Friday, August 22, 2008

Zardari Corruption Probe Alive in Switzerland

While the news of President Musharraf's resignation and Asif Zardari's nomination for president occupy the big headlines, the renewed reports of the continuing Swiss probe into corruption allegations against Zardari are also vying for attention in the same week.

Swiss Judge Daniel Devaud has "confirmed to NEWSWEEK that the prosecutor's office was still investigating "aggravated" money-laundering offenses. Likewise, Jacques Python, a Geneva lawyer hired by Pakistan to work with Swiss authorities on the corruption case, said he had every reason to believe that the Geneva prosecutor's investigation was still open. And Alec Reymond, a lawyer who had represented Bhutto in connection with the Swiss investigation, also says the case is still open."

In 1997, after Zardari had been imprisoned on suspicion of corruption, Judge Devaud found that Bhutto herself had purchased a necklace worth 117,000 British pounds from a London jeweler—using cash and a bank transfer from the account of Bomer Finance, a British Virgin Islands company, which the magistrate said was jointly controlled by Bhutto and Zardari. (Her supporters claimed this allegation was based on trumped-up evidence supplied by her political enemies. Bhutto herself reportedly claimed her husband had bought the necklace but never told her about it). In 2003, Bhutto was convicted of money laundering in Switzerland and filed an appeal of her conviction by Swiss Court.

According to Newsweek's Mark Hosenball and Michael Isikoff, Judge Devaud's investigations in 2003 resulted in a series of court orders against Bhutto, Zardari and one of their Swiss lawyers, Jens Schlegelmilch. The orders, akin to misdemeanor guilty findings by a U.S. justice of the peace, were issued by the Swiss judge, an investigating magistrate in Geneva who has handled many high-profile investigations into the alleged laundering of corrupt payments through Switzerland by foreign politicians. The full text of Devaud's orders can be read at a NAB site here.

As to the outcome of the Swiss prosecution, some legal experts believe that Swiss prosecutors have three possible courses of action: close the case entirely, prosecute it by bringing it into a superior court or arrange the Swiss version of a plea bargain, in which money seized by Swiss authorities during the investigation probably would be confiscated or handed over to charity, but charges would be settled without any prison sentences.

In June 2008, a senior PPP leader and president of Pakistan's Supreme Court Bar Association, Mr. Aitzaz Ahsan, who was interior minister in Benazir Bhutto's first government, told James Traub of the New York Times that most of the corruption and criminal cases against PPP Co-Chairman Asif Ali Zardari which were dropped recently in Pakistan were justified, and that the PPP was a feudal political party led by a figure (Zardari) accused of corruption and violence. After a moment's reflection, Ahsan further added, “The type of expenses that she had and he has are not from sources of income that can be lawfully explained and accounted for.”

The charges of corruption will likely haunt Zardari for the rest of his life. The way for him to leave a better legacy is by renouncing the amnesty he received from President Musharraf and by offering to go through a fair trial to clear his name.

Related Links:

Bhutto Convicted of Money Laundering by Swiss Court

House of Graft by New York Times

Can the West Help End Corruption in Developing Nations? on Haq's Musings

Bhutto's New York Apartment , A Luxurious East Side Penthouse

Bhutto-Zardari Front Company in Virgin Island

Asif Zardari wikipedia entry

Financial Times on Zardari's mental health

Is Zardari Guilty? on PakAlumni Worldwide


Anonymous said...

What my hope is for a Zardari Presidency is the fact that he will use his connections, assets and network to build up Pakistan.

Zardari's Assets alone for the development of the nation can speed up the process by creating energy plants, etc. Pakistanis are very merciful people in general. It is the Military which is unforgiving and some political stake holders.

Your points are well observed and taken! I wish that justice could be done, but Switzerland is a developed nation with a strong legal system, yet it can't fight International corruption. We all wish for a better Pakistan.

Anonymous said...

Munzir Naqvi writes:

"Pakistanis are very merciful people in general."

I do not know which Pakistanis you are referring to but you have no clue of the reality. Please educate yourself a little more before making silly statements.

What I do read in your comments is acceptance to corrupt leaders and lack of knowledge period of the reality in Pakistan.

Anonymous said...

Please explain this story by Reuters is the case closed or shelved as the Zardari's lawyer Saverio Lembo welcomed Zappelli's decision to shelve the ...

Riaz Haq said...

Here's an interesting commentary on Zardari that I just received via email:

The sheaf of documents - from specialists ranging from a Dubai cardiologist to a New York psychiatrist - remains, however, and paints a picture of a man with multiple and severe physical and mental health problems.

In March last year, Stephen Reich, a New York state-based psychologist, diagnosed HIM with dementia, major depressive disorder and post-traumatic stress disorder, problems stemming in part from being tortured while imprisoned in Pakistan. He could remember neither the birthdays of his wife and children, nor more than a handful of facts from two short stories he was read.

Another March 2007 diagnosis - by Philip Saltiel, a New York City-based psychiatrist - said emotional and neurological problems suffered by HIM because of medical treatment and imprisonment had resulted in "emotional instability" and "deficits in memory and concentration". Saltiel wrote: "I do not foresee any improvement in these issues for at least a year."

Reich re-examined HIM in June and September last year, each time reporting that he had made progress but still had problems that might make it impossible for him to testify in court.

Asif Ali Zardari (HIM)said that agreements with PML-N "are not holy like the holy Quran and the Hadith" and can be modified if circumstances change.

Anonymous said...


The bottom line is that Zardari is not a man of his word. It has nothing to do with the Quran or Hadith, this is a character issue and that Zardari lacks.

Taking things into perspective, we do not know the reality of the influence of the American channels (ref to emails from the US Ambassador to the UN and Zardari) that are negotiating for Zardari to take power.

Riaz Haq said...

Latest reports indicate the Swiss government has dropped all corruption charges against Zardari after Pak government refused to press charges pursuant to the NRO (amnesty granted by Musharraf). According to media reports from Pakistan, the PML-N Quaid Nawaz Sharif congratulated Zardari on the closure of the Swiss case. Ironically, the corruption charges against Zardari were initiated by Nawaz Sharif government in 1997. Both the leaders spoke to each other twice on telephone in last two days and discussed possibilities for the revival of their friendly relations.
The more things change, the more they remain the same, at least as far as accountability in Pakistan is concerned.

Anonymous said...

Zardari must be hanged in the street against these corruption

Riaz Haq said...

