Informational Al fassad thread...

superduper703

Well-Known Member
#1
Let's post here any news and comments about corruption in Lebanon. Anything can be posted from a commission on a transaction to cronyism, and everything in between.

Doesn't have to be about a specific party or from a specific source. All is good: From Mashnouq's cheque to the corruption at EDL.

PS: moderators, if there's already a thread like this one, please merge.
 
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  • Impera

    Active Member
    #2
    Let's post here any news and comments about corruption in Lebanon. Anything can be posted from a commission on a transaction to cronyism, and everything in between.

    Doesn't have to be about a specific party or from a specific source. All is good: From Mashnouq's cheque to the corruption at EDL.

    PS: moderators, if there's already a thread like this one, please merge.
    This is a targeted campaign against FPM!!! You have been exposed!!!!!

    Nah, just kidding. Good thread, but in less than 5 posts, no one will remember what the thread is originally about.
     

    neutral

    Legendary Member
    #3
    By 1992, the economic system was characterized by an inflation rate of 120%, a government budget deficit of 15% of GDP as well as the fear of facing a balance of payments crisis, since the surplus had only reached US$54 Million during that year. Therefore, the Lebanese government at the time did not have to carry out postwar reconstruction activities only, but it also had to shift monetary policy towards targeting price and exchange rate stability. The nominal exchange rate consequently became the main anchor in the government’s new stabilization program, otherwise known as the “Exchange Rate Based Stabilization”(ERBS) method. This technique aimed for an appreciation of the Lebanese pound by increasing the requirement of foreign reserves, rather than depending on the former inflationary finance method of money printing. In order to encourage such an exchange rate and level of foreign reserves, high and flexible interest rates were adopted. The rationale was that higher interest rates on LBP denominated instruments would attract the necessary capital to allow the LBP to appreciate (and hence, fight inflation) as well as financing the growing fiscal deficit. Consequently, interest rates on government bonds, for instance, were inflated to highs of 36% whilst those on deposits and loans oscillated at their similar end of war highs. In subsequent years, the high interest rates had managed to control the hyperinflation. According to Dr Dibeh, price increases in 1993, 1994, 1995 and 1996, averaged 24.7%, 8%, 10.6% and 8.9% respectively, falling from a high of 131% in 1992. In fact, by 1999, they reached 1.5%. Similarly, by July 2000, the Ministry of Finance stated that the Central Bank’s foreign reserves were at record level. Thus in this short period of time, Lebanon had managed to curb inflation and increase its foreign reserves. However, the high interest rates also had a devastating impact on economic growth and the emerging public debt. The high cost of borrowing funds for investment, such as those on bank loans, discouraged many productive projects from materializing. Similarly, the record profits incurred by commercial banks in the mid-1990s had not emanated from their traditional lending activities, but rather from the high returns they were receiving from the government bonds they had invested in. Moreover, the interest payments on those government bonds were becoming a drain on the public finances. Public debt soared from a rate of 59% of GDP in 1993 to over 140% of GDP in 2000. Economic growth consequently plummeted, reaching a level of -0.9% in 2000 (1% according to Makdisi) from a high of 8% in 1994. In early 1997, the government declared that it was determined to boost economic growth while maintaining an annual inflation rate of less than 10% . In response to the growing recession and public debt, the early months of 1997 saw a simultaneous steady decline in interest rates on T-Bills as well as a rise in the share of long term maturity bills. It was argued that by focusing on T-Bills with longer term maturities, the government could ease the pressure on its debt repayments. Furthermore, the Lebanese Banks Association reduced the interest rate on LBP lending from 24% to 16% in the hope to encourage LBP lending, since most lending was being made in foreign currency. This volatility in fluctuation however, is not apparent for interest rates on Dollar denominated deposits and loans. In fact, due to the limited availability of data, these rates are only recognized since 1995.

    http://www.economy.gov.lb/public/uploads/files/6445_2640_6894.pdf

    check page 3 and the graph on the lebanese govt bond rate.

