Egypt - What happened to the money?
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30 August - 5 September 2012Issue No. 1112
Egypt Published in Cairo by AL-AHRAM established in 1875
What happened to the money?
A judicial commission was formed this week to investigate money smuggled out of Egypt by cronies of the former Mubarak regime, writes Gamal Essam El-DinThe first government of Egypt's Islamist President Mohamed Mursi this week set up a judicial commission to inquire into the wealth of the family of ousted former president Hosni Mubarak and the cronies of his regime.
Mohamed Amin El-Mahdi, former chair of the State Council, was appointed head of the commission, with Hossam Eissa, a prominent law professor, and officials from the ministries of the interior and foreign affairs also being members.
According to Mohamed Mahsoub, minister of state for parliamentary affairs, the new commission, established on 27 August, will investigate money smuggled by the Mubarak family and the cronies of his regime outside Egypt.
The investigation will include new rounds of negotiations with European countries, especially the UK and Switzerland, and the United States and Canada, in order to find out what happened to the wealth of Mubarak family members held in banks in these countries, he said.
The commission will also cooperate with the ministries of justice in European Union countries and the department of justice in the United States in order to trace any money-laundering operations or hard currency smuggling out of Egypt.
Since the fall of Mubarak and his regime on 11 February 2011, political activists and the Egyptian public have been accusing governments of not doing enough to restore any stolen money.
The Hisham Qandil government's initiative comes after several commissions and fact-finding committees were established over the last year-and-a-half, none of them with much success.
In April 2011, Prosecutor-General Abdel-Meguid Mahmoud banned Mubarak and his family from travelling outside Egypt or from having access to their personal bank accounts in Egypt and abroad.
Although Mubarak now faces a life sentence in jail and his two sons Alaa and Gamal are in custody pending trial on corruption charges, the prosecutor-general has not been able to get back any Mubarak family money smuggled abroad.
According to European and American estimates, Mubarak's smuggled wealth is estimated at some $70 billion worth of assets and personal accounts in European and American banks.
Mubarak has denied any such wealth, and his lawyer, Farid El-Deeb, has told prosecutors that the former president's wealth does not exceed $1 million (LE6 million).
Mubarak has told prosecutors that he cannot comment on the business deals of his two sons. "If you have charges against them, please ask them because it is not my business," Mubarak told prosecutors.
Mahmoud was able to force Mubarak's wife Suzanne to relinquish a villa she had illegally acquired in the upscale Cairo neighbourhood of Heliopolis to the government.
Mubarak and his wife were also compelled to relinquish around $140 million held in personal accounts in the National Bank of Egypt, the money having apparently come from several Arab rulers, including the late Iraqi president Saddam Hussein, Saudi Arabia's late king Fahd and the United Arab Emirates' late ruler Sheikh Zayed, as donations intended to help construct the Library of Alexandria.
Also in April, 2011, the minister of justice entrusted the Illicit Gains Authority (IGA) and the Foreign Ministry to track down the wealth of the Mubarak family and a number of his regime cronies in Europe and America.
Chair of the IGA Assem El-Gohari accused European countries of not adequately cooperating with Egypt in helping to restore the smuggled wealth.
He said the IGA had been able to track down some 400 million Swiss francs (about $400 million) belonging to the Mubarak family and senior former regime officials such as Ahmed Ezz, a business tycoon who was the right-hand man of Mubarak's son Gamal.
Mubarak's lawyer said the money, deposited by Gamal in Swiss banks, represented revenue he had earned while working for the Bank of America in London during the 1990s.
Hossam Eissa, a law professor and member of the commission, said that "most of the efforts aimed at restoring the smuggled money have foundered because foreign countries were not cooperative enough."
Eissa recalled that in a speech delivered in May 2011, US President Barack Obama had said that his administration would help Egypt to regain money smuggled out under the former regime.
However, "Obama's speech was just rhetoric, and it has never meant anything on the ground," Eissa said.
One major obstacle is that America and the European Union countries do not trust the Egyptian judicial system. "They do not believe that the system is capable of giving these individuals a fair trial, and they are entirely against military tribunals," Eissa said.
The result has been that developing countries like Egypt can never succeed in forcing countries that talk endlessly about democracy and human rights actually to deliver on their supposed principles.
Meanwhile, prosecutors are investigating new charges levelled against Mubarak's sons Alaa and Gamal and former presidential candidate Ahmed Shafik, formerly a minister of aviation under the Mubarak regime.
The charges, levelled by former Islamist MP and lawyer Essam Sultan, accuse Shafik of helping Gamal and Alaa acquire a 40-million metre plot of land near the Ismailia governorate and overlooking the Morra Lakes in 1992 at the very cheap price of 75 piastres per metre.
Shafik, now living in Abu Dhabi, has denied the charges, insisting that he had not sold the land to Mubarak's sons. The latter have said that they will give up the land if the charges are dropped.
Prosecutors are also investigating other charges levelled against Mubarak's sons, including acquiring 25,000 feddans of land near the upper Egyptian governorate of Minya at a cheap price.
The charges assert that Mubarak's sons were helped by former minister of agriculture Amin Abaza, who is now in jail, to buy this land which was supposed to be devoted to reclamation projects.
Reports say that Mubarak's son Gamal later sold the land for more than $1 billion to Amr Tantawi, a close friend whose company controlled seaport services.
Mubarak's sons are also facing the charge of securing more than LE1 billion in cash from the flotation of the Watanti Bank on the stock exchange in 2006. The charges accuse chairman of the exchange and banker Hassan Heikal, son of journalist Mohamed Hassanein Heikal and board member of the brokerage and investment bank EFG, of having helped Gamal and Alaa to secure the illegal gains.
Hassan Heikal is now living outside Egypt.
Mubarak himself, alongside Shafik and former minister of agriculture Youssef Wali, are facing a new charge of misusing public funds by allocating land devoted to fish-farms to building luxurious villas for senior officials of the former regime.
The Ministry of Justice moved this week to wrest back land acquired by business tycoons loyal to the former regime.
On top of these is steel magnate and former ruling National Democratic Party (NDP) secretary for organisational affairs Ahmed Ezz, former minister of agriculture Amin Abaza, Coptic businessman Hani Abaza, and the former chairman of the General Authority for Reconstruction and Projects for Agricultural Development.
Investigations by prosecutor Ahmed Idris disclosed that as many as 40 NDP-affiliated business tycoons were able to buy land in different areas of Egypt at very cheap prices.
Most of the land is concentrated on the Cairo-Alex desert highway, Sinai and near the Gulf of Suez. Most of the men exploited their membership of the NDP and parliament to buy the land for profit-making purposes, rather than to reclaim it, as was supposed to be the case.
Prosecution reports say that most of the businessmen have offered to relinquish the land in return for the charges against them being dropped.
This week also saw the appointment of Mohamed Selim El-Awwa, an Islamist thinker and former presidential candidate, as a consultant to President Mohamed Mursi on matters of transitional justice.
El-Awwa said he was studying the experience of five countries, among them South Africa, in pursuing corruption charges against former regime officials.
He will reportedly hold meetings with the lawyers of senior officials from the former Mubarak regime and businessmen in order to find ways of bringing about reconciliation.
However, one major obstacle to El-Awwa's efforts is likely to be that senior members of the Muslim Brotherhood, to which President Mursi belongs, reject any reconciliation with former Mubarak regime officials.
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