Favors for Sale

The unprecedented punishment an Egyptian court handed prominent television anchorwoman Amani Abu Kozayyem in mid-March marked the climax of an anti-corruption campaign in Egyptian state television.

Abu Kozayyem was convicted of buying large plots of land in the prestigious "October 6" neighborhood, southwest of Cairo, at discounted prices, and selling them at market value. In violation of the law, she bought the plots from the former director general of the Egyptian Housing Ministry, Ismat Abu Al-Maghali. According to the indictment, the two made millions of Egyptian pounds from the transactions, sharing the profits among themselves. The court sentenced the broadcaster to eight years in prison and a stiff fine, handing the former senior ministry official 10 years.

This was not the only corruption case of recent years, which has been tied to the state television headquarters in Cairo, overlooking the Nile. Broadcasters, program editors and executives have been investigated, and will yet be investigated, suspected of taking bribes from businessmen in exchange for their appearing on talk shows.

Other forms of corruption have also been exposed in the Egyptian state communications system. It was revealed last year that Ibrahim Nafa, editor and former chair of the nation's foremost daily, Al-Ahram, profited from the newspaper's business activities in addition to receiving an enormous salary. Last week, the Egyptian paper El-Osboa reported on another affair involving Nafa, which sheds light on the ties between government and media.

According to El-Osboa, former prime minister Kamal El-Ganzouri ordered that more than a million dollars be transferred to Al-Ahram Deputy Editor Mohammed Zaid for medical treatment in the United States. Zaid needed a kidney transplant and the state treasury decided to finance the surgery, along with the travel and the expenses of the donor and an escort. As it turned out, Nafa ordered that the funds not be paid to the medical center that treated Zaid, but that they be used for the "newspaper's needs," via a subsidiary company he established in Washington. The newspaper, whose management has changed in the interim, is now being sued for payment of the sum. It appears that here, too, the Egyptian government will have to foot the bill, as a result of its prior commitment and pledge to underwrite the debts of Al-Ahram.

An earlier El-Osboa expose revealed that Nafa's son, Omar, is the partner of businessman Ahmad al-Jarhi, whose company was granted most of the contracts for operating the newspaper's equipment. Another one of Nafa's sons is a partner to the owners of the Dubai branch of Cartier, which annually sold the newspaper gifts for its employees and guests worth 55 million Egyptian Pounds. Both sons were partners in the Art-Group Company that received an exclusive contract to supply all of Al-Ahram's office equipment - in violation of the law.

But these are the least of the offenses reported by El-Osboa: The paper maintains that Nafa pocketed 3 billion Egyptian Pounds (about $600 million) during a period in which Al-Ahram owed hundreds of millions of dollars to the government and banks. Nafa received $15 from paper suppliers for every ton of paper, in a newspaper that uses 100,000 tons of paper each year, thus amassing an annual private fund of about $1.5 million. He allocated himself about $1,500 in travel expenses for every day he spent abroad - and Nafa typically spent 80-100 days overseas every year.

The sins of Egyptian media moguls are overshadowed by the corruption of government officials and their families. An annual human rights report, recently published by the U.S. State Department, roused Egyptian wrath as it outlined the details of a few of these cases. The most severe incident may be the February 2006 sinking of the Al-Salam ferry in the Red Sea, which claimed the lives of more than 1,000 people. Mamdouh Ismail, owner of the Al-Salam Maritime Transport Company and a member of the Egyptian Shura Council (the upper house of the Egyptian bicameral parliament), who is also a close associate of the director general of President Hosni Mubarak's office, escaped from Egypt and is now apparently residing somewhere in London. Despite his absence, the trial against him opened this month. He is charged with criminal negligence that caused the sinking of the ferry.

Neither are Jordan, Algeria, Lebanon and Syria free from institutional and governmental corruption. When it is no longer possible to thwart rumors, these governments occasionally expose affairs in anti-corruption campaigns aired via the official media. But such affairs pale in comparison to classic corruptive deals, which involve major foreign corporations and governing families.

