Pillage and Egyptian Government/Banking.

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Pillage and Egyptian Government/Banking.

Post by Hafiz »

Social Security Fund/Fraud

This post is irrelevant to all the essential tourist questions – where do I get toilet paper, where do I eat and drink, why does my tour guide keep offering me members of his family, what swim stroke works best in the Red Sea, should I accept Tutankhamen’s invitation to dinner passed to me by my tour guide etc. Lucky for my sanity all these questions are irrelevant.

People who have no interest in other than themselves when they travel follow a great British tradition . Chesterton understood it well:

“The only way to get back to them is to go somewhere else; and that is the real object of travel and the real pleasure of holidays. Do you suppose that I go to France in order to see France? Do you suppose that I go to Germany in order to see Germany? I shall enjoy them both; but it is not them that I am seeking. I am seeking Battersea. The whole object of travel is not to set foot on foreign land; it is at last to set foot on one’s own country as a foreign land.“
“The traveller sees what he sees. The tourist sees what he has come to see….They say travel broadens the mind; but you must have the mind….. Many modern internationalists talk as if men of different nationalities had only to meet and mix and understand each other. In reality that is the moment of supreme danger—the moment when they meet. https://clearingcustoms.net/2015/08/01/ ... on-travel/

This post is of course relevant to the needs of 50 million Egyptians who may have been thieved – as if any tourist cares a jot about the needs of Egyptians as long as his needs are met – and at 1/5th the price of a European beach resort. Those concerned about the poor and the poor of Egypt and who insist that those in power be held accountable for evil might be interested. Such people exist.

The source for this post is the late but impeccable Egyptian International lawyer, Bassiouni, employee of the UN, a distinguished professor at a 1st rate US university, the major architect for the International Criminal Court and twice, possibly, thrice, nominated for a Nobel Peace Prize – as if such things mean anything to the package tourist.

The story.

Egyptians pay from their salary an amount for their social security/pensions. Its theirs but the government ‘looks after’ it for them but an Egyptian government that steals from any open purse and steals from poor purses.

The formal Social Security Fund covers all public employees and a deal of those in the private sector including the self employed. Contributions vary by type of work as do employer contributions with total contributions ranging from 40% (seems very high) down to a payment from self employed of 15%. These contributions must be amongst the highest in the world giving rise to an invisible and unregulated fund several times the size of the banking ‘system’. On the other hand the rich were exempt because in the 90’s, and maybe later, this contribution tax was only payable on the portion of income less that E645 per month. Why this is the case you would need to ask a deranged Egyptian Minister or economist – no one else would understand.

Coverage includes benefits for old age, death, disability and pregnancy but not for all categories – its hard to know and coverage is possibly 20 million but its also hard to know or trust official figures. The whole area is plagued with unclear and overlapping responsibilities, multiple agencies, complex rules, no data, no annual reports, no representatives of contributors/pensioners on the boards, no accountability, no use of credible auditors, no use of expert advice, no interest in investing in other than Egyptian government projects, a mad and financially disastrous focus on subsidizing government at the expense of the citizen contributors and no interest in charging commercial rates/maximizing returns to market rates. This confusion and lack of professionalism in managing a big issue is what you expect – in some countries.

Even a vegetable investment advisor or banker would say – spread your risk, do research and invest carefully taking a long term view. The Supreme Fundistos or Fundaments didn’t do any of this and didn’t do a lot more and all of the funds, I repeat all, were invested in Egypt and in projects the government told their Fundaments to do – support our projects to keep us in power and give us the citizen’s ‘tomorrow cash’ for out immediate and unremitting budget deficit and to avoid higher taxes and likely citizen revolt.

I repeat the peoples money was not handled in other than a political way to support the maintenance in power of the military Junta and the 200 families.

In most countries on earth the board members and senior staff of such an investment fund would face criminal prosecution for negligence, breach of trust, breach of fiduciary duty etc. But not in Egypt.

For a long time notional trading surpluses from the funds, owned by citizens, were ‘appropriated’ by the government/loaned to the government at interest rates a fraction of inflation and in defiance of any legal and moral responsibility to maximize the benefit to contributors. Whether the cash/capital in the capital fund ended up the same place is hard to know.

They betrayed those who gave them their money for their future needs and old age. Indeed its worse. Because payments into the fund were compulsory citizens were required to contribute and for those on low wages/poor 15% of your wage is a lot. At no stage did the government permit contributors to have a choice of paying their contribution into an alternate fund of the citizen’s choice.

Unlike every other place on earth the contributors were not represented on the governing board of the fund and the reporting back of the fund to the contributors was scant, possibly misleading and therefore probably criminal.

