NY-Based Company Pulls Out of BDL's Forensic Audit


A New-York-based company contracted by the Lebanese government to conduct a forensic audit of the country's central bank has decided to pull out of the deal because it was not able to acquire requested information and documents, Lebanon's caretaker finance minister said Friday.

The announcement by Alvarez & Marsal deals a major blow to those hoping for accountability in a country mired in corruption and a crippling economic and financial crisis. It comes after Lebanon's central bank refused to provide the company with the needed documents, using the country's decades-old banking secrecy laws as a pretext.

Caretaker Finance Minister Ghazi Wazni told The Associated Press that Alvarez & Marsal, which was contracted in July, says the information it received so far isn't enough and that it doesn't expect to get more.

Wazni added that the Lebanese government last week asked the company to stay for another three months in order for the state to provide it with all the information and documents needed.

"I was surprised when I received their statement today," Wazni said adding that Alvarez & Marsal agreed last week to give the Lebanese state three more months. "I find it odd. They should not have accepted the extension last week," he said.

Wazni added that work has been underway to amend the banking secrecy law in order to facilitate the work of the New York-based company. He said legislators have started preparing draft laws and that the government was also working to amend the banking secrecy laws for Alvarez & Marsal.

The banking secrecy laws, once a mainstay of Lebanon's banking system, had attracted clients from around the Arab world who prized the anonymity its banks offered.

The country's current economic and financial crisis, the worst in its modern history, is rooted in decades of corruption and mismanagement. The crisis deepened after nationwide anti-government protests broke out in October last year and the spread of the new coronavirus in 2020. A massive blast at Beirut's port on Aug. 4 that killed over 200 people and caused damage worth billions of dollars has worsened the situation.

The outgoing government had been calling for a forensic audit into the central bank's accounts since March, after the country defaulted on paying back its massive debt for the first time earlier this year.

President Michel Aoun has been a strong supporter of a forensic audit but other politicians were strongly opposed to such a move, which could reveal parties that have been benefiting from corruption.

Comments 7
Missing kazan 20 November 2020, 17:47

conclusion: No one with a bit of integrity can work or cooperate with Lebanese officials.

Missing samiam 20 November 2020, 20:23

Not a shock---Barry's financial advisor who is also the current minister of finance, didn't want this from the beginning. They probably tried to persuade the firm to say everything was good.

Anything that the government says is a lie and a coverup and if I were any entity lending money to Lebanon, I would INSIST on the the audit being done.

Thumb canadianleb 20 November 2020, 21:23

Seriously anybody surprised about this? The surprise was hiring a firm to do the audit in the first place.

Missing formerlebaniz 20 November 2020, 22:53

They managed the storm of the people and brought back everything to normal for them. You have to give it to the political class in Lebanon excellent maneuvering!

Default-user-icon zouzou (Guest) 21 November 2020, 04:56

hang them all

Missing phillipo 21 November 2020, 07:16

Is anyone really surprised that the Lebanese Central Bank refused to hand over documentation?
The only surprise here is that it took the US company so long to understand what it was up against and didn't pull out sooner.

Missing arturo 22 November 2020, 18:39

Alvarez was not prepared to damage its reputation (and its ability to continue in the forensic accounting business) to help BDL. When they realized that their reputation was at stake, they had to back out.