Democracy Lab

"Captains Stay with Their Crew"

Most of the Americans charged by Egypt in the NGO affair have since left the country. But one, Robert Becker, decided to stay and face the music.

On Dec. 29, Egyptian security forces raided the offices of 17 pro-democracy groups (domestic as well as foreign). The authorities charged 43 members of the groups with money laundering and running illegal organizations. In a special ruling, an Egyptian court subsequently allowed most of the accused foreigners to leave the country on bail. But one of the Americans, Robert Becker of the Washington-based National Democratic Institute (NDI), opted to stay in Egypt and face the charges.

Though he remains free for the moment, he attended his most recent court hearing on April 10 with a bag containing clothes, toiletries, and a book to read in case the judge ordered his imprisonment. He and his Egyptian co-defendants, following the usual practice in such cases, listened to the proceedings from a cage in the courtroom. (The photo above shows him emerging from the cage after an earlier session in March.) Egyptian journalist Mohamed Fadel Fahmy interviewed Becker in Cairo for Foreign Policy.

Foreign Policy: What is your relationship with NDI now? They paid your bail of $330,000 but you still decided to stay back in Egypt and face the court.

Robert Becker: Since I appeared in court the only communication I've had from NDI and Washington was a letter informing me that, effective end of March, I no longer have a position anymore. I'm no longer getting paid. They're still paying for the lawyer, but they're not paying me. As far as I know, all 10 of the international employees who left are still getting paid.

FP: Why did you decide to stay?

RB: First, I'm not guilty. Second, a couple of the Egyptians who have been charged work directly for me. From the very beginning, I was very clear with my superiors that I wasn't going to leave the country if there were still charges hanging over them. I work with these kids. Captains stay with their crew. It's what leadership's about. There's not any circumstance where I would be comfortably living life in the U.S. while these kids were in a cage. At every turn, when there was pressure to leave, I weighed the options, and the best option for me was to stay with these guys. Some people call me brave, a lot of people call me stupid. But I sleep easy at night.

FP: What is the status of the Egyptians who are accused in the case?

RB: They're facing similar charges to me and the others. It's a tough trial. [It will be] hard for them to find employment because they've got charges hanging over them. It's terrible for their families, and there is no clear indication how long it's going to take.

Right now there are 15 staff members who have been charged: the four Egyptians and me. One of the things our Egyptian staffers were doing was helping me with Arabic, because I don't speak it. We were also teaching them. It was a good job. A lot of our staff have degrees in public policy or political science, and it was an opportunity for them to learn as well. But they were support staff. They would help set up training, interpret conversations. I didn't treat them as assistants. I also talked to them as students.

FP: You attended your last hearing on April 10. How did the last court proceedings go?

RB: We were led to believe they were going to open all the evidence. The offices of 17 organizations were raided. None of that evidence got sealed. It's got to be truckloads: files, computers. The session was supposed to start at 10 a.m. but it didn't convene until noon. There were about 45 minutes of civil complaints. One lawyer wants to charge us with espionage; another wants to bring a suit against the judges who intervened on the travel ban. Then there was a reading of the defendants and a reading of the charges. The judges went into recess, then came back almost two hours later. They announced that the next court date would be on April 18 [later postponed to June 5], and that it would be based on a series of documents requested by the prosecution but that the defense attorneys have never seen.

FP: Explain to me your own experience and the nature of your job as a political trainer who has advised thousands of activists, Islamists, and members of parliament during Egypt's revolution?

RB: At one point there were over 120 new political parties being formed [in a period of two months]. You had a totally new system. So our role was to teach. I worked in politics for 20 years. I worked in multiparty democracy, a very similar set-up to here. So we offered a range of training: how do organize a campaign, how to communicate with voters door to door, advertise. For candidates we did media training: How you give a good interview, a good print interview, a good television interview. We offered this training day in, day out, for any party. My team and I taught three to four thousand political activists all over the country. Pretty much every time we held training we had a wide mix: Al Nour, the Freedom and Justice Party, Wafd, Free Egyptian Youth, Popular Alliance, the April 6 Movement.

