One day in June last year at around 7 am, senior banker Antoine Dagher left home for one of Lebanon’s largest banks, his employer for the past 20 years. But the head of Byblos Bank’s ethics and anti-fraud department has never been there.
A few hours later, Dagher’s wife found his body beside their grey Honda car near their home in Hazmiyeh, an upscale suburb just minutes away from Beirut’s city centre. He was stabbed five times.
One year later, the murder of the father of two children is pending, and it has been shrouded in Lebanon’s once prestigious banking industry. In a police report read by the Financial Times, investigators stated that nothing was stolen, but the motive was not determined and no one was charged.
Without a clear answer, many bankers came to the conclusion they thought was inevitable: his murder was related to his work. Lebanese banks were attacked by protesters who were angry about their role in the country’s financial crisis and customers who were unable to withdraw cash. “It’s both scary and shocking,” said a former colleague of Dagle. “And until now, we don’t understand anything.”
Before heading the bank’s ethics and anti-fraud department, Dagher served as the head of Byblos Bank’s compliance department for ten years.
The job of a compliant banker is to ensure that their employers comply with local and international rules regarding money laundering and terrorist financing. A former regulator said that in Lebanon, “compliance is a risky business, if you do it well”.The stakes are high: “You have Hezbollah [a paramilitary and political party designated a terrorist organisation by the US], you have [politicians and their families], And you have corrupt bank management. “
The country’s financial crisis that broke out during the two weeks of large-scale protests and bank closures in October 2019 has complicated already difficult tasks. Lebanon’s problems have been exacerbated by the pandemic and the massive explosion in Beirut’s port last year. The root causes are decades of state mismanagement and political corruption.
Approximately 40 banks provide services to 7 million residents of Lebanon, many of which have invested heavily in government debt and the central bank. According to data from the World Bank, approximately 70% of bank assets are exposed to Lebanese sovereignty. The state defaulted on debt last year, after which the bank was forced to sell overseas operations and lay off employees in a comprehensive restructuring.
Since the beginning of the crisis, Lebanon’s GDP has shrunk by more than one-fifth, and its economy has largely shifted to cash. “This is not normal banking,” said a senior banker. “We are dealing with crises and madness.” The reputation of the industry has been destroyed. “Lebanese bankers are a precious commodity,” the senior banker said, citing the successful experience of financiers in top foreign banks. But two years after the collapse, now “your name is rubbish”.
The disillusionment of Lebanese banking is common. Although there is no law on capital control, individual banks strictly restrict withdrawals and transfers. The customer-facing banker stated that they must reject requests for funds that they consider valid, such as medical bills, and provide some services, such as new accounts or withdrawals, which are only applicable to VIP customers or bank managers.
As financiers were slandered for their role in the crisis, depositors’ funds were cut off, and angry customers and protesters burned bank branches and abused employees. The customer-facing banker said that the customer shot at the manager and asked to withdraw his own cash.
The customer-facing banker said that their work is now “very dirty.” But employees have no choice in order to keep their jobs and safety: “We are afraid, we live in a country without security, and they can kill us.”
Their fear stems from the culture of impunity in Lebanon. Dagle’s murder is not the only unresolved case. In recent years, dozens of political assassinations have gone unpunished. “The justice and security forces cannot solve the murder case… it really made the public lose confidence [their] ability. .. Protect them,” said Aya Majzoub, a Lebanese researcher at Human Rights Watch.
The pressure also comes from outside Lebanon. More banks were sanctioned on the eve of the crisis. In 2019, the U.S. Treasury Department imposed sanctions on Jamal Trust Bank for allegedly helping Hezbollah-the bank is currently in liquidation. The governor of the Central Bank of Lebanon is the subject of two European money laundering and corruption investigations. He denied wrongdoing.
The severe shortage of U.S. dollars makes it easier for criminals to launder money through banks and urgently need cash. A compliance expert stated that it is “difficult to trace and verify the true source of real money”. Experts say that since the beginning of the crisis, “compliance is not the top priority, but survival is the top priority”.
Byblos Bank stated that it had cooperated with the official investigation into Dager’s death, but declined to answer other questions. Four bankers said that Dagher is very popular, known for his decency and hard work. “He is the most ethical person in the bank,” a former colleague said, adding: “If he can see what is happening now [in the sector], I’m sure he will resign. ”
His daughter Michèle said that Dagher “is everyone’s favorite.” But his son Eli added: “We never realized how dangerous his job is.”