Riad Salameh was long considered a financial “wizard,” ensconced at the top of Banque du Liban (BDL), Lebanon’s central bank, for more than 30 years.
Meanwhile, Hezbollah started as a small clandestine militia that, in the space of a few decades, became a political and military power that holds considerable influence in the country— and sometimes the region.
In theory, there exists a solid, impenetrable barrier between the two.
For a portion of Lebanon’s Shia community, Salameh personifies the epitome of systemic corruption. He stands as one of the prominent figures associated with the country’s “bankocracy.”
Meanwhile, financial circles view Hezbollah’s clandestine economic network and its pariah status as obstacles to economic growth and prosperity.
Despite the apparent animosity, the flip side of the coin presents a contrasting perspective. Even during the rule of Hezbollah and its allies, Salameh, the former protégé of late Prime Minister Rafic Hariri, managed to be re-elected to his position five consecutive times.
“[Salameh] could not have stayed in his post for 30 years if he had not rendered eminent services to all local and international parties, including Hezbollah,” said political scientist Karim Bitar.
As the lawsuits against Salameh continue to mount, he finds his traditional supporters wavering and the noose tightening around his neck. Hezbollah and the Amal Movement have become his final bastion of support, aiming to prevent the worst-case scenarios of dismissal, forced resignation or even arrest.
But why would the “Resistance Axis” endeavor to safeguard the very engineer of a system it claims to despise?
As Salameh’s anticipated departure looms just a few weeks away, a sense of uncertainty shrouds the final phase of his reign. The issue of the connections between the BDL head and the country’s most influential armed group remains a forbidden topic.
“We know very little about the nature of these links,” said Mohanad Hage Ali, a researcher and director of communications at the Malcolm H. Kerr Carnegie Middle East Center.
Despite the fact that Hezbollah possesses significant influence that could have allowed it dispose of Salameh if it so wished, the BDL head has positioned himself as indispensable.
This dynamic represents a symbiotic relationship in which both parties provide support to each other, operating within the shadow of a political and financial structure that characterizes the Lebanese system.
Is the “Resistance” standing by Salameh’s side?
The question may appear incongruous, yet an accumulation of incidents gradually revealed the contours of implicit complicity.
A striking example emerged in January 2023 when the Office of Foreign Assets Control (OFAC), a division of the US Treasury, accused the BDL of “facilitating Hezbollah’s financial operations” through a license granted to CTEX, a company established in 2021 by Hassan Moukalled.
Moukalled, a Lebanese stockbroker and ostensibly a financial expert, is said to be one of the key figures that enabled Hezbollah to circumvent US sanctions by keeping a foot in the traditional financial system.
OFAC’s accusations were grist to the mill of those who have long questioned the nature of this relationship nurtured in the shadows, away from public scrutiny.
“Hezbollah and Riad Salameh have a symbiotic relationship,” says Makram Rabah, a political scientist and lecturer at the American University of Beirut (AUB).
Rhetoric plays a crucial role in this intricate game, where secrecy is paramount to maintaining the necessary “cover” to uphold everyone’s credibility.
“Hezbollah has absolutely no connection, either direct or indirect, with Riad Salameh,” emphatically declared Faysal Abdel Sater, an analyst with close ties to Hezbollah.
While the Interpol red notice against Salameh could have served as an opportunity for the Resistance circles to disavow him, they remain evasive in their stance.
“No comment, no reply,” said Hezbollah spokesperson Mohammad Afif Naboulsi.
Hezbollah leader Hassan Nasrallah previously voiced his party’s opposition to extending Salameh’s mandate, which expires in July 2023.
In a Thursday speech, Nasrallah said: “Lebanon has two options: Either the governor resigns of his own free will, or the judiciary assumes its responsibilities.”
But his words were not followed by action. Nasrallah maintains that it is not within the caretaker government’s powers “to dismiss [a senior official] or appoint a successor [to Salameh].”
For his part, Salameh perceives himself as a victim for being portrayed as solely responsible for Lebanon’s ongoing financial collapse.
“I advise the judiciary to start with the politicians,” he said in a recent interview with the pan-Arab channel, al-Hadath.
That would have been the end of the matter, if not for the fact that, through the years, both sides have left behind hints indicating something more.
