| Finance Ministry accused of writing bad checks Badih Chayban
Daily Star staff
Although the penal code states that citizens writing bad
checks may face up to three years in jail, the Central Bank has been regularly bouncing
checks from the government and leaving payees with little recourse.
According to an employee at the Central Bank, who spoke to The Daily Star on condition of
anonymity, the bank did not make payment on a number of checks approved by the Finance
Ministry last year.
An official at the Finance Ministry confirmed that the government was writing checks for
more money than it has on account.
The Central Bank employee said that the bounced checks were mostly issued by the Council
of the South, the Central Fund for the Displaced and some ministries.
According to the employee, all the checks were approved by the Finance Ministry,
“which should be aware if the government had sufficient provisions to pay its
dues” before the check holders try and cash them out at the bank.
“We are shouted at everyday at the bank, because people think that we don’t want
to give them their money, but what they don’t know is that even if we had money, we
had no money designated for them,” the employee said.
He said that people often had to visit the bank as many as 10 times and wait for as long
as two months before they received their payments, and even then only if the amount did
not exceed LL10 million.
“The more modest the amount, the more you had a chance of getting paid sooner,”
he added.
The employee also said that people were not being treated equally in the payment
procedure, adding that those with “high connections” stood a better chance than
the poor.
Kesrouan MP Farid Khazen, who has repeatedly talked about this issue, told The Daily Star
that “governments are not debit card holders and it is dangerously significant when a
government is unable to go over its account balance at the Central Bank.”
Khazen also asked how the Finance Ministry could approve checks while knowing that they
could not be paid.
“This puts the government and the Finance Ministry’s credibility on the
line,” Khazen said.
He said the government owed $20 million to a fuel oil merchant who was a friend of his and
who received a check for that amount from the Finance Ministry that was bounced by the
Central Bank.
“This showed a serious lack of cooperation between the bank and the ministry, a fact
that could lead to significant financial problems, and could result in an additional
reason for citizens to lose trust in their government,” Khazen said.
The MP also asked how the government could expect to attract investment when it was not
paying its dues.
According to the official from the Finance Ministry, the problem was due to the fact that
the amount of money spent by the government exceeded the amount supplied by the budget.
But he said that even checks that bounced would eventually be paid, but with some delay.
The official, who asked to remain anonymous, told The Daily Star that Finance Minister
Fouad Siniora and Central Bank Governor Riad Salameh had previously agreed not to make
payment on certain checks because “there was not enough money to pay (them).”
However, he added that he expected the problem to dissipate following the positive
“Paris II” donor conference, where Lebanon secured some $4.4 billion in soft
loans from the international community.
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