Lebanese banks won’t let their customers withdraw cash. Now enraged depositors are reaching for their guns.
On August 11th an unemployed 42-year-old grabbed his shotgun and a large jerry can of petrol. Dressed in a T-shirt and flip-flops, Bassam al-Sheikh Hussein walked into a Beirut branch of the Federal Bank of Lebanon, intending to carry out a heist.
As he entered, he slammed the heavy metal gate behind him with all his force. “It sounded like an explosion,” he told me. Inside the bank were seven or eight employees, two male customers and a woman who slumped to the floor at the sight of the armed man, begging to be spared. Hussein stopped her from banging her head and let her leave. “I was not rash,” he told me. “I was very calculated. I was calm.”
He sloshed petrol over the desks and an oily, pungent smell rose up. Employees complained it was suffocating them. Hussein grabbed the manager by the collar of his suit jacket and propelled him into a room at the rear. He jabbed the rifle into his back and told him to open the vault. The bank manager complied.
Inside were tall stacks of Lebanese pounds, as well as a small pile of dollars, amounting to around $3,500. The manager counted out four $100 bills.
“Are you f---ing stupid or what?” said Hussein.
The manager offered him all the dollars.
“Call your bosses and tell them I want all of my $210,000 right now!”
Hussein shoved the manager back into his office and pointed at the phone.
The police had cordoned off the bank and a crowd began to gather outside. They murmured sympathetically: Hussein wasn’t trying to steal other people’s money — he was simply trying to withdraw his own.
In Lebanon, recent history is separated into before, when things were dysfunctional but tolerable, and after, where the country finds itself now, after three years of hyperinflation, mass protests, the pandemic and an enormous explosion of poorly stored chemicals at the port of Beirut in 2020, which killed more than 200 people.
Hussein was not trying to steal other people’s money. He was simply trying to withdraw his own
In the before-times, Hussein and his wife, Mariam, were doing well. Hussein had been a lifeguard in his 20s, and saved enough money to buy a small apartment in the jumble of unplanned housing along the main road south of Beirut, where his family had settled in the 1980s during the civil war. Later, he went to work with his older brother Tarek, who had taken over their father’s small grocery shop. Business was good. Every month Hussein would take part of his salary—usually around $1,000—and deposit it in a dollar account at the Federal Bank. (The Lebanese pound has been pegged to the dollar since 1997; until recently, the two currencies were used interchangeably.)
Mariam gave up her job at a dentist’s clinic when their son was born four years ago. At the start of 2019 Hussein sold their small flat for $60,000, intending to buy a larger one. He put the money in his account, along with his savings, while he looked for the right place.
For decades, Lebanon’s banks and corrupt political elite propped each other up. Local banks bought billions of dollars’ worth of bonds, enabling the government to run up a huge debt. The currency peg seemed like a low-risk proposition. The system was sustainable so long as the Lebanese diaspora kept repatriating dollars. But as war in neighbouring Syria exacerbated political tensions, fewer expat Lebanese went home to spend their dollars or buy property. In 2018 sagging oil prices took a further toll on dollar deposits, as Lebanese workers across the Middle East ran short of cash. The central bank encouraged Lebanon’s retail banks to lend it dollars, which it used to plug the national budget deficit and maintain the currency peg. The country’s financial system has been described by the World Bank as a Ponzi scheme.
In the autumn of 2019, faced by an alarming budget shortfall, the Lebanese government announced a tax on WhatsApp messages. After decades of dysfunctional government, thousands of Lebanese took to the streets calling for revolution. The Lebanese pound, whose value on the black market had already fallen thanks to the government’s Ponzinomics, making a mockery of the official peg of 1,500 to the dollar, tumbled further. Rumours abounded that rich and well-connected individuals were taking their dollars out of the country and people started to get spooked. To forestall a bank run, banks closed for two weeks and limited withdrawals when they reopened. No one in Lebanon has had unimpeded access to their savings accounts since.
For decades, Lebanon’s banks and corrupt political elite had propped each other up
At the same time, the cost of living has soared. In March 2020 the government defaulted on its debt repayments, even as it introduced subsidies on imported food, medicine and petrol – expensive, populist measures aimed at easing the economic hardship caused by the pandemic. The result was hyperinflation. The Lebanese pound tumbled so fast that its value changed hour by hour. When I visited in October, the real value of the pound had fallen to 40,000 to the dollar. The price of a coffee on my receipt, given at the pegged official rate, was $145. No Lebanese institution will take responsibility for the situation: The government blames the central bank; the central bank blames the retail banks; retail banks blame the politicians.
