Lebanese economy circling the drain as forensic accounting firm quits

From AP:

A New-York-based company contracted by the Lebanese government to conduct a forensic audit of the country's central bank has decided to pull out of the deal because it was not able to acquire requested information and documents, Lebanon's caretaker finance minister said Friday.

The announcement by Alvarez & Marsal deals a major blow to those hoping for accountability in a country mired in corruption and a crippling economic and financial crisis. It comes after Lebanon's central bank refused to provide the company with the needed documents, using the country's decades-old banking secrecy laws as a pretext.

Caretaker Finance Minister Ghazi Wazni told The Associated Press that Alvarez & Marsal, which was contracted in July, says the information it received so far isn't enough and that it doesn't expect to get more.

The country's current economic and financial crisis, the worst in its modern history, is rooted in decades of corruption and mismanagement. 

The outgoing government had been calling for a forensic audit into the central bank's accounts since March, after the country defaulted on paying back its massive debt for the first time earlier this year.

President Michel Aoun has been a strong supporter of a forensic audit but other politicians were strongly opposed to such a move, which could reveal parties that have been benefiting from corruption.

Al Jazeera adds a salient point:

Nasser Saidi, a former vice governor at the central bank, said the decision likely came down to considerations over A&M’s image.

“Incredibly, this company cares more about its own reputation than Lebanon cares about its reputation,” Saidi told Al Jazeera. “They are professionals, they wanted to do a professional job, they were prevented from doing so and now we’re back to square one.”

Lebanon hired Alvarez and Marsal because of an outcry after they first hired Kroll, which has offices in Israel - as do virtually all major accounting firms.

Which means that there are very few professional forensic accounting firms available to do what Lebanon needs to climb out of its crisis, even if they open up the books of their central bank.

No country will provide aid to Lebanon without this forensic accounting - unless it is a country that intends to take over Lebanon altogether.

Like Iran, which expects a financial windfall in the coming months.

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