Why the big four asked for a parliamentary inquiry into banking


George Rennie, University of Melbourne

The major Australian banks are following familiar public relations tactics in requesting a parliamentary commission of inquiry into banking and financial services.

When the public mood is against an industry, it will try to win the public over, while getting the politicians to ignore the public mood. If that fails, the industry gradually concedes ground until attention goes elsewhere.

For this reason, the banks went from being steadfastly against a commission, to offering the option of self-regulation, to proposing a new “banking tribunal”, to eventually conceding, after the battle had already been lost, to a parliamentary inquiry.

The big problem for the banks, and a big part of the reason that their previous lobbying failed, is that their popularity with the Australian public is very low. This allowed, or pressured, politicians to call for the commission, and presents significant problems for the banks going forward, especially if they wish to avoid tougher regulation.


Read more: Royal commissions: how do they work?


The banks capitulated only once it became “all but inevitable” that an inquiry of some sort would be held.

Due to the recent citizenship saga, it was looking likely that a coalition of crossbench, Labor, Greens and some Nationals MPs would pass a bill for a commission of inquiry into the banks and other financial institutions.

Labor had already promised to set up a royal commission into the banking and financial services industry if it won the next election.

Concede ground only when it’s already lost

A royal commission will almost certainly bring many months of bad press for the banks.

As the industry has repeatedly made clear, it never wanted a royal commission. The banks claimed they had corrected the mistakes of the past and that a commission was “unwarranted”.

So the banking industry’s public and private lobbying efforts were geared towards convincing politicians to resist calls for the commission, while trying to boost public opinion by highlighting their corporate social responsibility.

This involved sacking executives over this scandal or that, removing certain ATM fees, and cutting bonuses and director pay.

The banks have also launched advertising campaigns, such as one highlighting that many Australians own bank shares through their superannuation.

Concurrently, the banks hoped that threatening to launch a “mining tax”-style ad campaign might scare politicians away from calling for a commission.

These campaigns have become a common threat since the success of the 2010 mining tax campaign opened corporate Australia’s eyes to the potential effectiveness of advocacy ads.


Read more: Banking royal commission will expose the real cost of bad behaviour


Tactics similar to those the banks are employing now have been used to varying degrees of success in the United States by the tobacco industry and the gun, finance and healthcare lobbies.

In 1998 the American tobacco industry agreed to make payments of over US$200 billion to dozens of states. But this happened only after decades of public education and campaigning against smoking.

Similarly, the American healthcare lobby successfully fought off several attempts to reform healthcare. Obamacare managed to pass in 2010 only after the industry got to substantively write it.

The public relations game

Appearing to co-operate and atone is the best way to try to influence the terms of an inquiry. It also helps to mitigate the worst of any bad press to come. This reflects a wider, pragmatic strategy of lobbying and public relations employed by the banks and other industries.

The focus for the banks will now shift towards damage control, along with heavy promotion of the banks “doing the right thing” by Australia.

To that end, expect to see even more banners proclaiming a bank’s sponsorship of the local footy team, and ads promoting the good work done in your local community.

The ConversationThese, along with an insistence that the commission is a witch hunt, that its findings are “old news”, that the banks have already taken steps to deal with the issue, will underpin the industry’s public relations battle while the royal commission takes place.

George Rennie, Lecturer in American Politics and Lobbying Strategies, University of Melbourne

This article was originally published on The Conversation. Read the original article.

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The public should be ‘shocked, dismayed and disgusted’ at the major banks



File 20171115 11234 330fag.jpg?ixlib=rb 1.1
ANZ and NAB have settled with ASIC over manipulation of the Bank Bill Swap Rate.
Shutterstock

Pat McConnell, Macquarie University

The Australian public should be dismayed and disgusted that the major banks are still attempting to cover up the extent of their complicity in manipulating the Bank Bill Swap Rate (BBSW), a key interest rate benchmark.

For years, the banks covered up the involvement of their traders in manipulating not only interest rate but also foreign exchange benchmarks, by attempting to outspend the corporate regulator, ASIC, in the courts, using shareholders’ money.

Faced with publication of the evidence they caved in at the very last minute to settle with ASIC, paying even more shareholders’ funds, for fines and legal costs.

Has any director or senior manager taken personal responsibility, or even apologised, for either the rampant misconduct or the failure to monitor it – No!

Little contrition

In a short media release, ANZ acknowledged, with little contrition, that

in the course of trading on the BBSW market, a small number of traders attempted to engage in unconscionable conduct on ten dates between September 2010 and February 2012. ANZ also did not have in place adequate policies and systems to monitor trading and communications of its BBSW traders.