The story is that the fund has been looted/pillaged – probably to the benefit of the army/200 families and definitely to the disadvantage of the average or poor Egyptian. Why am I not surprised and why am I not surprised that no one has been held to account and the IMF and World Bank are silent. The amount ‘missing’ is immense.

Mubarak looks to have looted this capital fund – for god knows what useful purpose – and since that looting – never revealed and never discussed – the daily social security payments to contributors have therefore had to come from depleted yearly government budget revenues – until they run out. He and his accomplice the vile Youseff Boutros Ghali (granted asylum in the UK as an ‘heroic’ man with money but far from that – as if the UK cares) were never charged for this. The current balance in the fund is a state secret the revelation of which will attract 10 years jail.

He is still parading the upper reaches of the world but if you see him in Mayfair a spit or two may not be illegal. Other times he works for the foul former employer of Farage (now on the Russian media payroll), Milken (2 years jail but got away with billions).


Here is one informed view.

“Perhaps the most troubling financial “diversion” was the transfer of the entire social security fund of US $ 86 billion to the government. The Mubarak government moved this fund from the Central Bank, where it was kept separate from government funds, to the National Investment Fund. To call this a diversion is mild. It was more like embezzlement by the government in power at the time, because these retirement funds, which are now in jeopardy, belong to the workers who contributed to them. The state is now covering pensions from its ordinary budget, thus adding to its deficit. Furthermore, the diverted US $ 86 (?) billion has not been specifically included as part of the national debt, which is also deceptive.

Many people believe that the entire fund, or a substantial part of it, has been spent/ lost in the state’s speculative and failed investment projects.” Bassiouni, M. Cherif. Chronicles of the Egyptian Revolution and its Aftermath: 2011–2016 (p. 553). Cambridge University Press. Kindle Edition.

This is written by the circumspect and highly regarded lawyer, senior UN official and Nobel Peace Prize nominee.

As far as one can tell the Social Security Fund was never administered by an independent trust/board under any moral or legal obligation to taxpayers/beneficiaries. Rather the funds are/were administered by the rackety National Investment Bank of Egypt (at one stage the pension funds were 70% of their capital/income) chaired by a Minister, (who was senior in the Central Bank during its dirty period 2003-11) with a board entirely of government insiders (many with no relevant experience) and whose primary, maybe sole, function was to loan money to the government. It did not seem interested in making investments based on benefits to pension beneficiaries and never managed risk by investing outside Egypt. http://www.nib.gov.eg/NIBWebsiteen/management.html. Its Chief Executive had an inglorious career, no experience of strategic/portfolio investment for pensions, a poor education, no experience of ever working outside Egypt and most of the time worked for government.

The brave 1993 World Bank said this about them in 1993, in the days before things went putrid:

‘effectively an accounting agency responsible for disbursing funds for the implementation of the government’s investment policy’ (I’d love to know that Titanic of a policy). It has few staff, cannot evaluate investments, cannot monitor investments and has low capital reserves for mistakes. From the government’s point of view and to the disadvantage of contributors/pensioners money was loaned at half the rate of the Egyptian commercial banks in what can only be described as a political action in complete defiance of commercial reality.’ The Egyptian Economy, 1952-2000: Performance Policies and Issues By Khalid Ikram

What the stolen funds were used for isn’t clear, has never been publically mentioned by the World Bank or Auditor General, was always excluded from a balance sheet and can’t be now tracked down and has never been investigated.

Lets be clear. It was once a capital fund owned by citizens producing an income flow to meet pension requirements but now these recurrent pension payments have got to be funded yearly out of the budget which is funded from taxes. They are paying for it twice. It is managed by people who breach all morality, natural justice and probably local justice to pursue the interests of a government that has squandered money for 3 generations – as it is at this moment.

It is not clear the extent to which the military have had access to these pension funds but only a fool would assume none.

If it was invested in national projects – these have failed as all have. In the late 80’s and 90’s the pension fund had a real rate of return of negative 12% whether they are any better now given their political decision making and paucity of skills is doubtful. After 1992 they ‘reformed’ themselves, no they didn’t it was just an illusion to mollify stupid western governments and even stupider UN officials, but their rate of return was still less than inflation. As ever they were loosing money/destroying capital.

So its likely that poor and ordinary people are funding Junta fiascos, funding the jobs of unqualified bankers and public money was going to putrid Egyptian property developers building middle and upper middle class gated and machine gun protected residential enclaves. Its clear this Bank was full of fools because the World Bank in 1993 said that they didn’t even do a basic cost benefit or risk analysis that a junior staff member would do on a small loan in in a suburban branch in the West - and if they didn't do this they would get fired.

