Mahmoud Mohieldin, an Egyptian national, is a Senior Vice President at World Bank Headquarters in Washington, D.C. He must be among the luckiest of the senior officials in the infamous regime of Hosni Mubarak, whose government in Cairo fell suddenly in January, 2011, when a popular anti-corruption uprising bloomed suddenly during the Arab spring. Mohieldin, the Minister of Investment at the time and a close crony of Mubarak’s son Gamal – and one of Gamal’s troika of go-to accomplices – had been plucked from a field of blossoming billionaires busily privatizing the assets of the Egyptian State by Robert Zoellick, then World Bank President, and moved to a senior sinecure overseeing procurement contracts at the Bank’s Washington Headquarters, in September, 2010.
The timing was perfect for Mohieldin. He exited Egypt just before the wind shifted, so to speak, and escaped to a post that allowed him to hide his personal wealth while he continued to play a role in the Egyptian economy from a well-paid perch beyond the reach of the incoming Egyptian government.
In contrast, Gamal, then the Deputy Secretary General of the National Democratic Party, and his other two cronies – former Minister of Finance Yousef Boutros Galli and former Minister of Trade Rashid Mohamed Rashid – went to prison as the new government examined the investment deals they had concocted as part of the economic reform that had made them all wealthy men.
Why was Mohieldin so lucky? Before he landed at the Bank, during the privatization of the state-owned department store chain, Omar Effendi (OE), whistleblower Yahia Hussein Abdel-Hadi alleged that the valuation committee on which he had served was pressured by Gamal’s trio – and by Mohieldin in particular – to sell the chain to a foreign investor at less than half of its potential value. The deal left over 2,000 workers unemployed and cost the Egyptian treasury nearly 600 million Egyptian pounds. In May 2011, three months after the fall of the Mubarak regime, the Administrative Court in Egypt annulled the OE transaction for “defects” and irregularities. The ruling specifically identified the Minister of Investment (Mohieldin) as a responsible party.
The allegations against Mohieldin did not end with Omar Effendi. He was named in two other sets of allegations stemming from two equally suspicious transactions: the privatization of the Mansoura for Resins & Chemical Industries Company, and the Al Nasr Housing & Development Company. The allegations in these two cases exhibited the same pattern as Mohieldin’s OE transaction: evaluators were pressured to undervalue state-owned assets and sell the assets to foreign investors for a fraction of their worth.
In addition, the others in Gamal’s trio were named parties in the investigations of these privatization deals: prosecutors also named former Prime Minister Ahmed Nazif with Mohieldin in both the Mansoura and Al Nasr allegations. Like Gamal, Rashid, and Boutros Galli, Nazif was charged with misusing public funds and unlawful gains (LE 92 million, or approximately $15 million). Nazif’s real estate purchases (totaling LE 4 billion, or approximately $670 million) were investigated – and prosecutors alleged that he used illegally obtained funds to purchase eight villas, 1,500 square meters of land, four flats, and a palace. Like the others, the court convicted Nazif and sentenced him to prison. The justices also levied a fine of 9 million Egyptian pounds ($1.4 million) against him for illegal enrichment.
By investigating Abdel-Hadi’s whistleblower disclosures, GAP was able to track these similar allegations of corruption surrounding Mohieldin and the other former officials of the deposed Mubarak regime. We produced a series of investigative blogs in both English and Arabic that exposed the information above and focused on Mohieldin’s role in the two additional (and potentially criminal) privatization transactions (see links for sourcing below). Our inquiry showed that while the others were tried and sentenced, Mohieldin alone was never investigated. Unlike his colleagues who were held accountable, Mohieldin remains untouched at the World Bank. GAP therefore requested Mohieldin’s financial disclosure records from the Bank three times, all without success. There was, however, a more recent disclosure form provided for 2016 – the only one we could find on the Bank’s website. Unsurprisingly, the form is not very revealing, and strains credulity.
Unlike his career as Gamal’s official investment adviser however, Mohieldin’s trajectory at the Bank is undistinguished. He has been moved to a series of decreasingly important posts (for example, over time Mohieldin consistently lost authority at the Bank, most notably his responsibility over procurement – compare the organizational charts here and here), though he made news recently when he announced that there are “good” signs from the International Monetary Fund concerning Egypt’s reform program. He should know. This is the reform program that placed Egyptian assets on the auction block once again, after Mohieldin’s efforts collapsed under the weight of corruption and fraud nearly a decade ago.
Perhaps now that Mohieldin’s comment has once again brought him back into the spotlight on these issues of paramount importance to the country, Bank leadership, or even Mohieldin himself, will address these allegations in light of the influence he continues to wield – reckoning that is long overdue for the Egyptian people. GAP did the investigative work, but responsibility for accountability remains with World Bank management. Given the impunity enjoyed by senior officials there, however, the possibility Mahmoud Mohieldin will be held to account seems unlikely.
GAP Investigative Blogs
- 8/10/11: Egypt Privatization & the Sordid Tale of World Bank Managing Director Mahmoud Mohieldin:http://wordpress-350926-1087337.cloudwaysapps.com/blog/120010-egypt-privatization-and-sordid-tale-world-bank-managing-director-mahmoud-mohieldin
- 8/13/11: Letter to the Executive Board Members of the World Bank: http://wordpress-350926-1087337.cloudwaysapps.com/sites/default/files/Letter_to_Executive_Board_Members_of_the_World_Bank_Group.pdf
- 8/22/11: Mounting Scandals Involving Mahmoud Mohieldin Betray Pattern: http://wordpress-350926-1087337.cloudwaysapps.com/blog/120027-mounting-scandals-involving-mahmoud-mohieldin-betray-pattern
- 9/22/11: More Charges For Mohieldin’s Former Associates; GAP Contacts World Bank Executive Board:http://wordpress-350926-1087337.cloudwaysapps.com/blog/120022-more-charges-mohieldins-former-associates-gap-contacts-world-bank-executive-board
- 1/24/12: Mahmoud Mohieldin and the Perfect Crime:
- 3/30/12: World Bank Advocates Public Financial Disclosures … Just Not for Itself:
- 6/25/12: A ‘Coup’ That Threatens the Goals of the Arab Spring in Egypt:
- 9/20/12: Another Corrupt Privatization Deal in Egypt Annulled: Court Orders Assuit Cement Renationalized: http://wordpress-350926-1087337.cloudwaysapps.com/blog/120020-another-corrupt-privatization-deal-egypt-annulled-court-orders-assuit-cement
- 12/21/12: Internal Document Shows World Bank’s Mahmoud Mohieldin Apparently Demoted:
- 2/9/13: New Egyptian Law May Provide Former World Bank Managing Director Mohieldin the Exit He Needs: http://wordpress-350926-1087337.cloudwaysapps.com/blog/120019-new-egyptian-law-may-provide-former-world-bank-managing-director-mohieldin-exit-he-needs