Full text of Mubarak investigation: Gas export to Israel, Hussein Salem, and wealth

This is part two of the general prosecution's investigation with former Egyptian president Hosni Mubarak. Part one of the investigation here
The Export of gas to Israel
Investigator Mustafa Suleiman went on to the more important part of the questioning, the deal to export Egyptian natural gas to Israel. The deal greatly damaged Egypt's public funds. Egypt lost around $715 million U.S. dollars as a result of the deal, which priced the gas at far below market value.
The Investigator began his questions as follows:
Q: What conditions surrounded the deals to export Egyptian gas to Israel?
Mubarak: The deal dates from the time of Israeli Prime Minister Yitzhak Rabin, I can't recall the exact date. He told me in a meeting that there was a clause in the peace treaty which allowed Israel to purchase petrol from Egypt by entering a public sale alongside other buyers and indeed petrol was exported to them for some time. When we were in need of gas I asked him whether we could exchange the export of petrol to the export of gas through public sales too. Then Dr. Atef Ebeed became prime minister. I instructed him to enter negotiations with the Israelis regarding the export of gas and eventually the gas line was built, but we stopped exporting for sometime until we pushed them to raise the price from $1 to $3 dollars and to allow us to review the price every three years. They agreed with great difficulty to both conditions.
Q: From the idea of export?
A: Prime Minister Yitzhak Rabin and I agreed.
Q: Who represented Egypt in the negotiations?
C: There was a special unit in the General Petroleum Corporation that was initially responsible in the first stage and in the later stage it was Dr. Ebeid, and a representative from the intelligence service.
Q: What were the terms of the contract and the rights and obligations of the parties?
A: I don't remember the terms of the contract, but what I remember in the contract was that the export price of the unit at the time the contract of $3 or 3.5, with the price review every three years.
Q: What measures were taken to implement the contract?
A: It was agreed to establish a company to implement exportation.
Q: Which company was entrusted with the implementation of that?
A: I think a company called East Mediterranean Gas.
Q: Why was this company chosen?
A: This company contributes to the Egyptian intelligence service by a large margin and the other shareholders include EGPC and businessman Hussein Salem.
Q: Was the company was selected through an auction?
A: I do not know.
Q: What is your link to Hussein Salem?
A: He is a businessman man like many others. I met him in the U.S. when I was vice –president and I enlisted him and others to help develop Sinai.
Q: So is it a business relationship or a friendship?
A: He's just a business acquaintance like other businessmen I deal with.
Q: Why did you not entrust the implementation of the contract to an Egyptian company that contributes to purely legal persons in general?
A: All people are afraid to deal with Israel, including public bodies.
Q: What is the party that determines the price of the exported gas?
A: The price was set at $1 dollar or 1.5, by the specialists of the General Organization of Petroleum. The export price was determined by a committee headed by Rachid Mohamed Rachid, Minister of Trade and Industry at the time.
Q: Whose duty was it to make sure the price met with international prices?
A: This is the work of the Committee, who knew best.
Q: According to former intelligence chief Omar Suleiman you are friends with Hussein Salem. What is your response to this?
A: This is not true. He was just a businessman like any other businessman I worked with.
Q: What you say has been said in his statement in the investigation that you commissioned Salem to found the East Mediterranean Gas company
A: This is not true. Dr. Atef Ebeid was responsible for this.
Q: What do you say about the manner mentioned report of the Expert Committee Delegate of the Attorney General, that the company in which Salem obtained a benefit without having the right, with an estimated value of this benefit, $2.9 after the decision of the Council of Ministers on 18 September 2000, and $9.5 billion after signing the agreement on June 13, 2005.
A: I know nothing, and this is the first time I hear of this.
Q: What do you say has been the outcome of the report stating that the price set was below market value and less than world prices after evaluation with the price of Russian gas?
A: I know nothing of this and had nothing to do with the setting of the price of gas.
Q: What do you have to say regarding the report's conclusions that the sale of gas to Israel has damaged public funds to a tune of $ 715 million?
A: The commission that set the price is the one that must answer to this allegation.
Gold Bars
The investigator went on to question the deposed president regarding a matter that may not concern many Egyptians directly but indicates a lot about the president's finances.
Q: Were you given gold bars as a gift from an Egyptian Gold mine?
A: No.
