Hussein Salem: A businessman from the times of crony capitalism (part two)

Karem Yehia, Wednesday 22 Jun 2011

During a career that spanned the 1960s and 70s and placed him firmly in the sphere of Egyptian and regional power, Hussein Salem made the contacts that were to gain him the fortune he sought

An old picture in which Husain Salem appears with the then president Mubarak
File photo showing Hussein Salem (centre) wiht a much younger Mubarak

Making friends in Bagdad then fleeing Abu-Dhabi

In 1963, Hussein Salem met Amin Huwaidi, a career Egyptian politician during the Nasser era.

At the time Huwaidi was serving as Egypt’s ambassador to Morocco before moving on to become minister of defence and, finally, director of Intelligence Services after the June 1967 War.

Huwaidi, unintentionally, played an influential role in shaping Salem’s life journey as someone who cosied up to people in the circles of political power in order to accumulate a fortune in the world of business.

Salem reunited with Huwaidi in Iraq sometime in 1963, around the time of the fall of General Abdel-Karim Qassem, the leader of the anti-colonial revolution in Iraq in the late 1950’s. The two men would collaborate in Iraq for a number of years.

However, as time went on, it became clear to both men that they were on opposite ends of the economic and political spectrum in terms of their political and practical choices. After Nasser’s death, Huwaidi focused on writing, and he remained loyal to the ideals of the 1960s until his death in 2008. Salem, on the other hand, walked down the path of crony capitalism from the 1970s onwards and became one of its most outstanding representatives during the reign of deposed president Hosni Mubarak.

Perhaps, things had to turn out this way.

Huwaidi was one of the symbols of and key players in the era of national liberation struggles, who believed in Nasser. Salem, in contrast, was a mid-level government operative looking to climb the social ladder, and did not seem interested, to say the least, in Nasser’s project.

Hussein Salem, in the aftermath of the January 25 revolution, would eventually end up as a fugitive pariah wanted for justice in his home country.

Baghdad Witnesses: Three years to remember

Fortunately, for us, two witnesses who were contemporaries of Salem in the critical years between 1963 and 1966 have surfaced. Moreover, they possess the courage to speak to us and on the record. These are former Egyptian ambassadors Amin Yousri and and Ibrahim Yousri (who are unrelated).

Sitting in his apartment in the Zamalek district of Cairo, Amin Yousri told us that Hussein Salem met Huwaidi for the first time in the early 1960s while working as branch director for Arab Company for External Trade in Casa Blanca, Morocco.

In 1963, Abdel Salam Aref became Iraqi president and, subsequently, Egypt and Iraq restored diplomatic relations. At this point Nasser appointed Huwaidi as ambassador to Iraq. There, Huwaidi brought Salem to work at his side as branch director of the Arab Company in Baghdad.

During the following months, Salem became friends with both Amin Yousri, then Egypt’s Press attaché at the Egyptian embassy in Baghdad, and Ibrahim Yousri, the second secretary at the embassy. Ironically, today, Ibrahim Yousri is one of the most outspoken opponents of Salem’s natural gas dealings with Israel.

Moreover, talking from his apartment in the Maadi district of Cairo, Ibrahim Yousri confirmed that Salem was a funny, social and likeable person, and this helped him develop a close personal rapport with Huwaidi and the two Yousris.

However, the two Yousris also concurred that Salem was not exactly an intellectually sophisticated person. Other sources also confirmed Huwaidi helped Salem develop a grasp of international politics, by enrolling him in book and study groups when they worked together in the Intelligence Services a few years later.

In any case, during those Baghdad years, Salem succeeded in winning Huwaidi’s trust. In turn, Huwaidi took in Salem to work for him at his office when Nasser appointed him director of Intelligence Services after the 1967 defeat.

Ibrahim Yousri believes that Huwaidi trusted Salem due to the fact that the latter was able, on a daily basis, to provide him with valuable intelligence through his work in the business circles in Iraq. The intelligence that Salem provided to Huwaidi was difficult to collect through traditional embassy channels, according to Ibrahim Yousri.

Amin Yousri, on the other hand, gave a different interpretation of Huwaidi’s trust in Salem: “Amin Huwaidi made bad judgments sometimes like any other human.”

Amin Yousri also told us that Salem was able to win friends among other employees at the embassy in Baghdad by helping them buy luxurious Mercedes cars at low interest rates offered by the Iraqi Central Bank. However, he adds that not all employees at the embassy, and certainly not Huwaidi, fell for Salem’s Mercedes offers.

Aside from the Mercedes deals, the two ambassadors do not recall that there were any other indicators that Salem was cruising into the business world during his stint in Baghdad, and that nobody accused Salem of financial improprieties at the time.

Ibrahim Yousri recalls, though, that Salem confided in him at certain times that he did not find his work in Baghdad to be personally fulfilling, and that he would rather move to Europe where he had friends whom he said could be of help to him in starting a private business.

Indeed, Ambassador Ibrahim’s testimony has to be credible since he did enjoy a somewhat close relationship with Salem given that the latter taught him snooker and the game of squash.

As Director of Intelligence Services after the 1967 defeat, Huwaidi sent Salem, who by now worked for him, on missions to Arab gulf countries where he was able to establish personal networks that certainly became quite useful in his subsequent business ventures.

However, in 1971, relationships between Salem and Huwaidi soured after Sadat (who took power after Nasser’s death in 1970) dismissed Huwaidi as director of Intelligence, and then imprisoned him with many other Nasser supporters to consolidate his power. At this critical juncture, the student abandoned his mentor.