But we should not be fooled by the references to the “small number of traders”, or “ten dates”.

Last year, CBA and NAB agreed to enforceable undertakings with ASIC in relation to manipulating the foreign exchange benchmark, which was arguably much more egregious than the BBSW manipulation, as it involved sharing of information with other market participants, in particular sensitive information about clients’ trades.

Not one of the directors or senior managers of these banks took personal responsibility for the actions of their staff or their collective failure to monitor such obvious misconduct.

The agreement between ASIC, NAB and ANZ stipulates that

Traders involved in the breaches will have to be retrained before they are allowed back on their banks’ trading floors

Trading on nonpublic confidential information, which is what “manipulating the bank bill swap rate to their advantage and the disadvantage of others” was, is often punished by custodial sentences not some short court-ordered training course. This would just reiterate the rules that the traders should have been following anyway and which diligent management should have been enforcing.

The failure to monitor staff seems not to have slowed the progress of some senior managers. For example, ANZ CEO Shayne Elliot, was head of ANZ’s Institutional Bank (i.e. trading operations) during most of the period in which the unconscionable conduct took place.

Why did they pursue the court cases?

So what were the boards of directors of some of Australia’s largest companies doing while this failure to monitor unconscionable conduct was going on?

While neither superstar chairmen Ken Henry (NAB) nor David Gonski (ANZ) were in place during the original misconduct, they have been in place since 2014 and have had ample opportunity to inquire into the details of the scandal.

Having read the same evidence as Justice Jagot, directors chose to proceed with the case before caving in on the day it was due to be heard in court. Investors should be tearing their hair out at such colossal waste of money on high-priced (and in the end useless) lawyers.

The LIBOR and foreign exchange scandals cost overseas banks billions of dollars in fines.

Did they really believe this time was different, given that other banks had already pleaded guilty to manipulating BBSW? Even if they were not in place at the time, the non-executive directors of both banks are certainly responsible for continuing this expensive charade.

Such lack of oversight should surely trigger the first investigation when the new Banking Executive Accountability Regime (BEAR) legislation comes into force, as it covers directors and senior managers.

Pulling no punches

Federal Court Justice Jayne Jagot certainly pulled no punches in her statutory approval of the settlement between ASIC and the ANZ and NAB banks, saying that the Australian public should be “shocked, dismayed and disgusted” by the behaviour of the two banks.

The Australian public is right to be perplexed as to why no one considers themselves personally accountable for such a fiasco. And investors must be afraid that in pursuing the failed litigation so far, without apologising, that further harm is not done by possible class action litigation in the United States.

The Australian taxpayer would be justifiably annoyed to learn that the offences admitted by the banks took place between 2010 and 2012, when the very same banks were given the free handout of a government guarantee following the global financial crisis (GFC) – that really is biting the hand that feeds you.

So, should Australian investors, taxpayers and the public be “shocked, dismayed and disgusted” as the judge suggested? Yes.

The ConversationBut recent history suggests that the largest banks will just try to tough it out before returning to their previous modus operandi. Only a royal commission into banking regulation will break this vicious circle.

Pat McConnell, Visiting Fellow, Macquarie University Applied Finance Centre, Macquarie University

This article was originally published on The Conversation. Read the original article.

It’s time for a royal commission into banking regulation


Pat McConnell, Macquarie University

The handling of recent financial scandals show that regulators are confused about what they do, or should do. And as a result the regulation of the financial system, which is vital to a strong functioning economy, is just not working effectively.

We can see the problem in the recent testimony to the House Economics Committee. Recounting the sequence of events that led the Commonwealth Bank to inform regulators of the alleged breaches of money-laundering legislation, CBA Chair Catherine Livingstone said:

We were having board meetings at the time I was being called to Canberra by the Treasurer. When the board meeting, which went over multiple days, finished, which was lunchtime on the Wednesday, I immediately phoned the other two regulators, ASIC and APRA.

This raises a raft of questions. Having known about the allegations of money laundering since 2015, why did CBA not inform the regulators until August 2017? Why did the treasurer warn CBA before CBA talked to the two regulators? When did the Treasurer first hear of the money-laundering breaches? And why did the treasurer not instruct AUSTRAC (an agency of the Attorney General’s department) to inform ASIC and APRA?

In a previous parliamentary hearing, Greg Medcraft, Chairman of ASIC, had said:

I met two days before with the chairman of the Commonwealth Bank, the chair of risk and the chair of the audit committee… There was no mention of what happened. Then I saw the announcement and, about a week later, the chair called me in to apologise. Timeliness and transparency are big issues in this one

So, either ASIC and/or APRA were aware of the allegations of money laundering at CBA and took no action until prompted by the treasurer, or the communications between the various agencies of government are not working as planned. Either way, this is no way to regulate a modern financial system.

