A sensitive line of inquiry into the root of the August 4 Beirut explosion threatens multiple parties
Rescuers gather near the heavily damaged grain silo in the Port of Beirut, four days after a monster explosion killed hundreds of people and disfigured the Lebanese capital, on August 8, 2020. Photo: AFP
BEIRUT – Lebanese investigators are understood to be probing why the MV Rhosus – a substandard vessel burdened with 2,750 metric tons of hazardous ammonium nitrate – was procured in 2013 to ferry heavy seismic survey machinery out of Beirut Port.
The ammonium nitrate would be seized by Lebanese Customs upon the departure of the Russian captain and crew, held illegally at the port for six years, and finally detonate on August 4, taking more than 180 lives according to the Red Cross, and robbing thousands of their homes, livelihoods and sanity.
The state’s line of inquiry is highly sensitive, as it risks connecting one piece of the puzzle — the procurement of what is now known as the “death ship” – to the Ministry of Energy and Water via its contract with Spectrum, the UK company that organized the seismic study and movement of equipment in question.
The tightly guarded investigation, which has enlisted French and US support, is being led by Military Investigative Judge Fadi Sawan, who took over the file from state prosecutor Ghassan Oueidat.
“Oueidat was getting close to linking the Energy Ministry to the Rhosus,” a source close to the inquiry told Asia Times.
Now, the source said, “the main investigation is happening under Sawan, but there is a parallel prosecution about Spectrum and how they chose this ship.”
The Energy Ministry at the time was led by Gebran Bassil, leader of the Hezbollah-allied Christian Free Patriotic Movement (FPM) and the son-in-law of sitting President Michel Aoun.
The probe also has massive international implications, risking litigation for Houston-based TGS, the world’s largest provider of subsurface data, which in August 2019 acquired Spectrum, and which was last valued at US$2.5 billion on the Oslo Stock Exchange.
The issue of what entity, if any, will pay out compensation for the blast, remains to be seen. The massive explosion damaged or destroyed more than a quarter of a million households and businesses, and victims included dozens of foreign nationals, including the wife of the Dutch ambassador.
To date, 16 Lebanese officials have been arrested in connection with the events leading up to August 4, including the once untouchable director general of Lebanese Customs, Badri Daher, dogged for years by corruption cases, and former port director Hassan Koraytem.
Daher – who oversaw the ammonium-nitrate stock at Beirut Port for six years, and who was responsible for port storage when the material was first seized – was included in an initial crisis cell convened by the authorities immediately after the explosion.
By August 17, Judge Sawan called in Daher for an hours-long interrogation and ordered his arrest.
Daher, observers say, represents the tip of the iceberg, a figure whose arrest presents a threat to parties from across the political spectrum – all of whom have some level of involvement in the port and require his facilitation for the entry and exit of goods.
Daher’s wife, Pascale Elia, is head of the Regional Customs Directorate of Tripoli, whose authority extends to the northern border with Syria. Customs did not respond to repeated written requests and calls by Asia Times to make any official available for an interview.
The Customs Directorate falls under the Ministry of Finance and the Ministry of Transportation, but has the reputation of operating as a mafia-like force of its own. When investigative reporter Riad Kobaissi and his Al-Jadeed TV crew stood outside Port Customs headquarters in 2013 demanding Daher’s then-boss, Shafiq Mehri, sit for an interview cleared by the Finance Ministry, a group of Customs officers came out and assaulted the team.
“If Badri Daher goes down he’s going to take many big heads with him,” said Tripoli-based Lebanese lawyer Khaled Merheb.
Full Spectrum
The Rhosus made its last port of call to Beirut Port in late November 2013 for the stated purpose of picking up seismic survey equipment and transporting it to Jordan.
The equipment requiring demobilization would have included four to five vibrator trucks with ancillary hardware and software. That would present a cargo of up to 160 metric tons, a dangerous prospect for a substandard vessel already at capacity.
The Rhosus was notably not a roll-on/roll-off ship, or a “RORO” in industry terms, which normally would have been used to transport vehicles, but was defended as being the cheapest option.
The glaring physical issues with the Rhosus were documented by Lebanese authorities as recently as the summer of 2013, when it entered to Lebanon’s southern port of Sidon, according to Noam Raydan, a geopolitical analyst and reporter, who has years of experience tracking tankers and vessels.
At the time, the Rhosus was found to have 17 deficiencies, including hull corrosion, leaky machinery and a lack of emergency sirens, according to Raydan, who first reported the port call in Forbes. The ship, flying under a known flag of convenience, was nevertheless allowed to sail on, something Raydan says is not surprising, given the complexities and legal liabilities involved in detaining a ship.
Having reviewed records of past years, Raydan told Asia Times she has thus far found no evidence of Lebanese port authorities detaining vessels over deficiencies.
