Mubarak's acquittal makes recovery of missing Egyptian funds harder

Mubarak's acquittal makes recovery of missing Egyptian funds harder
The acquittal of former Egyptian President Hosni Mubarak is a setback for Egypt's attempts to recover the funds allegedly misappropriated by Mubarak during his rule.
6 min read
28 January, 2015
Mubarak (right) is believed to have money in banks all over Europe [AP]

Egypt's attempt to retrieve funds believed to be misappropriated by former officials in the Mubarak administration has faced many obstacles - mainly a lack of political will and court verdicts finding Mubarak, his sons and top regime officials not guilty of financial corruption.

Refaat al-Sayyed, the former head of the Cairo Appeals Court, told al-Araby al-Jadeed that no official from Mubarak's regime had been found guilty of smuggling money abroad, so Egypt could not request the retrieval of any funds allegedly smuggled out of the country.

Only minor actions had been taken to retrieve the money smuggled abroad, he added. All that Egypt has done is to ask European countries to freeze assets belonging to Mubarak in Europe, to allow time for investigations in Egypt into the origins of these funds.

Frozen accounts

During Mubarak's 30-year rule, as much as $134 billion was suspected to have been smuggled out of the country.

Egyptian banks have frozen the accounts of more than 75 prominent figures from the old regime, acting on an official request filed by the Egyptian public prosecutor.

Some 700 million Swiss francs ($520 million) linked to Mubarak have been frozen in foreign banks, as well as other funds in various banks across the world which remain as yet unidentified.

These funds are believed to have been stashed in Swiss accounts by the ousted president, his family and entourage.

A few weeks after the 25 January revolution, the Military Council in Egypt formed the first judicial committee to retrieve the money Mubarak is alleged to have stolen.

According to a former president of Egypt's Court of Appeal, the Egyptian authorities did not do enough to retrieve the funds smuggled abroad. Though there is no accurate estimate of exactly how much money they're looking for, Egyptian authorities - in cooperation with the European Union - have estimated that more than $1.5 billion has been smuggled by top officials to accounts in several European countries.

     Estimates on the exact amount of money smuggled out of Egypt by Mubarak vary widely.

According to estimates made by the Foreign Relations Committee in the People's Council in 2012, under ousted President Mohammad Morsi, the total amount of money smuggled out of the country was as much as $134 billion.

Other experts regard this figure as unrealistically high, and estimate the real number at around $70 billion.

Betraying the Arab Spring

Economist Abdul Muttaleb said that a bank account holding Mubarak's name was found at the Central Bank of Egypt (CBE), showing that the ousted president possessed $4.5 billion. The money was later added to foreign reserves at the CBE.

Muttaleb said that, according to the Egyptian commission tasked with the retrieval of smuggled funds, Egypt managed to retrieve some money believed to have been smuggled by Mubarak into Switzerland and the UK.

But Mubarak's acquittal on corruption charges and the fact that neither he nor his sons - businessman Alaa and one-time heir-apparent Gamal - were found guilty means that the money smuggled abroad is their own and the Egyptian government will have no right to retrieve it.

Mubarak is now entitled to request the freeze on his assets in European banks to be lifted.

Mutaleb added that Egypt and Tunisia had both attempted to reclaim money allegedly smuggled by Mubarak and ousted Tunisian President Zine El Abidine Ben Ali to Swiss banks and others around the world, but their argument for the return of the money failed to comply with the standards set under Swiss law.

Egypt managed to impose a freeze on Mubarak's assets only after the committee to retrieve money smuggled overseas was formed.

But, despite several visits to Europe by Egyptian investigators after the 25 January revolution, the committee has failed to make much tangible headway.

Arab Spring countries have failed to prove corruption charges against their former rulers, Muttaleb added.

Egyptian banks have frozen the accounts of more than 75 prominent figures from the old regime.

Houssam Issa, a professor of international law and a member of the Legal Committee for the Retrieval of Egyptian Money Abroad, told al-Araby that it was impossible to recover the smuggled funds at the moment - saying that post-revolution leaders failed to show they were serious about reclaiming the money.

He said statements made by members of the Committee for the Retrieval of Money were "delusional" and that the committee had failed to achieve anything. He accused them of issuing statements periodically only to justify the overseas visits they frequently made to Europe.

According to Issa, the government should have formed a commission to fight corruption in accordance with the provisions of the 2003 United Nations Convention against Corruption, which any country must comply with before any funds smuggled abroad can be restored.

Mubarak's billions

Mubarak's cronies also avoided their funds being retrieved by the government.

Hussein Salem is a prominent business tycoon and a close associate of Mubarak. He fled Egypt shortly after the outbreak of the January 2011 uprising.

Unofficial reports estimate his fortune at $2 billion, with most of his millions coming from alleged gas deals with Israel. Spanish courts have refused to extradite Salem to Egypt.

More than a year and a half ago, Egypt's prosecutor-general issued a decision to freeze Salem's assets, those of his wife Nazimah Abdul Hamid, his two children, Khaled and Magida, and his grandchildren. But an Egyptian court has recently dismissed corruption charges against Salem.

In December 2014, Switzerland again froze hundreds of millions of dollars belonging to figures from the former Egyptian regime for a period of three years, until February 2017. The freeze was apparently due to the failure of the Egyptian authorities to access legal files related to Swiss criminal procedures against members of the Mubarak family in light of ongoing political instability.

Under Swiss law, the evidence presented for a repatriation of funds on the basis of malfeasance should be sufficient for a criminal investigation, indicating possible money laundering and that the funds in question are criminal in origin.

This money belongs to the people and must be recovered.
- Youssef Othman, assistant minister of justice

Assistant Minister of Justice for Illicit Gains Youssef Othman said that the acquittal of Mubarak along with other regime symbols would not affect cases concerning the retrieval of money smuggled overseas.

"This money belongs to the people and must be recovered," he said.

He also said that Egypt had reached agreements with some EU countries to extend the freeze on assets to allow more time for criminal investigations in Egypt into the origin of the funds.

Othman added that the ministry was contacting European countries to speed up the issue, especially in countries that had yet to reveal the exact amount of funds concerned.

In addition, efforts continue to be made to eliminate any obstacles relating to differences between Egypt's laws and those in other countries. Most countries' laws stipulate other nations are required to provide information about possible criminal wrongdoing.

This is an edited translation from our Arabic edition.