It was widely reported over a year ago that the corruption case was closed and $60 million handed back to Asif Zardari after the Pakistani Government withdrew its requests for judicial assistance from Switzerland and said it had no claim on his assets.

After an agreement in February this year by the Swiss banking giant UBS to pay $780 million and admit to criminal wrongdoing in selling offshore banking services that had enabled tax evasion, 14,700 Americans with foreign bank accounts have now come forward and admitted wrongdoing and agreed to pay taxes.

See the contrast? While US aided and abetted Zardari's corruption and tax evasion by sponsoring amnesty of Zardari by Musharraf, American attitude is very different when it comes to enforcing the law in US.

Riaz Haq said...

Jang Group has just published a sensational story where Pakistani Ambassador to UK and NRO beneficiary Wajid Shams-ul-Hassan has paid a secret visit to Switzerland and has got possession of the original documents/evidence that were used President Asif Ali Zardari in money laundering case.

The News Reports:
Pakistani High Commissioner in Britain Wajid Shamsul Hasan headed a secret operation in Geneva and received at least 12 cartons comprising the original documents and evidences against some Pakistani high-ups in Swiss money laundering case, Geo News reported Tuesday.

According to Geo News correspondent, the Prosecutor General of Pakistan in Geneva deposited these cartons in the era of former President Pervez Musharraf.

The sources said the secret operation was carried out at the bidding of a top personality of Pakistan, as these evidences could be used if Swiss Money Laundering case is reopened after the National Reconciliation Ordinance (NRO) terms comes to an end.

The sources at Pakistan embassy said if the concerned officials or the courts do not interfere by taking the evidences back from Wajid, then these documents would be wasted for good.

The secret operation begins at 9am on Monday when Wajid arrived in Pak High Commission’s car along with NAB’s senior official Danishwar Malik at the office of Prosecutor General in Geneva.

According to sources, the Prosecutor General kept refusing to give the documents for some hours, as nobody from Pakistan embassy was formally receiving them.

It should be mentioned here that after the NRO, these cases were closed. However now that the term of NRO is over, it was all the more likely that these cases could be re-opened and these evidences could be employed against Zardari.

Riaz Haq said...

President Asif Zardari's total assets are estimated at $1.5 billion, according to a NAB filing with Pakistan Supreme Court, reports the News:

ISLAMABAD: The National Accountability Bureau (NAB) on Tuesday submitted in the Supreme Court the list of the NRO beneficiaries, which showed President Asif Ali Zardari possessing assets worth $1.5 billion (Rs 120 billion) abroad and worth Rs 24.14 billion in the country.

Deputy Prosecutor General Abdul Baseer Qureshi presented the list of 248 NRO beneficiaries before the full court, hearing the petitions challenging the infamous ordinance, promulgated in 2007 giving legal cover to the corruption of politicians and bureaucrats

A 17-member bench of the apex court, headed by Chief Justice Iftikhar Muhammad Chaudhry, had directed the NAB the other day to submit authentic details of the NRO beneficiaries. According to the list, there are at least seven abolished references against President Zardari. The list indicates that the assets of President Asif Ali Zardari in foreign countries stand at $1.5 billion, including houses and bank accounts in Spain, France, the US and Britain while his assets in the country stand at Rs 24.14 billion.

In the list, President Zardari’s assets worth Rs 22 billion were mentioned as beyond means and the cases in this regard were withdrawn by the Accountability Court on March 5, 2008, under the controversial NRO.

Similarly, cases of corruption of Rs 268.3 million regarding the purchase of Ursus Tractors (Awami Scheme) and illegal construction of the polo ground at the PM House at the cost of Rs 52.297 million were terminated under the NRO in March 2008.Likewise, the list also includes allegedly causing loss of Rs 1.822 billion to the national exchequer by President Zardari by granting licence to the ARY Gold. The said case was also terminated under the NRO ordinance.

The NAB deputy prosecutor general told the court that information regarding the misuse of authority in affairs of SGS PSI Company by Asif Ali Zardari as well as illegal award of contract to Cotecna for pre-shipment was being collected.

The NAB list included names of Interior Minister Rehman Malik, Pakistan’s Ambassador to United States Hussain Haqqani, Defence Minister Chaudhry Ahmed Mukhtar, former NWFP chief minister Aftab Sherpao Khan, ex MNAs Nawab Yousaf Talpur, Anwar Saifullah Khan, Sardar Mansoor Leghari, Haji Nawaz Khokhar, Pir Mukarramul Haq, Brig (retd) Imtiaz, Usman Farooqi, Salman Farooqi, former president Habib Bank Younus Dalmia, Mirbaz Khetran and many others.

He submitted that the National Assembly’s standing committee approved the NRO, however, the concerned minister took it back from the assembly. During the proceedings, advocates general of the Punjab, the NWFP and Balochistan informed the court that under Section 2-A of NRO, no review boards were constituted in their respective provinces to decide the murder cases.

Advocate General Sindh Yousaf Leghari, however, informed the court that 8,000 cases were dropped under the NRO in Sindh, of which 3,000 were murder cases. He sought time to provide details of the cases decided under Section 2-A of the NRO in Sindh. The court directed the AG Sindh to submit report before the court today (Wednesday).

Abdul Hafeez Pirzada, counsel for Dr Mubashar Hassan, submitted the ordinance as whole was void because it was a fraud ordinance as it violated many substantial provisions of the Constitution.

He submitted that reconciliation meant reconciliation between husband and wife, between parents but this National Reconciliation Ordinance had trampled the rights of the entire nation. Pirzada contended that all stakeholders were not taken into confidence before its promulgation. “The nation is threatened with fragmentation,” Pirzada maintained.

Riaz Haq said...

The Supreme Court of Pakistan has declared NRO null and void ab initio, according to Dawn News:

ISLAMABAD: The Supreme Court has declared the controversial National Reconciliation Ordinance (NRO) null and void in a short order.

In a landmark decision, the apex court unanimously decided that the ordinance was unconstitutional.

All old cases that had been dismissed under the NRO stand revived and can now be reopened as per the court orders.

The court said that all orders that were passed and all acquittals under the NRO were illegal and never existed.

The apex court in its order also said that all convictions that were held prior to the enactment of the NRO stand revived as well.

Now the Zardari camp is expected to argue that, under the constitution of Pakistan, President Zardari is immune from prosecution as long as he is in office.

Anonymous said...

