As Lebanese got poorer, politicians stowed wealth abroad

Bold-faced names in “Pandora Papers” include the longtime central bank governor, Riad Salameh, a pivotal figure in the failed policies that helped trigger the financial crisis, Prime Minister Najib Mikati and his predecessor. (AFP)
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Updated 06 October 2021

As Lebanese got poorer, politicians stowed wealth abroad

  • Some of the newly outed holders of offshore accounts belong to the same ruling elite that is being blamed for the collapse
  • Bold-faced names in the leaked documents include the longtime central bank governor, Riad Salameh, Prime Minister Najib Mikati and his predecessor

BEIRUT: A trove of leaked documents confirmed that for years, Lebanon’s politicians and bankers have stowed wealth in offshore tax havens and used it to buy expensive properties.
A galling revelation for masses of newly impoverished Lebanese, caught in one of the world’s worst economic meltdowns in decades.
Some of the newly outed holders of offshore accounts belong to the same ruling elite that is being blamed for the collapse and for derailing the lives of ordinary Lebanese who have lost access to savings and now struggle to get fuel, electricity and medicine.
Bold-faced names in the leaked documents include the longtime central bank governor, a pivotal figure in the failed policies that helped trigger the financial crisis, as well as Prime Minister Najib Mikati and his predecessor.
The documents, named the “Pandora Papers,” were examined by the International Consortium of Investigative Journalists, with the first findings released on Sunday. The ICIJ report exposes the offshore secrets of wealthy elites from more than 200 countries and territories.
It was based on a review of nearly 11.9 million records obtained from 14 firms that provide services in setting up offshore firms and shell companies. Clients of such firms are often trying to hide their wealth and financial activities.
Setting up an offshore company is not illegal, but reinforces the perception that the wealthy and powerful play by different rules — a particularly upsetting notion for many Lebanese.
The papers show how members of the political class were sending wealth abroad for years, even as they urged people to deposit money in Lebanon’s banks, assuring them that it was safe, said Alia Ibrahim, a Lebanese journalist.
“We are not talking about regular citizens,” said Ibrahim, a co-founder of Daraj, a Beirut-based independent digital media platform, and one of scores of journalists across the world who worked with ICIJ on the investigation into the documents.
“These are politicians who served in public office for years, and they are partly responsible for the current crisis Lebanon is going through,” she said.
Lebanon is in the midst of what the World Bank says is one of the world’s worst economic meltdowns in the past 150 years. More than 70 percent of the population has been thrown into poverty, their savings nearly wiped out in the crisis that began in late 2019 and was in part caused by decades of corruption and mismanagement by the political class.
Hundreds of thousands of people staged nationwide protests against corruption starting in late 2019. Yet two years later the same politicians still run the country in the same way, protected by the sectarian-based system.
One of the protesters, Samir Skaff, said that the Lebanese are not surprised to be told that the political class “is made up of a bunch of thieves.”
“We have been saying that for years,” he said.
Offshore companies, though not illegal, can be used to elude taxes or hide illicitly gained money. The leaks only add further confirmation to what Lebanese have long said about their ruling class — though repeated reports of graft or illicit activity in the past have failed to bring change.
One of the 14 firms listed by ICIJ as providing offshore services is Trident Trust, with 346 Lebanese clients making up the largest group, more than double the second-place country, Britain.
One focus of the revelations is Riad Salameh, who has been Lebanon’s central bank governor for nearly 30 years.
Daraj reported that the documents showed Salameh founded a company called AMANIOR, based in the British Virgin Islands, in 2007. He is listed as its full owner and sole director, which Daraj said appeared to violate Lebanese laws forbidding the central bank governor from activity in any enterprise.
Salameh’s office told The Associated Press that the central bank governor has no comment on the documents. ICIJ quoted him as saying that he declares his assets and has complied with reporting obligations under Lebanese law.
Salameh, 70, is being investigated in Switzerland and France for potential money laundering and embezzlement. Local media reported over the past months that Salameh and his brother as well as one of his aides have been involved in illegal businesses, including money transfers abroad despite the capital controls imposed at home. Salameh had denied making such transfers.
Other documents showed that Marwan Kheireddine, chairman of Lebanon’s Al-Mawarid Bank, was involved in setting up a flurry of offshore businesses in the months just before the economic crisis hit in late 2019. In November that year, his bank and others began imposing capital controls that meant Lebanese could pull very little money out of their accounts even as the currency crashed, wrecking their savings’ value.
The Pandora Papers reveal that in 2019, Kheireddine received control of an offshore firm in the British Virgin Islands, which he then used to buy a $2 million yacht.
In January 2019, he and his brother set up four firms in Britain on the same day, all based at the same London address, and all registered as “small companies,” which Daraj said meant they are exempt from auditing. In 2020, Kheireddine bought a $9.9 million New York penthouse sold by American actress Jennifer Lawrence, Lebanese media reported at the time.
Kheireddine is a former Cabinet minister and a senior member of the Lebanese Democratic Party. He did not respond to calls and a text message by the AP.
Prime Minister Mikati, a businessman who formed a new government last month, has owned a Panama-based offshore company since the 1990s. He used it in 2008 to buy property in Monaco worth more than $10 million, Daraj reported from the documents.
The leaked documents also show that his son Maher was a director of at least two British Virgin Islands-based companies, which his father’s Monaco-based company, M1 Group, used to obtain an office in central London.
Mikati released a statement saying his family fortune was amassed prior to his involvement in politics and was “compliant with global standards” and regularly scrutinized by auditors. Contacted by the AP, Mikati’s media adviser Fares Gemayel said he had no comment.
Speaking to Daraj, Maher Mikati said it was common for people in Lebanon to use offshore companies “due to the easy process of incorporation” and denied the purpose was to evade taxes.
Mikati’s predecessor as prime minister, Hassan Diab, was a co-owner of a shell company in the British Virgin Islands, Daraj reported.
Diab’s office said in a statement Monday that he helped establish the company in 2015, but it did not do any business and he resigned from the firm and gave up his shares in 2019.
“Is the setting up of a company against the law?” the statement said.
Diab’s government resigned days after a massive Aug. 4, 2020, blast in Beirut that killed and injured hundreds and destroyed the city’s port and nearby neighborhoods. Diab was charged with intentional killings and negligence in the case. He denies any wrongdoing but has refused to be questioned by the judge leading the investigation.