The government has offered no help to depositors, who couldn’t take their money out of the bank. Instead, the central bank issued a series of “circulars”, directing Lebanese banks to allow people to withdraw a certain amount each month, according to a complex set of rules and exchange rates. In theory, most depositors were able to take out $400 in cash from their dollar accounts each month.
Hussein was able to withdraw this monthly allowance from his bank throughout 2020, which was just about enough to live on. But in mid-2021 the bank manager began to make excuses. The branch didn’t have enough dollars, he said, Hussein should come back later. He was able to withdraw his allotted amount only about a third of the time.
Business was getting tougher. At the start of 2022 Tarek realised he could no longer afford to pay Hussein; he made plans to sell his stock and close the grocery shop. Unemployed, Hussein was growing desperate. His father, who has Alzheimer’s, fell and broke his pelvis, so he needed care and equipment. Hussein and his brothers took out a loan, for which Mariam put up her gold jewellery as security.
Rather than buy the home Hussein dreamed of, he and Mariam moved into an apartment owned by his brother. His brother installed solar panels on the roof because it cost so much to use a private generator. They could afford only to run a refrigerator and a few light bulbs. “Air conditioning? Forget about it.” They no longer eat meat regularly and powdered milk is almost unobtainable. Every other middle-class family they know is in a similar situation.
No one in Lebanon has had unimpeded access to their savings accounts
Though Hussein saw others making withdrawals, the bank manager continued to stonewall him. Hussein repeatedly asked to talk to a senior executive, only to be told by the manager, “I am the boss.” By early summer he was going to the bank several times a week. Each time he returned more frustrated.
Lebanese have resorted to different means to get hold of their money. Early in the crisis, when protesters marched on the street and banks were closed, one well-connected businessman told me that he’d gone to the home of a recalcitrant bank chairman to demand that he personally release the money. Another man, Hassan Moughnieh, was refused the $15,000 he needed to pay for his mother’s cancer surgery, so he chained the door of the bank shut and wouldn’t let anyone leave until he had the cash. As a result of his frustrations, he helped to found the Depositors Association, one of several groups advocating for Lebanon’s account-holders. “We founded it to save lives,” he said. “Over the past two years we have lost eight people,” he added, referring to sick relatives of depositors who have died.
And a number, including Hussein, have resorted to stick-ups. According to Rami Ollaik, a lawyer, the Lebanese penal code enshrines the right of self-defence for life and property. He believes that Hussein’s actions were legally justifiable. Ollaik is a former Hizbullah activist who set up a new political movement that sought to transcend Lebanon’s sectarian divide. Voluble, media-savvy and intense, he has built a controversial public profile trying to hold the government to account while pursuing his passion for beekeeping. “I sell honey and fight corruption,” he told me. Last year, he successfully fended off an effort to permanently disbar him from practising law.
Since the banking crisis began, Ollaik has filed dozens of suits on behalf of depositors against individual banks. No case has reached a final judgment. He rails against the uselessness of Lebanese courts, blaming the collusion of bankers, judges and politicians, whose families and financial interests often overlap. There are endless delays; subpoenas are ignored; files are lost. Lebanese judges have been on strike since mid-August. As so often in Lebanon, wasta, or connections, means that the elite can get some of their cash, but most people cannot.
Inside the Federal Bank, Hussein turned off his phone to stay focused. Through the metal bars of the locked gate, he saw police negotiators, his brothers and Moughnieh, all of whom tried to persuade him to stand down. “This is too dangerous!” said Tarek. “Stop this! You could get hurt. You could die!” Hussein pointed the gun at his brother’s chest. “Leave,” he said, “or I’ll start shooting.”
A police negotiator offered him $5,000, “enough for your father’s medical bills”. Hussein refused. The offer was raised to $10,000. Hussein smashed the butt of his rifle into a window, yelling “Are you making fun of me?”
Hussein pointed the gun at his brother’s chest. “Leave,” he said, “or I’ll start shooting”
Despite his distress, Hussein was a disciplined bank robber. He lined up the employees against a wall and kept watch out of the window to make sure the police didn’t try to approach the building. Mid-morning, at the prompting of the police, he freed a customer who was feeling ill. A nearby restaurant provided lunch for everyone, sending word that they supported Hussein. Paranoid that the food had been poisoned, Hussein didn’t eat anything and was careful to drink only bottled water.
