The Obama Administration is declining to dispute statements made
by a senior Lebanese government official that would indicate the
U.S. government is comfortable with a Lebanese banking system that
may be — outside of Iran’s financing — the sole source of funds
propping up the Assad regime in Syria. But sources inside both the
U.S. Treasury and State Departments indicate that that is not the
case.
Last week, the Governor of the Lebanese Central Bank, Riad
Salameh, on a
high-profile Lebanese national news show, disputed news reports
that the U.S. government — specifically the U.S. Treasury
Department — was pursuing sanctions against at least one and
possibly multiple Lebanese banking institutions. Salameh claimed
that rumors of a fraying relationship between himself and the Obama
Administration were not true, and that concerns about the use of
Lebanese banks to launder drug money from Hezbollah to fund the
terrorist organization’s political activities, including support to
the Syrian regime, do “not reflect the position of the U.S.
Treasury Department.”
A Treasury source, declining to comment explicitly on rumored
investigations, said “Treasury’s eyes are wide open when it comes
to Governor Salameh,” adding that both the White House and the U.S.
State Department were aware of Salameh’s comments, but chose not to
dispute them directly. “As with just about everything else in that
region, it’s always more complicated than one might want,” says the
Treasury source, who said the refusal to dispute Salameh’s
statement had more to do with ongoing efforts by the U.S.
government against Syria than to “waste time setting the record
straight about comments made on what amounts to Lebanon’s version
of MSNBC. But there is no disputing the record of the current
governor of the Lebanese central bank, nor can the history of the
Lebanese banking system be disputed.”
A former senior State Department official who remains active in
global issues said, “There are very few if any long-time officials
in positions such as the one that Governor Salameh holds that have
any credibility with the U.S. government. Let’s just leave it at
that.”
The behind the scenes push back on efforts to portray Lebanon’s
banking system as clean, comes as former U.S. Senator George
Mitchell and his power law firm DLA Piper have been engaged by the
Lebanese Banking Association. Last month, according to a State
Department source, lawyers retained to represent the association,
as well as the central bank, traveled to Beirut, along with several
U.S. based crisis communications consultants, and met with Salameh
and other banking officials.
Within two weeks of that meeting’s conclusion, a column appeared
in
Forbes touting the Lebanese Central Bank as the U.S.’s
greatest ally in the war against terror funding and money
laundering. Seemingly feeling pressure from media and U.S. and
international banking regulators, Salameh has also begun more
vociferously insisting that Lebanese banks are adhering to the
global Syrian economic sanctions.
But the problem, according to U.S. Treasury officials, is less
about Syrian government or personal bank accounts in Lebanese
banks, and more with the bank accounts of Hezbollah officials, as
well as those of the Hezbollah political party, in those Lebanese
banks. The U.S. lists Hezbollah, which controls the Lebanese
government, as a terrorist organization, and in 2011 took
legal action against the Lebanese Canadian Bank (LCB), accusing
it of laundering hundreds of millions of dollars in drug proceeds
via deals with African and even Mexican drug rings. It also alleged
that “Hezbollah generated revenue from the network and that the
bank provided financial services to Iranian government
officials.”
“The fact is, the U.S. cleaned up LCB and it is today a clean
bank, but it was the Lebanese banking regulators that allowed all
of those ‘bad accounts’ to simply move on to other Lebanese banks,
and we believe the vast majority of those accounts remain open
today,” says a U.S. Treasury official. “What Hezbollah does with
that money is unclear, but we have a pretty good idea.”
“No one is buying Salameh’s latest charm offensive,” says a U.S.
State Department, who pointed out that Salameh has been accused of
similar efforts in the past, including some embarrassing details in
U.S. State
Department diplomatic cables that were leaked to the media.
“We’re at a critical juncture with Syria, and none of us is going
to waste time with an expensive legal and PR campaign that isn’t
going to influence any of us one way or the other.”
