In a controversial development, reports and media statements from official entities have revealed the involvement of several ministers in potentially dubious deals with private companies. This intersection between government and private interests raises serious questions about the impartiality of ministerial decisions and whether they are made for the benefit of the nation or a select few. Egyptian laws are clear about conflicts of interest, prohibiting any government official from exploiting their position for personal gain. However, recent reports indicate loopholes in the system or the lax enforcement of laws.

Assem El-Gazzar and Organi

Article 15 of the Conflict of Interest Law No. 106 of 2013 stipulates that “a government official is prohibited, upon leaving their position for any reason, for a period of six months thereafter, from assuming a position in the private sector with a company or entity that was related to their previous work, subject to their oversight, or associated with it, or from engaging in professional activities related to it, or dealing with the entity they previously headed; except with the approval of the Anti-Corruption Committee. They are also prohibited from investing in fields that were directly under their supervision or providing consultancy to companies that were subject to their oversight during the mentioned period. They are prohibited from engaging in any activity that could be considered as exploiting the information that their previous position made available to them.”

In clear violation of this law – contrary to the aforementioned article – the former Minister of Housing, Assem El-Gazzar, who left his position on July 2, 2024, appeared in Libya on July 6, having been appointed as the Chairman of the Board of Directors of Neom Real Estate Development Company, which is one of the leading companies of the Organi Group, owned by businessman Ibrahim Organi, who is close to Cairo’s authority.

This happened despite the law stipulating that a six-month period must pass after the government official leaves their position before they can assume another position in a company linked to their previous work or under their oversight when they were in office. Since Neom is a real estate development company, everything it offers intersects with the work of the former minister, and it was under his oversight for more than five years.

The Libyan Reconstruction and Development Fund’s Facebook page published a post accompanied by snapshots of the former Minister of Housing, just five days after he left the ministry, signing several contracts as the Chairman of Neom Real Estate Development Company. The other party signing was Engineer Belkacem Khalifa Haftar – General Manager of the Libyan Reconstruction and Development Fund – and the contracts pertain to several projects planned for implementation in Derna and the cities of the Green Mountain, described by the fund as part of its strategic vision for the development and reconstruction of all Libyan cities and regions.

Assem El-Gazzar did not appear in the snapshots posted on Ibrahim Organi’s website regarding the agreement, but it seems that it was agreed to keep the matter under wraps. All the photos on Ibrahim Organi’s official site featured the businessman himself signing the agreements, with no appearance of Assem El-Gazzar. However, the post by the Libyan Reconstruction and Development Fund exposed the matter.

Conflict of Interest

 According to the official gazette, the Conflict of Interest Law encompasses a wide range of government officials, from the President of the Republic, the Prime Minister, and ministers, down to lower administrative levels such as governors, general secretaries of governorates, heads of local units, and heads of public authorities and institutions. This also includes deputies and assistants of those holding these positions.

The law does not only prohibit former government officials from assuming positions in companies related to their previous ministries, but also extends the prohibition to investing in these companies and providing consultancy services to them. The ban period is a full six months after the official leaves their position. This comprehensive ban aims to prevent the exploitation of information that the official had access to during their tenure, as this information is supposed to be confidential or sensitive and could be exploited for personal gain at the expense of public interest.

Public Business Sector and Organi Companies

Article 6 of the Conflict of Interest Law states that “holding a government official position while also holding a membership in the boards of private companies or projects, or working in them, constitutes an absolute conflict of interest. They must resign from such membership or work immediately upon their appointment to the government position. If certain procedures are required for the acceptance of the resignation, they must refrain from attending board meetings or participating in the project’s or company’s activities, or in decision-making processes, and from accepting any material returns from them during the necessary period for those procedures.”

According to what was published on the official page of the Council of Ministers, Mohamed Ibrahim Ahmed Shimi – the new Minister of Public Business Sector – holds the position of CEO and Managing Director of “Cadence” Energy, which is part of the Organi Group. He has held this position since May 2023, and despite news of his resignation, there is no confirmed information about this.

