Corruption, Devastation and My Time in Beirut
I lived and worked in Lebanon for a year. While in Beirut, I dug into irregularities plaguing municipal contracts, noting the exchange of millions of dollars through suspicious tenders. My inquiry into a grossly overvalued contract for installing CCTV cameras across the city elicited no surprise from my peers; they were all painfully aware of the deceitful foundations upon which business deals were negotiated in the country.
That is why it was not surprising to hear the (now former) Prime Minister deliver these remarks during his resignation speech following the tragedy in Beirut:
“I previously said that the system of corruption is deeply-rooted in all the functions of the state; nevertheless I discovered that the corrupt system is bigger than the State, and that the latter is constrained by this system and cannot confront it or get rid of it.”
Last week’s explosion of 2,750 tons of ammonium nitrate tore through the city, leaving over 220 dead, 5,000 injured and 300,000 homeless. The government announced an investigation into the negligence that allowed such a catastrophe to happen. The cracks in Lebanon’s political system are now under international scrutiny as citizens reckon with how to proceed. Only a thorough and independent investigation will determine the exact factors that led to the devastating blast, but it is safe to assume that corruption will be a central finding.
I remember in October 2019, the streets echoed with the cries of protestors, chanting, “kellon ya3ni kellon,” meaning “all of them means all of them.” The message was understood to mean every single politician was to blame for the deteriorating economy and worsening living conditions. A proposed tax on the widely used WhatsApp was the spark but long festering frustration with systemic corruption was what drove people to the streets. When the marches began, anyone I stopped on the street would be quick to attribute the failures of their government to corruption. The problems superseded the sectarian lines along which government divided. Corruption had become endemic in positions of power, with money flowing through former militia leaders and profiteers of the Lebanese Civil War.
The rising unrest led to a repeat of history in the form of capital flight. A report published by the Carnegie Endowment for International Peace documented Lebanon’s drop into economic free fall, noting that nearly $800 million left the country between October 15 and November 7 of 2019. Food shortages and inflated prices decimated the middle class as funds poured into foreign bank accounts and political leaders lined their own coffers.
Lebanon’s strong civil society pushed for reform but faced structural and legal constraints. In April 2020, a website called Shinmimlam launched. The site consolidated corporate documents from the largely opaque (but public) national trade register providing users with an easy-to-use interface for searching through national businesses. Months later, in July, the Lebanese Ministry of Telecommunications blocked access to Shimimlam inside the country. Numerous transparency and human rights associations condemned the move. Lebanese officials cited privacy violations, but the real reason was apparent to all. The site would allow users to connect corrupt networks and Lebanese officials to illicit activity and misuse of funds meant to address Lebanon’s economic plight.
In the months leading up to last week’s tragedy, Prime Minister Hassan Diab’s cabinet was in talks to restructure the nation’s debt, which had ballooned to $90 billion USD, or, roughly, 170 percent of the country’s gross domestic product. Negotiations with potential lenders were underway after the government defaulted on Eurobond payments in March. Since then, political gridlock has delayed a $10 billion IMF bailout, and the spread of COVID-19 exacerbated the rising rate of unemployment and widespread hunger.
To date, the international community has raised nearly $300 million in emergency aid. The IMF’s managing director, Kristalina Georgieva, said that the Fund was willing to redouble their financial rescue efforts on four conditions. Among the key conditions are requirements to adopt controls, “to protect Lebanon’s international reserves while reducing rent-seeking and corruption.” She also called for more and better accountability among state owned enterprises. Specifically, she said of SOEs, “There must be more predictability, transparency and accountability of comprehensive audits of key institutions, including the central bank.”
The IMF, in cooperating with the Lebanese government, acknowledges that financial assistance must come with strings attached to guarantee its fair distribution. Some foreign governments are bypassing Lebanese officials entirely by donating directly to the UN, international organizations and local NGOs. In addition, countries are calling on Lebanon to launch a formal investigation into the negligence that resulted in the loss of life. The U.S. Department of State echoed these requests and stated their support for a “thorough and transparent” investigation into the explosion’s causes, and that “the Lebanese people deserve accountability and a government that prioritizes the safety and prosperity of its citizens.”
In time, we are will likely learn more about how decisions made by corrupt officials played a role in why explosive material was left to deteriorate in a warehouse in Beirut’s port for years. The history of corruption has already complicated funding for recovery efforts. These are the real-life consequences of a largely unchecked and corrupt system. As my friends and colleagues in Beirut begin to rebuild their lives, I urge the international community to support their pursuit of a transparent government, one with the necessary legal and regulatory tools to fight debilitating corruption. The Lebanese people deserve answers and accountability, and the entire TI network will continue to support their endeavor for justice.