RUMORS OF A CABINET RESHUFFLE AND CHANGES TO

C O N F I D E N T I A L SECTION 01 OF 03 CAIRO 002577

SIPDIS

SIPDIS

NSC FOR SINGH AND WATERS

E.O. 12958: DECL: 08/20/2017
TAGS: PGOV PREL EG
SUBJECT: RUMORS OF A CABINET RESHUFFLE AND CHANGES TO
RULING PARTY LEADERSHIP

REF: A. CAIRO 2305

B. 2006 CAIRO 7034

C. 2006 CAIRO 6961

D. 2006 CAIRO 5384

Classified By: DCM Stuart Jones, for reasons 1.4 (b) and (d).


1. (C) Summary: Cairo is abuzz with rumors of a looming
cabinet reshuffle, with conjecture focusing on expected
changes in the ministries of Justice, Social Solidarity,
Culture, Housing, and perhaps a change of the Prime Minister.
Speculation also abounds about an imminent shake-up in the
leadership of the ruling party, sparked by the recent
announcement that, for the first-time in the National
Democratic Party's (NDP) 29-year history, the party's
president will be elected. A cabinet reshuffle is unlikely
to have a major impact on broad government policies, but
would be aimed at shedding ministers who have become
political liabilities. Viewed through the lens of
presidential succession, changes to the cabinet and the NDP
leadership will gauge presidential son and presidential
aspirant Gamal Mubarak's prospects. If Gamal is able to
jettison some of the NDP old guard, and consolidate his
control of the party and cabinet apparatus by appointing his
own loyalists, he will be in a stronger position once the
succession gets underway. End summary.

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CABINET CHANGES COMING?
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2. (C) Rumors of a possible cabinet reshuffle are swirling
through the stifling heat of summer in Cairo, with both
political elites and the press focused on the issue. Egypt's
last cabinet shake-up occurred on August 27, 2006 (ref D); a
minor reshuffle that followed weeks of speculation akin to
the current gossip among Egypt's political classes.
President Hosni Mubarak hates to follow the pack, and may
choose to make no changes to his ministerial line-up just to
confound the pundits. However, in a sign that shifts are at
least under consideration, several of the reports about
imminent ministerial changes have been published in the
state-owned media, including an August 8 front-page editorial
by the editor-in-chief of the government-backed "Al Akhbar,"
quoting a "senior government source" as saying that a cabinet
reshuffle is coming soon.


3. (C) Media speculation and the analysis of our contacts
posits that any cabinet change may include some of the below
ministers:

-- Prime Minister (Ahmed Nazif): Whether Nazif's tenure will
continue is the key question on the minds of
politically-inclined Cairenes. Nazif, PM since 2004, has led
the government in implementing various economic reforms, but
his privatization and liberalization initiatives have
garnered intense criticism from his detractors. Many
observers assert that Nazif will stay on as PM, and that he
has Mubarak's full confidence. Other analysts hypothesize
that, due to the alleged rivalry between Nazif and
presidential son Gamal Mubarak, Nazif will be replaced by
either current Minister of Trade and Industry Rachid Mohamed
Rachid (a close Gamal ally, and an economic reformer with an
excellent track record at his ministry),Farouk Al Okda
(currently governor of the Central Bank),or Gawdat El Malt
(Director of the Central Auditing Agency, who is reputed by
journalists to "have the confidence of leading NDP figures.")
We think Nazif will stay.

-- Minister of Justice (Mamdouh Marei): Marei's one-year
tenure has been characterized by bitter, public disputes with
the various branches of the influential, independent-minded
Judges Club (ref B). The latest squabble between Marei and
the State Council Judges Club, precipitated by Marei publicly
comparing the Club's chairman to a famed Egyptian actress
known for her weepy, drama queen roles, resulted in Mubarak
appointing a 3-man committee to assess Marei's ministerial
performance. Marei is widely disliked throughout his
ministry, and our judicial contacts assess that with his
tough tactics against the Judges Club, Marei has fulfilled
the purpose for which he was appointed, and that Mubarak may
now take this opportunity to appoint a less controversial
figure as minister. Rumored replacements are Moqbil Shaker
(currently head of the Supreme Judicial Council) and Ossama
Atteweya (now one of Marei's deputies); both have long and
close contacts with the U.S.

