The Truth behind the Theft of the Century: Banks and Their Corrupt Institutions Are Stealing from Depositors

The Truth behind the Theft of the Century: Banks and Their Corrupt Institutions Are Stealing from Depositors

Lebanon, a small Mediterranean country, is still haunted by the 15-year Civil War that ended in 1990. As a result of this major conflict, the country is still facing social, economic, and political repercussions. Currently, the nation is undergoing a financial meltdown that the World Bank says could be among the worst since the mid-1800s. The French newspaper, Le Monde, refers to this as the “Theft of the Century”.

Across the nation, the current economic crisis has become a major burden for the average and less-well off citizen. Given that the Lebanese pound has significantly depreciated in value, the cost of everything across the country has risen dramatically. Essentials for day to day life, such as food, water, and electricity have all become so much more expensive.

The lira has lost 90% of its value since the fall of 2019, and annual inflation in 2020 was 84.9 percent, according to New York Times. By far, the most significant and long-lasting negative impact on Lebanon has been the economic crisis. Since the mid-nineteenth century, Lebanon’s current economic and financial crisis is likely to rank among the top ten, if not top three, of the most severe crises worldwide. The banking sector, which has formally implemented strict capital controls, has stopped lending and is not attracting deposits. Instead, it persists in a segmented payment system that distinguishes between older (pre-October 2019) dollar deposits, and minimum new "fresh dollar" inflows.

With the uncovering of several documents and information about dollar manipulation between the Lebanese Central Bank and other banks, United for Lebanon anti-corruption alliance (UFL), together with depositors from Depositors Outcry Association (DOA) “Sarkhat Al Mudiein”, moved to face banking policies. A report from April 2021 noted an enormous file exposing $5.7 billion of money laundering, and this information has become a primary legal complaint by UFL and DOA.

In addition, the Capital Control project draft was leaked and later discussed during the meeting of the joint committees of Parliament. The project faced fierce confrontation and was halted in its first version, given that it’s whole purpose was to prevent banks from being sued by depositors with an impactful effect. The Capital Control project also placed restrictions on the transfer of funds without any real accountability. The whole purpose of the leaked draft was to target and burden depositors, who have been facing great losses with the continuous decline in the value of the national currency.

Despite the numerous lawsuits by UFL lawyers on behalf of bank depositors and the associated demands and protests, the Lebanese Parliament has not taken the initiative to draft legislation to limit the banks’ measures against depositors. Given their lack of any support, the depositors of DOA exhaustively referred to the judiciary in order to put an end to the infringement and abuse of their rights, to no avail. Rather, attempts to exploit their case by certain political parties have dominated the picture lately.

Procrastination and bargaining were part of a long attempt to confront depositors. Furthermore, some judges were partners in the corruption surrounding the banks, and have kept silent. All of this has increased the burden that these depositors have been facing. While it is the judiciary’s responsibility to uphold accountability and justice, quite the opposite is taking place. There are no real verdicts, deterrent measures, or seizure of funds for those involved in corruption and money laundering cases. Even the interrogation sessions were postponed for months and only resumed after there was legitimate doubt regarding the conduct of many judges and the overall implications it would have on their political affiliations. Judges who did attempt to take deterrent measures have found themselves excluded from files, as seen with the case of Judge Amani Salameh. Other judges face pressure from a legal and political sphere. Regardless, many complaints are still waiting to be addressed by the judicial system in regards to the depositors and ongoing corruption by the banks.

The case of Depositor Rania Masri provides further context in regards to the internalized corruption within these banks. From her Facebook post, Masri states that she went to withdraw $400 from her account, and the teller explains to her that the bank would be taking a $2 commission fee and would be returning $398 back to her. There were no additional fees from the original contract that she had made, and she demands that her contract be honored. The teller refers her to speak to the “man in charge”. Instead of honoring the contract she made, he tells her that there is no guarantee that there won’t be an increase in fees in later months, and that she is welcome to cancel the contract if she wants. Masri insists that the contract needs to be respected, given that it is a legally binding document. The man simply tells her to come again the next day to speak with the manager, and cancel her contract. She concludes her post with expressing her frustration and comparing the banks to the mafias, who are holding her money hostage with no accountability; thanks to the sectarian leaders of the country.

After a long period of follow-up to the judicial context and with aggravating humanitarian cases, it was necessary to turn to escalation on the ground. Protests took place in front of the Association of Banks and several other banks in an attempt to stand up for the rights of these depositors who are suffering. For instance, an Egyptian depositor at Fransabank, Ayad Ibrahim, was prevented by the bank to receive his money or any part of it to continue affording medical treatments for his brother, who is suffering from advanced stages of cancer. As a result, Ibrahim and others from DOA and UFL held a sit-in inside of Fransabank. Despite promises to pay Ibrahim, Fransabank did not.

Khaled Dakakni, a Jordanian depositor at SGBL bank in Lebanon, is another example of a depositor who is suffering at the hands of the banks. After trusting these banks for the money he and his father had spent years saving, their life savings were ‘robbed’ by SGBL CEO, Antoine Sehnaoui, Governor of Central Bank, Riad Salameh, and several others. Khaled is currently suffering from a severe medical condition, and as it worsens, the bank’s policies are still preventing him from accessing the funds he needs. On the other hand, the bank has no problem assisting the privileged and rich, which goes to show both bias towards the less fortunate, and a major violation of ethics in their banking procedure. Dakakni's screams for justice have echoed in the hallways of human rights associations worldwide. Ultimately, these unjust banking policies are equivalent to that of manslaughter by denying people the fund they need simply to survive. Freezing of Sehnaoui’s assets, as well as those of his bank, SGBL, has been considered recently through a marked cooperation among the Office of United Nations High Commissioner for Human Rights (OHCHR), OFAC of the US Treasury Department, AFA anti-corruption agency in France and Europe, and INTERPOL. Meanwhile, Sehnaoui, who’s present in New York, is being placed on the latter’s arrest list, and is being advised to go back and hide in Lebanon where justice is ‘concealed’. In response to Dakakni’s case, the EU has ultimately re-emphasized its direct threat to the political elite.

The depositors’ patience is thin, but luckily a number of lawsuits are taking a desired course of justice. On December 16, 2021, Nicolas Mansour, the First Investigative Judge of Mount Lebanon, will hold two interrogation sessions. The aim of these sessions is to question Salameh, Sehnaoui, Mecattaf of money trading, PricewaterhouseCoopers (PwC) and others as defendants in a lawsuit filed by members of UFL and DOA, while depositors hold a sit-in in front of Mount Lebanon’s Justice Palace.

After several months of Judge Mansour having access to these case files, the depositors will be awaiting their course and his verdict to be issued. They have been also long awaiting the interrogation session of Salameh on January 20, 2022. They warn the judiciary against postponing this interrogation for any reason at all, and will not accept any excuses or insubstantial arguments that have been so accustomed to hearing in regards to getting the justice they deserve.

Photos of "Sarkhat Al Mudiein" President, Alaa Khorchid, and UFL founder, Rami Ollaik, during recent sit-ins.

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