Bassil’s lawyer, Majed Boueiz, on August 23 said the former energy minister had nothing to do with selecting the vessel, but only “corresponded with Customs to facilitate and accelerate” the entry of the seismic equipment, which was contracted by Spectrum.
That equipment and its path in and out, Boueiz said, were under the authority of Spectrum and its agents.
“As for the dates and mechanism of the equipment’s entry and exit, they were set by the marine and land agent for the company in question, without the Ministry of Energy having any role,” Boueiz said in a statement.
Boueiz has posted two relevant Ministry of Energy documents to his Twitter account, one dated February 18, 2013, and the other September 29, 2013, in which then-minister Bassil signs off on the entry of seismic machinery into Lebanon via Spectrum.
Both documents list a Jordanian company, GSC, as a subcontractor. Asia Times has requested an interview with GSC, but has yet to receive a reply.
David Rowlands, the former Spectrum EVP who signed the relevant onshore seismic survey contract with then-minister Bassil, told Asia Times he had no knowledge that the Rhosus had been contracted to remove the seismic equipment.
While Spectrum was in charge of “organizing” the seismic surveying, the company subcontracted the physical surveying itself and movement of machinery to other companies, he said.
“At Spectrum we don’t acquire seismic data; we subcontract that service to other companies,” Rowlands – who is no longer with the company – told Asia Times by phone.
According to the terms of the March 2012 contract with the Energy Ministry, Spectrum was responsible for any breach of safety standards by third parties.
Rowlands did not respond to a query of who was in charge of Spectrum’s logistics at the time.
“I would really like to know the chain of logistics decisions that lead the officers and management of Spectrum to identify this ship precisely as a suitable choice and contract with its charterers to demobilize their equipment in disregard to the minimum safety criteria,” said Walid Sinno, the former head of oil and gas at Clarkson, the world’s largest shipping brokerage specialized in petroleum.
“It is not credible for a company like Spectrum to say they left this up to the subcontractor,” the industry veteran told Asia Times by phone.
“As a prime contractor, the burden is on you to ensure the safe arrival and departure of everything associated with this campaign. If this seismic equipment was on the road and hit a child in Batroun, you think Spectrum wouldn’t be worried about what happened there? This is their responsibility; their contract with the ministry. It is not plausible they would have turned a blind eye to the ship or left everything to the subcontractor,” he said.
LOGI, a Lebanese non-governmental organization campaigning for transparency in the oil and gas sector, is currently demanding a release of the terms of all contracts concluded by the Energy Ministry, namely the percentage the government should be receiving from the sale of the surveys, as well as an audit of the account at the Central Bank holding the proceeds.
Seizing the cargo
The Rhosus’ former captain, Boris Prokoshev, in an interview with Reuters this month said there was never adequate space to make an unplanned stop for the heavy seismic equipment in question.
Yet the ship’s owner ordered Prokoshev and his crew to attempt to load the machinery onto the deck of the corroding vessel, at which point he says the hatches covering the ammonium-nitrate cargo below began to buckle under the weight.
Prokoshev and several crew members would remain stranded aboard the vessel for 10 months, as the shipowner and consignee of the ammonium nitrate bizarrely relinquished their cargo.
After their departure, in 2014, the ammonium nitrate was transported to shore and stored in a warehouse that was outside even the Lebanese army’s purview.
“They should have paid the ship owner to take the ship away. A couple of hundred thousand dollars just to remove it and not have that headache there, in the port. But they wouldn’t release it. Is that sensible?” the captain told the British Broadcasting Corporation.
“That cargo was dangerous,” he said. Thus far, no pictures have surfaced attesting to alleged damage.
Former energy minister Bassil on Tuesday launched a lawsuit against Lebanese journalist Dima Sadek, accusing her of propagating “false rumors” to sway public opinion against him, by asserting he held a role in the port explosion by allegedly consigning the Rhosus.
“We have nothing to do with the entrance of the Rhosus ship,” said FPM member and former energy minister Nada Boustany in an interview with Asia Times on Friday.
At no point, she said, was the Energy Ministry made aware by Spectrum of any issues with the ship contracted to remove seismic material.
“It is not my job to know if this ship came for this equipment,” she said. She maintains that Customs and the two ministries overseeing it – Finance and Transportation – should legally be held responsible for oversight of Rhosus, or any vessel, as Customs would have been the agency to issue the actual permits for the entrance and exit.
“In all of our contracts, in general, we facilitate entry because we need work to be done quickly and international companies have so many permits and licenses to get,” she said. “The exit we don’t care about.”
The former Customs chief Daher in the wake of the explosion has sought to defend storing the high-grade ammonium nitrate, which by then had a notorious reputation as a battlefield weapon in Syria and Iraq. He says he sent multiple notifications to the judiciary alerting them to the material over the years.
