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The illusion of a Lebanese state

Political gridlock, rampant corruption, a plunging currency, galloping inflation and deepening poverty have left the Lebanese people in despair.

A cedar forest in El-Arz, Bsharri, Lebanon, Dec. 1, 2006. Credit: Wikimedia Commons.
A cedar forest in El-Arz, Bsharri, Lebanon, Dec. 1, 2006. Credit: Wikimedia Commons.
Jacques Neriah. Credit: Twitter.
Jacques Neriah
Col. (ret.) Dr. Jacques Neriah, a special analyst for the Middle East at the Jerusalem Center for Public Affairs, was formerly a foreign-policy adviser to Prime Minister Yitzhak Rabin and the deputy head for assessment of Israeli Military Intelligence.

The disintegration of the Lebanese body politic is accelerating, with the various political factions conceding that all efforts to reach a political solution that would allow Lebanon to climb out of the abyss have failed.

As has happened many times before, since Oct. 31, 2022, Lebanon has been left with no president and only a caretaker government with no genuine powers or legitimacy. The historical core agreement, considered a sort of “holy alliance,” that governed Lebanese politics for the last 17 years, has ended without fanfare. That document, known as the Mar-Mikhail Memorandum of Agreement, was signed by the then-leader of the Maronite Free Patriotic Movement (FPM), Michel Aoun, and Hezbollah Secretary-General Hassan Nasrallah. The memorandum allowed Aoun to be elected president in 2016 while catapulting Hezbollah to prominence in Lebanese politics. In effect, Aoun was held hostage by Hezbollah, who was allowed by the agreement to block any political decision concerning matters foreign or domestic.

According to one member of the FPM, the decision to end the memorandum of understanding was taken by Hezbollah “after considering that there was no need anymore for the alliance with the FPM.” MP Jimmy Jabbour added: “Nothing is left of the Mar-Mikhail Agreement except for protecting the back of the resistance [Hezbollah], and there is no partnership anymore. The detachment between the FPM and Hezbollah has taken place, and the separation has become a fact.”

The imbroglio regarding the election of the next Lebanese president, combined with the break between Hezbollah and the FPM, means “there will be no election of a president in the foreseeable future,” he added.

Furthermore, the FPM declared, “The FPM will not take part in a parliament session should 65 votes be secured for the pro-Syrian Marada Movement head Suleiman Franjieh.”

Indeed, none of the four candidates eyeing the presidency can secure a simple parliamentary majority of 65 members, because each represents a political faction that will not compromise.

Hezbollah and its Shiite “twin,” Amal, are backing Franjieh, their ally in recent years, while the Christian factions have named Michel Mo’awwad as their candidate. The FPM is lobbying to put forward the name of its present leader, Gibran Bassil, President Aoun’s son-in-law. The fourth candidate is the army chief Joseph Aoun (not related to Michel Aoun), who cannot be elected because of constitutional limitations. In order for Aoun to become president, a new law would have to be enacted. But such a law is impossible to pass at the moment because a constitutional rule demands it be passed by a regular government, not a caretaker one.

To complicate things even more, to form a new legal government an interim president is needed, which Lebanon lacks.

Franjieh and Mo’awwad represent the Lebanese tragedy: Suleiman is the grandson of President Suleiman Franjieh (1970-1976), who asked the Syrians to intervene in Lebanon’s 1975-1990 civil war, and the son of Tony Franjieh, who was assassinated (June 13, 1978) by forces led by Samir Geagea, head of the Lebanese Forces (LF) party. Mo’awwad is the son of the assassinated president Rene Mo’awwad, who was killed after serving as president of Lebanon for 18 days (November 5-22, 1989).

However, since they are part and parcel of an electoral campaign, all candidates and supporters are trading barbs to belittle their rivals and tar them with accusations of corruption. In an interview with the al-Akhbar newspaper, Parliament Speaker Nabih Berri said he would try to break the impasse and only call for a session of parliament when he senses that the parties are ready to elect a president, not to “waste time” and make statements. “Our candidate is known but their candidate is a test-tube experiment,” said Berri. He added: “The only two serious candidates are Franjieh and army chief Joseph Aoun, who is currently impossible to elect because it would require a constitutional amendment that a caretaker cabinet cannot pass.”

Berri concluded that “the main problem in the presidential elections is inter-Maronite.”