Even more regulatory confusion

Just as he is due to leave his role as head of ASIC, Greg Medcraft managed to end two high profile cases with modest wins.

Both ANZ Bank and NAB have settled with ASIC for their parts in manipulating the BBSW intereset rate benchmark. Although the settlement remains to be approved by the Federal Court.

Westpac remains the hold out, and the prosecution’s case has opened in the Federal Court.

But in the euphoria at ASIC, a niggling question remains – what about the Commonwealth Bank?

For some time, Medcraft has warned that action against CBA had not been ruled out and that information was being gathered. Recently Medcraft confirmed that the regulator had “plenty of time” to take action against CBA.

This also raises a number of questions. Not least why ASIC has not filed claims against CBA or announced that there would be no action taken against the bank. If CBA has no case to answer then ASIC should come out and exonerate the bank and relieve its long-suffering shareholders.

But if CBA has even a minor case to answer, and the regulator has held off hoping that the bank would settle without going to court, then ASIC may have been much too clever for their own good.

As a result of a shareholder action following the alleged money-laundering scandal, ASIC is now looking at whether the CBA board “complied with continuous disclosure laws when it decided not to alert investors to the suspicious behaviour”.

This leaves ASIC in an extremely difficult position – looking at a possible failure to disclose the money-laundering scandal at CBA, while at the same time hinting that CBA may have done the same thing with BBSW.

But ASIC is not the only regulator to be operating in the dark. The latest Banking Executive Accountability Regime (BEAR) legislation only adds to the confusion on how best to regulate financial services.

When questioned in recent Senate Estimates about the regulatory impact statements that have been done for new BEAR legislation, Helen Rowell, deputy Chair of APRA, replied that she personally had “not seen them; I couldn’t say whether anyone else within APRA has seen them”.

This is despite the fact that APRA has been given an extra A$40 million over four year to handle the new legislation – for what, and where did this figure come from?

Again, this is no way to regulate a banking system. The confusion around what regulators do and how they do it, must be sorted out.

Where next?

The most obvious answer to clearing up this mess is to initiate a royal commission that looks specifically at banking regulation. In particular, what form a modern banking regulation system should take; which regulators should do what; what the responsibilities of parliament, ministers and regulators should be; and how regulators should share information and tackle common problems (such as banking culture).

Such a royal commission should concentrate on clearing up issues of regulatory philosophy, structure, legal requirements and administration. Whether or not there is an all-purpose banking royal commission, the failures in the current system have to be remedied.

Of course, the government has only got itself to blame for getting in this mess.

The government’s own Murray Inquiry into the Financial System made a recommendation that could have helped. The inquiry recommended the establishment of a new Financial Regulator Assessment Board (FRAB), which would:

advise government annually on how financial regulators have implemented their mandates. Provide clearer guidance to regulators in Statements of Expectation and increase the use of performance indicators for regulator performance.

Sounds sensible? Not to the government, as it chose to accept all of the major recommendations of David Murray’s inquiry except for this one.

And, instead of having one professional body that looks at the performance of regulators, there has been a nonstop procession of “independent” inquiries, by banks themselves, the banking industry and even regulators. No big picture, just a patchwork of unconnected recommendations. And undoubtedly more to come.

The ConversationAn opportunity missed.

Pat McConnell, Visiting Fellow, Macquarie University Applied Finance Centre, Macquarie University

This article was originally published on The Conversation. Read the original article.

Push for Islamic Courts in Kenya Alarms Christians


Emergence of Somali-related Islamic extremists puts authorities on high alert.

NAIROBI, Kenya, February 11 (CDN) — A constitutional battle to expand the scope of Islamic courts in Kenya threatens to ignite religious tensions at a time when authorities are on high alert against Muslim extremists with ties to Somalia.

Constitutional provisions for Islamic or Kadhis’ courts have existed in Kenya since 1963, with the courts serving the country’s coastal Muslim population in matters of personal status, marriage, divorce, or inheritance. Kenya’s secular High Court has jurisdiction over civil and criminal matters, and even a decision in the Islamic courts can be appealed at the High Court.

The Islamic courts have functioned only in Kenya’s Coast Province, but in a hotly debated draft constitution, their jurisdiction would expand across the nation and their scope would increase. The proposed constitution has gathered enough momentum that 23 leaders of churches and Christian organizations released a statement on Feb. 1 asserting their opposition to any inclusion of such religious courts.

