“Whenever you have military contracting, there is bound to be some money creamed off the top,” according to Yezid Sayigh, senior associate at the Carnegie Middle East Center. How much is creamed off in Lebanon, however, is difficult to establish.

The Lebanese defense budget is one of the most opaque budgets in the world, being awarded the lowest possible rank in Transparency International’s 2011 Defense Budget Transparency report, on a similar level to Yemen, Saudi Arabia, Algeria, Egypt and Iraq. This indicates a lack of auditing, a lack of public access to budgeting information and a lack of access and detailed knowledge by oversight committees and the legislature. Furthermore, “secret expenditures,” go completely without oversight.

“There is money but no accountability,” says former General Brigadier Elias Hanna. The low score is, however, in line with regional trends according to Leah Wawro, project officer at Transparency International and author of the report. “The region is one of the worst performers on defense budget transparency,” he remarks.

Opaque contracting

In addition to it being hard to define how much the Lebanese government actually spends on the military, what it spends this money on is also a challenge. Although the budget offers a general breakdown of expenditure, who gets paid to supply military hospitals, or Lebanon’s 59,000 soldiers with food, clothing and spare parts for their equipment and the like, is information the Army refused to release to Executive, despite numerous requests.

In the end though, all public contracting in Lebanon is plagued by clientelism, according to Transparency International’s latest national integrity system assessment of Lebanon (2009).

The Transparency International report goes on to note that: “Lebanese investors routinely pay bribes to win contracts and political interference exists in contract awards. Contracts are not awarded to the most qualified applicants.”

Such political interference also extends to the military, says Halil Khashan, professor of political studies at the American University of Beirut, adding that: “The army is cohesive not because it has a mission, but because of a system of patronage.”

A public tender is required for all goods and services exceeding $535 and the Public Procurement Directorate supervises the procurement process and approves all contracts exceeding $50,000.

Security services, such as the Lebanese Armed Forces (LAF) and Internal Security Forces (ISF), are subject to special procurement systems, with the LAF’s procurement overseen by the logistics arm of the army.

Requests by Transparency International concerning military procurement were refused on the grounds that these expenses were ‘secret’, according to Transparency International researcher Nadia Massih.

Lebanon’s military budget lacks any kind of auditing; the committees of Defense, Interior and Municipalities who are responsible for the civilian oversight of the defense budget have little actual control according to a 2008 report by the Henry L Stimson Center, a Washington-based think tank. “The situation is such that, for example, very few members of Parliament on the Defense Committee are even aware of what the defense budget is,” states the report. “And even those that are informed about the budget might not know how the budget is spent or who the relevant decision makers are.”

In Lebanon, bids are invited from a select group of registered companies. “Only those that subscribe to this kind of [military] contracting get access,” according to Yahya Hakim of Transparency International’s Lebanon office. “You have to be registered and listed to access the information for procurement, you have to pay for that information; around 1 million Lebanese Pounds for access to military procurement contracts.”

The norm, and improving

Where Hakim sees this as objectionable, Riad Kahwaji, chief executive officer at the Institute for Near East & Gulf Military Analysis (INEGMA) think tank, says this is standard procedure for military contracts. “In all militaries I have worked with in my life; the United Arab Emirates, the United States, if you want to submit something, you have to put down a deposit,” he says.

The procurement process for obtaining contracts has been “very much modified and improved” over the past few years, according to Kahwaji. “There is a committee that functions under the [LAF’s] administrative department; each time they want to get anything; food, spare tires and so forth, a committee is formed and staffed with experts in that area.” The recommendations of this committee move up the chain to the department of procurement, the planning department has to approve it, then the director of administration, and finally the LAF command has to sign off.

Rather than going through middlemen, there is now a list of requirements companies need to fulfill.

“Whoever wants to bid has to provide evidence that he actually represents and owns an existing factory and is not selling through several subcontractors,” according to Kahwaji.

A general at a military hospital — who spoke on condition of anonymity — says that despite the bidding process being open, there is room for corruption. Although each bid needs at least three tenders before a committee decides, he says it was unclear what was negotiated between committee members and contractors before bidding companies hand over closed envelopes containing their bid.

One method through which deals have been made, the general says, is by low-balling  the value of the bid in the envelope even though a better deal for the company has been agreed on beforehand with the process guaranteed by bribes paid to LAF officials, he said.

Lebanon is, however, far from unique in this regard; many in the industry have come to expect that any kind of military contracting is bound to be opaque, with room for private transfers to grease the wheels. This is partially due to the exclusive realm of such contracts.

“Who knows about the tenders is always going to be an insider [in a] process where you have to be in the know,” says Kahwaji. “I have been around many armies and you cannot get a full picture.”

