Lebanon central bank chief says detained brother did not profit from public funds

Riad Salameh tells Swiss television that Raja’s business is separate from his own

A poster featuring the image of Lebanon central bank governor Riad Salameh during a protest in outside the French embassy in Beirut, Lebanon, in January 2022. Mr Salameh told Swiss television his detained brother Raja did not profit from public funds. EPA

Lebanon’s embattled central bank governor, Riad Salameh, said his detained brother did not profit from public funds.

The governor’s brother, Raja Salameh, 61, was held on March 17 after Lebanese activists and lawyers filed a complaint accusing him and his brother of money laundering and illicit enrichment.

The following week, a judge pressed charges against both siblings.

On Wednesday, Riad Salameh told Swiss TV channel SRF 1 he rejected accusations of corruption against his brother.

“He has his business. He’s not my partner as president [of the central bank], and I’m not a partner in his business.”

When a reporter said Raja had received €300 million [$327.1m] in commission on the sale of government bonds, he answered: “Not true.”

“The contract is very clear. It says that no money from the central bank is involved and he has no exclusivity,” he said. “I don’t see how he could have been profiting from the central bank.”

Riad Salameh said he had already informed the Swiss judiciary that he was available for questioning.

A Lebanese judge ordered Raja Salameh’s release on Tuesday, but his lawyer told The National he was still being held because “the bail is very high”. He declined to give more details.

Judicial sources say the judge has reduced it from 500 billion to 200 billion Lebanese pounds, which is about $8 million dollars.

Riad’s younger brother Raja is a low-profile board member of a public-private partnership that manages central Beirut. He also led Forry Associates, based in the British Virgin Islands, which received more than $326 million between 2002 and 2014 from the central bank as part of a contract signed with the central bank, according to Swiss prosecutors.

Commercial banks paid commissions to BDL intermediaries when they bought government securities. One of these intermediaries was Forry Associates. Reuters reported in February that the central bank obscured recipients of commissions.

The detention of Raja Salameh came as a shock in Lebanon, where corruption is viewed as widespread but few top officials have ever been jailed. It also prompted Prime Minister Najib Mikati to accuse judges of increasing tensions in the country, which is widely viewed as bankrupt.

Riad Salameh, 71, was considered by most of Lebanon as one of the best central bankers in the world until the country’s financial collapse in 2019. His assets are under investigation in at least five European countries, including Switzerland, as well as in Lebanon, where a judicial hearing was postponed until June after he failed to appear for questioning on March 31. He was placed under a travel ban in January.

Swiss judges suspect that Riad Salameh embezzled hundreds of millions of dollars in public funds with the help of his brother, among others, and reinvested the cash into luxury property in Europe.

The continent’s criminal justice co-ordination body said in March that €120 million ($130.9 million) of Lebanese assets had been frozen in France, Germany, Luxembourg, Monaco and Belgium linked to an embezzlement investigation. German prosecutors told The National the move was tied to investigations into Riad Salameh.

Quote
Even if you only take interest, this money grows
Central bank governor Riad Salameh

The Banque du Liban governor has repeatedly said he is innocent. On Wednesday, he estimated his personal fortune at about $150 million, up from $23 million in 1993 – before he became head of the central bank – thanks to investments.

“Even if you only take interest, this money grows,” Riad Salameh said. He said he had a clear conscience and accused his detractors of relying solely on media reports. He has previously accused the judge who pressed charges against him of political bias.

Questioned by SRF 1 about real estate investments in Switzerland, Riad Salameh said: “Banks wouldn’t open accounts for anyone if something were illegal.”

He said he had used professional investment advisers and bank loans to buy property and that “I don’t see where is the crime in that”.

Updated: April 14, 2022, 1:51 PM