Lebanese politicians turned out to have the most offshore companies in the world, followed only by the UK and Iraq.
After millions of confidential files leaked, the International Investigative Journalism Consortium (ICIJ) published a groundbreaking investigation called the Pandora Papers yesterday, revealing the vast network of politicians and elites who have hidden wealth in offshore tax havens where they have registered companies and accounts.
More than 330 politicians and officials in 91 countries have been discovered to have ties to offshore havens, where they have invested their money and evaded taxes, including 35 current and former leaders.
These figures were dominated by those from Lebanon, in particular the recently appointed Prime Minister Najib Mikati and Central Bank Governor Riad Salameh. According to newspapers, billionaire Mikati owns a Panama-based offshore company which he used to buy $ 10 million worth of real estate in Monaco.
Mikati’s son Maher was also involved in the investigation, as he owns two companies in the British Virgin Islands, which enabled him to purchase an office for the family’s international investment firm – the group M1 – in central London.
In a statement, Mikati responded to the leaks by assuring that his family business and all financial transactions comply with international law, that his fortune was amassed before his involvement in politics, and that the M1 Group and its subsidiaries “maintained a separation between the public and the private. “
Insisting that the company was “up to global standards,” he said auditors were regularly consulted and its assets disclosed to the Lebanese Constitutional Council.
How did Lebanon’s financial collapse come about?
The misunderstanding, the Prime Minister asserted, was with the Pandora Papers providing the idea that all or most of the numbers are suspect simply “just by being listed in there”. He condemned this view, saying that it “goes against liberal business practices and good governance … principles which the Mikati family stands for.”
Maher said Al Jazeera that “the use of offshore entities could be considered a form of tax evasion for American and European nationals, but this is not the case for Lebanese nationals”. He echoed this point to the ICIJ, saying that in Lebanon this is considered normal practice and is done “because of the easy process of incorporation” instead of the desire to evade taxes.
Other Lebanese figures listed in the leaks included former Prime Minister Hassan Diab, former MP Neemat Frem, former minister and bank chairman Al-Mawarid Marwan Kheireddine and former vice-governor of the Central Bank. Mohammad Baasiri.
Although not illegal under international law, the fact that offshore companies and accounts are often linked to tax evasion and wealth concealment makes them an indirect form of corruption. The revelations of the widespread use of this practice by Lebanese politicians and personalities come at a time when the country is going through a series of political and economic crises.
After the Beirut explosion last year and political turmoil, the Lebanese currency fell sharply and shortages of essentials such as fuel ravaged the country. The current is suffering from what the World Bank has described as one of the most acute depressions of modern times. According to the United Nations, nearly three quarters of the Lebanese population are now live in poverty.
The Pandora Papers are seen by many as further proof of the involvement of the Lebanese political class in the endemic corruption plaguing much of the country.
By ignoring Lebanon’s oil crisis, Gulf states let Hezbollah lead the way