O 030645Z FEB 09
FM AMEMBASSY BEIRUT
TO SECSTATE WASHDC IMMEDIATE 4125
NSC WASHDC PRIORITY
ARAB LEAGUE COLLECTIVE PRIORITY
EU MEMBER STATES COLLECTIVE PRIORITY
USMISSION USUN NEW YORK PRIORITY 
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UNCLAS BEIRUT 000135 
 
 
STATE FOR NEA/ELA - LAWSON, NEA/ELA - IRWIN, NEA/PPD, R, 
INR/R/MR, INR-PARENT, 
NSC - MCDERMOTT 
 
E.O. 12958: N/A 
TAGS: PREF PREL KMDR OPRC KPAO KISL KPAL LE
SUBJECT:  Lebanon -- The Daily Star is Back 
 
¶1. Summary:  English-language Lebanese newspaper The Daily Star 
returned to publication on February 2, after having been closed 
since January 14 in a dispute over unpaid loans with the Standard 
Chartered Bank.  End Summary. 
 
¶2.  The publisher of the Daily Star, Jamil Mroue, told Arab 
nationalist As-Safir newspaper on January 29 that "the speed with 
which the decision to close the paper was implemented surprised the 
propretors of the newspaper, since they were not given he legal 
grace period required prior to the implementation of such a 
decision.  '...the declaration of any company's bankruptcy [by the 
creditors] does not go into effect until 30 days have passed, to 
give the opportunity to file an appeal.  As for the newspaper, the 
decision was made and implemented within an hour and a half.  We 
suddenly found the (the judicial delegation) closing our offices in 
the afternoon, in the midst of our workshop, in order to stop 
immediately (us from) publishing.'" Journalists at The Daily Star 
told us that they were not even allowed to take their personal 
belongings, including personal computers, and were ordered out of 
the newspaper building on January 14. 
 
¶3.  As-Safir newspaper said that the relationship between The Daily 
Star and Standard Chartered Bank, whose headquarters are located in 
Dubai, started approximately ten years ago, after Standard Chartered 
bought the Metropolitan Bank, which the newspaper had dealt with 
originally.  Mroueh explained that the real problem started in July 
2008 when the bank threatened to declare the newspaper bankrupt.  He 
said, "When the bank threatened to declare us bankrupt, we explained 
to those responsible our difficult working conditions during recent 
years, starting with the assassination of former Prime Minister 
Rafiq al-Hariri in 2005, the repeated assassinations and security 
incidents that paralyzed the country for days after each 
assassination or bombing, and the 'July offensive' and the Israeli 
siege.  It is true that the bank has a right to recover its funds; 
however, we told them that there were almost 500 days, during which 
we did not work.  To resolve the problem, in July 2008, we proposed 
that they take possession of the mortgaged lands (collateral for the 
loans), the value of which is equal to the owed money, but did not 
receive an answer.  We were surprised about the bankruptcy 
declaration on 14 January." 
 
¶4.  Responding to a question from As-Safir on whether there was 
political pressure behind the decision to shut down the newspaper, 
Mroueh said:  "We always look for 'backdrops' in Lebanon.  There 
must be a hidden element; however, stupidity is the only thing that 
can justify the reason for the closure today.  If there is another 
reason, we are bound to discover it later." 
 
¶5.  In its "We're Back" commentary on February 2, the newspaper did 
not explain the nature of the settlement that was reached allowing 
the newspaper to return to the newsstands.  It promised its readers 
and those who expressed support for The Daily Star to "expect to see 
some changes in format and style over the coming weeks and months as 
(the) newspaper tries to revitalize the way it serves its 
customers."  It warned, however, "do not expect us to abandon the 
essence of our mission which is to provide balanced coverage of this 
country and the world around it." 
 
¶6.  Background: The Daily Star was founded in June 1952.  Its 
publisher Kamil Mroueh was assassinated in 1966.  The newspaper 
ceased publication twice previously -- between 1977 and 1983, and 
from 1986 to 1995.  Its publisher is a Shi'a Muslim, known for his 
moderate views and American education.  The newspaper is considered 
a vehicle for young, new, and non-Lebanese journalists who want to 
start their journalism careers. Its journalists represent all 
political affiliations and sects, and, it is the only daily 
English-language, Beirut-based newspaper. 
 
Sison