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Egypt bans Mubarak from travel, freezes assets

By Steve Hendrix and James V. Grimaldi
Washington Post Staff Writers
Monday, February 28, 2011; 8:35 PM

CAIRO - Egypt's top prosecutor on Monday barred former president Hosni Mubarak and his family from leaving the country and seized control of Mubarak's assets as the new government moved ahead with an investigation into charges of corruption.

Opponents accuse Mubarak, who fled Cairo more than two weeks ago, of diverting millions of dollars from official coffers.

The office of prosecutor Abdel Meguid Mahmoud did not disclose details of the investigation involving the family. But it said the travel ban applied to Mubarak; his wife, Suzanne; his two sons; and their wives.

The pro-government newspaper Al-Ahram, citing military sources, reported on its Web site Monday that the former president's son Gamal Mubarak had been stopped by the military Sunday when he tried to leave the country.

News of the sanctions, and the possibility that they could lead to a formal prosecution, gave a boost to activists who had grown frustrated with what they see as the slow pace of reforms since Mubarak's fall. Although the delay may have allowed the former ruling family time to conceal some of its wealth, an official sanction of any kind against the man who dominated the government for three decades was welcome news, activists said.

"It's important, even just symbolically," said Hala Mustafa, editor of Democracy Review, an Egyptian quarterly. "It's hard to imagine the government would ask Interpol to go and find him if he left, but at least it shows they understand what happened here was a real revolution. Now they need to go further."

In Cairo's Tahrir Square, the center of the uprising that forced Mubarak from office, the development was greeted as a victory, even if an incremental one.

"We pressured the government to do this, and the government responded," said Ahmed Muhammed Zayed, who had been sleeping under a suspended blanket in the square for two nights. "That is why we need to pressure them some more. This is a drop in the ocean."

Experts in the field said tracking down Mubarak's millions is not as easy as simply freezing his assets or those of his family. Just finding the assets can be time-consuming because they probably are hidden in shell companies and entities incorporated in countries known as tax havens or secrecy jurisdictions, experts said.

After Mubarak was forced out, Switzerland sent notices to banks with a list of Mubarak family names and asked that their assets be seized. But specialists said it is likely that many, if not most, accounts are not in the family name.

"It isn't sitting all in one account where they can go and freeze it," said Jack D. Smith, a former U.S. banking regulator who is now a law professor at George Washington University. "If you don't get it quickly, stuff that's not frozen disappears. You have to ask the banks to help you, but it can be done. I'll bet you a lot of banks are still looking."

The legal process of returning the assets to Egypt could take years, Smith said. Cases involving other leaders have taken longer than a decade.

Estimates of Mubarak's wealth have ranged from $1 billion to $70 billion, and Smith said most are likely wild guesses.

Between 2000 and 2008, about $57.2 billion flowed out of Egypt because of graft, corruption, crime and illegal commercial activity, according to Global Financial Integrity, a program of the nonprofit Center for International Policy. Economists at the center have developed a methodology to track the unrecorded flow of money from countries based upon worldwide figures reported to agencies such as the International Monetary Fund and the World Bank. But the data are for the country as a whole and do not show individual transfers.

The overall amount of Egypt's illicit flows, about $6.4 billion a year on average, is a staggering number compared with the average income of about $2 a day in Egypt. Yet it places Egypt at No. 21 on a ranking of developing countries that experience illicit capital flights. China, Russia and Mexico top the list, and in the Middle East, Saudi Arabia, United Arab Emirates, Kuwait and Qatar rank ahead of Egypt.

Global Financial Integrity economist Dev Kar estimates that corrupt funds flowing from the Middle East and North Africa between 2000 and 2008 outpaced the world's other regions with developing countries. But the region still trails Asia for overall siphoning of money from domestic economies.

Mubarak is not the first member of his ruling clique to face investigation by the interim government. Several former ministers, party leaders and businessmen close to Mubarak have been jailed in the past two weeks on charges that include money laundering and profiteering.

But neither those arrests nor the fledgling investigation into Mubarak has been enough to satisfy protesters, who have remained massed in central Cairo by the hundreds. Even as students returned to class and the Egyptian stock exchange was slated to open Tuesday, activists have called for faster changes. The list of demands they have been pressing includes the immediate resignation of Prime Minister Ahmed Shafiq, a former Mubarak ally, the release of political prisoners and the arrest of those who opened fire on protesters early in the revolt.

On Monday, one of the leading protest groups threatened to cut off negotiations with the military council running the interim government unless it agreed to a timetable for protesters' key demands.

After a five-hour meeting with the council over the weekend, the Coalition for Revolution Youth gave officials two days to set a schedule or face the return of huge crowds in the streets, according to a posting on its Facebook page.

"In the event that a timeline is not set in response to said demands," the statement said, "the coalition will stop all negotiations with the supreme council and will work with the masses of revolutionaries in Egypt to pressure for their achievement."

Grimaldi reported from Washington.

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