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Egypt regime insider found guilty of corruption

By Aya Batrawy

Associated Press

Published: Thursday, Sept. 15 2011 2:16 p.m. MDT

FILE - In this Thursday, Feb. 24, 2011 file photo, former Egyptian Tourism Minister Zuheir Garana, right, and steel tycoon and prominent ruling party leader Ahmed Ezz, left, wearing white prison uniforms, sit in a metal cage as they appear in the Cairo Criminal Court in Cairo, Egypt. An Egyptian court has sentenced a steel magnate who was one of the top insiders from the ousted regime of Hosni Mubarak to 10 years in prison on corruption charges. Ahmed Ezz, once a leading figure in the former ruling party, was sentenced Thursday along with former government official Amr Assal. The two were fined a total of $110 million dollars. Former Trade Minister Rachid Mohammed Rachid, who remains at large, was sentenced to 15 years in jail and ordered to pay a 237 million dollar fine for approving production licenses to Ezz without auctioning them publicly first.(AP Photo, File)

The Associated Press

CAIRO — An Egyptian court convicted a powerful steel magnate who was a senior insider in the ousted regime of Hosni Mubarak on corruption charges, sentencing him to 10 years in prison.

Ahmed Ezz was a top ally of the ousted president's son and heir apparent, Gamal Mubarak, and together they all but ran the ruling party. Ezz became a symbol of the intertwining of business and politics that many Egyptians despised as corrupt, helping fuel the anti-Mubarak uprising.

Ezz appeared in court wearing a prison uniform behind a defendants' cage. He can appeal the corruption conviction.

Also, former Trade Minister Rachid Mohammed Rachid, who remains at large, was sentenced to 15 years in jail and ordered to pay a $237 million fine for approving production licenses to Ezz without auctioning them publicly first.

Rachid was convicted along with two businessmen earlier this year of squandering public funds and profiteering in a separate case. In that case, he was sentenced in absentia to five years in prison and ordered to pay nearly $800,000.

Thursday's verdict revoked the licenses of Ezz Steel and the Egyptian Sponge Iron and Steel Co.

The government said in a statement Thursday it would protect the rights of investors and do what it could to stabilize the stock market, after news of the verdicts played into investors' fears. The stock market closed down 2.69 percent.

Ezz was arrested in February, days after Mubarak was toppled by mass protests. Among the key demands of Egyptian protesters was an end to corruption and kickbacks that favored officials and businessmen close to the ousted president. Watchdog groups allege that top officials and tycoons were involved in sweetheart deals in the Mubarak era, and that the Mubaraks were major beneficiaries of that system

As a key official in the former ruling party, Ezz often spoke vehemently in support of the ousted president and was believed to be guiding efforts to promote Mubarak's son Gamal to inherit the presidency. He organized the ruling party's last election campaign, in 2010, which like previous votes saw widespread rigging in favor of regime candidates.

Ezz was long accused by businessman and activists of monopolizing the steel industry in Egypt.

He and a number of high ranking former officials and businessmen, including Mubarak's two sons, are being held in Cairo's Tora prison.

Also Thursday, Mubarak and his two sons watched as former Interior Minister Mahmoud Wagdy, who headed the post briefly during the height of protests, testified in their trial.

Wagdy was head of security during the "camel battle" when scores of men on camels and horses attacked protesters in Cairo's Tahrir Square in one of the most violent days of the uprising. Several people were killed in those clashes and a number of Mubarak loyalists, including former parliamentarians and ministers, are on trial for allegedly planning the attack.

In a separate case Thursday, ex-Oil Minister Sameh Fahmy and seven other defendants face trial on charges related to a natural gas deal with Israel that prosecutors say harmed Egypt's national interests.

Under the deal, the Cairo-based gas company agreed to sell natural gas to an Israeli company at a price reportedly under market value.

Prosecutors allege that businessman Hussein Salem, whose company is involved in the gas deal, made at least $336 million from the deal and that this came at an even higher cost to Egypt.

Salem has fled the country and is believed to be in Spain. He is being tried in absentia and is also on co-defendant in the Mubarak trial.

The defendants face up to 15 years in jail and fines of hundreds of millions of dollars. A former oil ministry official, Abdelalim Taha, told the court Thursday that the deal and that the price of gas to Israel was not in Egypt's favor. He said Fahmy offered Israel to sell gas at half the price Israel had requested, and that the deal was approved and signed by Cabinet.

The trial was recessed until Oct. 26. The court decided to include the testimony of Mubarak's ex-intelligence chief and vice president Omar Suleiman in this trial's documents.

Suleiman testified in a secret session on Tuesday in the Mubarak trial, where the longtime leader, his sons and Salem are also facing charges of corruption.

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