US embassy cable - 05CAIRO7369

C O N F I D E N T I A L SECTION 01 OF 02 CAIRO 007369 
 
SIPDIS 
 
E.O. 12958: DECL: 09/19/2015 
TAGS: ECON, PGOV, PREL, EG 
SUBJECT: THE AMBASSADOR'S MEETING WITH MINISTER OF 
INVESTMENT MOHIELDIN 
 
 
Classified by Charge Stuart Jones for reasons 1.4 (b) and (d). 
 
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Summary 
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1.  (C) The Ambassador had an introductory meeting with 
Egyptian Minister of Investment Mahmoud Mohieldin on 
September 14.  The Ambassador noted the positive progress on 
reform signaled by the recent presidential election, but 
noted concerns about heavy-handedness by the NDP.  He 
suggested ways the GOE could improve the electoral process in 
anticipation of parliamentary elections.  Mohieldin said the 
NDP was confident about the upcoming elections, and predicted 
that the major opposition parties would each win a few seats. 
 The new composition of the parliament might make continued 
economic reform more challenging.  Mohieldin added that the 
GOE would tackle corruption and make this a major focus, 
undertaking various initiatives including passing a new 
anti-corruption law.  End summary. 
 
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Presidential Election 
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2.  (C) The Ambassador had an introductory meeting with 
Egyptian Minister of Investment Mahmoud Mohieldin on 
September 14.  The Ambassador told Mohieldin that Washington 
had real confidence in the current GOE team and that the U.S. 
would like to help advance reform.  Secretary Rice had 
indicated to the Ambassador after Egypt's recent presidential 
election that the U.S. did not want it to be prescriptive or 
imply support for a particular party, but rather to support 
reform in general.  Despite the positive progress signaled by 
the election itself, there was some concern over 
heavy-handedness by the NDP in the electoral process.  The 
Ambassador suggested the NDP consult NDI and IRI regarding 
improvements that could be made in the electoral process 
before the parliamentary elections.  One possibility was to 
move more polling centers to schools and avoid those which 
remained in police stations, as that sent the wrong message. 
Such improvements would make it easier for the U.S. to be 
more supportive of Egypt's reform efforts.  The Ambassador 
noted the positive signal sent by the conduct of the security 
forces during the election.  Mohieldin responded that even 
the opposition was appreciative of the security forces' 
behavior on election day.  The police's impartiality put more 
pressure on the NDP to reform, as the party had always 
assumed their unqualified backing.  He anticipated that 
security would be even more impartial during the upcoming 
parliamentary election. 
 
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Parliamentary Elections 
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3.  (C) Mohieldin noted that the NDP had developed its reform 
agenda at the party conference in 2002.  In the 2000 
parliamentary election, the NDP won only 38% of the vote. 
Approximately 200 independent candidates won election, and 
subsequently joined the NDP.  Going into the 2005 
parliamentary elections, the NDP was confident and had gotten 
a boost from the presidential eleciton.  Provincial party 
leaders were now identified and linked to the party's central 
headquarters.  Opposition parties were still weak, but some 
strong independents would likely emerge during the campaign. 
He estimated that the Wafd party would win 4-5 seats, Tagammu 
4-5, Ghad 5-6, depending on the outcome of Ayman Nour's 
trial, and that independents allied with the banned Muslim 
Brotherhood would retain the number of seats they currently 
had (16), or perhaps win a few more.  Mohieldin noted that 
there was a 60-70% chance that he would run for parliament 
himself.  He would run if his uncle, a longtime 
parliamentarian from the Tagammu party, decided not to run. 
 
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Continuing Reform 
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4.  (C) Mohieldin said that Egypt needed support from the 
U.S. for continued reform.  Mubarak had made the political 
reform agenda clear:  devolution of power to the parliament, 
increased transparency through a "FOIA-like" law, and 
anti-corruption measures.  The economic reform agenda, 
however, was not specified during the election campaign and 
would be more challenging.  While economic reform had been 
relatively smooth in the past year, it would likely be more 
difficult after the upcoming parliamentary elections.  Some 
of the reforms on the agenda would be particularly difficult, 
including furthering privatization, trade liberalization, and 
improving relations with Israel.  Those who stood to lose 
from the reforms knew they would lose and were very 
outspoken.  Those who stood to benefit were not necessarily 
aware that they would benefit and would simply "thank God in 
silence" if the reforms were successful. 
5.  (C) On the issue of anti-corruption, the Ambassador urged 
Mohieldin to be proactive.  Mohieldin said that he had 
discussed corruption at a conference the previous day. 
Responsibility for anti-corruption efforts currently resided 
with the Authority for Administrative Control, which had had 
some success in prosecuting corruption.  The GOE, however, 
was considering establishing a new agency that would have 
representatives in each ministry.  A new anti-corruption law 
was also being drafted in parliament, and Mohieldin promised 
to share a draft with the USG.  A corporate governance guide, 
which was part of the GOE-USG financial sector MOU, would 
also soon be published. 
 
6.  (C) The World Bank was supportive of the GOE's efforts, 
as was the International Financial Corporation, which had 
given $1 million for a national anti-corruption program. 
That program would serve as a model for the entire BMENA 
area.  NGOs would be incorporated into the program to lend it 
credibility, and Mohieldin welcomed possible USAID 
assistance.  He said the overall aim was to present 
corruption as a destructive force and "haram," i.e., 
forbidden by Islam.  The NDP had also established a 
Secretariat for Values, which policed the party.  A Supreme 
 
SIPDIS 
Court judge headed the Secretariat, and reported directly to 
Mubarak.  The Ambassador undertook to raise awareness of 
these initiatives among USG policy-makers. 
 
 
Visit Embassy Cairo's Classified Website: 
http://www.state.sgov.gov/p/nea/cairo 
 
You can also access this site through the 
State Department's Classified SIPRNET website. 
 
JONES