Riad Salameh’s Arrest: Lebanon’s First Step Toward Accountability or Just Another Symbolic Move?
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Editor - . September 17, 2024
- . Update: September 18, 2024 10:57 am
Following the terrible 2019 financial crisis, former Central Bank governor of Lebanon Riad Salameh—who served for three decades—has become the first high-ranking official to be imprisoned on corruption and embezzlement accusations. Millions of people without access to their lifetime savings and the loss of around 95% of the value of the Lebanese pound resulted from the collapse bringing Lebanon to its knees. Salameh’s incarceration on September 5 has spurred rumors over whether his detention would start a long-overdue reckoning for those accountable for Lebanon’s economic collapse.
Legal and financial experts have expressed mistrust about the timing and motivation of the detention. Renowned for his close relationships to the political elite, Salameh had sometimes been referred to as “untouchable” or the “black box” of the governing class. Although he is not the only one blamed for Lebanon’s terrible financial situation, he is considered as a major designer of the system that brought about the nation’s fall-off. His participation in a Ponzi scheme confirmed his position as the “master of the game” since it led to the bankruptcy of the state and the depletion of billions of depositor money. Among the biggest worldwide economic crises since the middle of the 19th century, the World Bank has labeled Lebanon’s financial collapse.
The Charges and Allegations: Deeper Dive into Salameh’s Role
Salameh is now accused of misappropriation of roughly $42 million in public funds as well as of illegal gain. Just a small portion of the estimated $100 billion to $130 billion of public assets and spent depositor money here. His charges that have placed him behind jail this time relate to dubious transactions involving Optimum Invest, a Lebanese financial company. Salameh and Optimum Invest both deny any misconduct, but the scope of the affair is so great that European investigators have taken notice.
Under investigation in at least five European nations for financial offenses totaling hundreds of millions of dollars are Salameh and his brother Raja. Given Salameh’s French citizenship, there is much of conjecture that his arrest might be an attempt to prevent his trial overseas. On the other hand, his incarceration could be a calculated action meant to relieve global pressure on Lebanon. The nation runs the danger of being included on the “gray list” of the Financial Action Task Force for not putting in place efficient anti-money laundering policies. Such a classification could destroy Lebanon’s already weak financial sector, therefore restricting capital movements and resulting in a credit rating collapse.
A Scapegoat or a Signal of Things to Come
Whether Salameh’s arrest marks a sincere attempt to bring those accountable for Lebanon’s fall to justice or if he is merely a scapegoat employed by a political class firmly rooted in corruption is a topic of increasing discussion. Many analysts think the governing class has no interest in putting Salameh behind bars permanently since his incarceration could reveal a decades-spanning web of wrongdoing. Speaking anonymously, a judicial source said that Salameh’s trial would not likely be allowed to go unhindered by Lebanon’s political leaders as they too have profited from the system that resulted in the nation’s financial catastrophe.
With its political elite accused of amassing enormous riches via public resources, most of which have been moved to offshore tax havens, Lebanon ranks among the most corrupt countries in the world. Although major, Salameh’s arrest might not be the breakthrough many are expecting for. Lawyer and executive director of The Legal Agenda, a local rights-based group, Nizar Saghieh thinks Salameh’s detention was probably influenced by foreign pressure. Saghieh claims that the action is more of a “goodwill gesture” by the Lebanese government to satisfy international powers than a sincere endeavor to hold the corrupt elite responsible.
Investigative judge Bilal Halowitz is spearheading the continuous Salameh inquiry; he has thus far defied political pressure usually stifling such proceedings. Still unanswered, though, is whether Halowitz will be able to keep his investigation free from intervention by Lebanon’s seriously corrupted court system. The court of the nation is highly influenced by political and sectarian elements, which sometimes prohibit justices from conducting objective investigations. Though many people remain dubious, Salameh’s trial might act as a barometer for the court’s handling of well-publicized matters.
Senior Middle East policy consultant Imad Salamey, a political science professor at Lebanese American University, pointed out that Salameh’s trial might mark a turning point in knowledge of the underlying reasons behind Lebanon’s financial collapse. While holding Salameh responsible could help to rebuild some public confidence in the court system, Lebanon’s strongly rooted political and sectarian differences create a major challenge. Salamey underlined that other significant decisions, such the inquiry into the 2020 Beirut port explosion and the 2005 murder of former Prime Minister Rafic Hariri, both of which were sidetracked by political meddling, clearly show the lack of autonomy of the court.
The arrest of Salameh has sparked further worries about the accused possibly obstructing the court process under Article 751 of Lebanon’s Code of Civil Procedure. This article lets litigants challenge investigating judges, so perhaps stopping Salameh’s trial. Delaying investigations into the Beirut port explosion and financial wrongdoing involving local banks, Article 751 has past been employed. Should Salameh use this legal loophole, all efforts toward making the ruling elite of Lebanon answerable could be undermined.
Silent Victims: Lebanon’s Bank Deposits
Salameh’s detention has brought up the terrible memories of Lebanon’s 2019 financial crisis, in which millions of depositors lost their life savings over night. Salameh’s trial offers many Lebanese people their sole chance of seeing justice done and maybe retrieving even some of their lost fortune. One month before the crisis, according to a 2022 policy paper by Lebanese economic expert Toufic Gaspard, $169 billion were overall bank deposits. The fall basically destroyed the riches built over three generations, leaving families broken and despondent.
President of the Association of French Depositors in Lebanon Richard Pharaon has expressed strong disapproval of the Lebanese court. He contends that the system let powerful people freely move money overseas, failing to act when the crisis started. Pharaon says Lebanon’s banking crisis is the “robbery of the century” and insists Salameh’s trial will expose how the $130 billion in depositor money was misused. The worry today is that Salameh’s release would provide a last blow to the already precarious court system, so erasing public confidence.
Although Salameh’s arrest represents a significant first step, much more is required to guide Lebanon back on track. Western countries, particularly in Europe and the United States, are closely observing the trial in search of a verdict that will grant justice to Lebanese people. International pressure by itself, meanwhile, will not be sufficient to implement the broad reforms needed to rebuild the nation’s economy and win popular confidence in its institutions.
Starting with judicial independence, Imad Salamey contends that basic structural changes are required. Without such changes, the corrupt governing elite will be free to keep using the resources of Lebanon while the court will be unable to execute open and objective trials. Only with sincere reforms will Lebanon be able to reclaim justice and defend the rights of its people, especially the depositors whose life were turned upside down by the financial crisis.
As the narrative of Riad Salameh develops, Lebanon is the center of attention for the globe; nevertheless, the question still remains: will this be a moment of reckoning for the nation or merely another chapter in a long history of corruption and impunity?
