At Paris’ Place Rio de Janeiro 1, civil servants and businessmen frequently go to the Le Valois restaurant for lunch. It is located in a remarkable Hausman-style building in the opulent 8th arrondissement of the French capital.
Only a few people will be aware that a military official close to Egyptian dictator Abdul Fatah el-Sisi manages the luxury building, worth over 10 million euros. He does so through a state-owned Egyptian insurance company. Times have changed. Just a few years ago, it was the late Egyptian President Hosni Mubarak who founded the public entity.
Changing ownership of the building went more smoothly than regime change in Egypt: all that was needed was filling in a management change document at the Paris Registry Office.
The document raised questions about the effectiveness of the “asset freeze” procedure in France, given the doubts surrounding what is known as the “Mubarak building” since 2011.
This violation is not a one-of-a-kind. It is similar to close to thirty other violations concerning the frozen assets belonging to the clans of Mubarak and Tunisia’s former President Zine el-Abdine Ben Ali, which were made public following the 2011 uprisings in Egypt and Tunisia. The violations came to light as the result of months of research, carried out by Mediapart on a number of properties and businesses owned by the relatives of the disposed tyrants.
While similar asset and property restrictions are now in place as part of the sanctions against Russia for its invasion of Ukraine, the French state has encountered glaring difficulties to enforce sanctions in the past.
Asset Freeze Violated At Least 30 times
The Tunisian and Egyptian clans own French properties worth between 25 and 35 million euros. This includes about 10 luxury apartments, most of which situated in Paris’s fabled 8th and 16th arrondissements, almost as many “real estate companies,” as well as millions of euros stashed away in various bank accounts.
This is just the known heritage of the Ben Ali and Mubarak families in France. Experts estimate that at the time of the Arab Spring the wealth of each family worldwide amounted to some 175 million euros and US$ 70 billion respectively, yet, these numbers have been the subject of many speculations since then, and experts were not able to establish an official number.
As their regimes collapsed under pressure from the people, who had been oppressed by authoritarian rule for too long, while suffering under the scourge of poverty, nepotism and corruption, the revelation of their former leaders’ incredible wealth immensely angered them and has triggered many questions since 2011.
According to the French newspaper Libération, the mansion of Nesrine Ben Ali, one of the late president’s daughters, was valued at more than 2.5 million euros. In 2011, the French daily Le Monde estimated that her sister Dorsaf Ben Ali’s portfolio of properties in the 16th arrondissement to be worth 1.2 million euros. Years later, in 2019, Jeune Afrique magazine reported that President Mubarak’s daughter-in-law, Heide Al-Jamal, and her family own a property complex worth over 4 million euros.
The list of (former) senior state figures’ possessions has written international headlines. And as the list only grew longer, it eventually came to the attention of the courts of the two new regimes in Tunisia and Egypt, as well as in France.
Both families were subject to a French court inquiry for “corruption, abuse of public property, concealment of abuse of public property, laundering and embezzlement of public funds” as a result of a complaint by Sherpa and Transparency International France.
The Council of Europe also mandated freezing all Mubarak and Ben Ali assets in France and the rest of the European Union in support of the legal proceedings in 2011.
The freeze aims to prevent any use, transaction, or alteration of assets owned by over forty prominent Egyptian and Tunisian figures. This includes bank accounts, companies, vehicles, and real estate. It furthermore aims to encourage collaboration between European, Tunisian and Egyptian courts in the hope of a possible return of assets to the plundered states.
However, according to our sources, over the past 11 years the provisions have been violated at least 30 times.
Credit Suisse Authorized Transactions Worth Millions
The 30 violations illustrate the ease with which properties are managed by the individuals listed in the freezing order and their relatives. That was the case, for instance, with the multiple transfers of SCI shares. SCI used to manage the properties held by both clans. Most of these transfers took place in the first months following the imposed restrictions.
Such transfers may give real estate agents, brokers, and other middlemen the chance to get rid of troublesome real estate. In May 2011, Virginie Bennaceur, wife of French real estate broker François Bennaceur, who oversaw the purchase of Nesrine Ben Ali’s Parisian residence, resigned from her position as manager of SCI Nes, owned by the daughter of the Tunisian President.
