LDN - Other News

U.S. imposes sanctions on two Lebanese businessmen and MP

[October 29, 2021] By Timour Azhari

BEIRUT (Reuters) -The U.S. Treasury has imposed sanctions on two top Lebanese contractors and a lawmaker close to the Hezbollah movement over alleged large-scale corruption that undermined the rule of law in Lebanon.

Businessmen Jihad al-Arab and Dany Khoury, close to former Lebanese Prime Minister Saad al-Hariri and Christian politician Gebran Bassil respectively, were sanctioned on Thursday for alleged corruption related to state contracts.

Lawmaker Jamil Sayyed was sanctioned for allegedly seeking to "skirt domestic banking policies and regulations" and transfer $120 million abroad, "presumably to enrich himself and his associates," a Treasury statement said.

The allegations come amid an unprecedented economic crisis in Lebanon blamed on years of bad policies and corruption by the ruling elite that the United Nations says has left three-quarters of the population affected by poverty.

Sayyed did not directly deny allegations he had skirted banking regulations with a $120 million transfer during Lebanon's economic crisis aided by a senior government official, but called for evidence to be released.

"I'm not defending myself, you have a responsibility to present to us these details," he told a news conference on Friday, adding that the U.S. Treasury had not provided any paper evidence for bank transfers.

Sayyed, an outspoken MP close to Hezbollah who formerly headed the country's top intelligence agency, is seen as a potential successor to Parliament speaker Nabih Berri, who has held the post for 29 years.

STATE CONTRACTS

The Treasury alleged that Khoury and Arab both received state contracts worth hundreds of millions of dollars, including for garbage collection and disposal work, thanks to political connections.

Khoury did not immediately respond to a request for comment, and Arab could not be reached.

Bassil denied allegations by the Treasury that Khoury had benefited from his personal relationship with him.

"He is not my partner in politics, nor am I a partner in business," Bassil said in a tweet.

[to top of second column]

Lebanon's former Major General Jamil al-Sayyed looks on in the court room at the special international tribunal for Lebanon in Leidschendam January 14, 2011. REUTERS/Jerry Lampen/File Photo

Khoury had won a contract worth $142 million to operate a coastal landfill and has been "accused of dumping toxic waste and refuse into the Mediterranean Sea... all while failing to remedy the garbage crisis," according to the Treasury statement.

Al Arab meanwhile "served as an intermediary as of 2014 to broker a meeting between top Lebanese officials in advance of the Lebanese presidential election, in exchange for two government contracts valued at approximately $200 million."

Thursday's sanctions marked the first time that the United States has imposed sanction on a close associate of Hariri, a pro-Western figure, having previously focused on Iran-backed Hezbollah and its allies.

"The Americans are sending a message to the entire political class, not just those backed by Iran, and also to the Lebanese people that they haven’t walked away," Maha Yahya, director of the Carnegie Middle East Center in Beirut, told Reuters.

In 2020, Washington imposed sanctions on Bassil along with former finance minister Ali Hasan Khalil and former public works minister Youssef Fenianos, alleging corruption and material support for Hezbollah.

Thursday's sanctions "also include concrete allegations on Sayyed’s money transfer after the revolution. This is new and has an impact on Hezbollah’s reputation," said Mohanad Hage Ali, a research fellow at the Carnegie Middle East Center.

In a tweet, U.S. Secretary of State Anthony Blinken characterized the new sanctions as "an important step in promoting accountability in Lebanon."

(Reporting by Timour Azhari and Maha El DahanWriting by Timour AzhariEditing by Peter Graff, Hugh Lawson and Frances Kerry)

Back to top