Hussein Salem
Encyclopedia
Hussein Salem is an Egypt
ian businessman, co-owner of the East Mediterranean Gas Company
(EMG), and ally and advisor to former president Hosni Mubarak
. He is also the chairman and CEO of HKS Group, a hospitality company that operates Maritim Jolie Ville Resort
in Sharm El Sheikh. He has been described as "one of the most secretive businessmen in Egypt", a mogul, and Mubarak's close confidant.
Salem fled Egypt during the Egyptian revolution of 2011 on February 3. A warrant for his arrest was issued by the International Criminal Police
(Interpol) in May, 2011. He was later arrested at his home in La Moraleja, Madrid
, Spain
on June 14. Salem is currently under investigation for corruption, on charges he bribed Mubarak and his family to gain a monopoly on the sale of gas to Israel, and for squandering public funds by selling Egyptian natural gas to Israel at below market prices. Salem's trial in Egypt began on August 3, 2011.
's Muqattam district. Records of the Egyptian Administrative Control Authority indicate, however, that he was born in the Helwan suburb of Cairo, although al-Ahram Weekly
states the latter location was actually Salem's father's birthplace. His father, Kamal el-Din, worked as a school teacher, but died of typhoid during Salem's childhood. Afterward, his family moved to an apartment in the Korba area of Cairo's Heliopolis
district.
His mother, Hosnia Tabozoda (who was of Turkish
origins,) encountered great difficulty providing for her children with her late husband's pension, forcing Salem, the eldest of his two siblings to become the family's main provider. He also had five half-siblings from his father's first wife (Hosnia was his second wife,) but was not responsible for them, most of whom were older than Salem. Although it has not been proven, he allegedly has Bedouin
origins. Some sources say this was a rumor Salem allegedly spread in order to help him secure future business deals with the Bedouin tribes of the southern Sinai Peninsula
. The only known relation Salem had with the Bedouin was through marriage; his half-sibling Samiha married into the Abaydah tribe of Ismailia
and Sinai.
During his childhood, Salem's sustained an eye injury, disallowing him from entering the mandatory military service. He graduated from the Heliopolis Public High School, but had to repeat his senior year. In 1956, he graduated from Cairo University
's Faculty of Commerce. Shortly after receiving his degree, one of Salem's relatives secured a job for him as a clerk in the Textile Support Fund which then-President Gamal Abdel Nasser
had established to alleviate high unemployment rates, particularly among the youth. Later in 1956, Nasser nationalized the Suez Canal Company
, prompting a tripartite assault on Egypt by the United Kingdom
, France
and Israel
. Although Salem favored open markets, there has been no indication that he opposed the canal's nationalization, although he resented Nasser's decision to nationalize the holdings of top capitalists in Egypt in 1961.
In 1959, he married Nazimah Abdel-Magid Ismail and the couple moved into a three-bedroom apartment in the Golf area of Heliopolis. The monthly rent was nine pound
s (Salem's monthly salary was 18 pounds.) The couple's first child, Khaled, was born in 1961, followed by the birth of their daughter, Magda, two years later. According to one of his neighbors at the time, Salem did not own a car or many luxuries for most of the 1960s and early 1970s. He enrolled Khaled into Saint George, a private British school in Heliopolis, an education which Salem had to frequently borrow money to pay for.
, Morocco
which paid 43 pounds per month. A former CEO at the company—which was allegedly a front for the Egyptian Intelligence Services
—remembered Salem as a very private employee who traveled abroad often. The CEO believes Salem was supervising arms deals to help nationalist struggles against European colonialism in North Africa
, in line with Nasser's foreign policy at the time.
In Casablanca Salem befriended Amin Howeidi who served as Egypt's ambassador to Morocco at the time. That same year, 1963, Howeidi was appointed ambassador to Iraq
and he brought Salem with him to serve as the Arab Company's branch director in Baghdad
. Salem began cultivating relationships with the high-ranking staff of the Egyptian embassy in Iraq, particularly Amin Yousri the embassy's press-attache and Ibrahim Yousri the embassy's second secretary. Al-Ahram Weekly
editor Karem Yehia states that the Yousris claim Salem was a "likable" person, but not "intellectually sophisticated." Howeidi mentored Salem on international politics by enrolling him in study groups particularly after Howeidi was appointed by then-President Gamal Abdel Nasser
to the post of Intelligence Director in 1967 following Egypt's defeat in the Six Day War with Israel
.
According to Ibrahim Yousri, Salem gained Howeidi's trust primarily because he was able to regularly provide Howeidi with useful intelligence due to his connections with business circles in Iraq which would have otherwise been difficult to attain through the Egyptian embassy. Amin Yousri claims Salem cultivated good relationships with other Egyptian embassy employees by helping them buy Mercedes vehicles at low interest rates offered by the Iraqi Central Bank. Despite his relative success in Baghdad, Salem did not find his work there as particularly fulfilling and requested Howeidi a number of times for transfer to Europe where he said he had "friends" who could help him start a private business. Instead, Salem was sent on ambassadorial missions to the Arab Gulf states. There he succeeded in establishing his own personal networks that would later become useful during his future business ventures in those states.
