The MOB Guide in Lebanon :: Business Corruption 101

Have you wondered how things work in Lebanon, politics and corruption but another millionaire is born usually catches your attention.
The political and business affiliation is something that is frowned upon and prosecuted in many countries, but if your climbing up the corruption index as Lebanon (149/180) it starts to look like this is your goal and not something you are avoiding.
 So, why not ! You want to be corrupt .. meet your potential affiliates.

So you want to join the MOB  .. here is an illustration by research gate that simplifies the life cycle of corruption in business and politics.


So now that have an idea of how corruption cycle works, and the Dons …
We still know nothing eh ?

These Dons are not the only ones, and since am using images for the internet I chose one resembling the most of them, or the ones I could recall as well.

Next Step, ill tell you more about some hierarchy of the organizations, since those political dons and others were there a long time ago they have placed high officials in judiciary systems, military personnel and tier one governmental positions

So what do we have here,
Parliament, Cabinet, Presidency – Municipalities – Courts – Military/Army
President of the Bank of Lebanon is therefore one last piece of the controlling puzzle and some like me may argue he is one of the most important ones, as all Mobs so far were only as vulnerable as their accountant.

Here comes the businessmen, ones you wanted to be like but you either have some morale (not good in the hiring process here) or you have no money (worse !)

Finally, the followers : the mob personnel is something easy now since all those governmental institutes at hand, political hiring boomed.

Let’s get you familiar with some names
Nabih Berri, Saad El Hariri, Hassan Nasrallah, Michel Aoun, Michel El Murr, Gebran Bassil, Walid Junblat, Amin Jmayyel, Sleiman Franjieh
are currently standing on the top of the food chain, followed by their families, sons and co and other allied smaller families

Some Notable Judges that are politically affiliated
Ghassan Oueidat, Jan Fahed, Ali Ibrahim
Mohamad Badran, Fadi Elias, Ghada Aoun, Rahif Ramadan, Ghada Bou Alwan, Mohammad Berri, Ziad Bou Haidar, Nabil Wehbe, Hani Al Hajjar, Hussein Abdallah
Worth mentioning some are called judiciary keys like Salim Jraisaty, Ahmad Hariri, Ahmad Baalbaki  .. whom actual job is calling and instructing judges or negotiating court orders to satisfy their parties.
Military Personnel
Imad Othman, Abbas Ibrahim, Mohammad EL Ayyoubi, Jan Kahwaji, Edmon Fadel, Kamil Daher, George Khamis, Mohammad Hussaini, Abd Rahman Shhaitily, Amer el Hasan, Ahmad El Jamal

There is a lot of ministers and office runners and chiefs who are actually just what Lebanese call a chair’s leg, in which they only mean they support the sitting Don on top of that chair. (ill list some phone numbers of those who I either knew or obtained)

Later on many names will be mentioned related to them basically they belong to one of the following political parties one way or another… so far a standing record of zero independent Lebanese elects !

Let me give you an example of how practical things work in Lebanon
Let’s say you need a passport (You will need a photo and old passport and an application)
Application is obtained at your local mayor ( thus created a job for local “religious sect” personnel ) and an ID and a Family Extract, which require two individual applications and a wait time of a day or two, and separate fees, and am not going to mention supplementary paperwork let’s say accompanying a minor, and requiring a notarized application at a notary republic etc
The ironic part is none of these info are really used at general security (they already have them all!) they just send you that journey to make sure per their agreement with local Mobs to get a cut of every thing, and thus you end up paying 4-5 fees and applications, they you arrive at general security, wait, pay for stamps, make duplicates and they archive your whole application and just do a new electronic application and take a digital photo and tell you when to come pick it up.

I mentioned a lot of contractors, each to his own a separate political affiliation, say you are seeing a road work .. but that road work been there for months, why ?
Simple, because they assign someone to do cement layers for example, so they dig around to start the work, just while they are finishing or after the Electricity maintenance guys come dig to “maintain” something, and call road work again just as water or telecom or sewage maintenance are having a turn in digging and reconstructing … so you end up with endless loop of governmental funds spend to those contractors –> affiliated to politicians


This goes around in every single bid for task in Lebanon, you want to supply PCs for an institute, pay the piper.

