VZCZCXRO4730
RR RUEHBC RUEHDE RUEHKUK RUEHROV
DE RUEHLB #0472/01 0980406
ZNR UUUUU ZZH
R 070406Z APR 08
FM AMEMBASSY BEIRUT
TO RUEHC/SECSTATE WASHDC 1438
INFO RUEHEE/ARAB LEAGUE COLLECTIVE
RHEHNSC/NSC WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUCPDOC/USDOC WASHDC

UNCLAS SECTION 01 OF 03 BEIRUT 000472 
 
SIPDIS 
 
SENSITIVE 
 
SIPDIS 
 
STATE FOR NEA/ELA 
STATE PASS USTR 
TREASURY FOR MNUGENT AND SBLEIWEISS 
USDOC FOR 4520/ITA/MAC/ONE 
NSC FOR ABRAMS/SINGH/YERGER/DEMOPULOS 
DEPT PASS TO USAID/ME/MEA/MCCLOUD 
 
E.O. 12958: N/A 
TAGS: ECON EAID EFIN PREL PGOV PARM MNUC LE
SUBJECT:  LEBANON: RECONSTRUCTION CONTINUES TO REPAIR 2006 
HIZBALLAH-ISRAEL WAR DAMAGE 
 
SUMMARY 
------- 
 
¶1. (U) The GOL and some Arab donors continue to pay beneficiaries 
compensation to rebuild houses destroyed or damaged in the July 2006 
war, but the GOL needs additional funds to complete the process. 
The opposition has continuously attacked the GOL regarding 
disbursement of compensation, and even pro-government political 
forces and anecdotal evidence point to cases of fraud.  In an effort 
to show transparency, PM Siniora's office established a website and 
the High Relief Council has referred fraud cases to the courts.  End 
summary. 
 
GOL ENTITIES HANDLING POST-JULY 2006 
RECONSTRUCTION EFFORTS 
------------- 
 
¶2. (U) The High Relief Council (HRC), affiliated with the PM's 
office, handled the rehabilitation of property damage and 
compensation payments for death and injuries after the July 2006 war 
between Hizballah and Israel.  The HRC also is handling assistance 
for the reconstruction of housing units (damaged or destroyed), but 
offers no compensation for damages incurred by businesses, 
industries, or the agriculture sector.  HRC's consultants, Khatib & 
Alami Engineering, audit and assess damage to housing units and send 
the files back to the PM's office.  The HRC issues checks but does 
not give them directly to Lebanese citizens who are beneficiaries, 
instead funneling them through two politically-connected entities: 
 
-- The Council for the South (managed by Speaker Berri's Amal 
movement) to pay housing assistance to people in the south; and 
 
-- The Fund for the Displaced (which caters to Druze leader MP 
Jumblatt's constituents) to pay housing assistance to people in all 
other regions affected by the 2006 war, including Dahiya (Beirut' 
largely Shia southern suburbs). 
 
DISBURSEMENTOF HOUSING ASSISTANCE CONTINUES 
-------------- 
 
¶3. (SBU) Housing assistance is paid in two installments.  The HRC is 
using cash donated mostly by Arab donors and GOL funds to pay for 
Phase I & II assistance for housing reconstruction.  The HRC still 
has some funds from Arab donors, PM's Recovery & Reconstruction 
office Analyst Ghassan Tannous told us on April 3.  The GOL is 
paying a total of $40,000 in housing assistance for the 
reconstruction of each demolished house, regardless of the size of 
the house. 
 
¶4. (SBU) The Council for the South has paid nearly 90 percent of 
Phase I housing assistance and will continue to pay out the 
remaining 10 percent, as well as start payments on Phase II, 
expected to start this month, Tannous said.  Tannous further 
explained a Review Committee will check homes of people who received 
a first installment to make sure that it was spent on housing 
reconstruction so that they are entitled to receive the second 
installment. 
 
¶5. (SBU) The Fund for the Displaced is still paying Phase I housing 
compensation and will start paying Phase II, Tannous said.  The Fund 
has asked concerned citizens to come to the Fund's offices in 
Sanayeh (Beirut) and fill out a specific form for Phase II payment. 
Similarly, a review Committee will check that the first installment 
was used for housing reconstruction. 
 
