Monday, February 14, 2011

There's Money in Dictatorship

When it comes to making money, being dictator of Egypt pays better than founding and leading Microsoft or running Berkshire-Hathaway. At this point it appears Mubarak stole $70 billion or $80 billion from the nation -- from the people of Egypt, most likely by pocketing aid money sent from the US and by diverting taxes and tariffs into his personal accounts.

Seventy or eighty billion? That's a lot of money.The per-capita GDP of Egyptians is about $6,000. Mubarak's assets amount to roughly $1,000 per Egyptian. Seems like a good way to improve the economy of Egypt is to distribute that money to the 80 million Egyptians. A grand apiece.

However, the money may be of little help now that Egypt has switched from being a tyrannical regime with one strong-man at the helm to a military dictatorship with generals at the helm.

If anyone is thinking the new regime is better than the old regime, well, guess again. The new regime has already suspended the Egyptian parliament and the nation's constitution. Bad signs. Meanwhile Obama is letting it happen. It's that soft spot for Islamic dictators that he has. It seems he simply cannot bring himself to practice a little gunboat diplomacy, you know, send the Mediterranean fleet to the mouth of the Nile and send the 7th Fleet toward Egypt. Maybe a submarine loaded with cruise missiles.

Democracy can be messy, but that's the way it goes. If Egypt is going to become a country for the people, by the people and of the people, then the process of people bumbling their way through has got to start as soon as possible, which means now. Giving them guidance is one thing, but pretending the military is in charge for the benefit of the people is a cruel lie that may lead to a lot of dead Egyptians who challenge military tanks with their only weapons, which appear to be stones.

Probe sought of Mubarak family's purported fortune
Egyptian anti-corruption campaigners seek probe of Mubarak family's purported hidden wealth

Sunday February 13, 2011

CAIRO (AP) -- Switzerland has frozen whatever assets Hosni Mubarak and his associates may have there, and anti-corruption campaigners are demanding the same of other countries. But experts say hunting for the deposed Egyptian leader's purported hidden wealth -- let alone recovering it -- will be an enormous task.

Mubarak's actual worth remains a mystery. A recent claim that he and his sons Gamal and Alaa may have amassed a fortune of up to $70 billion -- greater than that of Microsoft's Bill Gates -- helped drive the protests that eventually brought him down.

"Oh, Mubarak, tell us where you got 70 billion dollars!" protesters chanted in demonstrations before Egypt's ruler of 30 years was driven from office Friday, and left Cairo for a gated compound in the Red Sea resort of Sharm el-Sheikh.

Corruption was endemic in Mubarak's Egypt where 40 percent of the country's 80 million people live on $2 or less a day, and critics accused officials of usurping the nation's wealth. Egyptians have long complained of an unspoken policy of sweetheart deals that allowed top officials and businessmen to enrich themselves.

In recent days, watchdog groups and private lawyers have demanded that the country's chief prosecutor launch criminal investigations against the Mubaraks and some of their wealthy associates. Scores of former government officials have already been banned from travel and several, among them four former Cabinet ministers, have had their assets frozen.

How far these investigations will go ultimately depends on the political will of Egypt's leadership, said Eric Lewis, a partner with Washington-based law firm Baach, Robinson & Lewis, which specializes in international asset tracing and has done work in Kenya and Pakistan.

"What you often find is that while there's a kind of political impetus that seems to want to do it, the reality is that the real urge for transparency is more symbolic than real," Lewis said.

Far-reaching corruption probes could test the resolve of senior military officials who are running the country in the transition period. Some warn that a purge of Egypt's tycoons could make economic recovery from the political crisis more difficult.

Anti-corruption campaigners are calling for a speedy investigation and are urging countries other than Switzerland to freeze assets pre-emptively. "It's going to be a very difficult task, but in the interest of public money, things need to move now," said Omnia Hussien, Egypt expert at the advocacy group Transparency International.

The Mubaraks have never publicly discussed their assets. Hosni Mubarak's official monthly salary as president, counting benefits, came to 4,750 Egyptian pounds ($808), in 2007 and 2008, according to a Cairo think tank.

Rumors of hidden riches, such as expensive real estate in Britain, the United States and elsewhere, were fueled by the cozy ties between the Mubaraks and Egypt's business elite. The sale of state companies and public land for cheap, starting in the 1990s, were key sources of enrichment for the two sides, said Ahmed Elsayed Elnaggar, editor of Egypt's Economic Report.

"Privatization ... is the biggest corruption process in Egypt all over its history, from the period of the pharaohs, until now," he said.

In the past six months, two leading real estate companies have seen projects challenged in court over such alleged links.

In a case that captivated the country, Talaat Moustafa Group saw its $3 billion planned Madinaty community challenged on claims it was illegally awarded to the firm without the required bidding process, at a loss of $26 billion to the public coffers.

The country's highest administrative court upheld a ruling that the government had to re-offer the land, a decision that threatened to cast doubt on more than 100 other such projects in Egypt. Instead, a government-appointed committee re-awarded the contract, essentially on the same terms, arguing that it was in the national interest to retain the existing ownership and that TMG's work on the land had altered its value.

TMG had been headed by Hisham Talaat Moustafa, a former parliament member who was subsequently stripped of his immunity and sentenced to 15 years for ordering the murder of his Lebanese diva girlfriend.

