Lebanese politicians and bankers stored wealth abroad as residents got poorer, Pandora Papers show

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A trove of leaked documents confirmed that for years, Lebanese politicians and bankers have pooled money in offshore tax havens and used it to buy expensive assets – in one of the world’s worst economic downturns in decades A shocking revelation to the newly imprisoned Lebanese people.

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Some of the newly out holders of offshore accounts belong to the same ruling elite who are being blamed for the collapse and derailment of normal Lebanese lives, who have lost access to savings and are now unable to find fuel, electricity and medicine. are fighting for.

Bold-faced names in the leaked documents include the longtime central bank governor, a key figure in the failed policies that helped trigger the financial crisis, as well as Prime Minister Najib Mikati and his predecessor.


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The documents, dubbed the “Pandora Papers,” were examined by the International Consortium of Investigative Journalists, with the first findings released on Sunday. The ICIJ report unravels the offshore secrets of the wealthy elite of more than 200 countries and territories.

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This was based on a review of approximately 11.9 million records obtained from 14 firms that provide services in setting up offshore firms and shell companies. Clients of such firms often try to hide their assets and financial activities.

Setting up an offshore company is not illegal, but reinforces the notion that the rich and powerful play by different rules – a notion particularly troubling for many Lebanese.

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Lebanese journalist Aaliya Ibrahim said papers showing how members of the political class had been sending money abroad for years, even as she urged people to deposit money in Lebanese banks, assuring her that it is safe.

“We are not talking about regular citizens,” said Ibrahim, co-founder of Daraz, an independent digital media platform based in Beirut, and one of the journalists from around the world who sided with the ICIJ over the scrutiny of documents. Work done.

“These are politicians who have served in public office for years, and they are partly responsible for the current crisis in Lebanon,” she said.

The World Bank says Lebanon is facing one of the world’s worst economic recessions in the past 150 years. More than 70% of the population has been thrown into poverty, their savings nearly depleted in the crisis that began in late 2019 and in part due to decades of corruption and mismanagement by the political class.

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Hundreds of thousands of people staged nationwide protests against corruption starting in late 2019. Yet two years later, the same politicians run the country in the same manner, protected by a communal-based system.

One of the protesters, Samir Skaff, said Lebanese were not surprised that the political class was “made up of a bunch of thieves.”

He said, ‘We have been saying this for years.

Offshore companies, although not illegal, can be used to evade taxes or hide illegally earned money. The leaks only confirm what Lebanon has long said about its ruling class – although repeated reports of corruption or illegal activity in the past have failed to bring about change.

Trident Trust is one of 14 firms listed by the ICIJ as providing offshore services, with 346 Lebanese clients making up the largest group, more than twice that of second-ranked country, the UK.

One focus of the revelations is Riyadh Salameh, who has been Lebanon’s central bank governor for nearly 30 years.

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Daraz said documents show that Salame founded a company called AMANIOR based in the British Virgin Islands in 2007. He is listed as its wholly owner and sole director, which Daraz said violates Lebanese laws forbidding the central bank’s governor from activity. any enterprise.

Salameh’s office told The Associated Press that the central bank governor had not commented on the documents. The ICIJ quoted him as saying that he declared his assets and complied with reporting obligations under Lebanese law.

Salameh, 70, is being investigated in Switzerland and France for possible money laundering and embezzlement. Local media have reported over the past months that Salameh and his brother, as well as one of his associates, have been involved in illegal business, including money transfers abroad despite capital controls at home. Salameh had denied making such transfers.

Other documents have shown that the president of Lebanon’s Al-Mawrid Bank, Marwan Khereddin, was involved in setting up a flurry of offshore businesses in the months just before the economic crisis struck in late 2019. In November of that year, his bank and others began infusing capital. The controls meant that Lebanese could withdraw little money from their accounts, even if the currency crashed, ruining the value of their savings.

The Pandora Papers reveals that in 2019, Kheireddine gained control of an offshore firm in the British Virgin Islands, which it then used to buy a $2 million yacht.

In January 2019, he and his brother set up four firms in the UK in a single day, all based in the same London address, and all registered as “small companies”, which Daraz said they had Exempted from auditing. Lebanese media reported at the time that in 2020, Kheireddine bought a $9.9 million New York penthouse sold by American actress Jennifer Lawrence.

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Kheireddine is a former cabinet minister and a senior member of the Lebanese Democratic Party. He did not respond to calls and a text message by AP.

Prime Minister Mikati, a businessman who formed a new government last month, has owned an offshore company based in Panama since the 1990s. Daraz told documents that he used it to buy a property in Monaco in 2008 for more than $10 million.

Leaked documents also show that his son Maher was a director of at least two British Virgin Islands-based companies, which his father’s Monaco-based company, M1 Group, used to obtain an office in central London. Was.

Mikati issued a statement saying that his family fortunes were gathered prior to his involvement in politics and were “in line with global standards” and regularly scrutinized by auditors. When contacted by the AP, Mikati’s media advisor Fares Gamayel said he had no comment.

Speaking to Daraz, Maher Mikati said that it is common for people in Lebanon to use offshore companies “due to the easy process of incorporation” and denied that the purpose is to evade taxes.

Daraz pointed out that Mikati’s predecessor as prime minister, Hassan Diab, was a co-owner of a shell company in the British Virgin Islands.

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Diab’s office said in a statement Monday that he helped set up the company in 2015, but it did not do any business and he resigned from the firm and gave up his shares in 2019.

“Is setting up a company against the law?” The statement said.

Diab’s government resigned on August 4, 2020, following a massive explosion in Beirut that killed and injured hundreds of people and destroyed the city’s port and surrounding areas. Diab was charged with willful murder and negligence in the case. He denied any wrongdoing but refused to be questioned by the judge leading the investigation.

Our Morning Update and Evening Update newsletters are written by Granthshala editors, giving you a brief summary of the day’s most important headlines. .


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