“It is clear that the Muslim community is basically carving for itself an Islamic state within a state,” the Kenyan church leaders stated. “This is a state with its own sharia [Islamic law]- compliant banking system; its own sharia-compliant insurance; its own Halaal [lawful in Islam] bureau of standards; and it is now pressing for its own judicial system.”

Muslim leaders are striving to expand the scope of Islamic courts to include civil and small claims cases. They also want to upgrade the Muslim tribunals to High Court status. These demands have alarmed Christians, who make up 80 percent of the population and defeated a similar proposal in a 2005 referendum. Muslims make up 10 percent of Kenya’s 39 million people, 9 percent of the population follows indigenous religions and less than 1 percent are Hindu, Sikh and Baha’i.

The National Council of Churches of Kenya (NCCK) said the Committee of Experts (CoE) responsible for “harmonizing” drafts from various stakeholders ignored their concerns. The committee was responsible for determining what matters would be unduly “contentious” and was charged with keeping them out of the draft.

“We wrote to them, but we have been ignored,” said the Rev. Canon Peter Karanja, NCCK general secretary. “Who told the CoE that Kadhis’ courts were not contentious?”

Saying the committee ignored the crucial requirement of omitting what is “contentious,” Karanja said it did little to build consensus. He said that unless the Islamic courts are stricken from the constitution, Christians might be forced to reject the document in a national referendum later this year.

Muslim leaders, just as stridently, insist that recognition of the Islamic courts does not elevate Islam over other religions, and that if the courts are removed they will shoot down the draft in the referendum.

The 2005 referendum split the country and was followed by a bitterly disputed presidential election in 2007 that sparked rioting, reportedly leaving 1,300 people dead. The election dispute was resolved with one candidate becoming president and the other prime minister, and at the heart of the proposed constitution is an attempt to transfer presidential powers to the prime minister.

Christian leaders point out that the “Harmonized Draft” of the constitution discriminates against non-Muslims and contradicts its own Article 10 (1-3), which states that there shall be no state religion, that the state shall treat all religions equally and that state and religion shall be separate. They see the attempt to expand the scope of the Islamic courts as part of a long-term effort by Muslims to gain political, economic and judicial power.

Muslim leaders claim that inclusion of the Islamic courts in the new constitution would recognize “a basic religious right” for a minority group. Some Muslim extremists have said that if Islamic courts are removed from the draft constitution, they will demand their own state and introduce sharia.

Extremists Emerge

The constitutional issue erupted as security officials went on high alert when sympathizers of the Islamic terrorist al Shabaab militia appeared in a protest in mid-January to demand the release of radical Muslim cleric Abdullah Al-Faisal, who had entered the country on Dec. 31.

Al-Faisal, imprisoned from 2004 to 2008 after a British court convicted him of soliciting murder and inciting hatred, is on a global terrorism list. Government spokesman Alfred Mutua said Al-Faisal has been known to recruit suicide bombers and was arrested for violating terms of his tourist visa by preaching. He was reportedly deported to his native Jamaica on Jan. 21.

Eyewitnesses to the protests in Nairobi told Compass one demonstrator clad in fatigues, with his face masked by a balaclava, waved the black flag of the al-Qaeda-linked al Shabaab militia and passed his finger across his throat in a slitting gesture, taunting passersby.

Officials from the Council of Imams and Preachers of Kenya and from Muslims for Human Rights defended the demonstrations as legitimate to condemn violation of Al-Faisal’s rights. At least one person died as the protests turned violent, and Internal Security Minister George Saitoti said five civilians and six police officers were injured, with one security officer wounded from a bullet said to be shot by a demonstrator.

Al Shabaab-affiliated operatives appear to have targeted Christians in Kenya, according to an Internet threat in December by a group claiming to align itself with the Islamic extremist militia seeking to topple Somalia’s Transitional Federal Government. In an e-mail message with “Fatwa for you Infidels” in the subject line to Christian and governmental leaders in Kenya, a group calling itself the Harakatul-Al-Shabaab-al Mujahidin threatened to kill Muslim converts to Christianity and those who help them.

“We are proud to be an Islamic revolutionary group, and we are honored to be affiliated with Al Qaeda, a group of honest Muslims in which we share long-term goals and the broad outlines of our ideologies, while focusing on our efforts on attacking secular and moderate governments in the Muslim world, America and Western targets of opportunity and of course Uganda, Ethiopia, Burundi and Kenya if they do not stop their assistance to the Somali fragile and apostate government,” the group wrote in the e-mail. “Although we receive support for some of our operations, we function independently and generally depend on ourselves…”

The group threatened to shake the Kenyan government “in minutes,” calling it the “the most fragile target in the world.”

The emergence of al Shabaab and its sympathizers in Kenya coincides with the swelling of the Somali population in the country to 2.4 million, according to the August 2009 census.

