Walid Fayad has been named energy minister in Najib Mikati's newly formed cabinet. (Credit: DR)
BEIRUT — Incoming Energy Minister Walid Fayad met a controversial end as an executive at the international consulting firm Booz Allen Hamilton, where he was terminated and later a defendant in a US civil lawsuit accusing him of financial misconduct, court documents reveal.
Fayad previously denied all allegations against him to the court, and an agreement was eventually reached to settle the matter out of court. Even so, the revelations about the civil court case, filed in a US district court in Virginia, may prove an obstacle for Fayad in convincing skeptical Lebanese that he is not cut from the same cloth as the country’s entrenched political elite.
According to documents, Fayad was hired as an executive vice president based in Booz Allen Hamilton’s Abu Dhabi office in early 2014. The contract came with a compensation plan granting him awards of shares, stock options and other financial benefits and incentives.
“Beginning in early 2017,” the complaint alleges, Fayad and a fellow executive “engaged in a continuous pattern of illicit activities and misconduct in an effort to secure lucrative employment with a competing consulting company in the Middle East region.”
According to the lawsuit, around January or February of that year the two began disclosing confidential and sensitive information to the competing firm in order to negotiate a more lucrative employment contract with that firm. They also allegedly began using Booz Allen Hamilton money and resources to cover travel, accommodation and other costs as they pursued that potential employment.
Around the same time, the complaint alleges, Fayad and the other executive used the firm’s resources to woo other Booz Allen Hamilton employees to join them in leaving and joining the competitor. This included allegedly using the firm’s money to bankroll a boat cruise in Dubai to persuade the other employees.
From March to August 2017, Fayad also allegedly sold stock options and shares of stock that he acquired as part of his employment contract for a sum totaling almost $850,000.
He was terminated from his employment a couple of months later, in October 2017, according to the company’s lawsuit, which alleged that he had breached their contract and demanded that he repay them more than $920,000.
Lawyers for Fayad and his co-defendant filed a countersuit and sought for the case’s dismissal, alleging the company had “acted in bad faith” and citing an earlier ruling from a United Arab Emirates court that said Booz Allen Hamilton had terminated their employment without cause. The UAE court awarded Fayad and his fellow executive damages over their terminations.
The parties agreed to settle the dispute out of court, and the Virginia lawsuit was voluntarily dismissed with prejudice, meaning the claims cannot be brought to court again, in December without a court ruling or findings of fact. The terms and amount of any settlement are not publicly available.
Fayad did not immediately respond to a request for additional comment. A Booz Allen Hamilton spokesperson said only that “the parties have resolved the matter.”
The dispute could prove an inauspicious start for a minister tapped to join a “rescue cabinet” of independent technocrats meant to steer Lebanon out of a variegated crisis blamed largely on decades of political corruption and mismanagement.
The Energy Ministry Fayad will head has been the subject of allegations of corruption and bad faith in particular, due to a series of contracts with a Turkish power barge company whose inception lacked transparency, which have gone on to cost the state more than $1.5 billion.
Regular protests against Lebanon’s political class have taken place since October 2019, when mass protests erupted across the country calling for the downfall of traditional officials, many of whom were leaders during the 1975–90 Civil War, and for independent specialists to be installed in their place.
UPDATE: In a statement issued by Fayad's media office, the minister denied “all baseless rumors circulating about this separation.” The two parties “reached a friendly and satisfactory settlement,” and Fayad has a “good relationship” with the company, according to the statement.