Recent verdict of Supreme Court of Pakistan mean that Mr.Zardari was not eligible to contest for president election.Therefor immunity is also cancelled since Oct 2007.
Zardari must be put out of President house. The amount he earned by CORRUPTION was sufficent enough to build many hospitals, hundreds of schools and a lot of other welfare projects in country.
He must be hanged on street for depriving thousands of medical facilities and education. He is a butcher who killed his wife. Only death can complete his lust of money.
A.K. Khan Karachi.Pakistan

Riaz Haq said...

Here is an AP story about the aftermath of Pakistan's amnesty reversal:

ISLAMABAD, Pakistan—Pakistan's anti-corruption agency has barred the defense minister and nearly 250 other top officials from leaving the country as political turmoil deepens following a Supreme Court ruling that struck down a graft amnesty.

The agency said Thursday that the officials were now under investigation following this week's court verdict, which meant that up to 8,000 graft and other cases dating back to the 1990s have, or will soon be, reopened. The decision has roiled the country's political elite just as the United States is looking for a solid partner to help it fight against al-Qaida and the Taliban along the Afghan border.

U.S.-allied President Asif Ali Zardari and several of his key aides are among those who benefited from the amnesty deal. Zardari is protected by constitutional immunity from any criminal prosecution, but opponents say they plan to challenge his eligibility for office.

Pakistan's anti-corruption agency said 247 people who had cases withdrawn under the amnesty had been blocked from travel because cases against them were now under investigation. It did not say who was on the list, but Pakistani news channels reported that Interior Minister Rehman Malik—a key aide of Zardari—was included, as well as Defense Minister Ahmed Mukhtar.

Mukhtar told a local television station that immigration officials at the airport had barred him from boarding a Pakistani International Airlines plane to China along with the navy chief late Thursday. He said he planned to take delivery of a new warship. It was not clear what he was being investigated for.

While the armed forces are under nominal civilian control, analysts say that in reality the top brass—not Mukhtar—make the decisions regarding defense issues. As such, investigations against him and Malik are not expected to directly impact the country's fight against militancy in the border regions.

Wednesday's Supreme Court ruling has significantly weakened Zardari and raised question marks over his future. It has been welcomed by many Pakistanis, who viewed the graft amnesty as an immoral piece of legislation that whitewashed the crimes of the elite.

The 54-year-old, who heads the country's largest party, is already unpopular, in large part because of his close ties with Washington. He now faces the prospect of bruising court battles that will likely mean old corruption charges come under fresh scrutiny.

Zardari's aides said any corruption charges against him were politically motivated and noted that they have never been proved despite being aired since the 1990s. Critics countered he was morally obligated to resign, at least while the court heard any challenges to his rule.

"It will be in his own interest, it will be in the interest of his party and it will be good for the system," said Khawaja Asif, a senior leader from the opposition Pakistan Muslim League party.

The Obama administration needs political stability in Pakistan to succeed in neighboring Afghanistan, where violence against U.S. and NATO troops is running at all time highs. Washington is trying to get Islamabad to crack down on insurgents close to the northwestern border who it says are behind much of the insurgency in Afghanistan.

Earlier Thursday, two U.S. missile strikes pummeled targets in the border region killing 17 people, local intelligence officials said. The latest attacks in more than 40 this year rained down Thursday on North Waziristan, a haven for al-Qaida and the Taliban, including groups determined to push the U.S. and NATO out of Afghanistan.

It was not immediately clear exactly who or what was the target of the strike, and the Pakistani officials said they were trying to establish the identities of the dead.

Riaz Haq said...

Here's a report from the News about Zardari receiving expensive gifts:

ISLAMABAD: President Asif Zardari has set a new record within a year by taking one-third of all the expensive gifts presented to all Pakistani presidents and prime ministers. Of the gifts totalling Rs160 million, Zardari has taken gifts worth Rs62 million during the first year of his presidency.

In his foreign visits so far, Zardari has been given 27 gifts worth Rs62 million,which is one-third of the accumulated cost of the 3,039 gifts, which were given to presidents and prime ministers in three decades.

Zardari is said to have got two BMWs and two foreign manufactured Toyota Jeeps as gift by Libyan leader Colonel Qadafi during his visit to Libya, which he took to his home, after paying a sum of only Rs9.3 million as retention cost.

These shocking figures were produced before the Senate standing committee on cabinet division by the cabinet secretary on Monday during a presentation to its members. Zardari is now richer by Rs50 million within one year in the presidency, without doing a single rupee irregularity as this all was done under the law as he paid 15 per cent of the total cost of two BMWs and two jeeps and retained them.

The other 13 Pakistani presidents and prime ministers, from Gen Ziaul Haq to Gen Musharraf and from Prime Minister Mohammad Khan Junejo to Shaukat Aziz, quietly took 3,039 expensive gifts worth Rs160 million to their homes. The list shows three presidents and two prime ministers — Farooq Leghari, Gen (retd) Pervez Musharraf, Asif Zardari, Nawaz Sharif and Shaukat Aziz — took gifts worth Rs150 million out of Rs160 million but Asif Zardari took the largest share within a year of his presidency.

Others including Gen Ziaul Haq, Ghulam Ishaq Khan, Rafiq Tarar, and PMs Mohammad Khan Junejo, Benazir Bhutto, Balakh Sher Mazari, Zafarullah Khan Jamali and Chaudhry Shujaat Hussain got gifts worth Rs10 million.

This extraordinary list does not contain names of hundreds of ministers, federal secretaries, officials and military officers and generals who, too, received gifts from foreign dignitaries and took them home.

According to an official copy presented to the National Assembly committee members, the record of similar gifts received and retained by two prime ministers, Yousuf Raza Gilani and Zulfiqar Ali Bhutto, was not produced before the committee.

One source said either both the gentlemen did not get a single gift during their tenures or the official record of their gifts had gone missing so it was not produced before the committee members. The source claimed there could be one other possibility: the cabinet division bosses did not produce the record for some other “obvious reason”.

Shaukat Aziz, Gen (retd) Musharraf and Asif Zardari were among the few leaders who got the most expensive gifts. Sources said these gifts were valued at much lower price than their actual price to enable these leaders to take the gifts home without paying a single penny or after paying a meagre part of the cost.

Riaz Haq said...

Here's a billion dollar LNG contract scandal uncovered by a complaint of the Fauji Foundation CEO, as reported by The News:

The NA members were told that the petroleum ministry bosses had never recommended to the Economic Coordination Committee (ECC) to give the multi-billion dollar contract to French firm (GDF-SUEZ), whom surprisingly they all were religiously defending now.

