On 27 November 2020, Lebanon’s Banque du Liban (Central Bank) Governor Riad Salameh was charged on suspicion of embezzlement, money laundering and abuse of influence in Switzerland, Britain, Luxembourg, Germany, the Netherlands, and Lebanon.
European judicial scrutiny over Salameh’s financial dealings first began in Bern, Switzerland, where legal authorities began investigating Lebanese bank transfers totaling about $400 million, the source of which is suspected to be Salameh, his brother Raja Salameh, and the governor’s assistant Marianne Howayek.
The Swiss Public Prosecutor’s Office subsequently wrote to Lebanon’s discriminatory Public Prosecution, requesting legal assistance from state authorities to investigate information that the Central Bank of Lebanon had laundered money and conducted embezzlement operations between 2002 and 2015.
These ‘suspicious’ transfers had been carried out through a company by the name of Forry Associates, owned by the two Salameh brothers.
On 26 December 2001, the Central Council of the Banque du Liban approved the governor’s request to sign a financial services contract between Forry and the Central Bank related to foreign currency debt bonds.
According to the Swiss Federal Prosecutor, the money was laundered in European and Lebanese banks, and was used to purchase real estate in several countries. Forry is, according to the Bern investigators, a shell company and a fraudulent front for the Salameh family.
This discovery represented the first fall of the domino for Riad Salameh, known to be ‘America’s man’ in the Lebanese financial sector.
Washington’s ‘criminal’ in Lebanon
The relationship between Riad Salameh and the US began to be revealed publicly in April 2019 when Lebanese daily newspaper Al-Akhbar published minutes of a meeting between the US Assistant Secretary of the Treasury for Terrorism Financing and Financial Crimes, Marshall Billingsley, and the (former) Lebanese Economy Minister, Mansour Bteish.
The minutes reveal a US official saying:
“We need a governor of the Banque du Liban and a deputy governor who we can trust, and who is sensitive and with whom confidential information about terrorist financing and money laundering can be exchanged. The situation today is that we trust Governor Riad Salameh and (former) Deputy Governor Muhammad Baasiri.”
Switzerland began its investigation in November 2020, and in February 2021, Lebanon’s discriminatory Public Prosecution launched a special investigation into Forry Associates and its relationship to the Salameh brothers.
The result of the investigation led by Lebanese Public Prosecutor Judge Jean Tannous (under the supervision of Public Prosecutor Ghassan Oueidat) led to a raid on Raja Salameh’s Beirut office in April 2021.
Then, on 26 May 2021, German and Swiss authorities ordered a freeze on the funds of Riad and Raja Salameh, and the same request was sent to France on 1 June.
French authorities immediately responded and began implementing procedures, while in Switzerland, citing the slow pace of judicial procedures, officials have yet to respond to Lebanese judiciary requests for assistance and information.
Surprisingly, given that Switzerland initiated this whole process, the Swiss have refused to send a copy of the contract signed between the Banque du Liban and the Forry company to the discriminatory Public Prosecution in Lebanon.
Bags of cash and financial sleaze
Thus far, three European states are leading criminal investigations against Riad Salameh: Switzerland, France and Luxembourg. The Netherlands, Germany, Britain, and Belgium are still examining complaints and follow-ups to files, and have not yet launched their own criminal investigations.
In July 2021, French airport customs authorities arrested Riad Salameh after discovering an undeclared amount of 84,430 euros and 7,710 dollars in his private bag, far more cash than is legally allowed to physically enter France without a permit.
Salameh’s initial response was to deny knowledge of the money, but shortly after being taken to an interrogation room, he confessed to have ‘forgotten’ that he had placed the money in his bag.
The scandal in France and the penalty slapped on Salameh have been added to the two complaints filed against him in Paris.
The first complaint was submitted on 16 April 2020 by Accountability Now, an NGO organization focused on Lebanon’s financial and political crimes against the Lebanese people, established by both Lebanese and Swiss human rights activists.
The second complaint was submitted on 30 April by the French ‘Sherpa’ organization, which specializes in combating economic and financial crimes around the world.
Investigations have progressed in France, leading to the interrogation of Raja Salameh, and the dispatch of a French police force on 21 October to raid apartments and real estate suspected of belonging to Riad and Raja Salameh and a certain Anna Kozakova, who the French press described as “the mother of Riad Salameh’s illegitimate
The main objective of these raids was to gain access to an apartment located on the French Champs-Elysées, rented by Riad Salameh from Kozakova.