The Council of Ministers’ page, which notes the end date of each minister’s previous tenure before assuming their new position, did not mention that he left this position, only the start date of his tenure in Organi’s company. This continues the overt disregard of Mustafa Madbouly’s government ministers for the principle of conflict of interest and the suspicions surrounding ministers when they combine private sector work with official government positions.

Organi’s empire has seen remarkable growth in recent years, especially after the January 2011 revolution. Recently, Cadence was established in 2023 as a technical arm of the Organi Group to expand its activities in vital sectors such as energy and industry. From real estate development to ready-mix concrete and car dealerships, Organi owns a vast group of companies: “EgyMix for Ready-Mix Concrete, Neom for Real Estate Development, Sons of Sinai for Construction and Building, Sons of Sinai for Trade and Contracting, Egypt Sinai – Aitos for Security Services, Sinai for Good Foundation, Organi Development, Hala for Tourism Services, Al-Wasim Association, Neom for Exchange, and Global Auto.”

Reports indicate a close connection between Cadence and the Ministry of Public Business Sector in Cairo. The former Minister of Public Business and current Minister of Electricity, Mahmoud Asmat, witnessed the signing of a partnership contract with Cadence to establish a factory for producing chlorine granules. This relationship raises questions about the extent of Organi’s influence on the ministry’s decisions, especially since the ministry owns significant assets and companies targeted for privatization.

Organi has sparked widespread controversy due to his rapid rise and involvement in several contentious issues, most notably the case of the seized plane in Zambia.

Investigative reports revealed that Ibrahim Organi owns the plane seized by Zambian authorities, which was carrying a large amount of money and suspicious materials. This revelation has heightened suspicions about the sources of the Sinai businessman’s wealth and his business activities.

Despite the criticism directed at the Ministry of Public Business Sector for liquidating some companies, the ministry has achieved significant profits in recent times. However, the issue of transparency and integrity in dealing with the ministry’s assets and affiliated companies remains questionable, especially given the close relationships between the ministry and businessmen like Organi, who plays a prominent role in Gaza. He established the “Hala” company, responsible for coordinating the passage of Palestinians from Gaza to Egypt. This control has led to a significant increase in the fees paid by Palestinians, sparking widespread criticism.

Egyptian writer and political analyst Magdy Al-Haddad likened Ibrahim Organi’s current empire to what former President Hosni Mubarak’s regime facilitated for businessman Ahmed Ezz, who monopolized the iron market through “Ezz Dekheila Steel Company” after working in the arts. Al-Haddad described this as a setback against the gains the people nearly achieved after the 2011 revolution, suggesting it appears as a challenge to the citizens struggling with economic conditions, exacerbated by appointing those included in the ministerial reshuffle to major companies run by individuals close to the regime.

“Why are so many ministers allowed to work in private companies? It might be due to the gains some state entities want to achieve indirectly through these companies managed in this manner, attracting former or current ministers, blatantly violating the Conflict of Interest Law,” adds Al-Haddad in his conversation with Zawia3. He points out that “what’s happening is bringing Egypt back to decades when alliances between money, power, and arms seemed commonplace, but these days, the alliance is between power and wealth without arms.”

The political analyst believes there is something akin to recycling former ministers within the private business of the regime and its followers, behind the facade of Organi Group companies, to ensure these ministers, who were witnesses and part of the government’s failures, do not escalate their grievances. By not offering them a personal benefit upon removal, they could transfer their anger to the citizens already affected by the current conditions.

Al-Haddad confirms that the breaches of laws and the path towards obscurity in monetary policies pose a danger to the state and economy’s core. He highlights that the Egyptian economy’s crises persist due to faulty institutional policies and the practice of appointing insiders rather than competent individuals. He describes the continuous borrowing from the International Monetary Fund as a cornerstone that deepens the economic predicament, stating that the debts Egypt has accrued in recent years will remain a dark spot in the history of future generations.

