Hussein Salem is often pilloried as a man who used his friendship with the former Egyptian president Hosni Mubarak to amass billions of dollars.
Corruption at the top Hosni Mubarak’s reputation for frugality never quieted speculation that the longtime Egyptian president, his family and his confidants were exploiting their positions of power to salt away billions of dollars in private bank accounts. Read article
Mubarak’s mates exploited their connections As the search continues for Egypt’s missing billions, one man – Hussein Salem – personifies the scale of the challenge facing investigators.
Starting in a government job paying 18 Egyptian pounds a month, Mr Salem rose to become one of Egypt’s most powerful men, dubbed the “Father of Sharm El Sheikh” for his role in developing a cluster of villages along the Red Sea into a glitzy resort.
Corruption investigators say his success was due, at least in part, to his ties with the former first family.
But Egyptian prosecutors are in talks with his lawyers on a deal that would see all charges against him dropped if he hands over a share of his assets to the government, both sides say.
Mr Salem, 79, who fled during the uprising of early 2011 that eventually ousted Mubarak, is accused of money laundering, enabling others to make financial gains and hurting national interest. He is under house arrest in Spain, facing other laundering charges there.
The negotiations involving one of the Mubarak era’s most controversial and reviled figures represents a change for the government of the president, Mohammed Morsi.
It is among the first signs that its zeal to recover hundreds of millions, perhaps billions, of dollars of allegedly ill-gotten wealth by Mubarak, his family and his inner circle may be flagging amid the country’s worsening economic situation and mounting difficulties in locating the funds.
The decision in January to start negotiations with Mr Salem and other members of Mubarak’s inner circle is vehemently opposed by government investigators, whose job is to follow their money trails through labryinths of offshore bank accounts and companies.
While some prosecutors favour a financial settlement, the investigators say no deal with Mr Salem should be considered until the full extent of his wealth and its location is determined.
They also say such deals condone corruption and prevent greater recoveries in the future.
“It is a mistake,” said Mohamed Mahsoub, who resigned as minister of state for parliamentary affairs in December, saying the government refused his calls to make investigations into Mubarak-era corruption a higher priority.
“What kind of message does this send to businessmen and officials? To me it says, ‘don’t worry about corruption. If you get caught, you can just negotiate later and give up some of your assets’.”
Late last year, Mr Mahsoub called for an independent committee of judges, anti-corruption activists and financial experts to lead Egypt’s search for assets of the Mubarak-era officials and business figures.
In part, he said, he was trying to wrest control from an “ineffective” judicial panel created by the military after Mubarak’s resignation to oversee asset recoveries.
But Mr Morsi rejected his recommendations in December without giving a reason, Mr Mahsoub said.
The next month, the head of the Public Funds Prosecution – one of a half-dozen agencies carrying out corruption investigations – said the government was ready to negotiate with members of the old regime, including those who had been convicted of embezzlement and corruption.
“The reason they are doing this is they are very frustrated with the process of recovering the assets,” said Hussein Hassan, an anti-corruption expert in the Cairo office of the United Nations Office on Drugs and Crime, who works with the Egyptian government.
“The process is very long and the amount of money they have recovered up till now is very small. Reconciliation could mean money brought back to Egypt very fast.”
Saleh bin Bakr Al Tayyar, a Saudi lawyer based in Paris to whom Mr Salem has given power of attorney to negotiate a settlement with Egypt, said Egyptian authorities were “taking the case very seriously”.