So, how to find those bids and offer your bribes ? Oh it’s not public .. here is two hiccups and loopholes politicians have to go through ( awww )
1 : They cannot pass projects over 100,000,000 LL ( around 66K USD officially ) that must be passed through governmental monitoring channels
2: They cannot always do bids announcements early on.
Oh well, this became the opportunity for them !!!
1 : Split the project into multiple projects below 66k USD, now generally its always 50k projects which makes their approval local without going to higher supervision and .. more sub-contracts and more commissions ( different levels opportunities)
2: They delay bid till it is actually urgent requirement, so they use a bylaw allowing them to request official bid and approve it by nomination for a company that has a good standing ( according to them of course )

Bigger projects like Telecom, BDL/EDL/ CDL Aka Bank, Electricity and Casino Du Liban (Just to name a few) have board members, which are also split equally on what they call the 6×6 that refers to half Muslims half Christians in each, and each 6 has its seat split between its sects.
Each sect, is of course represented by its religious God Father, the Don.
You will never deal directly with the Don unless you are another Don, so you deal with their consigliere on big projects or a parliament member or a minister or advisor that will always take the cut and pushes your deal forward.

Such big projects if you happen to be involved in, must be approved by all with profits and commissions split sometimes are a prepaid fee to just be considered, or a higher fee to be approved and an ongoing revenue share. Sometimes it is hiring process where they get full power of hiring and thus you pay for their militia whether they are useful to you or not, so you could end up with extra on-paper employees.

As a commercial company that aims for profit, extra charges must be included now and contracts inflated to cover all those payments and fees, but since the bidding is just a gesture, you will get approved and again public funds are used to pay you, them and everyone in between.

You might wonder with such corruption why do people keep them ? I mean they are the ones paying for all of this right ?

But most people do not overthink especially when they get their kickback as well

Practical example is when you also know that in that small country there is over 350,000 governmental employees of which there is around 150,000 Military personnel of which there is around 83000 Army personnel …
As of 2019 this cost was upwards 61% of national GDP costing around 5B out of around 9B
Those hired people who mostly do not even show up to work, get paid and sometimes health coverage by being inserted into governmental institutions and thus guarantying their loyalty and allegiance and their families votes.
( Its like when insurance pays you back 30% of what you lost … you feel like insurance is actually helping – except they hired the thief that robbed you)

BTW: If you actually needed an official diploma, Al Jammal would have been a familiar name to get a diploma signed officially by the ministry skipping 4-5 years of education with a crash course and expedite fee

Here is some families that run, , Medical Cartels, Flour Cartel (yes bread is monopolized too),
Contractors Nabil EL Jesr , Dani Khoury, Imad Jomaa, Jihad el Arab
Other hall of fame contractors : Jamal Itani (Beirut Municipality assigned by Mayor Ziad Shbeeb), Antoine Makhlouf, Hisham Itani (IT and Biometrics equipment etc)
Fuel Cartels Al Basatna,Rahme, Yammine, Maroun Shammas
Advertising ( Omar Abd Khalek ( Nohad Machnouk nephew) M&A ( Hind Berri, Nabih daughter) Clementine ( Michel Aoun daughter)
Whilst some infamous general managers OR high ranking officials tied to politicians :
Ministry of health : Mona Baalbaki and Rahif Jalloul
Customs : Badri Daher, Hisham El Sabeh, Shamseddine
Casino Du Liban: Hamid Krayde , Roland Khoury
Telecom : Imad Kraydeye, Abd El Meneem Yusuf
Ministry of education: Ahmad EL Jammal 

Hey, this is make it or break it crime country !
Do not steal a bread loaf and expect to be excused, such capital crimes are punished to the full extent of the law.

Here is some examples of minor crimes that can go unpunished or with a slap on the wrist : ( for your business study)

Municipality of Beirut :: Deals 2 Go
Ziad Shbeeb x-Mayor of Beirut, is no stranger of shiny deals, including ones signed for HICON owned by Imad Khatib which in turn does city greeneries, trash pick ups, cleanups and site digging,
Park Meter deals ( That collect money and pay nothing to the government, and keep working after expiry of contracts)

Customs high ranking officials like Asaad Tfayle, removed a block of delivering fuel to stations accused of smuggling in order to give them time to continue operating, Hisham El Sabeh running Airport customs and manifests in supreme powers
Star system, oh that is definitely a star in the port system, it is the red/green lines that enforces inspection or pass-thru for imports, pay well and your containers go to green – magically.
Badri Daher, confiscating and running bids and exploiting port of Beirut customs operations whom allegedly came to reform.
Overriding resale laws of real-estate owned by religious institutions is a specialty of Jan Fahed one of the supreme judges.

