Saturday,18 August, 2018
Current issue | Issue 1279, (21 - 27 January 2016)
Saturday,18 August, 2018
Issue 1279, (21 - 27 January 2016)

Ahram Weekly

Conflict over corruption claims

Rather than focus on refuting accusations of corruption,  observers say the government should concentrate on solving the problem at its roots, writes Niveen Wahish

Hesham Genina
Hesham Genina
Al-Ahram Weekly

Debate continues to rage about head of the Central Auditing Organisation (CAO) Hisham Geneina’s recent statement that corruption within the government cost the country some LE600 billion in 2015.

Meanwhile, the fact-finding committee formed to look into the veracity of Geneina’s allegations has published a statement arguing that that there are “technical shortcomings” to Geneina’s allegations and to the methodology he used to calculate the amount of corruption involved.

There were also shortcomings in his classification of some internal government transactions as corruption, as well as in his calculation of cases that are in still court.

While the committee’s statement has been published, Geneina’s allegations have not been made public in their original form, although a copy of his report is said to have been sent to the presidency and the cabinet.

Last Tuesday, the CAO responded to the fact-finding committee’s statement, expressing reservation against some of the language used and describing it as “propaganda”.

The CAO stressed that it had earler received a study from the Ministry of Planning estimating the cost of corruption at around LE250 billion annually.

“Minister of Planning Ashraf Al-Arabi asked the CAO to review the study and then address the departments concerned,” the CAO statement said. The CAO’s opinion was the study by the Ministry of Planning was, in fact, not accurate and that the cost of corruption in the last four years was LE600 billion. The CAO statement went on to refute every allegation in the committee statement. One of the points it made in the statement was that referring the violations to the investigative authorities does not mean that the government has received its dues, therefore it will continue to count in those violations in later years if the issue has not been resolved or a court ruling has been issued in its regard. “The CAO statement also streessed that it will continue to carry out its role in supervising and protecting the people’s money.

Some observers have written that the attack on Geneina is unwarranted and that the government has focussed on denying the problem instead of doing something about it.

“The blame has been put on the head of the CAO, who has done his job in revealing corruption in the government apparatus, rather than on those accused of corruption,” wrote prominent columnist Fahmy Howeidy in the Al-Shorouk newspaper.

“We have left the problem as it is and focussed on appearances instead,” Hani Tawfik, director of the Egyptian Private Equity Association, told Al-Ahram Weekly. “We all know that corruption is huge in Egypt, though we do not have a figure for it. We should not just attack Geneina because he announced a number.”

Tawfik said the figure announced by Geneina was “believable,” pointing out that Egypt’s GDP is around LE2 trillion, in addition to another LE1 trillion if the informal sector is counted.

In countries with similar economies to Egypt’s, such as Mexico and Greece, 30 per cent of GDP is collected in taxes, which would equal LE900 billion. In effect, only a third of that is actually collected in taxes, meaning that there must be corruption in the form of tax evasion of LE600 billion — the same figure cited by Geneina.

The statement by the committee has deviated from its goal by focussing on Geneina rather than fighting corruption, and it attempts to show that Egypt has no corruption, even though financial, administrative and political corruption does not need Geneina or the auditing agency to demonstrate it, argued researcher Amaar Ali Hassan in the Al-Masry Al-Youm daily newspaper.

Reports by the international NGO Transparency International rank Egypt as being among the countries with the most corruption, he said.

“Each country has its own version of corruption. This is what we learnt while studying political science,” Ahmed Kamaly, chair of the economics department at the American University in Cairo, told the Weekly. “We need to work on minimising it.”

To start with, better pay for government employees is needed to prevent their becoming corrupt to cover their financial needs, he said. Teachers give private lessons because they are not paid properly, for example, which “is a form of corruption,” he said.

Increasing salaries would cost the government more, but it would benefit because those employees would become more accountable, Kamaly said.

He also stressed the importance of observing the constitutional balance of power and keeping the legislative, executive and judicial branches of government separate in order to prevent any abuses. This separation had recently become blurred in Egypt, he said.

There is also a need to streamline the laws, Kamaly said, since transactions are often governed by more than one law, which creates loopholes. Investments alone are governed by at least three laws, he said.

The fact-finding committee ordered to look into Geneina’s statements includes one of the two recently appointed deputies to Geneina, as well as officials from the ministries of interior, planning, finance and justice.

“Many of the committee members are from the very ministries and institutions that Geneina’s report has accused of corruption,” wrote former MP and political scientist Amr Al-Shobaky in Al-Masry Al-Youm. “They have accused him of misleading and tarnishing the reputation of Egypt and conspiring against it, a redundant accusation that some people make to prevent dialogue on key issues, in this case corruption.”

Egypt’s reputation should not be the pretext on which Geneina is attacked, said Kamaly. He added that if the problem is recognised by the government, this will put it in a favourable light with international financial institutions, which will see that the government is being transparent and taking steps to deal with the problem.

“International investors are not waiting for Geneina’s opinion. They already know that there is corruption in Egypt,” Tawfik said. He added that such investors want good relations with the relevant authorities in order to overcome any obstacles they may face as a result of corruption.

“The fact-finding committee does not have the authority to accuse anyone, yet its statements include serious accusations,” Osama Diab, a researcher with the Egyptian Initiative for Personal Rights, an NGO, told the Lebanese daily As-Safir.

The committee said that the report was prepared in cooperation with foreign entities, which is harmful to the economic and political environment at a time when the government is trying to attract investment to provide jobs and a better life for its citizens, he said.

However, in statement on its website, the CAO said that it had carried out the study at the request of the Ministry of Planning to cover the years 2012-2015 with a focus on certain sectors to identify the shortcomings in those sectors.

“The Ministry of Planning requested the report in the framework of its cooperation with a foreign entity to enable it to get funding to combat corruption in the administrative apparatus,” Ali Taha, Geneina’s lawyer, told Mada Masr, a news website.

After the committee’s statement, some have asked for the resignation of Geneina or his dismissal from his position. MP Mostafa Bakry has said that he is collecting signatures from MPs demanding that the committee’s report be presented to the prosecutor-general and that Geneina be dismissed from his post.

The committee’s statement said that the president had presented its report to parliament and the national committee for combatting corruption.

Other MPs have defended Geneina and refused to discuss the committee’s report without first seeing the CAO’s original report and its comments on the committee’s report.

Both the constitution and the law governing the CAO do not allow for the dismissal of the heads of supervisory authorities such as the CAO. But the president has approved a decree that allows him to dismiss the heads of supervisory authorities and independent regulatory bodies, including the CAO, if there is proof that they are “harmful to national security” and if they are no longer trusted or do not perform their duties, causing harm to national interests or legal persons.

Geneina, whose term ends in September 2016, was appointed in 2012 by then-president Mohamed Morsi. For some, this has been a reason for attacking him, including accusations that he remains loyal to the ousted Morsi regime, which has in turn has led some to argue that the attacks on Geneina are political.

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