Report from Compass Direct News 

Turks Threaten to Kill Priest over Swiss Minaret Decision


Slap to religious freedom in Switzerland leads to threat over church bell tower in Turkey.

ISTANBUL, December 15 (CDN) — In response to a Swiss vote banning the construction of new mosque minarets, a group of Muslims this month went into a church building in eastern Turkey and threatened to kill a priest unless he tore down its bell tower, according to an advocacy group.

Three Muslims on Dec. 4 entered the Meryem Ana Church, a Syriac Orthodox church in Diyarbakir, and confronted the Rev. Yusuf Akbulut. They told him that unless the bell tower was destroyed in one week, they would kill him.

“If Switzerland is demolishing our minarets, we will demolish your bell towers too,” one of the men told Akbulut.

The threats came in reaction to a Nov. 29 referendum in Switzerland in which 57 percent voted in favor of banning the construction of new minarets in the country. Swiss lawmakers must now change the national constitution to reflect the referendum, a process that should take more than a year.

The Swiss ban, widely viewed around the world as a breach of religious freedom, is likely to face legal challenges in Switzerland and in the European Court of Human Rights.

There are roughly 150 mosques in Switzerland, four with minarets. Two more minarets are planned. The call to prayer traditional in Muslim-majority countries is not conducted from any of the minarets.

Fikri Aygur, vice president of the European Syriac Union, said that Akbulut has contacted police but has otherwise remained defiant in the face of the threats.

“He has contacted the police, and they gave him guards,” he said. “I talked with him two days ago, and he said, ‘It is my job to protect the church, so I will stand here and leave it in God’s hands.’”

Meryem Ana is more than 250 years old and is one of a handful of churches that serve the Syriac community in Turkey. Also known as Syrian Orthodox, the Syriacs are an ethnic and religious minority in Turkey and were one of the first groups of people to accept Christianity. They speak Syriac, a dialect of Aramaic, a language spoken by Christ. Diyarbakir is located in eastern Turkey, about 60 miles from the Syrian border.

At press time the tower was standing and the priest was safe, said Jerry Mattix, youth pastor at the Diyarbakir Evangelical Church, which is located across a street from Meryem Ana Church.

Mattix said that threats against Christians in Diyarbakir are nothing out of the ordinary. Mattix commonly receives threats, both in the mail and posted on the church’s Internet site, he said.

“We’re kind of used to that,” Mattix said. He added that he has received no threats over the minaret situation but added, “I wouldn’t be surprised if we do.”

Mattix said the people making threats in the area are Muslim radicals with ties to Hezbollah “who like to flex their muscles.”

“We are a major target out here, and we are aware of that,” Mattix said. “But the local police are taking great strides to protect us.”

Mattix said he also has “divine confidence” in God’s protection.

The European Syriac Union’s Aygur said that Christians in Turkey often serve as scapegoats for inflamed local Muslims who want to lash out at Europeans.

“When they [Europeans] take actions against the Muslims, the Syriacs get persecuted by the fanatical Muslims there,” he said.

The threats against the church were part of a public outcry in Turkey that included newspaper editorials characterizing the Swiss decision as “Islamophobia.” One Turkish government official called upon Muslims to divest their money from Swiss bank accounts. He invited them to place their money in the Turkish banking system.

In part, the threats also may reflect a larger and well-established pattern of anti-Christian attitudes in Turkey. A recent study conducted by two professors at Sabanci University found that 59 percent of those surveyed said non-Muslims either “should not” or “absolutely should not” be allowed to hold open meetings where they can discuss their ideas.

The survey also found that almost 40 percent of the population of Turkey said they had “very negative” or “negative” views of Christians. In Turkey, Christians are often seen as agents of outside forces bent on dividing the country.

This is not the first time Akbulut has faced persecution. Along with a constant string of threats and harassment, he was tried and acquitted in 2000 for saying to the press that Syriacs were “massacred” along with Armenians in 1915 killings.

In Midyat, also in eastern Turkey, someone recently dug a tunnel under the outlying buildings of a Syriac church in hopes of undermining the support of the structure.

At the Mor Gabriel Monastery, also near Midyat, there is a legal battle over the lands surrounding the monastery. Founded in 397 A.D., Mor Gabriel is arguably the oldest monastery in use today. It is believed local Muslim leaders took the monastery to court in an attempt to seize lands from the church. The monastery has prevailed in all but one case, which is still underway.

“These and similar problems that are threatening the very existence of the remaining Syriacs in Turkey have reached a very serious and worrying level,” Aygur stated in a press release. “Especially, whenever there is a problem about Islam in the European countries, the Syriacs’ existence in Turkey is threatened with such pressures and aggressions.”