Calling Berri a “master of corruption,” Mo’awwad said Berri’s remarks were an insult to his father, slain president Rene Mo’awwad, and all the MPs and blocs that voted for him in the latest presidential election session. “The Lebanese do not forget and will not forget Nabih Berri’s militia practices, nor his siege of Beirut and its people and economy, nor his siege along with his ally Hezbollah of the entire country to please foreign schemes,” he said.

The Lebanese Forces (LF), siding with Mo’awwad, joined the exchange of accusations by condemning the Shiite custom of “pleasure marriages” (niqah mut’aah), described by critics as “legal prostitution” and “adultery [temporary] marriage,” drawing a flurry of attacks from Hezbollah. The LF and the Kataeb parties brandished their weapon of last resort: boycotting parliament sessions to prevent the quorum needed for the election of a candidate, a threat that most opposition parties did not accept.

Adding fuel to the raging fire, the caretaker prime minister, Najib Mikati, gave an interview in which he claimed, quoting a poll conducted by the Maronite Church, that the Christians in Lebanon represent only 19.4% of the population (very far from the almost 40% claimed since the last census, conducted in 1932). Mikati was understood to be insinuating that the partition of leading positions in Lebanon, decided upon in 1943 in a non-signed oral covenant, should be changed. However, his statement drew widespread denial that the population distribution among the three main confessions (Christian, Sunni and Shiite) has changed.

Amid conflicting reports about possible deals presented by various parties and meant to allow the election of a president, the latest rumors point to a possible deal that could be reached in late spring or early summer, according to which Franjieh would be elected president in return for the appointment as premier of Nawaf Salam, former ambassador to the United Nations and International Court of Justice judge.

The presidential vacuum has created a chaotic situation in which the various branches of government fight one another. This is particularly true of the clash between the judiciary and the executive branch. For example, since the massive Beirut port explosion on Aug. 4, 2020, all investigations conducted by judges to uncover the causes of the blast have been blocked by politicians, especially those linked to Hezbollah, who have used their power and influence to block all investigations.

The judicial system has also been blocked in its effort to investigate the assassination of the journalist Lokman Slim (Feb. 4, 2021), an outspoken critic of Hezbollah.

Endemic corruption

While the Lebanese press is full of details regarding politicians plundering state coffers and filling their own, in many cases with the active cooperation of the banks, Judge Ghada Aoun, a relative of President Aoun and a Mount Lebanon prosecutor, has charged the director-general of the internal security forces with obstructing the implementation of a judicial warrant.

Interior Minister Bassam Mawlawi, under Prime Minister Najib Miqati’s orders, instructed the authorities not to carry out Ghada’s orders. Lebanon’s top prosecutor, Ghassan Oweidat, told Aoun to pause a probe into banks’ wrong-doing.

Ghada Aoun blasted the directive as “a total breakdown of justice in this poor country,” and called it “an unprecedented interference in the work of the judiciary.”

Lebanese Judge Raja Hamoush on Thursday charged Central Bank Governor Riad Salameh, his brother Raja and his assistant Marianne Howayek with embezzlement, forgery, illicit enrichment, money laundering and breach of tax law.

In fact, Ghada Aoun is aware of the link between the brothers Taha and Nagib Miqati and Riad Salameh. According to a press report, Riad Salameh received $14 million from Taha Miqati, which was transferred in the framework of an agreement between a company owned by Salameh in Geneva and the Miqati brothers’ M1 group.

Ghada Aoun is not only going after the governor of Lebanon’s central bank. She is also after 20 other Lebanese banks, suspected of money laundering, assisting Hezbollah and illegally transferring monies outside of the country. The Swiss regulator, too, is investigating 12 Lebanese banks related to the governor of the Bank of Lebanon, who is accused of transferring $250 million into his personal accounts in Switzerland, the United Kingdom, France, Luxembourg, Liechtenstein and Germany, and of facilitating the transfer of $5 billion from Lebanon to foreign banks at a time when it was forbidden to transfer foreign assets abroad in the aftermath of the 2019 economic crisis.

Governor Salameh, together with his brother Raja, his son Nadi and his personal assistant Marianne Hoayek has been accused by the Swiss authorities of money laundering and speculating against the Lebanese lira, as well as of illegal transfers abroad. According to Ghada Aoun, proof and testimonies are coming from the Swiss investigators that cannot be ignored.

Investigators also discovered that Riad Salameh had a daughter with a Ukrainian woman, to whom he transferred $21 million.

Riad Salameh’s activities were revealed in the massive “Panama Papers” document trove. According to those documents, Salameh had two bank accounts in Panama worth hundreds of millions of dollars. In addition, a company owned by Syrian President Bashar Assad’s cousin Rami Makhlouf transferred €55 million to Salameh’s Zurich account. Salameh also owns a bank account at First National Bank with $80 million in deposits.