-- Minister of Social Solidarity (Ali Al Moselhy): Mubarak
needs a fall guy to be the focal point for public ire over

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various problems plaguing Egypt, such as alleged shortages of
drinking water, problems with the strategic wheat reserves,
and the rising cost of living. It appears that Moselhy
himself expects to be the scapegoat. In an August 15 meeting
with USAID's Acting Mission Director, Moselhy implied that he
was soon to lose his job, noting, "I am not afraid to speak
my mind. That's why I am out. I am out." Only a few names
have been mentioned as a replacement, among them NDP whiz kid
and close Gamal advisor Mohamed Kamal.

-- Minister of Culture (Farouk Hosni): Hosni, a 20-year
veteran of the cabinet, is largely unpopular with Egyptians,
due in part to his liberal opinions (ref C),but he has been
kept in the minister's chair for decades, reputedly because
he is a favorite of First Lady Suzanne Mubarak. Egypt
recently announced a campaign for Hosni to be appointed as
UNESCO Director-General. The election will not take place
until 2009, but our contacts speculate that the excuse of
Hosni needing to wage a time-consuming campaign for the
UNESCO position provides a face-saving means for Mubarak to
rid the cabinet of the unloved Hosni, who is currently also
facing a corruption scandal within his ministry.

-- Minister of Housing, Utilities and Urban Development
(Ahmed Maghrabi) and Minister of Transport (Mohamed Mansour):
Both of these ministers, often pilloried in Egypt's
independent press for being out-of-touch, ineffective wealthy
businessmen, have been consistently rumored in the media as
likely to be removed. The loss of either would be a blow to
Egypt's economic reform agenda. However, Maghrabi in
particular may be deemed by Mubarak to have become a
liability for the government, after his tone-deaf comments in
recent days about the availability of drinking water, coming
against the backdrop of increasing public concern over the
issue.

-- Several press reports have also mentioned the possible
replacement of Minister of Foreign Affairs Ahmed Aboul Gheit,
Minister of Higher Education Hany Mahfouz Helal, and Minister
of Water Resources and Irrigation Mahmoud Abou Zeid. Sacking
Abou Zeid could be appealing for Mubarak, as he could play
the role of scapegoat for the current drinking water
problems.

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RULING PARTY LEADERSHIP SHAKE-UP IN THE WORKS
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4. (SBU) Simultaneous with rumors of a cabinet reshuffle,
speculation has abounded about a looming change in the
leadership of the ruling party, sparked by the recent
announcement of NDP secretary-general Safwat El Sherif that,
for the first-time in the NDP's 29-year history, the party's
president will be elected (ref A). The election itself will
take place at the November 3-5 NDP party conference, with the
5,500 conference delegates voting. Sherif has tried to quell
rumors that the election of an NDP president means Mubarak
would be replaced, stating publicly that he was unaware of
any NDP member other than President Mubarak who was "ready to
run for the post," and that those who believe the elections
"open the door for Gamal Mubarak to inherit power from his
father are living in an imaginary world."


5. (C) Nonetheless, it appears possible, though not certain,
that Gamal may indeed aim for the NDP presidency. In a
recent meeting with poloff, a close advisor and associate of
NDP secretary for organization and Gamal crony Ahmed Ezz
asserted that "Gamal will make a play for the presidency of
the party in November .... Ezz thinks he should have done
this directly after the 2005 presidential elections, and is
urging Gamal to stop delaying and make this move." Gossip in
Cairo's political salons is that the Gamal clique will also
move to unseat long-time NDP SYG Sherif at the November
conference, sidelining him to a vice-presidential party
position, and replacing him with a Gamal stalwart such as Aly
El Din Helal, currently the NDP's media secretary.

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COMMENT
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6. (C) Although a cabinet reshuffle is unlikely to have a
major impact on broad government policies, cabinet changes
and an NDP leadership shake-up would be useful gauges of how
strong Gamal is, and how much his father supports his
presidential aspirations. If Gamal is able to jettison some
of the NDP old guard, and consolidate his control of the
party and cabinet apparatus through the positioning of his
loyalists, he will be in a stronger position to control the

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power dynamics and make a successful play for the presidency,
once the succession process gets underway.


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