Telecom stars : Imad Kraydeye & Abd EL Menhem Yusuf ran Ogera successfully *cough* to the ground .. no seriously it is fine, they just managed to extort, employ and profit off all telecom operators and all maintenance contracts related to ogero.
Michel Murr (Studio Vision) convicted of operating and stealing telecom channels
Sponsorship is a thing, which is a way of paying off charities and companies owned by people they want to bribe officially almost done by all telecom ministers.
Nicola Sehnaoui for example upped hiring in his era from around 2300 to ~3000 employees in one shot
Information Ministry in 2018 claimed offering free worldcup coverage, but in fact the broadcast rights owner, SAMAA got paid 8 Million, which Telecom operators paid for, which was deducted from Governments funds which are the peoples .. but its free !
The deal is said to be orchestrated by Melhem Riachi at the time or was he mentioned in the celebration dinner arrangement deal .. uf i forget
Buildings are always cheaper to rent and more profitable that is why ministry of telecom rents buildings, (As well as others) but ministry of telecom went the whole nine yards by renting buildings up to 100 Million USD per year 🙂 .. told you cheaper than buying or building.

Ministry of Health held replacing cancer pills with fake ones, especially ones covered by the ministry and/or selling free ones in public is not a strange thing with notable examples of Mona Baalbaki and Rahif Jalloul story ended with a 1.5M$ fine, then later dropped to only 50k.

Advertising ( Omar Abd Khalek ( Nohad Machnouk nephew) M&A ( Hind Berri, Nabih daughter) Clementine ( Michel Aoun daughter)

Casino Du Liban, had quite a run through
Hamid Krayde (Michel Sleiman) era included hiring LUDI to buy slots to score commission, instead of buying directly , Paying valet companies for kick back when in fact valet companies usually pay to secure a location not to mention they already have valet employees who get paid monthly
Roland Khoury came to revamp (joking), and he is assigned via Tayyar and Michel Aoun, however with his roundtable of Tayyar consultants including Edy Maalouf when he started before Edy became a parliament member, and through Jad Sawaya (another Tayyar contractor) were constructing a deal to launch the online casino, revamp the parking deals and other reforms.
However, and they did succeed in reforming the parking deal as now it went to their allies they did not successfully launch the online casino, which they asked for a bid by a provider with so many good qualities but also accepted bids from Lebanese companies which has nothing to do with the industry and anyway Amal with their control via Mohammad Choaib on board of Intra and being a Nabih Berri fellow, and Ali Hassan Khalil in MoF who also control 50% of the decision did not allow the deal to go through since they did not agree on shares.
Each pretending they want a clean deal while negotiating terms under the table for their commissions.

Electricity Du Liban, is the Idol or all stars in corruption as it surely surpasses any other deal per a given year, maybe not all of them combined by far was the guaranteed revenue stream for the MOB since it had all parties injected with money, but the orange party in particular as they ran the show,
This you will find hundreds of articles about, but the missing pieces they do not tell you about is how it economically creates their circle of businesses
The ministry imports fuel, exclusively via the companies that commissions for them, and to maintain fuel profits all electrical power plants are not to be changed to anything more advanced and remain running on fuel, thus generating more maintenance contracts too.

Because of the lack of fuel supply which they cause, local generators businesses are flourished too, which they sell the same fuel
Note that the whole fuel imports are backed up by the governmental aid funds, so they import with less cost and taxing but they do tax the people and end users.
This topic can run for pages and pages so you get the drift .

In Lebanon you cannot setup a business using home location, as it requires an industrial lease type, and if a non Lebanese partner exists especially those who can not own property like Palestinians or other refugees and foreigners quota, that will also require extra fees and investigations, and employing as a foreigner actually requires you to pay 100M LL to the ministry of labor.
Offshore companies are restricted in business types and will also require a lot of vetting to setup a bank account for.
Importing/exporting any physical items will tend to average you more cost at your warehouse than other existing products in retail shops !
Services acquired online, or purchased online ( Ex: Facebook ads, bind you legally in Lebanon to pay 3-7% foreign import fee… yes on services that you already paid tax for towards the seller country)
You will need to officially assign a lawyer, an accountant and an auditor and contract them within your company’s paperwork, and changing those is usually a hassle as they could require any fee, while changing that requires their approval as well to be let go .. yup!
You must register all your employees and pay labor fees and medical for the social security, even though the SS is useless and then you have to encourage employees by adding them to an external insurance provider.

Don’t fret, those are just minor hiccups compared to what you would face if you run a business and trying to compete with a mob ran business and your products or stores will never be really operable till you pay the piper.