Q: There is a memorandum on mining and building materials at the Central Auditing Agency that said Board of Directors of the Egyptian General Authority for Mineral Resources and General Manager of five gold mines gave you a gold bar weighing approximately 5.5 kg on January 6, 2009. What is your response?
A: This is untrue. Perhaps someone took it and pretended it was I who took it.
Mubarak claimed he was tired at this point and could not answer any more questions. The investigator respected his wishes despite having many more questions to ask him. He concluded that Mubarak should remain in custody for the next 15 days and that Dr Hussein Hamouda, head of Egyptian General Authority for Mineral Resources, should be called for questioning on April 28.
Last session of the investigation
Days passed quickly, and Mustafa Suleiman, the investigator, returned to Sharm el-Sheikh on May 10 to consider the renewal of Mubarak's detention. Mubarak was then lying on a bed sitting next to his lawyer Farid El-Deeb in Room 309 on the third floor of Sharm el-Sheikh International Hospital.
The investigator came to Sharm El-Sheikh loaded with more serious information and statements from witnesses, including a telephone call from former minister of petroleum Sameh Fahmy with new information regarding the gold bars which the investigator faced Mubarak with – it elicited surprise from the former president.
Q: What do you have to say regarding Fawzi Shaker's statement that Gen. Mustafa Shaker gave him a wrapped parcel that he delivered by hand to you?
A: It is possible that he handed me a parcel that I never unwrapped and forgot about.
Q: What is the reason to accept this gift, which is of such magnitude and value?
A: In order for it to be sent to the museum as the first product from an Egyptian gold mine.
Q: Why did you not ask for a more symbolic gift and why did you not send this one away?
A. Because I haven't seen it till now.
Q: What is the fate of this alloy of gold now?
A: I deposited it at the Military Museum at Abdeen Palace May 9, 2011.
Q: Why was the bar kept in your home since January 2009 and not deposited in the museum?
A: I did not open it and forgot to deposit in the museum as usual with all the gifts provided to the presidency.
The investigator decided it was time for a change of topic and began to question Mubarak about his relationship with business tycoon Hussein Salem.
Q: Have you or any member of your family had any financial dealings with Salem?
A: No, only the purchase of five villas. One for me, one for Alaa, one for Gamal, and two villas jointly owned by Gamal and Alaa.
Q: Has not there been participation in any commercial companies or investment, or agencies in Egypt or abroad?
A: No.
Q: What are details of the purchase of villas from Salem?
A: I purchased them in the 1990's as I recall and they were yet to be completely finished. Mine was 500,000 EGP (U.S. $85,000) and the others were 300,000 EGP (U.S. $50,000) each.
Q: Was the purchase price commensurate with the value of the villas at the time of purchase?
A: I do not know, but I'm the first who purchased a villa from him. Many people bought after I did, including Sultan Qaboos, Ibrahim Nafie, and Gamal Azab the businessman.
Q: It is proven from the available pictures of contracts for the purchase of villas that your villa of 1,564 meters square cost 500,000 EGP. The villas of Gamal and Alaa Mubarak, 1,960 and 1,840 meters respectively, cost 400,000 EGP. Yet each area of 1,085 meters should cost an additional 300,000 EGP. What is your explanation for the difference in price, which does not suit the area of the villa and the price you paid?
A: I do not know and I paid the price thinking that it included the surrounding land.
Q: What do you say of reports that say that the price you paid is not in accord with prices prevalent at the time?
A: I do not know.
Omar Suleiman and gas deal
The investigator moved back to the issue of exporting natural gas to Israel, and asked Mubarak:
Q. Did you mandate or issue instructions to the General Intelligence to take part in the negotiations to export gas to Israel?
A: Yes.
Q: When were these instructions? What were they? And whose were they?
A: In the beginning of the negotiations I asked General Omar Suleiman to take part in the negotiations
Q: Were you notified after all the details of the negotiations with the Israeli side in terms of quantity and price, duration and incentives and exemptions before the conclusion of the contract?
A: Yes. I was notified of the details of the first negotiation and I asked the price and I knew that this price was far too law. There were new negotiations before the execution of the contract, and as I remember it was assigned to Rachid Mohamed Rachid, who raised the price from $1 dollar to $3.5 dollars before the implementation of export, and also that we can reconsider the price every three years.
Q: Have you ensured the suitability of the conditions and details of the negotiations, and that it is going in favor of Egypt?