     

    Amirkani

    Legendary Member
    Orange Room Supporter
    #4
    By 1992, the economic system was characterized by an inflation rate of 120%, a government budget deficit of 15% of GDP as well as the fear of facing a balance of payments crisis, since the surplus had only reached US$54 Million during that year. Therefore, the Lebanese government at the time did not have to carry out postwar reconstruction activities only, but it also had to shift monetary policy towards targeting price and exchange rate stability. The nominal exchange rate consequently became the main anchor in the government’s new stabilization program, otherwise known as the “Exchange Rate Based Stabilization”(ERBS) method. This technique aimed for an appreciation of the Lebanese pound by increasing the requirement of foreign reserves, rather than depending on the former inflationary finance method of money printing. In order to encourage such an exchange rate and level of foreign reserves, high and flexible interest rates were adopted. The rationale was that higher interest rates on LBP denominated instruments would attract the necessary capital to allow the LBP to appreciate (and hence, fight inflation) as well as financing the growing fiscal deficit. Consequently, interest rates on government bonds, for instance, were inflated to highs of 36% whilst those on deposits and loans oscillated at their similar end of war highs. In subsequent years, the high interest rates had managed to control the hyperinflation. According to Dr Dibeh, price increases in 1993, 1994, 1995 and 1996, averaged 24.7%, 8%, 10.6% and 8.9% respectively, falling from a high of 131% in 1992. In fact, by 1999, they reached 1.5%. Similarly, by July 2000, the Ministry of Finance stated that the Central Bank’s foreign reserves were at record level. Thus in this short period of time, Lebanon had managed to curb inflation and increase its foreign reserves. However, the high interest rates also had a devastating impact on economic growth and the emerging public debt. The high cost of borrowing funds for investment, such as those on bank loans, discouraged many productive projects from materializing. Similarly, the record profits incurred by commercial banks in the mid-1990s had not emanated from their traditional lending activities, but rather from the high returns they were receiving from the government bonds they had invested in. Moreover, the interest payments on those government bonds were becoming a drain on the public finances. Public debt soared from a rate of 59% of GDP in 1993 to over 140% of GDP in 2000. Economic growth consequently plummeted, reaching a level of -0.9% in 2000 (1% according to Makdisi) from a high of 8% in 1994. In early 1997, the government declared that it was determined to boost economic growth while maintaining an annual inflation rate of less than 10% . In response to the growing recession and public debt, the early months of 1997 saw a simultaneous steady decline in interest rates on T-Bills as well as a rise in the share of long term maturity bills. It was argued that by focusing on T-Bills with longer term maturities, the government could ease the pressure on its debt repayments. Furthermore, the Lebanese Banks Association reduced the interest rate on LBP lending from 24% to 16% in the hope to encourage LBP lending, since most lending was being made in foreign currency. This volatility in fluctuation however, is not apparent for interest rates on Dollar denominated deposits and loans. In fact, due to the limited availability of data, these rates are only recognized since 1995.

    http://www.economy.gov.lb/public/uploads/files/6445_2640_6894.pdf

    check page 3 and the graph on the lebanese govt bond rate.

    View attachment 5475
    Sa7i7 innak ghashim. He hinted to you "EDL" w inta ma fhemet... w jeyi te7kileh 3an Hariri w interest rates w ma ba3ref shou...

    Ra7 yif2a3 to tell you that Bassil stole $1.2 billion from EDL that no one spent. This, you are not qualified to understand and you need him to explain it to you. So3beh 3leik.

    And here you are showing off with a theft of over $50 billion that is too obvious and everyone can see.

    Please give us something that no one else can see or understand except super duper bright minds like his. LOL
     

    joseph_lubnan

    Legendary Member
    #5
    Sa7i7 innak ghashim. He hinted to you "EDL" w inta ma fhemet... w jeyi te7kileh 3an Hariri w interest rates w ma ba3ref shou...

    Ra7 yif2a3 to tell you that Bassil stole $1.2 billion from EDL that no one spent. This, you are not qualified to understand and you need him to explain it to you. So3beh 3leik.

    And here you are showing off with a theft of over $50 billion that is too obvious and everyone can see.

    Please give us something that no one else can see or understand except super duper bright minds like his. LOL
    Speaking of spoiled and corrupt politicians, Bassil is a spoiled kid :) That we already know for sure, for the rest of it, well more transparency is needed both in Telecom and Electricity, but alas, mostly propaganda is put forth by FPM when it comes to Bassil...

    p.s I always imagined him throwing a tantrum and pounding his feet in the ground in front of GMA saying "daddy-in-law, ma baddi illa wizaret elittissalat" :)
     

    Amirkani

    Legendary Member
    Orange Room Supporter
    #6
    Speaking of spoiled and corrupt politicians, Bassil is a spoiled kid :) That we already know for sure, for the rest of it, well more transparency is needed both in Telecom and Electricity, but alas, mostly propaganda is put forth by FPM when it comes to Bassil...

    p.s I always imagined him throwing a tantrum and pounding his feet in the ground in front of GMA saying "daddy-in-law, ma baddi illa wizaret elittissalat" :)
    We're good in propaganda. We airlifted a mansion from Monaco to Rabieh and called Bassil's Castle.

