The U.S. Treasury on Thursday imposed sanctions on two top Lebanese contractors and a lawmaker close to the Hezbollah movement over alleged large-scale corruption that undermined the rule of law in Lebanon.
Businessmen Jihad al-Arab and Dany Khoury, close to former Lebanese Prime Minister Saad al-Hariri and Christian politician Gebran Bassil respectively, were sanctioned for alleged corruption related to state contracts.
Lawmaker Jamil Sayyed was sanctioned for allegedly seeking to "skirt domestic banking policies and regulations" and transfer $120 million abroad, "presumably to enrich himself and his associates," a Treasury statement said.
Sayyed did not respond to a request for comment and wrote on Twitter that he would hold a news conference on Friday to discuss the matter.
The Treasury alleged that Khoury and Arab both received state contracts worth hundreds of millions of dollars, including for garbage collection and disposal work, thanks to political connections.
Khoury did not immediately respond to a request for comment, and Arab could not be reached.
The allegations come amid an unprecedented economic crisis in Lebanon blamed on years of bad policies and corruption by the ruling elite that the UN says has left three-quarters of the population affected by poverty.
Khoury had won a contract worth $142 million to operate a coastal landfill and has been "accused of dumping toxic waste and refuse into the Mediterranean Sea... all while failing to remedy the garbage crisis," according to the statement.
Al Arab meanwhile "served as an intermediary as of 2014 to broker a meeting between top Lebanese officials in advance of the Lebanese presidential election, in exchange for two government contracts valued at approximately $200 million."
Thursday's sanctions mark the first time a close associate of Hariri, a pro-western figure, is sanctioned by the U.S., which previously focused on Iran-backed Hezbollah and its allies.
"The Americans are sending a message to the entire political class, not just those backed by Iran, and also to the Lebanese people that they haven’t walked away," Maha Yahya, director of the Carnegie Middle East Center in Beirut, told Reuters.
"They are echoing the Lebanese people in saying, 'all of them means all of them'" Yahya said, referring to a slogan popularized during massive anti-government street protests in 2019.
Washington in 2020 sanctioned Bassil along with former finance minister Ali Hasan Khalil and former public works minister Youssef Fenianos, alleging corruption and material support for Hezbollah.
Thursday's sanctions "also include concrete allegations on Sayyed’s money transfer after the revolution. This is new and has an impact on Hezbollah’s reputation," Mohanad Hage Ali, a research fellow at the Carnegie Middle East Center, said.
Secretary of State Anthony Blinken characterized the new sanctions on Twitter as "an important step in promoting accountability in Lebanon."
"Lebanese officials must end corruption and take urgent action to address the crises the Lebanese people face," he said.
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