FP: Did you contact them or did they contact you?

RB: A little bit of both. Every week we would announce what we were doing that week -- say, a course on door-to-door campaigning -- and they'd say, "We're going to send three people, four people." Some of the parties requested more specific things, so we did a lot of one-on-one training for them.

Some people teach math, some people teach literature. All I can teach is how to run for office, how to run a campaign. And we did.

NDI has been here for six years, since 2005. We run a very transparent operation. We routinely met with the various ministries overseas. We had nothing to hide. In the six months that I was teaching political parties and political activists, I was very well-received. They were very eager to learn.

FP: And later you observed the elections?

RB: Yes, all three rounds. We filed reports on what we saw, more or less certifying that these were open and free and fair elections. Thirty million people voted, shattering the turnout at past elections. The run up to the election was a little bit disorganized, but I give the Egyptian voters credit: They were very well-organized, disciplined, patiently waiting in lines to cast their votes. Our international observers were members of parliament from other countries, former ministers from all over the world. We had Indonesians, Malaysians, European leaders, U.S. leaders -- a very wide mix.

FP: Where were you when the security forces raided your offices?

RB: I was actually home that day. I kind of felt guilty about not being there, because my team was held at bay for five or six hours by guys with guns.

There was a round of interrogations in January, and then I was added to the no-fly list. Later I found out that I was one of the 43 charged. I decided right then and there that I wasn't going to seek sanctuary -- mainly because my teammates, the Egyptian staffers, couldn't seek sanctuary. And I've never felt unsafe in Cairo.

I was interrogated once. They asked questions about USAID grant money and how the funding works. I honestly had no idea, since it wasn't my job. My job was to teach.

They wanted to know how we contacted political parties and where we got the maps. We created maps that divided up the parliamentary election districts by color according to which round of the elections they were participating in. Most of the information came from the High Election Commission website.

FP: And what about the cash they found in your office during the raid? It was rumored to be a million Egyptian pounds.

RB: No, I don't think it was that much. We had 25 to 30 international election witnesses flying in from around the world. The institute pays travel, lodging, and per diems. Most of that money was supposed to pay for food for people who had volunteered to come from Asia or Europe or the U.S. or Africa to spend four days in Egypt, participating in a historic election.

FP: What kind of problems do you face on the streets? Do people see you as a spy?

RB: Well, I've never had any problem on the street. I get a lot of praise for staying. I didn't do this for pay. I don't do a lot of interviews and stuff like that. I get a lot of credit for respecting the system and sticking with my guts. The street has quieted down about it. There hasn't been a lot of chatter. I'm happy to talk to any Egyptian. Like I said, we were very transparent about what we did. I run into people quite often who came into classes that we taught and now have nothing but good things to say about what they learned.

I'm charged with managing an illegal NGO and illegally receiving foreign funds. I didn't do either one.

FP: Have there been any threats against you? When you were leaving court the other day, there were people yelling at you, saying that you should be exchanged for Egyptians imprisoned in the U.S.

RB: They wanted to trade me for the Blind Sheikh [Omar Abdel Rahman]. But that's not going to happen.

FP: And who protected you?

RB: It was actually a couple of members of the Al-Nour Party, people who had come to several of the trainings I had run. When I came out of the cage the first time they were right there and walked me out. We don't agree on much politically but we respect each other. I gave them the same level of teaching and expertise I would give to any other party. I think it's just a respect thing.

FP: How does this issue affect the future of NGOs in Egypt?