In November 2011, businesswoman Chadia Clot, who used to be closely linked to the Qatari royal family, resigned from co-managing SCI with Dorsaf Ben Ali and her husband, Slim Chiboub.
Belgian authorities suspected SCI represented an “entry fee” given by the Emir of Qatar to relatives of President Ben Ali for the development of a marina in Tunisia, according to the book “Le Vilain Petit Qatar” issued in 2013 by Nicolas Beau and Jacques-Marie Bourget.
Such transfers at times directly benefit the relatives of the former leaders. This is, for example, how former Egyptian Minister of Industry Rachid Mohammed Rachid and his wife were able to transfer all shares of SCI 51 Avenue Montaigne to their daughters in February 2013.
As a result, if the couple’s properties are ever to be seized by the court, some 3.9 million euros worth of real estate (two plots of land in Paris and an apartment in Cannes) could elude French justice.
Aside from such property ownership shenanigans, the manipulation of freezing procedures we have been able to document has also seen many frauds. This includes: changing the headquarters address, renaming the company, mortgaging properties, as well as deceptions in key financial transactions.
Evidence of this is the early mortgage payment in April 2011 (the fraudulent operation has not yet been fully understood), as part of the acquisition of a property partly owned by Mubarak’s daughter-in-law Heidi Rasekh in a transaction estimated to be worth nearly 4 million euros. It was authorized by Credit Suisse. And it was by no means the only one.
Between 2011 and 2014 her father Mohammed Rasekh made several bank transfers with a total worth of some 3 million euros to his other daughter Hannah. Credit Suisse authorized these transactions as well.
Yet, this is a clear breach of Article 561-2 of the Monetary and Financial Code, which defines the beneficial owner, as any person “exposed,” as a result of functions performed by “direct members of his family, persons known to be very close to him, or a person who becomes so, through work relationship.”
It has been reported that during the same period Hannah Rasekh opened at least six bank accounts to receive transfers from her father at the Parisian branch of the Saudi Lebanese Bank.
Although both banks claim to have acted in accordance with French law, these incidents represent clear violations of the asset freeze, according to a lawyer and expert on economic sanctions.
In 2016, one of these operations enabled a Commodore closely connected to Egypt’s current regime to take control of the building at Place Rio de Janeiro 1, which features at the start of this article.
Secretly Handed Over to Sisi
“The advantage of Sisi is that it will not cost him much trouble to recover Mubarak’s properties,” said a former Egyptian minister, who is now a refugee in Switzerland. Smiling bitterly, he added: “To track the assets of the current dictator all you have to do is to track the assets of the former one. It’s the same!”
The former minister was at one point involved in tracing the assets of Mubarak’s clan around the world. Yet his entire archives were seized following Sisi’s coup in July 2013, shortly after he was able to escape Egypt and seek sanctuary in exile.
“Sisi wanted to know Mubarak’s financial network, and he has largely been successful in doing so,” he said. “The entire Egyptian economy is maintained through hidden financial flows, offshore companies, and gifts awarded in the form of private or public contracts. The same practices prevail today. Nothing has changed.”
The building with an estimated value of nearly 10 million euros at Place Rio de Janeiro 1 is a perfect example of the way things are done, according to the former minister. Since 2011, the building has been suspected of belonging to the Mubarak family. At one point it was even squatted by the Black Thursday group, which is active in denouncing inappropriate housing conditions.
Nevertheless, up until very recently, the only information available about the new owners of the building was the name of the company, Egyptian National Insurance, and the name of the building’s manager, of whom never a trace was found: 114-year old Pierre Goron.
New documents provided by the Paris Commercial Court Records Office in 2018 revealed that the company in question was a French subsidiary of the Egyptian insurance company known as “MISR,” a public corporation founded by a decree issued by President Mubarak in the 2000s.
Since 2016, however, admiral Ossama Saleh, an ex-representative of the Egyptian Defense Ministry in Paris has been in charge of the company, even though his expertise appears to be totally unrelated to insurance. The company’s management was transferred, so that neither the judicial investigation nor the assets freeze could prevent the operation.
“Sisi treats his relatives the same way Mubarak did,” said the former Egyptian minister. “Be loyal to me and I will give you a state-owned company. In Egypt there is no boundary between the public and private sector. This is kleptocracy: governing by corruption.”
