Friday, April 22, 2011

Investigating how Mubarak amassed his wealth

Hundreds of Thousands in Tahrir Square
Image of Egypt's Tahir Square by Ramy Raoof, found at Flickr Creative Commons.

One of the reasons the people of Egypt demanded the ousting of President Hosni Mubarak was because of corruption. They say Mubarak, his family and his close circle of friends become richer and richer, while no one else could. With Mubarak gone, a team of lawyers have begun an investigation into the corruption and hope to recover the riches and return the money to Egypt.

We focus on corruption stories from time to time because it does affect the lives of the poor. Mubarak amassed billions in wealth through kickbacks and awarding government contracts to his friends. All of that money could have been used to further develop Egypt. The less corruption a country has the easier it is for the poor to move up the economic chain. The people who protested in Egypt found that it was impossible to do so.

From the Inter Press Service writer Cam McGrath tells us about the investigation into Mubarak's sources of wealth.

"Mubarak’s wealth is in the billions in a country where over 40 percent of the population live in poverty," says Ahmed Sakr Ashour, a professor of business administration at Alexandria University. "The huge contrast shows that the president abused the authority of his position to enrich himself."

Egypt’s interim government has launched the largest corruption probe in the nation’s history to identify, sequester and – it is hoped – recover Mubarak’s illicit fortune. Investigators are working with local corruption watchdogs to follow the money trail, while foreign governments have been asked to freeze the former ruling family’s overseas assets.

"You can’t imagine the number of people stepping forward with information," says Marghany, who recently joined the Egyptian Legal Group for Redemption of the People’s Wealth (ELGRPW), an ad hoc group of lawyers and jurists seeking restitution of Mubarak’s ill-gotten gains.

ELGRPW is appealing to whistleblowers and using its worldwide network of professional associates to help investigators untangle the complex web of shell companies, anonymous trusts and offshore bank accounts. The group claims to have renowned corruption investigators and "the high priests of corporate law" on its ticket.

Investigations have revealed that Mubarak, a former air force commander, sat at the top of a pyramid of corruption that extended all the way down to the lowest civil servant. But it was the privileged few – family and friends in the top tiers – who benefitted most from their proximity to the "Pharaoh," as he was often called.

"To operate any successful business in Egypt required taking on the Mubaraks or one of their proxies as a partner," a Cairo-based financial expert told IPS. "If you cooperated, you were given a virtual monopoly over your domain; if you refused you were run out of business, or worse."

While relatively little is known about how Mubarak accumulated his personal fortune, a clearer picture has emerged about the illicit dealings of his family.

"The real shock is not the wealth of Mubarak himself, but what his two sons have been able to accumulate over the last 25 years," says Ashour. "From the time they graduated they entered into shady business dealings and exceeded their father in terms of corruption."

Alaa Mubarak, 49, and his younger brother Gamal, 47, are currently being held for investigation in a high-security prison south of Cairo.

According to Ashour, Alaa was the first to wade into business, taking shares and kickbacks in high- profile transport, construction and real estate projects. But his "mafia-style" dealings were soon overshadowed by those of his more financially savvy brother, Gamal, who after working as an investment banker in London, returned to Egypt in the late 1990s to begin a meteoric rise up the political ranks.

In Feb. 2000, Mubarak appointed Gamal and a number of his business associates to the general secretariat of his ruling National Democratic Party (NDP). Gamal was later promoted to head the NDP’s powerful Policies Secretariat, fuelling assumptions that Mubarak was grooming his son as his successor – a charge the family has long denied.

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