Report from Compass Direct News 

EGYPT: COURT DENIES RIGHT TO CONVERT TO SECOND CHRISTIAN


Maher El-Gohary provides requested documents, but judge dismisses them.

ISTANBUL, June 16 (Compass Direct News) – A Cairo judge on Saturday (June 13) rejected an Egyptian’s convert’s attempt to change his identification card’s religious status from Muslim to Christian, the second failed attempt to exercise constitutionally guaranteed religious freedom by a Muslim-born convert to Christianity.

For Maher El-Gohary, who has been attacked on the street, subjected to death threats and driven into hiding as a result of opening his case 10 months ago, Saturday’s outcome provided nothing in the way of consolation.

“I am disappointed with what happened and shocked with the decision, because I went to great lengths and through a great deal of hardship,” he said.

El-Gohary follows Mohammed Ahmed Hegazy as only the second Muslim-born convert in Egypt to request such a change. El-Gohary filed suit against the Ministry of the Interior for rejecting his application in August last year.

In contrast to their angry chants and threats in previous hearings, lawyers representing the government sat quietly as Judge Hamdy Yasin read his decision in a session that lasted no more than 10 minutes, according to one of El-Gohary’s lawyers, Nabil Ghobreyal.

The judge rejected El-Gohary’s application even though the convert provided a baptism certificate and a letter of acceptance into the Coptic Orthodox Church that the judge had demanded.

“The judge said he will not accept the [baptism] certificate from Cyprus or the letter from Father Matthias [Nasr Manqarious],” said Ghobreyal. “Even if he gets a letter from the pope, the judge said he would not accept it, because the remit of the church is to deal with Christians, not to deal with Muslims who convert to Christianity; this is outside their remit.”

El-Gohary sounded perplexed and frustrated as he spoke by telephone with Compass about the verdict.

“The judge asked for letters of acceptance and baptism,” he said. “It was really not easy to get them, in fact it was very hard, but if he was not going to use these things, why did he ask for them in the first place? We complied with everything and got it for him, and then it was refused. What was the point of all this?”

A full explanation of Yasin’s decision to deny the request will be published later this week. The judge’s comments on Saturday, however, provided some indication of what the report will contain.

“The judge alluded to the absence of laws pertaining to conversion from Islam to Christianity and suggested an article be drawn up to deal with this gap in legislation,” said Ghobreyal.

High Court Appeal

Such a law would be favorable to converts. Thus far, hopeful signs for converts include a recent decision to grant Baha’is the right to place a dash in the religion section of their ID cards and a High Court ruling on June 9 stating that “reverts” (Christians wishing to revert to Christianity after embracing Islam) are not in breach of law and should be allowed to re-convert.

At the age of 16 all Egyptians are required to obtain an ID that states their religion as Muslim, Christian or Jewish. These cards are necessary for virtually every aspect of life, from banking, to education and medical treatment.

No Egyptian clergyman has issued a baptismal certificate to a convert, but El-Gohary was able to travel to Cyprus to get a baptismal certificate from a well-established church. In April the Coptic, Cairo-based Manqarious recognized this certificate and issued him a letter of acceptance, or “conversion certificate,” welcoming him to the Coptic Orthodox community.

El-Gohary’s baptismal certificate caused a fury among the nation’s Islamic lobby, as it led to the first official church recognition of a convert. A number of fatwas (religious edicts) have since been issued against El-Gohary and Manqarious.

El-Gohary’s case could go before the High Court, his lawyer said.

“This is not the end; this is just the beginning,” said Ghobreyal. “I am going to a higher court, I have ideas and I am going to fight all the way through. It’s a long road.”

Ghobreyal’s tenacious attitude is matched by his client’s.

“I am going to persevere, I will not give up,” said El-Gohary. “Appealing is the next step and I am ready for the steps after that. I am going to bring this to the attention of the whole world.”

The judge had received a report from the State Council, a consultative body of Egypt’s Administrative Court, which expressed outrage at El-Gohary’s “audacity” to request a change in the religious designation on his ID. The report claimed that his case was a threat to societal order and violated sharia (Islamic law).

El-Gohary’s lawyers noted that the report is not based on Egypt’s civil law, nor does it uphold the International Convention on Civil and Political Rights that Egypt has signed. It stated that those who leave Islam, “apostates” such as El-Gohary, should be subject to the death sentence.

Report from Compass Direct News

EGYPT: CONVERT’S RELIGIOUS RIGHTS CASE THREATENS ISLAMISTS


Muslims said to fear that freedom to legally change religion would wreak societal havoc.

