Lebanon’s PM demands 5 years’ worth of salary from university in dollar wire transfer

Lebanon’s Prime Minister Hassan Diab asked the American University of Beirut (AUB) to pay his salary for the next five and a half years of employment, via a dollar wire transfer to a foreign account, in January, according to a report by online outlet Al-Modon.

Diab reportedly requested the university pay the entire salary, despite the now-prime minister no longer fulfilling his contract, which is set to end in 2025.

The 61-year-old academic and former education minister has taught computer engineering at AUB since 1985 and acted as the university’s vice-president of Regional External Programs (REP) since 2006.

Diab reportedly hired a lawyer to send a letter to the Chairman of the university’s Board of Trustees, Philip Khoury. The letter asked for full “wages and benefits” to be sent in dollars, to a foreign-held account, and threatened legal action if the university failed to comply, Al-Modon reported.

Diab’s annual salary from the university is $200,000, meaning the now-prime minister requested a total payment of $1 million, even as Lebanon teeters on the brink of economic collapse.

Lebanon’s currency, the lira, has lost more than 50 per cent of its value since October. Though it is officially pegged at 1,507.5 to the dollar, the parallel market rate slid to a record 3,625 Lira to the dollar as of last week.

READ: Protests against soaring living costs continue in Lebanon

In a televised address on Friday, Diab sharply criticised the central bank’s management of the crisis, blaming the organisation’s Governor Riad Salameh for the rapid devaluation of the currency, and the mounting losses in the banking system.

Diab said: “There are major gaps in the central bank: a gap in the performance, a gap in the strategy, a gap in the clarity and openness, a gap in the monetary policy, and a gap in the accounts.”

The prime minister called on “the central bank governor [to] come out and honestly announce to Lebanese the facts, on why what’s happening is happening.”

READ: Lebanon: Protestors back on the streets as politicians argue over economic rescue plan

According to Diab, Lebanese bank deposits plunged by $5.7 billion in January and February, meaning that liquidity at cash-strapped banks is “beginning to run out”.

Central bank financial data, nevertheless, points to “accelerating” losses in the sector, with $3 billion withdrawn in the past four weeks alone.

The erosion of trust in Lebanon’s banking system in recent months has led to a major capital flight, with fluctuating and volatile exchange rates compounding the chaos, even as Diab seeks to protect his deposits in foreign-held accounts.

READ: Lebanon: Money transfers close as currency goes into freefall