It is time to have a serious debate about the thriving industries of prostitution, gambling, weapons and drugs in Lebanon — that is the opinion of Lebanon’s straight talking Minister of Tourism, Fadi Abboud. In an interview with Executive in April the minister assailed the poor regulation, outdated laws and hypocritical divergence between policy and practice relating to these economies of vice. What is more, Abboud has his eye on the bottom line, smells a fast buck and wants the government to have a piece, or at least a bigger piece, of the action.
In this report Executive investigates the murkier corners of Lebanon’s economy from the hashish fields of the northern Bekaa valley to the strip clubs on the Jounieh highway to find out who is cashing in, who is covering whose back and who would be the winners and the losers in a shake up of the status quo.
Guns for all
It may be widely accepted that Lebanon is awash with arms but in reality nobody has a clue about who has what. This is hardly surprising considering the country’s protracted years of warfare, weak government and plethora of sectarian militia leaders-cum-politicians now running the show. The regulation and monitoring of the industry are laughable, and Abboud wants to shake up the system, both to bring clarity to the situation and to rake in some dollars for the state’s coffers.
“Nowadays we expect there are no less than 3 million light arms and small weapons in the country — everyone has arms here,” estimates Fadi Abi Allam, president of the Permanent Peace Movement, a non-governmental organization that works on disarmament. “This is a huge problem and there is the problem of arms trading through Lebanon.”
There is a native stock of weaponry in the country, much of which is a remnant from the civil war as the militias’ agreement to disarm in 1989 resulted in most of the small and medium sized weapons disappearing into the homes and under the beds.
What is more, Lebanon’s porous borders and fragile security have facilitated the country becoming a conduit for smuggling and trade in combat weapons to and from neighboring Syria. And yet while a discussion on the weaponry within Lebanon could not be complete without acknowledging the huge yet clandestine arsenal of Hezbollah, Abi Allam says, “We can see different districts of security made by different political leaders. The issue is not just that Hezbollah has arms. Of course Hezbollah has kinds of arms that the others don’t, but all Lebanese groups have arms to some extent.”
What’s on the books?
The law is quite clear on the issue of arms in Lebanon, but its application and the processes of regulation are not. The decree that deals with arms and ammunition from June 12, 1959, amended in 1999, classifies arms into different categories and makes it illegal for anyone to deal in arms unless they have permission from the Ministry of Defense and the Ministry of Interior. Law 220 from May 1993 further stipulates the need to have a license to carry a hunting rifle, and under Article 3 of the law; if you have any kind of gun without a license you can be sentenced from six months to three years in prison and subject to a fine.
Arms are categorized into five categories in Lebanon and those permitted for hunting are all in the fifth bracket. “We can sell hunting guns to everybody but once they are bought from us they need to get a license or the police might catch them, confiscate the weapon and arrest them,” says Joseph Abi Saab, importer and exporter of arms and owner of Brescia Middle East hunting store in Jounieh.
Licenses range in price, with a single barrel costing some LL50,000 ($33), a double barrel LL100,000 ($66) and a semi automatic LL200,000 ($132). The state further benefits in this trade with each importer having to pay a license fee worth 1.5 percent of the import value, 5 percent customs duties on all imports and then importers and traders pay the same income and corporation taxes as any other business. Imports in arms and ammunition amounted to $28 million in 2011, which once import licenses, customs duties, VAT and corporation tax have been factored in amounts to a tidy little earner for the government.
The real money maker
However, it is the trade of weapons in categories one to four, meaning combat weapons, which is on Abboud’s radar. In theory, only the government, more precisely the Ministry of Defense, can import such weapons and even the trader who organizes the shipments never gets to see the weapons — he just works as the middleman and takes his commission while the army collects the goods.
There is, however, an inherent contradiction in the regulation of combat weapons, where people can be officially sanctioned to own firearms that could only have come from the black market. Basically, the Ministry of Defense offers licenses to owners of combat weapons — which must have been bought or imported illegally — without wanting to know how they were obtained or where they came from.
What is more, the licenses are often issued as mukhtalif, Arabic for ‘varied’, meaning that there is no specific gun type or number attached to the license, so the holder is permitted to handle any personal combat weapon from a handgun to an M16. A money exchanger, who has a license and spoke on condition of anonymity, said, “If you are an individual who is part of a political party or movement then you can easily get a license that says mukhtalif so you can own any kind of weapon… It completely depends on your connections. If you don’t have connections you don’t get a license.”