CAIRO, Egypt, May 12 (Compass Direct News) – In the dilapidated office here of three lawyers representing one of Egypt’s “most wanted” Christian converts, the mood was hopeful in spite of a barrage of death threats against them and their client.

At a court hearing on May 2, a judge agreed to a request by the convert from Islam to join the two cases he has opened to change his ID card to reflect his new faith. The court set June 13 as the date to rule on the case of Maher Ahmad El-Mo’otahssem Bellah El-Gohary’s – who is in hiding from outraged Islamists – and lawyer Nabil Ghobreyal said he was hopeful that progress thus far will lead to a favorable ruling.

At the same time, El-Gohary’s lawyers termed potentially “catastrophic” for Egyptian human rights a report sent to the judge by the State Council, a consultative body of Egypt’s Administrative Court. Expressing outrage at El-Gohary’s “audacity” to request a change in the religious designation on his ID, the report claims the case is a threat to societal order and violates sharia (Islamic law).

“This [report] is bombarding freedom of religion in Egypt,” said lawyer Said Faiz. “They are insisting that the path to Islam is a one-way street. The entire report is based on sharia.”

The report is counterproductive for Egypt’s aspirations for improved human rights, they said. In the eyes of the international community it is self-condemned, the lawyers said, because it is not based on Egypt’s civil law, nor does it uphold the International Convention on Civil and Political Rights that Egypt has signed.

The report stated that those who leave Islam will be subject to death, described El-Gohary as an “apostate” and called all Christians “infidels.”

“During the hearing, they [Islamic lawyers] were saying that Christians are infidels and that Christ was a Muslim, so we said, ‘OK, bring us the papers that show Jesus embraced Islam,’” Faiz said, to a round of laughter from his colleagues.

Ghobreyal, adding that the report says El-Gohary’s case threatens public order, noted wryly, “In Egypt we have freedom of religion, but these freedoms can’t go against Islam.”

The trio of young lawyers working on El-Gohary’s case, who formed an organization called Nuri Shams (Sunlight) to support Christian converts’ rights, said they have received innumerable threats over the phone and on the Internet, and sometimes even from their colleagues.

Churches Challenged

To date no Christian convert in Egypt has obtained a baptismal certificate, which amounts to official proof of conversion.

Churches fear that issuing such certificates would create a severe backlash. As a result, converts cannot apply for a change of religion on their ID, but El-Gohary was able to travel abroad to get a baptismal certificate from a well-established church. In April a Coptic Cairo-based priest recognized this certificate and issued him a letter of acceptance, or “conversion certificate,” welcoming him to the Coptic Orthodox community.

El-Gohary’s baptismal certificate caused a fury among the nation’s Islamic lobby, as it led to the first official church recognition of a convert. A number of fatwas (religious edicts) have since been issued against El-Gohary and Father Matthias Nasr Manqarious, the priest who helped him.

“The converts have no chance to travel, to leave, to get asylum, so we have to help them to get documents for their new religion,” Fr. Manqarious told Compass by telephone. “So I decided to help Maher El-Gohary and others like him. They can’t live as Christians in broad daylight.”

For several months El-Gohary has been in hiding, relying on others to meet his basic needs. When Compass spoke with him by phone earlier this month, he said he lives in fear for his life and worries about his 14-year-old daughter’s safety.

“I’m hiding. Someone brings me my food and water. I haven’t gone out in a week,” said El-Gohary. “Many Muslims and sheikhs … say if anyone sees Maher Gohary, he must kill him. My life is very difficult.”

His original case, filed in August of last year, included an attempt to change the religious affiliation on his teenage daughter’s ID, but he later dropped it after further legal consultation. El-Gohary said that when radical Muslims recognize his daughter on the streets, they warn her that they will kill her father when they find him.

“She’s afraid for me,” he said.

His church acceptance letter has re-kindled discussion of a bill proposed by parliamentary members affiliated with the Muslim Brotherhood, a hard-line Islamist opposition movement, which would make apostasy punishable by death, said El-Gohary’s lawyers. Human rights experts, however, say that such a bill does not stand a chance in the Egyptian Parliament and is primarily a smokescreen to induce fear in Egypt’s Christian converts from Islam.

Some Hope from Baha’is

Sources said the fact that the judge asked for a baptismal certificate and filed the letter of acceptance in the case represents progress in the ongoing struggle of Egyptian converts, who are not recognized in their own country.

Now that El-Gohary’s lawyers have produced the acceptance letter, the judge in the case finds himself in a bind, said Hassan Ismail, general secretary of the Egyptian Union of Human Rights Organizations.

