Friday 18 March 2011

EGYPT: Clamping down on corruption

TheNakedTruthInAConfusedWorld

 



A great leap forward has been taken against corruption, but now Egypt needs a robust system of watchdogs to prevent it from resurfacing, writes Mohamed Hafez




Before the 25 January Revolution, everyone knew that corruption was rampant. Afterwards, it turned out that it was worse than we ever imagined, having spread not only among the ruling elite of politicians and businessmen, but also in the ranks of the media.

The demonstrators who took to the streets on 25 January drew strength from public dissatisfaction with the regime, and one of their foremost demands was an end to corruption. Soon after the revolution, reports of the wealth of ex-president Hosni Mubarak began surfacing.

On 4 February, the UK-based newspaper The Guardian ran a story on Mubarak's assets, estimating his total worth at $70 billion. On 9 February, 37 Egyptian public figures filed a report with the attorney-general demanding an investigation into the wealth of Mubarak, his wife, and his two sons. But how was such wealth amassed by one man or one family?

Most of the money the presidential family accumulated was generated through partnerships with foreign investors and companies. Those who sought investment in Egypt needed political backing, and the presidential family was willing to oblige at a price. Gamal Mubarak also made a fortune off Egyptian debts in the 1980s. He bought the debts in the international market at 35 per cent of their original value, knowing that he could make the Egyptian government honour them at their full value.

As soon as Mubarak stepped down on 11 February, complaints about his wealth were filed at the rate of 1,000-1,300 reports a day. The news media also published detailed accounts on corruption, its main figures, and how it was conducted. Eventually, many government ministries and agencies were implicated, including the agriculture, interior, housing, trade, petroleum, and tourism ministries, as well as the General Authority for Construction and Agricultural Development Projects (GACADP), the Industrial Development Agency, and the Egyptian Radio and Television Union (RTU).
On 8 March, the Cairo Criminal Court ordered a freeze on the assets of Mubarak and his family. Similar action was taken against top public figures, including seven ministers who worked under former prime minister Ahmed Nazif. The chairmen of the Industrial Development Agency, the RTU, and the Al-Ahkhbar Foundation were also accused of abusing their authority. Former interior minister Habib El-Adli was accused not only of profiteering and money laundering but also of involvement in the bombing of the Two Saints Church in Alexandria.

Former tourism minister Zoheir Garana, housing minister Ahmed El-Maghrabi, information minister Anas El-Fiqi, trade and industry minister Rachid Mohamed Rachid, National Democratic Party whip Ahmed Ezz, RTU chief Osama El-Sheikh, Industrial Development Authority chief Amr Asal, Akhbar Al-Yom chairman Mohamed Ahdi Fadli were all charged with corruption. Egyptian businessman Suleiman Amer, Moroccan businessman Faysal Al-Shaabi and Emirati businessman Wahid Metwalli Youssef were also implicated.

Thereafter, the North Cairo Criminal Court indicted El-Adli, Garana, El-Maghrabi, Asal and Ezz. Rachid, who had left the country, was indicted in absentia. A travel ban was slammed on petroleum minister Sameh Fahmi and agriculture minister Amin Abaza, whose assets have also been frozen. The attorney-general also banned several business tycoons from travelling, including Mohamed Abul-Enein, Rania Abdel-Karim, Mohamed Khattab, Helmi Abul-Eish, Hisham El-Hazeq, Mahmoud El-Gammal, Shehab Hafez, Ahmed Bahgat and Safwan Thabet.

Many of the charges involve illegal land sales. According to a report by the Central Auditing Agency, land seized illegally in recent years totals 3.5 million feddans (or 15 billion square metres). The loss to the state treasury was initially estimated at LE78.2 billion ($13 billion).

According to prosecutors, Abaza gave land originally allocated for fresh college graduates to businessmen. Nearly 160 people, mostly government officials, parliamentarians, and businessmen, seized nearly 6,465 feddans in illegal ways.

As the investigations continued, a pattern of insider trading, sweetheart deals, and blatant nepotism emerged, one in which government officials, bankers, and developers were involved. For years, the country has been run by business tycoons who were supposedly more knowledgeable about the economy than everyone else. As it turned out, they were also quite knowledgeable about ways to escape public accountability, while pillaging state-owned property.

Also, the auditing and supervisory agencies were too weak to stop the tide of corruption. For example, the Administrative Supervision Agency was answerable to the cabinet, and any investigation of government officials had therefore to be signed by the prime minister. The Central Auditing Agency was answerable to the president, who had the power to stop corruption cases from going to trial.

Having ousted the president and sacked or imprisoned the worst offenders, the country is now poised to turn a new leaf. But corruption will keep coming back unless we have strong watchdogs in place. Our supervisory bodies need to have adequate funding, training, staffing, and the legal mandate to act timely against cases of corruption.

Posted by Aadel M Al-Mahdy at 5:00 PM  
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