Lebanon navigates US-Hezbollah tensions

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Article Summary
Lebanon continues to play an outsize role in US foreign policy as Congress and the administration of President Barack Obama seek to ramp up the pressure on government member Hezbollah without undermining the country’s stability.

Lebanon continues to play an outsize role in US foreign policy as Congress and the administration of President Barack Obama seek to ramp up the pressure on government member Hezbollah without undermining the country’s stability.

The war in next-door Syria has only further complicated the already delicate balancing act of Lebanese politics. Congress in particular has sought to punish Hezbollah for its role in shoring up the Iranian-backed regime of President Bashar al-Assad, while the State Department is trying to help the country cope with a massive influx of refugees.

“The question of how best to marginalize Hezbollah and other anti-US Lebanese actors without provoking civil conflict among divided Lebanese sectarian political forces remains the underlying challenge for US policy makers,” the Congressional Research Service writes in its most recent report on Lebanon. “The ongoing political deadlock and the prospect of executive, legislative and security force leadership vacuums amplify this challenge.”

Underscoring US fears that Lebanon will descend into chaos, John Kerry stopped by Beirut unannounced in June — the first secretary of state in five years to do so. Kerry pledged US support for the country, which has taken in more than 1 million Syrian refugees — more than any other country — calling Lebanon “very important to the security of the region and beyond.”

Last month, the State Department announced another $93 million in humanitarian assistance for Lebanon, for a total of $485 million in Syria-related aid since the conflict began three years ago. The Obama administration and Congress have also agreed to keep funding to the tune of about $75 million a year for the Lebanese Armed Forces, which recently weathered a major clash with al-Qaeda-affiliated Syrian rebels.

US aid for the Lebanese Armed Forces, however, remains at about half the level of five years ago, before Hezbollah increased its participation in the Lebanese government. And the State Department’s January travel warning urging Americans to avoid “all travel” to Lebanon has hurt a country heavily dependent on tourism.

In Congress, meanwhile, lawmakers increasingly have turned their attention to Lebanon’s crucial banking sector, which has been accused of laundering money for Hezbollah, a State Department-designated terrorist group. In response, the Lebanese Central Bank — aka Banque du Liban — hired US lobbying powerhouse Patton Boggs two years ago to “assist the foreign principal on the promotion of the image of Lebanese banking before the US Congress and administration.”

Private banks have also joined the fight to salvage their reputations — and profits.

The Association of Banks in Lebanon (ABL), a trade group, hired DLA Piper and, briefly, Levick Strategic Communications, to lobby on its behalf. DLA Piper’s top lobbyist on the account is former Rep. Mike Castle, R-Del., who once sat on the House Financial Services Committee.

MEAB s.a.l. has hired the BGR Group and Patton Boggs to lobby the State Department and Congress, respectively. The Lebanese bank, formerly known as the Middle East and Africa Bank, has been accused of laundering money for Hezbollah, a charge it denies.

The effort has had mixed results.

Last month, the House unanimously passed Hezbollah sanctions legislation introduced by Rep. Mark Meadows, R-N.C. The bill requires the Treasury Department to notify Congress of any central banks that knowingly facilitate “significant” transactions for Hezbollah, but Lebanese bankers told Lebanon’s Daily Star that the ABL was able to ease the language so that Lebanese banks should not be held responsible for any mistake or oversight made by a correspondent bank.

“We made some remarks about the bill and asked for some modifications and the Americans complied,” one banker told The Daily Star.

The Senate version of the bill is stalled in the Banking Committee.

The bill has the support of the pro-Israel lobby American Israel Public Affairs Committee, which classifies it as part of the legislative effort to weaken Iran’s hand as the United States negotiates a nuclear deal. Banking lobbyists, however, were able to call on the support of a handful of traditional friends of Lebanon in Congress as they made their case for protecting a banking industry that contributes about 7% of the Lebanese GDP and is a major source of financing for the Lebanese government.

In particular, lobbyists for Patton Boggs met four times last year — before the Hezbollah sanctions bills were introduced — with staff from Oversight Committee Chairman Darrell Issa, R-Calif. Issa, one of the few Lebanese-Americans in Congress, is a director of the American Task Force for Lebanon and the co-chairman of the Congressional Caucus on US-Lebanon Relations, along with Rep. Nick Rahall, D-W.Va.

Julian Pecquet is Al-Monitor's Washington Editor. He was previously Congressional Correspondent from 2014 through May 2017 and most recently before that headed up The Hill's Global Affairs blog. On Twitter: @JPecquet_ALM, Email: jpecquet@al-monitor.com.

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