Is it the same story for Tunisian properties? In interviews regarding a building complex located at 44/46 Avenue d’Iéna, which is suspected by the courts of being linked to Ben Ali’s family, a person who presented himself as “working for the Tunisian Embassy” stated that the building had become a “Tunisian embassy property”.
But how could such a transfer of management or ownership happen, while there were still two open legal cases in France and over 40 people had seen their assets frozen?
According to our investigation, the Banque de France – in charge of sanctioning financial institutions in case of a breach of asset freezes – has not issued any sanctions against either Crédit Suisse or Saudi Lebanese Bank.
Similarly, French customs, which is in charge of looking into alleged violations of the real estate property freeze, has not announced any inquiry into the information we provided.
Failure to Recover “Illegally Acquired Assets”
Bercy County, which oversees the two agencies, emphasizes the importance of distinguishing between the freezing measures and the ongoing legal procedures against the two families before the National Financial Prosecutor’s Office.
However, it is clear that these measures are related. If the freeze on properties is not properly implemented, and the individuals targeted by this freeze have been able to transfer ownership to a third party, they can avoid potential seizures.
“Not all the frozen properties have been seized as part of the judicial investigation,” said Sara Brimbeuf, head of the Illicit Financial Flows Program at Transparency International France. “The gradual lifting of restrictive measures targeting Mubarak’s entourage has enabled the transfer of these assets outside of France.”
The fate of the mysteriously “transferred” property to the Egyptian Ministry of Defense, as well as the properties now being held by the Tunisian embassy, serve as typical examples: none of these properties weren seized by the French judiciary.
The National Financial Prosecutor’s Office stated that other confiscations had been carried out against former Egyptian dignitaries, but when asked why they had given up some of them, the judicial authority justified the matter by referring to the “reconciliation agreement” reached with Egypt.
“In order to be able to confiscate these assets again through the French judicial investigation procedure, proof must be provided of the illicit source of the funds, as well as its funding cycle, which often proves to be an extremely complicated process, and requires active cooperation from the State of origin.”
In a report called “The Failed Recovery,” Swiss organization Public Eye expressed its displeasure at these “mysterious reconciliation agreements,” through which the Egyptian state no longer adequately cooperates with Swiss justice, preferring instead to make behind-the-scenes settlements with the defendants. A strategy the French legal system would have paid for?
According to a 2018 testimony from the Tunisian NGO I-Watch, the Tunisian state reportedly lobbied the European Union to unfreeze the assets of some individuals.
Nearly 12 years after the Arab uprisings, the hope of recovering Egypt’s and Tunisia’s illicitly acquired assets seems to be more elusive than ever.
The EU has seemingly already turned the page on Egyptian assets, lifting asset restrictions in April, considering that its “objective has been achieved.” Asset freezes are still in effect in France and across Europe for 35 Tunisians connected to former president Ben Ali.
“The French regulations in this field, although improved significantly in recent years, still have many gaps,” said Sara Brimbeuf. For example, companies registered abroad are not required to declare their beneficial owners in France.
All that is needed is a company registered in a foreign tax haven to intervene in the financial scheme in order to lose track of the beneficial owner.
As a civil actor, Transparency International France sent two letters to the investigative judge in charge of the Mubarak and Ben Ali cases, requesting several measures last October, hoping to revive the case.
France should learn from the numerous flaws in its asset freezing legislation, particularly at a time when the supposed asset freezing of more than 1,300 people connected to Russia’s invasion of Ukraine is taking place.
This story was also published in French: https://www.mediapart.fr/journal/international/130323/gel-des-avoirs-les-exemples-ben-ali-et-moubarak-montrent-les-limites-du-systeme
Published with the support of JournalismFund Europe (www.journalismfund.eu)
Osama Al-Sayyad is an Egyptian investigative journalist currently based in The Netherlands. His main expertise lies in civil-military relations in the Middle East and North Africa and is a member of various cross-border investigation teams.
Alexandre Brutelle has been a freelance investigative journalist since 2014 working on illicit financial flows, environmental crime and human rights abuses in Middle Eastern, African and European countries. In 2017, he created Politics Watch, an online database on criminality in the public sphere