This apartment is officially leased by the Banque du Liban as a “reserve center” in case a force majeure event prevents it from working from its headquarters in Beirut’s Hamra district, or its secondary headquarters in Bikfaya, the Matn district of Mount Lebanon.
The raid revealed that the Banque du Liban rented the apartment for a whopping $500,000 per year – basically, it seems, to house only an electronic server no more than two square meters in size.
A deluxe suite of lawsuits
The prosecution of the central bank governor is not limited to France, as Accountability Now has also filed a complaint in Britain.
On 14 October, a meeting was held in The Hague, which included representatives of the Public Prosecution Office in Lebanon, France, Switzerland, Germany, Luxembourg and Britain, with the intention “to coordinate the investigation steps into the wealth of Riad Salameh, Raja Salameh and Kozakova.”
The wealth of these three individuals is also being pursued in Belgium; while Luxembourg has frozen Salameh’s accounts after launching a criminal investigation against him on 12 November.
Media investigations have revealed three companies registered in Luxembourg in the name of Riad Salameh with combined assets of about $100 million, while a further entity is registered in the name of Raja Salameh.
Discoveries from previous investigations also show that Riad Salameh owns real estate amounting to 150 million dollars, about half of which is in Britain, and no less than 35 million euros invested in French real estate purchases, mostly between 2007 and 2014.
Lebanese lawsuits against its criminal ‘strongmen’ are gaining importance in the country. While the European legal clampdown on Riad Salameh is unprecedented, the most important implications are the lawsuit filed against him in Lebanon, handled by the discriminatory Public Prosecution.
Salameh collaborates closely with most Lebanese political forces and parties, enjoys the cover of the Maronite Patriarchate, and is carefully promoted by the majority of local media outlets.
Nevertheless, Judge Jean Tannous has questioned Salameh twice, as well as employees of two financial auditing firms, Ernst & Young and Deloitte, both of which audit the accounts of the Banque du Liban, a number of its managers, and former members of the bank’s Central Council.
Meanwhile, Salameh’s assistant, Marianne Howayek, was arrested for a few hours at Beirut airport last May, during which documents and electronic devices were confiscated before her release.
Riad Salameh is not just one of ‘Washington’s men’ in Lebanon; he is also the most powerful employee of the Lebanese state.
The Monetary and Credit Law, which regulates the work of the Lebanese banking sector, bestowed broad powers upon the central bank governor in terms of preserving money and the nation’s economy, but Salameh expanded his sphere of influence by taking advantage of the successive failures of political authorities to carry out their duties and to define the financial and social policy of the state.
Salameh’s crimes against Lebanon … with US blessing
Since 1997 to date, Salameh has personally taken all the measures and made all the decisions that led to Lebanon’s economic collapse.
These include fixing the exchange rate, borrowing US dollars from the Banque du Liban, and luring Lebanese banks to bring in deposits from correspondent banks abroad and placing them in the Banque du Liban with high interest rates.
Salameh’s actions also includes executing financial engineering that doubled the profits of bank owners and increased the state’s indebtedness; concealing the losses of the banking sector; applying subsidies to the importation of fuel, medicine and wheat, and then raising prices before finding an alternative for the Lebanese citizenry; disrupting the financial plan of the government of former Prime Minister Hassan Diab; and finally, participating in currency market speculation which contributed to the collapse of the Lebanese Lira currency, wiping out depositors’ life savings.
In its report issued in the spring of 2021, the World Bank described Salameh as “the exclusive policy maker” in Lebanon’s economy. Today, he is a suspect, having refused since February 2021 to provide the discriminatory Public Prosecution with his personal account statements in order to investigate the Forry case.
But instead of suspending Salameh from his position as the Central Bank’s governor until investigations were completed, the Council of Ministers expanded his authority, making him a ‘partner’ in the development of a financial rescue plan and IMF negotiations for Lebanon.
Today, Riad Salameh continues to be protected by the political, religious and media establishments of Lebanon, and by a US administration that refuses to allow him to be dismissed.
Specifically, it was the US embassy in Beirut which directly intervened against former Lebanese PM Hassan Diab’s decision to sack Riad Salameh and reset Lebanon’s collapsing financial system on a different path.