Robert Fisk: Beirut's banks – and a money trail from Syria to Iran…

The Central Bank of Lebanon is accused of taking deposits from terrorists and criminals

Related Topics

Syria strikes again. After weeks of shelling across the Lebanese border, the inevitable has happened. An anti-Iranian activist group, along with a host of "informed sources" in a Wall Street Journal report, is claiming that Beirut's wealthy banks have become a sovereign money-laundering jurisdiction for "massive inflows of illicit deposits … from Hezbollah's terror and criminal activities, and the illicit symbiotic relationships among Iran, Syria and Hezbollah".

At least, that's what the United Against Nuclear Iran group says. And, of course, everyone says that the Central Bank of Lebanon is involved. Poor old Lebanese banks. Or rather, rich old Lebanese banks. For every time there is a new hate wave against the hateful Islamic Republic, or a new Israeli-Hezbollah dust-up, New York fumes with allegations that Lebanon's bankers are deep in the financial mud with the various Hitlers of the Middle East.

And of course, Riad Salameh, the Lebanese central bank governor has trotted out to deny all the accusations. "Everything that has been said about the traffic of money from Syria to Lebanese banks is untrue," he said, adding that the number of Syrian deposits in Lebanese banks had gone down.

Mr Salameh, of course, is a fairly angry chap. This, after all, is the man who steered legislation through the Beirut cabinet in the mid-2000s to ban any Lebanese bank from dealing in sub-prime loans and derivatives. Since he knew how dodgy they were – he himself worked on Wall Street – he largely prevented the Lebanese banking system from being caught in the world's economic collapse. Unlike, of course, the New York banks, whose own corrupt practices managed to bankrupt thousands.

More than a year ago, I lunched with a Beirut financial adviser and asked when he thought the WSJ would try to bite the Lebanese banking system for money laundering and helping the Syrian regime. "I think we're past all that now, Robert," he said. "We've reached a new level of financial maturity with the Americans." Sure.

America's suspicions make sense only if you believe in the conspiracy theory, but the anti-Iranian group's argument plods along like a novel. Since Lebanon has "a great risk of sovereign default" (untrue) because of "its high debt to GDP ratio" (factually correct), there must be "a fraudulent hidden scheme driven by Hezbollah and its late (sic) sponsors, Iran and Syria, to support this economic house of cards". Therefore Lebanese financial institutions must be forbidden from participating in the US financial system.

Given the mass illegality within the US system, Lebanese bankers would be well advised to ban themselves from it. But now that the US Treasury is being told to designate Lebanon's financial system as a "money-laundering concern", is it true?

Well, the Treasury blacklisted the Lebanese Canadian bank last year over money-laundering charges and "connections to a terrorist group". But, long before the Arab revolutions, it was said that up to three-quarters of all Syria's privately-held dollar liquidity rested in Lebanese accounts. After all, who would open an account in the Central Bank of Syria?

I do occasionally pick up a whiff of something irregular – a system, for example, of transferring money from Lebanese-owned Syrian private banks to Beirut – but on nothing like the scale of US claims.

Of the world's top 1,000 banks, based on their probity and financial stability, eight Lebanese banks are included. That's according to The Banker magazine. Which I suppose the lads and lasses don't read.

React Now

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
iJobs Job Widget
iJobs General

Pharmaceutical Computer System Validation Specialist

£300 - £350 Per Day: Clearwater People Solutions Ltd: Pharmaceutical Computer ...

High Level Teaching Assistant (HTLA)

£70 - £90 per day: Randstad Education Birmingham: Higher Level Teaching Assist...

Teaching Assistant

£50 - £80 per day: Randstad Education Birmingham: Randstad Education is the UK...

Senior Java Developer - API's / Webservices - XML, XSLT

£400 - £450 Per Day: Clearwater People Solutions Ltd: Our client is currently ...

Day In a Page

Read Next

i Editor's Letter: Take a moment to imagine you're Ed Miliband...

Oliver Duff Oliver Duff

Letters: No vote poses difficult questions – so why rush?

Independent Voices
A roller-coaster tale from the 'voice of a generation'

Not That Kind of Girl:

A roller-coaster tale from 'voice of a generation' Lena Dunham
London is not bedlam or a cradle of vice. In fact it, as much as anywhere, deserves independence

London is not bedlam or a cradle of vice

In fact it, as much as anywhere, deserves independence
Vivienne Westwood 'didn’t want' relationship with Malcolm McLaren

Vivienne Westwood 'didn’t want' relationship with McLaren

Designer 'felt pressured' into going out with Sex Pistols manager
Jourdan Dunn: Model mother

Model mother

Jordan Dunn became one of the best-paid models in the world
Apple still coolest brand – despite U2 PR disaster

Apple still the coolest brand

Despite PR disaster of free U2 album
Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits
Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments