The Limits of Fighting Corruption in Egypt

Hisham Geneina’s trial is a tool to deter sharing information about corruption within state institutions.

Hisham Geneina, the former head of the Central Auditing Organization (CAO), Egypt’s main oversight body, is still facing the repercussions of the controversial statement he made at the end of 2015 that corruption had cost Egypt nearly 600 billion Egyptian pounds ($76 billion). Even though the CAO was quick to point out in the face of misleading headlines that the estimate was cumulative for 2012 to 2015, not for a single year, a chorus of voices called for Geneina to be fired and put on trial, including Mustafa Bakri, a parliamentarian closely linked to the military establishment. President Abdel Fattah El-Sisi issued a decree in March 2016 dismissing Geneina, shortly after parliament passed a legislative amendment that gave the president the right to fire the heads of watchdog agencies. A few months later, in July 2016, a court ruling sentenced Geneina to one year in prison with a 10,000 pound ($1,300) bail, on top of another 20,000 pound ($2,600) fine for spreading false news. This case reflects concerns that the executive body is covering up corruption within state institutions. There is an attempt to prevent the circulation of information, including regulatory reports, on the details of corruption—and the trial is used to show the state’s zero tolerance for publishing information about corruption in the media.

Since it was founded in 1964, the CAO has worked to oversee the accounts and general performance of state institutions, in addition to monetary fines under Law 144 of 1988. The agency’s authority covers the state’s administrative units as well as local governments, public sector companies, joint public-private companies with at least 25 percent state ownership, labor unions and professional syndicates, political parties, state- or party-owned media conglomerates, and other agencies whose regulations stipulate CAO oversight. This means that CAO’s reports give insight into the state’s administrative performance and the level of corruption within public agencies and companies. The Egyptian president has a good deal of influence over the CAA through the right to appoint its head, but the CAO enjoys some autonomy, as Article 20 of Law 144 of 1988 stipulates its head cannot be removed from his position during his first four years. This article was still valid when President El-Sisi fired Geneina.

In addition to reporting financial violations to various government entities—whether the presidency, parliament, or ministries—the CAO also sends its reports on alleged graft to the public prosecutor and other agencies with a broader mandate to conduct investigations, such as the Administrative Control Authority. Under Hosni Mubarak, the CAO’s role was limited to reporting on individual violations without gauging the overall impact of corruption within the government. Since Hisham Geneina became its head in 2012, he has rebelled against these rules, giving excerpts from the CAO’s reports to the media and fueling public debate over government anti-corruption efforts. Geneina’s approach allowed for greater transparency but also revealed a major shortcoming in efforts against corruption: the CAO was able to report on violations, but there was no clear mechanism to hold corrupt officials accountable or change the policies that had fostered the misuse of public funds in the first place. This limitation pushed Geneina to take his fight to the media, using statements and interviews to highlight corruption and pressure other government agencies to take action.

The CAO’s controversial report outlines financial and administrative violations it had already documented in smaller reports sent to government agencies between 2012 and 2015. Geneina’s attempt to present a ballpark figure for the total misused government funds may have been an overreach. But as Geneina has asked his critics repeatedly, if the report is indeed imprecise in its estimate of corruption costing 600 billion pounds between 2012 and 2015, then what is a more accurate figure and which organization is better qualified than CAO to make this judgment?

However, more important than the report’s headline-grabbing figure is its detailed content, which gauged misappropriations against the legislative and regulatory standards within sectors including urban planning, development, oil, healthcare, religious endowments, and banking. There are, of course, varying amounts of information available about each sector, but the CAO’s comments are substantiated by numerous incidents documented in detailed reports to other investigative and executive agencies. These instances of corruption show the depths of lawbreaking within government agencies and reveal the deficiency of institutions’ anti-corruption efforts—such as the reluctance by the executive branch and investigating agencies to amend policies that led to squandered public funds or open corruption probes, respectively.

For example, in the development sector, the CAO submitted several complaints to the authorities to investigate the illegal allocation of properties to individuals and companies, including top judges, security officials, and former cabinet ministers. The CAO detailed one example in which the public prosecutor allegedly reached a deal with the benefactors of these land dealings, who promised to make a financial payment to the state—but the organization pointed out that the public prosecutor does not have the authority to cut such deals.

In the oil business, the CAO described how the rapid creation of new public sector companies—whose mandates overlap with the General Petroleum Agency (GPA)—make it extremely difficult to judge their economic performance due to subsidies they receive from the GPA. According to the CAO’s calculations, this is costlier for taxpayers than if the GPA were to pursue these projects by itself because the new companies offer higher salaries and benefits packages. In addition, the report documented the rising prices of cooking gas as middlemen buy gas at subsidized prices intended for consumers and sell at a profit, as well as rampant graft in gas exploration and production contracts with foreign partners.

In the health care sector, the report addresses the abuse of government-subsidized medical treatment, which has been given needlessly—sometimes without any medical consultation—to ministers and prominent figures. Furthermore, the report details how public funds were squandered during the construction of new hospitals, wherein the required technical specifications were disregarded, construction lagged years behind schedule, and contracts were given out without transparency. One noteworthy detail in the final section of the report is that some members of the administration of the National Communications Regulation Agency receive around 60 million pounds ($8 million) in monthly bonuses.

All of these practices are worth studying in each sector individually, particularly given the government’s constant talk of economic reform or restructuring the bureaucracy to cut costs and improve performance. But this drive cannot be addressed in isolation from anti-corruption efforts.

Despite the overwhelming evidence of corruption the report presents, Geneina was left standing alone, and no political powers rushed to his defense during the trial. He has suggested that certain intelligence agencies, seeing his anti-corruption crusade as a national security threat, were behind both the complaints filed against him with the public prosecutor and the mudslinging in the media.

Political parties have a healthy debate on issues such as demonstrations, detentions, and minority rights, but are almost entirely silent when it comes to fighting corruption. Even when corruption earned a place in recent campaign platforms of presidential candidates or parties, it has not been a top issue, suggesting that the political elite and civil society alike have failed to generate coherent anti-corruption policies since the January 2011 uprising. Yet the CAO’s reports can still be a catalyst to organize anti-corruption efforts in Egypt among civil society and political powers. Civil society can spur public debate by raising awareness about legal developments and the role of watchdog agencies—while also grading government anti-corruption efforts and proposing legislation, including bills to give the public greater access to information. Meanwhile, political parties can hold internal debates, consult experts to prioritize the fight against corruption in their platforms, lay out clear anti-graft policies, and lobby the government to move forward. More importantly, they can explicitly link the problems stemming from corruption with the economic woes of the average citizen to gain their support for the fight against corruption.

This article was translated from Arabic. It is reprinted with permission of Sada and can be accessed online here.

Mohamed Abdel Salam is a researcher for the Association for Freedom of Thought and Expression in Cairo.