The blood transfusions of citizen money into polluted bodies continues and even the Cairo press says in 2018 that the pension fund loans to government exceed $US15 billion – I suspect more. https://egyptindependent.com/government ... -ministry/ Loans are really forced asset transfers where a huge debt is to be ‘exchanged’ for ‘farm land’ in the governments insane and failing 1.5 million feddans farming fiasco – probably at government ‘direction’.

The past is not the past because the current Governor of the Central Bank, Amer, his current wife and former Sisi Minister (she failed and failed quickly), Dalia Khorshid who now heads up the Military Intelligence owned venture capital firm (that owns scores of TV stations and newspapers and will be running the new tourism marketing campaign for Egypt with no relevant experience called, not unexpectedly, Eagle Capital) and many others still in power were on ‘duty’ (or is it dirty) at the time in the Central Bank in senior positions during this theft and it is impossible they did not know of it.

Dalia previously worked for Orascom – why am I not surprised.

Where this new Eagle Capital gets its money (several hundred $US million) from isn’t clear and investing in newspapers and TV stations is a great way to loose money – fast. Maybe they got this money from a ‘friend’.

Here is Amer if you chance on him in in a Knightsbridge Real Estate Agent's office near the Mubarak family home. Call the police and adopt a standard Egyptian police/prosecutor/court/judge approach - fabricate an allegation.


Along with most of the top 10,000 military, government and commercial ‘leaders’ he is incestuously related on all sides – very Egyptian – but the only intimacy I can track down at this stage is that he is he is a nephew of General Abdel Hakim Amer, the former defense minister, Vice President and friend of President Gamal Abdel Nasser. I’m sure there is more. His uncle’s parents showed gross ignorance of Egyptian history in choosing Hakim as a name unless they liked the 11th century perverted Caliph in Cairo. A bit like the nephew the General failed in all things – ’47, ’56, Yemen (but some ‘nice’ crimes against humanity over Yemeni civilians with gas – c.7,000 dead) and ’67. He was the person publically blamed for the ’67 defeat, was fired then arrested for an alleged coup following which he probably tried to suicide, failed, tried again and succeeded.

Dalia will be easy to spot, or spit at, likely in Harley Street trying to patch up the three previously botched Egyptian face lifts and running or crawling towards the London Clinic. Even their world class skills may be insufficient.


For such botched image its amazing she is now the media mogul/agent of Military Security - still she can now censor all accurate photo's of herself and stories about her sex life. https://www.memri.org/reports/president ... trol-media

The then Governor of the Central Bank at that time, Farouk El Okdah/Okda founded from scratch his own financial business which is now Egypt’s largest leasing company IncoLease. He was both regulator and market participant at the same time in this matter and as also a director of British Arab Commercial Bank Public Limited Company (formerly, British Arab Commercial Bank Ltd.) from December 31, 2003 to October 29, 2010 which he was meant to be regulating. How can you be a player and an umpire at the same time? That commercial bank has a long history – all of it worse than awful on the integrity front.
https://www.bloomberg.com/research/stoc ... pId=883478

He also used his statutory powers as governor to allow his own financial services company to be registered, drive its competition into insolvency and deter any future competition to his hundreds of millions.

Farouk could be anywhere – Cyprus, Bahamas, Jersey and Guernsey or the City, all places to stash the cash because no one trusts Egypt as he would know given he was responsible for its financial integrity for ages – but never tried very hard. I suggest extreme caution and keep an eye out for associated chaps with bulging jackets. Call the police.


Okdah and possibly Amer were involved in the sale of a state asset – the Alex Bank reported at $ 2 billion. Within 48 hours, the bank was resold for $ 4 billion. That was because all of the bank’s liabilities on the second sale were reported to have been covered by a guarantee from the Central Bank; if the Alex bank’s liability is guaranteed, its value increases. The original buyers were oligarchs who were well connected with the Mubarak presidency. The buyers included a group of foreign banks. However, neither the Central Bank nor the government disclosed information about the transaction. Bassiouni, M. Cherif. Chronicles of the Egyptian Alex Revolution and its Aftermath: 2011–2016 (p. 390). Cambridge University Press. Kindle Edition.

Farouk Abd El Baky El Okdah exercised one man rule over the country's banking system through cronies in all the central bank's major departments. The central bank's reserves, Ajmi claims, were unaudited and subject to the personal control of the central bank governor, who abused his position to enrich political allies of now deposed Egyptian president Hosni Mubarak.’ It is also claimed that the Central Bank under Okdah greatly overstated the countries international currency and gold reserves.https://pjmedia.com/spengler/2011/12/2/ ... -in-egypt/

The Royal Bank of Scotland published research which suggested that the exit of dodgy billions leading to up 2011 may have had assistance from Okdah – or at least no resistance. An academic book on clientism states that Okdah was ‘a close associate of Gamal Mubarak’ and engaged in settlements with major businessmen rather than arrest them. “Businessmen, Clientelism, and Authoritarianism in Egypt” by Safinaz El Tarouty. This allegation is consistent with what Okdah told the US Ambassador – the sale proceeds would subsidize the debts forgiven.

