The unusual suspects
On 16th September seven bank ‘robberies’ took place in Lebanon on a single day – but these weren’t ordinary raids. We meet two of the people who have resorted to extreme measures to access their own money during a devastating financial crisis
16th September 2022 (Taken from: #48)
On 11th August 2022 Bassam al-Sheikh Hussein walked into a Beirut bank brandishing a rifle and a canister of petrol and threatened to set himself on fire if he wasn’t given $210,000. Seven hours later, having taken several employees of Federal Bank hostage, the food delivery driver accepted an offer of $30,000 and surrendered to police. During the ordeal a large crowd formed outside the bank to shout support for him and chant anti-bank slogans. Hostage-takers aren’t usually considered heroes, but this was far from a normal bank robbery. Hussein was demanding his own money.
Wearing a tight-fitting black T-shirt, denim shorts, flip-flops and a backwards baseball cap – the same attire he wore during his heist at Federal Bank, minus the firearm – Hussein greets us warmly at his house in a suburb near Beirut’s airport. He lives here with his wife, son and father, who reclines in an armchair in the living room. When the bearded bank ‘robber’ reaches to hold his father’s hands, the tiger tattoo on his upper arm becomes fully visible. He says that his dad has severe Alzheimer’s and is entirely ignorant of the fact that his son recently held up a bank to pay the money owed for his hospital treatment.
I wasn’t ready to beg or steal. I couldn’t think of any other solution”
Hussein is one of millions of Lebanese citizens whose money is ‘locked’ in the accounts of commercial banks. Since the start of the country’s liquidity crisis in 2019, banks have implemented monthly withdrawal limits because they don’t have the dollars to give to people who made deposits with them in good faith. Limited withdrawals can be made in the local currency, the lira, but at such a terrible rate that depositors lose a large amount of money with every transaction. Hussein claims that for three months before his raid the bank hadn’t let him withdraw anything at all despite him having amassed savings of more than $200,000. In addition to his father’s $50,000 medical bills, Hussein faced rising personal debts. “I have my living costs, my car, my daily life – and everyone knows how expensive the cost of living is,” he says. “I didn’t think of selling my kidney or my heart. I wasn’t ready to beg or steal. I couldn’t find any other solution.” While taking hostages at a bank just to withdraw money from your account is an extreme measure by any standards, for many Lebanese the time for moderation has long passed.
Before the civil war began in 1975, the country was known as the ‘Switzerland of the Middle East’, a beacon of prosperity in a troubled region which boasted a sturdy and reliable banking system. Even a few years ago, the country was viewed as an economic success story. But today, according to the World Bank, the country is experiencing “one of the top ten, possibly top three, most severe economic collapses worldwide since the 1850s”. The currency has collapsed, with the lira having lost more than 95 percent of its value since 2019. Unemployment has tripled and inflation is the second highest in the world, behind only Sudan. More than 80 percent of the population is living in poverty, public services are almost non-existent and for those who can’t afford their own generator, electricity is only available for one or two hours a day at random hours, sometimes only in the middle of the night.
There’s an acute shortage of medical supplies and over 40 percent of Lebanon’s doctors have left the country since 2019. Nearly half of households are food insecure and since early October a deadly cholera outbreak – the first in the country for three decades – has been spreading rapidly. Multiple crises are raging and there doesn’t appear to be anyone capable of finding solutions – the country has been without a functioning government since parliamentary elections in May ended in stalemate. It’s little surprise that on this year’s edition of the UN-sponsored World Happiness Report, Lebanon is ranked 145th of 146 countries, between Afghanistan and Zimbabwe.
The day before his raid, Hussein went to the Hamra branch of Federal Bank to ask for his money. “I told the director that if I couldn’t get my monthly withdrawal of $400 I can’t pay my debts to people,” he recalls. “He told me it wasn’t his problem. I said ‘Let me speak to someone higher than you’ and he said he was the highest boss there. I told him ‘If you don’t give me [my monthly withdrawal]… you will see something you don’t like.’ He said ‘Go, do whatever you like,’ so I said ‘OK, I will’.”
