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CAIRO, Aug 9 2011 (IPS) - The World Bank, which has often pressed borrowing nations to adopt more robust financial transparency regulations, has refused to disclose the financial records of one of its senior officials despite allegations of corruption, abuse of authority and mismanagement of public funds while he served as a minister under the now toppled Hosni Mubarak regime in Egypt.
In correspondence seen by IPS between the World Bank and a Washington-based non-governmental organisation that advocates for accountability in international institutions, the lender has refused to produce the records of Managing Director Mahmoud Mohieldin, who was a close aide to Mubarak and his son Gamal in Egypt – citing concern over personal privacy.
The bank’s legal counsel, Anne-Marie Leroy, told the Government Accountability Project (GAP) that the bank had to strike “a careful balance between disclosure of financial interests and personal privacy and security concerns,” and therefore decided against disclosing Mohieldin’s financial statements.
The 46-year-old Mohieldin, who served as Egypt’s investment minister from 2004 until his appointment as a World Bank managing director in October 2010, became a controversial figure in Egypt after the popular revolt that ousted Mubarak on Feb. 11.
Mohieldin was one of a three-member team that led the country’s deeply unpopular economic polices that included an aggressive privatisation programme and drastic cuts to government expenditures on subsidies and the social sector.
The team included Foreign Trade and Industry Minister Rashid Muhammad Rashid and Economy Finance Minister Youssef Boutros-Ghali. Both are now on the run outside of Egypt after Egyptian courts found them guilty of corruption, misuse of public funds and profiteering.
Mohieldin, who travelled to Egypt several times from the start of his World Bank tenure until the revolution began on Jan. 25, hasn’t set foot in Egypt since the country started a series of probes into widespread corruption under Mubarak.
GAP said it was seeking Mohieldin’s financial disclosure records from the World Bank after it became clear that he is the subject of controversy in Egypt and at the international level.
GAP maintains that the bank’s response of publishing abbreviated forms of the documents will “not suffice to clarify the questions that now surround the alleged business conduct of Mr. Mohieldin as Egypt’s former Investment Minister.”
One of accusations filed with prosecutors in Egypt is that Mohieldin pressured the valuation committee to undervalue the Omar Effandi retail chain – therefore illegally benefiting the buyer. An Egyptian court ordered the sale to the Saudi company Anwal annulled on the grounds that corruption was involved and the valuation was inaccurate after the revolution.
According to court documents, the 82 stores making up the Omar Effandi chain – that include historical buildings dating back to the 19th century – were sold for only 590 million Egyptian pounds (100 million dollars) when the land value alone that the stores sit on could fetch 4 billion pounds (671 million dollars).
As the World Bank resisted transparency over its managing director, workers in Egypt were protesting against Mohieldin. In late July, hundreds of workers from Omar Effandi distributed fliers requesting that the country’s interim military rulers arrest Mohieldin and bring him back to Cairo from Washington be investigated in Egypt.
Another case before investigators alleges that Mohieldin sold a chemicals producer – Egypt for Chemical Industries – to Belgian investors at well below market prices.
“Mr. Mohieldin is apparently under investigation for corruption in Egypt, yet the bank appears to be shielding his finances from public scrutiny in the United States,” said GAP international programme officer Beatrice Edwards.
A source close to bank management, who spoke on condition of anonymity, said that Mohieldin “maybe enjoying the personal protection” of World Bank Group President Robert B. Zoellick, because of Zoellick’s admiration of Mohieldin’s work that led to massive economic changes in Egypt and his role in World Bank plans to roll out more loans to the Arab region.
Zoellick has publicly praised Mohieldin as “a tireless reformer”, and has said that Mohieldin has an “outstanding track-record of results in reform, modernisation, and knowledge-generation.”
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