Despite numerous requests from Executive, the Ministry of Defense did not respond to requests for comment on the number of licenses issued, the registration process, the amount of money it makes from it, or the customs it pays on the weapons it imports.
Yet clearly, the supply of combat weapons is fed by a thriving black market that is much larger than the legitimate one.
“Lebanon is like a supermarket for weapons, I can get anything, anytime,” says Rifaat Ali Eid, leader of the Arab Democratic Party in the Jabal Mohsen neighborhood of Tripoli, whose militia regularly makes headlines on account of its armed clashes with the residents of Bab el Tabbeneh.
It is this supermarket of arms that Abboud wants to regulate and skim off the top of.
“We could put a license fee of 500,000LL ($330) every year for each gun and we could tax the purchase 200 percent. Today a Kalashnikov whose real price is $450 is selling for $2,500; why don’t we take this money, regulate the market and then we will know that every gun that is not registered is illegal.”
Just as the system of licensing combat weapons is maintained through a series of patronage networks linked to the political and military establishments, so too is the black market trade in arms. “Of course these traders are protected. No one can do this dangerous work without cover from people in power,” says legal importer Abi Saab. “If you are trading in combat weapons and the secret police catch you, and you are not backed up, then no one knows what could happen to you. They are all supported by politicians.”
For Abboud’s vision of Lebanon becoming a regulated and taxed trade hub for combat weapons to become a reality, he would have to find a way around those people in power who are profiteering from the status quo. Perhaps that explains why there is so much inertia against change.
“The government is not cooperative on this issue and they don’t have the intention to control this issue,” says Abi Allam. “The parliament has a lot of work in order to do something practical, but they are not doing anything at all.”
Thank you Ma'am
Prostitution is illegal in Lebanon — well, on paper at least. The reality, however, is muddled by legal ambiguities and somewhat conflicting policies. The bottom line is that prostitution is rife and from the ghetto street corner to the 5-star penthouse suite women are selling their bodies. The price tag varies anywhere between $10 to $5,000, as surely, sex knows no class distinction.
Abboud harks back to the ‘heydays’ when prostitution was legal in Lebanon and the bordello was an acknowledged and legalized institution. He advocates a return to a similar system by bringing prostitution out of the dark and back into the open. The rationale he proffers is based on both concerns for the women involved and stone-cold profiteering. He argues that legalizing and regulating the ‘world’s oldest profession’ would offer increased protection and rights to the women, and at the same time, “could make $10 million a year or more for Lebanon.”
On February 6, 1931, while Lebanon was still being conceived, prostitution was legally acknowledged as a profession. This was only allowed in registered bordellos, which were regulated by the state and had to follow strict guidelines. The system persisted into the civil war by which time the majority of the bordellos were in downtown Beirut, where fighters would converge to forgo their internecine bloodletting and satisfy their sexual desires.
However, while this law has never been cancelled, prostitution within bordellos has become a thing of the past. “In Lebanon if you want to delete a law you need to issue another one but in this case that did not happen. They just stopped applying it,” explains Hiba Abou Chacra, social worker in the rehabilitation and reintegration center at the non-governmental organization Dar Al Amal. “Now prostitution is illegal in the eyes of the law, there is nothing known as legitimate prostitution.”
The end of the bordello certainly did not mean the end of prostitution, but rather what has come to exist is essentially the continuation of the trade within two sectors: The regulated and unregulated. Super nightclubs, certain licensed bars and massage parlors are not for prostitution per se, but in the vast majority of cases are involved in the sex trade in one way or another and are regulated and monitored by the state. On the other hand, to some extent, there are women working in street prostitution, illegal brothels, or those who are on call from certain phone numbers for ‘home delivery’, and this is all unregulated and unlicensed.
Quantifying the number of people involved in illicit industries is never an exact science, but, “It has been estimated that there are tens of thousands women in prostitution,” says Ghada Jabbour, head of the exploitation and trafficking in women unit at the women’s rights NGO Kafa. “There are around 6,000 to 7,000 ‘artists’ working in the country in the super nightclubs. It is incredibly difficult to know how many women are involved in street prostitution, apartment brothels, internet prostitution, massage parlors and so on.” Lebanon’s super nightclubs employ foreign women who enter the country on an ‘Artist’ visa system that permits them entry to the country for three months at a time.