Over the course of the afternoon the negotiators’ offers increased: first to $15,000, then $20,000, then $30,000. Hussein refused each one. By 6pm the crowd outside had swelled and tension was building. “Stay until you get the full amount!” people shouted. “Hero! You’re a man! You are standing up for your principles, your rights! We are with you!” As it began to get dark, the crowd started to push against the police line around the bank. Hussein’s brothers and Mariam were sent to talk to him again, and begged him to end his siege. The final offer was $35,000, with a promise from the police that he could go free.
Hussein reluctantly agreed. He was given the money in a black plastic bag. He counted the brick of dollars fast and handed it to Tarek. He released the bank employees one at the time until Tarek called to say that he’d arrived home safely with the cash. Hussein let the bank manager out last. “I told him, ‘Get the f--- out.’” Then he surrendered his gun to the police.
Despite assurances, the police arrested Hussein. Ollaik, Moughnieh and other activists tried to intervene and a small crowd formed outside the station to protest. In the days that followed, Hussein’s family organised a demonstration in their neighbourhood, with dozens of people barricading the main road with tyres. Mariam gave interviews to the press; Hussein’s brothers said on TV that, if charges weren’t dropped, they’d torch every branch of the Federal Bank. His case became a national sensation. After five days he walked out, a free man.
Several robbers followed in Hussein’s wake. Some of them were supported by Ollaik, who was pleased by the publicity but dismayed that some raids got out of hand. Vested interests were trying to discredit the bank raiders, he said, by sending thugs to create a violent atmosphere. Yet some of his clients are clearly bent on making a bigger scene. Ali al-Sahili, who had already held up a bank with a loaded gun and a home-made landmine, told me he was looking for other branches, “but this time I will wear a suicide-vest and if they don’t give me the money I will blow myself up.”
Ollaik suggested I visit a Shia village in the stony hills along the border with Israel to meet another client, Ibrahim Beydoun, a retired calligrapher who had worked in Saudi Arabia for 40 years. Locked out of his savings, he had borrowed money from a nephew and felt the debt “on my head like a stone.” Beydoun has walked on crutches since a childhood accident and needed insulin for his diabetes. His wife also had medical expenses. Their son helped them out, but the indignity and injustice rankled.
“Stay until you get the full amount!” people shouted. “Hero! You’re a man!”
“I have a volcano inside me!” Beydoun told me. “Politicians took my money and our deposits in the banks and put it into banks in Europe and into their homes — they have big yachts and I don’t know what.” He was planning to raid a bank as soon as he could identify an appropriate branch. He had told his son to buy a gun. They were looking for a wheelchair because Beydoun could not stand up for long periods of time.
Ollaik thought the idea of a disabled person robbing a bank would attract press coverage. “It’s a risk,” he told me, “but it would create more buzz in this terror game.” He has never had a savings account himself. Other leaders of pro-depositor organisations think he is reckless to encourage raids, but they can’t quite bring themselves to condemn them: Operations can be successful and charges are often dropped.
I suggested to several robbers and their supporters that, sooner or later, someone was going to get hurt. Hussein told me he is biding his time before planning another raid. “If blood must be spilled, so be it,” he said. Al-Sahili and Beydoun told me they were ready to kill and die. Ollaik’s position remained ambiguous: He said he didn’t want violence, but was happy to use the threat of it as leverage. In more than one case he’d persuaded police to release his bank-robbing clients by warning them that he’d gather a mob to burn down the station if they didn’t.
At the end of October, Ollaik gathered a group of around 40 angry depositors, encouraging them to orchestrate more heists. “We worked hard for that money. They stole our lives,” Beydoun told the assembly. Afterwards Ollaik, Beydoun, al-Sahili and Catherine al-Ali, another frustrated depositor, began to plan an ambitious raid. Many banks are now closed, except by appointment. Al-Ali drove around Beirut, looking for a target where security was light.
On the morning of November 2nd the team marched into a branch of Credit Libanais in Beirut, accompanied by journalists filming the scene. Al-Ali was armed with a taser, al-Sahili with a pistol. Beydoun circled the bank in his wheelchair, with a Molotov cocktail in his lap and a lighter in his hand. They sloshed gasoline over desks. The bank manager was immediately frightened into compliance. He unlocked the ATM and the bank’s safe, and handed over $54,000 in cash.
Outside, police had formed a cordon and an armed swat team arrived, ready to storm the bank. Negotiations stalled and the siege dragged on for over 15 hours. Finally, at 3am, Ollaik and the three depositors agreed to be taken into custody if they could keep the money.
Ollaik and Beydoun were released after six days; al-Ali and al-Sahili were let go two days later. All remained unrepentant. Weakened by a hunger strike, Ollaik remained defiant: “We are righteous. We are victorious.”