The US government sanctioned former Lebanese ministers Ali Hassan Khalil and Youssef Fenianos for corruption and “facilitating Hezbollah’s agenda”.
The sanctions announced on Tuesday by the Treasury Department affect Mr Fenianos, a former transport minister, and Mr Khalil, a former minister of finance, under the counterterrorism authority.
US officials said there were allegations of corruption involving both men and urged that they be excluded from the formation of a new government, with the country promising to isolate Hezbollah’s pro-Iran militia and political party.
They stopped short of targeting any current officials in a nation torn by economic crisis and reeling in the aftermath of a deadly explosion in Beirut last month.
US officials said the two former ministers exemplify “the old corrupt way of doing business” in Lebanon.
“Corruption has run rampant in Lebanon, and Hezbollah has exploited the political system to spread its malign influence,” US Treasury Secretary Steven Mnuchin said.
“The United States stands with the people of Lebanon in their calls for reform and will continue to use its authorities to target those who oppress and exploit them,” he said.
The country ranks 137th out of 198 nations in Transparency International’s corruption index.
The Treasury Department said the two former ministers “provided material support to Hezbollah and engaged in corruption".
"These designations underscore how some Lebanese politicians have conspired with Hezbollah at the expense of the Lebanese people and institutions,” it said.
“The United States supports the Lebanese people in their calls for a transparent and accountable government free of corruption.”
The department listed US allegations of corruption and ties to Hezbollah against the two men.
“As of mid-2019, Hezbollah used its relationship with officials in the Lebanese government, including Fenianos as Minister of Transport and Public Works, to siphon funds from government budgets to ensure that Hezbollah-owned companies won bids for Lebanese government contracts worth millions of dollars,” it said.
Specifically it accused Mr Fenianos of receiving in 2015 hundreds of thousands of dollars in exchange for political favours.
The US accused Mr Khalil, who previously served as the minister of finance (2014-2020) and minister of public health (2011-2014), of helping Hezbollah in moving money to avoid sanctions.
“Mr Khalil worked to move money in a manner that would avoid US sanctions enforcement from government ministries to Hezbollah-associated institutions,” the Treasury Department said.
It also accused the former finance minister of using his power to exempt a Hezbollah affiliate from paying most taxes on electronics imported to Lebanon, and refusing to sign cheques payable to government suppliers in an effort to solicit kickbacks.
He demanded that a percentage of the contracts be paid to him directly.
US Secretary of State Mike Pompeo welcomed the sanctions.
"Anyone helping to advance Hezbollah’s political or economic interests is further eroding what remains of effective governance and facilitating financing for terrorism," he said.
Hanin Ghaddar, a senior fellow at the Washington Institute for Near East Policy, said the sanctions were important in falling under the anti-corruption category.
"This is an important first step because it targets corruption, an action that has received broad public support in Lebanon, as corruption is the main reason behind the economic collapse," Ms Ghaddar told The National.
Randa Slim, a senior fellow at the Middle East Institute, said the sanctions also signalled a tougher stance towards political affiliates of Mr Khalil and Mr Fenianos.
“It sends strong messages to Speaker of the House Nabih Berri and Parliamentarian Suleiman Franjieh,” Ms Slim said.
US Assistant Secretary of State David Schenker said more anti-corruption sanctions were expected as the country faced its worst economic crisis and protests approached their first anniversary next month.
The US and France are hoping the next government will enact structural reforms to curb corruption, cut Hezbollah’s influence and allow Lebanon to receive international aid.