    We also airlifted $1.2 billion from nowherestan to Bassil's pockets.

    P.S. All airlifting services provided by Bassil's non-existing private Airbus 380. Inta sheyif malla king-size bed fiya?
     

    joseph_lubnan

    Legendary Member
    #7
    We're good in propaganda. We airlifted a mansion from Monaco to Rabieh and called Bassil's Castle.

    We also airlifted $1.2 billion from nowherestan to Bassil's pockets.

    P.S. All airlifting services provided by Bassil's non-existing private Airbus 380. Inta sheyif malla king-size bed fiya?
    When you started Airlifting left and right you got me wondering as to which direction you are taking your post in :)

    Zamatna lol
     

    leb-wi-noss

    Well-Known Member
    #9
    This paragraph was in a Nahar article about the internal elections:

    لا تشذّ هذه الحركة بمن تضمّ في مواقفها السياسيّة عن مواقف التيّار وخياره السياسي، فهي مع التحالفات الداخليّة المعقودة وخصوصاً الحلف مع "حزب الله"، ومع مواقف العماد عون فيما يتعلّق بالوضع الإقليمي ومكافحة الجماعات التكفيريّة والإرهابيّة. فأين تكمن المشكلة؟ يختلف العونيون على سوء إدارة بعض الملفات، وتحكّم العائلة العونيّة ورجال الأعمال بتيّارهم، بعدما سقطوا بـ"باراشوت" بعد العودة عام 2005، فلا الميزانيّة ولا الكشوف الماليّة تقدّم دورياً وسنوياً، ولا المؤسّسات العاملة والناطقة باسم الحزب مسجّلة باسمه. الأموال موجودة بكثرة ولكنها مهدورة.



    See what they are doing with the money of the people who believed in them and donated generously to "the cause". Imagine what will they do with the money of the general public. ;)
    Many of you will say that this is Annahar. But X did adopt this article and he was the one who posted it.

    Free Patriotic Movement ( Tayyar ) Presidential elections 2015 | Page 6 | The Orange Room - Lebanon's number one discussion forums
     

    superduper703

    Well-Known Member
    #10
    This paragraph was in a Nahar article about the internal elections:

    لا تشذّ هذه الحركة بمن تضمّ في مواقفها السياسيّة عن مواقف التيّار وخياره السياسي، فهي مع التحالفات الداخليّة المعقودة وخصوصاً الحلف مع "حزب الله"، ومع مواقف العماد عون فيما يتعلّق بالوضع الإقليمي ومكافحة الجماعات التكفيريّة والإرهابيّة. فأين تكمن المشكلة؟ يختلف العونيون على سوء إدارة بعض الملفات، وتحكّم العائلة العونيّة ورجال الأعمال بتيّارهم، بعدما سقطوا بـ"باراشوت" بعد العودة عام 2005، فلا الميزانيّة ولا الكشوف الماليّة تقدّم دورياً وسنوياً، ولا المؤسّسات العاملة والناطقة باسم الحزب مسجّلة باسمه. الأموال موجودة بكثرة ولكنها مهدورة.



    See what they are doing with the money of the people who believed in them and donated generously to "the cause". Imagine what will they do with the money of the general public. ;)
    Many of you will say that this is Annahar. But X did adopt this article and he was the one who posted it.

    Free Patriotic Movement ( Tayyar ) Presidential elections 2015 | Page 6 | The Orange Room - Lebanon's number one discussion forums
    I am not too familiar with the finances, but can someone confirm whether OTV is registered to Aoun's name? Also, wasn't the money donated to the Army during the 1988-1990 period registered in a bank account under his wife's name?
     

    Amirkani

    Legendary Member
    Orange Room Supporter
    #11
    I am not too familiar with the finances, but can someone confirm whether OTV is registered to Aoun's name? Also, wasn't the money donated to the Army during the 1988-1990 period registered in a bank account under his wife's name?
    Shou you couldn't last more than 24 hrs. before divulging your real purpose for starting this thread? LOL
     

    HannaTheCrusader

    Legendary Member
    Orange Room Supporter
    #12
    I am not too familiar with the finances, but can someone confirm whether OTV is registered to Aoun's name? Also, wasn't the money donated to the Army during the 1988-1990 period registered in a bank account under his wife's name?