Lt Colonel Elie Al Asmar leads a department of around 25 men within the Internal Security Forces (ISF) that deals with prostitution in Lebanon, and he takes exception to the suggestion that prostitution is in any way regulated in Lebanon: “Prostitution is not regulated. There is no regulated prostitution in Lebanon,” he says. “All prostitution is clandestine. There is no prostitution allowed.”
Yet while this may be true to the letter of the law it is not really true to the spirit of the law. Ostensibly the super nightclubs are not in any way involved in prostitution but there is a ritual that everyone from the customer to the girls to the law enforcement officer knows all too well.
As the manager at a super night club in Jounieh told Executive, “It’s very simple, you come and choose a girl to sit with, you buy a bottle of champagne from us for $70, and the next day you take her and have sex with her. Of course you will pay her for that around $100 to $150. What more is there to say?”
The women are tightly controlled and regulated by rules, strictly enforced by the General Security, which confines them to the super nightclub or their hotel for the majority of the time. However, from 1pm to 8pm every day they are given ‘free time’ and it is in these few hours that the women can leave and go meet the customer to complete the deal that was sealed the night before with the bottle of champagne.
While the super nightclubs and authorities may wipe their hands of any responsibility once the women are out of the premises, the ceremony is well known and in practice amounts to a kind of regulated prostitution. “There is a two-faceted policy adopted by the authorities,” says Kafa’s Jabbour. “On one hand, the authorities say prostitution is banned in this country but then they are involved in regulating it. Everything goes through them. In practice it is kind of legalized without any legal text.”
Furthermore, the most recent United States State Department’s Trafficking in Persons Report from last year stated that, “In 2010 5,595 women entered Lebanon on the Artiste three-month visa system, which serves to sustain a significant sex trade and enables forced prostitution through such acts as withholding passports and restriction on movement.”
The security forces keep close tabs on these activities but it is much harder to monitor the unregulated sector, in which nearly all Lebanese prostitutes work. A concierge at one of Beirut’s most prestigious hotels, speaking on condition of anonymity, tells of parties where groups of men would bring 30 to 40 prostitutes, all of whom would receive hundreds of dollars each. Serving the big spenders within the hotel affords the worker an inside track on their more illicit activities. He claims there are a number of pimps who service the super rich enjoying the seedier side of Lebanon’s reputation as the party capital of the Middle East. “People pay up to $5,000 a night for a prostitute,” he says.
While this kind of prostitution is prevalent in Lebanon it is not easy to police. General Michel Shakkour, ex-head of the ISF General Crime Directory, reasons, “Can you imagine me sending my people to the lobby of the Phoenicia or the Metropolitan and checking all the girls entering and leaving? It would not be possible. We are a touristic country.”
And here in lies the crux of the Abboud’s argument. Lebanon is highly dependent on the tourists’ dollar, which is estimated to constitute anywhere from a fifth to a third of the economy, and the prevalence and ease of access to prostitution is undoubtedly a draw for many cash-flashing men seeking illicit thrills. The minister argues in true profiteering style, “We are being pushed out of the market by other countries in the region already like the UAE [United Arab Emirates].”
Adding a humane veneer to his business logic Abboud reasons that proper regulation would end the “slave-like” conditions of the ‘artists’, while offering greater protection and ensuring healthier environments for all women in the sex industry. Abou Chacra from Dar al Amal may take exception to Abboud framing his reasoning in terms of financial gain, but acknowledges, “We imagine that the organization of this work within a legal framework may bring positive results. The current system is chaotic and unclear so it exposes the women to a number of dangers such as violence, exploitation and health problems.”
However Kafa’s Jabbour is unconvinced by the argument that legalizing prostitution offers greater protection and safety to women, and posits that legalizing the prostitution industry will provide a safe haven to pimps, human traffickers and others who profit from buying and selling women. She backs up her argument by pointing to evidence, which shows that legalizing prostitution in the Netherlands did not eradicate trafficking and exploitation of women, or eliminate underground prostitution. She espouses decriminalizing the women but criminalizing the industry, which would mean targeting the pimps, traffickers and clients, a policy that has shown some success in Sweden.
