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Lebanon's finance minister questioned by European investigators

In a first, Lebanese Finance Minster Youssef Khalil was questioned today in the case against Central Bank Governor Riad Salameh and his brother, who are accused of embezzlement.
Retired servicemen try to remove the barbed wire barricade outside Lebanon's central bank during a demonstration demanding inflation-adjustments to their pensions in Beirut on March 30, 2023. (Photo by JOSEPH EID / AFP) (Photo by JOSEPH EID/AFP via Getty Images)

BEIRUT — A European judicial delegation questioned Lebanon’s caretaker Finance Minister Youssef Khalil at the Justice Palace in Beirut Friday in a case involving the central bank’s governor, according to the official National News Agency.

Before he was named minister in Najib Mikati’s current government, Khalil occupied several positions at the central bank since 1982. Khalil, who is seen as a close associate of Governor Riad Salameh, is being questioned over his alleged role in covering up the financial crimes Salameh is accused of during his tenure as head of financial operations until 2021.

No details of the hearing have been made public yet.

The questioning of a sitting minister who enjoys immunity under the constitution is a first in Lebanon. For decades, the country’s entrenched political elite has evaded any accountability amid rampant corruption. Lebanon is currently facing an unprecedented economic and financial crisis that has led to high poverty rates and increasing prices. Meanwhile, banks have been limiting cash withdrawals and imposing informal capital controls amid shortages of foreign currency.

The delegation from France, Germany and Luxembourg is leading an investigation into allegations of laundering of public money in Europe by Salameh and his brother, Raja Salameh, who are suspected of embezzling more than $300 million in money transfers to the obscure offshore company Forry between 2002 and 2015. Both brothers deny any wrongdoing.

The investigators questioned Raja Thursday. During the five-hour hearing, Raja insisted that Forry is solely owned by himself and that $155 million in funds he raised came from investment profits made over 10 years via foreign exchange transactions.

The European delegation also questioned Riad in March. The 72-year-old banker, who has occupied his role at the central bank for three decades, was charged with embezzlement, money laundering, illicit enrichment, fraud and tax evasion in a domestic probe into his assets.

In related developments, Judge Ghada Aoun, who brought the charges against Riad, was removed from office on Thursday over legal violations, including making statements on cases to the media and on social media. Aoun has been a controversial figure in Lebanon, where some praise her for going after corrupt leaders while others accuse her of political bias. 

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