As for his brother Raja and his assistant Marianne, they hold bank accounts worth $446 million and $340 million, respectively. When a journalist began investigating the issue in 2020, Ghada Aoun was summoned to the internal security headquarters and accused of tarnishing the reputation of the Lebanese banks and the prestige of the economy led by the governor of the Central Bank, Riad Salameh, and advised to forget about her investigation.

Her critics claim that she is acting on behalf of former President Michel Aoun, who was accused of embezzlement by his deputy in 1988.

According to Gen. Issam Abou Jamra, in 1988 Michel Aoun received $30 million from Iraqi dictator Saddam Hussein that was earmarked for army salaries. Aoun immediately took $5 million and transferred the funds to his wife’s account in France, while he took $12 million for his personal use. When he was elected president in 2016, the finance minister, Mohammad Safadi, unblocked the remaining $13 million in Michel Aoun’s personal account.

Ghada Aoun’s critics point at Michel Aoun’s embezzlement and ask why she is not concentrating on that issue instead of “harassing” the banking sector. A complaint was filed in the appeals court of Mount Lebanon asking for an investigation into the corruption involving the former president.

Hezbollah’s dirty hands

Hezbollah has also experienced its share of setbacks amid the chaos. At the end of February 2023, the United States succeeded in putting its hands on one of Hezbollah’s financiers, Mohammad Ibrahim Bazzi, in Bucharest, and is in the process of extraditing him. In addition, the U.S. State Department has offered a reward of up to $10 million for information leading to the disruption of Hezbollah’s financial mechanisms. This development occurred amid growing criticism in Lebanon of Hezbollah’s bank Al-Qard al-Hassan (AQAH), which continues to expand with no oversight at all by the Lebanese Central Bank while the judges concentrate on investigating “legal banks.”

AQAH was registered as a social organization in 1987 with the Lebanese Interior Ministry. Today, it is the long financial arm of the “resistance,” with a clientele numbering more than 1.9 million people and offering services such as the extension of almost $4 billion in loans. AQAH has developed from a social organization into a huge financial institution that functions without being registered with the Central Bank of Lebanon. Branches are opening and ATMs are being installed in almost all of Lebanon. AQAH offers its clientele loans at exceptionally low interest and comfortable repayment terms, but the primary mission of the “bank” is to finance Hezbollah’s activities. AQAH has 31 branches all over Lebanon, 15 in Beirut, 10 in South Lebanon and six in the Bekaa Valley—with 500 employees.

Mindful of U.S. sanctions on Hezbollah, AQAH has no accounts in Lebanese or foreign banks and does not invest in Lebanon or abroad. The bank’s only link is with Iran. However, from time to time, the United States penetrates Lebanese banks to discover illegal business conducted with Hezbollah. Such was the case in 2019 with the Jammal Trust Bank, which offered services to Hezbollah’s executive council and the Martyrs Foundation.

Lebanon is in chaos. The revelations about the monies stolen, transferred and disappeared fuel the anger and despair of the Lebanese people. The plunging Lebanese pound, which has lost more than 90% of its value since October 2019, galloping inflation and deepening poverty, combined with the lack of any alternative, are understood by many to mean that Lebanon has ceased to exist as a state.

The dollarization of the economy is moving fast. All prices in supermarkets and other commercial entities are displayed in dollars. Electricity is almost nonexistent. Hospitalization costs are out of reach. Teachers have no money to fill their gas tanks and cannot reach the schools. A third of Lebanon’s students in the public sector and a third of the teachers have not seen school for the last two months. Medicines are brought individually from visitors from abroad, or bought at pharmacies selling dubious Iranian- or Syrian-made medications. In this dire reality, the Lebanese, aware of the profound differences between the various political camps, have lost hope of seeing a solution soon.

The ones that survive are those who receive remittances from abroad. All the rest have become dependent on the state for their physical survival. Without the estimated $8 billion a year injected into Lebanon by the Lebanese diaspora, the country would cease to exist.

Col. (res.) Dr. Jacques Neriah, a special analyst for the Middle East at the Jerusalem Center for Public Affairs, was formerly foreign policy adviser to Prime Minister Yitzhak Rabin and deputy head for assessment of Israeli Military Intelligence.

This article was originally published by the Jerusalem Center for Public Affairs.

The opinions and facts presented in this article are those of the author, and neither JNS nor its partners assume any responsibility for them.
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