Unique in the world Okdah and maybe Tarek Amer decided that the privatization of banks would be decided in the following way. Competitive bids would close in the morning, they would then be instantly evaluated and a written report prepared for cabinet and cabinet would then decide on who would get the bank and that this would all be done in less than 8 hours. The purpose of this ‘process’ was blatant corruption and ripping off the taxpayer. https://wikileaks.org/plusd/cables/06CAIRO5392_a.html

Out if this fiasco some insiders, including the ‘boys’ made tens of millions. At this time and possibly still the Central Bank and other State organs break the rules as regulators and seek overseas investment – always for oligarch projects and usually by concealing financial facts. Bassiouni p 389 on Kindle version. The Central Bank also guarantees certain loans made by domestic banks to oligarchs. Bassiouni p 358.

To describe Okda as the traffic policeman in most of the Mubarak-era corruption wouldn’t go too far. Given the suffering and theft of poorer people from the mismanagement of the economy and theft I think a more accurate metaphor would be to describe him as the leader of a greeting group – at the Dachau train station.

He is a hero of the country and holds many awards The Nasser Award, The Order of the Nile. He embodies everything Egypt respects – well what the top respects and many think Egypt needs thousands just like him.

The sensational Panamanian and Swiss bank accounts attract media attention – and brief indignation. Maybe instead it’s more complicated in Egypt and large scale subtle thefts and stuff ups do more damage – but don’t sell newspapers or catch our eye.

We should add this to the very long list of Great Projects – Toshka, the very secret East Owinat farming disaster in the SW desert, the Canal 1st and a more recent iteration, 3 other failed huge farm projects, 5 lost wars and no won ones, the New Imperial Capital, infecting 15% of the country with HepC and doing little about it, a destroyed education system, the 1.5 million feddans project and many others. Does everything fail in Egypt under the military Junta, only to be concealed by a media that knows no truth – but does know how to guarantee a career.

Is there a single even partial success in 70 years? Please post if you have one – other than survival in power of failure.

https://ueaeprints.uea.ac.uk/48815/1/20 ... ySTPhD.pdf 2014 east Anglia Phd thesis on the sewerage farm that is Egyptian politics and business.

The recent proposal by the Government of Egypt to set up a sovereign investment fund (sources of funds unclear) is perverse and its likely that it will be no more competently managed nor more morally managed than the previous Social Security Fund. It will be insiders making decisions, public money going to friends/Army, evaluation will be hopeless, returns disastrous and no money invested in gold standard securities let alone international securities. One thing will be certain – the taxpayer will be funding this new fiasco. https://www.reuters.com/article/egypt-i ... Z420150611

The Presidents Masr Fund which has been going for 4 years is clouded in mystery except for several facts. The source of funding is unclear but what is clear is that it is funding projects to win votes and has on its Board at least 3 Mubarak crooks who, were it not Egypt, would be in jail.

There is even a bizarre proposal to place a higher tax on Banks and for this money to go into the Presidents personal Masr Fund (no parliamentary supervision, exempt from all auditing, no annual report, no competitive bidding on contracts etc). The funny bit about this is that the extra bank tax will only apply to those government banks which will be privatized so this will drive their sale price down, drive off any overseas banks and mean the banks are sold to only locals and at a cheap price.

Seems like a standard Egyptian deal to keep the US, EU and UN quiet – looks good but is actually rotten. In any event the current world markets means that these rackety banks that have not had the filleting that sensible governments would have done to prepare them for sale and as a result are now worth almost nothing. They were always worth close to nothing.

Announcements of privatizations have vacillated from 5 to 28, from imminent sales of 2 to nothing, from majority sales to – unclear. Its not irrelevant that there is no announcement of the specialist banks and legal firms that do this privatization/IPO that work for all governments in every place on earth on an exacting task that needs o be done fairly and at arms length (concepts Unknown in Egypt). My bet is that the advisors on sales will also be the buyers which would be illegal in every place but 1. The names of the firms (broad definition to avoid using an obscenity) will likely be the same as in the Mubarak privatizations including the $US2 billion fraud ($US4 billion in modern money), on the Bank of Alexandria or any number of other related frauds. They are not professional financial or legal advisors just crooked croupiers in the Egyptian casino.

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Re: Pillage and Egyptian Government/Banking.

Post by John Landon »

You dont change governments by voting, if you could then voting would be banned by Government..
Democracy is good, but its all an illusion... :br
**** *** the world bank and watch what happens. Mubrack should have known that..

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