How a Country Buys Silence

 

Nobody punished me for speaking up. They laughed. She was punished, after twenty-one years. Two lessons from the same system, and a third one it teaches everyone else.

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A scandal treated as a scandal

In June, I watched a report about KPMG Australia and wrote a short piece about it, When the Auditors Are Not Audited. The story deserves to be told in full, because I only told half of it.

KPMG, one of the four largest accounting firms in the world, audited the property group Lendlease for nearly seventy years. That work gave its auditors access to Lendlease's confidential board papers, which contained bids rival firms had submitted to win the work. In May 2024, an employee raised a complaint inside the firm. Partners, the employee said, had used those papers to chase audit contracts at other companies, including the bank Westpac and the property group Dexus. The firm investigated itself and found nothing. The whistleblower did not stop. The complaint went to the regulator, and then to a senator, who read the allegations out in parliament in March this year.

Then things moved. The firm admitted that its handling of the whistleblower had fallen short. The chief executive left. The head of audit left. Lendlease announced it would replace KPMG as its auditor. The regulator opened a formal investigation into three partners. Some thirty-five witnesses were called before a parliamentary committee. The firm apologised to the whistleblower. And the Reserve Bank of Australia, which had been paying KPMG to run its own whistleblower service, said it did not expect to reappoint them.

In June, what struck me was the scale. Their case was about board papers. Ours was about a country. The World Bank described Lebanon's financial collapse as possibly among the three worst economic crises in the world since the mid-nineteenth century. Depositors were locked out of their own money. The central bank's accounts carried inflated assets and qualified audit opinions, and a forensic audit later spoke of disguised losses. In Australia, misused papers shook one of the biggest firms in the world. In Lebanon, the professionals who audited, signed and stayed silent were still treated as neutral technicians. I ended that piece with a question: who certified the theatre while the building was already burning?

I missed the most important part. The first channel failed in Australia too. The firm's own process cleared the people accused. What saved the whistleblower was that someone outside the firm was listening.

This piece is about what happens when nobody else is listening.

The list that never ends

I was twenty-one, and it was my first real file at the audit firm. A client owned an asset, the asset owed tax, and someone had to take the paperwork to the Ministry of Finance branch in Baabda, which handled Mount Lebanon. The owner of the firm gave it to me. I was excited.

The firm had a library I still think about. Every week, people from a legal publishing company came to the office with the latest changes in the law and filed them into hardcover binders, each new page in its exact place, every section indexed. You don't see those binders anymore. Before Baabda, I read everything in them about asset taxation. I asked my colleagues how the process worked. Go in, they said, ask at the desk, and they will guide you.

There was no desk.

I left the car in a paid garage nearby, because there was nowhere else to park, and walked in with a backpack on my shoulders and the law in my head. Inside, there was no information desk, no sign, nobody whose job was to tell you where to go. I asked people who did not have the energy to answer me. One word at a time, I worked out which department I needed. I went through one aluminium door after another, past piles of paper stacked on every surface, until someone finally had the decency to point at the man who handled files like mine.

He was in his mid-forties, with a black moustache, sitting behind the grey aluminium desk you find in every government office in this country. I gave him an innocent smile and explained my file. I made sure he understood that I knew exactly which documents the law required. He listened carefully. He looked through my papers. Then, in a clear and calm voice, he told me some papers were still missing. I took notes. That was possible. Files have gaps.

Then he said: when you finish preparing these papers, come back here to my office, and I will give you another list.

I had never been in that situation before, and I understood it immediately. In our library, the law was indexed down to the paragraph. At this desk, the law was a list, and the list would end when I paid.

I went outside. Mobile phones were new, and I had a Nokia the size of a small brick. I called the owner and told him the man was asking for money.

He laughed.

That laugh explained the whole morning. There was never going to be a desk. My colleagues knew it when they told me to ask at one. The owner had sent a twenty-one-year-old with a backpack and a head full of tax law into that building to learn something the library could not teach him. He is the same man who later drove me to a vast industrial complex producing premium toilet paper, tissues, diapers, straws and dozens of other products, and never told me why we were going, as I described in Digital Was Never the Problem. That was how he taught. It was not a cruel laugh, and he was not a bad man. We parted on bad terms eventually, and I still believe he had a good heart. It was the laugh of someone watching a lesson land exactly as planned.

He told me where the office cash was and what to say. Put it in the file, go back in, tell him you brought everything he asked for. I went back in. The file was processed the same day.

I did not know how to feel about it then. Over the years I learned that almost nothing in this country moves without money in the file. I learned it so well that I stopped calling it a lesson.

Coffee with a whistleblower

In 2023, I drove through bad weather to a village far from Beirut, with a colleague beside me. My car was new, which was the only reason I trusted it on those roads. We were visiting people who had received small grants from an entrepreneurship programme I worked on, a few months after the programme had ended. Monitoring visits were not my job. I went because I wanted to see what had become of the people we had trained.

