As Lebanon’s plunge into further economic and political turmoil resumes, its so-called political elite have yet to stop bickering and cooperate towards addressing Lebanon’s staggering $95.9bn public debt. Yet what Lebanon’s archaic warlords turned politicians have equally failed to explain is both where these billions of dollars have vanished to, and where the billions appropriated from the lifesavings of citizens by Lebanese banks have gone.
President Michael Aoun addressed the Lebanese last week, summoning them for their support in seeing through the forensic audit which the cabinet of Prime Minister Hassan Diab approved in April 2020 and has yet to reach any tangible results.
Aoun, unleashed a frontal assault against his political opponents who he branded as “thieves” – mainly Prime Minister designee Saad al-Hariri, Parliament Speaker Nabeh Berri and the governor of the Banque du Liban (BDL), and the Lebanese Ministry of Finance, who failed to present the auditors with vital information and documents they requested citing the banking secrecy.
Contracted by the Lebanese government, Alvarez & Marsal, a New York-based company that is a pioneer in this field of auditing, threatened to withdraw last November, as it had not yet received all the information it requested to conduct a proper audit of the BDL’s accounts. Alvarez & Marsal backtracked after a commitment from the government to secure this information, which still has yet to be honored.
The forensic audit requirement is one of the vital demands of the international donor institutions, in particular the International Monetary Fund, which require the audit before handing over a proposed $10 billion loan, or even any other donations or relief. These international organizations are crucial for Lebanon to pull itself out from its economic abyss.
Yet to many, Aoun’s call for the forensic audit is merely a populist maneuver the president utilizes to redirect blame and to exert pressure on Saad Hariri, especially since Hariri succeeded recently in holding Aoun and his son-in-law Gebran Bassil responsible for disrupting the formation of the cabinet in front of the eyes of the world.
The current forensic audit’s main flaw according to many skeptics is that it does not include all sectors of the Lebanese state, but rather focuses exclusively on the central bank, and flagrantly excludes the Ministry of Public Works and the Ministry of Energy – both individual blackholes within the Lebanese state and the main culprits behind waste and theft caused by crony contracts in recent years.
The electricity sector alone, which has been under the supervision of Bassil and other members of his party, has incurred Lebanon over $47 billion in debt, mostly caused by money spent on shady deals and contracts which have yet to provide Lebanese with decent, or any, electricity.
The forensic audit has polarized Lebanon’s political factions, with Aoun considering the process as an opportunity to settle scores. Both Aoun and Hezbollah falsely do not consider themselves part of the country’s establishment, and thus do not claim responsibility that for the current economic collapse, a delusional presumption to say the least.
The most dangerous implication about Aoun’s proposal is his continued promotion of the narrative that Hezbollah is not responsible for the ongoing collapse, and that the blame exclusively rests on the successive governments and economic plunders of the late Prime Minister Rafik Hariri and later his son Saad, both infamous for an excessive liberal economic approach.
To follow Aoun’s logic, or lack of, both him and Hezbollah are elements of reform who failed to carry out their plan simply because of the resistance of the corrupt political class, a claim that Hezbollah naturally supports.
Aoun’s presumption that he is free from blame is discredited by numbers. Lebanon’s public debt in 2005, when he returned from exile, was $38.5 billion, meaning that since then he has been partner in expanding this debt an additional $57.4 billion.
Regardless of Aoun’s intent, or if he is only bluffing, a forensic audit that goes beyond examining if the numbers simply add up and goes into tracing transactions and understanding if there was criminal or fraudulent intent, is of vital importance, regardless of who calls for it. This information is crucial for the Lebanese to understand what happened, assign blame accordingly, and make sure that any future public funds do not meet the same fate.
Expanding the forensic audit, contrary to what some Lebanese are demanding,is not really needed at this stage, because as is auditing the central bank will allow access to other entities, and will expose the Aoun’s bankers and his son-in-law’s shady deals at the ministry of energy and the ministry of communication.
Objecting to the forensic scrutiny and defending Riad Salameh, governor of the BDL, merely because Aoun and Hezbollah are endorsing it is both farcical and foolish. Salameh, just like Aoun and the entire political class, are primarily responsible for Lebanon’s debacle and a forensic audit will not only prove this, but will also confirm that Aoun is not simply part of this corrupt clientelist system but rather its Corrupter-in-Chief.