Relations between Howeidi and Salem deteriorated following Nasser's death in 1970 and the succession of Anwar Sadat
to the presidency afterward. Howeidi, an ardent supporter and symbol of Nasser's socialist
and nationalist struggles, was imprisoned by Sadat in 1971; Salem, uninterested in Nasser's ideals subsequently abandoned Howeidi, did not visit him in prison and ignored his wife's phone calls. Nonetheless, Salem lost his job in the Intelligence Directorate along with its perks. His half-brother Abdel Hamid later managed to secure Salem a job at Nasr Import and Export Company that same year by petitioning a senior official in Sadat's administration.
, United Arab Emirates
(UAE) in 1972 where he became CEO of the Arab Emirates Trade Company, an importer of food supplies for UAE. He was set up there by former Egyptian economy minister Hassan Abbas Zaki, an economic adviser to the president of the UAE, Sheikh Zayed, at the time. Using his position, between 1972 and 1977 Salem reportedly developed extensive business relations in several Western countries, as well as India
and Pakistan
. Through these contacts, he gained considerable wealth and began transferring large amounts of cash to Switzerland
where he also purchased a number of hotels.
Starting in 1977 Salem's financial situation began to improve considerably. Following then-Egyptian President Anwar Sadat
's visit to Israel on November 19, 1977, the UAE downgraded relations with Egypt. Salem had still managed to maintain good relations with Emirati officials, but nonetheless left the UAE that same year. The primary reason behind Salem's departure was not linked to the political situation between the two countries, however. Instead he was said to have been forced out by some Emirati business families who claimed Salem's operations hurt them financially. According to Yehia, some sources say Salem fled hours before his company's headquarters were raided by auditing officials while other sources claim he was actually arrested and spent a number of days in an Emirati jail. Sayed Ali al-Sharfaa, the director of the Royal Chief of Staff at the time, stated Salem was not charged with a crime and was subsequently pardoned by Sheikh Zayed. He also denied rumors that Salem had amassed $20 million in Abu Dhabi, stating "These are exaggerations ... We did not have anyone in the Emirates who had more than a million Dirham
s at that time." Contrarily, Amin Yousri claimed that Salem had directly informed him that he acquired $200 million in the UAE which he transferred to his Swiss bank accounts. He would later relocate half of his money to Spain
, according to Yousri, where he gained Spanish citizenship and bought a mansion in Majorca.
whom Sadat appointed Vice President in 1975. It was only in 1977 that things began to shape up for Salem. After returning to Egypt from a short assignment in the United Arab Emirates, he moved with his family from his Golf area apartment into a new unit in an apartment building he constructed in Saba Emarat area of Heliopolis. For two years Salem lived in his old apartment in Cairo
's affluent Heliopolis
neighborhood. Although he was a millionaire by then, he took a job as an employee of the economy ministry, tasked with managing commercial deals. He reportedly kept his other business ventures private while working in the government. In 1979, Prime Minister Mustafa Khalil
appointed him Commissioned Minster of Trade at the Egyptian embassy in Washington D.C..
That same year, Salem became CEO of the Egyptian American Transportation Company (ETSCO), established in Delaware
with a branch in Cairo. On October 9, 1982, an article was published by the Washington Post entailing violations the company committed regarding various arms deals following the singing of the Camp David Accords
in 1979. The arms deals involved using money from the Persian Gulf states
to fund Mujahideen
efforts against the Soviet occupation of Afghanistan
and dictatorships in Latin America
. Kamal Hassan Ali, the Egyptian minister of foreign affairs at the time, vehemently denied the allegations against ETSCO, calling them "wicked." He claimed the Egyptian government found no evidence of foul play on the part of the company during its year-long investigation of the incident. Ali went on to threaten to sue "anyone who dares to smear his name or any other Egyptian official" in American courts.
ABC News
ran a televised documentary in early March 2011 about what it described as corruption that was built in the Camp David Accords and American military aid to Egypt. The network highlighted what it called the role of Hosni Mubarak
, Mounir Thabet (Suzanne Mubarak
’s brother) and the late Field Marshal Abu-Ghazalah in ETSCO’s illegal ventures. The aforementioned men received millions of dollars by maintaining an operation filled with illegal commissions, bribes and bidding violations. Salem paid an $8 million fine to The Pentagon
in 1984 to settle the case. However, Amin Yousri would later discover through a memo sent from the Egyptian embassy to the Foreign Ministry in Cairo that Salem actually paid the Pentagon a much larger figure than was publicly announced. The memo mentioned that Salem's lawyers reached a $60 million settlement with the US government. A former partner in ETSCO who was also a CIA agent, Edwin Wilson, told ABC that Salem was a "front man" for Mubarak. According to anonymous employees
experienced a boom in real estate investment, particularly in Sharm al-Sheikh. That year, Salem had commissioned the construction of a very large hotel called the Jolie Ville in that city. Suspicions were raised on Salem's acquisitions of property in Sinai since it was notably difficult for locals to acquire small parcels of land there and Salem had little background in construction. High-ranking officials, including Abdel Moneim Said, the governor-general of South Sinai, and Hamid Khodeir, a local council member of the nearby city of el-Tor
, claim Salem gained contracts for the land along the southern Sinai coast due to his close friendships with Mubarak and his son Gamal
. From 1987 until the early 21st-century, Salem had established tourism empire in Sinai, owning several hotels. Major expansions to his business operations in Sinai included a mass conference hall, a golf course, a luxurious mosque for Mubarak's personal use, and numerous palaces, one of which he sold to Mubarak. In 1997, the Jolie Ville hosted a large conference sponsoring peace in the Middle East related to the Arab-Israeli conflict.
