Thieves of State: Why Corruption Threatens Global Security (13 page)

Such self-dealing distortion of the economy can only be considered corrupt. And yet that was not the corruption that sparked the 2011 revolution.

“People don’t like critics of the military,” one young activist told me that spring. A cameraman covering the events concurred: “The people don’t hate the top military brass. They don’t know them to hate them.”

One explanation, in other words, for Egyptians’ tolerance of military excesses is that military corruption has been largely hidden from view. Camera-shy officers have tended to stay out of the limelight; transactions are shielded by budget secrecy; much of the wealth has been inconspicuous—the chief luxury assets are located along isolated stretches of the north coast, on the Suez Canal, or in distant Upper Egypt. Many of these assets, moreover, are held by the institution, with officers enjoying only usufruct, not personal ownership, of the villas and lavish hotels.

Another root of the perplexing tolerance taps deep into Egyptian national identity. The military remains connected in people’s minds to the Free Officers’ Movement, the birth of the Egyptian Republic in the early 1950s, and nationalist hero Gamal Abdel Nasser, with his emphasis on social welfare. “No doubt there is corruption in the Egyptian military,” remarks the Oberlin professor and military expert Zeinab Abul-Magd. “But ordinary Egyptians won’t react against it because of the long nationalistic myth. Even if they suffer, they look up to the military.”

The army has assiduously maintained that myth, by means of a barrage of media propaganda, including sonorous television commercials, or the huge billboards in 2013 Cairo depicting, in one case, a soldier graciously accepting the gift of a flower from an adolescent girl. “We are the backbone of this country,” General el-Kishk assured me. “We are the glue that holds it together.”

“The army,” in the words of one young activist, whose chiseled features could have been lifted off a Luxor bas-relief, “is for the country.” The Egyptian military remains a powerful symbol, and—especially in
comparison to other institutions—is seen as adding some measure of value to the community.
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S
O IT WASN’T
Hosni Mubarak’s army that enraged the revolutionaries of 2011. It was, instead, a small network of high-rolling capitalists centered around the dictator’s son, Gamal. Beginning in the late-1990s, this group was seen to have hijacked Egyptian state institutions, rewriting the laws, awarding themselves privileged access to land and other public resources, and employing police repression—all for personal gain.

“Everything changed when Gamal came back to Egypt,” following a stint at the Bank of America in London. A retired municipal employee, two teeth blackened from lack of access to good dental care, recalls the moment in 2013, in his small apartment on a working-class street in Alexandria. A pile of newspapers occupies one end of a cheap, mass-produced couch. “A huge gap existed between him and the ordinary people and their experiences of Egypt. He had no feeling for Egyptians. He knew there were poor people, but he didn’t know what it was like to be poor in Egypt. And that ignorance was reflected in all his plans, all the strategies he devised on his path to inheriting his father’s rule.”

An experienced judge named Yussef Auf echoes the analysis: “Gamal worked for five years in London and came back in 1999, planning to succeed his father. And everything changed.”
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“It was a clique of big businessmen, close to the Mubarak family and the ruling party,” says Mohamed el-Shewy of the Egyptian Initiative for Personal Rights. “They used their influence in parliament to
issue laws in their favor,” especially regarding public tenders and land allocations.

El-Shewy’s colleague Osama Diab, a dynamic thirty-year-old, whose English accent reveals a recent London residency, refers to the “replacement of one ruling class by another.” The new class, he says, “ran the country—socially, economically, and in terms of the dominant discourse. Everything looked like them, modern, younger, Westernized.” As a child in the early 1990s, he recalls, “it was rare to see a Benz or a BMW. The cars on the streets were Ladas or locally made Fiats. But suddenly, hundred-thousand-dollar cars started showing up. There are gated communities, hotels whose luxury is positively provocative. People know how much these things cost.”

The owner of a small clothes-ironing business in the working-class neighborhood of Boulaq put it simply: “The people at the top were working for themselves, not for the people.”

