POLITICAL ANALYSIS December 2020 Head-to-Head with Corruption: The Lebanese Challenge* Executive Summary The corruption of the Lebanese political and It is crucial to analyse this devastating phenomenon bureaucratic system is nothing new. Since the early and better understand its origins and entrenchment in days of its independence, Lebanon has endured growing the Lebanese economic and political system. Corruption cases of corruption. Successive governments were was nurtured by political sectarianism as mirrored in unable – provided they were willing – to put an end to the design of the successive Lebanese cabinets and red tape practices whereby public servants would reproduced in sectarian elections. This sectarianism is extort bribes from citizens in return for administrative a patronage system that has paved the way to public services. These practices are illegal and constitute an embezzlement policies and to the redistribution of abuse of public positions to secure private benefits. captured funds. It has impacted the Lebanese state to the extent that the latter has become a “looted state” Today anti-corruption efforts are timelier as the by sectarian groups. The most severe impact, Lebanese state, suffering from a 100-billion-dollar symbolically speaking, is “the loss of state legitimacy”; debt, struggles to avoid total collapse. Lebanon’s debt a state considered to be corrupt, negligent, and showing crisis is the result of corruption, embezzlement and little concern for protecting public interests or soundly misuse of public funds, unlawful appropriation of public managing its finances. property and revenues, and the illicit enrichment of leaders and civil servants. This shows the magnitude The resilience of corruption in Lebanon finds its deeper and scale of the problem. Not one state agency has roots in regional history as much as from the trivialisation been spared by corruption. It has in fact led to “the of corruptive habits in national life. Corruption is not an privatisation of public affairs” and the establishment of irreversible phenomenon. It is an attitude that is a “patrimonial state”; a state where the management of constructed, learnt, and reproduced. This attitude owes public funds and assets, national heritage, and public its resilience to the prevailing impunity and the lack of interests is dictated by private interests. This monitoring and awareness programmes among phenomenon per se, once it becomes universal, is an students and grassroots. If nothing is done to eradicate indicator of the state collapse and incapacity to manage corruptive behaviour through appropriate civic the common good. It is an early sign of its obsolescence. education, it will continue to thrive. * This is the edited translation of an analysis originally prepared in French by Joseph Maïla, professor of geopolitics and director of the Mediation Programme at the Institute for Research and Education on Negotiation (IRENÉ) at the Higher School of Economic and Commercial Sciences (ESSEC), Paris. 2 I Head-to-Head with Corruption However, the demise of corruption requires a system From a legal and administrative standpoint, it is vital to that teaches civic values, care for common good and accelerate the appointment of members of the National transparency in the accounts and practices of both the Anti-Corruption Commission and to implement the state and the private sector. National Anti-Corruption Strategy adopted on 12 May 2020. It is vital, as well, to enforce and strengthen the To this end, reform in Lebanon is a requirement on at laws on illicit enrichment, and to enact a new law for least three levels. awarding public contracts with better transparency, control, and unified regulations. For this to happen and With regards to political accountability, elections held to be enforced, the financial expertise within the on the grounds of a new electoral law and facilitating Lebanese judiciary needs to be reinforced and judges the transition to a non-sectarian and civil political should be trained to investigate corruption files; this is system will loosen the sectarian grip over public part of a long-awaited reform of the judiciary. The latter institutions. This law should also allow citizens to vote must use all the means offered by international law to in their constituency of residence rather than at the track down the fraudulent evasion of illicitly constituted place of registration of their family’s civil status. funds and recover stolen assets and ill-gotten gains. Lebanese citizens would be better enabled to claim and control the improvement of their living conditions in the In terms of civic culture, it is urgently needed to change places where they live and exercise their profession mentalities and promote a culture of responsible instead of perpetuating traditional allegiances to clan citizenship to overcome the indifferent or nearly and family solidarity. This law would also reduce the tolerant attitude towards corruption that prevails voting age to 18 and ensure adequate female today. This will require awareness raising at schools representation so that women, young people, and and higher education institutions, and an extensive marginalised groups, can be integrated into the information and sensitisation campaign about the democratic process. A wider administrative values ​​of citizenship and the consequences of corrupt decentralisation will allow citizens to participate in the practices. It will be necessary to involve all civil society development of their region and, ultimately, to better actors, in particular the youth and women associations, monitor and control public spending. supporting them to lead the way for the emergence of a new civic engagement. Anti-Money Laundering and Law on the Countering Mechanism for the Financing Appointing of Terrorism Whistle-blower Grade-One Law Protection Law Civil Servants No. 44 dated No. 83 dated No. 7 dated 24/11/2015 10/10/2018 03/07/2020 Access to Anti-corruption Law on Illicit Information in the Public Enrichment Law Sector and the and the No. 28 dated Creation of the Declaration of 10/02/2017 National Anti- Assets and Corruption Other Commission Interests No. 175 dated No. 189 dated 08/05/2020 16/10/2020 Lebanese Legislation on Combating Corruption Since 2015 Lebanese Legislation on Combating Corruption Since 2015 Head-to-Head with Corruption I 3 Introduction Corruption in Lebanon governs all sectors of society. At must therefore be linked to the type of state in which it the level of public administrations as in the latter’s operates, to the legislations of the latter and the state relations with citizens, prevails a somehow mutually of their enforcement, to the economic system it agreed upon system intended to facilitate administrative operates in and to the political culture and traditions procedures, secure participation in public tenders and that make it possible.2 the exoneration from taxes. This system stems more from fraud and venality than from the respect of laws Corruption, in its various forms, is not a recent and legal procedures. At the top of the pyramid, phenomenon in Lebanon. Going back to the Ottoman politico-financial groups are splitting the wins of era, where the 19th century reform decrees, known as fraudulent contracts to supposedly ensure the smooth the “Tanzimat”, mentioned the fight against corruption running of public services. Commissions extracted in the Empire, or even to the Governorate or from the manipulated awarding of public tenders to Moutassarifate of Mount-Lebanon (1861–1915) where pre-determined bidders can lead to the illicit certain Governors of the Mountain, including Mouzaffar enrichment of political leaders and officials appointed Pacha (1902–1907), offered administrative positions to key ministerial or administrative decision-making for money, the circumvention of the law and illicit positions. As a consequence, bit by bit, all public enrichment never really ceased. The young independent sectors, let alone economic and social practices, Lebanese Republic fought crises in which corruption became plagued by corruption. was not absent. The first President of the Republic, also a hero of independence, was forced to resign on 17 Corruption is a set of practices whereby public servants September 1952, during his second mandate, following extort citizens in return for administrative services. It suspicions of nepotism.3 President Béchara El-Khoury pre-supposes a willingness to circumvent the applicable was accused of abusing his position as head of State laws or administrative regulations for the mutual for personal interests or for the benefit of his family.4 benefit of stakeholders. It supposes a relationship The bankruptcy of Intra Bank, the largest Lebanese between two parties, individuals, or groups, in which bank, in 1966, whose founder and director was convicted one party obtains advantages of whatever nature of fraudulent bankruptcy, shook the Lebanese banking (heritage property, services, public contracts, tax system and had regional repercussions.5 Likewise, at exoneration or discounts etc.) in return for illegal the end of the 1960s and the beginning of the 1970s, the retribution. This approach is the result of an abuse scandal surrounding the purchase of the Crotale committed by a person entrusted with a public position missiles in which the Commander-in-Chief of the Army of the jurisdiction and prerogatives arising from his/her was involved gave rise to the 1972 Chamber of Deputies position to secure private interests.