Lebanon’s caretaker PM steps in to protect banks charged with money laundering
The Association of Banks in Lebanon announced that, thanks to Mikati's overstepping of his authority, they would 'temporarily suspend' a strike that has helped decimate the value of the lira
By News Desk - February 24 2023

(Photo credit: Dalati & Nohra)

Lebanon’s caretaker Prime Minister, billionaire Najib Mikati, ordered security forces this week to ignore judicial orders issued against two commercial banks charged with money laundering, documents reviewed by Reuters show.

Mikati reportedly sent a letter to Interior Minister Bassam Mawlawi on 22 February telling security forces to “not carry out decisions issued by” prosecutor Ghada Aoun, alleging her judicial orders “constitute an overstepping of authority.”

In response to Mikati’s meddling in judiciary decisions, Mawlawi issued a directive for the General Security directorate and the Internal Security Forces not to act on Aoun’s orders.

Mikati’s office denied the accusations of interference in the judiciary.

Aoun has been in charge of investigating Lebanon’s financial sector since the manufactured economic collapse of 2019, caused by decades of corruption, wasteful spending, and financial mismanagement by the banking sector.

The prosecutor also investigated Central Bank Governor Riad Salameh, charging him with illicit enrichment last year for embezzling millions in public funds during his three-decade tenure.

Mikati stepped in to protect Salameh from these charges as well, calling for the freezing of the corruption probe and even receiving orders from the US embassy to protect him.

This week, Salameh was charged with money laundering, embezzlement, and illicit enrichment by judge Raja Hamoush. He faces similar charges in at least five European countries.

Mikati’s latest overstepping of his authority was swiftly condemned by Lebanon’s Higher Judicial Council, which, on 23 February, called on the caretaker premier and Mawlawi to reverse their decisions.

The statement released by the council calls for respecting “the principles of the separation of powers and the independence of the judicial authority, which are enshrined in the constitution and the law.”

“Mr. Mikati is interfering in a flagrant way with justice to stop the investigations that I am conducting in the case of banks and money laundering. For the defense of the sovereignty of law helps us,” Aoun tweeted on Wednesday.

As a result of Mikati’s interference on their behalf, the Association of Banks in Lebanon (ABL) on 24 February announced a “temporary suspension” of a banking sector strike that has been ongoing since the start of the month.

“Following an appeal from Prime Minister Najib Mikati and out of banks’ understanding of the difficult economic situations and of the need to provide banking services to all citizens at the end of the month, the Association of Banks in Lebanon has decided to temporarily suspend the strike for one week,” the ABL said in a statement.

The strike was launched in protest against the judicial probe into their illicit dealings.

This month Aoun charged two banks – Societe Generale du Banque du Liban (SGBL) and Bank Audi – with “money laundering” over their transactions with the central bank. Last year Aoun froze the assets of five top banks and their board members, although they were not charged with any wrongdoing.

Since the onset of the crisis in 2019, Lebanese banks unilaterally imposed restrictions on withdrawals in US dollars and Lebanese liras that were never formalized by law. This situation, coupled with the banks’ role in creating the crisis in the first place, has led depositors to seek access to their funds through lawsuits and often by force.

Last week, depositors launched new attacks against commercial banks as the Lebanese lira shed nearly 100 percent of its value, hitting a new low of 80,000 liras per one US dollar on the black market.

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