Mubarak Faces More Questioning on Gas Deal With Israel

The announcement, carried by the government-run Middle East News Agency, came after the agency reported that the former oil minister, Samih Fahmy, and five other top officials had been imprisoned pending an investigation of the deal.

Adel el-Saeed, the prosecutor’s spokesman, issued a statement saying that among other issues, Mr. Mubarak was being questioned about gas exports to Israel at a low price that amounted to “hurting the country’s interests.” Egypt lost more than $714 million in the deal, the prosecutor said in a statement quoted by wire services a day earlier.

Selling gas to Israel was deeply unpopular in Egypt from the time the pipeline opened in 2008, given the sour public mood toward its neighbor, and it was a rallying point for the Tahrir Square protest movement since its start in January. But the deal was protected at the highest levels as long as Mr. Mubarak was in power. The key shareholder in the private company that brokered the deal was the president’s longtime friend, Hussein K. Salem, and a senior Egyptian official said the intelligence service also owned a slice of the deal.

Now that the protection has been removed, however, the deal has emerged as a kind of public litmus test toward how relations with Israel will be handled in the post-Mubarak era.

“Hosni Mubarak would always be completely responsive to what Israel wanted with zero regard for what the man in the street wanted,” said Mansour Abdel Wahab Mansour, a Hebrew language professor and political analyst of Arab-Israeli relations at Ain Shams University. “That is not going to change 180 degrees, but the new government or the new system will have to give somewhat more consideration to public opinion.”

Egyptian gas exports, not yet fully restored since an explosion rocked the pipeline in the Sinai in February, used to supply 40 percent of Israeli needs.

There were questions from the moment the deal was signed, particularly since it was handed to Mr. Salem and an Israeli partner, Yosef Meiman, whose East Mediterranean Gas Company acted as a middleman between Egypt and the Israel Electric Corporation and other clients.

The basic accusation was that the partners obtained the gas at a preferential rate from the government of Egypt, which cut supplies to local consumers in order to fill the Israeli deal, and then sold the gas at a significant markup, pocketing the profits.

The details of the full deal have never been released publicly. But former Egyptian government officials who have seen it, and who spoke on the condition of anonymity, said the price renegotiated around 2008 was raised to about $4 per million BTUs, up from the previous cap of $1.25 per million BTUs. East Mediterranean Gas could then negotiate its own terms with Israeli buyers.

There is no global benchmark global price for natural gas, noted Nikos Tsafos, an analyst at PFC Energy in Washington. But Mr. Tsafos said that in comparable deals in the region, Turkey, Greece and Italy were paying $7 to $10 per million BTUs.

Mr. Meiman, who controls about one-quarter of East Mediterranean Gas, could not be reached for comment. But the general attitude of the Israeli government toward the arrangement has been that it can accept a re-examination of the deal as long as it is only about price. A senior Israeli official said, however, that if the investigation becomes a pretext for halting the deal for domestic political reasons, Israel would have reason for genuine concern.

In 2007, Mr. Salem sold off separate stakes in the company to a Thai firm and to a partnership headed by Sam Zell, the American real estate tycoon. Mr. Zell’s spokeswoman, Terry Holt, did not respond to requests for a comment on Friday.

Permission for the sale came from the presidency and the intelligence agency, which had a small stake in the deal along with the government-owned Egyptian Natural Gas Holding Company, said the senior Egyptian official, speaking on the condition of anonymity. Ministers outside the petroleum ministry were not consulted and the government ignored a court order to show publicly that the deal was not diverting gas needed domestically.

“That was a big question mark,” the official said. “We never understood why it was sold — and it would have made sense to allow local companies to buy it. From a national security point of view it did not end up with the most sensible arrangement.”

For the Egyptian business community, the answer came down to Mr. Salem, an intelligence agent turned tycoon who fled Egypt after the uprising and is being sought by prosecutors.

Ethan Bronner contributed reporting from Jerusalem.

 

Ensign Faced Formal Questioning Over $96,000 Payment

 

That formal testimony, scheduled for May 4, was the final step as Senate investigators prepared for what were almost certain to be Senate ethics charges against Mr. Ensign, Republican of Nevada. Mr. Ensign’s resignation is effective May 3.

In the letter, issued late Thursday, Mr. Ensign acknowledged he was stepping down to avoid further scrutiny — hoping that his departure from the Senate would mean the end of any further questions about his affair with Cynthia Hampton, the wife of his former senior aide, Douglas Hampton.

But in interviews Friday, officials said the two leaders of the Ethics Committee — both the top Democrat and the top Republican — had decided not to let the investigation disappear. They are likely to take the unusual step of issuing a statement that details evidence of wrongdoing uncovered in the committee’s 22-month investigation, its largest in more than a decade. Those details could include interviews with dozens of witnesses and a review of records of Mr. Ensign and his family.

The investigators were focused in particular on the assertion by Mr. Ensign that the $96,000 payment made in April 2008 by Mr. Ensign’s parents was a gift to help longtime family friends and had nothing to do with any effort to keep Douglas and Cynthia Hampton from disclosing an affair that might wreck a political career.

Mr. Hampton, in an interview in 2009 with The New York Times, said that this was in fact a severance payment, made as part of an elaborate plan with Mr. Ensign to find Mr. Hampton work as a lobbyist so that he could maintain his wages after he left his Senate job. Mr. Hampton had been one of the senator’s closest friends and most influential aides until he learned that his wife was having an affair with Mr. Ensign.

Any charges against Mr. Ensign that the Ethics Committee might have made probably would have revolved around the payment.

If it in fact was a severance payment, it could represent an illegal campaign contribution by Mr. Ensign’s parents because Cynthia Hampton had served as the treasurer of his political campaign. A severance payment to her should have been recorded as a political expenditure.

