supervisory Board in the Lebanon Department.
Security analysts believe that “Safa worked as a financial facilitator for Hezbollah through his public and private positions.”
Safa’s name appeared in the US investigations in 2011 at the Lebanese Canadian Bank.
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