Al-Ahram Weekly Online   25 September - 5 October 2008
Issue No. 916
Published in Cairo by AL-AHRAM established in 1875

SPG abolished

Does the demise of the post of socialist prosecutor-general mean less protection against financial malpractice? Asks Gamal Essam El-Din

Minister of Justice Mamdouh Marei announced on Sunday that the 37-year-old post of the socialist prosecutor-general (SPG) would finally be abolished, in compliance with last year's constitutional amendments, one avowed aim of which was to rid Egypt of any lingering socialist references that might hamper the transition to a fully fledged market economy.

The office of the SPG, said Marei, was created under the 1971 constitution to preserve the socialist principles of the 1952 Revolution in both the economic and political spheres. To meet this objective, Marei explained, the SPG assumed exceptional judicial powers which included referring citizens to "courts of ethics" and sequestrating their assets to settle outstanding debts. This latter role will now be assumed by the Ministry of Justice's Illicit Gains Office (IGO) and the prosecutor-general.

The IGO, Marei noted, will take charge of the 271 complaints currently filed against banks for providing loans in the absence of appropriate collateral. The IGO will also be involved in settling outstanding debts still owed by Al-Hoda Misr, one of several investment companies -- others include El-Rayan and El-Saad -- which in the 1980s attracted vast sums in deposits from Egyptians on the promise of high interest rates. Effectively pyramid schemes, by the early 1990s the companies had gone to the wall, taking the savings of many Egyptians with them.

IGO's chairman, Ezzat Abul-Kheir, has announced that two new departments will be affiliated to his office, one investigating complaints and the second supervising already existing sequestration orders which currently effect 19 citizens, 14 in Cairo, four in Alexandria and one in Port Said.

During its 37 years the SPG investigated some of Egypt's high-profile corruption cases. In 1982 it ordered the sequestration of the assets of President Anwar El-Sadat's brother Esmat, and later took charge of liquidating the assets of Al-Saad investment company, settling an estimated LE320 million in debts owed to more than 40,000 depositors. Al-Hoda Misr's assets were sequestered in order to settle LE261 million in debts owed to 38,000 citizens.

More recently the SPG froze LE330 million of assets belonging to Mamdouh Ismail, owner of the Al-Salam ferry which sank in the Red Sea in February 2006 with the loss of 1034 lives. The money was sequestrated in order to fund compensation for the families of the victims.

Abolition of the SPG has been criticised by human rights activists and civil society organisations. Ahmed Kamal Abul-Magd, deputy chairman of the National Council for Human Rights, argues that the SPG played an important role in protecting citizens against financial malpractice. The term socialist prosecutor, says Abul-Magd, is misleading. "While it is true that at first the office was used to strip citizens suspected by the ruling regime of violating 1952's socialist principles from exercising their political rights since 1994 the SPG has confined its activities to safeguarding citizens against financial swindlers." Public sector banks and institutions as well as ordinary citizens saw the SPG as an effective tool for preserving financial rights.

Abul-Magd doubts that the Illicit Gains Office will be as successful in fighting financial malpractice. "It would have been better to change the name to comply with the market economy rather than eliminating the office altogether," he says.

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