Lebanon contracts NY-based company to do forensic audit

BEIRUT (AP) — Lebanon’s government agreed Tuesday to hire a New York-based company to conduct a forensic audit of the country’s central bank accounts to determine how massive amounts of money were spent in the nation plagued by corruption.

President Michel Aoun’s office said the government chose Alvarez & Marsal for the forensic audit. Two other companies, KPMG and Oliver Wyman, will be contracted to do traditional accounting audits of central bank accounts.

Lebanon’s economic crisis, rooted in decades of corruption and mismanagement, deepened after nationwide protests against the political class erupted in October. Banks have imposed informal capital controls, limiting the withdrawal of dollars, and the cash-strapped government defaulted on its sovereign debt in March for the first time. The coronavirus lockdown that lasted three months threw tens of thousands of people into poverty and unemployment.

The move to name Alvarez & Marsal came after weeks of delays after other companies were not accepted because of alleged links to Israel, with whom Lebanon is at war.

The government had asked Lebanon’s General Security Directorate to look into several companies, and Alvarez & Marsal was among those cleared.

The government had been calling for a forensic audit into the central bank's accounts since March following the country’s first ever default on paying back its massive debt.

“This is a cornerstone on which reform can be built on,” Prime Minister Hassan Diab was quoted as saying during a Cabinet meeting. “This will be a historic decision for Lebanon and will mark a radical change to reveal overspending and theft.”

The announcement comes as talks between the government and the International Monetary Fund have failed to make progress...