"National Action for Fighting Corruption in Lebanon"

January 22, 2001

Prepared by:

Information International, SAL

Corruption is a disease plaguing many countries in the world, although it is more deeply rooted in some countries than others. In Lebanon, this phenomenon is most pronounced among the political elite, whether inside or outside power. It is depleting the government’s scarce financial resources, obstructing economic growth, discouraging new talent and widening the gap between the rich and the poor.

This Corruption in Lebanon Country Assessment Report - 2000 compiled by request of the United Nations according to the methodology adopted for the Global Programme against Corruption, delved into the various facets of corruption, its causes and its impact on both the state and its citizens.

The study estimated that approximately one billion US dollars in annual drain may be directly linked to corruption - a conservative figure based solely on the research findings.

The study extended for two months and included, in addition to desk research, 12 focus discussion groups among politicians, local and foreign diplomats and experts as well as four case studies and opinion polls at a national level (Section II).

There was near unanimity that the misallocation of funds and human resources in many public offices as well as a lack of transparency, accountability and impunity were allowing corruption to fester, seriously undermining civic consciousness.

It is generally accepted that corruption is the use of one’s public position for illegitimate private gains. But illicit deals may also take place in collusion with the private sector through individuals or corporations. It is a behavior, which departs from ethics, morality, or civic virtue.

In Lebanon, all three internationally recognized types of corruption are widespread — ‘Grand Corruption’ among the public sector’s elite, ‘Parochial Corruption’ stemming from the nepotistic tendencies of the political hierarchy and ‘Petty Corruption’ committed by low-income employees, more often than not, for survival purposes.

Although in the past some would argue that corruption might have been functional to the maintenance of the political system or even a substitute for administrative reform, this phenomenon in all its types - grand, parochial or petty; organized or chaotic; and judicial or administrative - negatively affects many aspects of citizens’ lives and squanders public resources. What was earlier seen as the "victimless crime greezing the wheels" is now by most countries seen as "sanding the wheels", depriving the majority of people rule of law and any hope of a quality of life.

Whether out of need, greed, nepotistic tendencies or political ambitions the impact of corruption on the state and its citizens is enormous.

Several factors have led to the current state of affairs. Although corruption had been deeply rooted for decades, chaos and disrespect for the law during the civil war compounded the problem. Low salaries of public sector employees, political influences on the judiciary, confessional and feudal mentalities, foreign interference in domestic affairs, inefficiency of supervisory bodies, selective or lenient enforcement of the law, the absence of civic education and the inefficient media have combined to worsen the situation.

By and large, citizens believe that corruption is prevalent in Lebanon. Only 1 percent of people polled did not perceive corruption as a common practice. Most citizens blame the phenomenon on the political elite.

Participants in the focus groups were of the opinion that several rulings and decisions taken in Parliament, or by the government, the judiciary or security forces were tainted with corruption.

Over the past twelve months, the media has highlighted corruption accusations leveled against some 20 politicians and senior civil servants. Talk shows on corruption issues are abundant and popular. But a serious weakness in investigative journalism has left many issues unknown to the public.

The Office of the Minister of State for Administrative Reform with the support of CICP has organized a series of workshops since 1996, to raise public awareness on the issue, identify the sources of corruption and suggest cures. In addition, USAID has funded an anti-corruption campaign.

Corruption has had a major impact on the nation. It has diminished the citizens’ confidence in the government, led to the misappropriation and mismanagement of public funds and human resources and weakened patriotic sentiments in general.

The study reveals a high level of awareness about the concept, definition, causes and impact of corruption among citizens, many of whom believe that their elected MPs are not doing an adequate job to rein in the abuse of power or misappropriation of public funds.

The majority of citizens agree that a first step toward any reform would be the introduction of a new and fair electoral law to govern the next elections, away from outside interference. There is also a growing sense of antipathy toward the kin relationships and feudal and confessional considerations that govern the elections.

The government’s failure to push through Parliament a law setting a campaign expenditure ceiling and regulating media coverage of candidates ahead of last summer’s elections raised questions about the fairness of the polls.

Another source of complaint is the high income and benefits enjoyed by the 128 MPs, whose monthly wages have jumped from US$ 2,097 for each MP in 1996 to US$ 5,667 in 2000, in addition to a monthly sum of US$ 1,800 in "Social Allowances." This compares to the government-decreed minimum monthly salary of US$ 200.

There are strong arguments for trimming benefits enjoyed by MPs, senior public sector bureaucrats and military and security personnel. These include exemptions from paying telephone bills and other charges, school allowances in private institutions and large retirement packages.

There is also distrust in the judiciary, largely due to the clout of the political establishment over the legal system. In 1998, more than 20 corruption cases were leveled against officials of the outgoing administration. To date, only two have been concluded.

The credibility of supervisory bodies is threatened. The Supreme Council for the Trial of Presidents and Ministers, a concept first proposed in 1926, was endorsed by Parliament in 1990. Composed of seven MPs elected by the House and eight senior judges, it has yet to be installed. Other supervisory boards complain about the political transgressions on their prerogatives, with the Civil Service Council, for example, reporting that between 1992 and 1998 almost all public appointments were made without its knowledge, even though the law stipulates that it has the final say in the hiring and firing of government employees.

