In reconciling with regime figures, officials opt for quick cash over formal trials

Members of the Shura Council Human Rights Committee voiced their disapproval of ongoing reconciliation initiatives with these members of the former regime Tuesday, following a speech by a prominent human rights lawyer.

 

Mohamed al-Damaty, a member of the National Council for Human Rights, said that the government was putting the cart before the horse by reconciling with suspected corrupt officials, allowing them to settle out of court and avoid criminal charges by paying restitution. Formal prosecution should come first, he said, and then opportunities for reconciliation.

 

He said the people would never accept reconciliation settlements reached with such figures.

 

 

The ongoing political turmoil and worsening economic crisis have preoccupied many Egyptians, leaving courts free to engage in reconciliation processes without much scrutiny. So far, dozens of the most high-profile members of Hosni Mubarak’s regime have either traded cash for innocence or are in the process of doing so, including steel magnate Ahmed Ezz.

 

In January, the government’s announcement that it had officially launched a financial reconciliation initiative with figures from the ousted Mubarak regime provoked little reaction.

 

Then, officials said that through reconciliation, they could help inject much- needed funds into the troubled economy, and help abate the growth of the budget deficit, at about LE170 billion to date this year.

 

Some economists have said the reconciliation process could also help strengthen the country’s stock market by reassuring investors. Many experts partly attribute the decrease in investor confidence to fears that the government might enact retrograde corruption laws on some corporations.

 

But others worry that by reconciling during an unstable political climate, officials are both getting short-ended financially and failing to administer justice to some of the country’s most notorious criminals from the past 30 years.

 

 

Reconciliation has proved to be a popular option with some former regime figures abroad.

 

Former Finance Minister Youssef Boutros-Ghali, currently in London, and former Foreign Trade Minister Rachid Mohamed Rachid, who works in Qatar, are among the former officials who have asked to reconcile with the government.

 

Some officials estimate that more than LE1 billion could be deposited in government coffers if reconciliation deals with ex-officials go through.

 

The proceedings are also often complex, with multiple charges against one individual, and sometimes more than one official or investor accused of corruption, making it difficult to know if justice has really been served.

 

One example is the case of Rachid, who was accused of unfairly issuing licenses to Ezz Steel. Amr Assal, former Industrial Development Authority head, also faces charges in the case.

 

During the trial, Rachid’s defense team called for Ezz to be questioned on wasting state funds related to the steel licenses. The defense hoped that by offering up Ezz, the court might drop some charges against Rachid.

 

The attempt was unsuccessful.

 

In 2011, a criminal court sentenced Rachid in absentia to five years in prison for profiteering and squandering public funds. The court also ordered him to pay LE18.8 million to the state.

 

Ezz and Assal were found guilty and sentenced to 10 years in prison each, and ordered to pay a combined fine of LE660 million.

 

In another case, he was also sentenced to another five years for abusing public funds and was fined LE4 million.

 

But that was not all. For another case, Rachid received a sentence of another 15 years in prison, and a LE1.4 billion fine.

 

It’s not known at which stage Rachid is in the reconciliation process, if he is at all, as with many other prominent foreign regime figures. Even Investment Minister Osama Saleh said he doesn’t have a detailed understanding of where things stand.

 

“I have read in the newspapers about the progress on Rachid’s request for reconciliation but did not receive any official documents to that effect,” Saleh said in an interview with Al-Masry Al-Youm.

 

But experts and human rights activists ask: Should a figure such as Rachid, accused of multiple counts of corruption, even be considered for reconciliation? Or should Ezz, for that matter?

 

Legal and Parliamentary Affairs Minister Mohamed Mahsoub in October denied press reports that he had been assigned to reach a US$5 billion settlement with Ezz.

 

 

Economic expert Reda Issa said he is not surprised by the use of the reconciliation settlement mechanism. This tactic, he said, is not at all new to the government.

 

Reconciliation is legal in more than one branch of the government, he said. The Central Bank of Egypt governor can reconcile and reach settlements in corruption cases.

 

The trade minister can also reconcile in monopoly cases and obtain fines instead of filing criminal cases.

 

“It was the way of the old regime and still the way of the current regime,” Issa said.

 

He also doubts the Public Fund Prosecution’s plan to reconcile more than 50 percent of the assets owned by figures of the former regime.

 

“How and who exactly will evaluate the real worth of these figures’ assets, and will we calculate the value of these assets by today’s worth or before the revolution value?” Issa said. “It is very tricky, actually, and is doomed to fail, or will lead to more corruption.”

 

To start the reconciliation process, he said, there needs to be a sense of openness and transparency in the country that the current political atmosphere cannot afford.

 

Accelerated attempts to try to reconcile with figures of the old regime are not just aimed at getting quick cash, he said, but gathering political support from members of the dissolved ruling party in the upcoming elections.

 

“Mubarak and company are not profiting from laws they passed, but from amendments to the 1997 investment law that the Supreme Council of the Armed Forces passed on 3 January 2012 to allow this kind of deal making on impunity for cash,” he said.

 

 

While opposition to reconciliation is barely getting a foothold, the government is already elbow-deep in a number of reconciliation procedures with Mubarak-era officials. And indicators show that an increasing number of Egyptians find reconciliation with corrupt figures an agreeable solution.

 

Constitutional law expert Shawky al-Sayed, in a recent phone call to a TV program on Al-Tahrir satellite channel, actually advised the government to expand the circle of former regime figures with whom it could reconcile.

 

In doing this, he said, the government could achieve stability and save the effort and expenses that would be wasted on legal court cases. He also said the process must be accelerated for the government to obtain the stolen funds, even in criminal cases.

 

An opinion poll conducted by the Cabinet’s Information and Decision Support Center found that 52 percent of Egyptians disapproved of reconciliation with former regime figures in March 2012, compared with 57 percent in August 2011.

 

The center found that 29 percent of citizens agree to release former regime members currently on trial, in exchange for stolen assets, compared with 26 percent in August 2011.

 

 

Finance Minister Morsy Hegazy announced early this month that one of two new bank accounts at the Central Bank for repatriated funds had received LE69 million paid to the state by former regime figures, who are no longer under investigation as part of the ongoing reconciliation initiative.

 

Egypt in November reportedly recovered about $1.8 billion in money and land unlawfully acquired by former regime officials. These have also been deposited in a Central Bank account, the minister said.

 

The money obtained through reconciliation so far is insignificant in terms of Egypt’s budget deficit, however.

 

But President Mohamed Morsy’s government is making more moves toward this end.

 

During a London visit last month, Hassan Malek, chairman of the presidential committee Tawasol — outreach, in Arabic — told Egyptian businessmen abroad that they shouldn’t be afraid to return home for fear of being prosecuted for crimes.

 

Through Tawasol, Malek has been tasked with opening channels of communication with a number of fleeing Egyptian businessmen abroad to reconcile with the state. In London, he was part of a delegation of Egyptian officials and businessmen who met with foreign investors to try to restore confidence in the economy.

 

Malek, a longtime Muslim Brotherhood member, is also head of the Egyptian Business Development Association.

 

“Egypt opens its arms to all Egyptians outside Egypt and welcomes all Egyptian investors and businessmen abroad. We are sending a message that they are all welcome and requesting them to go back to their country. I think the door is now open for all businessmen to come back,” he said in London.