The electricity sector has become an embodiment of corruption in Lebanon. Électricité du Liban, Mar Mikhael, Beirut. November 10, 2019. (Hoda Kerbage/The Public Source)

The electricity sector has become an embodiment of corruption in Lebanon. Électricité du Liban, Mar Mikhael, Beirut. November 10, 2019. (Hoda Kerbage/The Public Source)

Anti-Corruption: A Neoliberal Strategy to Breathe New Life into Lebanon's Spoils-Sharing System?

While more and more people are driven into poverty — free falling into the abyss engineered by the political class and their cronies in the banking and private sectors — the political class has found a new raison d'être: leading the battle against corruption. In this article, we examine if Lebanon's revamped anti-corruption strategy is mere theatrics to return Lebanon into the fold of the international donor community and transnational capitalism. 

Last year, on April 21, 2020, the Lebanese parliament convened and passed the “Law on Fighting Corruption in the Public Sector and the Establishment of a National Anti-Corruption Commission.” Advocates of political reform from civil society present the Anti-Corruption Commission (ACC) as a foundation for “good governance” and an antidote to corruption its forming, supposedly, the necessary first step to contain the crisis. 

Amendments, however, have delayed the formation of the ACC, which forewarns that its presumed “independence” will be sabotaged. Technocratic fixes through the ACC may or may not temporarily suspend the crisis, but only to make possible more of the same mechanisms of plunder that have long dispossessed the majority to hoard wealth for the oligarchic-clientelist class and international rentiers, money lenders, and corporations.

The Neoliberal Origins of Anti-Corruption

In the 1990s, as neocon pundits proclaimed the "end of history" and gleefully welcomed the era of globalization and neoliberalism, "anti-corruption" became a mantra to justify and facilitate neoliberal restructuring in the Global South. In his 1996 address to the Annual Joint Meetings of the World Bank and the International Monetary Fund, the Bank’s president James D. Wolfensohn stressed the urgency to battle “the cancer of corruption” in “developing countries,” which “deters foreign investors,” by implementing “national programs” involving “civil society” and “national leaders,” and “supporting international efforts to fight corruption.” The latter include Transparency International (founded in 1993 in part by ex-World Bank staffers); the Anti-Bribery Convention (passed in 1997) that penalizes international businesses for engaging in bribery with foreign officials in the pursuit of lucrative contracts; and the United Nations Convention Against Corruption (UNCAC) (passed in 2003).

In the 1990s, as neocon pundits proclaimed the "end of history" and gleefully welcomed the era of globalization and neoliberalism, "anti-corruption" became a mantra to justify and facilitate neoliberal restructuring in the Global South.

The cancer metaphor that Wolfensohn used to pathologize the Global South as a diseased body recalls an earlier colonial discourse that pathologized the colonized by describing illnesses, like tuberculosis and hysteria, as “physical symptoms of social diseases.” It suggests that corruption spreads in the South like cancer is endogenous to the body, a social symptom of political "backwardness." Only Northern intervention could save the South from itself and bring it closer to political maturity is the paternalistic implication. 

Turning a blind eye to the private sector, the mainstream discourse singles out the public sector as the breeding ground for corruption, which allows international financial institutions (IFIs), donor, and creditor nations to crusade against corruption through neoliberal interventions. To fight corruption, they argue, countries of the Global South should downsize their public sectors, deregulate the economy, and privatize state assets. Accordingly, IFIs package so-called anti-corruption reforms with “structural adjustment programs,” a euphemism for debt programs, often at high interests, bound to austerity and privatization capitulations.

Since the eighties, many countries in the Global South, including Senegal, Thailand, and Jordan, have faced debilitating financial crises, at least in part the consequence of colonialism, and received from IFIs “rescue” packages, often loans with hefty interest rates, and implemented the strict conditions tied to them. Yet, for all the melodious rhetoric of combating corruption, these packages have introduced austerity, slashed social spending, and privatized en masse state assets in the interest of politically connected tycoons, all of which left corruption unabated, if not made it worse. To foot the bill, the poor have lost a significant share of what little they had to regressive taxation schemes imposed by the IFIs as a lending condition. Meanwhile, local and international lenders and businesses made handsome profits through the newly "freed" market, often conniving to evade taxation and liability for deregulated labor conditions and socio-environmental devastations inherent to capitalist ventures.

