Friday
22Jul2005
What the Mubaraks own
When you've lived in Egypt long enough and you take an interest in politics, sooner or later you'll hear a story about how one of Mubarak's sons edged himself into a business. The one I heard was about one of the more prominent members of an old Egyptian family -- what would have been called under the monarchy a Pasha.
The family didn't have that much money left, but enough to start businesses and be able to take take advantage of certain business opportunities. This elderly man, at some point in the 1990s, managed to become the dealer for one of the more prominent European car brands. The car retail industry is a lucrative one in Egypt, and the dealerships are much sought after.
As he was about to sign the deal, he received a visit from Alaa Mubarak, Gamal's older brother. He offered him to become a 50% partner in the new venture -- the venture that he had spent a number of years trying to set up. It was, as they say in The Godfather, an offer they couldn't refuse.
A few months later, the man died. His relatives say he withered away at the shame of having been taken advantage of and being robbed of his property.
And now, read this compilation of all the brands the Mubaraks have a stake in. I don't know if it's all true, but I know for a fact that some of it is. But basically it means it's practically impossible not to hand over some of your money to the Mubaraks if you live in Egypt.
There is one I would like the add to the list. Hussein Salem, the owner of the Movenpick Jolieville in Sharm al Sheikh (where the president has a residence), has long been a frontman for Mubarak. Most of his activities have to do with weapons dealing (or so I've heard from one of his employees). But lately, he's been involved in a deal with an Israeli businessman that was just sealed: the purchase of Egyptian gas for the next fifteen years by the Israeli Electricity Company. This multi-billion dollar deal, in which Mubarak personally intervened with Ariel Sharon to solve when it was being blocked by board members of the electricity company and some ministers, has been talked about in the press by as part and parcel of Middle East. The Bush administration is said to have encouraged it as part of Egypt's normalization with Israel.
And then you wonder why Egyptians aren't positive about normalization...
The family didn't have that much money left, but enough to start businesses and be able to take take advantage of certain business opportunities. This elderly man, at some point in the 1990s, managed to become the dealer for one of the more prominent European car brands. The car retail industry is a lucrative one in Egypt, and the dealerships are much sought after.
As he was about to sign the deal, he received a visit from Alaa Mubarak, Gamal's older brother. He offered him to become a 50% partner in the new venture -- the venture that he had spent a number of years trying to set up. It was, as they say in The Godfather, an offer they couldn't refuse.
A few months later, the man died. His relatives say he withered away at the shame of having been taken advantage of and being robbed of his property.
And now, read this compilation of all the brands the Mubaraks have a stake in. I don't know if it's all true, but I know for a fact that some of it is. But basically it means it's practically impossible not to hand over some of your money to the Mubaraks if you live in Egypt.
There is one I would like the add to the list. Hussein Salem, the owner of the Movenpick Jolieville in Sharm al Sheikh (where the president has a residence), has long been a frontman for Mubarak. Most of his activities have to do with weapons dealing (or so I've heard from one of his employees). But lately, he's been involved in a deal with an Israeli businessman that was just sealed: the purchase of Egyptian gas for the next fifteen years by the Israeli Electricity Company. This multi-billion dollar deal, in which Mubarak personally intervened with Ariel Sharon to solve when it was being blocked by board members of the electricity company and some ministers, has been talked about in the press by as part and parcel of Middle East. The Bush administration is said to have encouraged it as part of Egypt's normalization with Israel.
And then you wonder why Egyptians aren't positive about normalization...
Tags: 
Egypt
Egypt
Reader Comments (1)
The gas deal was actually drawn up in the first peace process, but it faltered with the assassination of Rabin. Anyway, there were two crucial players in that, both former spooks: Hussein Salem for the Egyptians, and Yossi Maiman for the Israelis. Salem has an investment vehicle called Masaka Group, and Maiman has one called Merhav.
The Midor Refinery was part of the same package as this gas deal, and although they managed to build it, the Egyptian government had to bail it out a couple of times because the investment dried up after Rabin's death. then when they finished it they found that they couldn't actually buy any Arab oil while there was still Israeli money in the project, so they had to buy Merhav out of Midor.
The major reason that the US has always been so keen on the deal is because of the classical liberal idea that economic interdependence makes war less likely. Hence the high-level interest in the deal and the role of the spooks.
They have been pushing to revive the gas part of the project since this new peace process started picking up steam, and the Israeli Electric Co signed an agreement in principle with East Mediterrannean Gas to buy the gas in May 2004. Maiman has a 25% stake in EMG.
But some in Israel didn't want it to happen either, notably Joseph Paritzky, then the Infrastructure Minister, who favoured an alternative deal proposed by BG using recently discovered Palestinian gas.
So Maiman released a tape that on which Paritzky could be heard planning a smear campaign against a political opponent within his party. The cassette, it transpired, had been recorded two years ago by a trade union seeking to discredit Paritzky, and had come into the possession of a private investigator retained by Maiman. With Paritzky discredited, opposition to the deal with Egypt pretty much dried up.
I wrote this up for publication about this time last year. Basically there was no way in hell either Egypt or Israel were going to let this deal fall apart.