Perspectives - May 7, 2021

Electricity Blackout Looms Over Lebanon as Cash for Power Generation May Run Out

An energy blackout once again looms over Lebanon. Reuters reported that the country’s lights might go out this month because cash for power electricity generation is running out, according to a Lebanese lawmaker. Lebanon's parliament had approved a $200 million emergency loan to finance fuel imports for power generation in March, but a committee reviewing the loan has yet to approve it. "We should not forget that starting May 15, gradual darkness will start," said Nazih Nejm, a member of parliament, according to a government statement released after he met the caretaker finance and energy minister.

Lebanon cannot afford to hold strategic costs for longer than two months and only keeps enough fuel to produce energy to last for about two months. As a result, Lebanon is perpetually threatened with total power blackouts.

Lebanon-Israel Maritime Borders Resume, Stall Again Ahead of Sixth Round

This past Tuesday, Lebanon and Israel resumed their U.S.-mediated indirect negotiations over maritime border negotiations after six months. The meeting lasted for five hours. During the meeting, Lebanon continued to insist on its recently adopted maximalist position of disputing 1,430 square kilometers of water with Israel, on top of the 860 square kilometers that were previously the source of contention. The decision to adopt this stance, reports indicate, came from the Lebanese Armed Forces command.

Talks were expected to enter their sixth-round on Wednesday, but despite State Department fanfare over the resumption of negotiations – which referred to them as a “positive step towards a long-awaited resolution – talks appear to have stalled indefinitely again. The latest session was postponed after President Michel Aoun rejected what he called “preconditions” set by the U.S. mediator. Aoun's statement said U.S. mediator Ambassador John Desrocher, who arrived in Lebanon on Monday, had asked the Lebanese delegation to stick to the previously accepted demarcation. "President Aoun gave his instructions to the delegation not to go on negotiating with preconditions, but to adopt international law which would be the basis for guaranteeing continued negotiations to reach a fair and just resolution," Aoun said after meeting with the Lebanese delegation, according to a statement from his office.

Seven Percent of Lebanese Population Vaccinated for COVID-19

Only seven percent of Lebanese citizens have been vaccinated against COVID-19, according to the head of the National Committee for the Administration of COVID-19 Vaccine in Lebanon, Abdul Rahman al-Bizri. Bizri called it “shameful” that the country’s vaccination campaign had been halted on weekends and religious holidays – including Orthodox Easter and the upcoming Eid al-Fitr.

Relatedly, the Lebanese Health Ministry also reported that since February 14, 2021, 321,682 first-stage and 186,708 second-stage vaccinations had been administered. According to figures released by the Health Ministry, the total number of cases since the virus was first detected in the country in February last year rose to 531,234. The total number of fatalities now stands at 7,415. 972 patients are currently hospitalized for COVID-19 and related complications, with 478 in the ICU and 162 requiring ventilators.

Le Drian Visits Lebanon, Warns Lebanese Officials Obstructing Political Progress

French Foreign Minister Jean-Yves Le Drian visited Beirut for talks with Lebanese leaders to end months of political paralysis that has stalled the formation of a new government. Le Drian met President Michel Aoun at Baabda Palace on Thursday morning for about 30 minutes, during which they discussed the government formation developments. Le Drian later also met with Parliament Speaker Nabih Berri. However, the French Foreign Minister signaled his implicit displeasure with the two, saying he only met with them “because of what they constitutionally represent.” He also met with Prime Minister-designate Saad Hariri, but that meeting was kept short.

Le Drian said Lebanon was headed towards what he called “collective suicide” and threatened that Paris would impose further sanctions on Lebanese officials to force them to change course because “my observation is that they…have not lived up to their responsibilities or seriously started working on the country’s recovery.”  Le Drian stressed that recent sanctions on Lebanese leaders are only the beginning of a long list of tough sanctions ahead, saying that “France is going to call for international community pressure on leaders to have Lebanon’s parliamentary elections held on time.”

