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Lebanon’s State Ponzi Scheme Seeks Jewish Investors

The reeling regime in Beirut would like some of that magic Jewish money, please

Tony Badran
November 11, 2021
Screenshot via Facebook
Lebanon’s ambassador in Paris hosts French Jews of Lebanese descent at the embassy for a "family reunion," Nov. 3, 2021Screenshot via Facebook
Screenshot via Facebook
Lebanon’s ambassador in Paris hosts French Jews of Lebanese descent at the embassy for a "family reunion," Nov. 3, 2021Screenshot via Facebook

The Lebanese ambassador to France made news last week when he invited a number of Jews of Lebanese heritage, who had long since fled that country, for a “family reunion” at the embassy in Paris. A bewildered and wisely suspicious 70-year-old woman, who left Lebanon decades ago, asked the ambassador, “Why now?”

Lebanon is “in danger,” the ambassador replied. “All its citizens who belong to different religious sects must come together to save it.”

Allow me to translate: What we have here is known as the Lebanese swindle.

You might have heard about the country’s two-year-long economic and financial crisis, the result of a Ponzi scheme that went bust in late 2019, exposing the bankrupt, dysfunctional country that always lay beneath the glitzy façade of the Travel + Leisure version of Beirut. This nationally managed scam can be traced back to the end of the country’s civil war in 1990, when the warlords and oligarchs launched a campaign to attract the capital of Lebanese expats. These expats were enticed with a glorified tourism ad campaign promising that they could take ownership of their country and rebuild it, a fallacy perfectly calibrated to tug at their heart strings, appeal to their vanity, and suspend their disbelief. Oh yes, yes: This country run by the Assad crime family, whose “statesmen” are the very same warlords from the civil war, and where a terrorist organization continues to wage war against its southern neighbor—this country is now, at last, a real, normal state. Bring your money, children of Lebanon, park it in our banks, move your families home, and start businesses here.

The expats bought the dream, and once they’d invested their entire lives in it, they became accomplices in the perpetuation of the lie. Even non-Lebanese foreigners followed suit and moved their dollars and euros, even their families, to Beirut. They all became instrumental in expanding the national Ponzi scheme from mere false advertising into policy advocacy in Washington, D.C., and capitals across Europe. And boy did U.S. and European officials buy into the scam, too. In fact, much of what passes for policymaking on Lebanon in the United States and Europe is premised on the same emotional and sociological impulses leveraged by the tourism ad.

Take, for example, comments from the French and British ambassadors in 2018—a year before the Ponzi scheme was exposed and Lebanon went belly up. French Ambassador Bruno Foucher reassured the Lebanese that President Emmanuel Macron would never allow Lebanon to be destabilized, describing the country as a “model of savoir-vivre.” For his part, the outgoing British ambassador, Hugo Shorter, using the hashtag #beautifullebanon on Twitter, offered his own contribution: “Lebanon ... is an exceptional country. There’s no other country like it in the world that I’m aware of.” Between skiing in the morning and swimming in the Mediterranean in the afternoon, you see, you don’t even notice the garbage overflowing in the streets. “There is a complexity here, which is, from a professional point of view, very stimulating,” Shorter went on. Just make sure you bring U.S. dollars and deposit them in Lebanon’s exceptional, stimulating banks.

Shorter’s tourism ad testimony went on, reflecting the Lewis Carroll-like, smoke and mirrors, mind-altering and reality-warping nature of his host country: “When I first arrived, I felt it was a bit like looking at a kaleidoscope that was constantly changing … its complexity is such that there are many different levels of reality and dynamics that are overlapping.”

To a normal person, Shorter’s chronicle of his stint in Lebanon sounds less like a dreamy adventure than a descent into madness: After the shock of arrival into what feels like an insane asylum, connections with reality become tenuous and sanity is lost, replaced by multiple, overlapping realities. Such exciting complexity!

It might sound like an insult to call Shorter’s description hallucinatory, but delirium is quite literally what the Lebanese government is selling. The same week its embassy in Paris reached out to the Lebanese Jews of France, its minister of tourism unveiled the country’s new official slogan, apparently designed to gild and embrace his country’s dysfunction: “Lebanon: I love you in your madness”.

“This will be our touristic identity that the world will see,” Minister Walid Nassar said at a news conference in Beirut. Henceforth it was official: Lebanon’s identity is madness. Truer words were never spoken.

Henceforth it was official: Lebanon’s identity is madness. Truer words were never spoken.

Ambassador Shorter might have made a compelling case for the psychedelic experience of Lebanon, but it’s not for everyone. Take the Saudis, for example. After riding the Lebanese crazy train for decades, in 2016 the new leadership in Riyadh decided it was time to get off, eventually leading the Saudi foreign minister to refer to relations with the Hezbollah-dominated country last week as “pointless.” Predictably, when a mirror is held up to Lebanon’s politicians and the previously mentioned expats, they go berserk. The more tightly held the fantasy, the more severe the collision with reality, leading to psychic disintegration.

The task, therefore, is to repair the fantasy, to restore the scheme. Which brings us back to the invitation of the Jews to the embassy in Paris.