RB: There are a lot of things that are priorities in this country: jobs, combating poverty, better education, security. Transitions are difficult, they take time. You can't pass every new law you need at once. NGOs, whether they be those that teach democracy or deal with human rights, or those that work at the local level to combat illiteracy or improve healthcare conditions, play a vital role. You don't have to be a big, international group. Almost every time you read a report coming out of Syria about civilian casualties, those reports are usually coming from foreign NGOs that are there right in the middle of the combat, running hospitals and clinics, on the frontlines. It's not the Syrian government that was reporting that 52 civilians were killed yesterday, it was a European NGO. I think this does hurt the future of non-government organizations. In a vibrant society you need NGOs to advocate for the people. If Egypt is going to move forward, it's going to take time, but you're going to need those citizen groups, whether their funding is foreign or local.

FP: The government seems to be very upset about the active role Egyptians played in your work.

RB: Were people in the government upset that some political parties sprang up and ran some good campaigns? I don't know; I've never heard that. Our operation dealt with the Islamists, the nationalists, the ex-NDP parties, the liberals, the socialists.

I know that we sent Egyptians to observation missions to Nigeria to cover the elections last summer, and we have also embedded them in campaigns in other parts of the world so that they can see firsthand how political campaigns work.

NDI has operated in 120 countries around the world. We've done a lot of election observation. We draw from a wide array of people that we've dealt with in other countries.

FP: So why did you bring a bag with you to the cage?

RB: One of the defendants had lived in the UK, and there's a saying that if you bring your umbrella, it never rains, so we all decided that if we packed a bag, we wouldn't be detained overnight. And so a few days ago I packed a bag. A few change of clothes, towels, some toiletries and a book to read. I'm not a very superstitious person, but it's worked so far.



Financial (Secret) Services

A conversation with the mysterious Anonymous analysts who are exposing fraud and corruption in Chinese companies -- and taking them down.

Anonymous Analytics (AA), a mysterious group claiming to be a faction of the global hacktivist organization Anonymous, just released its second short-selling report, this time about the multi-billion dollar Chinese company Huabao International.

Entitled "Smoke and Mirrors," it's a comprehensive unraveling of fraud in China's biggest flavor and fragrance provider. It accuses Huabao of lying about its suppliers and grossly overstating its profit margins to enrich the chairwoman and her proxies, to the detriment of shareholders. Since short-seller Muddy Waters released its first report in 2010, many firms have investigated fraud in public Chinese companies, making millions by publishing information that caused companies' stock price to fall. But this is the first time a group as murky as AA has entered the fray.

AA is cagey about most facets of its existence, including its motives. In its disclosure, the group says it holds "no direct or indirect position in any of the securities profiled in the report," but adds that readers should "assume" certain contributors to the report are shorting the stock. They certainly did their homework. At one point, AA claims Huabao used Photoshop to blur the location of one of its facilities, but AA found it anyway -- by travelling to Botswana, where the group says it learned that the base "is used for a different sort of business altogether" but declined to elaborate. Its anonymity allows AA to dangle information; it warns it will release more incriminating details if Huabao threatens anyone involved in producing the report.

The company claims it will respond to these "misleading" allegations and has suspended trading in Hong Kong. The first short-selling report AA released in September contributed to the collapse of one of China's biggest vegetable producers, Chaoda Modern Agriculture, then with a market cap of nearly half a billion dollars; trading of the company's stock remains suspended.

I reached AA through the contact page on its website; the group agreed to an interview but wrote "we generally prefer email correspondence since we can answer with one voice instead of multiple on the cuff." Asked how many people I was speaking with, the response was: "at least one." AA answered all of my questions, with one notable exception: a request for elaboration on their funding and the identity of contributors to their report; to which they responded "as a matter of confidentiality, we don't discuss anything related to our partners/contributors/affiliates/sources."

On the bottom of the first page of its Huabao report, AA appended the slogan "You should have expected us." Here's what to expect next from AA:

Foreign Policy: What inspires your choice of targets? Would you describe there being any ideology behind it? Would you be more inclined to publish a report on say, a Chinese weapons company than a Chinese toy maker, for example?