Should the Beirut port blast site be turned into a place of remembrance?

Updated 6 sec ago

Should the Beirut port blast site be turned into a place of remembrance?

  • A design project envisions a museum, sound-therapy space and amphitheater where the deadly explosion occurred in 2020
  • Sultan El-Halabi was inspired by New York’s 9/11 memorial to imagine a place of remembrance for Lebanon

DUBAI: For Sultan El-Halabi, Aug. 4, 2020, began like any other day in Beirut. He was driving with his mother from their hometown of Chouf to the Lebanese capital, where they checked into a sea-facing hotel to rest.

But shortly after 6 p.m., El-Halabi’s mother said she felt a strange rumbling sensation. El-Halabi crossed the room to the balcony to investigate the cause when all of a sudden, the entire window frame flew off, collapsing right in front of him. They were both lucky to escape uninjured.

“No one could have expected that to happen,” El-Halabi, a 23-year-old architecture graduate, told Arab News from his base in Dubai, more than a year on from the Beirut port blast — a disaster that killed over 200 people and left some 300,000 homeless.

The scars from the blast remain visible on the city skyline. (AFP)

“I remember the view of the city afterward. They were warning people at the hotel to stay indoors because acid or chemicals could be in the air. The sky started changing color. It was more reddish. It was like a war zone. Everything, in just one second, was completely gone.”

More than a year later, the scars remain visible on the city skyline. What is less visible are mental scars the blast has left on those who survived and who lost homes, businesses and loved ones.

“In Lebanon now, you should just live your day as if it’s your last,” El-Halabi said. “Always stay connected with your loved ones because you never know what could happen.”

The tragedy motivated El-Halabi to base his senior graduation project at the American University in Dubai on restoring the devastated port, transforming it into an accessible, multi-functional and job-creating site that can be “given back to the people.”

His project, named “Repurpose 607,” envisages replacing the five damaged warehouse plots with a memorial museum, a sound-healing therapy space, an amphitheater and an underground parking area.

“Everything, in just one second, was completely gone,”  said Sultan El-Halabi, referring to the port tragedy. (Supplied)

The site would also feature a library, offices and a cafe, while a raised, circular footpath would offer visitors an overview of the port.

Flooded with natural light, the sound-healing therapy building would offer meditation and cognitive behavioral sessions to help those suffering with post-traumatic stress disorder as a result of the blast.

“For many people, until this day, if they hear a slight bang or any weird noise, they would always refer to the explosion or take cover,” El-Halabi said. Sound therapy could help many traumatized Beirut residents find calm and closure.

The proposed memorial museum would include a timeline of Beirut’s history up until the day of the blast and the names of its victims engraved on a large triangulated stone.

The tragedy motivated Sultan El-Halabi to base his senior graduation project on restoring the devastated port. (Supplied)

El-Halabi likens this tribute to how Americans honored the dead in New York following the 9/11 terrorist attacks.

“They did not rebuild where the Twin Towers were located,” El-Halabi said. “They dedicated that plot of land to the people and they transformed it into a beautiful memorial place to make sure that people’s memories would live on forever. It kind of inspired me to do something similar, but for Lebanon.”

