Two requests from Hussein Salem, a fugitive businessman, and Rachid Mohamed Rachid, a former trade minister who is currently in the United Arab Emirates, were last week presented for settlement agreements, or so-called reconciliation, that would offer immunity from prosecution in exchange for the return of misappropriated funds. The requests came in the wake of an announcement by Egypt's Public Funds Prosecution Service (PFPS) a few weeks ago that it would be ready to settle outstanding cases concerning the embezzlement of public funds with a number of Mubarak-era officials. In the wake of the ouster of former president Hosni Mubarak during the 25 January Revolution two years ago, many former ministers and well-connected businessmen have been facing charges of corruption, money laundering and profiteering. Some of them have been jailed, while others have fled the country. Among such prominent figures are Ahmed Nazif, a former prime minister, Youssef Boutros Ghali, a former minister of finance, former trade minister Rachid Mohamed Rachid, Hussein Salem, a businessman, Ahmed Ezz, a steel tycoon and former high-ranking official in the former ruling National Democratic Party, former housing minister Ahmed Al-Maghrabi, and Zoheir Garana, a former tourism minister. Hussein Salem, one of Mubarak's closest associates, has been accused of making illegal profits from Egyptian gas sales to Israel through a major stake in East Mediterranean Gas which carried out the exports. Salem's lawyer has submitted a formal request to Prosecutor-General Talaat Abdallah to seek a settlement in return for half of his property inside and outside Egypt. Hassan Yassin, an assistant prosecutor, told the press that a decision would be made this week on whether or not to reach a legal settlement with Salem. The request is being considered, he said, and procedures would be known this week. Former minister of trade and industry Rachid Mohamed Rachid has also requested a settlement. The PFPS said that the state prosecutor was not party to political issues and that the idea of the settlements had emerged after the government had agreed to settle disputes with Mubarak-era officials. The PFPS's primary role was to protect public funds and the public interest, it said. However, the idea of the settlements has sharply divided the public into two camps, with the first supporting reconciliation and the other against. Hafez Abdel-Aziz, an employee, said that all of Egypt needed to be reconciled with each other. “We have big problems coming in the future, and we won't survive if we are divided. We need to get past these distractions. I want the government to take back the people's money. Once that is done, I don't care what happens to these people who are stopping us from improving Egypt. Let bygones be bygones, and let's work to improve the future,” he said. Others refused to countenance any such reconciliation with individuals who had broken the law. “It is unfair that an individual should escape punishment just because he has money and is willing to pay for his freedom. The law must be respected, and it must be applied to put an end to corruption and to prevent officials and businessmen from financial misdealing in the future,” said Ahmed Attia, a teacher. The government of Prime Minister Hisham Kandil has attempted before to settle cases with businessmen charged with illegally acquiring public funds and property during the Mubarak era. These overtures have been met with widespread criticism from opposition groups. While the public is divided over the issue, President Mohamed Morsi took the decision in January to seek settlements with members of the former Mubarak regime because of the present economic crisis, hoping that the settlements could inject funds into an ailing economy. On 13 January, Mustafa Al-Husseini, head of the PFPS, announced that prosecutors were ready to discuss settlements with some 20 individuals already found guilty of stealing public funds, including several Mubarak-era cronies, in exchange for the reimbursement of funds that had been illegally obtained. Such settlements would be pursued with individuals not also involved in the killings of protesters during the 25 January Revolution, he said. The proposals have been welcomed by economists, who believe that it will benefit the economy and that the state will be able to regain looted funds that are often otherwise untraceable. “As long as a businessman is not also charged with another crime, reconciliation is preferable on condition that clear criteria regulating the process are announced,” said Ahmed Ghoneim, a professor of economics at Cairo University. Ghoneim said that the trial of businessmen in front of regular courts gave a bad reputation to investment in Egypt. Such financial cases should be dealt with through the administrative courts, he said, and it would be better if they were kept out of the criminal courts from the beginning. “These cases have a negative impact not only on investors, but