x Abu Dhabi, UAESunday 21 January 2018

Egypt hunts for the ill-gotten gains of the Mubarak regime

As the search gathers pace, the line between illicitly obtained wealth and perfectly legal - though not always transparent - transactions between members of the Mubarak family, their friends and others who operated in the same lofty political and financial circles has become more difficult to draw.

This Georgian townhouse in the Knightsbridge area of London illustrates the conundrums - and possible dead ends - that face Egyptian investigators in their hunt for what they believe are the Mubarak family's hidden millions.
This Georgian townhouse in the Knightsbridge area of London illustrates the conundrums - and possible dead ends - that face Egyptian investigators in their hunt for what they believe are the Mubarak family's hidden millions.

CAIRO // As Hosni Mubarak goes on trial again in Cairo, the allegation that he was complicit in the murder and attempted murder of hundreds of peaceful demonstrators during the revolt that toppled him from power more than two years ago again takes centre stage.

But Egyptian authorities are also pursuing corruption charges against Mubarak and his family, which the beleaguered government of Mohammed Morsi is keen to see prosecuted.

Earlier this week, the prosecutor general's office ordered a new investigation into allegations that the Mubaraks illegally took state funds designated for Egypt's presidential palaces.

In a separate case, the former president's two sons, Alaa and Gamal, along with seven Egyptian businessmen, are being tried on charges of insider trading.

Eager to show that it is more honest and virtuous than its predecessor, the government also has mobilised scores of investigators and lawyers in a worldwide search-and-recovery operation for the allegedly ill-gotten gains of the old regime.

As that hunt gains pace, however, the line between illicitly obtained wealth and perfectly legal - though not always transparent - transactions between members of the Mubarak family, their friends and others who operated in the same lofty political and financial circles has become more difficult to draw, investigators say.

"We are just beginning to uncover relationships between the old regime and other governments and businessmen," said an official at the Illicit Gains Authority, who requested anonymity because investigations were continuing.

Under Egypt's 1975 Illicit Gains Law, it is illegal for a government official to profit financially from misusing government positions. It is also illegal, under a 2002 law, to conceal or try to conceal any illegal profits through money laundering.

But the vast network of relationships emanating from the Mubarak family has complicated efforts by Egyptian authorities to recover what they have alleged publicly are tens of millions, perhaps billions, of dollars in illegal wealth amassed by the Mubaraks and their close associates.

For Mr Morsi, these difficulties - and the possibility that the courts will rule that the Mubaraks broke no Egyptian law - represent a potentially explosive political issue, for he has staked the success of his government partly on recovering money and property purportedly stolen from the Egyptian people.

An imposing, double-fronted Georgian town house in the Knightsbridge area of London illustrates the conundrums - and possible dead ends - that face Egyptian investigators in their hunt for what they believe are the Mubarak family's hidden millions.

At first, the five-storey house at 28 Wilton Place seemed to government investigators an easy target for recovery: Gamal Mubarak, the former president's youngest son, frequently resided there from at least the early 1990s until 2010. According to the UK property website Zoopla, the house is worth £6,754,992.

Gamal held no government post during his initial years in London. He worked as investment banker for Bank of America, first in Cairo and then in London. He then left the bank in 1996 and set up Medinvest Associates Limited, which managed a private equity fund.

He returned to Egypt and entered formal politics in the late 1990s, rising to become deputy secretary-general of the ruling National Democratic Party and his father's widely touted heir apparent.

A 1996 filing to the British companies authority by Medinvest appears to show that Gamal lived in the property at 28 Wilton Place.

In the submission, he listed it as his address. The 2010 birth certificate of his daughter, Farida, also bears the address. But if Egyptian government investigators thought that this helped prove their case for recovery, they were soon disappointed. London property records for 28 Wilton Place show a Panamanian company, Ocral Enterprises Inc, as the owner.

Incorporation records, copies of which were obtained by The National, name five Panamanians as directors of Ocral Enterprises. Company shareholders are not identified in the documents, as permitted under local law.

Egyptian authorities said that they then concluded that the Mubarak family were the owners of Ocral Enterprises.

In yet another unexpected turn, however, they determined from discussions in Panama with authorities there that the company was controlled by Omar Zawawi, an Omani businessman.