    OTV is in Mireille name
    The other account are in sett Nadia

    The new building for Tayyar , we are split between registering in Claudine of Chamel kids names

    We are just waiting for Sanyoura, to see if he can give us a waiver on transfer fees , you know, like he gave the pig's family in 2005

     

    neutral

    Legendary Member
    #14
    Profile: Former Lebanese PM Rafik Hariri
    _53789439_001007756-1.jpg

    Image captionRafik Hariri resigned as prime minister in 2004, a year before his death
    Rafik Hariri was a dominant force in Lebanese politics in both life and death.

    As prime minister of Lebanon, he is widely credited with getting the country back on its feet after the devastating 15-year civil conflict.

    He held office from 1992 to 1998 and again from 2000 until his resignation in 2004 - a total of five terms.

    But on 14 February 2005, a year after he quit as leader, explosives were detonated as his motorcade drove past the St George Hotel in the Lebanese capital, Beirut.

    His death had profound implications in Lebanon, paving the way for the Cedar Revolution and the withdrawal of Syrian troops from the country after 29 years.

    The investigation into his murder led to years of political turmoil.

    An unprecedented international tribunal began at The Hague in January 2014, at which four suspected members of Shia militant group Hezbollah were tried in absentia for the murder of Hariri.

    Saudi fortune
    Hariri was born in 1944 to a poor Sunni Muslim family in the southern port of Sidon.

    After training as a teacher, he went abroad to seek his fortune, following a path well-trodden by many of his countrymen.

    _53792026_001079353-1.jpg

    Image captionHariri's death sparked mass protests to demand the withdrawal of Syrian troops
    He found employment in a construction firm in Saudi Arabia, eventually establishing his own firm, Saudi Oger.

    He became the personal contractor for Prince Fahd, who went on to become king of Saudi Arabia, and amassed a fortune that propelled him into the US magazine Forbes as one of the richest 100 men in the world.

    A flamboyant figure, he was well regarded among international leaders, counting French President Jacques Chirac as a close friend.

    When he returned from Saudi Arabia in 1992 as prime minister, he was seen as a breath of fresh air in a country dominated by former militia leaders.

    Ordinary people pinned hopes on the dynamic tycoon to restore Beirut's pre-war reputation as a leading financial centre.

    He put the country back on the international financial map through the issuing of Eurobonds and won plaudits from the World Bank for his plan to borrow and beg for reconstruction money.

    Feud with Lahoud
    But his economic record was mixed: his ambitious borrow-and-build schemes left massive public debt and budget deficit, which pushed up interest rates and slowed growth.

    _53789441_012342006-1.jpg

    Image captionA statue of Hariri stands at the site where he was killed in Beirut
    He was accused of ignoring the poor, despite his long record of funding charitable causes.

    Ordinary Lebanese began to judge him by the same standards of cynicism applied to other politicians, many of whom had made their fortunes in civil war activities.

    When he left power in 1998, it came about partly because Hariri was reluctant to play second fiddle to President Emile Lahoud, a former army chief.

    Hariri's legacy was further tainted by accusations of corruption and he also faced criticism for saddling the country with big debts.

    But Hariri returned in October 2000, taking his old job back off the political veteran Selim al-Hoss.

    He presided over a revival in Lebanon's tourism industry, largely thanks to hundreds of thousands of visiting Gulf Arabs.

    But he again fell out with his pro-Syrian government colleagues during the crisis over the extension of President Lahoud's term in office.

    He never overtly came out against Syria in the dispute, but his resignation in October 2004 was taken as a clear protest against the Syrian pressure to keep Mr Lahoud in office.

    It was a move which some say cost him his life
     

    neutral

    Legendary Member
    #15
    The Three Faces of Corruption in Lebanon
    by Ziad Abdelnour
    0102_corruption1.gif


    Lebanese Prime Minister Rafiq Hariri has worked tirelessly in recent weeks to attract foreign aid and investment for Lebanon's moribund economy. His search for cold, hard cash has taken him to Iran, Japan, Kuwait, Oman, Saudi Arabia and France in the last month alone. During his brief stops back in Lebanon, Hariri has rolled out the red carpet for EU President Romano Prodi and World Bank President James Wolfensohn. Unfortunately, the prime minister has little to show for his efforts.