A former LAF staffer who worked in logistics — and was not cleared to speak to the press — confirmed this modus operandi: “You know how it works; connections are everything, everybody knows each other.”

If you had a chauffeur driven car with free petrol, bodyguards at your side 24 hours a day, seven days a week, free babysitting and rides to school for the kids, as well as school fees for your children and health care for the family thrown in, you could be a Hollywood starlet; or, you could be a high-ranking officer in the Lebanese military cashing in on the regular package of benefits offered to you.

Addressing the costs associated with this type of spending is but one of the tasks facing the Lebanese Armed Forces (LAF) on its path to reform. “The waste in the Army is not the [number of people in the] Army — the waste is in the five or six cars following a Brigade Commander and in soldiers driving kids to school,” complains former General Elias Hanna.

The LAF is overseen by the Ministry of Defense, which enjoys the largest allocation of funds of any ministry, receiving $1.2 billion in the 2012 Draft Budget. The Lebanese defense budget ranks ninth globally in terms of military expenditure as a percentage of gross domestic product, with Lebanon spending 4.2 percent of its GDP on the military in 2010, according to the World Bank. Regionally, Lebanon was outspent in 2010 by Jordan, with 5.2 percent of GDP dedicated to military spending, the United Arab Emirates (5.4 percent) and Israel (6.5 percent), but surpassed Syria (which spent 3.9 percent that same year).

Even so, “the budget [the LAF] gets for an army in the 50,000s [of personnel] is nothing, it’s sad,” says Riad Kahwaji, chief executive officer at the Institute for Near East & Gulf Military Analysis (INEGMA) think tank.

According to internal army documents, it is estimated that the LAF need at least $1.3 billion for essential force development, including communication equipment, training and weapons.

There are two causes for the lack in funding, says former Brigadier General Amine Hotait. “The first is the poverty of the state; we have a public debt approaching $60 billion.” The second, he says, is politicians  don’t see the point of adequately funding the army as they know it is impossible to compete militarily with Israel, with whom Lebanon is still officially at war.

“Why give money without use?” asks Hotait.

Paying the troops

The LAF, including the navy and the air force, comprise 59,000 personnel, 57,000 of whom serve in the Army. At least 85 percent of the Lebanese defense budget is allocated for the salaries, amenities and allowances for these men, according to the 2010 military budget — the latest approved by the cabinet. This has left the LAF largely reliant on foreign donors for their equipment, as the breakdown of the budget shows.

Israel, the region’s top military spender relative to GDP, spent 60 percent of its military budget on personnel in 2010, while arms acquisition comprised 30 percent. Neighboring Jordan, which also allocates 85 percent of its military spending to salaries, still managed to spend $1.6 billion on equipment orders between 2005 and 2008, according to a study by the Center for Strategic International Studies, a Washington-based think tank. Over the same period, Lebanon spent $90 million, mostly on spare parts and logistics.

According to the latest available information published by the Beirut-based research firm Information International in 2010, a regular soldier receives $437 per month in his first year, which increases on average $20 a month for each year of active service. A starting salary for a junior officer, such as second lieutenant, is $683, with average yearly increases of just more than $25 per month.

In 2011, parliament approved a pay increase of $76 million for the military and security forces, while in the same year military salaries, indemnities and allowances amounted to $1.64 billion, according to the Ministry of Finance. This number includes wages for the Internal Security Forces (ISF), General Security Forces and State Security Forces, though the Army received the bulk (almost 70 percent) of this money: $1.1 billion. The actual expenditure on salaries thus exceeded the budgeted salaries significantly. The 2010 budget allocated $838 million for salaries, indemnities and allowances, while in practice such costs were $1.18 billion over the period from January to November 2010 alone, according to Ministry of Finance’s wage and salary statistics.

A significant percentage of last year’s wages, $191 million (17 percent), were paid in indemnities and allowances, which also provide a social security network for soldiers’ dependents through a variety of allowances for their schooling and healthcare. These include hospital treatment expenses ($65 million), school benefits ($63 million) and illness and maternity benefits (almost $14 million).

This system has led to a ‘militarization of welfare’, say both Aram Nerguizian, an expert on the LAF and a senior associate at the Center for Strategic and International Studies (CSIS) in Washington, and Yezid Sayigh,  senior associate at the Carnegie Middle East Center.

“When you can’t give welfare to everybody, you have to distinguish between population groups to justify providing only for one group,” says Sayigh. “Here they distinguish through institutions; through the military.”