The local Bedouins who lived along the southern Sinai coast privately criticized Salem for ignoring their community by not building any projects in the local areas. Members of the el-Tor local council complained that his operations further marginalized the Bedouins by not contributing to their welfare, increasing their sense of marginalization. Abdel-Moneim Said agreed, stating "Salem did not contribute anything that benefited ordinary people in the governorate." In 2002, Said claimed that after the local government constructed a strip-like "Walk" adjacent to the Jolie Ville Hotel intended for locals to open business along, Mubarak ordered the governor to hand it over to Salem.
which Mubarak helped broker, Israel and Egypt began work on a gas pipeline to supply the former with natural gas
and to build a petroleum refinery in Sinai, the first privately owned refinery in the Arab Middle East. Mubarak awarded Salem licenses to work on both projects. Salem's relations with Israeli business circles dates back to the 1970s during his tenure at the Washington D.C. embassy and whilst the Israelis and Egyptians were negotiating Camp David. In 1996, Salem sold most of his shares in the new refinery company, Midor, and made a substantial profit. In 2007, he sold most of his shares in the East Mediterranean Gas Company
, a year before the pipeline actually pumped any gas. According to the New York Times, Israel gained 40% of its gas needs from below-market price Egyptian gas exports. The Israeli newspaper Yediot Aharonoth described Salem as the "number one man" of the normalization process between the two states.
Egypt
Egypt , officially the Arab Republic of Egypt, Arabic: , is a country mainly in North Africa, with the Sinai Peninsula forming a land bridge in Southwest Asia. Egypt is thus a transcontinental country, and a major power in Africa, the Mediterranean Basin, the Middle East and the Muslim world...
ian businessman, co-owner of the East Mediterranean Gas Company
East Mediterranean Gas Company
East Mediterranean Gas Company is an owner and operator of the Arish–Ashkelon pipeline. It is a joint company of Mediterranean Gas Pipeline Ltd , the Israeli company Merhav , PTT , EMI-EGI LP , and Egyptian General Petroleum Corporation ....
(EMG), and ally and advisor to former president Hosni Mubarak
Hosni Mubarak
Muhammad Hosni Sayyid Mubarak is a former Egyptian politician and military commander. He served as the fourth President of Egypt from 1981 to 2011....
. He is also the chairman and CEO of HKS Group, a hospitality company that operates Maritim Jolie Ville Resort
Maritim Jolie Ville Resort
Maritim Jolie Ville Resort is a resort hotel and golf course in Naama Bay, Sharm El Sheikh, Egypt. It is run by the HKS Group, chaired by Hussein Salem....
in Sharm El Sheikh. He has been described as "one of the most secretive businessmen in Egypt", a mogul, and Mubarak's close confidant.
Salem fled Egypt during the Egyptian revolution of 2011 on February 3. A warrant for his arrest was issued by the International Criminal Police
Interpol
Interpol, whose full name is the International Criminal Police Organization – INTERPOL, is an organization facilitating international police cooperation...
(Interpol) in May, 2011. He was later arrested at his home in La Moraleja, Madrid
Madrid
Madrid is the capital and largest city of Spain. The population of the city is roughly 3.3 million and the entire population of the Madrid metropolitan area is calculated to be 6.271 million. It is the third largest city in the European Union, after London and Berlin, and its metropolitan...
, Spain
Spain
Spain , officially the Kingdom of Spain languages]] under the European Charter for Regional or Minority Languages. In each of these, Spain's official name is as follows:;;;;;;), is a country and member state of the European Union located in southwestern Europe on the Iberian Peninsula...
on June 14. Salem is currently under investigation for corruption, on charges he bribed Mubarak and his family to gain a monopoly on the sale of gas to Israel, and for squandering public funds by selling Egyptian natural gas to Israel at below market prices. Salem's trial in Egypt began on August 3, 2011.
Early life
Salem was born on November 11, 1933 in the Khalifa neighborhood of CairoCairo
Cairo , is the capital of Egypt and the largest city in the Arab world and Africa, and the 16th largest metropolitan area in the world. Nicknamed "The City of a Thousand Minarets" for its preponderance of Islamic architecture, Cairo has long been a centre of the region's political and cultural life...
