Riad Salameh's case is an opportunity to restore confidence in Lebanon

Lebanon's protracted financial crisis has led to many angry demonstrations over the country's troubled banking system. AP

When Bassam Al Sheikh Hussein walked into to his local bank in Beirut in August 2022 to withdraw $35,000 from his savings for his father’s medical treatment, he did so armed with a rifle and a gas canister. A seven-hour standoff ensued as he took bank employees hostage and demonstrators gathered outside to condemn a banking system that had forced citizens like him to demand their own money at gunpoint - an illegal act borne of desperation.

No one was hurt in this extreme manifestation of Lebanon’s economic crisis. But for some among the country’s elite, access to cash – in some cases millions of US dollars – appears to have been little trouble. However, recent developments suggest that one of Lebanon’s most troubled institutions – Banque du Liban (BDL), as its central bank is known – may be getting its house in order at last.

At the centre of a legal, political and criminal storm is Riad Salameh, the bank’s former governor. Accused of having embezzled more than $330 million in public money through a slush fund at the BDL, Mr Salameh – once regarded as a financial wizard – is being investigated by a French court. On Friday, the lawyer who initially brought legal action against Mr Salameh in France told The National that the central bank has joined the inquiry as a civil party.

This was a positive step, William Bourdon said, adding that he expects the inquiry to finish next year, with a trial to follow. It is the latest in a series of legal twists and turns concerning Mr Salameh, a man who once wielded significant influence over Lebanon’s ailing economy.

The investigation began in 2021, after Mr Bourdon and French lawyer Amelie Lefebvre lodged a complaint with the French National Financial Prosecutor's Office. It quickly gained momentum with the creation of an international investigative team involving Germany and Luxembourg, resulting in €120 million ($132 million) of assets tied to Mr Salameh being frozen in 2023. An arrest warrant from the French judiciary followed in May last year.

Mr Salameh has repeatedly denied any wrongdoing. Nevertheless, the details that are emerging paint a picture of impunity and malpractice at the BDL that is only now beginning to change under new management.

The bank’s engagement with the French case, while welcome, comes with some caveats. Although as-yet undisclosed information about corruption may come into the public domain, the investigation is being led by foreign judiciaries, not Lebanon’s institutions. Mr Bourdon is seemingly cautious about the BDL’s involvement with an overseas court. “If the civil party [the central bank] co-operates in good faith, it could help open new chapters,” he said. “Will it do so? That's the question. If not, it would reveal the opportunistic nature of the move.”

Although any effort to achieve justice for the Lebanese taxpayer is welcome, it is the state itself that should be in the driving seat when it comes to exposing any alleged wrongdoing. For, at the same time as foreign-led investigations are gathering pace, domestic inquiries into corruption are bogged down in political wrangling. One such investigation into Mr Salameh that opened in 2021 has faced considerable hurdles and is now moribund.

The stakes are high. Not only does the central bank and the Lebanese state stand to recover allegedly embezzled millions – an important win for a country in such dire straits – additional investigations could spread the net wider. Mr Bourdon is considering another complaint into the transfer of billions of dollars overseas in October 2019 at a time when most depositors – such as Mr Al Sheikh Hussein – were locked out of their savings and the Lebanese currency lost 98 per cent of its value.

Those overseeing Lebanon’s institutions have an opportunity to show that they are serious about undoing decades of corruption. This is not just about justice in one case, or regarding one individual – it is about showing that confidence in Lebanese sovereignty and statehood can be restored, and that it is a country that can turn the page on these dark years during which some citizens were forced to become bank robbers.