Some 500,000 people, roughly 10 percent of the Lebanese population, rely on the military hospitals, and coffers, for their healthcare, according to a general responsible for a military hospital [As Executive lacked military clearance for this article, despite numerous requests, he asked to remain anonymous]. Less than 10 percent of patients treated in military hospitals are active service members, the general explained.

The Army and the Ministry of Defense did not respond to repeated requests for comment over a three-month period.

The highlife of the officer corps

For Lebanon’s 3,400 commissioned officers, amenities include chauffeur driven cars, unlimited free fuel, free cell phones, bodyguards and follow cars for the officers and their family, according to Information International’s salary breakdown and former General Hanna. Hanna is concerned that this is not only a waste of financial capital, but also human capital, as soldiers are tasked with running errands for their superiors. “Why should soldiers be driving officers’ kids to school? How is that soldier protecting the nation?” asks general Hanna.

A Brigadier General will initially earn $1,560 monthly in wages. He also receives a housing allowance, a personal budget for military equipment such as uniforms, a rank allowance, field service indemnities and a chauffeur allowance worth $1039. In addition to this, he will receive free health care and education for his family. “The benefits are why people join, not the salary,” says Brigadier General Amine Hotait, adding that this is true for all ranks. “If they cut the benefits nobody can stay in the army.”

Benefits for officers are especially costly due to the high number of top brass (see diagram). According to the 1981 New Defense Law Lebanon is supposed to have 80 generals, yet the LAF currently has 420. In comparison, Britain has 46 for a force of 109,500, almost twice the size of Lebanon’s.

“The number has accumulated due to the need to reward combat during war time,” says another former Brigadier-General who spoke on the condition of anonymity. Hotait confirmed that the situation is illegal, but says efforts are being made to reduce the size of the officer corps by offering lucrative retirement packages.

Due to the promotional structure of the LAF, which does not have an exit policy for its employees, personnel costs are unlikely to decrease in the future. “There hasn’t been a policy of stop-gaps in promotion,” says CSIS’ Nerguizian. “There are no mechanisms to weed out the incapable officers; everybody gets a B even if they are an F student.” A European diplomat who has intensive contact with the LAF, but cannot be identified due to the sensitivity of the matter, was more explicit: “Anybody who does not commit criminal errors will be promoted; you will become a general someday.”

The New Defense Law of 1978 stipulated that the Military Council, consisting of the heads of all the departments within the Defense Ministry, should advise on all promotions. However, top appointments require political backing and approval by the Council of Ministers.

“The last five years [the Military Council] have been trying to get the number of generals down to 150, but it has been politically very divisive,” says Nerguizian. “The officers are there as clients [of political figures], and as long as they are there, you have access.”

The appointment of Jean Kahwaji as Commander of Forces (COF) in 2008, at the relatively young age of 54, was supposed to be a step in the right direction, according to the European diplomat, as it is customary for generals who are more senior than the COF to retire as they no longer stand a chance of occupying the top spot; in this case however, none of the senior generals chose to retire, added the diplomat.

Lacking arms, and aim, for the army

The high personnel costs have taken their toll on arms procurement. Since 1990, the Lebanese government has not allocated more than 1 percent of the Lebanese Defense Budget for arms procurement. As a result of this lack of funds, the LAF has been mostly reliant on equipment it acquired from militias after the civil war, as well as donations.

The United States has been the largest military aid provider since Syria withdrew in 2005; until recently it provided up to $100 million annually. France, Britain, Belgium, the United Arab Emirates and the Netherlands have also donated trucks, anti-tank missiles, helicopters and border patrol equipment.

More recently Russia and Iran have offered their own military supplies to Lebanon. Such donations are not done entirely selflessly, as the maintenance of equipment is very costly, and requires reliance on donors, especially concerning specialized equipment whose spare parts are not freely available.

“The LAF isn’t hooked,” says Sayigh from the Carnegie center, “rather it has been obliged for many years to rely on donations and perhaps this is a good thing, since it partly means that the LAF has not sought to buy high-tech, high-cost prestige items that it doesn’t really need, can’t really use, and can’t afford to maintain.

Even if the LAF had the money to spend, Lebanon still lacks a national defense strategy that stipulates what mission it should be procuring weapons for. Although the Taif accord, signed in 1989 near the end of the Lebanese Civil War, stipulates the LAF’s primary responsibility is to protect the country against Israel, this role has been usurped.

“The external threat [Israel] is taken care of by Hezbollah, they are the reason Israel fears Lebanon now,” said the former Brigadier General who asked not to be named. “However, it is a partnership with the army; they are the ‘hand’ of the army. It is a partnership of the citizens, the army and the Resistance.”