“The judge is in a paradox with the document he asked for,” Ismail said. “It is difficult to accept it, and yet it is difficult having this document among those of the case.”

Ismail, who has worked for years defending the rights of both Baha’is and converts, said it is hard to predict what the judge will decide in June. Even with all the required documents and “proof” of El-Gohary’s conversion, he said, the judge may still deny his right to change religions.

“For us human rights activists, these decisions are political, not legal,” he said. “These sorts of documents put the government into a corner, and we are working hard to get them in order to push the government to make different decisions.”

At the age of 16 all Egyptians are required to obtain an ID that states their religion as Muslim, Christian or Jewish. These cards are necessary for virtually every aspect of life, from banking, to education and medical treatment.

Baha’is, who do not fall under the rubric of any of Islam’s “heavenly religions,” were forced to lie about their religion or not obtain cards until March, when in a historical decision Egypt’s Supreme Administrative Court upheld a lower court’s 2008 ruling that all Egyptians have a right to obtain official documents, such as ID cards and birth certificates, without stating their religion.

The gains of Baha’is have been a gauge of sorts for the Christian convert community, even though in reality they are not granted the freedom to change their stated religion or leave it blank on their cards and the official registry.

“I’m very optimistic about the cases of minorities and converts in Egypt,” said Ismail. “I believe that the case of Baha’is was an indicator for converts … If we were able to push their case, then we can defend the rights of converts.”

The human rights activist said that although discrimination against converts who are seen as apostates from Islam is greater than that against those raised in other religions, ultimately converts will be able to gain legal ground. El-Gohary’s case, he said, will play an important role.

“After years of fighting, the Baha’is have rights,” he said. “I think converts will succeed even if it takes years. Many are expecting to see Maher’s case [succeed], because it’s well documented.”

Attorney Ghobreyal said that El-Gohary’s case is on solid legal footing based on Article 46 of the Egyptian Civil Code, which grants religious freedom to the country’s citizens.

In his mind it is irrational that the government gave rights to the Baha’is, who fall outside of the three heavenly religions, while not granting the same rights to Christian converts. His only explanation is that a governmental green light to people to leave Islam could wreak havoc.

Not only is there fear of the Muslim front reacting violently to such a decision, but “they’re afraid that if they allow it, then all Muslims will become Christians,” said Ghobreyal. “They know there are many converts, and they will all officially become Christians.”

The lawyer said there are rumors circulating that there are a few million converts eagerly awaiting the results of El-Gohary’s case. Egypt’s last census in 2006 did not factor in religion, so figures of the Coptic population are based on estimates. These range from 6 to 15 percent of the country’s 80-million population. It is not possible to estimate the number of converts, most of whom live in secrecy.

“Ten years ago, you never heard about a convert, but now you hear that someone is going to the court to ask to become a Christian,” said Ghobreyal.

Hegazy’s Hope

The first convert to file for a change on his ID card, Mohammed Ahmed Hegazy, said he was pleased with the progress of El-Gohary’s case and hoped that more converts would take the risk of joining their cause.

“I think that every case added to the convert case will be a help,” said Hegazy.

An outspoken critic of the refusal of Egypt’s established churches to openly baptize converts, Hegazy said that in El-Gohary’s case publicity and criticism pushed the church to take a step in the right direction in producing the conversion certificate.

“But this is not a big step, and there are many more that need to be taken and have not been,” he said. “Just to be clear, the [Egyptian] church has not given a baptism certificate, it has given an acceptance letter, and the church has declared they are not going to give a baptism paper … but we can’t deny that the step that the priest took to give the certificate was audacious.”

Hegazy, who lost his case in January 2008 and is waiting for an appeal date, was never able to get a baptism certificate, nor can he travel since he does not have a passport. If he returns to his hometown to apply for one, he risks losing his life.

He said he still hopes any of Egypt’s churches will help him by baptizing him and giving him a certificate in time for his appeal or for a new case he plans to open soon. Hegazy said that although his case is not as public as it used to be, he still faces danger when he leaves his house.

Although he is also in hiding and fears for his life, El-Gohary said he hopes his case opens the way for other converts to experience freedom.

“I hope this for all of those who want to live in the light and the sun; there are many families,” he said of Egypt’s converts. “I want to live in peace as a Christian. I hope my country gives me the freedom to worship my God and gives me my human rights.”

Egypt is a member of the U.N. Human Rights Council, an inter-governmental body made up of 47 states responsible for strengthening the promotion and protection of human rights around the globe. On April 18, 2007, in its written statement applying for a seat to the Human Rights Council, the representative of Egypt to the U.N. stated that if elected it would emphasize promoting cultural and religious tolerance, among other human rights.

Report from Compass Direct News