    A UN-commissioned corruption assessment report on Lebanon released last month indicates why this is so. Its findings illustrate starkly the scale of corruption in the Lebanese political system and its devastating impact on the Lebanese economy. The report, which was researched by a private company, Information International, and commissioned by the United Nations Center for International Crime Prevention, estimated that the Lebanese state squanders over $1.5 billion per year as a result of pervasive corruption at all levels of government.

    This should be of no surprise to anyone familiar with the Lebanese political system. In some electoral districts, candidates for parliament must pay up to $3 million dollars to join a winning electoral slate. Once they are elected, entry into the cabinet often carries an even higher price tag. Naturally, having bought their way into the political system, most ministers have few qualms about using their positions to recoup these expenses.

    Perhaps the most intriguing statistic mentioned in the UN report is the following: Only 2.4% of the $6 billion worth of projects contracted by various government bodies were formally awarded by the Administration of Tenders. The rest of these contracts were awarded not to the most qualified applicant, but to the company willing to pay the highest bribe to the minister in charge of the project. Hence, it is not surprising that the report finds that over 43% of companies in Lebanon "always or very frequently" pay bribes and another 40 percent "sometimes" do.

    This corruption does not stop with the top echelon of ministers and directors of various government agencies--it is a cancer which infects the entire government hierarchy. The report mentions, for example, that 40% of households in Lebanon are not billed for electricity and don't even have meters installed. To be sure, most of them do pay for electricity--just not to the electric company. This scam is familiar to many Americans who, at one time or another, have slipped the cable man a twenty to hook up HBO for free. The difference is that in Lebanon the practice is virtually institutionalized, and it is the nation's energy supply, rather than video images, that are squandered. Another difference is that cable companies in the U.S. at least try to do something about it (e.g. the "stealing cable is a crime" commercials that appear frequently on TV). Electricite du Liban loses around $400 million each year and has yet to take action (perhaps a "stealing electricity is a crime" ad campaign might be a good place to start).

    f_berri_nabih_sm.jpg

    Nabih Berri
    Pervasive greed among Lebanese political elites explains a great deal about why Lebanon's national debt has skyrocketed to over $23 billion--a whopping 140% of the country's GDP. Greed is the first face of corruption in Lebanon, but it does not tell the whole story.

    Clientalism is the second face of corruption. Politicians in Lebanon derive what little popular support they have by distributing services and jobs to their constituents. Perhaps this is true of other countries, but nowhere is the practice more openly acknowledged and accepted as the norm than Lebanon.

    Consider the case of Tele-Liban, the state-run television station which has been losing money year after year. Everyone has agreed that the station's bloated bureaucracy is the number one culprit for its dismal finances. But, rather than finding a way to objectively assess which jobs are superfluous, Lebanese politicians have been bickering over whose appointees will get the axe. The spectacle of Information Minister Ghazi Aridi and MP Omar Karami publicly arguing last month over who has the smallest "share" of employees at the station is, unfortunately, not an aberration.

    Until last month, the state-funded Lebanese University (LU) had gone months without a president because Parliament Speaker Nabih Berri and other cabinet members couldn't agree on whom to appoint. In December, university faculty and students boycotted their own classes in protest. Even the acting president, Ata Jabbour, publicly declared that "the Cabinet's continuing delay in appointing a new president and council for the university is the result of a political struggle between government officials."1

    Just as institutionalized greed filters throughout all levels of government, clientalism pervades throughout any institution linked to the state. The worst problem at LU is not that political clientalism influences administrative appointments, but that clientalism obstructs the university's functions even at the level of the student body. According to a first-year law student quoted in a recent news report on this topic, students cannot even register for courses at LU without permission from a member of Berri's Amal movement. "In order to get things done, you need an ally from the movement," said Wafaa, who asked that her last name not be published. "They have the final word on every issue." LU professor Antoine Messara concurred, saying that the Amal members "consider the university their own property" and that "appointments in the university, even at the highest levels, are controlled by them."2

    The third face of corruption in Lebanon reinforces the other two and obstructs any significant measures to eliminate them. This third face is Syria, which occupies Lebanon with over 35,000 troops and controls the commanding heights of every major political institution in the country. Clientalism is a powerful force in Lebanese society, but it does not have the power to intimidate an entire university. Greed, on the other hand, is an evil which cannot flourish when politicians are accountable to the population. Nabih Berri is not innately more greedy than anyone else--it is the fact that he cannot be removed from office by the people he serves that causes his greed to become boundless and all-consuming.