's Muqattam district. Records of the Egyptian Administrative Control Authority indicate, however, that he was born in the Helwan suburb of Cairo, although al-Ahram Weekly
Al-Ahram Weekly
Al-Ahram Weekly is an Egyptian English-language weekly broadsheet printed by the Al-Ahram Publishing House in Cairo, Egypt.It was established in 1991 by the Al-Ahram newspaper, which also runs a French-language weekly version, Al-Ahram Hebdo....
states the latter location was actually Salem's father's birthplace. His father, Kamal el-Din, worked as a school teacher, but died of typhoid during Salem's childhood. Afterward, his family moved to an apartment in the Korba area of Cairo's Heliopolis
Heliopolis (Cairo Suburb)
Modern Heliopolis is a district in Cairo, Egypt. The city was established in 1905 by the Heliopolis Oasis Company, headed by the Belgian industrialist Édouard Louis Joseph, Baron Empain, as well as Boghos Nubar, son of the Egyptian Prime Minister Nubar Pasha.-History:The Baron Empain, a well known...
district.
His mother, Hosnia Tabozoda (who was of Turkish
Turkish people
Turkish people, also known as the "Turks" , are an ethnic group primarily living in Turkey and in the former lands of the Ottoman Empire where Turkish minorities had been established in Bulgaria, Cyprus, Bosnia and Herzegovina, Georgia, Greece, Kosovo, Macedonia, and Romania...
origins,) encountered great difficulty providing for her children with her late husband's pension, forcing Salem, the eldest of his two siblings to become the family's main provider. He also had five half-siblings from his father's first wife (Hosnia was his second wife,) but was not responsible for them, most of whom were older than Salem. Although it has not been proven, he allegedly has Bedouin
Bedouin
The Bedouin are a part of a predominantly desert-dwelling Arab ethnic group traditionally divided into tribes or clans, known in Arabic as ..-Etymology:...
origins. Some sources say this was a rumor Salem allegedly spread in order to help him secure future business deals with the Bedouin tribes of the southern Sinai Peninsula
Sinai Peninsula
The Sinai Peninsula or Sinai is a triangular peninsula in Egypt about in area. It is situated between the Mediterranean Sea to the north, and the Red Sea to the south, and is the only part of Egyptian territory located in Asia as opposed to Africa, effectively serving as a land bridge between two...
. The only known relation Salem had with the Bedouin was through marriage; his half-sibling Samiha married into the Abaydah tribe of Ismailia
Ismaïlia
-Notable natives:*Osman Ahmed Osman, a famous and influential Egyptian engineer, contractor, entrepreneur, and politician, was born in this town on 6 April 1917....
and Sinai.
During his childhood, Salem's sustained an eye injury, disallowing him from entering the mandatory military service. He graduated from the Heliopolis Public High School, but had to repeat his senior year. In 1956, he graduated from Cairo University
Cairo University
Cairo University is a public university located in Giza, Egypt.The university was founded on December 21, 1908, as the result of an effort to establish a national center for educational thought...
's Faculty of Commerce. Shortly after receiving his degree, one of Salem's relatives secured a job for him as a clerk in the Textile Support Fund which then-President Gamal Abdel Nasser
Gamal Abdel Nasser
Gamal Abdel Nasser Hussein was the second President of Egypt from 1956 until his death. A colonel in the Egyptian army, Nasser led the Egyptian Revolution of 1952 along with Muhammad Naguib, the first president, which overthrew the monarchy of Egypt and Sudan, and heralded a new period of...
had established to alleviate high unemployment rates, particularly among the youth. Later in 1956, Nasser nationalized the Suez Canal Company
Suez Canal Company
The Universal Suez Ship Canal Company was the Egyptian corporation which was formed by Ferdinand de Lesseps during 1858, constructed the Suez Canal between 1859 and 1869, and owned and operated it for many years thereafter...
, prompting a tripartite assault on Egypt by the United Kingdom
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
, France
France
The French Republic , The French Republic , The French Republic , (commonly known as France , is a unitary semi-presidential republic in Western Europe with several overseas territories and islands located on other continents and in the Indian, Pacific, and Atlantic oceans. Metropolitan France...
and Israel
Israel
The State of Israel is a parliamentary republic located in the Middle East, along the eastern shore of the Mediterranean Sea...
. Although Salem favored open markets, there has been no indication that he opposed the canal's nationalization, although he resented Nasser's decision to nationalize the holdings of top capitalists in Egypt in 1961.
In 1959, he married Nazimah Abdel-Magid Ismail and the couple moved into a three-bedroom apartment in the Golf area of Heliopolis. The monthly rent was nine pound
Egyptian pound
The Egyptian Pound is the currency of Egypt. It is divided into 100 Qirsh , or 1,000 Milliemes ....
s (Salem's monthly salary was 18 pounds.) The couple's first child, Khaled, was born in 1961, followed by the birth of their daughter, Magda, two years later. According to one of his neighbors at the time, Salem did not own a car or many luxuries for most of the 1960s and early 1970s. He enrolled Khaled into Saint George, a private British school in Heliopolis, an education which Salem had to frequently borrow money to pay for.
