The Magazine

Mr. Hariri Goes to Washington

From the May 12, 2003 issue: The prime minister's prime real estate.

May 12, 2003, Vol. 8, No. 34 • By RICHARD W. CARLSON
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ACCORDING TO the Washington Post, a fellow you've probably never heard of named Rafik Hariri wants to build a $25 million house in Washington, D.C., a Kennedy Center-scale monument better suited to the banks of the Tigris River. Why did Hariri pay $13 million for the property on Foxhall Road back in 1987? Why does he want to pay $25 million or more to build a 103,667 square-foot house on it now? The answer, self-evidently, is he's a very rich and very conspicuous consumer, who, in this instance, runs a foreign government as if it were his own personal real estate office.

Rafik Hariri is the prime minister of war-torn Lebanon, and, according to Forbes, has a personal fortune of about $3.8 billion. "This is a guy who treats all of Lebanon like he owns it personally, his own plaything," says Tony Haddad, president of the Lebanese-American Council for Democracy.

Picture Lebanon and you likely conjure images of barbed wire and machine gun emplacements, with a downtown Beirut of collapsed buildings, dust, and the corpses of dogs. No more. Since Hariri took over as prime minister in 1992, he has rebuilt hundreds of acres of central Beirut, although his massive new construction won't benefit the average Lebanese family--they make around $200 a month and couldn't afford the paving stones they'd walk on. It is for Hariri's rich friends and fellow social travelers throughout the Arab world and Old Europe, who might covet the downtown condos facing the sea that sell for $5 million each. Another 150 acres of downtown Beirut waterfront is now being created on landfill atop a former garbage dump by Hariri and his private construction company, Solidere.

The deserted, gutted buildings in central Beirut are about gone, and the rubble has been mostly cleared away. This was done by Hariri and Solidere, which owns, or has owned, almost all of the central district. Hariri seems to have a financial interest in anything that generates a profit in Lebanon, extending even to ownership of the trash collection business and waste containers along the downtown sidewalks. And how did he get his hands around all of downtown Beirut? He took it, some 230 acres, worth close to $2 billion. Actually, the government seized it for him when he became prime minister, taking it away from its many owners by the power of eminent domain, and then handing it over to Hariri's company to develop. It was one of the most valuable land grabs in history.

Hariri tore down hundreds of beautiful but damaged historic buildings, making way for high rises to house the likes of Merrill Lynch (though he did save and rehabilitate a few old jewels). Even a 500-yacht marina, whose ownership was strongly contested, was handed over to Solidere by Hariri's government. Solidere has sold downtown land for hundreds of millions of dollars to European, Kuwaiti, and Saudi investors to build hotels and apartments. Solidere's master plan for downtown Beirut calls for gleaming Riyadh-like offices and condominiums, replacing the Ottoman charm of old Beirut at prices comparable to New York or Cannes, and available only to the very rich. But while Hariri has succeeded in, and has been widely praised for, transforming the bombed-out downtown, he has also saddled Lebanese taxpayers of this and future generations with an enormous, burdensome debt. Much of the borrowed money pays lenders back at very high interest rates. The country's debt by year's end will be $31 billion. The debt service is a staggering $3 billion a year.

One of Hariri's flamboyantly self-promotional websites (he maintains three: www.rhariri.com, www.rafik-hariri.org, and www.hariri-foundation.org.lb, all with numerous photos of Hariri, a bear-like man with eyebrows like summer caterpillars) has a flashing opening line that states, "Together For A Better Future." The together part presumably refers to his involuntary partners, the common folk of Lebanon, who will pay down the debt without sharing the profits. A poll from the Lebanese Information Center (LIC) found that more than 40 percent of the Lebanese population would leave the country if they could. Dr. Joseph Gebeily, president of the LIC, says this reflects the widespread and bitter popular resentment of the Hariri government.