    Conclusion

    Not surprisingly, Lebanese officials condemned the UN report. Even the National Integrity Steering Committee, a government-appointed body ostensibly working to stamp out corruption in Lebanon, reacted negatively. Sources close to the committee said that it was reluctant to release the report's findings to the public because it "tainted Lebanon's image."3 Fortunately, the UN had no such reservations about releasing the findings.

    Fouad Saad, the minister of state for administrative development, insisted that the Lebanese people, rather than their government, are to blame for corruption in the country. Corruption is a "malignant tumor" that infects the entire population of Lebanon, said Saad. "Even if we replace all government employees, it won't solve the problem because that's how the public is." Most Lebanese strongly disagree with this statement. According to the report, over 96% believe that the "political class" in Lebanon is primarily responsible for corruption in Lebanon.

    During his visit to Lebanon last month, World Bank President James Wolfensohn could only throw up his hands in despair and offer the following words of advice to Lebanon's politicians: "it's not a question of winning or losing internal battles."4 Afterwards, Lebanese officials had the audacity to accuse him of "interfering" in domestic affairs.

    Meanwhile, investor confidence in Lebanon remains at rock bottom and international aid donors have politely shown Hariri the door. Even the $500 million in grants and soft loans that have already been received have not yet been spent because Lebanon's political elites have been unable to provide the sponsors with sound proposals for their allocation. Sadly, this is the result of Lebanon's version of checks and balances--powerful politicians deliberately obstruct projects that don't directly feed into their patronage networks.

    Notes
    1 The Daily Star (Beirut), 7 December 2000.
    2 The Daily Star (Beirut), 31 January 2001.
    3 The Daily Star (Beirut), 24 January 2001.
    4 The Daily Star (Beirut), 1 February 2001.
     

    Amirkani

    Legendary Member
    Orange Room Supporter
    #16
    I am not too familiar with the finances, but can someone confirm whether OTV is registered to Aoun's name? Also, wasn't the money donated to the Army during the 1988-1990 period registered in a bank account under his wife's name?
    Yalla weje3neh 2albeh 3leik w ma ra7 khallik tbahdel 7alak ktir.

    OTV is a publicly-owned company with thousands of very small shareholders (ye3ni the vast majority own shares between $100 and $1000 each).

    Trying to point to corruption in the founding of OTV is like claiming Bassil stole $1.2 billion that was not spent from EDL.

    Kamen ta am ba2a tbahdel 7alak, you ought to know that EDL is a totally autonomous entity with its own Board of Directors and Executive director and several layers of independent management. The Ministry (and minister) of Energy cannot spend a single penny of EDL's money. They just act as a planning and oversight authority.

    It's been over a month that you try to hint to non-existing stuff that you can pin on FPM w inta mish fehman kou3ak min bou3ak.

    La2 l dineh mish 3am bit shatteh :)
     

    neutral

    Legendary Member
    #17
    Cables: Lebanese Berri family’s wealth hits about US$2 billion
    Published April 10th, 2011 - 10:47 GMT



    Nabih_Berri_and_Iranian_President_Mahmoud_Ahmadinejad.jpg

    Berri and Iranian President
    Follow >
    Al Akhbar
    ,
    Jeffrey Feltman
    ,
    Lebanese Parliament
    ,
    Mohammed Abdel-Hamid Beydoun
    ,
    Mohammed Obeid
    ,
    Nabih Berri
    ,
    Shiite Amal
    ,
    U.S. Embassy
    Lebanon’s al Akhbar newspaper on Thursday reported about a cable sent from the U.S. Embassy dated April 7, 2006 about a meeting between the diplomats at the embassy with economic expert and political analyst Mohammed Obeid and former MP and Minister Mohammed Abdel-Hamid Beydoun.

    According to the cable, the two men stressed that the support of the Shiite Amal movement in the south has been diminishing. The reason, according to Obaid, is the decline in credibility of the leader of the movement, Lebanese Parliament Speaker Nabih Berri. Obaid said, according to the cable, that Berri family’s wealth is around US$2 billion. He added that Berri family is the largest landowner in the south of Lebanon. Obaid conveyed that Berri receives US$400,000 per month from Iran. He directs some US$100,000 to his supporters, and leave the rest in his pocket.