In the service of this official makeover, Lebanese oligarchs, as well as the foreign think tank-journalism-NGO-activist class, have decided to enlist Lebanon’s Jews. Of course, there is no Jewish community in Lebanon. Lebanese Jews all live abroad, and most haven’t been in Lebanon for half a century. Unlike the Muslim and Christian Lebanese expats who were brought back after 1990, no one has any illusions about the Jews returning to (let alone investing in) Lebanon. Their hoped-for role in the Lebanese con is different, and the Lebanese ambassador in Paris was not subtle about it: As the holders of inordinate influence in the West, the all-powerful Jews should be enlisted to help Lebanon market the latest iteration of its national scam.

To get the underlying premise, consider a scene from Roman Polanski’s 2002 film The Pianist. A Nazi officer comes to the Warsaw ghetto and explains to the Jews there that, by being allowed to send someone to the market to buy potatoes and bread, they were being afforded a great opportunity for making “good business”: Instead of eating the food, they could sell it! “Isn’t that something where you, Jews, are good in [sic]? Make money?”

That line might as well have been playing on repeat in the Lebanese ambassador’s head, because his message to the Lebanese Jews of Paris was essentially the same: Isn’t there a way for you, omnipotent and shifty creatures, to use your magical powers to help us get more money and international support?

The other useful role that Jewish presence and support can play is to help repackage an old Lebanese saw: the cosmopolitan “tolerance” of its mythical past. Convivencia is always a good draw. The world must save Beirut, the Paris of the Middle East, the last Levantine city of multicultural coexistence. Look, we have Jews. We love Jews!

Tellingly, the oligarchs of the Lebanese regime didn’t have to personally promote this lie; once more, it was the Lebanese “intelligentsia” that marketed it on the regime’s behalf. The whole episode was so transparently contrived that, in one amusing instance, the fraudulence was almost too awkward to bear. When a Lebanese Middle East studies professor in the United States decided to chip in with a celebratory tweet, applauding the government’s outreach to the Jews of the Lebanese diaspora and expressing hope that they might one day get invited “to their spiritual abode, their Beirut Synagogue,” he included two ostensible pictures of that “Beirut Synagogue” (whose actual name escaped him). The pictures were, in fact, of the Villa Abdel Kader, a palace with no Jewish connection whatsoever, located a few streets away.

Less amusing in all this is the role of the U.S. government. It’s not only that Washington has for years, up to and including the recent financial meltdown, propped up the myth of a clean and solvent Lebanese banking sector that in reality serves as Hezbollah’s laundromat. It’s that the U.S. government, like Lebanese diplomats and Beirut expats, is itself helping market the misleading tourism ad.

Take Amos Hochstein, the State Department’s senior adviser for global energy security. Hochstein was sent to Beirut last month to revive maritime border demarcation talks between Lebanon and Israel. The talks broke down last December, when the Lebanese, predictably, decided to expand their claims by several hundred kilometers, so as to include Israeli waters and offshore gas fields.

In Beirut on Oct. 21, Hochstein gave an interview to an Arabic-language channel, in which he made a pitch straight from the Lebanese oligarchs’ script:

And look, in 2016, when I was here, had we reached a resolution in 2016, today, you wouldn’t have any blackouts in Lebanon. The lights would be going on and you would be paying the cheapest gas prices, because you need, paying consumers, Lebanese people, would be paying producer prices and you’d likely be exporting. … What we don’t want is to sit in 2025 and ask the questions, what could have been? Instead, let’s come back and have this interview in 2025, when gas is flowing for the first time to Lebanon from its own fields, and when you’re joining the rest of the Eastern Mediterranean in selling gas into the global market, and you become a global exporter of a product. That’s, that’s what’s at stake here. That’s what’s on the table.

Sure, why not? The last block that was explored turned up dry, and you’ve yet to even begin further exploration, and sure you’re a corrupt, insolvent mess, but never mind all that. In four years you could not only be done with all your electricity problems; you could be exporting gas! Washington loves you in your madness.

At one point, Hochstein’s interviewer punctured his fantasy bubble with a sharp reality check: Isn’t Hezbollah under U.S. sanctions, she asked? You know, the terrorist group that runs Lebanon, its “government” and its “institutions”? Much of Hochstein’s response could’ve been delivered by a Lebanese politician—or activist:

I see Lebanon as a country. I don’t think of Lebanon as—Hizballah as Lebanon. … This U.S. administration fully supports Lebanon, supports the progress of Lebanon, recognizes the opportunity that is Lebanon. ... If we want to make sure that Lebanese people are traveling and moving back to Lebanon, rather than moving out of Lebanon, then you have to have hope for people that the situation will change and that they can build a better life here. That’s the goal of this administration. We want to support its military and we want to support its economy as long as it continues to act on the promises that are being made on all of the reform agenda and the idea of building back—not a new Lebanon, but bringing back the old one that was such a great place for people to live and to grow.

Oh, it’ll be fine! Hezbollah? What’ve they got to do with it? Personally, I don’t see Hezbollah as Lebanon. People can move back and build their lives here. They can be exporters of gas—just think of all the benefits. Sure, Hezbollah, with its missiles and army, will be tapping into and directly benefiting from those funds, but who’s to say? That could even be a good thing. Think of how much they’d have to lose! Just imagine with me. It could be like the Lebanon of old. You’ve got PLO-era Lebanon, you’ve got hostage-crisis-era Lebanon, you’ve got Syrian occupation Lebanon—a kaleidoscope of possibilities, really. Multiple layers of complex, overlapping realities.

Don’t you worry, this administration fully supports this wonderland, and is content to underwrite its alternate reality with hundreds of millions of dollars a year. Just put it on the taxpayer’s tab.

Tony Badran is Tablet’s news editor and Levant analyst.