While Jabbour and Abou Chacra may differ regarding decriminalizing prostitution, they are both ardently against using it to promote tourism.
“What do we want to say? That we are a country where women can be bought and sold just to make some quick money,” asks Jabbour rhetorically. The temptation does seem to exist, however, to turn the state into the biggest pimp of them all.
Hashing it out
It was during the 1980s, with Lebanon verging on a failed state rife with war, kidnappings and chaos, that “Lebanese Blond” and “Red Leb” earned international notoriety. No, these were not references to the country’s beautiful fair haired ladies, but to varieties of hashish produced in the fertile Bekaa Valley and exported to international markets.
As the civil war drew to a close with the signing of the Taif accords in 1989, American authorities pressured both the Lebanese and Syrians to clamp down on the Bekaa’s hashish and heroin industries. Production subsequently plummeted, but in the not so hidden corners of the northern Bekaa farmers have continued to grow the marijuana plants (botanically referred to as ‘cannabis’) from which the resin is extracted to produce hashish. According to the United Nations Office on Drugs and Crime’s 2011 World Drug Report, Lebanon is “increasingly reported as a source of cannabis resin [hashish],” and is identified within the top five producers in global markets.
A combination of officials being paid to look away, politicians trying to secure their voting base and farmers willing to run the risk of having their crop eradicated to secure up to 10 times more revenue than they could from growing vegetables, means the state has failed to stamp out this illegal trade. Again, Minister Abboud suggests that perhaps it is time to face up to reality, accept this economy of vice and look into growing the crop for alternative uses such as medicinal byproducts.
Every year farmers in the impoverished northern Bekaa grow plots of marijuana plants with the knowledge that their crop may be uprooted and burnt. They continue to do so quite simply because if they manage to give the authorities the slip then the returns are so handsome then it will have been worth the gamble. Indeed, as Executive went to print clashes were erupting in the Bekaa between ISF soldiers and hashish farmers as the annual show down of crop eradication began.
“You are comparing gold and lead here,” says Dominique Choueiter, industrial hemp project coordinator at the United Nations Development Program (UNDP), when comparing hashish and normal produce.
Fields of green
As the wide flat plain of the northern Bekaa lifts up to hug the lower eastern slopes of the Mount Lebanon range, a farmer nicknamed Abou Elie runs his fingers through the potent smelling leaves of his cannabis bushes that are only a couple of months away from budding. The hot dry days and cold crisp nights are perfect for maximizing the content of the mind altering chemical in the plants, Tetrahydrocannabinol (THC).
“I hedge my bets with what I grow,” he says. “If the market fails for my fruits and vegetables then I can compensate with hash or tobacco. On the flip side if the government comes and destroys my crop of hashish then I would sink if I don’t continue growing the potatoes, onions, carrots, garlic and so on.” Abou Elie is growing 10 dunums (10,000 square meters) of marijuana plants and if all goes well he should bring in about $12,000 gross, or $10,000 net, in profits this year. That is without irrigation, whereas farmers who irrigate can expect around $30,000 to $50,000 for the same sized plot, according to the ISF sources. Abou Elie calculates that if his crop survives, in a worst case scenario, his profits will be three times better than from alternative produce, but will most likely be “much, much more.” The divergence in returns varies greatly year-to-year as fruit and vegetable markets are notoriously volatile in the face of global fluctuations. Furthermore, this year the Syrian crisis has put an extra squeeze on the markets of agricultural farmers, who are thus pinning even greater hopes on their hashish crops. A crude calculation of the value of the Lebanese hashish industry can be worked out from the eradication of 35,000 dunums last year. The UNDP’s Choueiter says few farmers escaped the cull, and if we assume half was irrigated and half was non-irrigated then that amounts to $87.5 million at the wholesale price between trader and farmer. This would increaseat least 10-fold in value by the time it gets to the street, amounting to $875 million. That’s no small fry.
In mid-July, Colonel Adel Mashmoushi, the man at the ISF charged with policing drugs in Lebanon, told Executive he believed the families and tribes controlling the hashish trade in the Northern Bekaa were preparing to ambush them. He was not mistaken. Within the week his men were under attack from gun and mortar fire. The eradication program is no easy pickings and takes about 1,000 ISF men, with the support of the army, two months to complete and Choueiter calculates that the cost to the ISF in 2011 was about LL500 million ($331,674).
