Lebanon's ex-central bank chief Riad Salameh to be released on 'record-breaking' $20m bail

Legal experts have voiced concerns over slow pace of corruption investigation

Lebanon's former Central Bank governor Riad Salameh has been charged with embezzling public funds, forgery, illicit enrichment and money laundering. AFP

Lebanon has ordered the release of former central bank governor Riad Salameh on what is reportedly the largest bail in the country’s history, set at $20 million and 5 billion Lebanese pounds (about $55,000).

The Beirut Indictment Chamber ruling also imposed a one-year travel ban on Mr Salameh, who remains under several judicial investigations at home and abroad over allegations of financial misconduct.

Last September, a Lebanese judge charged Mr Salameh with embezzling at least $44 million from the central bank − in what has become known as the Optimum scandal − as well as illicit enrichment and forgery. He was placed in pretrial detention and his request for bail was rejected.

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Mr Salameh has denied any wrongdoing. His lawyer Mark Habka told The National the bail set by the court was an “illogical" amount that would be challenged.

Mr Habka said the decision to grant bail came “very late” and his client was due to be released next month in any case, as provisional detention can last only one year.

Once revered as the architect of Lebanon’s financial system, Mr Salameh is now widely blamed for its collapse and the subsequent financial crisis, which the World Bank has described as one of the worst since the mid-1800s.

Legal experts said that although releasing someone from provisional detention is not unusual, the slow pace of the investigation is a concern in a country where accountability is often elusive.

“Releasing someone from preventive detention is not, as such, an odd or an exceptional measure," former justice minister Marie-Claude Najm, of Saint Joseph University in Beirut, told The National. "Preventive detention is meant to be an exception."

She said it was used only when there is a risk to the case, to ensure the individual does not flee the country and remains available to the court, to preserve evidence, to prevent pressure on witnesses or collusion with accomplices, and sometimes also to protect the individual’s life.

"It is not supposed to last forever and the law also provides for a maximum period of preventive detention," she added.

“What is striking, rather, is that the case should be moving faster. We would have expected the investigation to have been completed by now, the case referred to court and the trial opened, so that the truth can be revealed and, at the same time, the rights of defence afforded."

The National revealed last year the details of the Optimum scandal, in which Mr Salameh is accused of embezzling millions of dollars from 2015 to 2018 through deals with Lebanon's central bank, Banque du Liban.

According to investigators, BDL would lend Optimum money to buy bonds, which the bank would then immediately repurchase at a substantial mark-up equal to the future interest payments on the bonds.

The premium would be returned to BDL as a commission and booked as an asset, while it was merely moving money around.

The financial scheme generated about $8 billion worth of sham transactions, which experts described as an accounting trick to conceal financial losses.

Lebanese investigators suspect Mr Salameh of diverting at least $44 million of the commissions into a slush fund.

The Optimum case is separate from the widely reported Forry Associates Ltd case, another broker allegedly used by Mr Salameh to allegedly embezzle $330 million from the central bank between 2002 and 2015.

This case is under investigation domestically and internationally, notably in France, which has issued an arrest warrant for Mr Salameh and several other suspects.

European judiciaries have also frozen assets worth hundreds of millions linked to Mr Salameh and his family.

While the Forry case has gathered pace abroad, it has remained in limbo for years in Lebanon, where judicial proceedings are often subject to political influence.

Some observers have expressed worries that the same could happen in the Optimum case.

Ms Najm said the judicial process would continue, regardless of the decision to release a suspect, but raised questions about how it would proceed.

"Is the Lebanese judiciary co-operating as it should with foreign requests for judicial assistance? Is the investigation advancing? These are the key questions,” Ms Najm said.

She criticised the trend in public interest cases, such as the prosecution of public servants for corruption or embezzlement, where people are placed in preventive detention or released after provisional detention without any real follow-up, even from the media.

“At the end of the day, there is no judicial truth clearly revealed to the public opinion and people do not understand whether there was a trial, a judgment, or nothing at all," she said.