Mainstream Anti-Corruption Makes its Way to Lebanon

However, the troubling alliance between the anti-corruption discourse and neoliberal restructuring does not make corruption any less real. Lebanon’s political class has for long used the state to accumulate power, wealth, and establish entrenched sectarian-clientelist dependencies. Corruption has been part of the political system since independence. Following the end of the civil war, nepotism and unrestrained exploitation of the public sector for private ends went haywire when warlords saw an avenue for greater wealth accumulation in the newfound “peace.”

The troubling alliance between the anti-corruption discourse and neoliberal restructuring does not make corruption any less real. In the postwar period, the ground was laid for unrestrained corruption to exploit the public sector for private ends.

Even though Lebanon ratified the UNCAC in 2009, this state of affairs persists, as expected. In recent years, the political class has even joined in the mainstream anti-corruption chorus that has been prevalent on the international stage since the 1990s. Virtually every party that competed in the 2018 parliamentary elections had paid lip-service to the need to fight corruption. Nowadays, public officials routinely hurl accusations of corruption against one another to score political points.

One of the UNCAC’s stipulations to the signatories is the establishment of public bodies, known as ACCs, specialized in fighting corruption. They are tasked with monitoring, investigating and deterring any form of corruption in the public sector, including bribery, pilfering public funds, withholding public information, and illegally awarding public contracts to clientelist networks. ACCs are often endowed with prosecutorial power.

The ACC, which doesn’t yet exist, will be an ally of the private sector harboring transnational capital bent on seizing new opportunities for quick profit and the political class’ vast financial and corporate interests. Scrutinizing the law’s original content and proposed amendments exposes mechanisms of co-optation that preserve the political class and the dividends it has accrued over many decades at the expense of the majority. 

The Law Enters, Exits, then Re-enters the Parliament... and Cabinet!

A closer look at the anti-corruption law reveals the jurisdiction of Lebanon’s upcoming ACC: It is responsible for preventing, uncovering, and investigating corruption cases in the public sector, referring them when necessary to the relevant administrative and judicial authorities, and ensures that the anti-corruption laws are properly implemented. This includes investigating non-compliance with the Access to Information Law, while providing protection and financial compensations to whistleblowers in accordance with Whistleblower Protection Law. On paper, Lebanon’s ACC fulfills the provisions of the UNCAC by safeguarding access to critical documents, including government contracts with private firms that may have been awarded dubiously. In theory, the ACC would also oversee the implementation of the Transparency in the Petroleum Sector Law to prevent the pilfering of revenues generated from the objectionable petroleum extraction and exports. It would also look into the financial disclosures of civil servants in accordance with the new Illicit Enrichment Law. Notably, the ACC can directly request the assistance of the judicial police without having to go through the public prosecutor, and can request from the relevant judicial authorities to freeze the assets of a suspect and ban them from traveling.

The pathway toward an ACC, however, has already raised well-grounded suspicions surrounding its independence from the political class. On June 27, 2019, shortly before Lebanon’s economic and financial collapse, when the political class were angling for the reform-contingent loans and grants pledged by donors at the 2018 CEDRE conference, parliament passed the first version of the law. The president then returned it to parliament in July 2019 through Decree 5272 for amendments. While the original law stated that the ACC’s members must have never been part of any political party or group, the president’s revision objected to this stipulation, which pushed the parliament to reformulate the law to state that members must not have been part of any political party or group for at least five years before appointment.

The Anti-Corruption Commission will be an ally of the private sector harboring transnational capital and the political class’ vast financial and corporate interests.

Transparency International’s Lebanon chapter, the Lebanese Transparency Association (LTA), which “advocates for reforms by focusing on systems improvements and by building coalitions with other anti-corruption stakeholders, including the government… the private sector… and the international community,” had objected to the original formulation of the law. It argued that the law failed to address the appointment of individuals who are close to political parties without being formal members. The LTA’s reservations were not considered and the law was amended based on the president's wishes and passed again a year later in April 2020. Besides the obvious struggle over capital, from the legal get-go, then, it is possible for the political class’ cronies to become members of the ACC.