Colonel Mashmoushi’s job is not only hindered by the lawlessness in the areas he has to work in, but also the complicity of elements from within the security forces and political establishment.
“There are officials and officers who profit handsomely from this,” explains Abou Elie. “Everyone involved has a partner among the authorities. They all take their cut at every step of the game. We will have to pay half of what we earn. If you pay you are fine, and if you don’t then they will simply arrest you.”
Colonel Mashmoushi is dependent on the intelligence from forces in the field, and sent around a memo in the weeks leading up to the eradication requesting tip-offs about where the cannabis crops were. Asked whether corruption and bribery could be squandering his efforts he replies, “In the ISF we are from the population, with relations to the people, and of course sometimes people take bribes, but this is not common. We have our morality and punish severely anyone caught doing this.” Statistics on investigations into corruption and bribery within the ISF are deemed “too sensitive” to be made public, according to Mashmoushi.
Society in the northern Bekaa is woven with tribal affiliations, and securing the loyalty of the families producing hashish can be a determining factor for the political parties in keeping large extended kin networks of voters on board. For the ISF teams being sent to uproot the marijuana plantations, a lack of political support on the ground makes the job a hell of a lot harder to execute. “I need support from all of the population and political cover but sometimes they need the votes, which means they won’t take the same position as me,” gripes Colonel Mashmoushi. Abou Elie goes a step further and claims that many of the local political parties are getting fat off the hashish trade by direct involvement. “Of course the parties make a lot of money off this — it is all about politics and the parties,” he says. “Everyone here belongs to parties. You don’t take your own decisions. If the party says yes, then it’s a yes, if the party says no then it’s a no.”
Few alternative crops
In such an environment it is little wonder the farmers continue to produce hashish. A 2007 report by the UNDP concluded that, “farmers will likely continue to cultivate illicit cannabis, and there is a danger of a return to illicit opium cultivation, unless appropriate measures and/or meaningful development alternatives are made available.”
Despite the fact several studies have illustrated therapeutic affects related to THC consumption, there is not a sufficient market in manufactured medicines that could substantiate legitimate exportation of cannabis grown in Lebanon, according to the UNDP. Another alternative is growing industrial hemp plants, which are varieties of the cannabis plant that contain less that 1 percent THC — compared to the normal 20 percent or higher found in marijuana plants — and thus are useless as narcotics. Once processed, hemp is among the strongest natural fibers in the world, while the plants also produce an oil whose many uses vary from fuel to medicine, and most importantly hemp has a growing international market. However, Choueiter’s study found that while hemp could provide an alternative for the hashish farmers, such a program would need strong government support in terms of implementation, policing and, at least initially, subsidies.
The reality is that there simply is not the will among the politicians or the strength and support within the security apparatus to bring this to fruition. The annual game of cat and mouse between the ISF and the hashish merchants will continue as politicians and policemen continue to fatten their wallets from the sidelines.
Raising the stakes
The Casino Du Liban (CDL) has for many a year been synonymous with the Lebanese high life, as dignitaries, VIPs and stars of the silver screen have graced its gaming tables. Ensconced on the near vertical slopes overlooking the Jounieh Bay, Lebanon’s betting hub is partly owned by the state and enjoys a legal monopoly on nearly all kinds of gambling within Lebanon. However, corruption and patronage maintain an illicit gambling economy outside the confines of the CDL from which the government is not getting its cut. In the eyes of Minister Abboud, it is time to open up the playing field and bring some diversity to the table.
Every night, officials from the Ministry of Finance (MoF) survey the floor of the casino and as the final chips are cashed they take a flat rate of 40 percent of all earnings. Last year alone the state profited LL168 billion ($112 million) from the dashed hopes of gamblers at the CDL. The government owns its stake in the casino through an investment body called Intra Investment in which the Banque du Liban (BDL), Lebanon’s central bank, owns 38 percent of the shares. Intra Investment is the majority stakeholder in the CDL with 52.32 percent, while the Abela Tourism Development Company owns 14 percent and the remainder is held by unlisted ‘private investors’.
The legal hegemony afforded to the casino dates back to decree 6919 from June 29, 1995, which granted the CDL a monopoly for 30 years. This law essentially annulled the gambling law from 1959 that had previously applied to the sector. The annexes of the 1995 decree strictly outline the vast majority of gaming activities that are confined to the CDL while other gaming activities may be permitted elsewhere, but only with the appropriate permission.
