Billions, billions, where are the billions?

The Hunt for Mubarak's Billions

Philip Shenon is an investigative reporter and bestselling author, based in Washington D.C. Almost all of his career was spent at The New York Times, where he was a reporter from 1981 until 2008. He left the paper in May 2008, a few weeks after his first book, The Commission: The Uncensored History of the 9/11 Investigation, hit the bestsellers lists of both The New York Times and The Washington Post. He has reported from several warzones and was one of two reporters from The Times embedded with American ground troops during the invasion of Iraq in the 1991 Gulf War.

The Egyptian leader has resigned, but the search for his massive family fortune is just beginning. Philip Shenon reports on how the wealth was concealed—and shifted around as the uprising began. Plus, full coverage of the Egypt revolution.

With the old pharaoh gone, the hunt for his gold begins.

A senior Western intelligence official tells The Daily Beast that European spy agencies have detected efforts in recent weeks by former Egyptian president Hosni Mubarak and his family to shift their assets, believed to total in the billions and perhaps tens of billions of dollars, to bank accounts and investments where they cannot be easily traced in a post-Mubarak Egypt.

We’re aware of some urgent conversations within the Mubarak family about how to save these assets, and we think their financial advisers have moved some of the money around,” the official said, refusing to say how the conversations were monitored. The conversations occurred, he said, before Mubarak’s resignation Friday and before Swiss banking authorities announced they had frozen accounts there believed to be held by Mubarak and his clan.

“If he had real money in Zurich, it may be gone by now,” the official said. “The Mubaraks didn’t want to finish up like Ben Ali.” (In an uprising in Tunisia last month that appears to have inspired Egyptians to act, President Zine El Abidine Ben Ali and his family were forced into exile in Saudi Arabia so abruptly that Swiss authorities were able to freeze the family’s bank accounts while they still reportedly held substantial amounts of money.)

The intelligence official said the CIA and other Western spy agencies believed that recent news reports suggesting that Mubarak was worth as much as $70 billion were “exaggerated to the extent that anybody, Mubarak included, really knows how much the family is worth.” The official added, however, that “it’s very fair to assume that he’s a billionaire, probably many times over—he’s been taking his cut for a long time.”

Mubarak, it seems, will spend much of his retirement like other toppled despots of recent years—fending off litigation in courthouses around the world seeking to trace and seize his family’s ill-gotten gains. (Think Ferdinand Marcos of the Philippines, Jean-Claude “Baby Doc” Duvalier of Haiti, and Suharto of Indonesia, among others.)

The other defendants in Mubarak’s court battles will likely include his many loyal henchmen in the Egyptian government, including some of the army generals who are now apparently running Egypt in the wake of Mubarak’s ouster.

Mubarak’s best hope of not being forced into exile—he fled Cairo for his palace in the Egyptian Red Sea resort of Sharm el-Sheikh and has said repeatedly in recent days that he intends to die in Egypt—may be the fear of the generals of what he might reveal about widespread corruption in the Egyptian military if the Mubaraks became subject to the laws of an unfriendly host country.

Photos: Mubarak's New Life in Sharm el-Sheikh
Former President Hosni Mubarak (2nd-R) poses with his wife Suzanne (2nd-L) accompanied by their sons Gamal (R) and Alaa (L) in the Tahadeya Place in Cairo in this undated photo (Credit: AFP/Getty Images)

Diplomats and scholars who specialize in Egyptian affairs say while Mubarak’s fortune is almost certainly well-hidden abroad in secret bank accounts and in investments using dummy corporations, there may be some obvious routes to finding the money, especially by tracing the many lucrative foreign business ventures of Mubarak’s youngest son, Gamal.

The urbane 47-year-old Gamal, who treats London as a second home and bases himself there out of a six-story Georgian townhouse in Knightsbridge, a stone’s throw from Harrods and Hyde Park, once seemed in line to succeed his father.

Down the street from his London home are the offices of Medinvest Associates, the investment and consulting firm he founded after leaving a job at Bank of America; news accounts suggest that Gamal may no longer be formally tied to the firm. “I’d like to know a lot more about Medinvest and what its real function has been,” said a Western diplomat who was long based in Cairo. (Spokesmen for Medinvest did not return phone calls last week from The Daily Beast for comment.)

Arwa Hassan, a Middle East specialist for the anti-corruption group Transparency International, said Gamal appeared to be at the center of the Mubarak family’s finances, often approaching successful businesses operating in Egypt and insisting that he be added to their board of directors or their executive ranks in a not-so-subtle effort to take his share.

“It was really common for Gamal Mubarak to approach a successful business and say, make me a partner in your business,” she said. “I’ve heard this from various sources. I don’t think it was a secret.”

That Mubarak might be as rich—or even richer—than many of his counterparts in the Arab world, including some of his oil-rich royal neighbors in Saudi Arabia and the Persian Gulf, would once have seemed startling given Mubarak’s often successful effort over 30 years to portray himself as a simple, unpretentious man who never sought power—or wealth—but was forced into leadership by the assassination of his predecessor, Anwar Sadat.

His reported wealth is especially shocking given the poverty of his nation. The average Egyptian has an income of about $6,000 a year, with almost 20 percent earning the equivalent of less than a dollar a day.

Christopher Davidson, a Middle East scholar at Durham University in Britain, said Mubarak has been accumulating wealth at a rate that may put some of his greediest neighbors to shame, often by insisting that the Mubarak family and its cronies receive a cut of the hundreds of billions of dollars in foreign investment that have flowed into the country during his decades in power.

“I think this is something the international media has never paid much attention to," Davidson said. “But on the Arab street, this has been well known. With the Mubaraks, we’re talking about one of the richest families in the world. They control a very large empire of wealth that has been very carefully hoarded.”

He said he worried that most of Mubarak’s money would never be found, no matter how aggressive the search. “Families like the Mubaraks pay big bucks to insure that investigations to find their money lead nowhere,” he said. “Their wealth has probably been spread carefully—and cleverly.”

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