Palm Hills Development, specializing in upscale residential compounds, faced a similar case -- and its ownership structure is a case study of the ties between public officials and the business world. Relatives of the recently fired housing minister and of a transportation minister who resigned in 2009 either hold stakes in or are on the board of one of the major shareholders of Palm Hills.

Mubarak's younger son, 47-year-old Gamal, set himself up as the director of a London-based investment firm called Medinvest Associates Ltd. in 1996, but resigned in 2001. Said Kaba, a current director of Medinvest, said the company is no longer linked to Mubarak's relatives, telling the Sunday Times in London that he knew little about the family's possible U.K. investments.

Medinvest, based in a stone-front building in London's swank Knightsbridge neighborhood, is listed as having one employee and 50,000 pounds sterling (nearly $80,000) of issued capital -- the minimum needed to get a trading certificate, operate a business and borrow. The company's profit and turnover weren't disclosed. Its net assets were valued at just over 225,000 pounds (nearly $360,000).

Gamal Mubarak is listed as the owner of 28 Wilton Place, a six-story Georgian townhouse a few blocks from Medinvest's office.

The Cairo-based Mideast investment bank EFG-Hermes said Gamal Mubarak holds an 18 percent share in a subsidiary, EFG Hermes Private Equity. The bank said Gamal Mubarak's relationship with the company began in 1997, before he entered politics, and was made public at the time. The banks said it "does not manage funds for the Mubarak family, nor has it received -- directly or indirectly -- any benefits or special consideration from the Egyptian government."

Gamal Mubarak entered politics in 2000 and quickly rose to the top of his father's ruling National Democratic Party. He was fired from the party's political bureau last week in what appeared to be a failed attempt by the regime to buy time and defuse public anger.

While corruption complaints up to now have focused on former top officials, Egyptian lawyer Ibrahim Youssri said he is seeking a criminal investigation of the Mubarak family. Youssri said the general prosecutor agreed to meet with him Monday to review the evidence.

"This is a really positive sign," Youssri said.

Officials in the prosecutor's office were not immediately available for comment.

Egypt can only start the long process of recovering assets once it launches criminal investigations, said Daniel Thelesklaf, who heads the Basel-based International Center for Asset Recovery. After that first step, Switzerland can release bank information, to be followed by the return of assets following convictions, he said.

Last month, after the ouster of another Mideast autocrat, Tunisia's Zine Al Abidine Ben Ali, Switzerland froze the bank assets, estimated at $620 million, of former Tunisian government officials.

Thelesklaf said recovering assets has become easier in recent years, with the adoption of international anti-corruption conventions. Egypt is a signatory, and so are the United Arab Emirates, touted as a possible retirement refuge for Mubarak.

The responsibility lies with the Egyptian authorities to get an investigation started, said Thelesklaf, noting that other countries with limited resources, such as Haiti and Nigeria, have managed to repatriate public funds. "If Nigeria can do it, Egypt can do it," he said.

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Blogger SNAKE HUNTERS said...

Egypt: On the bright side if there is one, their Field General Mohamed Hussein Tantawi is the man now in charge.

General Tantawi has our F-16's and M-1 Abrahm Tanks, and is an old friend of Secretary Robert Gates.

On the negative side, there's a report the Muslim Brotherhood intends to form a Political Party!

___ ___

10:16 AM  
Blogger no_slappz said...


The problem comes down to what the generals do in six months, or whenever it is they promise to hand Egypt over to the forces of democracy.

In my view, it's more likely that as the hand-off day approaches, they will claim the nation is not ready to make the switch. They will empower themselves to stay in control longer, then longer again, and then Obama, their US enabler, will be out of office and the next administration will have other concerns.

The fact that Egypt has US hardware and that many of its leaders were trained in the US only makes it harder for us to assert our will.

Not becasue the Egyptian military is powerful. It isn't. In a fight with the US military it would collapse as fast as Saddam's army in 2003. But in Egypt, the Egyptian military faces only the people, who have very few guns, and certainly no tanks or planes.

What will happens is the military will say it's complying in most ways -- except the one that truly counts -- and that the US must be patient because the Egyptians do not know how to handle too much freedom.

That's what muslims say. They say the US is bad because people have too much freedom. But they do not know how crazy they sound when they say we have too much freedom but then force out their dictator so they can have more freedom.

There is also their obsession with hating Jews. When Lara Logan was attacked in Cairo, the men surrounded her, obviously a reporter with a news crew, and shouted "Jew, Jew, Jew," then attacked her, beat her, possibly raped her and most likely ripped her clothes off.

But if Egypt becomes a democracy like Turkey, the change will be good news for Egypt, the US and the middle east. Change seems to be overtaking the Islamic world, and the person who should get the credit is George Bush.

There's no doubt the example of Iraq is on the minds of Egyptians. They would like the freedoms that are now part of life in Iraq.

Moreover, a democractic Egypt would probably be in a position to get a lot of expert international help with its oil and gas drilling. No one knows the extent of Egyptian oil and gas reserves, but, there's plenty in the ground. All they have to do is start drilling in earnest, something that was beyond the scope of Mubarak's regime.

8:02 AM  

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