It took almost an hour to reach her. We expected an apartment, or something that looked like a learning centre. It was two blocks of shops. She had built an education business out of nothing, in a place with few opportunities and a long way from any city.

She welcomed us the way people in her village welcome guests, and started making coffee while she talked. She could talk. Here is what I thought of her at that point. I had always found her a little too sure of herself, one of those people who believe they can talk their way through anything. I did not like the business either. On my numbers it would be losing money before long, and the premises seemed to prove me right. I expected a courtesy visit: listen, drink the coffee, leave.

Then, over the coffee, she told us why she had joined the programme.

She had been a teacher in a public school for twenty-one years. Every public school in Lebanon has a financial committee, and she sat on hers. The director of the school had a daughter on the payroll as a teacher. The daughter did not come to school and did not teach a single class. She refused to accept it. She did what every whistleblowing policy in the world tells you to do. She went above the director, to the Ministry of Education, and filed a complaint.

The director stayed. She was thrown out, after twenty-one years. Within a year she was sitting in our training sessions, looking for another way to feed the people who depended on her. The shops were not a business model. They were what was left.

Lebanon has had a law protecting whistleblowers since 2018. Lawyers who work with it say its protection only takes effect through a disclosure to the National Anti-Corruption Commission, a body that has struggled for staff and funding since it was created. She went to her own ministry, the obvious place to turn. The law did not reach her.

In Australia, when the firm failed its whistleblower, a regulator, a senator and a parliamentary committee were listening. She had one place to turn, and it ended her career.

I had come to monitor her business. I left having been audited. My numbers had no line for what she had already paid.

We had both been gatekeepers once. I was a junior auditor. She sat on a financial committee whose whole purpose was to catch exactly what she caught. My lesson cost me an afternoon. Hers cost her twenty-one years.

How a country buys silence

I used to call it culture. We Lebanese, I would say, have a tolerance for corruption that outsiders cannot believe. I still think the tolerance is real. I no longer think we are born with it. Nobody in these two stories was. At twenty-one, my first instinct was to walk out of that building and report what I had heard. Her first instinct was to file a complaint. I was taught, and she was punished for not learning.

People who study how corruption becomes normal inside organisations describe what happened to me in Baabda almost step by step. Blake Ashforth and Vikas Anand call it socialisation. Newcomers are not forced into corruption, because people rebel against force. They are placed in situations where they must compromise to solve a problem. Without that step, corruption would die out with the people who started it. Every generation has to be initiated. Mine was initiated with a calm voice and the promise of another list.

The system has three ways of buying silence, and each works on different people.

The first is laughter, for the newcomer. Nobody punished me in Baabda. Nobody needed to. They laughed, and I learned that speaking up makes you naive. Nobody wants to be naive twice.

The second is punishment, for the one who refuses. It only has to happen once, it has to be thorough, and it has to be seen. Last week I wrote that institutions get what they reward. They also get what they punish. Throw out one teacher after twenty-one years, and every teacher in that school learns to look at the floor. The system does not need to punish everyone. She teaches the rest for free.

The third is participation, for everyone else, and it works best of all. In Transparency International's 2019 survey, 41 percent of people in Lebanon who used a public service had paid a bribe, the highest rate of the six countries surveyed. More than half had used wasta. In dealings with the courts, it was close to two in three. Most people I know have paid something, in money or in favours, for a signature, a permit, a hospital bed or a court date.

Why do we go along? Partly fear. Partly because most of us have never felt that the state belongs to us. It sits over our lives like a third party. It rules us, taxes us, loses our papers, and we have no say in how it behaves. What we do belong to is whoever delivers. The political scientist Melani Cammett found that in Lebanon, access to services usually runs through political leaders and parties, and that receiving those services gives people a real sense of belonging. The loyalty goes to the one who delivers, not to the state. And partly because it works. You pay, and the file moves the same day. Studies of countries where corruption is the system rather than the exception find the same thing again and again: people can disapprove of it completely and still not fight it, because refusing alone changes nothing and costs you everything. Albert Hirschman wrote that when voice fails and loyalty is gone, people exit. Lebanon has become very good at exporting its children.

There is a darker reason. Small corruption is open to everyone. Almost everyone takes part, a little. And a person who has taken part cannot accuse. The system does not have to silence the citizen who paid for a permit. It made him a participant, and participants stay quiet about the larger theft above them, because their own small share is on the record somewhere, even if only in their memory.

Look at where I stopped the Baabda story. I stopped it there on purpose. Nearly twenty-five years later, one afternoon at a grey aluminium desk still decides where I stop talking.

The other way

Somewhere in that conversation over coffee, the teacher said a sentence I have been carrying since.

If I saw the devil himself destroying the earth, I would turn my face away.

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Rot and Renewal is a weekly series on how institutions fail and how they come back. Next week, the twelfth piece: how institutions come back.