Last Saturday, June 2, former Egyptian President Hosni Mubarak was sentenced to life in prison for his role in the deaths of innocent protestors during the popular uprising that ended his decades-long regime. Mubarak was found to be an accessory to murder for failing to prevent the killing of the demonstrators, a ruling that allowed him to escape the death penalty.

Mubarak was not alone in standing trial. Six leading ministry officials joined him in facing these charges, as well as multiple charges of corruption. Officials included Interior Minister Habib Adli, and Mubarak's two sons, Alaa and Gamal. Like Mubarak, Adli was sentenced to life in prison for his complicity in the protestors’ deaths. Unfortunately however, and perhaps unsurprisingly, Alaa and Gamal, as well as six police commanders, were acquitted of all charges.

Despite having dodged the bullet here on technicalities, Alaa and Gamal now face additional charges for money laundering and insider trading – they’re accused of pocketing upwards of 2 billion Egyptian pounds (approx. US$ 331 million). Also not a surprise, referred to trial right alongside Mubarak’s sons are Yasser El Mallawany and Hassan Heikal, both board members and joint chief executive officers of Egyptian investment bank EFG-Hermes. If you didn’t already know, in 1997 Gamal acquired an 18 % stake in EFG-Hermes Private Equity, a subsidiary of EFG Hermes Holding.

This is a familiar story. As we have analyzed in depth throughout the course of our own investigation (here, here and here, for starters), the sons of Mubarak have long been the subject of financial corruption investigations. For example, Alaa was first brought into custody in April 2011 pending multiple investigations into corruption and abuse of power. Suspicions of corruption are not new for Gamal either, whose highly suspect efforts to “modernize” Egypt’s economy in an infamously corrupt privatization campaign resulted in the sale of many Egyptian companies at a fraction of their values to foreign investors.  This type of modernization cost the Egyptian people thousands of jobs and hundreds of millions of dollars. With their assets frozen, Mubarak’s sons remain behind bars. But for how long?

Traducción al español del artículo "Murky Management of Spanish Trust Fund at IDB", publicado el 9 de mayo de 2012 en la web de Government Accountability Project (GAP), http://www.whistleblower.org

Nota: ¡El texto del artículo ofrece hipervínculos a todos los documentos citados, para su visión y descarga!

The Government Accountability Project (GAP) es la más importante organización sin animo de lucro en EE.UU. dedicada, entre otros objetivos, a promover la libertad de expresión, la transparencia, y la integridad en el funcionamiento de la ONU, del Banco Interamericano de Desarrollo, y del Banco Mundial.

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Ya que el nuevo Gobierno español toma medidas de austeridad para hacer frente a un déficit público del 8,5% del PIB, sus responsables deberían plantearse ahorrar dinero público de los fondos fiduciarios bilaterales que España destina al Banco Interamericano de Desarrollo (BID). Y es que siguen aflorando e intensificándose las denuncias de ilegalidades e irregularidades en la gestión de los $50 millones de dólares del Fondo General de Cooperación de España (FGE) en el BID. La pendiente solución de estos hechos, que fueron denunciados por primera vez en otoño de 2011 por trabajadores españoles del BID, se ha convertido en una prueba de fuego de la voluntad del nuevo Gobierno español de luchar contra las irregularidades, el amiguismo, y la falta de rendición de cuentas en los programas oficiales de ayuda al desarrollo del país.

The Palace of Moncloa is the residence for the Spanish Prime Minister

*Lee este artículo en Español aquí. 

As the new Spanish government contemplates austerity measures in the face of an 8.5 percent of GDP budget deficit, cost-cutting officials might look to one of their Trust Funds at the Inter-American Development Bank (IDB) to save some public money. Events related to allegations of mismanagement and improprieties continue to plague the $50 million Spanish General Trust Fund (FGE) there. The pending resolution of this issue, which was first exposed in the fall of 2011 by Spanish whistleblowers at the IDB, has become a litmus test of the willingness of the newly-elected Spanish government to address poor management, cronyism and lack of accountability in the country’s official development cooperation programs.

In January and February 2012, GAP published blogs about the FGE, echoing the story broken by the Spanish newspaper ABC. The details of the case first appeared in ABC on October 2, 2011, citing the IDB whistleblowers’ evidence. A second ABC article (February 6, 2012) revealed that the Spanish Tribunal de Cuentas (the equivalent of the US Government Accountability Office) would investigate and audit Trust Fund activities and donations financed by the Spanish Ministry of Economy from 2008 onwards, especially those of the FGE. The Tribunal made its decision despite a note sent to ABC in October 2011 by Spain’s Deputy Primer Minister/Minister of Economy, Ms. Elena Salgado, denying all allegations.

As president of Dartmouth University, President Obama’s nominee to head the World Bank, Jim Yong Kim, presides over extreme, traumatizing, pervasive, revolting and potentially illegal hazing at fraternities. Andrew Lohse, the whistleblower who exposed it, is now, alone, among those charged with misconduct, on the brink of expulsion.