The senator and his mother, Sharon Ensign, both provided sworn statements to investigators from the Federal Election Commission when it investigated the payment, asserting that it was in fact a gift to the Hamptons, who before the affair were close family friends.

Robert L. Walker, a defense lawyer representing Mr. Ensign, declined Friday to address questions about the matter.

The Ethics Committee also has been investigating if Mr. Ensign conspired to help Mr. Hampton, after leaving his office, violate a one-year lobbying ban by contacting Mr. Ensign’s staff to assist two Nevada companies that Mr. Ensign had helped him get work with. Mr. Hampton has said this was part of their mutual plan to transition him out of his Capitol Hill job.

All of this was to be addressed in the May 4 deposition — a formal, sworn interview that is considered the final step before the Senate Ethics Committee would have voted on possible charges. At that point, if Mr. Ensign contested the charges and did not voluntarily agree to a punishment of some kind, the committee most likely would have moved to hold a public hearing on the accusations — and released thousands of pages of documents it had gathered as part of its nearly two-year investigation.

That investigation record will most likely now never become public, as the rules require that the accused lawmaker be given an opportunity to review the record and contest any documents before they are released.

But the Senate Ethics Committee can still choose to make some kind of a public statement — even after Mr. Ensign resigns — detailing material it had turned up in its investigation, Senate officials said. It can also still make a referral to the Department of Justice asking it to consider criminal charges based on any evidence of wrongdoing it might have found.

Those choices will have to wait until the Senate is back in session, which does not happen until early next month. Senator Barbara Boxer, Democrat of California and chairwoman of the Ethics Committee, and Senator Johnny Isakson, Republican of Georgia, the vice chairman, are currently on a trip to China.

One Senate official on that trip, interviewed by telephone Friday, said that both of them expressed determination to not let the case against Mr. Ensign simply disappear as a result of his resignation.

“Neither one is interested in just dropping this,” the Senate official said, asking that he not be named, as he was not authorized to discuss the matter.

In a statement, Ms. Boxer and Mr. Isakson said simply that the case was not yet closed.

“The Senate Ethics Committee has worked diligently for 22 months on this matter and will complete its work in a timely fashion,” the statement issued late Thursday said. “Senator Ensign has made the appropriate decision.”

 

Mubarak summoned for questioning

 10 April 2011 Last updated at 14:55 ET Hosni Mubarak: ""I have been in great pain because of the unjust campaigns"

Former Egyptian President Hosni Mubarak has been summoned by the state prosecutor for questioning over alleged corruption and killings of protesters.

The announcement came shortly after Mr Mubarak made his first statement since he was ousted two months ago, denying accusations of corruption.

The former leader said he had the right to defend his reputation and denied having any assets in foreign countries.

Mr Mubarak's sons Gamal and Alaa have been summoned for questioning as well.

The prosecutor-general said Mr Mubarak's statement, broadcast on al-Arabiya TV, would not affect the inquiry.

On Friday, Cairo's Tahrir Square once again filled with demonstrators calling for Mr Mubarak and his family to be tried for corruption.

At least one person was killed and dozens were injured when troops moved in to clear the square. The injured suffered gunshot wounds but the army denied using live rounds.

Protesters and anti-corruption campaigners have been pressing for an investigation into the Mubarak family's assets, put at anywhere from $1bn to $70bn (￡616m-￡43bn).

Continue reading the main story Yolande Knell BBC News, Cairo

The timing of these latest developments is crucial. They follow mass demonstrations calling for the prosecution of the former president and his close associates.

After a huge rally on Friday, hundreds of activists said they would stay in Tahrir Square in central Cairo until their demands were met.

This led to violence and put a greater strain on relations with Egypt's new military rulers. It also opened up divisions in the protest movement over how to react.

The hope will be that these interrogations and investigations will assure people that justice will be done and restore calm.

Speculation has been rife about Mr Mubarak's whereabouts and his personal finances since he was forced from office nearly two months ago. It is likely to increase with his audio statement in which he insists he has money only in an Egyptian bank account and served his country honourably and with loyalty.

Correspondents say protesters have become impatient with the slow pace of change pursued by the army council which replaced Mr Mubarak after he stood down on 11 February.

Mr Mubarak resigned on 11 February after 18 days of anti-government protests in which at least 365 people died.

He fled to his villa in the Red Sea resort of Sharm el-Sheikh with his family.

Mr Mubarak, his sons and their wives have been banned from leaving the country and their assets have been frozen.

Mr Mubarak made an audio recording of his speech on Saturday in the wake of the latest protests. It was broadcast by al-Arabiya TV on Sunday.

"I have been in great pain because of the unjust campaigns and untrue allegations targeting myself and my family," he said.

"They aim to tarnish my reputation and discredit my integrity, my stance, my political and military history during which I worked hard for Egypt and its people in peace and war."

Mr Mubarak, 82, is believed to be in poor health, though his aides have denied this.

Legal threat

Mr Mubarak said he was willing to co-operate in any investigation to prove that he did not own any property abroad or hold foreign bank accounts.

He said he would authorise the prosecutor-general "in writing to allow him to contact, through the foreign ministry, all countries in the world to prove to them... that their former president only owns domestically, according to previous financial disclosure."

But he warned of legal action if he considered himself defamed, saying: "I reserve my legal rights toward whoever tried to ruin my and my family's reputation."

Former Prime Minister Ahmed Nazif has also been detained for 15 days.

Prosecutors want to question him about the misuse of public funds.

Egypt has already requested a number of governments to freeze the overseas assets of the Mubarak family.

Three Mubarak-era ministers, including former interior minister Habib el-Adly, have already been charged with corruption.