The proposed site would have pedestrian paths as well as greenery and seating areas to offer space for quiet reflection away from the city traffic. A basement area would also be built to include a gallery for Lebanese artists to showcase their work.

The proposed site would have pedestrian paths as well as greenery and seating areas to offer space for quiet reflection. (Supplied)

Aesthetically geometric and bold, it is a place designed to benefit the people, to help them “to overcome the trauma and for them to see the beauty in the site rather than always fearing it,” El-Halabi said.

In his design, only one crucial element of the site remains untouched and preserved — the massive grain silos, which experts claim shielded the city from further damage. “It symbolizes strength and empowerment,” El-Halabi said. “It’s proof to the world that we could overcome any obstacle that we face.”

The young architect acknowledges it could take time for traumatized residents of the Lebanese capital to feel emotionally ready to visit a renovated site. “Of course it could be controversial,” El-Halabi said.

Aesthetically geometric and bold, it is a place designed to benefit the people. (Supplied)

“Many people have different opinions and you can’t change them so easily. Everyone has their own freedom to view things the way they’re supposed to. But, I am able to at least enlighten them with the advantages behind this proposal.”

As a student embracing cutting-edge digital technology, El-Halabi admired the ideas of pioneering architects like Antoni Gaudí and Frank Gehry, and especially Santiago Calatrava, who designed the falcon wing-shaped UAE pavilion at Expo 2020 Dubai.

The idea has been called “clever and thoughtful.” (Supplied)

Having lived almost all of his life in Dubai, El-Halabi says he has also been heavily influenced by his ever-evolving urban surroundings — considered one of the world’s most dramatic and experimental cityscapes.

“It all started with dunes,” he said, reflecting on Dubai’s astronomical growth over recent decades. “They were able to convert the UAE into a heavenly place. It inspires me a lot. It shows that, in such a short time, nothing is impossible.”

He also subscribes to the notion that architecture is more than its stylistic elements, and should ultimately work to enhance people’s lives.

Sultan El-Halabi likens this tribute to how Americans honored the 9/11 terrorist attacks victims. (Supplied)

“It’s about finding the missing satisfaction of what people need and trying to provide it to them,” he said. “Architecture is more than just designing or placing a building. You need to take into consideration the people and provide facilities for them. It also needs to fit in perfectly with its surroundings.”

In October last year, as part of Dubai Design Week, “Repurpose 607” was among 60 submissions that made it to the MENA Grad Show, where graduates from across the region present their “design meets purpose” projects that address social, health and environmental issues.

“It’s an architectural solution that goes well beyond architecture,” said Carlo Rizzo. (Supplied)

Carlo Rizzo, the show’s 2021 edition editor, praised El-Halabi’s project, describing it as one of the “top entries.”

“Repurpose 607 struck me first of all for its empathy,” Rizzo told Arab News. “It’s an architectural solution that goes well beyond architecture. It looks at the built environment as a platform for building resilience in our communities and takes mental health and wellbeing as a starting point.

“Repurpose 607” was among 60 submissions that made it to the MENA Grad Show. (Supplied)

“To remember the victims and transform the site into a place of healing is not just a clever and thoughtful idea, but an urgent solution addressing a very real need.”

El-Halabi, who currently works for a Dubai-based architectural firm, still hopes to see his Beirut port project brought to life some day.

“I’ve been to Lebanon two times since the explosion,” he said. “Every time I pass by the port, I always picture how it would look in real life, trying to see my project being built there. It could have potential.”

Twitter: @artprojectdxb

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Delegations waiting for the start of a meeting of the JCPOA in Vienna, in December 2021. (AFP/File Photo)
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  • Daesh group's Jan. 20 attack on the prison was the biggest military operation by the extremist group since the fall of their self-declared caliphate in 2019

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About a half-dozen Daesh fighters surrendered Friday morning, among scores of militants hiding in a basement in the northern section of the prison, according to Siamand Ali, a spokesman for the US-backed Syrian Democratic Forces.
He would not confirm or deny a report by the Britain-based Syrian Observatory for Human Rights, an opposition war monitor, that SDF fighters discovered the bodies of 18 of their comrades inside Gweiran prison, also known as Al-Sinaa prison, in northeast Syria on Friday.
Daesh group’s Jan. 20 attack on the prison was the biggest military operation by the extremist group since the fall of their self-declared caliphate in 2019. It came as the militants staged deadly attacks in both Syria and Iraq that stoked fears that Daesh may be staging a comeback.
The weeklong assault on one of the largest detention facilities in Syria has turned the city of Hassakeh into a conflict zone. The Kurdish-led administration declared a curfew and sealed off the city, barring movement in and out.
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The SDF had said that between 60 and 90 militants were hiding out in the northern section of the prison.
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The SDF said preliminary information put the force’s death toll at 35.


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