Pompeo Intervenes to Release $115 Million in Aid for Lebanon

(Bloomberg) -- Secretary of State Michael Pompeo personally intervened Thursday to order the release of about $115 million in economic aid to Lebanon that had been quietly held up for a month, the latest skirmish over delays that became an issue in the Ukraine impeachment inquiry, four people familiar with the matter said.

The delay in releasing the Economic Support Funds, which had not been previously reported, was imposed by Bonnie Glick, the deputy administrator at the U.S. Agency for International Development, after deliberations with Deputy National Security Adviser Victoria Coates and hard-liners in Congress, the people said. Pompeo called Glick on Thursday and told her to release the money, they said.

Such aid deliberations have become more politically charged -- and drawn far greater scrutiny -- amid Democratic lawmakers’ impeachment inquiry into President Donald Trump. Democrats contend that Trump held up $391 million in aid to Ukraine to pressure its new president to investigate Joe Biden and the Democrats.

The economic assistance to Lebanon was separate from a package of $105 million in military assistance to Lebanon that was frozen without explanation in recent weeks before being released.

Both cases highlighted a deep divide within the administration over Lebanon, with hard-liners arguing that U.S. money to the Middle East country is only helping designated terrorist groups -- chiefly Hezbollah, the Iran-backed militia that wields enormous sway over the government.

Hezbollah’s Influence

Other U.S. officials, including Pompeo and senior officials at the Defense Department, argued that the money has the opposite effect by helping inoculate Lebanese institutions against Hezbollah’s influence. Releasing the economic assistance had been a priority for David Hale, the undersecretary of state for political affairs. Hale also testified in the Ukraine impeachment inquiry.

According to a notification submitted to Congress on Thursday morning and obtained by Bloomberg News, the $114.5 million in aid supports “good governance, civil society, water supply and sanitation, basic education, higher education, and private sector productivity programming.”

Lebanon has been without a functioning government since Prime Minister Saad Hariri resigned in late October in the face of mass protests against a political establishment accused of corruption and economic management. Meeting in Paris on Wednesday, diplomats from France, the U.S. and other nations said Lebanon shouldn’t expect a bailout for its struggling economy until it implements a raft of reforms.

The aid to Lebanon was delayed without a formal hold, which can only be imposed by the White House’s Office of Management and Budget.

One of the people familiar with the matter framed the delay as part of the broader international effort to ensure that Lebanon’s caretaker government doesn’t misuse the funds and U.S. taxpayer dollars are spent wisely.

Officials at the State Department, National Security Council and USAID declined to comment on Thursday.

Aid Review

The decision to release the aid comes as the Trump administration is reviewing how it allocates foreign assistance globally. The review has come under fire from advocates for more overseas assistance because of the demand by some administration officials that aid be given only to countries that are seen as supportive of the U.S.

A draft of that review obtained by Bloomberg News calls for the U.S. to “reduce or eliminate foreign assistance to countries and international organizations that are working against or do not support United States’ interests.”

Some opponents of the Lebanon aid have argued against it on similar grounds, contending, for example, that the U.S. should not fund education materials in Lebanon that are seen as anti-Semitic and don’t acknowledge Israel’s right to exist.

Republican Senator Ted Cruz of Texas has circulated a two-page bill -- the “Stop Sending American Taxpayer Money to Governments Controlled By Terrorists Act” -- that would block assistance to any Lebanese government that’s unduly influenced by Hezbollah.

To contact the reporters on this story: Nick Wadhams in Washington at nwadhams@bloomberg.net;Jennifer Jacobs in Washington at jjacobs68@bloomberg.net

To contact the editors responsible for this story: Bill Faries at wfaries@bloomberg.net, Larry Liebert

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