It was disclosed that the petroleum ministry had actually recommended the award of the contract to Shell-Qatar, whose bid was higher than the French bid by $1.5 billion. But Shaukat Tarin had thrown this recommendation of the ministry in a dustbin after he learnt that he was being asked to award the contract to a party (Shell), whose bid was higher by $1.5 billion compared to the lowest bidder.

At the end of the hour-long presentation followed by a question-answer session, Chairman MNA Sheikh Waqas Akram, praised the journalist for his comprehensive presentation. Later, MD Fauji Foundation Lt Gen Rab Nawaz was said to have reiterated his old stance that his firm’s bid was the lowest if compared with the GDF-Suez, which was awarded the deal.

The committee met with Chairman Sheikh Waqas in the chair and was attended by MNAs Barjees Tahir, Nawab Yousuf Talpur, Wasan, Khurum Wattoo and others. Petroleum Minister Naveed Qamar, Secretary Kamran Lashari, Special Secretary G A Sabri and MD FF General Rab Nawaz attended the meeting.

Klasra told the committee that his story was based on the minutes of the ECC presided over by then Finance Minister Shaukat Tarin. The minutes had revealed that Tarin had got a telephone call from MD Fauji Foundation that the lowest bid given jointly by FF/Vitol had been rejected and the highest bidder GDF-Suez was given the lucrative contract. Tarin had informed MD FF that he was not aware of any such bidding because the petroleum ministry never shared such information in its official summary tabled before the ECC on Feb 9.

Consequently, Tarin had alarm bells ringing and had ordered a serious probe into the whole issue as to why the bid offered by FF/Vitol was not mentioned in the summary. But the petroleum ministry never replied to the queries of Tarin till he departed from his office at the end of February, much to the satisfaction of the petroleum ministry officials who thought that the issue had been buried but the publication of the scandal by The News shook them.

Petroleum ministry officials had even written a letter to Tarin, informing him that Minister Naveed Qamar had desired that they should not respond to him as he would “personally deal” with this issue. According to Klasra, he had contacted Shaukat Tarin to get his version about these startling developments and the ex-FM had confirmed on record that he was kept in the dark about the joint bid of FF/Vitol, which was claimed to be the lowest.

Tarin confirmed that he got no reply from the Ministry of Petroleum till he left the office. He also claimed that according to his calculation and information, there was a difference of one billion dollars in the bid price of the French company and FF/Vitol, so the country had suffered a loss of a billion dollar.

Minister Naveed Qamar is a close friend and ally of Zardari.

Riaz Haq said...

Recent survey by Transparency in Pakistan show that the corruption in Pakistan has dramatically increased, according to report in Dawn. Here are some excerpts:

The overall corruption has increased by around Rs28 billion in a year, and more than 70 per cent of Pakistanis say the present government is more corrupt than the previous one, said a Transparency International Pakistan official.

Releasing the findings of the National Corruption Perception Survey 2010 at a press conference at the Karachi Press Club on Tuesday, TIP chief Adil Gillani said that over Rs195 was misappropriated during 2009 while more than Rs223 billion — an increase of Rs28 billion, or about 15 per cent — has been misappropriated during 2010.

He said the survey — jointly financed by the USAID and the Swiss Agency for Development and Cooperation — reveals the perception levels and frequency of corruption faced by the common Pakistanis on a daily basis.

He said an average expenditure on bribery per household this year was Rs10,537, based on a population of over 169.58 million and eight members per family, the cost of bribery comes to Rs223 billion.

Mr Gillani said the departments of police and the power sector had retained their first and second positions, respectively, since 2002. Other corrupt sectors during 2010 were the land administration, education, local government, judiciary, health, taxation, customs and tendering and contracting.

Pakistan at 42nd position

He said Pakistan shared the 42nd position among the most corrupt countries in the world with Bangladesh. India, though located in between and despite being more populous, was less corrupt than both its neighbours and was placed on the 95th position on the chart of corruption.

He said the TIP had developed a 24-page questioner that was put to 5,200 people from all the four provinces. Students of the Institute of Business Administration Karachi carried out the survey in Sindh; Gujranwala University, Gomal University and Sarhad University carried out the survey in Punjab, Balochistan and Khyber Pakhtunkhwa, respectively.

He said the survey found that only the present Punjab government was cleaner than the previous one, while the rest of the governments — federal and three provincial ones — were considered to be more corrupt than their predecessors. The Khyber Pakhtunkhwa government was the most corrupt of the provincial governments, he said.

The TIP chief said the credibility of the country was at the lowest level as almost no funding had been released in the last two years from the Friends of Pakistan fund being managed by the World Bank.

miss0me said...

the truth is that people party is a curse on pakistan sent by Almighty for our own doing.corruption has always been flourishing during this party's example: a person purchased a peon's job for rs.50,000/. he is happy and staunch supporter of ppp.why? he says he got the job through pp agent otherwise there was no chance of getting the job.he would earn fifty thousand in 5/6 months otherwise he would have remained unemployed for ever.the pp agent is happy that he received his share because of the pp govt. and the peon is happy the he got the job because of pp govt. Both are staunch supporter of pp and would do their best to help pp in any elctions. can you, n muslim league walas, beat them. keep on your policy of friendly opposition.
sardar muhammad riaz khan

Riaz Haq said...

The latest Transparency International report says corruption has significantly increased in Pakistan during the last two years. Pakistan has slipped from 134th place in 2008, to 139th in 2009 and 143rd in 2010:

KARACHI: Pakistan's decline continue in Corruption Perceptions Index (CPI) and now its Index Score is 2.3 against 2.4 in 2009, and out of 178 countries, its ranking as most corrupt country has slipped 7 ranks, from 42 in 2009 to 34 most corrupt country in 2010.

The 2010 CPI shows that nearly three quarters of the 178 countries in the index score below five, on a scale from 0 (perceived to be highly corrupt) to 10 (perceived to have low levels of corruption), indicating a serious corruption problem.

Syed Adil Gilani, Chairman TI Pakistan said in last two year there have been unprecedented cases of corruption involving tens of billions of rupees in public sector organization, which under the Rule of Law, should have been taken up by the National Accountability Bureau.

He said the political will of the government to fight corruption is lacking which has resulted in the Supreme Court of Pakistan to take suo moto action against mega corruption in NICL, Pakistan Steel, Rental Power Plants.

The CPI 2010 reveals that corruption in Pakistan is increasing, while in Bangladesh it is decreasing. Bangladesh was perceived to be the most corrupt country in 2001, 2002 and 2003 and its ranking in 2010 is 39 most corrupt country.

