PM Diab sues his former employer AUB for $1m severance package

PM Diab’s lawsuit for severance package comes as the prestigious university struggles for its financial survival. Before he formed his cabinet Diab requested AUB that his compensation be transferred outside of Lebanon. This would have allowed him to bypass the capital controls which severely restrict US dollar withdrawals that have been in place since last November.

By Timour Azhari

Beirut, Lebanon – Lebanese Prime Minister Hassan Diab is suing the cash-strapped American University of Beirut for roughly one million dollars, sources familiar with the matter tell Al Jazeera.

The AUB – one of the oldest and most prestigious universities in the Middle East – is in a battle for its financial survival as the institution is squeezed by Lebanon’s worst economic crisis in living memory and the ravages of the coronavirus pandemic.

Before becoming prime minister in January, Diab was an engineering professor at the AUB and served as its vice president for regional external programs – a position he was slated to hold until 2025.

Two sources familiar with Diab’s lawsuit told Al Jazeera that the prime minister filed the complaint in June, seeking approximately one million dollars in severance package compensation he claimed he is due.

During a meeting with AUB’s Board of Trustees before his government was formed, Diab had also made an oral request that his compensation be transferred outside of Lebanon, one source who was briefed on the meeting said.

Lebanon is suffering from a severe shortage of US dollars, and such an arrangement would have allowed Diab to skirt informal capital controls severely restricting US dollar withdrawals and transfers abroad that have been in place since November.

“We thought he was coming in to ask for something in the public interest – to arrange a meeting with an official or seek input on those he was considering [for Cabinet positions]. It turned out to be completely out of selfish self-interest,” the source said.

Local news site Al Modon had reported in April that Diab threatened to sue the AUB if he was not paid what he believes he is owed. Al Arabiya English on Tuesday first reported he had filed suit.

Diab’s office did not immediately respond to Al Jazeera’s request for comment.

AUB has a standing policy that public office holders cannot simultaneously serve as full-time faculty. Individuals who do take public office can either resign their position with the university or opt to take unpaid leave of up to two years, the sources said.

Diab has done neither, instead arguing that holding the office of prime minister forced him from to leave his university job for which he should be paid in full, the sources said.

Diab’s lawsuit was filed after AUB in May announced that it was “facing perhaps its greatest crisis since the university’s foundation in 1866”, due to huge losses it was suffering stemming from Lebanon’s unprecedented economic crisis that has seen thousands of businesses fold, tens of thousands of Lebanese thrown out of work, and the local currency ravaged by inflation. 

AUB President Fadlo Khuri said last month that the university is laying off 25 percent of its staff – more than 1,000 people – and closing some administrative departments.

“It’s just incredible,” one source said. “Because he’s the PM, now he feels like he can bully AUB and get away with this.”

Al Jazeera