Relatedly, Le Drian had earlier indicated that France would restrict Lebanese officials suspected of corruption or obstructing government formation from entering its territory. He did not name any of those targeted or say how many. The Foreign Ministry did not release details of what the restrictions entail. The move stops short of sanctions for now, but Le Drian said more could come later. "We reserve the possibility to adopt additional measures toward all those who are hindering a solution to the crisis," he said.

Riad Salameh Faces Corruption Charges in France

Lebanon’s embattled Central Bank Governor Riad Salameh faces new corruption allegations in France, according to Reuters. Sherpa, an anti-corruption group, has submitted a legal complaint against Salameh over foreign investments, including property he owns, worth millions of euros. The group said it had filed the complaint on Friday over what it alleged were Salameh’s “suspicious” real estate purchases in France. The 81-page complaint outlines what it says are assets, companies, and investment vehicles across Europe worth hundreds of millions of euros which it alleges Salameh, members of his family, and his associates used over the years to divert funds out of Lebanon. Salameh's brother, son, and an associate are also named in the legal complaint, said Laura Rousseau, head of the illicit financial flows program at Sherpa.

Meanwhile, Salameh has protested his innocence, saying he has demonstrated through documentation that he had acquired his wealth before assuming the post of Central Bank Governor in 1993. "I have also declared that my properties in France were acquired prior to being governor," he said.

The lawsuit in France comes days after Lebanon’s public prosecutor launched an investigation into Salameh after a Swiss legal request alleged that more than $300 million had been embezzled from the Central Bank through a company owned by Salameh’s younger brother, Raja.

In January, the Swiss attorney general's office said it had requested legal assistance from Lebanon in investigating "aggravated money laundering" and possible embezzlement relating to the Lebanese central bank. The Swiss request, seen by Reuters, alleges that Forry Associates, a company owned by Raja Salameh with a bank account in Switzerland that took a commission on sales of Lebanese Eurobonds and Treasury bills, was paid $326 million by the central bank between 2002 and 2014 in transactions labeled as fees and commissions. Most of the payments to Forry were then transferred to an account in Raja Salameh's name. More than $7 million were also transferred from Forry Associates between 2008 and 2012 to an account in Riad Salameh's name, the document said.

 A senior Lebanese judicial source told Reuters that Raja’s business offices had been sealed off, with computers and files confiscated during the investigation. Riad Salameh protested his innocence in this case as well.

Hariri May Resign if Cabinet Formation Deadlock Persists

Prime Minister-designate Saad Hariri might step down if Cabinet options opposed to his convictions are imposed on him, officials in his Future Movement said Tuesday. MP Hadi Hbeish told al-Jadeed TV that Hariri was reserving this option but has yet to decide. Hbeish could be telling the truth or bluffing to give Hariri leverage over President Michel Aoun, who – along with his allies in Hezbollah – wants to avoid the additional political vacuum that would be brought on by the search for a suitable alternative to Hariri for the premiership.

Canada: Hezbollah, Iran Laundering Money in Canadian Casinos

The Canadian government has formed a committee to investigate Hezbollah- and Iranian-linked money laundering, gambling, and drug-smuggling operations through casinos in Vancouver, Al-Arabiya reported. A former Canadian Royal Mounted Police officer told the news channel that there were also links to Chinese networks active in illegal activities in Canada.

Nasrallah Gives Quds Day Speech

Hezbollah Secretary-General Hassan Nasrallah gave his annual Quds Day speech on Friday to coincide with the last Friday of Ramadan. Nasrallah’s speech was largely dedicated to stressing the growing strength and improved strategic position of the Iranian-led Resistance Axis. He stressed that Tehran and its proxies now found themselves in a better position vis-à-vis their adversaries, particularly since the United States was now adopting a more conciliatory tone towards the Iranian regime and engaged in nuclear deal negotiations. He expressed his confidence that Iran would never compromise on supporting its proxies – whom he dubbed “allies” and “partners” – in negotiations and that these talks were already reflecting positively in the region –as demonstrated by Saudi-Iran talks and rising Israeli concern.