Thus the LAF has effectively been pushed into the role of guaranteeing internal security, he says, which was originally the primacy of the Internal Security Forces (ISF).

A new target?

The ambiguity of the LAF’s actual task further complicates the consolidation of the military’s weapons arsenal, as taking out armed groups in a civilian area requires different gear and training than defending borders to protect the country’s sovereignty. A national defense strategy, and a clearly defined role for the LAF, may yet materialize, however, given that it was among the matters up for discussion last month at the National Dialogue sessions.

“The Army executes the policy of the government, it is not the role of the army to set its own policy,” says Kahwaji of INEGMA. “The politicians have to set a national defense policy which defines the role for the LAF, when that is done, the LAF has to fulfill its mission.”

Such a policy will also allow for a clearer assessment of personnel needs and a more streamlined policy of arms acquisition. But this is only possible if the politicians will choose to fund the institution beyond providing salaries, or enforce oversight to ensure these funds are well spent.

Lebanon’s military spending, relative to the size of its economy, is among the highest in the world. Given this, it is only right and proper for` the Lebanese to ask: What am I getting for my tax dollars?

The skirmishes in North Lebanon recently did well to highlight what the Lebanese are not getting from their money, with the commander of the Lebanese Armed Forces (LAF) stating that he would not deploy his forces in Tripoli until he was certain they would not have to exchange fire with gunmen in the area.

This policy of ‘soft action’ throws in doubt the image the LAF fosters for itself as a cross-confessional entity that is the single most important unifying force in the country, the ‘heart of the nation’ with no sectarian affiliation, loyal only to mother Lebanon. Were this the case, though, shouldn’t the army be able to intervene when sectarian divisions begin tearing parts of the country apart?

The Lebanese defense establishment accounts for nearly 15 percent of government expenditure. The LAF is accorded the lion’s share of the defense budget, at least 85 percent of which is spent on salaries and allowances for staff. A large part of this spending has no military application; officers enjoy extensive perks ranging from free gasoline to soldiers acting as personal drivers to take their kids to school. Meanwhile, the LAF’s own internal estimates report that it needs at least $1.3 billion for essential force development, including communication equipment, training and weapons; between 2005 and 2008 only $90 million was spent  in this regard, mostly on spare parts and logistics. This has left the army with out-dated equipment, most of which was procured through donations.

The LAF’s battle against Fatah Al Islam insurgents at Nahr El Bared Palestinian refugee camp in 2007 painfully exposed the inadequacy of the Army’s equipment, with media reports that soldiers were dropping hand grenades from helicopters. The battle could not have been won without emergency United States and Gulf military support; the LAF nearly ran out of ammunition a few weeks into the three-month conflict. In 2010 the situation was so dire that then-Minister of Defense Elias Murr appealed to civilians to contribute money into a Central Bank account to buy the army arms.

While all this suggests the LAF is underfunded, evaluating whether funds are adequate is difficult when it is unclear what the Lebanese Army is actually supposed to do. A strategic plan for the LAF is non-existent, as politicians have failed to create a National Defense Strategy to articulate its mission. The recent resumption of the National Dialogue could, potentially, solve this problem.

According to the Taif Accord, the LAF mandate is to protect Lebanon against external foes, specifically Israel, with its secondary task to support the ISF. In terms of external security, however, Hezbollah has usurped the LAF’s role, being vastly better armed and trained to face the threat over the southern border. The army has, de facto, been relegated to supporting the ISF. But when the army stands aside as Sunni and Alawite militias battle it out in the north, how effective can it be in ensuring internal security?

The reason the LAF cannot intervene is because it is staffed with Lebanese: While warring with Fatah Al Islam was an easy choice — given that the militants were largely non-Lebanese — the army is loathe to move against any sect in the country, lest the army itself begin to fracture along sectarian lines.

Thus, it would seem that the LAF’s main function is as a conduit for financial support for a large portion of the nation, a ‘militarization of welfare’ if you will. The LAF and Internal Security Forces (ISF) are some of  Lebanon’s largest employers — with the LAF employing 59,000 soldiers, while some 10 percent of the Lebanese population is reliant on military affiliation for healthcare, according to military sources, not to mention education for their children and pensions. This situation is not uncommon in the region; Jordan and Egypt are both examples where a heavy reliance on the military has entrenched loyalty to the state.

But is that what the Lebanese want their army to be?

Without a National Defense Strategy to end the ambiguity surrounding the LAF’s role in the country, there can be no progress. Only with an articulated mandate can reforms be given direction, training and equipment acquisitions made purposeful, and standards set against which the army’s competency can be measured. Then perhaps, the Lebanese will know what their money is buying, and salute the protectors of the country for their service.