Mubarak's friend and tycoon Hussein Salem tests Egypt's investigators
Known as the "Father of Sharm El Sheikh" for his role in building some of the first - and biggest - hotels in the Red Sea resort town, Salem fled Egypt during the 2011 uprising that toppled Mubarak's regime.
In his heyday, however, Salem parlayed his friendships with Mubarak and other top Egyptian officials into fabulous wealth, which he enjoyed to the hilt, his fondness for white tuxedos, cigars and private planes becoming the stuff of legend. His rise is all the more remarkable because he started his career at a government textile fund with a monthly salary of 18 Egyptian pounds (Dh11) in the 1950s, according to a recent book by the Egyptian journalist Karem Yahia titled The Black Box: Hussein Salem Story.
In a testament to the intermingling of business and politics in Mubarak's Egypt - and the degree to which they often seemed indistinguishable - Salem served as a source for the country's spy agencies, according to the retired general Mohammed Rashad, a member of the Egyptian General Intelligence Services from 1966 to 1993.
It was in this capacity - the businessman spy - that he first began amassing businesses and wealth in the Emirates, the US and later back in his home country.
"Salem was never on our staff, but he was useful," Mr Rashad told The National. "His character is one of someone who knows how to climb the ladder very fast. He knew how to get to people and use them. In time, he built up connections across the world."
Yesterday, Egypt's prosecutor-general, Abdel-Meguid Mahmoud, ordered an investigation into Salem on charges of tax evasion, the general prosecution service said in a statement.
Now under house arrest in Spain, the 78-year-old Salem is today an enduring symbol of what many Egyptians view as an era of crony capitalism overseen by Mubarak, when a handful of Egyptians enriched themselves while most remained mired in poverty.
For Egyptian authorities trying to determine the fate of what they believe are billions of dollars in ill-gotten wealth during the Mubarak era, the challenge posed by Salem is monumental: how to unravel the mostly smoke-and-mirrors financial edifice that one of Egypt's shrewdest businessman built to mask his business transactions.
Court documents obtained by The National show that Salem and his family presided over a business empire that stretched from France to Hong Kong and included companies and off-shore accounts in the UAE, Spain, Switzerland and Romania.
Yet Egyptian investigators examining the financial dealings of Mubarak-era political and business figures have found only meagre amounts of cash held in Salem's name in Egypt.
An account at a branch of Societe Generale, the French bank, had 45,379 Egyptian pounds, US$4,091, 18,730 Euros, 4,170 Saudi Riyals, 370 Swiss Francs and 30 British pounds - in all, only $37,444.36 in cash.
Authorities also seized "ornaments, jewellery, gold coins, precious stones and watches" valued at 278,833 Egyptian pounds and a Cessna 680 Citation Sovereign private jet.
The documents show that besides owning three hotels, Salem had 17 properties, including villas in the upscale gated community of Katameya Dunes on the edge of Cairo, which were held in his name and those of his children and grandchildren.
Taken together, these frozen assets are but a fraction of the billions believed to have been amassed by Salem during his ascent to the pinnacle of Egypt's business and political elite.
Egyptian authorities believe the key to unlocking the caches of hidden wealth is the offshore companies that Salem and other powerful Egyptians set up in a high-stakes shell game to mask their financial dealings from tax collectors and outside scrutiny.
The case of a Panama-registered company offers a rare glimpse into how Salem hid his interests in businesses across the world as the authorities closed in on Mubarak's confidantes after he stepped down last year, Egyptian investigators say.
The company is called Clelia Assets Corporation and, until early 2011, it listed as directors a Swiss lawyer and Salem's two adult children, Khaled and Magda.
Clelia emerged from the shadows after Egypt's public prosecutor announced in May 2011 that it was indicting Mubarak, his sons and Salem on corruption charges. Three days later, the company's directorship changed, according to documents obtained from the public commercial registry in Panama.
Khaled and Magda Salem were replaced by two names, Firidun Goyushov and Sadik Ercan. Those men turned out to be executives at an Azerbaijan-based company, the Evsen Group, which is controlled by Ali Evsen, a Turk.
Investigators believe the move was intended to keep ahead of investigators, who had begun searching filings across the world to find Salem's assets. What is not yet known is the exact nature of the deal between Mr Evsen and Salem regarding Clelia.
Three weeks after the change in directorships, Salem and Mr Evsen were both detained in Spain and are still the subject of a money-laundering case.
Mr Evsen is reportedly detained in Spain at present - though his spokesman would not confirm this is the case, He is a tycoon in his own right, with interests in Turkey, Azerbaijan and Albania.
"Clelia" is a Latin word describing a species of snake that eats other snakes, and as a female name means "to have renown, fame".
Egyptian investigators later found other connections between the two men, which are also the under investigation. Mr Evsen had obtained a 28 per cent stake in East Mediterranean Gas (EMG) from Salem - his entire ownership of the company - for an undisclosed price in 2005.
The creation of EMG, which acted as an intermediary for a deal for Egypt to export gas to Israel, was the subject of a criminal case in June. The deal represented one of the most prominent intersections of Egyptian national security, private business and the Mubarak regime - and it was among the first deals to be placed under investigation after Mubarak left office. A partner in EMG was Yosef Maimen, an Israeli businessman who has been identified by Israeli media as a former Mossad agent.
Several former government officials and Salem were given prison sentences and fined more than $2 billion in June for selling natural gas at below-market prices to Israel. That case is now under appeal. Egypt shut off the flow of gas to Israel in April after EMG stopped making payments to the government.
Records sent to Egypt from Hong Kong reveal a third connection between Salem and Mr Evsen. An account belonging to Mr Evsen in the Bank of China there had received bank transfers from both Salem and his son, Khaled.
Salem's lawyer in Switzerland did not respond to a request for comment. Mr Evsen denied the charges of money laundering in an emailed statement.
Mr Evsen declined to address his company's relationship with Clelia Assets in Panama, the account in Hong Kong or the details of his acquisition of the stake in East Mediterranean Gas - which he only described as part of his strategy to "diversify my investments portfolio worldwide".
"My relation with Mr Hussein Salem is a pure business relation," he said in the statement. "The business deals I have been in with Mr Salem (which I may say have not been of an everyday frequency) have been correct ones and I have not had any reasons until now to regret the trust I have put in these business relations."
Mr Evsen confirmed he had been arrested in June 2011 on charges of money laundering and had been the subject of another investigation in Albania in December 2011, which was closed without charges in April 2012. He was reportedly re-arrested in Spain in July 2012, but his representatives declined to explain his legal status.
"I have put my trust in God, and relying in my conscience I believe that once all investigations will be over, everything will be clarified, and all this will be remembered as a test of patience and belief in God," Mr Evsen said.
After disappearing from Egypt shortly into the uprising that forced Mubarak from power in February, Salem surfaced fourth months later in Spain, where he holds a second citizenship. He was placed under house arrest by Spanish authorities on June 16, in compliance with an international arrest warrant put out by Interpol at the request of Egypt, and was later charged in Spain with money laundering.
Earlier this year, a Spanish court approved his extradition to Egypt after the Egyptian public prosecutor signed an agreement that Salem would receive a retrial on corruption charges and if convicted, serve part or all of his sentence in a Spanish prison.
But the extradition has been delayed because Mr Salem has filed an asylum request with Spain, which is still pending.
Updated: October 24, 2012 04:00 AM