Janet Reitman of Rolling Stone investigated Dartmouth’s infamous fraternity system and described the violence, class privilege and ritual abuse that fraternity pledges must survive in order to join the clubs. On this site, we don’t quite have the stomach to detail the particulars of hazing at Dartmouth, but suffice it to say that the customs mainly involve forcing the younger boys to wallow repeatedly in the bodily emissions of the older ones. Extreme binge drinking is, of course, part of the fun, as well as, inevitably, gang vomiting. 

It is also common knowledge at Dartmouth that the frat boys at times fall back on date-rape drugs to romance their girlfriends. An un-named Dartmouth girl reported to Reitman having two drinks at a fraternity party:

The next thing she remembers is waking up in the hospital with an IV in her arm.  “Apparently, security found me in front of the house. That was my introduction to the frats: passing out from drinking, waking up in the hospital and not having any idea what happened.” What she did notice were bruises that looked like bites on her chest that hadn’t been there before.

GAP's Shelley Walden holds the GAP & NTU petition in front of the Department of the TreasuryLast week, GAP delivered copies of our joint petition, Protect Whistleblowers at U.S. Taxpayer-Funded International Banks, to key officials at the Treasury Department and in Congress, in conjunction with Treasury Secretary Tim Geithner’s testimony before the House Committee on Appropriations (State, Foreign Operations and Related Programs Subcommittee). This joint petition was produced with coalition partner National Taxpayers Union. Thank you to the more than 500 supporters who signed the petition!

Geithner was slated to testify about the reforms required by Congress as part of the U.S. contribution to the General Capital Increases at the Multilateral Development Banks (MDBs). Unfortunately, Geithner failed to mention whistleblowers once in his testimony, despite the fact that the U.S. Consolidated Appropriations Act, 2012 requires the Treasury Department to report whether the World Bank, African Development Bank and Inter-American Development Bank are making "substantial progress" toward "implementing" best practices for the protection of whistleblowers from retaliation before the U.S. can contribute tens of billions of dollars in cold cash and guarantees to bailout these institutions.

The Treasury Department recently released its report to Congress and unfortunately, it is not responsive to the whistleblower protection requirements in this legislation. Given that Congress is on the verge of contributing billions of dollars to the MDBs, one would think that Congress would have spent part of the hearing evaluating Treasury’s report and determining whether the MDBs have complied with the reforms required. As sometimes happens, much of the hearing was devoted to unrelated issues.

في نهاية هذا التقرير تجد ترجمة له باللغة العربية

Here at GAP, we were both shocked and pleased this morning to see that the World Bank advocates the public disclosure of financial assets by public officials as an effective anti-corruption measure.

Disclosure by public officials of their income, assets and interests should be mandated if the fight against corruption is to succeed, according to a study released today by the Stolen Asset Recovery (StAR) Initiative of the World Bank and the United Nations Office on Drugs and Crime.

Does this mean that the Bank itself will release the long-sought financial disclosure records of its Managing Director Mahmoud Mohieldin? We sure hope so. Mohieldin, you will recall, was the Minister of investment under the corrupt regime of Hosni Mubarak in Egypt. He was lucky enough to depart the country six months before the revolution that sent the Mubarak family to jail and sentenced Mohieldin’s fellow Ministers to lengthy prison terms.

GAP requested the public disclosure of Mohieldin’s financial assets after a whistleblower in Cairo called attention to his central role in a badly flawed and ultimately annulled privatization project. Allegations of fraud related to the privatization were also widely publicized. The whistleblower claimed that Moheildin and his staff sold a government company to a private investor for half of its real value.

We made the first request for Mohieldin’s financial information, which he was to make to the Bank as a condition of his hire, through the Bank’s Access to Information program. GAP received the following response:

Specifically the information you request is covered by the "Personal Information" exception under the AI Policy. However, we would like to inform you that the summary of such information for the calendar year 2010 will be disclosed in due course through the World Bank Annual Report. For the calendar year 2009, you can find the summary of such information publicly available at: http://go.worldbank.org/MXXC54C2X0.

World Bank headquarters in Washington, DCOnce again it’s time to debate who should be the next World Bank President. By tacit post- World-War-II agreement, the World Bank President has always been an American, while European governments are entitled to produce the Managing Director of the International Monetary Fund (IMF). But this year, “the process” debate is also open. Although any member government is now, theoretically, able to nominate a candidate – and a couple of them have – everyone knows the US nominee is the hands-down, walk-away winner. So many onlookers are vocally objecting to the unfairness of an arrangement among a closed group of First-World governments that allows them to choose the heads of international financial institutions among themselves – secretly.

It’s not as if this procedure has worked well lately. In the past five years, we’ve seen both a World Bank President and an IMF Managing Director resign after their appalling personal conduct came to light. Paul Wolfowitz left the Bank in June 2007 after whistleblowers exposed the sinecure he arranged for his “girlfriend,” and it became clear that he had lied to the press and the Bank’s Board about it. The departure of Dominique Strauss-Kahn from the IMF was even more sordid, involving criminal charges of sexual assault in 2011. DSK did go home a free man, but this week he’s back in the news – under investigation for “aggravated pimping” in France.

Nice. These episodes ought to be enough to make even the most defiant defenders of First World privilege rethink the wisdom of the backchannel deal-making for such powerful positions. Some kind of open, merit-based selection process might have illuminated the character flaws of these two before the world’s finance ministers handed them the keys to the international economy.