Egyptian intelligence in Baghdad
During the early 1960s Salem had landed a job as the branch director for the Arab Company for External Trade in CasablancaCasablanca
Casablanca is a city in western Morocco, located on the Atlantic Ocean. It is the capital of the Grand Casablanca region.Casablanca is Morocco's largest city as well as its chief port. It is also the biggest city in the Maghreb. The 2004 census recorded a population of 2,949,805 in the prefecture...
, Morocco
Morocco
Morocco , officially the Kingdom of Morocco , is a country located in North Africa. It has a population of more than 32 million and an area of 710,850 km², and also primarily administers the disputed region of the Western Sahara...
which paid 43 pounds per month. A former CEO at the company—which was allegedly a front for the Egyptian Intelligence Services
Egyptian General Intelligence Directorate
The General Intelligence Services , often called the Mukhabarat , is an Egyptian intelligence agency responsible for providing national security intelligence, both domestically and transnationally, with a counter-terrorism focus....
—remembered Salem as a very private employee who traveled abroad often. The CEO believes Salem was supervising arms deals to help nationalist struggles against European colonialism in North Africa
North Africa
North Africa or Northern Africa is the northernmost region of the African continent, linked by the Sahara to Sub-Saharan Africa. Geopolitically, the United Nations definition of Northern Africa includes eight countries or territories; Algeria, Egypt, Libya, Morocco, South Sudan, Sudan, Tunisia, and...
, in line with Nasser's foreign policy at the time.
In Casablanca Salem befriended Amin Howeidi who served as Egypt's ambassador to Morocco at the time. That same year, 1963, Howeidi was appointed ambassador to Iraq
Iraq
Iraq ; officially the Republic of Iraq is a country in Western Asia spanning most of the northwestern end of the Zagros mountain range, the eastern part of the Syrian Desert and the northern part of the Arabian Desert....
and he brought Salem with him to serve as the Arab Company's branch director in Baghdad
Baghdad
Baghdad is the capital of Iraq, as well as the coterminous Baghdad Governorate. The population of Baghdad in 2011 is approximately 7,216,040...
. Salem began cultivating relationships with the high-ranking staff of the Egyptian embassy in Iraq, particularly Amin Yousri the embassy's press-attache and Ibrahim Yousri the embassy's second secretary. Al-Ahram Weekly
Al-Ahram Weekly
Al-Ahram Weekly is an Egyptian English-language weekly broadsheet printed by the Al-Ahram Publishing House in Cairo, Egypt.It was established in 1991 by the Al-Ahram newspaper, which also runs a French-language weekly version, Al-Ahram Hebdo....
editor Karem Yehia states that the Yousris claim Salem was a "likable" person, but not "intellectually sophisticated." Howeidi mentored Salem on international politics by enrolling him in study groups particularly after Howeidi was appointed by then-President Gamal Abdel Nasser
Gamal Abdel Nasser
Gamal Abdel Nasser Hussein was the second President of Egypt from 1956 until his death. A colonel in the Egyptian army, Nasser led the Egyptian Revolution of 1952 along with Muhammad Naguib, the first president, which overthrew the monarchy of Egypt and Sudan, and heralded a new period of...
to the post of Intelligence Director in 1967 following Egypt's defeat in the Six Day War with Israel
Israel
The State of Israel is a parliamentary republic located in the Middle East, along the eastern shore of the Mediterranean Sea...
.
According to Ibrahim Yousri, Salem gained Howeidi's trust primarily because he was able to regularly provide Howeidi with useful intelligence due to his connections with business circles in Iraq which would have otherwise been difficult to attain through the Egyptian embassy. Amin Yousri claims Salem cultivated good relationships with other Egyptian embassy employees by helping them buy Mercedes vehicles at low interest rates offered by the Iraqi Central Bank. Despite his relative success in Baghdad, Salem did not find his work there as particularly fulfilling and requested Howeidi a number of times for transfer to Europe where he said he had "friends" who could help him start a private business. Instead, Salem was sent on ambassadorial missions to the Arab Gulf states. There he succeeded in establishing his own personal networks that would later become useful during his future business ventures in those states.
Relations between Howeidi and Salem deteriorated following Nasser's death in 1970 and the succession of Anwar Sadat
Anwar Sadat
Muhammad Anwar al-Sadat was the third President of Egypt, serving from 15 October 1970 until his assassination by fundamentalist army officers on 6 October 1981...
to the presidency afterward. Howeidi, an ardent supporter and symbol of Nasser's socialist
Arab socialism
Arab socialism is a political ideology based on an amalgamation of Pan-Arabism and socialism. Arab socialism is distinct from the much broader tradition of socialist thought in the Arab world, which predates Arab socialism by as much as fifty years...
and nationalist struggles, was imprisoned by Sadat in 1971; Salem, uninterested in Nasser's ideals subsequently abandoned Howeidi, did not visit him in prison and ignored his wife's phone calls. Nonetheless, Salem lost his job in the Intelligence Directorate along with its perks. His half-brother Abdel Hamid later managed to secure Salem a job at Nasr Import and Export Company that same year by petitioning a senior official in Sadat's administration.
