By Nohad Topalian | 2025-03-13

BEIRUT -- Lebanon's drive to dismantle vast corruption networks has gained momentum with the imprisonment of former Central Bank governor Riad Salameh and France's prosecution of leading bankers.

The moves come after decades of dysfunction ate away at the integrity of the country's financial systems, enabling Iran-backed Hizbullah to operate with impunity and siphon billions from state coffers.

Salameh was charged in September with embezzling hundreds of millions and imprisoned, in a case that revealed how Lebanon's banking system had enabled both political elites and Hizbullah to drain state resources.

In March 2023, French authorities indicted former Minister of State and AM Bank chairman Marwan Kheireddine for allegedly collaborating with Salameh to funnel illicit wealth through overseas accounts and luxury properties.

While facing charges of money laundering and forming a criminal organization, Kheireddine transferred his $200 million British real estate empire to his brother, according to the Organized Crime and Corruption Reporting Project.

Hizbullah's financial empire

"Suspicions surround numerous political decision-makers and ministry heads regarding the theft of public funds spanning many years," financial expert Patrick Mardini told Al-Fassel.

"The political class wrongly presented Salameh as solely responsible for all public fund theft," he added, noting that the web of corruption extends far beyond the former Central Bank governor's actions.

Meaningful reform requires fundamental changes, Mardini said.

"First, ending public fund embezzlement through no-bid contracts and favoritism, replacing them with competitive tenders. Second, establishing transparent, accountable public fund management."

Hizbullah and its affiliated state ministers "wielded significant influence over government operations both before and after the financial collapse," he said.

"Their allies spread corruption and embezzled funds under Hizbullah's protection, particularly in public works, water and electricity sectors."

He pointed to the party's role in a subsidy program that "cost the state $6 billion, largely wasted through smuggling to Syria."

Chance for reform

"Lebanon faces an important chance to begin accountability, as Hizbullah's influence declines after years of operating as a state within the state," economic writer Antoine Farah told Al-Fassel.

"The party had prevented accountability, engaged in illegal activities and encouraged the culture of corruption," he said, stressing the need for institutional reform.

The challenge lies in dismantling both traditional corruption and Hizbullah's complex financial networks that operated within this system.

During Salameh's three-decade tenure, these parallel structures flourished through money exchange houses and front companies.

"Recent developments offer hope for enhanced accountability," Farah said.

He pointed to "the government's introduction of judicial independence laws, support for the Public Procurement Authority and commitment to forensic audits of all ministries."