Here's how the US can pressure Lebanon's new government to tackle corruption

Here's how the US can pressure Lebanon's new government to tackle corruption
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Against the backdrop of three months of political and economic protests, Lebanese politicians appear to have reached a deal establishing a nominally technocratic government in Beirut. Still beholden to Hezbollah, the government has little Sunni or Druze support. Some protesters already call this a “Halloween government” since it gives thinly disguised cover to longtime establishment politicians. But the new government is unlikely to be able on its own to tackle the single biggest challenge it faces: the rampant corruption responsible for the country’s acute financial crisis. 

The formation of a new Lebanese government has been a central demand of the international community and a necessary precondition for any international aid. But that is not enough. The government must quickly take action to fight corruption and enhance transparency. For a country that has run on corruption and political patronage, this will be a very heavy lift.

Nearly all of Lebanon’s political establishment is entangled in Beirut’s deep-rooted corruption crisis, which cuts across the sectarian divide. Lebanon ranks 138th out of 180 nations in the Corruption Perceptions Index released by the anti-corruption watchdog Transparency International. Meeting in December, the International Support Group for Lebanon issued a final statement in Paris urging Lebanese authorities to “take decisive action” to tackle corruption and tax evasion while improving economic governance and the country’s business environment.

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At the time, U.S. Secretary of State Mike PompeoMichael (Mike) Richard PompeoHouse, Senate panels to question ousted State Dept. inspector general on Wednesday: report National security adviser says foreign powers trying to exploit US race relations Britain and Europe need to step up their support for Hong Kong MORE said that while Lebanon must take these steps, the U.S. is ready to “do the things that the world can do to assist the Lebanese people getting their economy right and getting their government right.”

Today, the U.S. should take action that would force the new government’s hand and empower it to take on the corrupt political establishment — something no Lebanese government could otherwise do on its own: Washington should issue sanctions targeting some of the most egregious corrupt actors across the Lebanese political and sectarian spectrum under the Global Magnitsky Act. Corrupt leaders seek profit and the political power that comes with funding patronage projects. Global Magnitsky sanctions would not only name and shame Lebanon’s most corrupt actors, it would block all property and interests they hold in the United States, which are likely to be substantial.  

There are other tools available to designated political corruption — such as Section 7031(c) of the Department of State, Foreign Operations, and Related Programs Appropriations Act, 2020. The State Department employed this tool earlier this month targeting Moldovan corruption, but it includes only a ban on visa to enter the United States for the designee and their family members, and it lacks the authority to block funds held in the United States. Global Magnitsky would be a better fit in the case of Lebanon. 

The State Department issued anti-corruption designations under the Global Magnitsky Act targeting entities in Cambodia, Latvia and Serbia in December, and there are no shortage of strong candidates for such action among the political elite in Lebanon today. Under the umbrella of such a U.S. action, the Lebanese government could be empowered to take the kind of action necessary to clear the way for the international aid package the country desperately needs.

Such action would have broad public support. Since the Lebanese people took to the streets on Oct. 17, 2019, U.S. officials have supported protesters’ demands for anti-corruption measures and reforms. In fact, corruption is the main reason behind the economic collapse that has pushed people to the streets. They clearly oppose the new government, which provides former foreign minister Gebran Bassil, a Hezbollah ally and one of the most roundly protested political figures, with control of a third of the cabinet and, therefore, the power to block legislation not to his or Hezbollah’s liking. To be sure, demonstrators would cheer sanctions against corrupt politicians and their business-class enablers.

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The most notable aspect of the Lebanese protests was its anti-sectarian rhetoric and cross-sectarian participation. People from all sects and regions of Lebanon rallied to demand the end of the sectarian system and accountability for corrupt politicians. This is not a coincidence. The link between Lebanon’s sectarian leaders and the country’s acute corruption crisis is very strong, because they use nepotism and exploit state institutions to strengthen control over their constituencies. 

These sectarian leaders have been implicated in a laundry list of corrupt deals and transactions used to build their financial empires through the good offices of politically-allied corrupt businessmen. One need look no further than Lebanon’s electricity, gas and garbage sectors to see how corruption has depleted the state of its resources and led to the economic crisis.

Designating corrupt Lebanese businessmen and officials under the Global Magnitsky Act would offer a tangible response to the persistent demands of Lebanese protesters because such action would target corrupt individuals from all sects and complement the anti-sectarian rhetoric of the Lebanese street. Now that a government has been formed — one that is unlikely on its own to gain the trust of the street or the international community — this is the perfect moment to send a message of support to the Lebanese people.

Hanin Ghaddar is the Friedman visiting fellow at the Washington Institute for Near East Policy.  Matthew Levitt is the institute’s Fromer-Wexler fellow and director of its Reinhard program on counterterrorism and intelligence.