For more than a decade, Lebanon's central bank charged commercial banks in the country commissions when they bought government securities without making clear that the bulk of those commissions went to a company controlled by the brother of the central bank's governor, according to documents seen by Reuters.
Four contracts between Banque du Liban and a Lebanese commercial bank seen by Reuters, dated from 2004 to 2014, state that the bank entering into the contract agreed to pay 3/8 of 1% commission on purchases of government certificates of deposit worth millions of dollars. Such contracts were standard for commercial banks making such purchases at the time, two senior executives in the finance industry told Reuters.
The Swiss attorney general's office told Reuters it is conducting a criminal investigation into suspicions of "aggravated money laundering related to alleged embezzlement offences to the detriment of BDL," but declined to comment further for this story. However, details of the contracts seen by Reuters, which have not previously been reported, show that the commissions were to be paid to BDL. Three contracts, written in Arabic and printed on paper bearing the central bank's letterhead, state: "We authorize you to deduct a commission of 3/8 of 1%," where "you" refers to the central bank. In none of the contracts is Forry mentioned.
"These are clearly public funds, because if the commission wasn't paid" to Forry, "the central bank would've gotten a better deal" by receiving the fee itself, said Mike Azar, an expert on Lebanon's financial system and former economics professor at Johns Hopkins University in the United States.
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