also on current officials, who refrain from approving any procedures or regulations out of fears that they too could end up in prison,” Ghoneim said. Manal Metwalli, director of the Economic and Financial Research Centre, also supported the proposals, saying that “reconciliation will save the reputation of Egypt's investment climate”. Metwally added that this had been harmed by verdicts issued in 2012 relating to privatised companies, and some foreign investors had filed suits against Egypt in international arbitration as a result. However, “clear criteria are needed, and the government should explain to the public what the criteria are,” Metwalli said, adding that before any cases were decided a committee of experts should be formed to study the costs of reconciliation and decide clear and objective criteria. The committee should also discuss different scenarios and determine how any money recovered would be used. “We need a law to regulate the whole process of reconciliation,” Metwalli said, though according to the PFPS no new legislation is planned. Prosecutors say that the settlements can be carried out within the framework of an investment-promotion law drafted in 1997 and a declaration issued by Egypt's former ruling Supreme Council of the Armed Forces (SCAF) in January 2012, which allows prosecutors to negotiate charges of fraud facing those having close relations with the former regime. Hanaa Kheireddin, a professor of economics at Cairo University, agreed that the prosecutions had frightened foreign investors and had further distorted Egypt's balance of payments and put considerable downward pressure on the pound. Reconciliation with the businessmen was a good step, she said, since they were not always guilty of corruption. “There are many businessmen committed to contracts signed with former officials. They followed the regulations put in place by the former regime, which permitted otherwise illegal practices,” Kheireddin said. Although some experts believe that the amnesty could calm investors' anxiety over the fates of some of the country's leading businessmen, the move has been opposed by several human rights groups which believe that it violates the rule of law. It also violates the rights of the Egyptian public, the groups say, as it stipulates that offenders must return improperly acquired funds to those funds' original value, thus ignoring the appreciation of the assets since their illegal acquisition. However, some activists say that such settlements are inevitable given the country's worsening economic situation and the weakness of the cases against many former regime officials accused of corruption. Last week, Finance Minister Morsi Hegazi said that Egypt had reclaimed less than LE100 million in illegally acquired funds from Mubarak-era officials who were either suspected of, or charged with, corruption.
Among the accused Prominent former regime figures accused of corruption and profiteering include: Ahmed Nazif, a former prime minister accused of profiteering and illegal enrichment. He has spent one year in jail, having been given a three-year prison sentence and fined LE9 million. Youssef Boutros Ghali, a former finance minister accused of corruption and profiteering. In June 2012, he was sentenced to two 15-year sentences in absentia for waste of public money and abuse of power. In July 2012, Ghali was sentenced to 10 years in prison for profiteering. An extradition request has been made to the UK authorities. Rachid Mohamed Rachid, a former trade minister accused of corruption and profiteering. In June 2012, Rachid was sentenced to five years in prison in absentia. In September 2012, he was sentenced to another 15 years. An extradition request has been made to the UAE. Ahmed Al-Maghrabi, a former housing minister accused of corruption. In May 2012, he was sentenced to five years in prison and an extradition request made to Qatar. Ahmed Ezz, a steel magnate and former ruling party official accused of wasting public funds and money laundering. He was sentenced to 10 years in prison in September 2012. Ezz was sentenced to a further seven years in prison in October 2012 and fined LE19.5 billion. Zoheir Garana, a former tourism minister accused of corruption. In May 2012, Garana was sentenced to five years in prison, and in September 2012 he was sentenced to a further three years for unlawfully issuing company licenses. Hussein Salem, a business tycoon and one of former president Mubarak's closest associates. He has been accused of fraud relating to the Israeli gas deal and a Red Sea land sale. Salem was convicted in October 2011, along with his son Khaled and daughter Magda, to seven years in jail and a combined fine of more than $4 billion on charges of money laundering and profiteering. He also faces trial in Spain for money laundering. An extradition request has been made to Spain. Anas Al-Feki, a former information minister accused of corruption. He was sentenced to seven years in prison in September 2012.