The deeply entrenched confessional system has created a system of spoils, whereby each group feels it is entitled to a certain share of public posts. This has led to a gross overstaffing in certain sectors and shortages in others. It has also packed the government with unsuitable employees, whose sole qualification is allegiance to an influential politician or a religious power.

This year, the government allocated about US$ 130 million in schooling allowances for its employees and for free education. Statistics show that of the 350,000 students in private schools, 300,000 enjoy allowance benefits. Even public school teachers send their children to private schools along with those of military personnel and other government employees who are reimbursed between 20 and 100 percent of the fees. Another US$ 13 million is spent on rent for public school buildings.

Public education is not performing to its potential. This is in part due to the teaching body including uncertified teachers. Also, poor distribution of human resources has left some areas desperately overcrowded with teachers, while others suffer from very low student-teacher ratios. The surplus in the 40,000-strong force of public teachers is estimated at 9,000.

According to a recent Finance Ministry Audit, the government can easily slash US$ 50 million off the US$ 370 million healthcare bill by monitoring invoices that often exceed the original costs by 25 percent and clamping down on beneficiaries of the system producing forged bills for fictitious treatments.

Analysis of the functioning of the Electricity Authority revealed that some 300,000 units, or 30 percent of subscribers, do not pay their bills, leading to an annual loss of US$ 180 million. Another 300,000 units are illegally connected to public lighting in the streets, depriving the Treasury of millions more. In a recent interview, the chairman of the authority, said only 50 to 55 percent of the US$ 800 million spent annually on electricity is paid for.

Senior public and military officials also are exempt from payment, leaving an additional 4,900 households benefiting from free electricity, costing the government US$ 3 million.

Most of Lebanon’s roads are classified as being in "poor" or "critical" condition. By the World Bank’s 1995 estimates, these cost an annual US$ 140 million in accidents, maintenance and reconstruction.

The five-year Development Plan earmarked US$ 982 million to improve existing roads, but was arbitrarily increased to US$ 1.45 billion after some politicians insisted on road projects for their constituencies.

In the telecommunications sector, the scene is no different. The only two companies offering cellular services were ordered to pay US$ 300 million each for allegedly breaching their contracts with the government. The payment was due on May 24, 2000, but the companies have challenged the ruling and the money remains unpaid.

Privileges enjoyed by senior civil servants and military and security personnel also extend to the telecommunications sector. Some 3,600 users enjoy free mobile telephone services, denying the government of its share of the companies’ revenue. This has led to a loss of US$ 100 million over five years. An additional 18,000 landlines, whose users are exempt from payment, are costing the government US$ 15 million annually.

The Ministry of the Displaced had estimated in 1993 a US$ 600 million budget to rectify the situation. To date, some US$ 1.6 billion has been spent and another US$ 650 million is needed by the ministry’s own estimates.

Another unresolved, but potentially lucrative issue is that of public coastal land illegally expropriated during the civil war. Since 1991, successive governments have tried and failed to settle the dispute over some three million square meters. Estimates of the potential income from this case have ranged from a conservative US$ 100 million to an unrealistic US$ 10 billion. But the most realistic amount is the estimate provided by a former Finance Minister, who proposed a one-time settlement of US$ 100 million with an additional US$ 28 million to be collected annually in lease.

The government is losing some US$ 190 million a year as a result of its oil import policy. Five companies directly linked to politicians or power brokers have the exclusive rights to import and distribute oil and its derivatives, except for fuel oil, which is handled by the Electricity Authority. This is depriving the Treasury of US$ 90 million per year in profit, and preventing the rehabilitation of the Zahrani refinery, which could raise another US$ 100 million a year for the government if refining crude for domestic use is done locally. Idle workers at both facilities continue to cost a total of US$ 12.6 million annually.

The media, nicknamed Lebanon’s Fourth Authority, also has a serious credibility crisis, with surveys showing political bias in news reporting and selectivity in exposing corruption cases. This has deprived the public of an independent source of information, instrumental for initiating change, and dimmed hopes of enforcing the principle of checks and balances.

Licenses for the audio-visual media were handed out in 1996 along confessional and feudal lines. An Audiovisual Media Council has been established to regulate the industry, but it can hardly act as an independent watchdog while it is government-appointed.

In the print media, publications are largely owned by individuals or families with direct financial and political links to politicians and advertisers. This conflict of interests is restricting the work of journalists and diminishing their ability to handle corruption issues with the required objectivity.

Also, the Press Federation and the Union of Editors and Journalists have for a long-time been inefficient at providing coverage for members in conflict with the government.

The credibility of NGOs has been tarnished by a lack of transparency. Sources of funding are seldom disclosed and ties to politicians are common. In many cases, requests for licensing remain shelved for years in the absence of political backing for applicants.

The lack of transparency and accountability is further evidenced in the permanence of individuals presiding over NGOs.

A plan for action was drafted on the basis of the assessment findings. A National Integrity Steering Committee (NISC) was appointed to lead further activities including public awareness campaigns and drafting of proposals for reform strategies.

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