“You even need permission for pin ball machines,” says lawyer Wassim Mansouri. “Poker machines? You need permission for that. You even need a license for playing cards without money.”
Despite this there are a plethora of gaming centers in Lebanon, whose bright lights and promise of a “gambling paradise” are more often than not filled with rows of slot machines and despondent characters tapping away in silence in the vain hope that their chips will come in. Glamorous this is not.
The licensing and monitoring of these machines is littered with ambiguities and contradictions. According to a spokesperson at the Ministry of Finance, an annual license fee of LL1 million ($666.67) is collected for each poker machine, but this flies in the face of a 2008 agreement between the CDL and the MoF that all poker machines in Lebanon must be on the premises of the CDL. In its July 11 meeting the cabinet called on the Ministry of the Interior and the municipalities to clamp down on all gambling establishments operating outside of their licenses, and yet the MoF continues to collect the license fees.
With such inconsistencies between the authorities it is perhaps not surprising that the rules are bent and bastardized as standard practice. Khalil, a young man who manages the front house for one of the gaming centers on the Jounieh highway, claims illegal machines are imported, illicit poker nights are held, licensing hours are routinely flouted and machines are tampered with to charge higher playing fees. This is all possible because, “The police know the story, if you pay you can do whatever you want, but not in public.”
Colonel Ali Sheri is in charge of the department in the ISF responsible for policing gambling, and he denies corruption is a major problem but concedes that gambling violations are not a priority in the eyes of many of those applying the law. “You are happy if you catch people breaking the law but then the judge will say ‘what is this?’ and then let him go,” says Sheri. “The punishment needs to be stronger in terms of arrests and fines and closing places down.”
In addition to the abundance of small gaming centers routinely flouting their licenses, there are poker clubs that sprout up for a month of two, in which time they harvest their profits before shutting down and relocating. “Of course they have cover from political people and if they can stay open for several months then it is worth their while,” complains Lara Hafez, marketing manager at the CDL. As for the more well-heeled and well-connected high rollers that want to escape the regulations of the CDL and the taxes of the MoF, poker parties are organized in private homes, which almost always stay aloft from the meddling ways of the ISF.
Colonel Ali Sheri retells a recent bust, on a tip off from the CDL, in which he raided a large private villa in the mountains that was surrounded by top-of-the-range cars and filled with a banquet hall and a series of poker tables. “Of course there are important figures at such events and this makes things very difficult for us,” he says. “If they have lots of money and power what can we do?”
Abboud would like to open the market, regulate these clandestine gambling activities and allow Lebanon to become a gambling destination to rival its regional competitor; Turkish Controlled Northern Cyprus. However, the CDL’s monopoly has 12 years left to run and considering the fact it is part owned by the BDL and heavily taxed by the MoF, it is a long shot to imagine that a new law will be passed to overrule the 1995 decree.
The CDL’s Hafez was at best elusive when asked if there may be a conflict of interest with the government holding a major stake in the casino. “The management may have political connections, but they are not answerable to politicians and act independently,” she says. Back in 2006 Riad Salameh raised the idea of selling the bank’s shares in the CDL but that suggestion quickly slipped off the table and according to Hafez, “It does not seem to be an option for the time being.”
What’s more, Abboud lambastes the CDL for not expanding its activities, opening new branches or reaching out to wider segments of the market. However, at the casino Hafez counters that they are confined by the law to their current location, but have plans for expansion on site, although details were patchy as “plans are still under review.”
The cozy set up between the casino, the bank and the politicians looks set to stay regardless of Abboud’s gripes. For the coming 12 years at least the challenge, including for Abboud’s tourism police, is simply to implement the law as is.
The profits of vice
Lebanon’s economies of vice are thriving. Weak security, rampant corruption and rackets within the corridors of power are making sure of that. It would appear protecting mini-fiefdoms is much easier than actually formulating, implementing and enforcing coherent national strategies or legislation that addresses reality.
When assessing how to tackle these problems the answers are rarely black and white. But that is exactly why the country is in such dire need of a straight-up debate about these issues that are so flippantly swept under the carpet. Minister Abboud is certainly right about that much at least.