Foreign aid is ruining Lebanon

There is a reason why Transparency International ranks Lebanon as more corrupt than Russia and Nigeria.

By Michael Rubin, Middle East Forum

On October 4, 2024, as fighting erupted between Israel and Hezbollah, Secretary of State Antony Blinken promised an emergency bailout to Lebanon.

“The United States will provide nearly $157 million in new U.S. humanitarian assistance to support populations affected by conflict in Lebanon and the region,” he declared.

Vice President Kamala Harris chimed in the next day, reinforcing U.S. commitment to Lebanon’s humanitarian needs and reporting, “This additional support brings total U.S. assistance to Lebanon over the last year to over $385 million.”

The question neither Blinken nor Harris answer is whether the foreign aid it gives Lebanon might actually be part of the problem. The chief job of the Lebanese Armed Forces is to defend Lebanon’s sovereignty.

The U.S. government gave each Lebanese soldier $100 per month in the last six months of the year. While some of that money leaked to Hezbollah—many Lebanese soldiers moonlight for the group—at a minimum, the Lebanese Armed Forces did not even try to fulfill its primary job.

The Lebanese government cannot point to a single militiaman disarmed, nor can the Biden administration point to any policy objective accomplished by the $220 million it gave Lebanon before Blinken’s latest emergency assistance.

While U.S. policy focuses on Hezbollah terrorism, Lebanese have a broader perspective.

Lebanese do not focus only on Hezbollah, though; they see all of their legacy politicians and political groupings, Shi’ite, Sunni, Christian and Druze to be mafia groups now more interested in dividing spoils and siphoning aid through corrupt ministries, state organizations and banks.

There is a reason why Transparency International ranks Lebanon as more corrupt than Russia and Nigeria.

Lebanese, for example, speak derisively about both Nabih Berri, the Shi’ite speaker of parliament, and his wife Randa Assi Berri, “Madame Berri” as Lebanese call her, as they whisper about her role especially in embezzlement from state projects, especially as they siphon money away from the state-run “Council for the South.”

Lebanese explain that public parks meant to restore greenery are paved over in concrete, solely because “Madame Berri” had the concrete concession. In 2006, a leaked U.S. Embassy cable reported that Berris’ wealth had already exceeded $2 billion.

They are not alone. Last month, the Lebanese government charged Riad Salameh, a Maronite Christian and Central Bank governor for three decades, with embezzling $42 million.

This was not due to a newfound commitment to transparency, Lebanese say, but rather to ensure he remains isolated in prison without bail to silence him; he knows too much about how and when various Lebanese officials used state coffers as a slush fund while running a Ponzi scheme to make the Lebanese treasury appear solvent.

In November 2020, the U.S. Department of the Treasury press release detailed how Gibran Bassil, a Maronite Christian and son-in-law of then-President Michel Aoun, channeled money to front companies owned by himself and close family members.

Forbes reported Saad Hariri, a Sunni, two-time prime minister and son of assassinated Prime Minister Rafic Hairri, is worth $1.5 billion.

The United States has no shortage of billionaires, but they are concentrated in business, tech, and finance; their fortunate may be vast, but they also produce wealth.

In Lebanon, the pattern is opposite. There is no shortage of billionaires, but they are all politicians or close relations of politicians. Corruption smothers ordinary businessmen.

None of this is secret or unknown to the White House, State Department, National Security Council, or Pentagon. Successive U.S. administrations, however, simply accept this corruption, either to buy quiet or stave off collapse.

Lower-level bureaucrats in each U.S office do not want to make waves. As too often occurs inside the U.S. government, civil servants and diplomats measure their progress by spending money, not achieving results that are more tangible.

To flood Beirut with cash as Blinken and Harris now do is incompetence. It fans corruption, finances terror and feeds dysfunction. Certainly, it is fair to ask if any U.S. funding should go to Lebanon.

The money comes from different departments and accounts, but the optics of giving Lebanon more than $100 million while Hurricane Milton bears down on Florida is daft.

Second, if the moral hazard inherent in aid trumps the risks of allowing Lebanon to collapse or others to fill the vacuum, then maybe some funding would be wise, but that does not mean that the manner in which the United States funds Lebanon is wise.

If the Biden administration or any successor wishes to do better, there is another way.

Beirut is the center of corruption, and the various Shiite, Sunni, and Christian consiglieres and Mafiosi calculate that they can access the revenue streams by embedding themselves at the center of institutions through which foreign aid passes.

Lebanon, however, is not simply its capital. There are nine governorates in Lebanon and more than two dozen districts, each of which in turn contains numerous municipalities, more than 1,000 in total.

When I visited municipalities across the country, including deep in Hezbollah and Amal territory, two commonalities emerged regardless of the dominant religion or sect:

First was frustration with Beirut and its funders and little if any money trickled down to town councils to spend it on local needs and projects. Second, none had ever had an American diplomat visit the municipal council.

Municipal councilmen say that hiding corruption at a local level would be difficult. If a town seeks to buy a garbage truck or build a new sewer, it either happens or it does not, but every resident of that town would know the status and who, if anyone, suddenly got wealthy.

Money that passes through Beirut ministries or the Council of the South remains theoretical to most Lebanese until diverted into politicians’ accounts outside.

If the United States divided its emergency aid equally across Lebanese municipalities, each would receive upwards of $150,000 that they could use to purchase tents, establish soup kitchens, or build emergency shelters.

That may not seem like much, but diplomats and the U.S. Agency for International Development can much more easily audit smaller amounts.

The question is whether Blinken will order U.S. diplomats to work with town councils or leave the embassy compound’s fortified walls.

If not, then he knowingly wastes American aid and enabled Hezbollah embezzlement. If he cites safety concerns, so be it.

The follow-up questions must then be: Why did the United States not fund municipalities while Lebanon was at peace, and do Blinken and Harris believe that Lebanese will be more honest about supervision about how they spend American grants?

The first rule of holes is to stop digging when stuck in a pit. Decades of U.S. funding, however, have effectively turned U.S. policy in Lebanon into a canyon. It is time to stop digging.

Corruptionembezzlementforeign aidLebanon