    In another cable, American ambassador to Lebanon during the war of July 2006, Jeffrey Feltman has met with then Lebanon’s Prime Minister Fouad Siniora. According to the document, Siniora, speaking about the reconstruction effort, said he had asked Saudi Arabia and Kuwait not to transfer the amounts of US$500 million and US$300 million, respectively, because “I do not want these funds to reach the pocket of the Parliament Speaker Nabih Berri.
     

    neutral

    Legendary Member
    #18
    LEBANON: RIAD SALAMEH: PRESIDENTIAL CANDIDATE OR FINANCIAL PROFITEER?
    Date:
    2007 January 31, 16:44 (Wednesday)

    We have created a canonical ID by taking the original document ID and adding a '_' at the end and then WikiLeaks' annotation for different datasets: Cablegate = a, the Kissinger Cables = b, etc. If document IDs are duplicated in the original datasets we number each duplicate, eg 1976WARSAW05657_b2 is the second document with that ID in the Kissinger Cables." data-hasqtip="true" oldtitle="Canonical ID" title="" style="box-sizing: border-box; cursor: pointer; padding: 0px 1px; margin-top: 2px; margin-left: 2px; display: inline-block; font-size: 10pt !important; background: transparent;">Canonical ID:
    07BEIRUT166_a

    SUMMARY ------- 1. (C) Ministers Haddad and Azour shared with Ambassador some insight into the Central Bank (CBL) and its governor Riad Salameh, but stopped short of accusing him outright of malfeasance. However, they referred to the GOL/banking relationship as a "mess" and indicated that there are people who can provide more information. They are pleased with the proposed International Monetary Fund (IMF) program, to which Salameh might be opposed. End summary.

    2. (C) Ambassador and EconOff visited the Grand Serail January 31 to pay a congratulatory post-Paris III call on the Ministers involved -- Minister of Finance Jihad Azour and Minister of Economy and Trade Sami Haddad -- and benefited from the occasion by indulging in post-party news and gossip with several of the residents of the increasingly dormitory-like Grand Serail. The exchanges, both in tandem and then later alone with Haddad, provided more information on the complex relationship between the Central Bank and the GOL, as well as more questions than answers about Central Bank Governor Riad Salameh. While Salameh is generally well regarded and has won kudos for his expert management of Lebanon's precarious finances in crisis periods, rumors have been circulating that Salameh had somehow managed to profit from Paris III financially -- as he had (it is also rumored) profited from Paris II. So detailed are these whispers that we were previously asked by the Minister of Information to look into activities on an exact date: ten days prior to the January 25 date of Paris III. CONCERNS ABOUT THE CENTRAL BANK -------------------------------

    3. (C) Acknowledging that the relationship between the CBL and the GOL is "very complex" Haddad questioned why the Central Bank should hold interest-bearing bonds from the GOL; should the GOL "pay itself?" In the crisis atmosphere after the 2/14/05 assassination of Rafiq Hariri, the Karami government -- unable to raise money from the private sector directly -- borrowed some USD 6 billion from the CBL. Azour noted that the Siniora government has managed to pay back USD 3 billion so far and pays interest on the rest. Spread out among the banks, this does much to insure their prosperity. The CBL borrows at market rates and then lends to the GOL at higher rates. The large banks have a huge exposure that may in fact exceed their net worth. Further, by law, the GOL should receive 80 percent of the profits of the CBL, but the money has not been transferred for the last three years. In 2005, the CBL issued ten-year CDs; these should never have exceeded a one-year maturity.

    4. (C) Indicating that the situation is a "mess," Azour said that a law has been sent to the Parliament on debt management. While the actions of the CBL have not been universally negative (sometimes they benefited the GOL), there is clearly a need to reach financial independence. On a positive note, the GOL has not borrowed from the CBL for the last 18 months -- the life of the Siniora cabinet -- with the exception of a three-month loan of USD 200 million at the end of July 2006, which has been repaid. The issue of the banks' participation in the post-Paris III reform program is the subject of a meeting today. Azour said that Salameh does not want the GOL to interfere in banking, but he needs to find ways of insuring the contributions of the banks to the reform program. This is still "a missing piece" of Paris III. DID SALAMEH CROSS THE LINE? ---------------------------

    5. (C) While the ministers outlined the situation and detailed next steps after Paris III, a very unflattering picture emerged of both Riad Salameh and the activities of the CBL. While neither minister was prepared to say that Salameh has been profiting illegally from insider knowledge, the responses of "no comment" and "there are plenty of people who can give you information" seemed to indicate that they have their own doubts. Both ministers agreed that "it happened on a massive scale" around the time of Paris II, and "may have happened" now. In simple terms, the existing debt has a market value that would be lower before the donor's conference, and higher after. If individuals could buy some of that debt just prior, they would make a profit after. If BEIRUT 00000166 002 OF 003 the CBL were so inclined, it could sell the debt to favored banks or private citizens.