Reduced corruption has paid dividends to Bangladesh whose annual GDP growth last year was over 5%, while Pakistan's GDP growth last year was near 2.4 %. Delay in formation of An Independent Accountability Commission by the parliament may further aggravate the situation.

Chairman TI Pakistan said that the Supreme Court of Pakistan, which has a declared policy of Zero-Tolerance for Corruption on 22 March 2009, in its order of 12th October, 2010 in NICL Case No.18 of 2010 involving six procurements is considers the Violation of Public Procurement Rules 2004 as a criminal act. It is a landmark order, treating violation of Public Procurement Rules 2004 as a federal crime and it will help reduction in Corruption.

The direct impact of increased corruption is witnessed in the rise in the prices of food commodities which according to the latest official data of Federal Bureau of Statistics, have increased up to 120 percent in last one year viz. sugar from Rs 54 to Rs 80, pulses from Rs 50 to Rs 110, eggs from Rs 35 to Rs 60, and the Foreign Direct Investment for the fiscal year 2009-2010 dropped to US $ 2.21 billion from US$ 3.71 billion in FY 2008-2009, and in July-Sept 2010 it is further dropped to US $ 387.4 million ( 68% of last year).

Foreign debt on Pakistan increased from US $ 40 Billion in 1999 to US $ 46 billion in 2008, whereas in last two years it has increased to US $ 53.5 billion.

Across the board Application of Rule of Law, Merit based appointments and easy Access to Justice is the only solution to save Pakistan from corruption, which is responsible for poverty, inflation, terrorism, illiteracy, lack of electricity and hording of essential food commodities.

In the 2010 CPI, Denmark, New Zealand and Singapore tie for first place with scores of 9.3. Unstable governments, often with a legacy of conflict, continue to dominate the bottom rungs of the CPI. Afghanistan and Myanmar share second to last place with a score of 1.4, with Somalia coming in last with a score of 1.1.

Riaz Haq said...

Here are some excerpts from a recent by India's piece on the impact in South Asia of Swiss Bank secrecy law change forced by the United States:

SHAKEN BY the Swiss government’s recent announcement that it would reveal the names and account details of Indians who have stashed away an estimated $1.4 trillion ( Rs.62 lakh crore) in Swiss banks, the tax evaders are rushing the greenbacks back home. The Swiss are only waiting for the Indian Parliament to ratify the revised Double Taxation Avoidance Agreement (DTAA) that the two countries signed in August. The revised treaty is also likely to ensure that henceforth global shipping companies will be required to pay tax on their profits only in their country of domicile. Currently, though India has DTAAs with 79 countries, not all of them have provision for exchanging taxation-related information..............
As for the Swiss government, it could soon push its banks to exchange information related to the tax evaders’ bank account details, as per norms set by the Paris-based Organisation for Economic Cooperation and Development. The move is believed to have been prompted by intense pressure from G-20 nations. “This is worrying many Indians who have money stashed away in those banks,” says Jethmalani, adding: “So they are taking out their money and, for the time being at least, investing heavily in the market.”

And this has been happening in Pakistan as well, ever since the Swiss Parliament’s historic move to pass the Return of Illicit Assets Act (RIAA). There, too, the tax evaders have started transferring billions of dollars from their Swiss bank accounts to secret destinations in Europe and Asia. According to recent estimates, roughly $200 billion — four times the external debt of Pakistan — is stashed away in Swiss banks and is now being withdrawn. Top sources in Lahore say they have evidence that Pakistanis are moving their black money to two destinations — London and Islamabad — via PN, and opening sub-accounts with FIIs. “Our problems are similar. They are making everything above board, everything official,” said Ali Mohammed, a broker at the Karachi Stock Exchange.

Earlier this month, Christa Markwalder, president, Foreign Affairs Committee (Presidentin Aussenpolitische Kommission des National Rats) of the Swiss Parliament told Tarun Vijay, MP and national spokesperson of the Bharatiya Janata Party, that she had recently explained to Finance Minister Pranab Mukherjee about how the matter could be resolved to India's satisfaction. Incidentally, Vijay was the first to directly contact the Swiss government in this regard. But Jethmalani feels India is not pressing the Swiss hard enough. “Soon, there will be a crash of an unusual nature in the markets — because even if the Swiss government is keen, the Indian government does not seem to be keen to push the agenda,” says Jethmalani.

Riaz Haq said...

Here's a report of French Defense Minister confirming bribes paid to Pakistani officials on a submarine deal in the 1990s during the PPP regime:

Former French defense minister has confirmed bribes on arms deals with Pakistan, the cancellation of which prompted the deadly Karachi bombing in 2002.

Charles Millon, on Wednesday, told a hearing tasked with probing into the killing of French engineers that he was sure there were kickbacks on ammunition contracts with Pakistan.

“For the Pakistani contract, looking at the secret service reports and analyses carried out by the (defense) ministry services, one has the absolute conviction that there were kickbacks,” AFP quoted Millon.

Former President Jacques Chirac had tasked him with ending bribes on arms contracts shortly after coming to power in 1995.

However, bribing between officials and corporations in France continued until an incident involving arms deals eight years ago allegedly resulted in a deadly bombing in Pakistan.

The bomb attack took place in Karachi, in May 2002, in which 15 people died, including 11 French engineers and technicians from the Directorate of Naval Construction, working in the construction of submarines.

Since 2008, French persecutors are examining charges that the cancelling of commissions for one of the arms deals prompted the attack.

Riaz Haq said...

Here is a Christian Science Monitor report on wikileaks early reaction in Pakistan:

Long derided in liberal Pakistani circles as a fanciful conspiracy theory, the notion that the US has designs on Pakistan’s nuclear arsenal will likely gain traction here following a report that the US has mounted a secret effort to remove highly enriched uranium from a Pakistani reactor since 2007....
The perception that America is attempting to rob Pakistan of its nuclear capability has long been touted by Islamists and hardliners in Pakistan, and is frequently brought up alongside the theory that the security firm Xe (formerly known as Blackwater) is responsible for a spate of suicide bomb attacks on civilian targets over the past few years. The US, for its part, has been keenly aware of the sensitivity of the issue, so much so that in May 2009, Ambassador Anne Patterson reported that Pakistan was refusing to schedule a visit by American technical experts for fear of stoking the Pakistani media’s suspicions.