The next day at around noon, Hussein returned to the bank. “I told the director, ‘I want my money’ and he said ‘There is no money. When there is money I will call you. Don’t come here any more.’ I went to the car, picked up my gun and a gallon of petrol… When he saw me he started screaming ‘What are you doing?’” Hussein put his gun to the bank director’s head. “He opened the safe and gave me $400 and I told him I wanted all my money,” he says. “Yalla. Now.”
After some negotiations at gunpoint the bank raised its offer to $10,000. “Meanwhile I took the petrol and spread it over the table of the employees,” continues Hussein. “Everyone was panicking… I told them to stay away from me, that I was not going to hurt them but they must stay away from me.” There were three customers in the bank at the time he began his raid, he says. He let out one person who fainted when he first entered with his gun, and the other two were released later in the afternoon.
“I was really angry when they brought me $10,000,” Hussein says. “I took my gun and hit the windows a few times and said I wanted all my money now… They increased their offer to $15,000… I didn’t accept. I told them that no one will leave here alive if I don’t get all my money.”
Seven hours into the siege, having made arrangements for food to be provided for his hostages by a local restaurant, Hussein grudgingly accepted the bank’s latest offer. “They told me we will give you $35,000 plus another $400 each day and they wouldn’t arrest me,” he says. “They told me that they could get the minister of the interior on the phone to make a guarantee… I told them to give me all my money and [only then will] I release the people here. My family were outside the bank and they were pressuring me, saying that what the bank was saying was true, and that they wanted to find a solution… So I gave my brother the $35,000, asked him to take it to my house, and started releasing the employees, one after the other, every ten minutes.” When his brother confirmed that he was safely home with the money, Hussein surrendered to the police.
Hussein emerged from Federal Bank a folk hero, waving at his supporters as he was led to the police car. Although his actions shut down much of the neighbourhood, many locals were sympathetic – the country is full of people in a similar situation, who haven’t been able to obtain the money to pay for urgent medical care for themselves or loved ones. Many share his sense of desperation and fury, and the humiliating act of having to beg to bank staff just to get one’s own money is a feeling known to many. This frustration and anger is undercut with a real sense of fear – for those like Hussein with deposits in US dollars, there’s a genuine possibility they will never see their money again.
Eight days before Hussein took the law into his own hands, the World Bank accused the Lebanese authorities of running a vast Ponzi scheme that has “caused unprecedented social and economic pain” to the people.
Both the economic and political roots of today’s crisis lie in the 1990s when Lebanon pegged the lira to the US dollar, meaning that its banks always needed large reserves of American currency. When the lira flagged in the 2010s, in part due to the instability caused by the conflict in neighbouring Syria, the central bank urgently needed US dollars to buy up lira and restore parity. To increase the flow of dollars into the banking system, the central bank introduced a policy it called ‘financial engineering’, which saw commercial banks offer dollar depositors exorbitant interest rates – sometimes as high as 15 percent – to maintain a flow of foreign currency into the system. The new dollars were then loaned to the central bank, which in turn loaned dollars to a incompetent and deeply corrupt government. To reward the existing depositors with high interest rates, more and more dollar investors were required – and eventually, as is the case with any Ponzi scheme, the house of cards collapsed. Hussein’s bank statements may say he has $210,000 in his account, but his money, along with everyone else’s, has been squandered or plundered by the political and financial elites.
The head of the central bank, and one of the most powerful people in the country during his 25 years in office, Riad Salameh was charged with money laundering earlier this year along with his brother Raja. The brothers deny that they embezzled public funds, but Salameh also faces several European investigations into allegations that he stole hundreds of millions of US dollars from the central bank. The World Bank has said that the central bank “orchestrated” a “deliberate depression” – and the Lebanese people are furious with Salameh and his inner circle.
