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Shiite financier investments embarrasses Hezbollah
 A Mideast version of the Bernie Madoff scandal is threatening to tarnish Hezbollah's reputation in Lebanon for being incorruptible, and the powerful Shiite militant movement faces calls to bail out small investors to keep its position from being undercut.Hundreds of Lebanese sold land or drained their retirement savings and handed over hundreds of millions of dollars to Salah Ezzedine, a Shiite businessman with connections to Hezbollah. The anti-Israeli Hezbollah is on a U.S. list of terrorist organizations and maintains the strongest military force in Lebanon. For its Shiite followers, however, it is seen as a trusted quasi-government that provides social services and aid. The group gets substantial funding from Iran and paid out millions to rebuild the Shiite heartland in south Lebanon after a devastating 2006 war with Israel. Hezbollah has said it had nothing to do with the alleged swindle and has so far resisted pressure to rescue the investors. Nevertheless, many investors put their trust in Ezzedine, principally because of the financier's connections to Hezbollah and because of his reputation as a pious, respectable Shiite. Ezzedine's investment company promised as much as 40 percent in annual returns, according to residents of this southern Lebanese village. Ezzedine and his partner, Youssef Faour, have been arrested on suspicion of cheating investors out of perhaps up to $1 billion, prosecutors say. Earlier this month, they were charged with fraudulent embezzlement, a crime punishable by 15 years in prison. Alleged victims included well-off Shiites but also smaller investors who sold land or pulled out savings to bundle the cash and give it to Ezzedine. Lebanese are comparing to the swindle by Madoff, now serving a 150-year prison sentence for masterminding a multibillion-dollar scheme that burned thousands of investors. Hezbollah leader Sheik Hassan Nasrallah earlier this month denied the group had any connection with the financier. A parliament member from Hezbollah reportedly lost money with Ezzedine and is suing him -- a sign, the group's supporters say, that it, too, was victimized. Still, Hezbollah is trying to ward off any blow to its status among loyalists. Nasrallah spoke recently by video link to a group of investors in the south to hear their complaints and reassure them, although he made no promises of compensation, according to an investor who lost money, speaking on condition of anonymity because of the sensitivity of the meeting.
Posted by: Fred 2009-10-01 |
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