Anonymous Analytics: Our choice of targets [has] been mostly limited by how much information we believe we can dig up on them. For example, our first report on Chaoda was a complete joke. The company was such an obvious fraud that we didn't really have to put much effort into finding information on them. Everyone already knew it. We just came in and took the last punch. We believe the reason Chaoda no longer trades today has less to do with our report, and more to do with the fact that the company was giving regulators such a headache. If you're going to commit fraud, don't be so obvious.

With Huabao, our most recent target, things about the company just didn't make sense. How did this 36-year-old female who no one had ever heard of manage to become a billionaire overnight, particularly in a notoriously government-controlled and patriarchal industry? This example is a stretch, but helps demonstrate the absurdity of Huabao: Imagine if you had never heard of [CEO Mark] Zuckerberg until after Facebook's IPO. It just didn't make sense.

Then there were the massive insider selling, opaque related-party transactions, etc. These are red flags that we start looking for, but more often than not, it leads down the rabbit hole.

Right now, we have enough tips and more leads and more people helping us that we can be more selective in our targeting process. That said, the industry doesn't really matter as much as the people leading the company. Who would have thought a vegetable producer (Chaoda) would be an ideal vehicle to commit fraud? From a media standpoint, it would be more interesting to take down a weapons manufacturer run by some bald guy sporting a white cat. But that doesn't always turn out to be the case.

FP: Any retribution from Chaoda Modern following your report?

AA: There has been no retribution to date. If there ever is an issue regarding safety, we do have an encrypted insurance file we will release.

FP: What is the relationship between Anonymous and Anonymous Analytics? You say that you're a faction of Anonymous, but what does that mean exactly?

AA: Our members grew up within the Internet subculture and cesspool that is 4chan. We have been active in the Anon community over the last several years in some capacity. Some of us eventually grew up and got jobs in industry and government but we retained the dark humor that is Anonymous. More importantly, we retained the skill to source information and social-engineering capabilities that we honed through our work with Anonymous. This ability has proved useful in our more high-brow work with Anon Analytics.

FP: You say on your website that "All information presented in our reports is acquired through legal channels." So, no hacking?

AA: We don't hack for information since that would attract all kinds of horrible attention we don't need. Imagine the end result of a group of hackers raiding corporate servers for information, and then compiling that information into market-moving reports. It's a good script for a movie, but it's also good way to invite black helicopters. But then again, if we were hacking, chances are we wouldn't go around talking about it.

FP: What would you say the Holy Grail of corporate exposure would be, in regard to China and the United States?

AA: This is a tough one to answer. In the U.S., the Holy Grail would likely be a major financial institution -- there's certainly enough venom among the U.S. population toward financial institutions. In China, it would likely be a government-controlled entity where management is asset-stripping at the expense of the common people.

FP: How many people were involved with this report? Any plans to publish a version in Chinese or in other languages?

AA: We don't discuss the number of individuals that worked on our report, and it changes from project to project. Multiple languages might be something we look at down the line, but don't expect to happen. There's an issue of costs, time, and our sense of humor not translating well.

FP: I see your Drop Box is closed in part because of a large number of tips. Any hints on what we should expect from you in the coming months?

AA: Hopefully more quality work. We're looking to step away from China. Targeting Chinese companies has become a cliché, which probably explains our self-loathing. At the same time, there are some reasons that these companies have become a target:

First, China's governance and accountability standards have not yet reached the same level as developed markets. In other words, managers of these companies have not yet learned how to properly hide their improprieties.

Second, most Chinese companies are manufacturing- or production-based. This lends itself well to the diligence process. It's easy to go into a factory and take a picture of a production line that's idle. It's a binary decision: Either the company is producing, or it isn't.

When it comes to more established economies, they tend to be service-based. You can't exactly go into the office of Goldman Sachs and take a picture of a stack of papers and some guy playing solitaire at his computer. Contextually, it doesn't translate well into a report.

These are just some of the reasons Chinese companies have become easy targets. That said, we are trying very hard to make our next report ... unique.