    6. (C) Azour chose his words carefully, praising the independence of the CBL. But Salameh appears to have been operating completely outside of the scrutiny of the GOL, more so than mere independence from policy direction would suggest. Although the board of the CBL should include two members who are, by regulation, the two Directors General of the Ministry of Finance and the Ministry of Economy and Trade, the CBL seems to have managed to circumvent this requirement, continuing to meet although there is currently no DG in Economy and Trade. In addition, Haddad suggested that the two DGs had previously been "compensated" with multiples of their salaries as GOL employees. Saying that the CBL has not been sending audited financial statements to the Minister of Finance, as required, Haddad pointed out that there are several other areas of concern that Salameh would probably not wish to come under scrutiny, such as the interest paid to the CB, high-yield US Dollar CDs sold to the banking sector and other "financial gimmicks." WHY IT TOOK SO LONG TO GET THE IMF PROGRAM ----------------------

    7. (C) Haddad is quite sure that Salameh is opposed to the imposition of an IMF EPCA program, the request for which was approved by the Council of Ministers, and welcomed by the two ministers. This final approval took some time, since not only did Salameh disapprove, but Saad Hariri needed to be convinced that the current IMF was not the IMF which his father had opposed. With the GOL's request to the IMF approved prior to the Core Group meeting in Paris in mid-January, the specific request was not announced there because Salameh had raised objections to elements of it. In a meeting chaired by the PM just before the IMF returned once more to Beirut, Haddad offered to resign over the issue, and Salameh backed down, at which point the GOL's request for an IMF program was announced. Haddad noted that while the IMF's "regional" officers, such as Mohsen Khan, supported the GOL request for an EPCA program, the "tehhnical" officers did not. Azour thought what really made a difference in resolving this difference of view within the IMF was the forceful letter sent by G7 representatives. COMMENT -------

    8. (C) We have no way of knowing the truth of these rumors. Salameh has been widely credited for successfully guiding Lebanon's precarious financial situation through extremely dangerous periods. Certainly, with the resignation of the Karami cabinet after Hariri's assassination and the simultaneous shuttering of the parliament, Salameh seemed to be the only official working to stabilize Lebanon during the critical spring 2005 period as the "Cedar Revolution" gained momentum and Syria was forced to withdraw its forces. Salameh -- whose presidential ambitions are well known -- may oppose an IMF program because he does not want the truth to be known that he wasn't such a genius after all. Of course, he may also be reluctant to welcome IMF oversight, requiring audited statements and probably ordering the selling of operations such as MEA and the Casino du Liban. It is possible, in other words, that he has something to hide, but it is also possible that he is, in Haddad's opinion, "a good short-term plumber" but "no architect."

    9. (C) Salameh has his detractors -- while invariably polite, Fouad Siniora is known to detest him -- and his prominent role at Paris III seems to have brought out the daggers. Perhaps Haddad (as Azour was more circumspect) is simply among those trying to bring the celebrated Governor down a notch after wildly generous accolades. According to Haddad, at the 1/24 luncheon for the Lebanese Paris III delegation with President Jacques Chirac in Paris, Chirac referred to Salameh and Jouyet (who managed Paris III for the GOF) as the "technicians," saying that he preferred technicians to politicians. Other than Chirac and Siniora, they were the only voices heard, according to Haddad, with ministers shunted to the margins. During the official Paris III events, Salameh was routinely given precedence over any of the Lebanese ministers, and Chirac pointedly remarked how much Lebanon "owes" Salameh. At a dinner hosted by Rafiq Hariri's widow Nazik, Salameh was lionized. BEIRUT 00000166 003 OF 003

    10. (C) Given that Azour was pointedly ignored for his contributions, and Haddad's seat at the conference was given to Salameh by the French, the two ministers' comments could have been motivated by jealousy. (Unusually for Lebanese intra-Christian bickering, neither Haddad -- a Protestant and thus ineligible to ascend to the heights of Baabda -- nor Azour are current competing with Salameh for the presidency.) However, there is a great deal of smoke around this subject, and Haddad actually said that he would resign from the government if Salameh became president. Although we have no way of confirming the rumors at this point, we speculate that there is at least a little fire somewhere beneath the smoke. We are waiting for more details from Salameh's would-be competitors for the presidency, for they have an interest in uncovering any improprieties in hopes of eliminating one of the front-runners. FELTMAN
     

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