A good lawyer if you do not know, will handle a leased virtual business location and hire all sub contracted required personnel for you and a connected one will even find you contacts for all the other aspects but let me elaborate.
A bank contact can override offshore vetting for you with putting some good word for putting some cash in his favor
Operating under an offshore will help you avoid the taxes legally, and although you cannot officially bill local businesses, no one will mind.
A corrupt accounting at the end will put you toward two choices, either have a fully accounting department and legalize all your paperwork while they find any savings they can do for you or simply ignore everything and when you are audited offer the government assigned auditor a bribe to close the file for you.. works.

Technically, ignoring the laws is the way to do it .. why is that ? Because the laws are meant not to be updated to make no sense for you and make zero profit if you do it the way you think it should be done.. thus forcing you to reach out for local partners IF you are interesting enough to collaborate or offer a new revenue stream for them
If you are just competing, good luck with that .. especially if you are on your own.

Next part is where you operate, every location in Lebanon is governed by local mob law, do not worry about finding them, they will find you!
It is how you deal with it afterwards, for a small business just pay your dues for supposed protection from perpetrators (usually they will send those and protect you from them as well)
If you want to run a bigger business and have some seed funds, you reach out to their handler, then boss and offer the business study (basically how much return you are guaranteeing them per month) the rest of data is useless.

Now the next part is only needed if you are taking your business for the next upper level .. expanding, multi-locations and nationwide.
The local mob is not enough for you, and usually they will not introduce you to their bosses in fear of losing your income unless you really showed them how they will still profit (note they will always profit, but what their boss pays them is less than what you can directly seed).

Now you need a governor, a politician (parliament member/minister) or a military high rank official (any or each of them will introduce you to the proper channels after paying the dues)
Vital channels and hubs for business tend toward the ruling party in the era you are launching and tend to survive afterwards, think of it like being unable to operate without the blue and red politicians based on who is running the show.
What I called Axis-8 in my other article, mainly Hezbollah, Amal and FPM (Tayyar Watani Hurr) have the scales to their favor and with keeping the country imbalanced it empowers them even more.
How is that, traditionally when new government forms and a new president is elect so does a new cabinet and soon after they change the general managers of all big important departments and ministries to assign people who swore allegiance to them and do their bidding.

We are talking Port/Airport thus controlling import and export, for example in Lebanon you can find unlocked new iPhone/Samsung in retail price less than it is in the US, simply by buying wholesale in US (paying no taxes as wholesale does not require it), importing to Lebanon via a connected person (Sanctioned Star telecom for example ran by sanctioned Amhaz) and letting shipments pass through without customs, fees nor import fees will yield you low cost,
Ironically, as everyone knows this, so it is re-applied in the car import industry and why they promoted US cars over EU imports so they can smuggle more US cash inwards.
Taxes, settlements and accounting audits are all controlled by the ministry of finance, which again can settle anything for you in fraction of what you should owe, even today you can settle a 100k USD for 10k max through the right people, or is it the wrong people ?
Building, renovating and investing in real estate is all sorted with the local municipality governor, as many would suppose paying off the police will get them off your back, but that is temporary and they keep coming back for more, while when you do it via the governor those people disappear.

Being a diverse country they have created different police/military organization each controlled by one of different Don assignee thus the more business you do the more favors you need and more connections in all parts are needed.
Basically in a tested environment, over 80% of your profits go to the local militias and governing politicians, but the reason that this is still profitable because most businessmen who rise are happy with the 20% of millions, and the cycle of corruption flourishes as it employs you and you employees.

Even illegal business have a place, mind you carrying a gun would lend you couple of months in a military court but dealing with illegal arms while paying your dues to your mob can yield you thousands of steady dollars in  your pockets.

Lebanese have an upcoming opportunity, the chances are slim as they still do not agree on salvation path and many still believe in their slaughterers as saviors
But if you want to make a change …

If you vote for Nobody

Disclaimer :
I have no elaborated in each specific case as most of them need pages to go through alone, however and considering the fact am not a writer nor a journalist, just an entrepreneur with a new hobby, the story telling would not be in its best format or structure, so some names could be missed but not forgotten.

My only purpose is to illustrate how the ruling mafia has structured businesses and political, judiciary and economical circles are intertwined using some public information, and some information I personally experienced doing business in Lebanon couple years back.
Less is more, to grasp the concept is basis for change if will was found, so what’s your take !

What's your take ?

Menu
%d bloggers like this: