European investigators from Germany, France and Luxembourg have arrived in Beirut to probe Lebanon’s powerful central bank governor and dozens of other people in connection with allegations of state corruption.
Once celebrated for steadying Lebanon’s precarious finances through years of instability, Banque du Liban’s Riad Salameh has been the subject of intense scrutiny since Lebanon’s financial collapse in 2019 that drove millions into poverty and entrenched paralysis in the Middle East nation’s political system.
At least five European countries are known to be investigating Salameh on suspicion of laundering public money in Europe, which stem from a Swiss investigation that was launched more than two years ago.
Swiss authorities suspect Salameh and his brother Raja of embezzling more than $300mn from BdL between 2002 and 2015 through transactions to an obscure offshore company, according to a letter from the Swiss attorney-general’s office requesting legal assistance from Lebanese authorities, sent in November 2020. Swiss investigators alleged that the offshore company, Forry Associates, was controlled by Raja, with more than $300mn then funnelled from Forry to Swiss bank accounts controlled by both brothers.
Many Lebanese, including activists and opposition lawmakers, accuse Salameh of mismanaging Lebanon’s monetary policy and reserves in his three decades at BdL’s helm. They have also questioned how he amassed his vast personal wealth. But political leaders continue to support him.
Salameh, 72, has repeatedly denied wrongdoing and says the international probes are part of a smear campaign designed to scapegoat him for Lebanon’s financial implosion. He has said his money was acquired during his years as an investment banker. His brother has also denied wrongdoing.
Salameh is also the subject of a corruption investigation in Lebanon, where a prosecutor charged him with illicit enrichment and money laundering in March. He denies the allegations. The case was referred to an investigative judge to conduct the inquiry, which has repeatedly stalled amid accusations of political bias and meddling.
Lebanon’s economic crisis has seen the Lebanese pound lose more than 95 per cent of its value against the dollar since October 2019. More than three quarters of the population is now under the poverty line, with government salaries slashed. Lebanon’s judiciary only began a return to work last week after a five-month strike over pay.
Switzerland’s investigation was followed by inquiries launched in France, Germany, Luxembourg and Liechtenstein. German and French prosecutors say they are investigating whether some of the funds identified by Swiss authorities were used to purchase real estate owned by Salameh and his inner circle in their countries.
Last April, the EU’s legal agency Eurojust said €120mn of Lebanese assets linked to an embezzlement investigation had been frozen in France, Germany, Luxembourg, Monaco and Belgium. German prosecutors confirmed the asset freezes were linked to investigations into Salameh.
“It is no longer a secret that Lebanon received requests for legal assistance from Germany, France, Luxembourg and Switzerland over suspected financial crimes,” caretaker justice minister Henri Khoury said last week. He added that during their week in the country, the European delegations will seek to question the Salameh brothers, the heads of commercial banks as well as BdL auditors and officials.
Khouri said Lebanon had already sent Germany, Switzerland and France “numerous pieces of evidence” requested. Lebanon is a signatory to a UN convention on corruption which stipulates mutual legal assistance in such cases. But German officials, who arrived last week, are said to have been frustrated by some of their judicial counterparts, who have limited their access to some files.