Business in Abu Dhabi
Unhappy at the loss of the prestige and perks of his former intelligence job, Salem decided to move to Abu DhabiAbu Dhabi
Abu Dhabi , literally Father of Gazelle, is the capital and the second largest city of the United Arab Emirates in terms of population and the largest of the seven member emirates of the United Arab Emirates. Abu Dhabi lies on a T-shaped island jutting into the Persian Gulf from the central western...
, United Arab Emirates
United Arab Emirates
The United Arab Emirates, abbreviated as the UAE, or shortened to "the Emirates", is a state situated in the southeast of the Arabian Peninsula in Western Asia on the Persian Gulf, bordering Oman, and Saudi Arabia, and sharing sea borders with Iraq, Kuwait, Bahrain, Qatar, and Iran.The UAE is a...
(UAE) in 1972 where he became CEO of the Arab Emirates Trade Company, an importer of food supplies for UAE. He was set up there by former Egyptian economy minister Hassan Abbas Zaki, an economic adviser to the president of the UAE, Sheikh Zayed, at the time. Using his position, between 1972 and 1977 Salem reportedly developed extensive business relations in several Western countries, as well as India
India
India , officially the Republic of India , is a country in South Asia. It is the seventh-largest country by geographical area, the second-most populous country with over 1.2 billion people, and the most populous democracy in the world...
and Pakistan
Pakistan
Pakistan , officially the Islamic Republic of Pakistan is a sovereign state in South Asia. It has a coastline along the Arabian Sea and the Gulf of Oman in the south and is bordered by Afghanistan and Iran in the west, India in the east and China in the far northeast. In the north, Tajikistan...
. Through these contacts, he gained considerable wealth and began transferring large amounts of cash to Switzerland
Switzerland
Switzerland name of one of the Swiss cantons. ; ; ; or ), in its full name the Swiss Confederation , is a federal republic consisting of 26 cantons, with Bern as the seat of the federal authorities. The country is situated in Western Europe,Or Central Europe depending on the definition....
where he also purchased a number of hotels.
Starting in 1977 Salem's financial situation began to improve considerably. Following then-Egyptian President Anwar Sadat
Anwar Sadat
Muhammad Anwar al-Sadat was the third President of Egypt, serving from 15 October 1970 until his assassination by fundamentalist army officers on 6 October 1981...
's visit to Israel on November 19, 1977, the UAE downgraded relations with Egypt. Salem had still managed to maintain good relations with Emirati officials, but nonetheless left the UAE that same year. The primary reason behind Salem's departure was not linked to the political situation between the two countries, however. Instead he was said to have been forced out by some Emirati business families who claimed Salem's operations hurt them financially. According to Yehia, some sources say Salem fled hours before his company's headquarters were raided by auditing officials while other sources claim he was actually arrested and spent a number of days in an Emirati jail. Sayed Ali al-Sharfaa, the director of the Royal Chief of Staff at the time, stated Salem was not charged with a crime and was subsequently pardoned by Sheikh Zayed. He also denied rumors that Salem had amassed $20 million in Abu Dhabi, stating "These are exaggerations ... We did not have anyone in the Emirates who had more than a million Dirham
Dirham
Dirham or dirhem is a unit of currency in several Arab or Berber nations, and formerly the related unit of mass in the Ottoman Empire and Persian states...
s at that time." Contrarily, Amin Yousri claimed that Salem had directly informed him that he acquired $200 million in the UAE which he transferred to his Swiss bank accounts. He would later relocate half of his money to Spain
Spain
Spain , officially the Kingdom of Spain languages]] under the European Charter for Regional or Minority Languages. In each of these, Spain's official name is as follows:;;;;;;), is a country and member state of the European Union located in southwestern Europe on the Iberian Peninsula...
, according to Yousri, where he gained Spanish citizenship and bought a mansion in Majorca.
Return to Egypt and move to Washington D.C.
Salem returned to Egypt following his business ventures in the UAE. In addition to his past history with the Egyptian government, he had established relations with highly influential figures in Egypt by appointing their sons or relatives to positions in his company in the UAE. In late 1977, not long after arriving in Egypt, he met Hosni MubarakHosni Mubarak
Muhammad Hosni Sayyid Mubarak is a former Egyptian politician and military commander. He served as the fourth President of Egypt from 1981 to 2011....
whom Sadat appointed Vice President in 1975. It was only in 1977 that things began to shape up for Salem. After returning to Egypt from a short assignment in the United Arab Emirates, he moved with his family from his Golf area apartment into a new unit in an apartment building he constructed in Saba Emarat area of Heliopolis. For two years Salem lived in his old apartment in Cairo
Cairo
Cairo , is the capital of Egypt and the largest city in the Arab world and Africa, and the 16th largest metropolitan area in the world. Nicknamed "The City of a Thousand Minarets" for its preponderance of Islamic architecture, Cairo has long been a centre of the region's political and cultural life...
