The US administration continues to tighten its hold over the Iranian axis and Hezbollah particular. Following the imposition of sanctions on Hezbollah allies within Lebanon, the latest of whom being the head of the Free Patriotic Movement Gebran Bassil, the Wall Street Journal published a report which claimed that American and Western diplomatic officials are exerting pressure on the Lebanese Central Bank. This pressure is part of an international campaign to sideline Hezbollah, fight corruption, and alleviate the burden of the economic crisis in Lebanon.
The Journal said in its report, that was published at a notable time right after the latest UNESCO session and in tandem with the withdrawal of Alvarez and Marshall consulting firm from the BdL audit. Western officials said that Washington and allies have been demanding a criminal audit at the Central Bank for months, as they believe that it may “ Uncover evidence of money laundering, corruption, and relationships between senior Lebanese officials, including the bank itself, with Hezbollah.”
According to the officials contacted by the newspaper, the pressure exerted on the Central Bank which includes threats of sanctions, is a rare step. The United States does not normally take similar measures against even the staunchest of enemies such as North Korea, Iran, or Venezuela.
The officials added, according the WSJ, that Washington and its allies are empowered by Lebanon’s dire need for emergency funding. They are demanding an audit hoping to shed some light on the Central Bank’s ambiguous financial operations. Concerns over these operations have exacerbated following the withdrawal of “Alvarez and Marshall”.
In parallel, many current and former Western and Lebanese officials say that influential parties in political and economic positions of authority have so far hindered international efforts to subject the Central Bank to comprehensive scrutiny. These include Governor Riad Salameh and government officials linked to Hezbollah. This would make them potential targets for sanctions by the United States and its allies, according to the Wall Street Journal report.
A former official in the Lebanese Finance Ministry said in a comment that: “A comprehensive audit is unlikely to occur as long as Salameh is still in his position.”
The Wall Street Journal pointed out here that Salameh refused requests for an interview.
Concealing Hezbollah’s Activities
Regarding the role of the Central Bank, officials from the US and allied countries indicate that the weakness of the Central Bank’s oversight emboldened rampant corruption which was cited in a series of US sanctions. According to the newspaper, officials concluded that the Central Bank had a key role in financing Hezbollah. Some of the evidence fueling these concerns are BDL records that the Wall Street Journal reviewed copies of. These records show that well-known Hezbollah accounts in private Lebanese banks were allowed to operate, even after US directives to close them were issued. The officials also expressed their concern over Hezbollah’s access to the Lebanese banking system which allows them to finance attacks against the US forces and their allies in the region, as well as supporting Iran. They also claimed that much of Hezbollah’s funding comes from abroad through illegal activities such as drug smuggling.
Despite the closure of some accounts by Salameh under US requests, Hezbollah maintained reliable access to the banking system which helped them thrive, according to the officials. It is noteworthy that, last June, the US Ambassador to Lebanon Dorothy Shea replied to a question about Salameh’s role, saying: “It is not right to take any person or institution as a scapegoat for Lebanon’s economic collapse. At the time, Shea emphasized that Salameh “has the confidence of the international financial community.”
Lebanon’s Crisis: Unique Opportunity
Speaking of Lebanon’s economic and financial crisis, US officials said that the crisis provides a unique opportunity to do what the United States fought for in the past. Officials maintain that they do not support the implementation of any rescue plan without a comprehensive audit as well as adoption of policies called for by the International Monetary Fund.
On the other hand, Western officials say that without a comprehensive audit of the Central Bank, the full extent of Lebanon’s economic woes cannot be determined. Whether Banque du Liban has any remaining foreign reserves to prevent the collapse of the local currency as well as hyper inflation must be verified.