Egyptian president Mohamed Morsi. (AP Photo/Maya Alleruzzo)
On March 28, Egypt’s former trade minister, Rachid Mohamed Rachid, was removed from an arrest list after he paid back a total of 15 million Egyptian pounds (approximately $2.2 million) to the state as part of a reconciliation program under President Mohamed Morsi. Rachid, who served as minister from 2004 to 2011, fled just before the toppling of former president Hosni Mubarak and was tried in absentia for profiteering and squandering public funds during his time in office. He was sentenced to twenty years in prison and fined over 1.4 billion Egyptian pounds (approximately $202 million).
The deal struck between Rachid and the Morsi government came amid accelerated efforts by Egyptian authorities to reach out-of-court settlements with former regime officials and businessmen accused of corruption and cronyism. “We will reconcile through a legal process with anyone who did not corrupt or was somewhat corrupt but did not spill blood,” Hatem Saleh, the current trade minister said in January.
The sale of state assets, mainly land for housing and tourism developments, to crony businessmen at prices below market value became a hallmark of the Mubarak regime, particularly during its last decade in power. In the wake of Mubarak’s ouster, cases were brought against numerous businessmen and regime officials. But in January 2012, just days before Egypt’s newly elected parliament was to hold its opening session, the military council that ruled in the interim period issued a decree amending an existing investment law to allow charges to be dropped if the accused paid back their illicit gains. In an attempt to reinvigorate the process, this year the Muslim Brotherhood–led cabinet voted to allow defense lawyers to plea bargain for clients convicted in absentia.
The Morsi government and supporters of the reconciliation program argue the settlement process is a crucial component of a broader effort to return stolen funds, restore confidence and entice foreign investment back into the country in the midst of a deepening economic crisis. “Reconciliation with businessmen is part of the comprehensive and collective national reconciliation,” says Osama Farid, vice chairman of the Egyptian Business Development Association (EBDA), a new trade group with strong ties to the Muslim Brotherhood and Morsi. “It’s very important to send the right message to make people feel more secure and have more trust in the business environment.”
But critics of the program say the reconciliation process lacks transparency, does little to tackle corruption and undermines the promise of change at the very heart of the revolution. “The black curtain has been drawn again, and behind it they say they are doing reconciliation,” says Khaled Ali, a lawyer and former presidential candidate who led several prominent anti-corruption cases under Mubarak and who first shed light on the little-noticed decree amending the investment law in a newspaper column last year.