Abu Dhabi, UAETuesday 24 November 2020

Unfazed by withdrawal of auditing firm, Lebanon’s president vows to fight corruption

Michael Aoun says the country faces an existential battle and calls on citizens to stand united

Lebanese President Michel Aoun said he is determined to fight corruption after an auditing firm tasked with reviewing the country's central bank pulled out. AFP
Lebanese President Michel Aoun said he is determined to fight corruption after an auditing firm tasked with reviewing the country's central bank pulled out. AFP

Lebanon’s president Michel Aoun, who has always touted himself as a champion of a secular country and a crusader against corruption, said he is unfazed by the decision of auditing firm Alvarez & Marsal to withdraw from an agreement with the government to conduct a forensic review of the nation’s central bank, and said the assessment is critical to saving the state.

“I will not retreat or deviate from my battle against corruption that is rooted in our institutions, despite it being an unequal battle at the moment, given it is with a system that has held onto financial decisions for decades,” Mr Aoun, said on Twitter and in a televised speech a day ahead of the country’s commemoration of its 1943 independence from France.

“And I will not back down on the issue of criminal financial auditing, whatever the obstacles and I will take the necessary measures to restart the course.”

Alvarez & Marsal notified the government on November 19 of its decision to terminate its work, because they were unable to obtain the necessary information to carry out their work and “are not hopeful that they will be able to get additional information in the coming three months to carry on with their work,” outgoing finance minister Ghazi Wazni told The National on Saturday. The audit is an important prerequisite for Lebanon to obtain international assistance to help it emerge from its worst economic crisis since its independence.

The central bank, known as Banque du Liban, has cited banking secrecy laws from the 1950s that prevent it from sharing all the necessary information requested by the auditors. The audit is supposed to show how funds borrowed by the government from the central bank have been used. The government also has separate agreements with KPMG and Oliver Wyman for accounting audits.

Lebanon needs the financial assessment to secure a $10 billion bailout package from the International Monetary Fund and unlock $11bn of pledges from international donors.

The country defaulted on about $31bn of eurobonds in March, after which its currency plunged about 80 per cent against the US dollar in the black market and inflation surged to 131 per cent in September. Public debt reached $94.26bn as of the end of July with bank assets and deposits continuously declining.

The economy is expected to contract 25 per cent this year, according to IMF estimates.

“The withdrawal of Alvarez & Marsal from the mission entrusted to it is a setback to statehood, disclosure, accountability, and transparency,” Mr Aoun said. “Forensic auditing is the gateway to every reform, because it is able to uncover sources of corruption and waste and the reasons for the current [economic] collapse and those responsible for it.”

The president called on lawmakers to “fulfill their legislative duty.” He reached out to the country’s media organisations to “fight this battle in all honesty and transparency, for this is the real arena to fight corruption”.

Lebanon’s various newspapers and broadcast channels are backed or owned by the country’s political class. Mr Aoun’s own party, the so called Free Patriotic Movement launched its own OTV channel in 2007 and a radio station called Sawt Al Mada two years later.

The president called on Lebanese citizens, still reeling from a devastating blast at the Port of Beirut in August that exacerbated the country’s economic problems, to press on with their demands for transparency and accountability, a year on after they took to the streets to protest against the ruling political class.

“Dear Lebanese, I urge all of you to stand in solidarity, place pressure where necessary, and raise your voices in the right place to win the battle of criminal financial auditing, because it is the main battle to save Lebanon,” Mr Aoun said.

Updated: November 22, 2020 02:44 PM

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