The saga surrounding Egypt’s top auditor explained

As the chief of an organization tasked with monitoring the performance of other government entities, it’s hardly surprising that Hesham Geneina, head of Egypt’s Central Auditing Authority (CAA) has never been a universal favorite among Egypt’s public employees.

Geneina, however, has roused particular ire and is currently facing the threat of losing his job — a post that was previously immune from dismissal in order to protect the authority’s independence.

The current attempts to oust Geneina come after the publication of a report on the cost of corruption, but much of the momentum against him appears to stem from institutional politics and personal animosity.

In the latest twist in the plot, Prosecutor General Nabeel Sadeq on Wednesday imposed a gag order on the investigations into the corruption report — an indication that there is an official investigation by the prosecution over the report and Geneina’s statements about it. 

What is actually in the infamous report?

The latest effort to oust Geneina comes in the wake of public statements the auditor made about a report detailing the extent and consequences of corruption in Egypt.

So far, the contents of the report — reportedly titled, “Analysis of the cost of corruption in some sectors in Egypt” — have not been made public, although the Egyptian Initiative for Personal Rights is in the process of filing a case to demand its publication.

In the absence of the actual report, the public controversy stems from a December statement by Geneina to Youm7 newspaper. Geneina reportedly told the paper that it was difficult to accurately determine the cost of corruption in Egyptian institutions, but through auditing reports that were supervised by members of the CAA, “we can say that corruption in 2015 exceeded 600 billion pounds.”

What was the government response to the report?

Geneina’s statement caused outrage and prompted President Abdel Fattah al-Sisi to form a fact-finding committee to look into the details of the report.

On January 12, two weeks after the committee was formed, it slammed the report and accused Geneina of deliberate deception and exaggerating the extent of corruption. In a six-page “Statement to the Public,” the fact-finding committee said, “the study, prepared in collaboration with foreign agencies, might harm the state politically and economically at a time when the state seeks with all measures to attract investments and create job opportunities and a decent life for its citizens.”

The fact-finding committee also said it had communicated with Geneina, and established a number of points: Geneina said he had prepared the study with the help of a technical committee formed of his staff and under his chairmanship, the committee confirmed the accuracy of the LE600 billion figure for the years 2012-2015 and the study was sent without reference to the period it covered.

Is it possible the LE600 billion figure is accurate?

LE600 billion pounds sounds like an outrageous figure if you define corruption only as money going into the pockets of public officials through theft and bribery. However, in a response to the presidential fact-finding committee, the CAA argued that it based the figure on a much broader definition: the abuse of authority for private gain, either for an official or for another party.

This misuse of power can manifest itself in different forms, ranging from stealing public funds, interfering with the course of justice, or resorting to illegal or “non serious” mechanisms to conduct state activities, the CAA said.

For example, the figures compiled by the CAA include losses due to encroachments on state-owned land in Sadat City, which government officials failed to remove.

How did the report come to be written?

In stating that the report was prepared in “collaboration with foreign agencies,” the presidential fact-finding committee insinuated that its creation was part of an international effort to cast Egypt in a bad light. Although the committee’s statement did not specify the nature of the foreign agency concerned, media reports had mentioned that it was the UNDP, which has partnership and funding agreements with a number of ministries and governmental bodies, among them the ministries of planning and justice.

A source at the CAA, who spoke to Mada Masr on condition of anonymity, says the report was prepared at the express request of Minister of Planning Ashraf al-Araby. “The report was prepared at the request of the Ministry of Planning, to complement an incomplete research effort at the ministry,” the source said.

“The Ministry of Planning report was prepared by two of its staff members based on media reports, which lack accuracy of course; so the ministry sought the help of the auditing organization to complete and audit the report,” Hisham Geneina’s lawyer Ali Taha said. “In reality the ministry of planning requested the report in the context of its collaboration with a foreign agency in order to receive a grant from that agency to combat corruption in the administrative body.”

According to a Wednesday statement from the CAA, the Ministry of Planning’s original report had an even higher estimate of the cost of corruption: LE257 billion per year. 

Why all the hate?

In addition to a job description that involves exposing public corruption, Geneina has two major political liabilities: he was appointed to his post by former President Mohamed Morsi, and he got on the bad side of Justice Minister Ahmed al-Zend.

His association with Morsi leaves Geneina vulnerable to accusations of supporting the banned Muslim Brotherhood, a charge Geneina denies. The group is outlawed in Egypt, and popular conspiracy theories posit that a wide variety of foreign governments are working in concert with the Brotherhood to destabilize the Egyptian state

In a July interview with Mada Masr, Geneina denied that there is a personal conflict between himself and Zend. However, their rivalry dates back to at least 2009, when Zend narrowly defeated Geneina for presidency of the Judge’s Club in an election marred with allegations of government interference. After being appointed head of the auditing agency, Geneina attempted to audit Judge’s Club accounts, resulting in a series of lawsuits between the two. Geneina is currently facing charges of insulting the judiciary for statements alleging corruption in the Judge’s Club. He also told Mada Masr he believes Zend is the driving force behind an effort to change the law that shields the head of the CAA and other supervisory agencies from dismissal.

Can Geneina legally be fired?

With Geneina potentially facing prosecution over the corruption report, the question of whether or not he can be sacked has taken on renewed urgency.

According to the bylaws of the CAA, its head is appointed to a four-year term, cannot be fired, and cannot even resign without a presidential decree accepting resignation. Geneina was appointed in September 2012, which means his term is not due to expire until September of this year.

Article 216 of Egypt’s constitution states that each autonomous organization or regulatory agency — meaning the CAA, the Central Bank, the Financial Supervisory Authority and the Administrative Control Authority — shall be enacted by laws “defining its competences and regulations” and guaranteeing independence. It also states that the heads of regulatory agencies cannot be fired “except in the cases stated in the law.” 

In July 2015, Sisi passed a law giving him the power to removed the head of the CAA and other supervisory bodies if they “harm national security” or fail to carry out the missions of their position. That law was ratified by parliament this week.

The conflict between the CAA bylaw and the new law allowing the head of the agency to be fired creates a legal controversy.

“The law organizing the dismissal of heads of regulatory bodies is a general law. That is why some consider it to trump the special law concerning the regulatory body that prohibits the dismissal of its head. If this logic is enforced, it will be possible for the president of the republic to dismiss Geneina from his position on the basis of that law,” says Tarek Abdel Aal, head of the legal unit at the Egyptian Initiative for Personal Rights.  

Taha, Geneina’s lawyer contends that the law does not apply to Geneina unless the CAA’s bylaws are amended “through parliament and upon the approval of the organization itself.”

However, Article 215 of the Constitution does not require that the CAA and other independent agencies approve of amendments to their laws, only that they be consulted first.

In light of this debate, there are two possible scenarios if the state wants to get rid of Geneina: Either ignore the CAA’s bylaw and fire him directly by presidential decree, or parliament can amend the laws governing regulatory bodies to be in harmony with the impeachment law, after which the president will be free to dismiss Geneina and propose another candidate to parliament without having to wait for Geneina’s end of term in September. 


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