's affluent Heliopolis
Heliopolis (Cairo Suburb)
Modern Heliopolis is a district in Cairo, Egypt. The city was established in 1905 by the Heliopolis Oasis Company, headed by the Belgian industrialist Édouard Louis Joseph, Baron Empain, as well as Boghos Nubar, son of the Egyptian Prime Minister Nubar Pasha.-History:The Baron Empain, a well known...
neighborhood. Although he was a millionaire by then, he took a job as an employee of the economy ministry, tasked with managing commercial deals. He reportedly kept his other business ventures private while working in the government. In 1979, Prime Minister Mustafa Khalil
Mustafa Khalil
Mustafa Khalil was an Egyptian politician. He served as the Prime Minister of Egypt from October 2, 1978 to May 15, 1980. Khalil also served as the Egyptian foreign minister from 1979 until 1980. Khalil was best known for helping to negotiate the 1979 Camp David Accord peace treaty between Egypt...
appointed him Commissioned Minster of Trade at the Egyptian embassy in Washington D.C..
That same year, Salem became CEO of the Egyptian American Transportation Company (ETSCO), established in Delaware
Delaware
Delaware is a U.S. state located on the Atlantic Coast in the Mid-Atlantic region of the United States. It is bordered to the south and west by Maryland, and to the north by Pennsylvania...
with a branch in Cairo. On October 9, 1982, an article was published by the Washington Post entailing violations the company committed regarding various arms deals following the singing of the Camp David Accords
Camp David Accords
The Camp David Accords were signed by Egyptian President Anwar El Sadat and Israeli Prime Minister Menachem Begin on September 17, 1978, following thirteen days of secret negotiations at Camp David. The two framework agreements were signed at the White House, and were witnessed by United States...
in 1979. The arms deals involved using money from the Persian Gulf states
Persian Gulf States
Persian Gulf States can refer to:* Countries in the Middle East bordering the Persian Gulf and sometimes known as the Gulf States: Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates....
to fund Mujahideen
Mujahideen
Mujahideen are Muslims who struggle in the path of God. The word is from the same Arabic triliteral as jihad .Mujahideen is also transliterated from Arabic as mujahedin, mujahedeen, mudžahedin, mudžahidin, mujahidīn, mujaheddīn and more.-Origin of the concept:The beginnings of Jihad are traced...
efforts against the Soviet occupation of Afghanistan
Soviet war in Afghanistan
The Soviet war in Afghanistan was a nine-year conflict involving the Soviet Union, supporting the Marxist-Leninist government of the Democratic Republic of Afghanistan against the Afghan Mujahideen and foreign "Arab–Afghan" volunteers...
and dictatorships in Latin America
Latin America
Latin America is a region of the Americas where Romance languages – particularly Spanish and Portuguese, and variably French – are primarily spoken. Latin America has an area of approximately 21,069,500 km² , almost 3.9% of the Earth's surface or 14.1% of its land surface area...
. Kamal Hassan Ali, the Egyptian minister of foreign affairs at the time, vehemently denied the allegations against ETSCO, calling them "wicked." He claimed the Egyptian government found no evidence of foul play on the part of the company during its year-long investigation of the incident. Ali went on to threaten to sue "anyone who dares to smear his name or any other Egyptian official" in American courts.
ABC News
ABC News
ABC News is the news gathering and broadcasting division of American broadcast television network ABC, a subsidiary of The Walt Disney Company...
ran a televised documentary in early March 2011 about what it described as corruption that was built in the Camp David Accords and American military aid to Egypt. The network highlighted what it called the role of Hosni Mubarak
Hosni Mubarak
Muhammad Hosni Sayyid Mubarak is a former Egyptian politician and military commander. He served as the fourth President of Egypt from 1981 to 2011....
, Mounir Thabet (Suzanne Mubarak
Suzanne Mubarak
Suzanne Mubarak is married to the former Egyptian President Hosni Mubarak and was First Lady of Egypt until his ouster on 11 February 2011.-Early life and education:...
’s brother) and the late Field Marshal Abu-Ghazalah in ETSCO’s illegal ventures. The aforementioned men received millions of dollars by maintaining an operation filled with illegal commissions, bribes and bidding violations. Salem paid an $8 million fine to The Pentagon
The Pentagon
The Pentagon is the headquarters of the United States Department of Defense, located in Arlington County, Virginia. As a symbol of the U.S. military, "the Pentagon" is often used metonymically to refer to the Department of Defense rather than the building itself.Designed by the American architect...
in 1984 to settle the case. However, Amin Yousri would later discover through a memo sent from the Egyptian embassy to the Foreign Ministry in Cairo that Salem actually paid the Pentagon a much larger figure than was publicly announced. The memo mentioned that Salem's lawyers reached a $60 million settlement with the US government. A former partner in ETSCO who was also a CIA agent, Edwin Wilson, told ABC that Salem was a "front man" for Mubarak. According to anonymous employees
Investment in Sinai tourism
Sadat was assassinated in 1979 and was succeeded, in late 1981, by his vice president Hosni Mubarak who Salem had befriended and worked with in previous years. By 1987, the southern Sinai PeninsulaSinai Peninsula
The Sinai Peninsula or Sinai is a triangular peninsula in Egypt about in area. It is situated between the Mediterranean Sea to the north, and the Red Sea to the south, and is the only part of Egyptian territory located in Asia as opposed to Africa, effectively serving as a land bridge between two...