Randa el-Zoghbi and her colleagues at the Center for International Private Enterprise say this “new guard” surrounding Gamal Mubarak created “parallel structures” within key government ministries. “They didn’t touch the positions or salaries of the old bureaucrats—they just created a new structure alongside them.” This structure, including a bevy of “advisers” funded in part by the UN Development Program, answered only to the clique, according to many. Says el-Zoghbi: “Their decisions were subject to no accountability.”
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Egyptians connected the runaway capitalism espoused by this clique—and the staggering fortunes its members amassed—with a wave of privatizations that reached its peak between 1995 and 2005, throwing hundreds of thousands of Egyptians out of work. Employees in every sector were hit, from a bank teller, whose speedy typing got her nominated to churn out protest leaflets during the layoffs, to workers in cement or textile factories, to the employee of a state-owned manufacturer of kitchen appliances, forced into early retirement. “Egyptians bought the factory without having to bid on it, and they sold it to a foreign company within a year,” he recounted with a wry shrug. “They did it to make money off the sale, not to invest in modernizing anything.”

“The buyers did not invest in the factories,” agrees Kamal Abbas, coordinator of the Center for Trade Union and Workers’ Services. “There
was no technology transfer at all. Factories that haven’t closed are still operating with the same old machinery and methods dating back six generations. Society did not gain anything, and the profits were sent overseas.”

The retired Alexandria municipal government official with the damaged teeth recalls his old friend, Public Works Minister Mukhtar Khattab, telling him about the prime minister’s orders to cede the businesses: “He complained to me: ‘They’re selling the country!’ Of course, he may have taken bribes to do it, but he was only an accessory.”

While the acute lack of transparency during the privatization process makes proof difficult, the perception of most Egyptians is that these sales of public enterprises—for prices below the value of the land they were built on, goes the refrain—unfairly benefited the crony-capitalist clique around Gamal Mubarak. “They kept it amongst themselves,” says Wael El Zoghbi, the director of the Egyptian Business Development Association. “There was no access to information.” Business reporter Mohammad Gad reckons that “most sales were to the inner circle.”

The retired Alexandria official refers to this inner circle as “the moneygrubbers.” “The people used to sing a wedding song,” he recalls, beginning a quiet chant: “‘Marriage, marriage! The state and capital, marriage, marriage!”

“This,” assesses Judge Auf, “was one of the major reasons for the revolution.”

In other words, the high unemployment that many Western analysts blamed for the 2011 overthrow of the Mubarak regime was not seen by Egyptians as a structural, macroeconomic phenomenon resulting inexorably from rising population or incompetent economic policies. It was seen as the direct product of corrupt practices perpetrated by an upstart clique of crony capitalists who had captured key levers of the Egyptian state and were using them to advance their private agenda.
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This new crony-capitalist kleptocratic structure was emerging alongside and separate from the military-kleptocratic structure. It lacked the military’s historic legitimacy, and the traditional restraints on conspicuous consumption, and it scorned even the military’s pretense of serving a social role. But indications suggest it was beginning to encroach on the military’s economic domains.

P
ART OF
the difficulty of countering this new corruption, say many Egyptians, is that it was all done by the book—technically, anyway. “That’s part of the brilliance of corruption in Egypt!” exclaims Wael El Zoghbi. “They make it legal!” According to the retired official, “Fathi Srour [the speaker of parliament] made laws for Gamal so he could circumvent the whole judicial system.” Diab, of the Egyptian Initiative for Personal Rights, agrees. “The legal system was created by the people who were going to benefit.”

Such self-dealing legislation was anathema to mirror writers. “In enacting laws,” Erasmus instructed the future Holy Roman Emperor, “special care must be taken to ensure that they do not smell of profit for the privy purse or of special treatment for the nobility.”
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The frenetic new moneygrubbing behavior was emulated on a local level. The retired official, who ran one of seven Alexandria municipal districts, explains how public tenders worked in his own department. The state of the man’s teeth, and the modest allure of his apartment—no water during the day, a narrow galley kitchen—indicate a rare, frugal lifestyle for someone who held such a potentially lucrative position.