There’s also tremendous public anger towards the country’s political class, which in October 2019, as the scale and the causes of the financial crisis became clear, spilled over in a series of unprecedented anti-government demonstrations. For months protesters chanted “killun yaani killun” (“all of them means all of them”) at demonstrations across the country, demanding that the entire political and economic system be dismantled. The demonstrations brought down the government of Saad Hariri, but the situation would only get worse.
Since the end of the civil war in 1990, Lebanese politics has been dominated by the handful of sectarian warlords that negotiated peace. According to a June 2021 report by British independent policy institute Chatham House, after the war ended “the Lebanese state was turned into a vehicle for self-enrichment by the political class” and by the start of the current crisis in 2019 “decades of widespread corruption had rendered the public sector dysfunctional”. When in October 2021 a group of newspapers published details from a leaked trove of private financial records, known as the ‘Pandora Papers’, few Lebanese were surprised to discover that the country’s political and financial elites had millions of dollars stored in offshore tax havens.
After years of stalling due to disagreements over the size of the central bank’s losses, in April 2022 Lebanon reached a draft agreement with the International Monetary Fund for a $3 billion bailout. But the country has yet to implement the reforms required by the Fund, which involve restructuring banking laws and putting in place strong anti-corruption and anti-money laundering legislation. The inability – or sheer unwillingness due to entrenched privilege and corruption – of politicians and financial officials to make the desperately needed reforms is another cause of anger and frustration among the Lebanese.
Despite the promises that he wouldn’t be arrested, Hussein spent five days in police custody, some of which he spent on hunger strike. He was released after all charges against him were dropped. His wife Mariam Chehadi shows us footage of his homecoming celebration as his young son peers at the smartphone screen from behind the sofa. People are dancing in the street, and he’s held aloft by the crowd, an outlaw in the mould of Robin Hood. “They gave him rice and flowers,” says Chehadi. “They see him as a hero.”
Hussein’s raid didn’t just make a splash in his neighbourhood. Television and social media coverage of a man ‘robbing’ a bank to get access to his own account to help his ailing father spread throughout the country and beyond, and a flurry of copycat attacks followed.
I did not come here to kill anyone or to start a fire. I came to claim my rights”
The most celebrated of these raids came on 14th September, when a 28-year-old woman walked into a Beirut bank holding her three-year-old nephew’s toy gun and demanded $13,000 of her family’s money to pay for her sister’s cancer treatment. “I am Sali Hafiz,” she was seen telling the bank employees on her Facebook live-stream of the raid. “I came today… to take the deposits of my sister who is dying in hospital… I did not come to kill anyone or to start a fire. I came to claim my rights.” She left the bank with her money. The interior designer, who handed herself in to the authorities after weeks on the run, got off lightly. She was ordered to pay a fine of one million Lebanese lira (US$25) and given a six-month travel ban.
And then, on 16th September, seven depositors ‘robbed’ their own banks in a single day; five were successful. The Association of Lebanese Banks responded to the spree by announcing a three-day closure of banks in the country, and a few days later said that they would stay shut indefinitely “in the absence of assurances” over security from the government. When they reopened at the start of October the raids immediately started up again; one of the ‘robbers’ was MP Cynthia Zarazir, who staged a sit-in with her lawyer and successfully withdrew the $8,500 she needed for medical expenses.
The bank ‘robbers’ have received encouragement and support from an advocacy group which claims around 80,000 members, the Association of Depositors in Lebanon. Its head, Hassan Moghnieh, says he understands the raiders’ motives. In fact, he once raided a bank himself for similar reasons to Hussein. “In 2020 my mum was sick with cancer and she needed an immediate operation,” he tells us on a street in Beirut’s downtown district. “I took the [medical] reports to the bank showing them that I needed money for this surgery but they didn’t answer me… I went to the court [to try and withdraw his funds] but they did nothing. Nobody did anything and at the end of the day I needed the money because the [state-run] hospitals are miserable and private hospitals are expensive. I went to the bank. I took hostages. I was not armed but they brought my money to me.”
