Swiss open money-laundering probe of Lebanon’s central bank

The investigation is the latest blow of confidence to Lebanon’s crippled financial system.

Lebanon''s Central Bank Governor Riad Salameh speaks during an interview with Reuters at his office in Central Bank in Beirut, Lebanon October 24, 2017
The Swiss probe centres on $400m in transfers allegedly tied to Lebanon's central bank governor of 27 years, Riad Salameh, his brother Raja, and Salameh’s adviser Marianne Al-Hoayek, a judicial source told Al Jazeera [File: Jamal Saidi/Reuters]

Beirut, Lebanon – Swiss authorities have requested that Lebanon’s judiciary cooperate with a money-laundering investigation into the country’s central bank, in the latest blow of confidence to the insolvent financial institution and its crestfallen governor.

The probe centers on $400m in transfers allegedly tied to the bank’s governor of 27 years, Riad Salameh, his brother Raja, and Salameh’s advisor Marianne Al-Hoayek, a judicial source told Al Jazeera. Institutions in which the bank has a large stake – including Middle East Airlines and the Casino du Liban – are also under scrutiny, said the source.

Salameh issued a statement denying any wrongdoing and dismissing as “fabrications and fake news” reports of any transfers abroad on his behalf by himself, his brother or his adviser. He threatened legal action against anyone who publishes the information with the intention of harming his reputation.

The Swiss Attorney General’s office did not immediately respond to Al Jazeera’s request for comment. Swiss embassy officials in Beirut referred Al Jazeera to the prosecutor’s office. Lebanon’s outgoing justice minister also did not respond to a request for comment.

Reuters News Agency quoted the Swiss attorney general’s office as saying it had requested legal help from Lebanon in the context of an investigation into “aggravated money laundering” and possible embezzlement tied to the Lebanese central bank, formally known as the Banque du Liban.

It was not immediately clear whether Salameh is a suspect.

Tuesday’s news only deepens Salameh’s spectacular fall from grace since late 2019, when Lebanon plummeted into its deepest economic crisis since its 1975-90 civil war. Lebanon’s currency has since lost more than 80 percent of its value against the US dollar and more than half of the population now lives in poverty.

Previously the recipient of numerous international banking awards and a serious contender for the country’s presidency, Salameh has since been targeted by anti-government protesters who blame him, along with top politicians, for the country’s financial collapse.

Meanwhile, the international community has conditioned much-needed aid for Lebanon on a forensic audit of the central bank that Salameh has led since 1993.

The Swiss probe may yet face obstacles in Lebanon. The judicial source said that public prosecutor Ghassan Khoury, who received the Swiss request, noted a lack of evidence or supporting documents that would justify the “detailed questions” that Swiss authorities want to be posed to Salameh and others.

Khoury may ask for more information before deciding if he will comply with the request, said the source, noting that Lebanon had in 2020 requested the help of Swiss authorities in a probe into an estimated $2.4bn transferred outside of the country in the wake of October 2019 protests — transfers that circumvented unofficial capital controls.

Lebanon received no response at the time, the source said.

Source: Al Jazeera