The Wheat Corruption case, in which more than 300 public servants are accused of stealing and mixing imported wheat with local one, is one of the current cases that await decision on settlement requests - Picture from REUTERS The Wheat Corruption case, in which more than 300 public servants are accused of stealing and mixing imported wheat with local one, is one of the current cases that await decision on settlement requests - Picture from REUTERS

2019 illicit gain combat: 52 graft cases, 2M financial disclosures

Wed, Jan. 9, 2019
CAIRO – 9 January 2019: More government officials and employees are yet to submit their financial disclosures as the Illicit Gains Authority (IGA) expects the number to exceed that of 2018 and hit 2 million disclosures.

The IGA is authorized to collect disclosures from president, ministers, governors, parliamentarians and all state employees detailing their and their families’ wealth. Established in 1975, the IGA is subset of the Justice Ministry that investigates the collected disclosures for any missing information or unexplained increases in wealth.

In case state employees fail to prove the source of the gains in question, they will be subject to prosecution over corruption charges, travel ban and assets freezing. Unlike public workers, ordinary citizens are not required to submit their financial disclosures.

In 2018, the cabinet and the IGA announced collecting a total of 1,630,000 assets declarations that were due. The data collected were then examined by technical committees, including 700 judges, who also looked into the cases filed against state employees as well as reconciliation requests.

Soad el kholy
Deputy Governor of Alexandria Soad al-Kholy - File Photo


Await IGA scrutiny are 52 legal suits that are filed against former officials and businessmen accusing them of wealth inflation and influence peddling. Some of these cases were referred by the cabinet-affiliated Administrative Control Authority (ACA); like the case of Soad el-Kholy, the ex-deputy Alexandria governor, who is accused of receiving bribes. Kholy failed to prove the source of a sudden increase in her wealth including real estate, lands, bank accounts and cash all worth L.E. 30 million. Investigation into her wealth compared to her annual income is underway, covering the period since she assumed public work and until her detention in February 2018.

Some 23 cases were filed by individuals or lawyers against Muslim Brotherhood (MB) leaders, including ex-President Mohamed Morsi. The cases, which are being reviewed by experts, accuse the MB leaders of illegally acquiring agricultural lands and receiving unauthorized donations for the group’s political wing “Freedom and Justice” Party.

ACAAAA
The Egyptian Administrative Control Authority (


Considered one of the government’s bids to counter administrative corruption, financial disclosures are submitted two months after assuming work and after leaving it, to compare the persons’ wealth at the time they held office and after walking out.

State employees are required to submit a periodic financial disclosure after five years. Army officers also declare their assets every certain period of time, and before retirement or leaving the post. Furthermore, the president, prime minister, and ministers have to publish their financial disclosures in Egypt’s Official Gazette, according to article 166 of the 2014 constitution.


New reconciliation deals

Amendments of the IGA regulating law in 2015 are believed to have benefited many Mubarak-era officials, who managed to drop their charges after requesting reconciliation deals and paying the agreed-upon fine.

The IGA received new reconciliation requests worth L.E. 9 million in July 2018. A commission affiliated with the authority reviews the requests, and rejects those that lack seriousness and fail to meet the legal requirements.

Since the outbreak of the 2011 uprising, the government has been battling to retrieve public funds embezzled by former officials of the toppled regime, after some fled the country amid the riots and never came back.

Mubarak
Former President Mohamed Hosni Mubarak enters Criminal Court to testify in “Border Intrusion” case on December 26, 2018. Egypt Today/Hussein Talal

Expressing readiness to work out reconciliation deals with ex-officials, the government introduced new amendments that allow settlement with defendants accused of criminal offenses and misdemeanors punishable by law after the payment of a fine. The adjustments, although seen as win-win situation, have received mixed reactions, where many criticized that defendants will be simply cleared in exchange for returned smuggled money.

“The law will give the IGB [IGA] a new, absolute authority to settle with defendants if they return funds gained illicitly with interest. This is highly irregular. Settlement in criminal cases isn't an absolute right and should reflect public interest,” said former Deputy Prime Minister Ziad Bahaa el-Din in one of his articles in El-Shorouq newspaper in December 2015.

Bahaa el-Din, who was the former chairman of the Egyptian Financial Supervisory Authority, assured that the settlement should entail a fine or additional deterrent penalty beyond interest paid on illegally gained wealth.

The 2017 settlement with Mubarak-era business tycoon Hussein Salem, who fled the country in 2011 to Spain and only returned home in 2017, caused controversy after he was acquitted in return for 75 percent of his properties.

Salem was accused of profiteering and exporting gas to Israel at deflated prices. The fine, worth more than L.E. 5.8 billion, slashed the charges after the government failed to ensure his extradition to serve his 15-year prison sentence.

salem
Mubarak-era business tycoon Hussein Salem – File Photo


The last corruption case against Egyptian businessman Ahmed Ezz was overturned per the Reconciliation Law in April 2018; he offered to return in L.E. 669 million ($37 million) in exchange for dropping the case of squandering public funds, and removing his name off the travel ban list.

In June 2017, former Trade Minister Rashid Mohamed Rashid returned to Egypt from Italy after reconciling with the government; the freeze on his assets and the travel ban were also removed after he agreed to pay nearly L.E. 500 million ($28 million)back to the government.

The Wheat Corruption case, in which more than 300 public servants are accused of stealing and mixing imported wheat with local one, is one of the current cases that await decision on settlement requests. A report by the technical committee in the IGA will help decide whether to approve reconciliation with defendants or reject it.

According to official statistics, the IGA has managed to retrieve a total of L.E. 414 million of stolen public funds as well as squatted lands worth billions of pounds during 2018.

Corruption is one of many illegal methods used in illicit financial flows, including money laundering, overpricing and tax evasion, which result in hampering the economic reform.

Washington-based think-tank Global Financial Integrity (GFI) defines illicit financial flows (IFFs) as money that is illegally earned, transferred, or utilized. IFFs reduce domestic resources and tax revenue needed to fund poverty-reducing programmes and infrastructure in the continent.

According to the United Nations Economic Commission’s High Level Panel, Africa as a whole is estimated to be losing more than $50 billion in illicit financial flows every year.





 
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