US slaps sanctions on Lebanese tycoons, lawmaker over 'corruption'

The US Treasury slapped sanctions on prominent Lebanese tycoons Jihad al-Arab and Dany Khoury as well as lawmaker Jamil Sayyed for allegedly benefitting from corruption and adding to the breakdown of the rule of law in their country.

The three "have each personally profited from the pervasive corruption and cronyism in Lebanon, enriching themselves at the expense of the Lebanese people and state institutions," the US Treasury said.

"While the Lebanese people face daily struggles to access basic public goods, including medicine, electricity, and food, during a historic and devastating economic crisis, members of the Lebanese political class and their cronies operate with impunity to enrich themselves and hide their wealth," the Treasury said in a statement.

The Treasury said al-Arab, close to former Prime Minister Saad Hariri, has used political connections and kickback payments to win important public contracts worth hundreds of millions of dollars.

It said he over-billed the government in such contracts and, despite winning an emergency deal to address Beirut's 2016 garbage crisis, did not resolve the problem.

The Treasury also said he won two government contracts worth $200 million after brokering a political deal in 2014 ahead of elections.

Khoury, it said, used his ties to already-sanctioned politician Gibran Bassil to reap lucrative contracts "while failing to meaningfully fulfil the terms of those contracts."

"Khoury and his company have been accused of dumping toxic waste and refuse into the Mediterranean Sea, poisoning fisheries, and polluting Lebanon’s beaches, all while failing to remedy the garbage crisis," it said.

Sayyed, meanwhile, was accused of skirting banking regulations to move $120 million offshore.

"During the 2019 protests, when demonstrators protested outside his home demanding his resignation and calling him corrupt, Sayyed called on officials to shoot and kill the protesters," the Treasury said.

"The United States is levying sanctions on these individuals in solidarity with the Lebanese people, who have long demanded accountability, transparency, and an end to endemic corruption," said Secretary of State Antony Blinken.

"Acts like this have caused the Lebanese people to bear the brunt of a devastating economic crisis brought about by corruption and government mismanagement." 

The sanctions order the seizure of any property the three have under US jurisdiction, be they bank accounts or real estate or other assets.

They also forbid US individuals or businesses - including financial institutions with a US presence - from carrying out transactions with the three, effectively restricting their access to global financial and trade networks.

The Treasury justified the sanctions by saying that corruption has undermined the rule of law and governance in Lebanon, which is mired in a deep political and economic crisis.

Its currency has plummeted in value and people are struggling day to day, their savings locked up in banks since late 2019, and inflation soaring. Even the central bank has come under suspicion for corruption that has fed the crisis.

Washington and global organisations like the World Bank and the International Monetary Fund are pressing for across-the-board reforms, but political wrangling continues to stall progress.

In June, the World Bank said Lebanon's economic collapse is likely to rank among the world's worst financial crises since the mid-19th century.

There was no immediate reaction from any of the three sanctioned men.

In June, al-Arab announced he was shuttering his businesses in Lebanon, citing attacks on his family and companies.