According to security analyst Gen. (ret.) Talat Masood, the WikiLeaks revelations will prove a boon to hardliners in Pakistan.

“It really reinforces [what until now] has been a conspiracy theory – that America has always been after nuclear assets and gives a big handle to the right and those who have been saying America is not a our friend and saying they are following a dual policy: with India they are friends but with Pakistan they are trying to simultaneously undermine us.”

General Masood predicts the WikiLeaks cable report will have a serious short-term and long-term impact on US-Pakistan relations, and undermine those Pakistanis who have spoken up in favor of closer cooperation with the US in recent times.

“It places such people on the defensive – it looks like the US is trying to get close to Pakistanis who are more Westernized but who are compromising Pakistan’s national interest,” he says.

According to Pervez Hoodbhoy, an eminent Pakistani nuclear physicist based at Quaid-i-Azam University in Islamabad, the report probably refers to the highly enriched uranium Pakistan received from the US in the late 1960s as part of the "Atoms for Peace" program, before its weapons program began.

“As far as I can guess, the leak refers to highly enriched uranium that Pakistan received from the US in the late 1960's or early 1970s for running the small 5-mw research reactor at PINSTECH,” he says, in reference to a research center based close to Islamabad that is aimed at producing atomic energy. “There is no other reactor in Pakistan that runs on HEU. I suppose that the US wants it back because of fears that Al Qaeda might get its hands on it somehow.”

Pakistan gained its own nuclear enriching capability in 1976, therefore the removal of some highly enriched uranium by the United States would not eliminate its ability to create nuclear weapons.

Attempt to create misperceptions?
Separate WikiLeaks cables concerning Pakistani politicians could also prove embarrassing to its allies.

In one cable, King Abdullah of Saudi Arabia derides President Asif Ali Zardari as the biggest hurdle to progress, stating, “When the head is rotten, it affects the whole body.”

President Zardari however received a tepid lukewarm "endorsement" from Abu Dhabi Crown Prince Mohammed bin Zayed, "Zardarni [sic] is dirty but not dangerous," while… Sharif is “dangerous but not dirty – this is Pakistan. Sharif cannot be trusted to honor his promises,” a reference to Pakistan’s foremost opposition leader, Nawaz Sharif.

Farhatullah Babar, the president’s spokesman, said via text message that “President Zardari regards Saudi King Abdullah as his elder brother. The so called leaks are no more than an attempt to create misperceptions between two important and brotherly Muslim countries.”

Riaz Haq said...

Here's a BBC report saying "the world is a more corrupt place now than it was three years ago".

Some 56% of people interviewed by Transparency International said their country had become more corrupt.

In Afghanistan, Nigeria, Iraq and India more than 50% of people said they had paid a bribe in the past year - many of them paying off the police.

Meanwhile, a BBC poll suggests that corruption is the world's most talked about problem.

About one in five of those polled for the BBC by GlobeScan said they had discussed issues relating to corruption with others in the last month, making it the most talked about concern ahead of climate change, poverty, unemployment and rising food and energy costs.

In the Transparency International survey, political parties were regarded as the most corrupt institutions with 80% of people regarding them as corrupt.

Political parties also topped the list in Transparency's 2004 barometer, with 71%.

Religious bodies experienced a sharp rise in people regarding them as corrupt - 28% in 2004 increased to 53% by 2010.

Some 50% of people believed their government was ineffective at tackling the problem of corruption.

Transparency flagged up bribery as the major problem highlighted by the survey, with one in four of those polled saying they had paid a bribe in the past year.

Some 29% of bribes went to the police, 20% to registry and permit officials, and 14% to members of the judiciary.

Robin Hodess, Transparency's policy and research director, said police involvement in such transactions was "really worrying".

"It's a figure that's grown in the past few years. It's nearly doubled, in fact, since 2006. Nearly one in three people who had contact with the police around the world had to pay a bribe," she said.

While people from Cambodia (84%) and Liberia (89%) were the most likely to have to pay a bribe, the Danish respondents reported no bribery.

By region, people in sub-Saharan Africa were the most likely to have paid a bribe (56%).

Bribe-taking was least common in EU countries and North America (both 5%) - although these were the two regions seeing the biggest increase in concern about corruption.

Analysts blame this rising concern on the global financial crisis for undermining people's faith in government, banks and economic institutions.

The lobby group interviewed 90,000 people in 86 countries to compile its corruption barometer.

The opinion poll commissioned by the BBC sampled 13,000 people in 26 nations.

One question asked people to rate which issues they saw as most serious.

Corruption was ranked as the second most important topic behind poverty.

Respondents in Brazil, Egypt, Colombia, the Philippines and Kenya were especially likely to view corruption as a very serious issue.

In Europe, Italians were the most concerned about bribe-taking.

Publication of the BBC poll coincides with anti-corruption day held by the United Nations.

Mayraj said...

Today I had a conversation with someone who told me he was in Karachi for 6 years.
He was born and raised in Canada and went there for a job with Barclays. He does seem to have parents who were from Pakistan, however. He worked there and was involved in other banking industry orgs and also helped an NGO out.
I asked him for his impressions about the local system and the present state of the country. He has just returned home to Canada a few weeks ago.
He told me the system worked well and the mayor was a good mayor. He said he thought he did a very good job.
He also said right now country is in a deep mess. People in power seem to just want to take what money they can out of the system. he said this happening at all levels!

Mayraj said...

I would like you to be cognizant of the fact that now in Pakistan, corruption is at a scale that boggles the mind - at least it should boggle the mind. We are talking no longer millions but BILLIONS. We are talking about Pakistan's external debt shooting up by ten billion dollars in a short span of 3 years with nothing to show for it. I suspect the borrowed dollars have been purchased with corruption billions and transferred abroad. In the next 2 years huge repayments are maturing to the IMF and other lenders. The oil price may shoot up. Our exports reduce and our water supplies may stunt our agriculture. I don't see how we will be able to cope.

Billions are 'spent' by the government and as much as 40-50% if not more is diverted for pay-offs. There is hardly any development or relief going on anywhere. debt service has gone through the roof, being the biggest item in the budget. Poverty is rising, employment growth is nonexistent. Spending on social services had collapsed as there is no fiscal space.

Corruption is a HUGE component in both out fiscal and current account deficits. It has made a huge increase in both our domestic and international debt. it can corrupted the moral fiber of the country, especially the bureaucracy. Now the younger generation is actually embracing corruption as a perfectly acceptable way of life, looking at the leadership, the tycoons and the senior government officers as role models. They are actually openly defending the corruption of their families and expressing their intention to indulge in the same.