“We had an engineer named Gamal supervising our public works contracts. I used to call him ‘Thief.’ He would arrange tenders with contractors ahead of time. Between them, they could write up the public notice so only one company was suitable. He’d help the contractor make his paperwork perfect. Then, for ten thousand Egyptian pounds, say [about $1,500], he’d let them use cheap copper wire for electrical installations, or a shoddy Chinese water pump, instead of the more expensive Japanese one that was budgeted. The bigger the contract, the more likely this kind of collusion.”

On a drive on Alexandria’s famous waterfront roadway, the Corniche, I saw the remains of a multistory building, collapsed to its rubble-strewn knees, due to just such shoddy construction.

“Engineer Gamal could have gotten a higher salary in the private sector, but he stayed with us because he made much more money overall,” continues the retired official. Asked why he couldn’t put a stop to his subordinate’s practices, he says he did report Gamal to the Central
Auditing Authority. “And they moved him to a different city. It’s really hard to prove this type of crime well enough to be able to prosecute,” he sighs. “There’s no flaw in the paperwork. You’d have to dig up the whole building project to find hard evidence.”

The bane of millions of Egyptians’ existence was the Amn el-Shurta, or auxiliary police, which had fingers in almost every activity. At administrative departments they acted as gatekeepers. (“You will have to hold at bay these stewards,” wrote John of Salisbury, “who always bite or bark at you.” )
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At the airport, they colluded with taxi drivers to rip off tourists. In the streets, they allowed vendors to clog the pavement in exchange for bribes. At the checkpoints they set up, they frisked passersby. The auxiliary police shook everyone down. They could be unspeakably brutal. The head of a German research institute recalls the shrieks he used to hear wafting up from the basement windows of police stations during the Mubarak era.

The Boulaq neighborhood clothes presser, his round face lit by an unaccountably beatific smile as he irons a cotton
galabiyya
on a counter fitted into the half-door of his small shop in his working-class area of Cairo, describes being arrested by these auxiliary police a few years back. “They accused me of carrying a concealed weapon,” a ridiculous notion just on the face of it, in light of his cherubic air. “The public prosecutor dismissed the charges. The police arrest people like that for no reason, just to beef up their statistics.” And to make money on bribes, he adds. For a suspect, the change of a single word on a criminal complaint can mean the difference between days and years in jail.

“These aren’t just flimsy cases—they’re false cases,” declares Judge Auf when presented with this example. He shakes his head. “For six years, I dealt with this in criminal court every day. Once a crime is written up by the police, the public prosecutor doesn’t have much discretion. He has to investigate it. Then, if evidence is found—called the ‘tools of the crime’—the case is made. The judiciary has no legal way of stopping it.”

Such evidence is easy to manufacture, he contends. “The auxiliary police have stocks of it in their office: weapons, drugs, you name it. Depending on what level of crime they want a person convicted of, they plant it on him.” In other words, the police easily circumvent a judiciary
that remains, in the view of many, more honorable than other branches of government.
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The picture painted is of a free-for-all at subnational levels of government, and a pervasive police presence functioning as an enforcement arm for a newly emerging corrupt elite at the top—while serving itself along the way. Largely rendered a formality and legitimist in culture, the judiciary did not have to be fully co-opted into the corrupt system (as it was in Afghanistan) for that system to operate.

“The state really stopped functioning as a state,” Auf says of the period beginning in the late 1990s. “It stopped collecting taxes or making regulations or implementing and enforcing its laws. It left people without supervision, and opportunists filled the void. It allowed a gigantic shadow economy to flourish.”

Galal Amin, professor of economics at the American University in Cairo, has dubbed this phenomenon the “soft state.”

A soft state is a state that passes laws but does not enforce them. The elites can afford to ignore the law because their power protects them from it, while others pay bribes to work round it. Everything is up for sale, be it building permits for illegal construction, licenses to import illicit goods, or underhanded tax rebates and deferrals. The rules are made to be broken and to enrich those who break them, and taxes are often evaded. People clamor for positions of influence so that they may turn them to personal gain. Favors are sold or dispensed to protégés, relatives, and sycophants.
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