Exclusive-US Seeks to Block Hezbollah Ally From Naming Lebanon Finance Minister, Sources Say

US Aims to Prevent Hezbollah Ally from Selecting Lebanon's Finance Minister

By Laila Bassam, Maya Gebeily and Samia Nakhoul

BEIRUT (Reuters) - Washington is pressuring top Lebanese officials not to allow Hezbollah or its allies to nominate the country's next finance minister, five people with knowledge of the matter said, in an attempt to limit the Iran-backed group's sway over the state.

The unusually direct U.S. intervention in Lebanon's sectarian politics appears aimed at capitalizing on shifts in the power balance in Lebanon and the wider Middle East, with Iran-backed Hezbollah badly pummelled from last year's war with Israel and its Syrian ally Bashar al-Assad ousted from power.

Like all of Lebanon's main factions, the armed group Hezbollah has long named ministers to government, in coordination with its Shi'ite ally the Amal Movement, which has picked all of Lebanon's finance ministers since 2014.

But U.S. officials are keen to see that influence diminished as Lebanon's prime minister-designate Nawaf Salam forms a new cabinet, the five sources said, speaking on condition of anonymity as they were not authorised to speak to the press. 

They said U.S. officials have passed on messages to Salam and to Lebanese President Joseph Aoun - who enjoyed U.S. support as army commander and was elected president in early January - that Hezbollah should not be included in the next cabinet. 

Three of the sources said Lebanese American businessman Massad Boulos, who was appointed by U.S. President Donald Trump as an adviser on Middle Eastern affairs, was one of the people conveying that message to Lebanon. 

Although U.S. Republican Congressmen have publicly urged Trump to keep Hezbollah and its allies out of government, it has not previously been reported that Boulos and other U.S. officials were delivering this message directly to Lebanon.

There was no immediate response from the White House or State Department to Reuters questions on whether the U.S. has weighed in on Hezbollah's role in the cabinet or Boulos's role.

Boulos told Lebanon's Al Jadeed TV he looked forward to the government being formed without "those whose experience is with the previous system", so as to restore international confidence.

One of the people familiar with the matter, who is close to Hezbollah, said there was "significant American pressure on Salam and Aoun to clip the wings of Hezbollah and its allies."

Three other people with direct knowledge of the issue told Reuters that allowing Hezbollah or Amal to nominate the finance minister would hurt Lebanon's chances of accessing foreign funds to help meet a huge reconstruction bill from last year's war, in which Israeli air strikes flattened swathes of the country.

Much of the damage is in majority Shi'ite areas where Hezbollah draws support. Hezbollah has urged Arab and international support for Lebanon to rebuild, but Lebanese and regional sources say that international assistance is dependent on political developments. 

One of those milestones was Aoun's election as president. 

A source close to the Saudi royal court said French, Saudi, and U.S. envoys had told Parliament Speaker Nabih Berri, the leader of Amal and a close Hezbollah ally, that international financial assistance including from Saudi Arabia hinged on Aoun's election.

U.S. 'RED LINE' 

The next step, the sources said, was government formation.

When asked about Hezbollah's inclusion in the new government, France's foreign ministry spokesman Christophe Lemoine said the government needed to be strong and capable of bringing together all of Lebanon in all its diversity.

French officials said that even though Hezbollah had been weakened, the demands of Lebanon's Shi'ite community should not be ignored and that Hezbollah had a role in the political landscape.

Lebanon's power-sharing system parcels out state positions on a sectarian basis. The presidency goes to a Maronite Christian, the premiership to a Sunni Muslim and the speaker of parliament to a Shi'ite Muslim. 

Salam, a judge who had been serving as the head of the International Court of Justice, was nominated on Jan. 13 to form Lebanon's new cabinet. He had won the backing of most lawmakers, but not Hezbollah or the Amal Movement.

He has spent the last two weeks consulting with political parties to form a cabinet, whose posts are also doled out based on sect and political affiliation.

Berri told U.S. government-funded Arabic language broadcaster Al Hurra on Tuesday that his party had nominated lawmaker and former minister Yassin Jaber for the post. 

Three of the sources who spoke to Reuters for this story said the U.S. had no objections to the post going to a Shi'ite Muslim but that it did not want to see Amal or Hezbollah name the minister directly. 

One of them said that Washington had conveyed a message to Salam that Lebanon was in a new phase and that it was unacceptable for Hezbollah and its allies "to enjoy the same privileges" it once had, including by "obtaining sensitive ministries such as finance." 

U.S. House Representatives Darin LaHood and Darrell Issa, Republicans who co-chair the U.S.-Lebanon Friendship Caucus, wrote to Trump this week to ask him to consider that financial and reconstruction help to Lebanon "be predicated on several, crucial policies," according to a copy of their letter seen by Reuters. 

"Lebanon's new government must not allow any members of Hezbollah, or their political party proxies, to serve in the new government," the pair wrote. 

Michael Young at the Carnegie Middle East Center said the U.S. saw the finance ministry post as a "red line" given its say on public spending in Lebanon, whose financial system collapsed catastrophically in 2019 under the weight of massive state debts wracked up by profligate spending by ruling factions.

"The U.S. is trying to put in place in Lebanon a post-Hezbollah order, and therefore it makes sense as far as they're concerned to deny Hezbollah and the Amal Movement the latitude to have a say on government policy," Young told Reuters. 

The tug-of-war over the post has sparked political tensions in Lebanon, with the Christian Lebanese Forces Party - a staunch opponent of Hezbollah - threatening to boycott the government if Hezbollah and Amal name that minister and other key positions. 

(Reporting by Laila Bassam, Samia Nakhoul, Maya Gebeily and Timour Azhari; Additional reporting by Andrea Shalal and Matt Spetalnick in Washington, D.C.; Writing by Maya Gebeily; Editing by Tom Perry, William Maclean)