A: Compared with prices of those who were exporting to Spain and Italy at that time, it turned out to be in the best interest of Egypt.
Q: What do you say to the manner mentioned in the report of the Delegate of the Attorney General, that in the investigation of the contract to sell gas to Israel a number of irregularities were discovered, including that the contract had no clauses for revision and negotiation of price, that the contract terms allow for periodic revision of prices during the contract period of 15-years, in addition to giving an advantage to the individual entitlement in the Israeli side, to extend the period of validity of the contract an additional five years with the same price?
A: You will have to ask those responsible for the implementation of this contract as all I knew was that we were owed $3 dollars per unit and that we could review the price every three years.
Q: What do you say to the fact that, as proven by examination, Hussein Salem has indirect ownership in the various companies that own portfolios of securities the Egyptian Stock Exchange, that it dominates 70 percent of the Mediterranean Gas Company by having 20 percent of the shares and the agency to act, both selling and buying for the name of other companies that contribute 50 percent of the shares of the company?
A: I know nothing of this.
Q: As mentioned in the report of the Commission, the conclusion of the contract was weakest on the Egyptian side when renegotiating over adjusting the price of gas, which concluded in May 2009, there was not an appropriate price for the gas, which led to the detriment of public funds by U.S. $714.87 million. What do you say?
A: Ask the officials responsible.
Mubarak did not change the way he answered at the end of the investigation. He denied from the beginning his involvement in wasting public money, despite his agreement with Yitzhak Rabin regarding the gas agreement for the second time. He denied knowledge of export prices, despite the recognition in more than one part of the investigation that he was informed of the details of the contract and price negotiations.
Arms deals
Q: What conditions prevailed in Egypt regarding the conduct of arms deals during the period in which you assumed the presidency of the Republic?
A: Arms deals, both buying and selling, were done through two methods. The first through arms agreements, and the second through the contracts for the sale or purchase of arms. The conclusion of the agreements is through the mandate of the President of the People's Assembly under the law from the 1970s. Since I became head of state in 1981 I don't recall signing a single arms deal. As for arms contracts, you only had to get the approval of the head of the state to make sure that it is within the interests of the state to complete the deal.
Q: What are the limits of the mandate to deal in arms?
A: These limits are stipulated in the law and were concluded by submitting arms deals to the People's Assembly for approval.
Q: Can you identify the transactions that were brokered during your term?
A: Of course I can't.
Q: What are the main sources of arms in Egypt?
A: Mainly the United States, Russia and China, in addition to a number of other countries such as France, England, Germany, Italy, Korea, Ukraine and Bulgaria.
Q: What body represents Egypt in the arms deals?
A: Bodies within the General Command of the armed forces.
Q: What is the procedure of convening such deals?
A: I have no idea about these procedures.
Q: Do you know how to determine the price and method of repayment?
A: No. And the competent authority is the one whom you should ask.
Q: How are companies chosen?
A: I do not know.
Q: How is the selection and transportation of arms deals made?
A: According to the laws of the State contracted for America must be the transfer of weapons by U.S. transport companies, and for the country, the other procedures I do not know myself.
Q: Are there companies entrusted with the transport?
A: I do not know.
Q: Are the arms deals subject to review and monitoring of regulatory bodies at home?
A: From regulatory authorities within the armed forces only.
Q: Is one of the regulatory authorities outside the armed forces assigned to review and monitor the arms deals to make sure they are correct?
A: No. The armed forces play this role.
Q: Have you or any member of your family or in-laws had any activity in the arms trade or transfer?
A: No. I have no commercial activity in the arms field or any other.
Q: Have you or any of your family members participated in companies engaged in the trafficking of weapons out of Egypt?
A: No.
Q: Did you entrust to Salem deals for weapons transferred to the State?
A: No. I know that Salem was involved in the transfer of arms from America in the 1970's, along with Kamal Adham, investor and adviser to the former king of Saudi Arabia. He then dissolved the company after the death of Kamal Adham, and I do not know the exact details.
Q: Do you have a link or relationship with a company called White Winger Paris?
A: No. I do not know the company by that name and this is that first time I hear of it.
Mubarak's wealth and Egypt's foreign debt
Q: What do you have to say about the matter mentioned in communications from a number of citizens that you obtained, through arms deals on several commissions, your fortune of U.S. $70 billion?
A: It is not true and utterly groundless.
Q: What is the size of your wealth and its components and their sources?
