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Viewing cable 06CAIRO4981, KEFAYA'S REPORT ON CORRUPTION IN EGYPT

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Reference ID Created Released Classification Origin
06CAIRO4981 2006-08-14 03:01 2011-08-24 16:30 UNCLASSIFIED Embassy Cairo
VZCZCXRO9216
RR RUEHBC RUEHDE RUEHKUK
DE RUEHEG #4981/01 2260301
ZNR UUUUU ZZH
R 140301Z AUG 06
FM AMEMBASSY CAIRO
TO RUEHC/SECSTATE WASHDC 0517
INFO RUEHEE/ARAB LEAGUE COLLECTIVE
UNCLAS SECTION 01 OF 02 CAIRO 004981 
 
SIPDIS 
 
SIPDIS 
 
NSC FOR MIKE SINGH 
 
E.O. 12958: N/A 
TAGS: PGOV KDEM EG
SUBJECT: KEFAYA'S REPORT ON CORRUPTION IN EGYPT 
 
SENSITIVE BUT UNCLASSIFIED. NOT FOR INTERNET DISTRIBUTION. 
 
1. (SBU) SUMMARY: On July 4, the Egyptian opposition movement 
Kefaya published a 274-page report entitled "Corruption in 
Egypt:  The Black Cloud is Not Disappearing."  The report 
concludes that corruption has permeated all levels and 
aspects of Egyptian society, and stands in the way of further 
economic and social development.  Although the report draws 
from Transparency International, Human Rights Watch, IMF and 
UNDP reports, as well as Egyptian media sources and legal 
records, it also relies heavily on information from 
unreliable sources such as internet blogs and questionable 
local dailies.  It fails to cite the sources for many 
assertions, several of which seem exaggerated and of 
questionable veracity.  It is not a systematically conducted 
study, but rather a conglomeration of articles and reports, 
and does not unveil new cases of corruption or substantiate 
claims that already are public knowledge.  However, Kefaya,s 
efforts to raise Egyptians, awareness of, and engage in 
discourse on, the major problem of corruption in Egypt is in 
itself a notable step, and demonstrates that Egyptians are 
becoming increasingly vocal about sensitive issues despite 
the possible government backlash. END SUMMARY. 
 
----------------------------- 
Overview of the Kefaya Report 
----------------------------- 
 
2. (SBU) On July 4, the Egyptian opposition movement Kefaya 
published a 274-page report entitled "Corruption in Egypt: 
The Black Cloud is Not Disappearing."  Kefaya,s report takes 
a broad view of corruption.  It includes sections on 
corruption in the Ministries of Health, Agriculture, 
Petroleum, Finance and Antiquities; corruption in Egypt's 
privatization program; and a section on the interference of 
security forces in public life. General examples of 
corruption given in the report include: 
 
- election rigging; 
- the Emergency Law; 
- nepotism in government and public sector jobs; 
- capital flight through official banking channels; 
- the use of carcinogenic pesticides without informing the 
public; 
- preferential allocation of lands and housing under the 
Housing Sector; 
- misappropriation of armament commissions; 
- nepotistic selection procedures used by the Ministry of the 
Interior for the police academy; 
- torture of police station detainees; 
- prostitution rings linked to high-level government figures; 
- corruption in the judiciary; 
- corruption in the state-owned press; 
- the payment of "loyalty bonuses" to high-ranking army and 
security officials; 
- corruption in the education sector; 
- corruption in the health sector, including the importing of 
defective medicines. 
 
-------------------- 
The Report In Detail 
-------------------- 
 
3. (SBU) Although the report draws from Transparency 
International, Human Rights Watch, IMF and UNDP reports, as 
well as Egyptian media sources and legal records, it also 
relies heavily on information from unreliable sources such as 
internet blogs and questionable local dailies.  The report 
also fails to cite the sources for many assertions, several 
of which seem exaggerated and of questionable veracity.  For 
example, it does not offer supporting evidence for the 
incendiary claim that President Mubarak's sons control 
fifty-percent shares in major companies such as Mobinil and 
Vodafone.  With that caveat, following are some highlights: 
 
-- In the introduction, under the title "Corruption Rules 
Egypt: The Government of Corrupt-istan", the report states, 
"the biggest problem with corruption lies not in the falling 
of society,s icons ) who belong to the ruling class - one 
after the other, but in the fact that it became a social law 
and an underlying behavior that rules the different aspects 
of the Egyptian life," and asserts that "living in Egypt has 
become tied to the ability to cope with the governing 
corruption."  The report decries that "the Emergency Law has 
become the actual constitution of the country," and that 
President Mubarak, less than a year after his election, has 
"brushed away all his promises, especially in so far as 
freedoms and political and constitutional reform."  The 
introduction concludes that, "in his daily life, the average 
Egyptian citizen is unable to obtain any governmental service 
without resorting to bribery." 
 
CAIRO 00004981  002 OF 002 
 
 
 
-- The report maintains that both of Mubarak's sons have 
fifty-percent shares in companies like Alkharafi, Mobinil, 
and Vodafone and that Egyptian First Lady Suzanne Mubarak 
heads hundreds of charity NGOs and transfers their funds to 
her secret accounts in Swiss banks. 
 
-- The report asserts that National Democratic Party (NDP) 
Secretary-General and Shura Council speaker Safwat El Sherif 
 
SIPDIS 
and his sons are working with a prostitution ring; MP Ibrahim 
Soliman is involved in "swindling and bribery"; Minister of 
Interior Habib Al Aadly, together with President Mubarak,s 
sons, is engaged in drug dealing; MP Kamal El Shazly and 
Minister of Culture Farouk Hosny are smuggling antiquities; 
and Minister of Finance Youssef Boutros Ghaly is involved in 
"stock market manipulation." 
 
-- The report accuses the renowned Abou Ghaly and Effat Al 
Sadat families of involvement in drug dealing that results in 
their providing monthly payoffs to the Egyptian Drug Agency. 
 
-- The report cites a People's Assembly scandal of January 3, 
1999, involving MP,s misappropriation of an aid program that 
largely benefited 21 companies owned or represented by MPs 
from the ruling National Democratic Party (NDP). 
 
-- The report examines the beating, sexual abuse and 
extortion of street children detained in mass arrests by 
police. 
 
-- The report claims that individuals are often put on no-fly 
lists for purely political reasons.  This, despite the fact 
that individuals facing arrest warrants can use their 
connections to flee the country, as was allegedly the case 
with Mamdouh Ismail, the owner of the recently sunken 
Al-Salam ferry. 
 
-- The report accuses numerous businessmen of defaulting on 
bank loans and fleeing the country, including Tawfeeq Abdel 
Hay in 1982; Ashraf El Saad in 1991 and 1995; and George 
Hakim in 1994.  The report claims that by 2001, 853 cases had 
been filed against businessmen who had fled the country to 
escape charges. 
 
4. (SBU) Comment: The Kefaya report is not a systematically 
conducted study, but rather a conglomeration of articles and 
reports from various sources.  It does not unveil new cases 
of corruption or substantiate claims that already are public 
knowledge.  However, Kefaya,s efforts to raise Egyptians, 
awareness of, and engage in discourse on, the major problem 
of corruption in Egypt is in itself a notable step, and 
demonstrates that Egyptians are becoming increasingly vocal 
about sensitive issues despite the possible government 
backlash. 
RICCIARDONE