Lebanon’s Corrupted Elite: Money Laundering, Terrorist Financing, and the Collapse of a Country

Lebanon, once known as the “Switzerland of the Middle East,” has long been grappling with corruption at the highest levels. Despite a power-sharing agreement among its Christian and Muslim communities, modern-day Lebanon is mired in a sophisticated system of corruption, including money laundering and terrorist financing, particularly for Hezbollah.

Economic Instability and Corruption

The financial instability of Lebanon became apparent in 2019, when the Bank of Lebanon (BDL) initiated an ill-managed spending spree, leading to a crippling economic collapse, escalating debt, and plunging over 80% of Lebanese citizens into poverty. This mismanagement resulted in investigations into the banking industry, implicating not only Lebanese figures but also American judicial systems.

The Case of Riad Salameh

Among those under investigation is Riad Salameh, former BDL governor, who has been facing money laundering allegations since 2020. United for Lebanon, a group of attorneys dedicated to combatting corruption, filed a lawsuit against Salameh, Antoun Sehnaoui (CEO of Société Générale Bank of Lebanon), and four of the country’s main currency exchange houses.

Attacks on Ghada Aoun

In August 2021, Michel Mecattaf, a Lebanese transfer taxi company owner, was charged with illegally laundering billions of dollars alongside several associates. He and his co-defendants, including Salameh and Sehnaoui, began to retaliate by attacking the lead prosecutor, Ghada Aoun, personally. They accused her of being too close to former President Michel Aoun and disregarding the law to win her case.

Despite these attacks, Aoun persisted and even continued her investigation when a higher-ranking prosecutor removed her from the case in December 2021. The situation led to a controversy labeled as a “judicial uprising” by her supporters and a “mutiny” by her detractors.

The Lebanese Government’s Response

Fearing further corruption revelations, the Lebanese government tried to suppress Aoun’s case, leading to condemnation from anti-corruption groups and concerned citizens. The situation reached a critical point in February 2023 when banks stopped lending to each other due to the economic instability, leaving Lebanon’s economy on the brink of collapse.

Deep-Rooted Corruption and Hezbollah

The case took an international turn when families of Hezbollah terrorism victims filed a lawsuit in a U.S. district court against the bank and Sehnaoui for allegedly providing Hezbollah, a foreign terrorist organization, with financial services. The lawsuit targets other Lebanese banks as well, accusing them of collaborating with Hezbollah through the provision of extensive and sustained support.

Alleged Money Laundering and Hezbollah Support

Salameh and his associates are alleged to have transferred about $330 million from the BDL between 2002 and 2015 to acquire luxury real estate and other assets in Europe. Another disturbing revelation involves the 2011 acquisition of the defunct Lebanese Canadian Bank by Société Générale Bank of Lebanon, which had previously been identified as part of an international money laundering operation supporting Hezbollah.

Lebanon’s leaders must address these deep-rooted corruption issues if they hope to restore stability to the nation. Ghada Aoun, although under attack, remains a beacon of hope for those fighting for the rule of law in Lebanon. Only then can this nation begin to recover from its self-inflicted wounds.