Kojak’s Relationship with Talaat Moustafa Group

Despite the statement issued by Talaat Moustafa Group Holding – one of Egypt’s largest real estate development companies – confirming it received a letter from Misr Insurance Company, as a member of the group’s board, indicating Ahmed Kojak’s resignation from representing it on the board after his appointment as Minister of Finance, and the company’s disclosure to the Egyptian Stock Exchange a few days after the appointment that Misr Insurance would later provide its representative on the board; this does not negate that Kojak, before assuming his current position, was Deputy Minister of Finance for Financial Policies, concurrently holding the position he just left, according to the group’s statement.

This matter also falls under the purview of the Conflict of Interest Law since Kojak held an official position in Madbouly’s government as Deputy Minister of Finance, placing him under conflict of interest due to the intersection of the company’s work with the Ministry of Finance’s responsibilities and subsequently his duties when he was Deputy Minister, in Talaat Moustafa Group.

The company achieved significant growth in its profits and revenues in 2023, with net profits after taxes and non-controlling interests rising substantially to 3.31 billion pounds compared to 2.3 billion pounds the previous year. Revenues also saw a strong increase, reaching 28.43 billion pounds compared to 19.87 billion pounds in 2022. On an independent profit level, the company recorded a slight rise, reaching 682.46 million pounds in 2023.

How Will the Economic Climate Be Affected?

 Abdel Khaleq Farouk, former director of the Nile Center for Economic and Strategic Studies, reveals his opinion on the impact of these practices on investment and the economic climate in Egypt. He says: “If their validity is confirmed and they apply to any country in the world, not just Egypt, they will certainly have an impact. Investors always have expectations of fairness in the opportunities and advantages they receive. They thoroughly study the economic climate in the countries where they invest their money, which also applies to local investors. Therefore, transparency in Egypt’s investment climate is necessary.”

Farouk stresses in his statements to Zawia3 the need for law enforcement on everyone. If it is proven that the Conflict of Interest Law was violated regarding the appointment of a minister in a specific position in a private company whose investments intersect with the nature of their governmental work before the ministerial change, state and legal intervention is required because supposedly, no one is above the law now to prevent such matters from recurring.

The former director of the Nile Center for Economic and Strategic Studies continues: “Why doesn’t the state spend on reactivating government companies to increase their production and revenues instead of moving towards selling them to businessmen to repay debts? There is a necessity to reconsider spending on some major projects without priority or direct benefits to the citizen.”

Al-Mashat and Public Funds

Rania Al-Mashat, Minister of International Cooperation, who was renewed and included the Ministry of Planning in her work, still combines her governmental position, which she assumed in November 2022, with a non-executive independent board member position at Abu Dhabi Islamic Bank, which has extensive operations in Egypt.

The bank announced Al-Mashat’s appointment as a non-executive independent board member, which was presented to Prime Minister Mostafa Madbouly, who authorized her to do so, continuing the cycle of combining government positions with positions in private institutions, companies, and banks, ensuring ongoing suspicions already targeting the government.

Previously, Abu Dhabi Islamic Bank revealed achieving net profits of 1.007 billion pounds after taxes in the financial period ending in March 2023, compared to 445 million pounds in the same period the previous year, an increase of 562 million pounds, a growth of 126%. The consolidated business results indicators show a rise in the bank’s total revenues, reaching 2.364 billion pounds, a growth rate of 93% last year compared to the previous year.

Continuing the controversy sparked by appointing the Minister of Planning and International Cooperation in the new government, Egyptian parliament member Mohamed Al-Somoudi submitted a question to the government about the appropriateness of appointing the minister to the Gulf bank’s board, according to the law and the constitution. He said: “Accordingly, the minister Rania Al-Mashat’s combining her government position as a minister, receiving a salary from public funds, and a position in a Gulf bank in dollars constitutes a clear violation of the principle of separation between executive and functional authority and conflicts with the idea of a rational state and the new republic we aspire to.”

Despite the authority’s declaration that no one is above the law, while not applying the Conflict of Interest Law themselves, the question remains about the mechanism by which the authority itself and its government apply the laws they are supposed to safeguard.