Haseeb said...

At last some one has the guts to speak up hoestly instead of just praising a criminal just because they dont want to rock the boat !!

Riaz Haq said...

Here are some excerpts from Raymond Baker's book "Capitalism's Achilles Heel" regarding Pakistan's venal politicians:

"While Benazir Bhutto hated the generals for executing her father, Nawaz Sharif early on figured out that they held the real power in Pakistan. His father had established a foundry in 1939 and, together with six brothers, had struggled for years only to see their business nationalized by Ali Bhutto’s regime in 1972. This sealed decades of enmity between the Bhuttos and the Sharifs. Following the military coup and General Zia’s assumption of power, the business—Ittefaq—was returned to family hands in 1980. Nawaz Sharif became a director and cultivated relations with senior military officers. This led to his appointment as finance minister of Punjab and then election as chief minister of this most populous province in 1985. During the 1980s and early 1990s, given Sharif ’s political control of Punjab and eventual prime ministership of the country, Ittefaq Industries grew from its original single foundry into 30 businesses producing steel, sugar, paper, and textiles, with combined revenues of $400 million, making it one of the biggest private conglomerates in the nation. As in many other countries, when you control the political realm, you can get anything you want in the economic realm."
Like Bhutto, offshore companies have been linked to Sharif, three in the British Virgin Islands by the names of Nescoll, Nielson, and Shamrock and another in the Channel Islands known as Chandron Jersey Pvt. Ltd. Some of these entities allegedly were used to facilitate purchase of four rather grand flats on Park Lane in London, at various times occupied by Sharif family members. Reportedly, payment transfers were made to Banque Paribas en Suisse, which then instructed Sharif ’s offshore companies Nescoll and Nielson to purchase the four luxury suites.
Upon taking office in 1988, Bhutto reportedly appointed 26,000 party hacks to state jobs, including positions in state-owned banks. An orgy of lending without proper collateral followed. Allegedly, Bhutto and Zardari “gave instructions for billions of rupees of unsecured government loans to be given to 50 large projects. The loans were sanctioned in the names of ‘front men’ but went to the ‘Bhutto-Zardari combine.’ ” Zardari suggested that such loans are “normal in the Third World to encourage industrialisation.” He used 421 million rupees (about £10 million) to acquire a major interest in three new sugar mills, all done through nominees acting on his behalf. In another deal he allegedly received a 40 million rupee kickback on a contract involving the Pakistan Steel Mill, handled by two of his cronies. Along the way Zardari acquired a succession of nicknames: Mr. 5 Percent, Mr. 10 Percent, Mr. 20 Percent, Mr. 30 Percent, and finally, in Bhutto’s second term when he was appointed “minister of investments,” Mr. 100 Percent.

Riaz Haq said...

Even though the Pakistan People’s Party (PPP) has denied that former prime minister Benazir Bhutto owned the valuable jewellery set currently in custody of Swiss authorities in the SGS case, the Geneva Federal Tribunal’s Court of Appeals verdict suggests that the legal owner of the expensive necklace was PPP Co-chairman Asif Zardari or the “death estate [sic] of late Benazir Bhutto” and has suggested repatriating the set to Pakistan, Pakistan Today has learnt.

The government of Pakistan received the translated version of the verdict on Nov 10, and Law Ministry officials have exchanged notes with the government’s attorney in Switzerland on the status of the case and the options available to deal with the issue.

Zardari’s spokesman Senator Farhatullah Babar told Pakistan Today that the former president’s counsel had already informed the Geneva tribunal that neither Benazir Bhutto nor any of her heirs had anything to do with the necklace. He said that there was no change in PPP’s stance after the ‎verdict.


In a letter sent to the federal secretary of law, François Roger Micheli, the government’s lawyer from Python & Peter pleading the case in Geneva, told the Attorney General for Pakistan: “We hereby transmit you the judgment of the Federal Tribunal (“FT”) of 29.10.2014, which rejects the ultimate recourse filed by Bomer Finance Inc [the company representing Asif Zardari and Benazir Bhutto]. The FT followed our line of argument and confirmed the decision of the Court of Appeal of Geneva.”

“The tribunal also decided that Jens Schlegelmilch, the board member of Bomer Finance Inc. had acted as the attorney for both Asif Ali Zardari (AAZ) and Benazir Bhutto (BB) – a fact contradicted by PPP leadership.”

“The gist of the attached decision is: Bomer Finance Inc. has not proven that it is the legal owner of the jewellery set. The FT adds that Jens Schlegelmilch has not proven that he acted in a capacity as board member of Bomer Finance Inc. when negotiating and acquiring the jewellery set; he appears to have acted as the attorney for the BB-AAZ couple. The FT adds that its analysis would be the same, even if the balance of the purchase price of the jewellery set had been paid from the account of Bomer Finance Inc.”

“The FT suggests that the legal owner of the jewellery set is AAZ, or the death estate of BB. The task you had given us is done, and the objective has been reached. The next significant steps are the confiscation of the jewellery set, its realization and (assuming Pakistan is interested) the repatriation of the proceeds there from to Pakistan. Please advise if we are to make endeavours towards that ultimate objective,” the letter stated.


In another letter sent on Nov 25 by the government’s attorney, Micheli told the AGP as a first reply that the material particulars of the case at hand were such that there was no obvious legal answer, nor any reliable precedent, with respect to deadlines for taking action.

“However, and in general, it is obvious that every route becomes increasingly difficult to implement as time goes by. I have made a preliminary legal research, and spoken (off the record) this day with the prosecutor in charge of the matter. We have exchanged views. The ways forward we contemplated, are the following,” stated the letter.

“Confiscation in the context of the Swiss penal proceeding: In practical terms, this route implies that (i) the jewellery set is confiscated in Switzerland, and thereupon (ii) that it is sold at public auction upon instructions by the Geneva Prosecutor’s office (this is standard procedure), and thereafter (iii) that the proceeds of the realisation of the jewellery set are shared between Pakistan and the Swiss authorities. This route is legally conceivable,”


Riaz Haq said...

ISLAMABAD: An escape from a bad spell seven years ago gave Asif Ali Zardari access to the $60 million allegedly stashed in a Swiss bank, according to Pir Mohammad Ejaz, a spiritual mentor of the former president.

The pir, who remained by the side of Mr Zardari during his political ups and downs and even in his five-year stay in the presidency, told Dawn on Thursday outside an accountability court where Mr Zardari came on Thursday to face five references, including a money-laundering case.

