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

Share
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?
SPONSORED FEATURES
iJobs Job Widget
iJobs General

Recruitment Genius: Telesales Executive - OTE £25,000

£13000 - £25000 per annum: Recruitment Genius: Would you like to be part of a ...

Recruitment Genius: 1st Line Technical Support Engineer

£19000 - £23000 per annum: Recruitment Genius: This IT and Telecoms company ar...

Recruitment Genius: Assistant Manager - Visitor Fundraising

£23000 per annum: Recruitment Genius: The Visitor Fundraising Team is responsi...

Recruitment Genius: Developer

£30000 - £35000 per annum: Recruitment Genius: This is an opportunity to join ...

Day In a Page

Read Next
An investor looks at an electronic board showing stock information at a brokerage house in Shanghai  

China has exposed the fatal flaws in our liberal economic order

Ann Pettifor
Jeremy Corbyn addresses over a thousand supporters at Middlesbrough Town Hall on August 18, 2015  

Thank God we have the right-wing press to tell us what a disaster Jeremy Corbyn as PM would be

Mark Steel
The Silk Roads that trace civilisation: Long before the West rose to power, Asian pathways were connecting peoples and places

The Silk Roads that trace civilisation

Long before the West rose to power, Asian pathways were connecting peoples and places
House of Lords: Outcry as donors, fixers and MPs caught up in expenses scandal are ennobled

The honours that shame Britain

Outcry as donors, fixers and MPs caught up in expenses scandal are ennobled
When it comes to street harassment, we need to talk about race

'When it comes to street harassment, we need to talk about race'

Why are black men living the stereotypes and why are we letting them get away with it?
International Tap Festival: Forget Fred Astaire and Ginger Rogers - this dancing is improvised, spontaneous and rhythmic

International Tap Festival comes to the UK

Forget Fred Astaire and Ginger Rogers - this dancing is improvised, spontaneous and rhythmic
War with Isis: Is Turkey's buffer zone in Syria a matter of self-defence – or just anti-Kurd?

Turkey's buffer zone in Syria: self-defence – or just anti-Kurd?

Ankara accused of exacerbating racial division by allowing Turkmen minority to cross the border
Doris Lessing: Acclaimed novelist was kept under MI5 observation for 18 years, newly released papers show

'A subversive brothel keeper and Communist'

Acclaimed novelist Doris Lessing was kept under MI5 observation for 18 years, newly released papers show
Big Blue Live: BBC's Springwatch offshoot swaps back gardens for California's Monterey Bay

BBC heads to the Californian coast

The Big Blue Live crew is preparing for the first of three episodes on Sunday night, filming from boats, planes and an aquarium studio
Austin Bidwell: The Victorian fraudster who shook the Bank of England with the most daring forgery the world had known

Victorian fraudster who shook the Bank of England

Conman Austin Bidwell. was a heartless cad who carried out the most daring forgery the world had known
Car hacking scandal: Security designed to stop thieves hot-wiring almost every modern motor has been cracked

Car hacking scandal

Security designed to stop thieves hot-wiring almost every modern motor has been cracked
10 best placemats

Take your seat: 10 best placemats

Protect your table and dine in style with a bold new accessory
Ashes 2015: Alastair Cook not the only one to be caught in The Oval mindwarp

Cook not the only one to be caught in The Oval mindwarp

Aussie skipper Michael Clarke was lured into believing that what we witnessed at Edgbaston and Trent Bridge would continue in London, says Kevin Garside
Can Rafael Benitez get the best out of Gareth Bale at Real Madrid?

Can Benitez get the best out of Bale?

Back at the club he watched as a boy, the pressure is on Benitez to find a winning blend from Real's multiple talents. As La Liga begins, Pete Jenson asks if it will be enough to stop Barcelona
Athletics World Championships 2015: Beijing witnesses new stage in the Jessica Ennis-Hill and Katarina Johnson-Thompson heptathlon rivalry

Beijing witnesses new stage in the Jess and Kat rivalry

The last time the two British heptathletes competed, Ennis-Hill was on the way to Olympic gold and Johnson-Thompson was just a promising teenager. But a lot has happened in the following three years
Jeremy Corbyn: Joining a shrewd operator desperate for power as he visits the North East

Jeremy Corbyn interview: A shrewd operator desperate for power

His radical anti-austerity agenda has caught the imagination of the left and politically disaffected and set a staid Labour leadership election alight
Isis executes Palmyra antiquities chief: Defender of ancient city's past was killed for protecting its future

Isis executes Palmyra antiquities chief

Robert Fisk on the defender of the ancient city's past who was killed for protecting its future