Mr Zawawi is the owner of Omar Zawawi Establishment, a Muscat-based conglomerate. He is also special adviser for external liaison to Sultan Qaboos, the ruler of Oman. There is no suggestion that any of his or Ocral's dealings with Gamal Mubarak were anything but above-board and legitimate.

A reporter for The National visited the house in late February, seeking comment from Dr Zawawi. But a woman answering the door, who refused to be identified, said he was out of the country. Any statement required his authorisation, she said.

Through a spokeswoman in his office in Muscat, Dr Zawawi declined to discuss the Knightsbridge house or Ocral Enterprises Inc.

Lionel Halperin, a lawyer representing Gamal Mubarak, denied any wrongdoing or impropriety by the youngest son of the former Egyptian president in connection to 28 Wilton Place.

Bank of America paid his rent during his employment with that company, Mr Halperin said in an email. "Mr Mubarak does not know who was the owner of the property, which belonged to a company whose shareholders are not known to him," he said.

Mr Halperin, based in Switzerland, refused to answer any further questions about links between Dr Zawawi and the Mubarak family.

As their investigations continue, Egyptian investigators say there is no indication that Egyptian law was broken in connection with Gamal Mubarak's residency at 28 Wilton Place.

They say that they are still looking into what appear to be long-standing ties between the Mubarak family and Dr Zawawi.

According to news accounts, Dr Zawawi's contacts with the Mubarak family date to at least 1980, when Mena, the Egyptian state news agency, reported a meeting between Dr Zawawi and then vice president Mubarak.

On February 6, 2011, five days before Mubarak was forced from office, Dr Zawawi, now in his 80s, travelled to Cairo to deliver a letter to the president from Sultan Qaboos, according to news reports.

And in June 2011, Gamal and his brother Alaa sent a letter to Dr Zawawi, a copy of which was published in the Washington Times newspaper on June 24, 2011.

In the letter, Mubarak's sons insisted that no member of his family could receive a fair trial in Egypt and asked Dr Zawawi to "use your esteemed global standing to shed light on what is going on".

The tale of 28 Wilton Place underscores for Egyptian investigators the mysteries that still surround most of the Mubarak family's financial transactions.

The extent of the Mubarak family's wealth has not been determined, though investigators have said that it is more likely to be in the hundreds of millions of dollars, not billions as many Egyptians believe.

In October 2011, Assem Al Gohari, Egypt's deputy justice minister, announced that Gamal and Alaa held Swiss bank accounts totalling US$340 million (Dh1.24 billion), most of which he said was in Alaa's name.

Hossam El Shazly, a political analyst who has been studying Egypt's international corruption investigations from Switzerland, said the examination of the Mubarak family's financial transactions has become more complex with each passing month.

"Unfortunately, it just gets more complicated and new questions are raised by every discovery," he said.

"We know that there are many offshore companies and businessmen involved with the Mubarak family, but we don't know what kind of arrangements there were. Was this a government-to-government arrangement? Or was it something private?"

That question still lingers around the Georgian town house at 28 Wilton Place, where Gamal Mubarak, at one time the odds-on favourite to succeed his father to the Egyptian presidency, lived on-and-off for at least 15 years.

A plan to renovate the property offers a glimpse of the life he once enjoyed, far from the cell in Tora Prison the 49-year-old Mubarak now occupies, awaiting his retrial on charges of "illicit gains".

The town house contains four "vaults" on the lower ground floor, as well as four bedrooms, five bathrooms, two dressing rooms, a drawing room, a sitting room, a study and a kitchen, according to an application for a renovation licence filed on October 20, 2011, by Ocral Enterprises Inc to the City of Westminster.

The proposed changes include a conservatory, a new basement and a lift for the owners, said an attached design statement from the architecture company Madigan Browne.

"The owners are elderly and have lived in the house for the majority of their lives," the application said. "They currently use a stairlift to move around the house vertically. This arrangement is slow and sometimes difficult to use, therefore we have been asked to seek permission to install a lift to all floors."

The application does not identify the "elderly owners" of the house.

 

bhope@thenational.ae

* With reporting by Omar Karmi in London