Geld van Europese Investeringsbank zou in zakken oud-president Muburak zijn gegaan (en)
BRUSSELS - In the months prior to the popular uprising that led to the removal of Egyptian dictator Hosni Mubarak, EU development money was making its way into the pockets of those around him, according to a report by financial watchdog Counter Balance.
The survey - out this week - exposes the European Investment Bank (EIB i) for indirectly doing business with the Mubarak clan.
In March 2010, little less than a year before the fall of the dictator, the EIB made a €50 million investment into a private equity fund for the financing of infrastructure projects in the Middle East and North Africa, it says.
The chairman of the board was then Egyptian trade minister Rachid Mohamed Rachid, who after the toppling of the regime was found guilty of several counts of corruption and sentenced to 35 years in jail.
The fund's other participants included EFG Hermes, Egypt's largest investment bank, 18 percent of which is owned by Mubarak's youngest son Gamal.
EFG Hermes is also accused of retaining close ties with Syria's dictator, Bashar Assad.
In a separate investment, the EIB is accused of fattening the pockets of Palestinian leader Mahmoud Abbas, "to further his own political interests".
Counter Balance, a coalition of European NGOs, including the UK's Bretton Woods Project and Germany's Urgewald, are critical of the EIB's preferred method of investment - private equity.
Private equity funds invest in private rather than publicly listed companies, often with the aim of acquiring part of the control over the governance of the firm.
According to the EIB, it "enables unlisted private companies to obtain the equity needed for their creation or their development." It would also enable the firm to be on par with EU standards "in the areas of financial discipline and governance."
But the NGOs say that it amounts to the "outsourcing" of such discipline to the private equity fund, "which very likely does not possess the necessary skills in environmental and social impact analysis."
Private equity, they note, is "inherently anti-developmental."