The relationship between Salamh and Hezbollah dates back to the 1990s, when Lebanon was still under the control of Damascus.
“Salameh initially had a special relationship with the Syrian regime,” said Rabah.
During this period, a scandal shook the financial scene. the 2003 bankruptcy of Syria’s Bank al-Madina, following the embezzlement of tens of millions of dollars by individuals allegedly close to the Syrian regime.
Salameh’s handling of the affair came under fire, particularly when he vouched for the bank’s manager, Adnan Abou Ayache, and when he offered shareholders a way out by temporarily reversing his decision to freeze their assets.
In 2005, following the Syrian troops’ departure from Lebanon, Hezbollah emerged as a dominant force and reclaimed control of the domestic landscape. It was during this period that the connection between the party and the BDL leader underwent a significant transformation.
Faced with crises threatening Hezbollah’s financial activities — which, despite its denials, did not hesitate to use the Lebanese banking system to fund its operations —Salameh had several opportunities to demonstrate his talent as a mediator.
This was notably the case with the bankruptcy of the Lebanese Canadian Bank in 2013 and Jammal Trust Bank in 2019, both of which were forced to close down after being sanctioned by the US justice system for money laundering and terrorist financing.
These cases might have tarnished his image, but Salameh’s interventions managed to appease the Americans’ concerns, safeguard the sector's reputation, and ensure the continuity of the party's activities.
“Faced with American pressure, Riad Salameh has adeptly navigated a delicate balancing act, fulfilling Washington’s demands while simultaneously meeting Hezbollah’s requirements,” said a source familiar with the matter, who requested anonymity due to the sensitivity of the matter.
One particular incident serves as an illustrative example of this approach.
In 2016, as part of the implementation of sanctions under the Hezbollah International Financing Prevention Act of 2015, the US administration asked Salameh to close approximately 10 bank accounts associated with institutions or individuals closely linked to Hezbollah.
Hezbollah responded strongly, decrying the detrimental impact of the measure on the broader Shia community
To ease tensions, Salameh issued a circular aimed at preventing potential misinterpretations and abuses during the implementation of the sanctions. Hezbollah was satisfied.
“Through an intermediary, [the party] sent a message to Mr. Salameh, expressing its gratitude for his moderating role,” according to an article in the daily al-Akhbar, close to Hezbollah, published on July 22, 2016.
The link between the two grew stronger during the financial crisis between 2019 and 2020.
Faced with public criticism from demonstrators and segments of the political class in the wake of the October 2019, uprisings, Salameh sought protection.
He found it through the unwavering support of Parliament Speaker of Parliament Nabih Berri and the implicit backing of Nasrallah’s party. Despite some superficial political grandstanding, Hezbollah refrained from taking any actions to remove the BDL head.
Above all, the cash economy that has developed over the past four years enabled some to reap mass profits, despite the recession.
“It’s no coincidence that Hezbollah’s underground economy peaked, or grew in strength, after the collapse of the Lebanese financial model,” said Rabah.
Three financial instruments facilitated the party’s prosperity despite the crisis.
First, the Sayrafa platform and BDL’s intervention mechanisms in the foreign exchange market allowed the party to generate profits. Money changers, some of whom were affiliated with Hezbollah, were the primary beneficiaries of the post-crisis directives implemented by BDL.
Second, the state's maintenance of public subsidies, despite the crisis, also served the interests of the Syrian regime — to which Hezbollah has been militarily committed since 2015 — allowing for the trafficking of certain subsidized goods to Syria.
Third, the party’s microfinance company al-Qard al-Hassan has been flourishing despite the crisis, confirming Hezbollah’s ability to set up a parallel financial system.
By stating in his interview with al-Hadath that al-Qard al-Hassan operated “without a permit from BDL,” Salameh implicitly assumes his laissez-faire policy toward the financial institution, while simultaneously clearing his name.
After years of being kept under wraps, the dangerous links between Hezbollah and the BDL governor are becoming increasingly apparent.
“Riad Salameh’s strategy of portraying himself as a victim of both Hezbollah and [George] Soros is merely a facade,” said Bitar. “The reality is that we are dealing with one and only system in which the entire political class holds a stake.”
This article was originally published in French in L'Orient-Le Jour. Translation by Sahar Ghoussoub.