Despite their apparently close relationship over the years, Salem did not once visit Huwaidi in jail. Salem’s wife, in turn, refused to accept phone calls from Huwaidi’s wife despite the fact that the two spent time together shopping and cooking almost on a daily basis over a long period.

Salem’s betrayal was a blow to Huwaidi, especially after he more or less adopted him professionally and that the two spent Huwaidi’s last day before going to jail on Huwaidi’s personal farm.

The Mystery of Abu Dhabi: Creating a fortune

Hussein Salem felt somewhat at a loss after he lost his important position in the office of the Director of Intelligence, with all the perks that came with it including access to a summer house in the middle class beach of Sidi Bishr in Alexandria.

Salem’s half brother, Abdel Hamid, successfully petitioned a top Sadat official to allow him to move on from the Intelligence Services. For a short period he worked in the Nasr Import and Export Company.

Unhappy to have lost such access to power and glory, he decided to move to the United Arab Emirates in 1972.

Disparate stories converge to confirm that Hassan Abbas Zaki, the former minister of economy and external trade during the Nasser era (and the architect of Nationalisation Decrees of the 1960s) is the person who set Salem up in Abu Dhabi, the young capital of the new Gulf entity.

At the time, Zaki was working as an economic consultant to Sheikh Zayed, the emirates ruler. In this way, Salem landed a job as CEO of the Arab Emirates Trade Company, which imported strategic food supplies for the country.

Reliable sources told us that between 1972 and 1977 Salem developed extensive business contacts in western countries, India and Pakistan. Through these, he was able to accumulate considerable wealth and to begin to transfer large sums of cash to Switzerland. He was also able to purchase a number of hotels in Switzerland and to send his children to schools in the tiny European finance capital.

However, good days for Hussein Salem in the Emirates ended after the fall out between Egypt and Arab countries following Sadat’s historic visit to Israel on 19 November 1977. For a short period, Salem continued to maintain cordial relations with Emirati officials who had broken with Sadat over his visit. Privately, though, Salem expressed a sense of excitement over Sadat’s move. He must have felt that winds of change were blowing from the West towards the Middle East, and were carrying with them new, great opportunities of economic prosperity for people like him.

But, most stories indicate that Salem did not leave Emirates primarily because of the fallout between Arab leaders and Sadat, especially as the Arab economic boycott of Egypt did not start in full force before 1979. Instead, the most credible version of events asserts that certain Emirati business families, who suffered financially by Salem’s operations, drove him out of the country. These families, it is alleged, accused Salem’s company of committing financial violations and of illegally accepting bribes from foreign companies.

At the end, some sources say that Salem fled Abu Dhabi only hours before Auditing officials stormed his company’s headquarters. According to others, Emirati police actually arrested Salem and that he spent a few days locked up in a jail cell.

We called Al-Sayed Ali Al-Sharfaa, who was the director of the office of the Royal Chief of Staff in Abu Dhabi at the time, to try and establish the facts. Unfortunately, Al-Sharfaa could not recall any details. However, he said that Sheikh Zayed pardoned Salem and that the government of the United Arab Emirates never charged him with any crime. In fact, the official added, Salem was always welcome in the Emirates after 1977 and that he actually visited the country on more than one occasion.

Al-Sharfaa ridiculed the rumours that Salem made $20 million in Abu Dhabi and that he used the money to buy real estate in Switzerland. “These are exaggerations,” Al-Sharfaa said. “We did not have anyone in the Emirates who had more than a million Dirhams at that time.”

Nevertheless, Amin Yousri confirmed to us that Salem told him that he accumulated $200 million in Abu Dhabi. Salem also told the Ambassador that he transferred that sum to Switzerland. Later, he said, he transferred half of his money to Spain where he bought a mansion in Majorca and was able to gain Spanish citizenship.

The Businessman returns home looking for a “government job”

It is worth noting that Salem did not bring any of his money from the Emirates back to his home country despite the fact that Sadat had started the free market (Open Door) policy five years earlier, which was described by Egyptian writer Ahmed Bahaa El-Din as an “anything goes” approach.

A source who knew Salem in the Emirates told us that he had already established contacts with people in powerful positions in Egypt by appointing the sons and relatives of top Egyptian officials at his company in Abu Dhabi.

However, we know one thing for sure, Hussein Salem returned to Egypt in 1977 greased in vast sums of cash he had deposited in Europe.

It was also in 1977 that he first met Hosni Mubarak, whom Sadat appointed as his vice-president in 1975 – not in the early 1980s as some stories like us to believe. But it is quite conceivable that the two men could have met earlier than 1977 on one of the many trips Sadat sent Mubarak on to Gulf countries.

Salem spent two years living in Cairo. Salem, the millionaire, worked as a government employee in the ministry of economy managing commercial deals, while not divulging his business activities and interests to many people around him. He also continued to live in his old apartment in Heliopolis.

Salem’s biggest and most critical career move came in 1979: the Egyptian government appointed him to the position of commissioned minister of trade at the Egyptian embassy in Washington DC.

In the capital of the United States, Salem met two influential figures: Abdel-Halim Abu-Ghazalah, the military attaché at the Egyptian embassy and the future minister of Defence, and Mounir Thabet, the director of arms purchase at the embassy, and the brother of Mubarak’s wife, Suzanne.

Informed sources told us that Mostafa Khalil, the Egyptian prime minister and one of the primary architects of the 1978 Camp David Accords between Egypt and Israel, made the decision to appoint Salem to that position.

In Washington DC, as far as we are concerned here in Egypt, one of the most intriguing, mysterious and exciting chapters in the story of Hussein Salem unfolded.


Tranlated and edited by Mostafa Ali

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