UN report estimates cost of graft at $1.5bn a year
Maha Al-Azar
Daily Star staff

Calling it a “conservative” estimate, a UN-commissioned corruption assessment report has found that the government loses more than $1.5 billion a year as a result of graft. Information International, the private company contracted by the United Nations Center for International Crime Prevention, said Monday that Lebanon lost a significant amount of money through uncollected electricity bills and public land fees, especially on coastal property. The two sectors contribute to at least one-third of the country’s $1.5 billion in losses each year. With the 2001 budget deficit forecast at $3.4 billion, the government could cut the budget gap by almost half if it cracked down on corruption. Conference participants at the Marriott Hotel outlined the strategy that should be used for a successful anti-corruption campaign, highlighting the importance of three elements: enforcing laws, reforming the system to eliminate opportunities for corruption, and getting the public involved through awareness and educational campaigns. Anti-corruption experts noted the importance of an anti-corruption agency or an ombudsman assigned to investigatecorruption allegations and subsequently refer them to the judiciary for prosecution.
But Fouad Saad, the minister of state for administrative development, made a controversial argument that corruption was a “malignant tumor” that was not limited to the public sector but afflicts the entire population. “Even if we replace all government employees, it won’t solve the problem because that’s how the public is,” he said. “We need to start with education.” The National Integrity Steering Committee, which has been working closely with the UN to stamp out corruption, said one of its top priorities was to ensure democratic elections. However, the committee’s president, former Judge Philippe Khairallah, could not say whether the committee would recommend that a new election law be drafted. “We’re still in the strategy-planning phase,” Khairallah said. “We haven’t decided on an action plan.”
Indeed, deadlines have not been set yet, although committee member Adnan Iskandar estimated that within six months, a comprehensive action plan would be completed.
Alexander Schmidt of the Center for International Crime Prevention, however, hoped things would go faster. “By the end of the week,” he said, “we expect to have identified a priority and drafted an activities plan for it.” Schmidt said he expected that judicial reform would be given priority. Since July, the UN’s anti-corruption campaign has cost some $300,000. Information International received $40,000 in funding, but the company instead donated the money to an anti-corruption fund that will encourage investigative journalism and introduce anti-corruption ideas in education. The first phase of the campaign also includes the creation of a website, under construction by the engineering department at American University of Beirut. Bertrand de Speville, who formerly headed Hong Kong’s Independent Commission Against Corruption, acknowledged that the fight against corruption costs money. “But ever penny spent is worth it a thousand times,” de Speville said.
“Hong Kong is regarded as having spent a lot of money on fighting corruption,” he added, “but all this money constitutes less than 0.5 percent of its current annual expenditure.” De Speville said Hong Kong businessmen were initially reluctant to cooperate with the anti-corruption campaign, but they later discovered the rewards of transparent transactions. “Initially businessmen wanted the government to leave the private sector alone, focusing instead on the public sector in its anti-graft drive,” he said. “But then they realized that clean business was better for profits.”
Endemic corruption usually goes unreported
Findings of the Information International report:
• 98.6 percent of the population believes there is corruption in Lebanon.
• More than 43 percent of companies “always or very frequently” pay bribes, and another 40 percent “sometimes” do.
• Six out of 10 respondents “strongly agreed” or “agreed” that Lebanon’s judiciary is not independent in its decisions.
• Of the $6 billion worth of projects contracted by various ministries, directorates, and organizations, only 2.4 percent, or $143 million, were awarded by the Administration of Tenders.
• While the salary of MPs increased 2.7 times from 1996 to 1999, the minimum wage stayed nearly the same, increasing from $193 (in 1996) to $200 (in 1999). MPs earn about $7,300 per month (including expenses.)
• A  focus group estimated that one-third of all households do not pay electricity bills. Another 40 percent of households are not billed because they do not have meters installed. As a result, Electricite du Liban loses about $400 million annually, or half of the cost of the power it distributes.
• A weak sense of civic duty was registered among the general population, with only 12 percent reporting cases of corruption. In contrast, about 70 percent of Lebanese claimed they upheld laws, including traffic regulations, but said the majority of the population does not.