When it comes to appointments to the ACC, the law appears to make no room for political partisanship and representation on the commission. The six-member composition will be led by two retired judges, elected by the country’s judges, to serve as president and vice-president. The commission’s other four members include a lawyer, chosen among the Beirut Bar Association and the Tripoli Bar Association’s two candidates, an accounting expert, a banking or finance expert, and a public sector management expert. Anti-corruption, then, would be ruled by a committee of experts in isolation, or so it seems, from the political class. However, probing into how these appointments are made leaves more questions than answers.

First, the election process that determines the candidates, both judges and lawyers, is vague. Whether they will be chosen by the syndicates’ presidents, boards, or rank-and-file members remains unclear. Second, the expert in public sector management will be chosen among three candidates handpicked by the Minister of State for Administrative Reform, which gives the executive branch a direct say in the ACC’s composition. Third, it is the Banking Control Commission (BCC) that proposes three candidates for the expert in banking and finance appointment, which is especially problematic because of the BCC’s shared interests with the Central Bank, the Ministry of Finance, and the Association of Banks in Lebanon truly the last institutions one would want to delegate to fight corruption. The Central Bank, for instance, has refused to provide information to the forensic auditor in October 2020 under the pretext of “banking secrecy.” Lebanon’s extremely low scores on the 2019 Open Budget Survey reflect the obfuscations around public spending and budget allocations at the Ministry of Finance. And, extending an arm to the Association of Banks is akin to inviting the political class to sit on the commission since “18 out of the 20 [major] commercial banks [have] major shareholders linked to political elites”. 

Finally, the cabinet makes the final appointments to the ACC out of the proposed names it receives. Given the succession of "caretaker" governments in recent years with limited decision-making powers, should names be proposed, formalizing appointments may take time. Even when a "national unity" government forms again, the different parties will jockey for greater influence in the ACC. The LTA had lobbied to change this appointment process, so it is less prone to political meddling but its recommendations were rejected.

In late January 2021, the ACC law resurfaced with two proposed amendments in the unlikeliest of places: the Ministry of Finance’s 2021 Draft Budget Law presented to the cabinet. The first amendment enabled the appointment of experts with only a bachelor's degree and a minimum of twenty years of experience (as opposed to a master’s degree and at least ten years of experience as outlined in the original law). The second funnelled the ACC’s budget through the Prime Minister’s office (as opposed to its own separate budget in the original law), which dispels any illusion left regarding the commission’s independence. Because these proposed amendments have little bearing on the State Budget, their inclusion in the document suggests that the political class may already have specific individuals in mind for these posts.

Reform is the Echo that Pays

Lebanon is on the verge of an all-encompassing collapse and the political class is banking on more loans and Northern privatization prospects. Behind closed doors, it is fumbling to revive the 2018 CEDRE Conference, stalled negotiations with the International Monetary Fund since mid-2020, and the post-blast French initiative. Because these routes depend not only on geopoliticking but also on “good governance” and “anti-corruption” reforms, the re-emergence of the dubious ACC was well timed. Through Paris I, II & III in the 2000s, the political class has become a seasoned sponger who sells economic sovereignty for the illusion of reform and back-breaking loans. The poorest have subsidized the debt through a regressive tax regime and a value added tax, and gained nothing in return. These indebted promises of change through the ACC will be little more than an old trick to polish the state’s image in the eyes of domestic constituencies and international dollars.

Corruption must be fought, but it is an unfunded struggle that must situate corruption within local and global entanglements.
Corruption must be fought but it is an unfunded struggle. It does not end with an apolitical series of technocratic fixes to bring “good governance.” It is not about keeping our economy hostage to the dominant political economy, or breathing new life into the criminal political system which is already on life-support. Instead, the anti-corruption discourse and mobilization must wage a multi-front struggle that situates corruption within local and global entanglements. These include the undermined judiciary, gerrymandered electoral laws, desultory governance, the encroachment of private interests on the public sector, and constitutionally dubious immunity for crooks and criminals. It is equally crucial to recognize vested Northern interests in neocolonial relations of indebtedness, dependency, and domination through wealth accumulation generated from compounding high-interest loans, the extractive oil and gas economy, and privatization ventures, not least after disaster. The anti-corruption veneer of a “government committed to implementing reform” makes these more alluring and profitable to the North, most recently to international bidders looking to reconstruct, if not seize the port of Beirut.