Lebanon’s central bank chief in court to face money-laundering allegations

Lebanon’s central bank governor has appeared in front of a delegation of European investigators in a Beirut court, where for the first time he faced questions related to allegations of money-laundering and embezzlement of public funds.

At least five European countries are investigating accusations that Riad Salameh and his brother Raja Salameh misappropriated hundreds of millions of dollars and laundered some of the proceeds abroad. The teams from Europe also visited Beirut in January to question central bank officials and the heads of some of the country’s commercial banks.

Riad and Raja Salameh are also being investigated on corruption-related allegations in Lebanon. Both men and their associate Marianne Hoayek faced new corruption allegations this week by Judge Helena Iskandar, who is representing the state and overseeing the European delegation’s probe. As part of the new accusations the state moved to freeze their assets.

All three strenuously deny all the allegations of wrongdoing. Riad Salameh claims the international probes are part of a smear campaign designed to scapegoat him for Lebanon’s financial implosion.

The Banque du Liban’s Salameh, once celebrated for keeping Lebanon afloat during years of instability, has been the subject of intense scrutiny since the country’s economy imploded in 2019.

This is the first time he has appeared in court since separate allegations were levelled against him in Lebanon last year over illicit enrichment and money laundering.

Lebanese army soldiers and police officers on Thursday stood careful watch outside the Palace of Justice in Beirut while Salameh was questioned for more than five hours.

Under Lebanese law, the Europeans cannot directly question Salameh but must instead do so through a Lebanese judge, who acts as intermediary in the investigation.

Legal experts hailed the questioning as a breakthrough in the arduous quest for accountability for Lebanon’s economic meltdown. Many Lebanese, including activists and opposition lawmakers, accuse Salameh of mismanaging the country’s finances in his three decades as central bank chief. They have also questioned how he amassed his vast personal wealth.

The case opened this week is separate to other legal proceedings against Salameh in Lebanon. Beirut’s public prosecutor last month began investigating Riad and Raja Salameh and Hoayek for corruption, including embezzling public funds, forgery, illicit enrichment, money laundering and violation of tax laws.

Salameh’s sixth term as bank governor is up in July and he recently said he would not seek another term. There are also signs that his political support is waning. Caretaker prime minister Najib Mikati, previously a strong supporter of Salameh, said in a recent television interview that he was not in favour of extending the central bank chief’s term.