A: I have the expense of liquid funds of more than 6 million EGP (U.S. $1 million) in Egyptian banks, in addition to a villa in Sharm el-Sheikh.
Q: Do you have money or property, movable or liquid, out of the country?
A: No, I don't own anything outside the country.
Q: What is your link Deco Trier banking group in Switzerland?
A: I have no link.
Q: Do you have accounts in the British Barclays Bank International?
A: No.
Q: What is your link including to Peter Square, a former air force commander of the RAF?
A: This is the first time I have ever heard of him.
Q: What about the wealth of your wife and sons?
A: My wife does not have accounts in banks or shares in the stock market, and everything owned by inheritance from her parents has been sold. She has no real estate. As for my sons, Alaa and Gamal, I know that they have accounts abroad. I do not know of which of the proceeds of their work abroad, Gamal during work in the Bank of America and the office of Financial Advisors, and Alaa through consultation with financial investors in the UAE and Saudi Arabia.
Q: What are the circumstances of the appointment of Gamal as a representative of the Central Bank Board of Directors of the Arab-African Bank?
A: Gamal gained experience while working at the Bank of America in financial advisory, and when he returned to Egypt the Central Bank appointed him because of his experience and qualifications.
Q: Did you play a role in that appointment?
A: No. And I did not get involved in anything to do with my children.
Q: Did they meet the conditions, qualifications and experience necessary for these positions?
A: Yes, according to what I know of these qualifications.
Q: Do you know who was representing the Central Bank before being appointed as a representative of the bank?
A: I do not know
Q: Who was the Governor of the Central Bank at the time?
C: I don't remember
Q: What about the purchase of Egypt's foreign debts?
A: In those days, Dr. Atef Sedky was President of the Council of Ministers. My son Gamal was working in the Bank of America and learned through his job that someone had bought a bond of a debt that Egypt owned to England for an amount less than the amount of debt by about approximately 50 percent. He wanted to return to Egypt and bring a case to judge him to repay the entire debt. He called me on the phone, I asked him to speak to Dr. Atef Sedky and tell him about it, and as I recall at that time a law or regulation or a requirement was issued to prevent this occurrence. That's all I remember of the incident.
Q: How was this debt put up for purchase internally and externally?
A: I don't remember the details.
Q: Did you or any of your family members try to purchase the debt?
A: No, because the amount required to purchase it was large.
Q: Do you remember the financial institutions that dealt with this matter?
A: I don't remember.
Q: What do you say of the report of the National Security Authority that your total fortune has reached U.S. $70 billion in Swiss, British and American, and that your fortune has accumulated from military projects and government services during the period of 30 years, as well as through joint ventures between foreign investors and companies?
A: Lies.
Q: What you say to the communications against you that you have smuggled your money through a bank in Switzerland?
A: This is false.
Q: What do you say to reported communications that you have a bank account at Barclays Bank International and you have deposited money with a man called Peter Square?
A: This is not correct. I do not know this person
Q: It was said in communications that you have transferred a sum of money of 50 billion EGP using aliases on January 25, 2011?
A: This is untrue.
Q: What do you say to allegations that you own real estate estimated at 3.5 billion EGP in return for the exploitation of your powers as president for others' ends?
A: This conversation is not true, and funny.
Q: And have you added to you and your family accounts and deposits in Swiss banks, palaces and real estate in Manhattan and Beverly Hills, London, Paris, Madrid, Dubai, Washington and Frankfurt?
A: This is not correct.
The investigator's ruthless questioning of Mubarak, in addition to his lack of evidence to contradict the allegations pitted against him, caused him to physically break down and weep which prompted the investigator to let him rest for 30 minutes prior to resuming questioning, which he did ruthlessly. Mubarak mostly answered with "I don't know" and “It didn't happen." The investigator asked Mubarak to give a closing statement and Mubarak replied weakly from his bed, “I request that I be released due to my poor health, advanced age and the fact that there is no actual evidence against me."
On May 10, 2011 the investigation with the former president ended. Thirteen days later, specifically on May 23, Chancellor Mustafa Suleiman began to initiate procedures in the case. The next morning Public Prosecutor Abdel Magid Mahmoud issued a press release referring Mubarak to criminal prosecution on charges of murder of the demonstrators during the January 25 Revolution, financial corruption and bribery, peddling his influence, damaging state funds, and access to benefits and financial gains through his influence.
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