BEIRUT SOUTHERN SUBURBS: AN EXCEPTION 
----------------- 
 
¶6. (SBU) The PM's office has decided to regularize all non-compliant 
buildings in the Beirut southern suburbs (the area knows as Dahiya) 
and pay their owners compensation.  However, unlike the rest of 
Lebanon, where the housing assistance has to be spent on housing 
reconstruction, beneficiaries of housing assistance in Dahiya "are 
free to do with the money what they want; they can rebuild or sell 
their share in the building," Tannous told us.  It is worth noting 
that Hizballah has launched its "Waed" (promise) project for the 
reconstruction of Beirut southern suburbs residences.  The project 
covers 1.2 million square meters; it was launched in May 2007 and is 
expected to be completed in 18-24 months. 
 
 
BEIRUT 00000472  002 OF 003 
 
 
ARAB DONORS CONTRIBUTIONS 
----------- 
 
¶7. (U) A number of mostly Arab countries and funds have adopted 
selected villages in the south and pledged to rebuild them.  Except 
for Qatar and Syria, these countries are giving their contribution 
to the HRC to be spent in the selected villages.  These countries 
are: Saudi Arabia (219 villages), Oman (29 villages), Kuwait (25 
villages), Iraq (4 villages), Bahrain (1 village) and Indonesia (2 
villages), Tannous said.  He told us the HRC is paying housing 
compensation of $40,000 to beneficiaries and stressed that the PM's 
office submits to these donor countries quarterly progress reports. 
He refuted press reports that housing reconstruction was slow, 
blaming accusations on political interests, although he admitted 
that it might be slow in some areas.  He also noted that the last 
report sent to Oman showed that beneficiaries have re-built their 
houses (which were villas) as they were before the July war. 
 
¶8. (SBU) Qatar is paying $40,000 in housing assistance directly to 
people in four villages (Bint Jbeil, Khyam, Aita Chaab, & Ainata). 
Qatar has set up a Qatar reconstruction office in Beirut, and this 
office is contracting and paying directly for the reconstruction of 
schools, hospitals, and government offices in the selected villages. 
 It also paid for the reconstruction of all places of worship in the 
south.  Tannous said Qatar is not reporting to the GOL or the PM's 
office what it has completed or amounts spent, but the PM's office 
learned recently that Qatar spent about $101 million on housing 
compensation up to January 2008.  Qatar is also paying compensation 
to merchants in Bint Jbeil, according to press reports quoting 
Qatar's Beirut office.  Tannous told us he has been unable to touch 
base with the Qatar reconstruction office. (Note:  We also tried 
several times, but could never get hold of POC there.  End note.) 
 
¶9. (U) Syria is rebuilding damaged houses in two villages (Qoleila & 
Qana), Tannous told us. 
 
IRAN'S CONTRIBUTION 
------------- 
 
¶10. (U) Iran has rebuilt some of the demolished bridges in south 
Lebanon and one in the Biqa and continues rebuilding other bridges 
in the south.  It has also rebuilt some roads.  Iran is saying 
publicly that it is spending on several other sectors, such as 
educational and religious buildings, medical centers, power sector 
related projects - but no housing, however this needs to be verified 
by the GOL, a source at the PM's reconstruction office told us. 
 
 
OPPOSTION ATTACKS GOL ON HOUSING COMPENSATION ISSUES 
---------------- 
 
¶11. (U) The opposition has continuously attacked the GOL on the 
housing compensation issue.  Accusations include statements that the 
GOL is slow in disbursing housing compensation donated by Arab 
countries, or the GOL will not pay the second portion of housing 
assistance because of lack of funds, or that the GOL is diverting 
donors' contributions to other sectors.  This has lead PM Siniora to 
say publicly that the GOL respects the wishes of donors on 
where/what their contribution should be spent.  Siniora said the 
PM's website, www.rebuildlebanon.gov.lb, has details about each 
recipient and the amount of compensation he/she received. 
 
LOYALISTS CRITICAL OF FRAUD AND BUREAUCRACY 
-------------- 
 
¶12. (SBU) There is talk about fraud, and compensation payments (for 
housing and for disability) to people who do not qualify.  Druze 
leader and PSP head MP Walid Jumblatt charged recently that there 
were 1,000 people in north Lebanon registered as having sustained 
damages, while effectively only 20 people did.  We also heard that 
some Sunnis in Beirut received housing assistance although their 
houses were not damaged in the July war.  The HRC is following up on 
fraud cases, whether about medical or housing compensation, and 
brought some cases to court, the press reported.  There are also 
bureaucratic hurdles, as beneficiaries need to submit documentation 
proving ownership.  Many houses in the south were built without 
legal permits during the Israeli occupation, and some houses in 
Beirut southern suburbs were built on land owned by the government 
or private individuals. 
 
 
BEIRUT 00000472  003 OF 003 
 
 
SISON