Following the old money trail
In Beirut, a case of missing millions--and allegations of a slick government coverup
For someone who earned a salary of just $1,000 a month, Rana Koleilat managed to live a pretty nice life. She traveled by private jet, took along her servants and hairdresser, and stayed at the poshest hotels in London and Paris. Back home, in Beirut, Lebanon, she lived in a three-story penthouse. To anyone who asked how she lived so well, she replied that she had a "rich uncle."
Actually, Koleilat helped manage a private bank in Beirut, and thereby hangs a tale. Two years ago, the Bank Al-Madina collapsed in scandal. At center stage was none other than Rana Koleilat. The chairman of the bank, a man named Adnan Abou Ayyash, says he lost more than $1.2 billion, and he blames Koleilat and a few cohorts. Depositors lost another several hundred million dollars. Lebanese authorities have charged Koleilat, Ayyash, and eight others in one of the biggest banking scandals in Lebanon's history.
Interesting stuff, to be sure, but behind the scenes there's an even bigger story--how the bank allegedly funneled money to powerful Syrian and Lebanese officials, laundered funds for Iraq's Central Bank when Saddam Hussein was in power, and funded Hezbollah, the Lebanon-based terrorist organization.
Lebanese authorities have shown little curiosity in unraveling these ties or in answering questions. The Lebanese Embassy in Washington did not respond to questions submitted by U.S. News in mid-March. Likewise, Syrian officials did not answer the magazine's inquiries. Perhaps that's understandable. The Al-Madina bank scandal is a major embarrassment for both governments, providing a rare glimpse inside the corrupt profiteering long understood to be a by-product of Syria's 30-year occupation of Lebanon. Neither President Emile Lahoud nor Syrian President Bashar Assad, close allies, has been implicated in the scandal. But Syria increasingly finds itself in the cross hairs of the international community. Many Lebanese believe Syria and its allies in Lebanon played a role in the assassination in February of former Prime Minister Rafiq Hariri. In a report last week, a United Nations fact-finding team said President Assad threatened Hariri last summer with "physical harm" if he continued to press for Lebanese independence. The U.N. team stopped short of blaming Syria for Hariri's death but said its interference in Lebanon had contributed to the climate of violence that led to Hariri's murder.
Lebanon has a population of only 3.8 million, but it has a robust banking system. The Al-Madina bank was controlled by Adnan Ayyash and his brother, Ibrahim, both Lebanese natives. Adnan Ayyash, who made a fortune in construction and engineering projects and lives in Saudi Arabia, bought control of the bank in 1984, installed himself as chairman, and tapped Ibrahim as vice chairman to run the operation. Years later, after things went awry, Adnan Ayyash hired a private firm in New York, Fortress Global Investigations, to find out what happened. Fortress Global made its findings available to U.S. News , including legal papers filed in Lebanon and New York. Adnan Ayyash also agreed to be interviewed.
Friends in high places. Lebanese authorities have accused Ayyash of writing more than $50 million in bad checks. Ayyash says he is innocent of that charge and insists he did not participate in the looting of the bank. Authorities also charged Ibrahim Ayyash in the bad-check case. He, too, maintains his innocence.
advertisement