But Lebanese legal experts told Asia Times that when it comes to hazardous materials, Article 205 of the Customs law says there is no permission required for port authorities to order the removal of the materials.
Furthermore, Daher’s copy-paste petitions to the Court of Urgent Matters – sent improperly by courier rather than in person, and to a judge who told Daher multiple times he was not legally able to rule on the matter – also raise questions as to whether Daher was simply seeking to cover for any eventual liability.
According to those letters, Daher was asking to re-export or gain approval for the sale of the ammonium nitrate.
“The judge did his job to the book. He responded to the letter that he’s not [legally authorized] to let them sell or deal with this stuff. He told them to store it somewhere safe. Not to store it in the port,” Lebanese lawyer Khaled Merheb told Asia Times.
According to Merheb, the ammonium nitrate’s seizure and presence at the port existed outside the realm of legality.
The veteran lawyer believes there are a limited number of possibilities regarding the arrival of the ammonium nitrate.
“Either it was meant to be for a certain party in Lebanon, or to be transferred to a certain country through Lebanon,” he said, “or it was meant to be trashed somewhere and no country was accepting it, so they paid or bribed Lebanese officials to store it in Lebanon, which has happened before.”
Several security officials told AFP the Rhosus was seized by authorities after a lawsuit filed by a Lebanese company against the shipowner.
Destined for whom?
The owner of the Rhosus on August 21 was identified as Cypriot shipping kingpin Charalambos Manoli by the Organized Crime and Corruption Reporting Project (OCCRP), an attribution shrouded in secrecy.
“At almost every stage, the Rhosus’ deadly shipment was connected to actors who used opaque offshore structures and lax government oversight to work in the shadows,” said the report, which involved more than two dozen reporters working in multiple countries to track down the documents in question.
Manoli, two years before the Rhosus’ final port of call, would obtain $4 million from the Lebanese-owned Federal Bank of the Middle East (FBME) in the form of a loan, the OCCRP found. The Rhosus, it notes, was in late 2011 offered to FBME as collateral.
The same bank in July 2014 would be sanctioned by the US Treasury for money-laundering, allegedly serving as a conduit for clients to finance Hezbollah, and for facilitating the purchases of chemical weapons by the Syrian government.
The Tanzania-based bank maintains that “the MV Rhosus was never collateral for the loan.”
Raydan cautions that the flag of convenience system employed by the Rhosus is pervasive in the shipping industry, and that the presence of a number of accounts at FBME doing business on behalf of Hezbollah or Syria at the same time as the Rhosus owner was indebted to FBME should not be presumed as evidence.
There is, however, an ammonium-nitrate link that demands further investigation.
The US Treasury separately sanctioned FBME client Mudalal Khuri for his involvement in attempted procurement of ammonium nitrate in late 2013.
Khuri – a Syrian-Russian businessman flagged by Treasury as representing the “business and financial interests” of Syrian President Bashar al-Assad’s government in Russia – in this case allegedly served “as an intermediary” between Syrian Central Bank official Batoul Rida and an unnamed Russian firm.
Asia Times has submitted a request to the Treasury’s Office of Foreign Assets Control (OFAC) to determine the source of Khuri’s alleged attempted ammonium-nitrate purchase, where the material was when the attempt was aborted. The 2015 designation of Khuri makes no mention of Lebanon.
The 2,750 tons of high-grade ammonium nitrate that arrived to Beirut Port around the same period – November 2013 – was loaded on to the Rhosus via the Black Sea port of Batumi, Georgia, but more likely originated from neighboring Russia – the world’s largest producer of ammonium nitrate.
Georgia was last recorded by data compiler Knoema as having produced ammonium nitrate in 2008.
The Rhosus captain Prokoshev told the BBC that when he departed, the ammonium-nitrate bags were sealed and in good condition.
The last known images of the ammonium nitrate before the Beirut Port explosion, secured by Lebanon’s Al-Jadeed television from inside the Warehouse No 12 where they were kept, show the bags torn, messily piled, and in poor condition.
Three European intelligence sources investigating the blast told OCCRP said the size of the explosion was “equivalent to as little as 700 to 1,000 [metric] tons of ammonium nitrate,” suggesting that the amount stored in the warehouse by August was far smaller than the initial 2,750 tons.
That assessment echoed statements by Lebanon’s former interior minister Nohad Machnouk, who one week after the explosion claimed that more than half the original amount had been stolen over the years. Machnouk can also be expected to face questions over his role in securing the port.
The state’s investigation, among other queries, is working to determine the cause of the initial explosion that caused the ammonium nitrate to detonate, and whether it may have involved sabotage or was purely by accident.
But as Beirut residents struggle to rebuild their lives after the blast, many are united in one belief: that the entire political class shares responsibility for the gross negligence that led to this moment.
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