Moghnieh describes the situation in Lebanon as “catastrophic” and he places the blame squarely on the political class. “There is nothing in Lebanon. There is no law. There is no money. We are the only country in the world with no electricity. We don’t have water. We don’t have hospitals. We don’t have doctors. We don’t have medicines… They stole around $170 billion [the reported total amount of foreign currency deposits in the banking sector] of our money – the money of the depositors, the money of the Lebanese people. We worked abroad, we brought the money [back to Lebanon] to help our economy survive, to help our country. And they stole it.”
“Did you see what happened in the port?” Moghnieh continues, referring to the 4th August 2020 blast in the Port of Beirut which killed 218 people, injured around 7,000 and left more than 300,000 displaced from their homes. A fire had caused the detonation of 2,750 tonnes of ammonium nitrate, which had been improperly stored for six years despite numerous warnings being sent to officials. Human Rights Watch claimed in a 2021 report that “evidence strongly suggests that some government officials foresaw the death that the ammonium nitrate’s presence in the port could result in and tacitly accepted the risk of the deaths occurring”, yet nobody has been held accountable.
The devastating blast starkly symbolised the country’s collapse and intensified anger over decades of corruption and bad governance. Few Lebanese people are surprised that the investigation into the blast has stalled for two years, and almost no one has faith that it can take place without political interference. “Why did the [port explosion] happen?” Moghnieh says. “Corruption. Corruption.”
“[Our association] is supporting people to have their rights,” Moghnieh adds. “We just want our money. It’s our money and the government stole it.” Moghnieh, who has denied claims that his organisation was involved in planning several of the 16th September bank raids, believes that unless substantial changes are made soon there will be more raids. “There will be tens or even hundreds of people attacking the banks every day if they don’t find a solution. Or at least a roadmap to the solution.”
I could hear all those people outside supporting me, screaming ‘Don’t surrender!’ I disappointed them”
For those who work in banks in Lebanon this has been a particularly difficult time. “Bank employees have mixed feelings about the situation,” says a Lebanese woman who until recently worked in a Beirut bank (she requested we don’t use her name). She understands depositors’ anger – many bank staff also have their deposits locked in the system and are also angry – but says that having to spend every day dealing with furious customers, without the authority to help them get to their money, is extremely hard. And when the situation escalates, as it did in Hussein’s case, “the employees are not trained for situations where they are threatened, held up and have guns pointed at them while they are covered in diesel,” she says. “All this chaos leaves a huge, irreversible impact which sometimes leads to trauma. And bank staff are not offered any counselling or mental health services from their employers.”
Bassam al-Sheikh Hussein, however, has only one regret – that he didn’t go far enough. “I could hear all those people outside supporting me, screaming ‘Don’t surrender! Don’t stop until you’ve taken all your money!’ And I admit that I disappointed them. I really regret that I surrendered to the police. I should have stayed, I should have slept there, I should have made [the hostages] sleep there with me until I got all my money.”
Wasn’t he worried that he might go to jail, or get himself killed? “[When I entered the bank with the gun] I didn’t think of anything or anyone, not even my family or my father,” he replies. “If I’d thought about them I could not have done anything. I blocked them from my mind and went in very calmly with my gun and my petrol.” He was so determined to get his money that he really could have killed someone, he admits.
“Now instead of finding a solution [to this crisis, the government] will try to find ways to protect the banks more,” Hussein says. “The judges are saying they will arrest anyone that does the same [as me] – that they will call it a crime and they will put them in prison. But what kind of crime is this? It’s only the crime of wanting our money… It is their problem if there is no money, if they gambled with it. What I know is that when I put the money in this bank, I expected that I would get it back from this bank.”
Hussein will need more money soon, and he’s already thinking about how he’s going to get it. “The first time I didn’t shoot or burn anything,” he says. “Maybe the second time I will have to do all of this. Many things might happen. They need to find a solution.”
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