In a country where civil service appointments privilege political affiliation over competence, Lebanese Central Bank Governor Riad Salameh is a striking exception. On September 21, the business magazine Euromoney named Salameh its Central Bank Governor of the Year, crediting him with maintaining monetary stability and shoring up the Central Bank's reserves in spite of "the country's economic plight and political deadlock" since his appointment in 1993. However, the man that Euromoney called "one of the few people holding this country together" nearly lost his job just days after receiving the award.

The story began in late August, when the United States sent the Lebanese government a list of six individuals and five "charities" affiliated with the Palestinian terrorist group Hamas and asked that their accounts in Lebanon be frozen. After receiving written requests from the Foreign Ministry and Finance Ministry asking him to investigate the matter, Salameh directed the Central Bank's Special Investigative Authority (SIA) to launch a probe. On September 8, it sent a letter to all Lebanese banks asking them to disclose any accounts held by these individuals and groups.

Unfortunately for Salameh, whoever authorized him to conduct the probe hadn't checked with the Syrians. After Reuters leaked details of the probe on September 21, all hell broke lose as Lebanese political elites raced to upstage each other in condemning the investigation and denying prior knowledge of it. The Central Bank probe "contradicts the government's national stand on the resistance movement's in Lebanon and occupied Palestine," declared Information Minister Michel Samaha.[1] Parliament Speaker Nabih Berri demanded an inquiry to expose Central Bank officials "who tarnish Lebanon's resistance reputation." President Emile Lahoud publicly demanded that Salameh provide an explanation for the decision, while Prime Minister Rafiq Hariri condemned the SIA for "not consulting the political establishment."[2] Both were lying, however, as the two ministries that requested the probe - foreign affairs and finance - are controlled, respectively, by proteges of the president and prime minister.

A similar dispute has erupted over the issue of money deposited by the former Iraqi regime in Lebanese banks. A recent report in The New York Times quoted American officials as saying that these funds total about $495 million. The officials said that the Lebanese government initially pledged to surrender the funds, but recently stopped cooperating after coming under pressure from Syria.[3] In a statement issued in May, the Central Bank said that it had frozen millions of dollars of the ousted regime's assets. However, Lebanese officials now claim that they have no knowledge of such funds. "What money? We have no proof any money entered Lebanon in the first place," Prosecutor-General Adnan Addoum was quoted as saying.[4]

Ironically, these developments did not stop the Financial Action Task Force - the anti-laundering watchdog of the Organization for Economic Cooperation and Development - from recently removing Lebanon from its monitoring list.

Notes

  [1] "Central Bank Probe into Hamas Accounts Sparks Anger in Lebanon," Agence France Presse, 23 September 2003.
  [2] The Daily Star (Beirut), 24 September 2003.
  [3] "US Believes Syrian Banks Hold $3 Billion in Iraqi Funds," The New York Times, 21 October 2003.
  [4] The Daily Star (Beirut), 23 October 2003.