18 - 24 October 2001
Issue No.556
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Al-Ahram Weekly Online 18 - 24 October 2001 Issue No.556 |
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Former minister in the dock
The Supreme State Security Court promises to be the focus of attention for the next few months when it tries a number of businessmen and former high-level officials on charges of corruption.
Gamal Essam El-Din reports
The Supreme State Security Court began on Saturday the trial of Mohieddin El-Gharib, a 64-year- old former finance minister, on charges of profiteering, misappropriation of public funds and depriving the state treasury of LE28 million in customs duties.
El-Gharib's case is the first of three high-profile cases of alleged corruption that will be heard by the Supreme State Security Court, starting in October and November.
In the other two cases, Maher El-Guindi, a former governor of Gharbiya and Giza, faces bribery charges, and as many as 31 businessmen and leading public figures are implicated in what came to be dubbed by the local press as the "loan deputies" trial. They face charges of banking fraud and misappropriation of public funds.
The decision to put El-Gharib on trial followed an 18-month investigation that began in November 1999 -- one month after he left office in a cabinet reshuffle. El-Gharib, along with Ali Taha, former chairman of the Customs Authority, are accused of allowing a group of importers to evade payment of customs duties in return for personal favour, during his tenure as finance minister. Similar charges were also brought against four Customs Authority officials and four importers.
At the opening of the trial on Saturday, the Public Funds Prosecution Office charged El-Gharib with exempting three major businesses (MM Group, Aka International Group and American House Company) from paying up to LE28 million in customs duties. It was also claimed that Sherif, El-Gharib's son, is a business partner with Adel Agha, an Egyptian- American businessman who owns the American House Import-Export Company. El-Gharib, in interviews with the press, claimed that he was only assisting investors and businessmen in negotiating the Customs Authority's bureaucratic obstacles. "My decisions were in the interests of national investment, not for personal gain," El-Gharib said.
Equally attention-grabbing is El-Guindi's trial which is due to begin on 7 November. El-Guindi, governor of Gharbiya and then Giza during the period 1991 to 1999, was accused of receiving bribes, in cash and kind, worth LE1 million, from seven other defendants. El-Guindi was alleged to have taken these bribes in return for arranging the sale of a 130-feddan piece of land, along the Cairo- Alexandria desert highway, to the Pyramids Real Estate Company.
Mohamed Foda, a former press secretary for Culture Minister Farouk Hosni, was accused of complicity in the real estate transactions that El-Guindi was involved in. Foda was found guilty by the Supreme State Security Court last year and sentenced to five years imprisonment. He told investigators that he sought El-Guindi's help in finalising the land purchase by the Pyramids Company because of El-Guindi's connections dating back to the period when he was governor of Gharbiya. In return, Foda alleged that El-Guindi received money which amounted to LE1 million. Foda claimed that the bribes El-Guindi received also included gifts, including jewellery, expensive clothing and even "kebab." El-Gharib and El-Guindi each face sentences of up to life imprisonment if convicted.
On 17 November, the Supreme State Security Court will resume hearing a six-year-long trial dubbed by the local press as the "loan deputies" case.
The case involves 31 businessmen and bankers and former Minister of Tourism Tawfik Abdou Ismail who are accused of committing financial irregularities and bank fraud. In June 2000, the court ordered the maximum penalty for 15 businessmen and 16 bankers. The jail terms ranged between one and 15 years.
The defendants also included four former members of parliament who belong to the ruling National Democratic Party (NDP). All were found guilty of three offences: the misappropriation of bank funds, to the tune of LE 1 billion, profiteering and facilitating the illegal acquisition of public funds. The court also ordered that 10 of the 31 defendants be dismissed from the posts they hold in five banks.
One year later, however, all defendants initiated legal action with the Court of Cassation, asking for a retrial. They argued that the government had agreed in many cases that businessmen with large debts should be permitted to negotiate their rescheduling with banks. "We should be treated the same way as businessman and MP Rami Lakah was treated," said Khaled Mahmoud, one of four deputies accused of defaulting on LE67 million in unsecured loans. The Cassation Court approved the defendants' appeal and a retrial opened earlier this year.
Concurrent with the granting of retrials, five committees were formed by the court to assess the defendants' bank debts. Each defendant was released on LE20,000 bail. The committees concluded in July that most defendants had already paid banks the major part of their debts. The court, however, decided to postpone hearings until next month and is expected to hand down final rulings in late November.
The three trials have captured the attention of the press and the public, and are widely viewed as a sign that the government is committed to cracking down on suspected corruption. Prime Minister Atef Ebeid, however, has said that the loan deputies case "scared many businessmen away from borrowing from banks and, consequently, was partially responsible for the current market recession."
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