experienced a boom in real estate investment, particularly in Sharm al-Sheikh. That year, Salem had commissioned the construction of a very large hotel called the Jolie Ville in that city. Suspicions were raised on Salem's acquisitions of property in Sinai since it was notably difficult for locals to acquire small parcels of land there and Salem had little background in construction. High-ranking officials, including Abdel Moneim Said, the governor-general of South Sinai, and Hamid Khodeir, a local council member of the nearby city of el-Tor
El-Tor
El-Tor , also transliterated as Al-Tur and At-Tur and known as Tur Sinai, formerly Raithu, is the capital of South Sinai Governorate of Egypt, located at the Sinai Peninsula...
, claim Salem gained contracts for the land along the southern Sinai coast due to his close friendships with Mubarak and his son Gamal
Gamal Mubarak
Gamal Al Din Mohammed Hosni Sayed Mubarak , , is the younger of the two sons of ousted Egyptian President Hosni Mubarak and former First Lady Suzanne Mubarak...
. From 1987 until the early 21st-century, Salem had established tourism empire in Sinai, owning several hotels. Major expansions to his business operations in Sinai included a mass conference hall, a golf course, a luxurious mosque for Mubarak's personal use, and numerous palaces, one of which he sold to Mubarak. In 1997, the Jolie Ville hosted a large conference sponsoring peace in the Middle East related to the Arab-Israeli conflict.
The local Bedouins who lived along the southern Sinai coast privately criticized Salem for ignoring their community by not building any projects in the local areas. Members of the el-Tor local council complained that his operations further marginalized the Bedouins by not contributing to their welfare, increasing their sense of marginalization. Abdel-Moneim Said agreed, stating "Salem did not contribute anything that benefited ordinary people in the governorate." In 2002, Said claimed that after the local government constructed a strip-like "Walk" adjacent to the Jolie Ville Hotel intended for locals to open business along, Mubarak ordered the governor to hand it over to Salem.
Egyptian-Israeli gas deals
In 1993, following the 1993 Oslo Agreements between the Israelis and PalestiniansPalestinian territories
The Palestinian territories comprise the West Bank and the Gaza Strip. Since the Palestinian Declaration of Independence in 1988, the region is today recognized by three-quarters of the world's countries as the State of Palestine or simply Palestine, although this status is not recognized by the...
which Mubarak helped broker, Israel and Egypt began work on a gas pipeline to supply the former with natural gas
Natural gas
Natural gas is a naturally occurring gas mixture consisting primarily of methane, typically with 0–20% higher hydrocarbons . It is found associated with other hydrocarbon fuel, in coal beds, as methane clathrates, and is an important fuel source and a major feedstock for fertilizers.Most natural...
and to build a petroleum refinery in Sinai, the first privately owned refinery in the Arab Middle East. Mubarak awarded Salem licenses to work on both projects. Salem's relations with Israeli business circles dates back to the 1970s during his tenure at the Washington D.C. embassy and whilst the Israelis and Egyptians were negotiating Camp David. In 1996, Salem sold most of his shares in the new refinery company, Midor, and made a substantial profit. In 2007, he sold most of his shares in the East Mediterranean Gas Company
East Mediterranean Gas Company
East Mediterranean Gas Company is an owner and operator of the Arish–Ashkelon pipeline. It is a joint company of Mediterranean Gas Pipeline Ltd , the Israeli company Merhav , PTT , EMI-EGI LP , and Egyptian General Petroleum Corporation ....
, a year before the pipeline actually pumped any gas. According to the New York Times, Israel gained 40% of its gas needs from below-market price Egyptian gas exports. The Israeli newspaper Yediot Aharonoth described Salem as the "number one man" of the normalization process between the two states.
Revolution and trial
Following the overthrow of Mubarak during the 2011 revolution, Salem was indicted for corruption charges related to the gas deal. A main witness of the prosecution, accused Salem of illegally making $2 billion from the gas deals since he owned 70% of the shares in the East Mediterranean Gas Company during its inception. The Egyptian-Israeli contract itself is blamed for inflicting an annual Egyptian loss of $714 million due to the fixed, below international market price which Israel is supposed to pay. Salem is currently being held in Spain, awaiting possible extradition, and is being tried in absentia as Defendant No. 7 in an Egyptian court.Further reading
- Egypt to send Hussein Salem extradition file to Spain
- Salem's release in Spain
- Fugitive caught in Spain is not out on bail: judicial official
- Mubarak confidant can't post bail
- Salem to be kept under house arrest pending trial in Spanish court
- A man worth $58.7 billion
- Spain freezes $45 million in the account of Mubarak associate Hussein Salem
- Mubarak associate arrested in Spain