Lebanon Freezes Accounts of Former Central Bank Governor

Lebanese authorities on Monday froze the financial institution accounts of the nation’s embattled former central financial institution governor, Riad Salameh, days after the United States, Britain and Canada imposed sanctions on him for “contributing to the breakdown of the rule of law in Lebanon” by way of a long time of corruption.

The motion, introduced by Lebanon’s interim central financial institution governor, Wassim Mansouri, adopted an inside investigation. It got here simply two weeks after Mr. Salameh left his put up on the central financial institution, ending an 30-year tenure throughout which he nearly single-handedly constructed up Lebanon’s financial system from the ashes of warfare, and presided over its latest downfall.

The belongings of 4 individuals near Mr. Salameh have been additionally frozen by the central financial institution. They embrace Mr. Salameh’s brother, Raja Salameh; his son, Nady Salameh; Anna Kosakova, whom U.S. officers described as Mr. Salameh’s former companion; and his former assistant on the central financial institution, Marianne Hoayek.

The U.S.-led coalition accused them of serving to Mr. Salameh funnel a whole lot of hundreds of thousands of {dollars} by way of layered shell firms to put money into European actual property in order that he may amass an outsize fortune outdoors of the nation.

Mr. Salameh, 73, resigned his put up on July 31 as a cloud of investigation grew round him, following a long time when he was nearly untouchable in Lebanon thanks to shut ties to the nation’s political elite. France, Germany, Luxembourg and Switzerland began investigations into Mr. Salameh a number of years in the past over suspected monetary crimes, together with the suspected laundering of $330 million in funds by Mr. Salameh and his associates immediately from Lebanon’s central financial institution.

Paris and Berlin issued Interpol arrest notices for Mr. Salameh in May, however Lebanon doesn’t extradite its residents to international international locations.

Mr. Salameh couldn’t be reached for remark. He has repeatedly denied any wrongdoing and insisted that he amassed a private fortune of $23 million throughout a 20-year profession as a banker at Merrill Lynch.

The allegations of fraud had brought about a sensation in Lebanon, a rustic that has been affected by a historic collapse. In latest years, lots of its banks have turned largely bancrupt, unemployment has soared and the lira foreign money has plummeted in worth, leaving many Lebanese in charge Mr. Salameh for his or her sinking lifestyle.

A elegant, canny political operator and a Lebanese-French twin citizen, Mr. Salameh has been enmeshed in Lebanon’s politics since a earlier prime minister, Rafik Hariri, named him central financial institution governor in 1993. Mr. Salameh had been Mr. Hariri’s personal banker at Merrill Lynch.

Mr. Hariri was making an attempt to rebuild Lebanon after a disastrous 15-year civil warfare, and Mr. Salameh got down to stabilize the foreign money and reel in international funding. The nation supplied excessive rates of interest that attracted billions in deposits in Lebanese banks.

Mr. Salameh’s supporters hailed him as a talented savior for conserving the financial system steady. But in the end, his financial technique required ever extra borrowing to pay current collectors, and it collapsed in recent times in what some critics have known as an enormous Ponzi scheme.

In 2019, Lebanon entered an financial free-fall that, the World Bank mentioned in 2021, could rank within the prime three worldwide during the last 150 years, citing a “brutal” financial contraction of a magnitude “usually associated with conflicts or wars.”

Despite the calamity, Mr. Salameh till lately had not confronted critical calls by Lebanese politicians to step down.

But the corruption investigations in Europe started to pose new threats to his standing. Two months after the Interpol arrest warrants have been issued, the United States, with Britain and Canada, introduced the sanctions on Mr. Salameh, saying he “contributed to Lebanon’s endemic corruption and perpetuated the perception that elites in Lebanon need not abide by the same rules that apply to all Lebanese people.”

The former central financial institution governor “used his position to place his personal financial interests and ambitions above those of the people he served, even as the economic crisis in Lebanon worsened,” the Treasury below secretary for terrorism and monetary intelligence, Brian E. Nelson, mentioned in a press release final week.

Hwaida Saad contributed reporting.