Christoph de Margerie, CEO of French oil giant Total (the fourth largest oil company in the world), may find nothing new in these recent exposes. French police are currently investigating his role in the suspected bribery of senior members of the Iranian regime, including former president Hashemi Rafsanjani and his son Mehdi in 1997. Apparently, this was an attempt to provide Total with a $2 billion contract to develop gas fields in Southern Iran. The French government suspects that Total paid tens of millions of dollars to Iranian agents in order to win the contract.

Despite these allegations, Total continues to look into the feasibility of collaboration in another enormous Iranian project: Construction of the first terminal for the export of liquid gas, at an estimated cost of $10 billion. All this took place while, on the other side of the world, in New York, the United Nations Security Council decided to impose sanctions on Iran because it continued to develop its nuclear program.

In contrast, British authorities recently decided to suspend investigations of the British Aerospace (BAE) conglomerate, which is collaborating in the development of the "Eurofighter" combat aircraft. These protracted investigations once again made headlines when Saudi Arabia threatened to cancel its slated purchase of Eurofighters in favor of the French "Rafale" fighter plane.

The affair began in the 1980s, with a decision by Saudi Arabia to order new model warplanes. Because the United States, under Israeli pressure, refused to sell the Saudis sophisticated aircraft, Saudi Arabia turned to Europe, finding what it was looking for in Britain.

It now appears that the choice of a British plane was not coincidental. British news media have reported that BAE had a secret fund of some $40 million solely for the purpose of bribing Saudis who could influence the choice of a firm. It has been alleged that BAE Chairman Sir Richard Evans was personally involved in managing the fund, which ensured that the company would win multi-year contracts worth billions of dollars. "Managing" corruption-laced deals allegedly included providing luxury hospitality for senior officials, supplying call girls and giving expensive gifts. The company, by the way, maintains that it acted according to regulations.

It has also become clear that there is something shady about the explanation that the recent price hike for the planes was prompted by Saudi requests for advanced components. The suspicion today is that part of the price rise was due to a circuitous transaction, in which the surplus funds were passed on to Saudi middlemen as a reward for their success in nailing down the deal.

The Saudis were apparently amazed, not so much by the affair itself, as by the press reports of the suspicions and, worse still, by the investigation launched by the British authorities. This seems to have been the explanation for their threat to cancel the deal and for the sudden British announcement that the investigation had been frozen.

This is not the first time a British company has been involved in a corruption affair linked to the Saudis. In 1998, secret negotiations between Rolls-Royce and members of the Saudi royal family over a $32 billion dollar arms deal "blew up" as a result of an embarrassing argument over a few million dollars. In the past, a Panamanian company raised similar complaints against Rolls-Royce. In all of these affairs, analysts wondered whether the French and British governments, or at least their leaders, knew of and perhaps even approved the methods by which the companies secured the deals.

It is all but needless to note that no investigations were opened in either Iran or Saudi Arabia into the affairs. It seems that these affairs can only "compete" with the larger-scale corruption that results in billions of dollars wasted in Iraq: funds deposited in U.S. banks by the Saddam Hussein regime on the one hand, and American taxpayers' money on the other. It is unclear where the billions of dollars earmarked by the U.S. Congress for Iraqi civilian aid have gone. It is known that the government that arose following the onset of the American occupation wasted billions, in part on the payment of bribes and on establishing private militias. According to an estimate by the former United States Congress Special Inspector General for Iraqi Reconstruction, Stuart W. Bowen, Jr., Iraq loses about $4 billion a year as a result of internal corruption.

It is difficult to set criteria to judge the gravity of establishment corruption. Are property sales by the Egyptian broadcaster more serious than the Iraqi oil theft? Is the corruption within the Palestinian Authority more forgivable than a Saudi prince's shopping spree with British taxpayers' money?

Perhaps the more reasonable distinction was expressed by Egyptian intellectual Mamoun Fandi in a cynical 2004 article in which he called for a move toward "better corruption."

"I am not opposed to corruption in Arab states," he wrote at the time, "because that corruption is the strongest and best-accepted institution. Therefore, I do not urge waging all-out war against corruption, rather a war of a reasonable order of magnitude, in order to reduce it down to a rational level. Corruption in the Arab world is the mortar that binds the state to society. It does not grease the wheels of government - rather it glues and binds the state to society." It would appear that his words could be emblazoned in town squares in a number of European nations and, no less, in Israel.