“Zardari sahib got the money because of my meditation for which I spent a year in Madina in 2006,” he claimed.

Pir Ejaz removed the curtain from a mystery about when Mr Zardari got $60m and deposited it in a Swiss bank.

The former president could not draw the money for a long time because cases against him were pending in a Swiss court.

For the same money, Mr Zardari is facing a money-laundering case filed by the National Accountability Bureau. The NAB believes that it was the money Mr Zardari and other accused had acquired as commission for SGS Cotecna pre-shipment inspection.

The money was reportedly paid to Asif Zardari and other accused in Switzerland almost two decades ago.

“My meditation freed Mr Zardari from the bad spell he was under and in 2006 I called him from Madina to tell him that his case has been thrown into a blind well and he will soon get his money back,” he said.

During Thursday’s hearing, Pir Ejaz was seen standing outside the courtroom reciting verses from the Holy Quran.

“I have been protecting Mr Zardari from hardships since 2001, but when cases were being heard in a Swiss court I went to Madina for special meditation to save him.”

Pir Ejaz claimed that no evil can harm Mr Zardari now.

Riaz Haq said...

Zardari is angry with Pak Army after the Rangers' raid on the Sindh Building Control Authority (SBCA) building over illegal construction and China Cutting – illegal use and sale of state owned land.

As a reminder, here's a story in NY Times from Aug 14, 2003:

Ms. Bhutto and her husband, Asif Ali Zardari, who is jailed in Pakistan, were given six-month suspended sentences after an investigation by a Swiss magistrate. She was ordered to pay the Pakistani government nearly $12 million in restitution and was also ordered also ordered to hand over a necklace valued at $188,000.

Riaz Haq said...

Two former #Pakistan Generals punished in NLC corruption case by Military under Army Act: #ISPR

RAWALPINDI (Staff Report) – Inter-Services Public Relations (ISPR) on Wednesday said the two accused retired General Officers of Pakistan Army have been punished under the Pakistan Army Act in the light of inquiry conducted after violations were observed in NLC in 2009.

According to details the dismissal of Major-General (r) Khalid Zahir Akhter, implies forfeiture of rank, decorations, medals, honours, awards, seizure of pension, recovery of personal gains, cancellation of service benefits and all other allied facilities including medical whereas Lt-General (r) Muhammad Afzal has been awarded “Severe Displeasure” which in essence is a disciplinary award due to an offence of lesser degree.

On the other hand Lt-General (r) Khalid Munir Khan has not been found involved in any financial irregularity or serious misconduct and therefore stands absolved from all charges, ISPR statement said.

The inquiry was initiated by Defense Ministry after National Assembly’s Public Accounts Committee noted irregularities in the audit report of National Logistic Cell (NLC) in 2009.

Riaz Haq said...

The widespread public applause following last week’s arrest of the high profile Pakistani politician Asim Hussain was a timely reminder of the South Asian country’s popular yearning for a stepped up attack on corruption.

Though granular details of the nature of the latest charges against Hussain remain a matter of speculation, it is clear that the charges eventually connect with energy related issues as Hussain previously served as the de facto minister of petroleum and natural resources.

Though a medical doctor by training, Hussain rose to fame through his widely known proximity to Pakistan’s former president Asif Ali Zardari. In fact, he continues to be seen as one of Zardari’s most loyal political lieutenants. In sharp contrast to his training as a medical doctor, Zardari’s Pakistan Peoples Party (PPP) chose Hussain in 2011 to serve as its de facto minister. At a time when energy shortages across Pakistan were acutely visible, Hussain’s appointment attracted widespread interest and subsequent criticism.

Ultimately then, many concluded that his choice for the job spoke more of the cronyism that has dominated Pakistan’s democratic politics in recent years, rather than merit. His arrest has been followed by news of the issuance of fresh non-bailable arrest warrants by a Pakistani court for the arrest of former prime minister Yusuf Raza Gilani of the PPP and former PPP minister Amin Fahim on corruption related charges.

These three initiatives involving Hussain, Gilani and Fahim however must not be seen in isolation from Pakistan’s overall direction. In recent months, an army-backed campaign in the southern port city of Karachi to restore law and order, has also targeted members of the Muttahida Qaumi Movement (MQM) as part of a long overdue clean-up.

The result has indeed been a marked improvement in Karachi’s daily atmosphere where robberies at gunpoint, purse snatching and mobile phone thefts were once a common occurrence. The PPP remains the other main political force in Karachi by virtue of ruling over the southern Sindh province of which Karachi is the local capital.

It is important to note that the cases of the three PPP politicians highlighted last week on the face of it are the work of civilian agencies. Yet, a combination of conventional wisdom along side comprehensive analysis of Pakistan’s conditions clearly reveals the obvious handprint of the army led by General Raheel Sharif.

It is clear that the Pakistan army is keen to oversee a long overdue attack on corruption. Clearly, the sudden pursuit of high profile PPP politicians by Pakistan’s anti-corruption official outfit, which for long remained complacent on the matter, has unleashed suggestions of mounting pressure from the army to push this process forward.

Riaz Haq said...

The Panama Papers reveal hidden wealth of 12 world leaders including #Pakistan #PM #NawazSharif in offshore account

The hidden wealth of some of the world’s most prominent leaders, politicians and celebrities has been revealed by an unprecedented leak of millions of documents that show the myriad ways in which the rich can exploit secretive offshore tax regimes.

The Guardian, working with global partners, will set out details from the first tranche of what are being called “the Panama Papers”. Journalists from more than 80 countries have been reviewing 11.5m files leaked from the database of Mossack Fonseca, the world’s fourth biggest offshore law firm.

The records were obtained from an anonymous source by the German newspaper Süddeutsche Zeitung and shared by the International Consortium of Investigative Journalists with the Guardian and the BBC.

Though there is nothing unlawful about using offshore companies, the files raise fundamental questions about the ethics of such tax havens – and the revelations are likely to provoke urgent calls for reforms of a system that critics say is arcane and open to abuse.

The Panama Papers reveal:

Twelve national leaders are among 143 politicians, their families and close associates from around the world known to have been using offshore tax havens.
A $2bn trail leads all the way to Vladimir Putin. The Russian president’s best friend – a cellist called Sergei Roldugin - is at the centre of a scheme in which money from Russian state banks is hidden offshore. Some of it ends up in a ski resort where in 2013 Putin’s daughter Katerina got married.
Among national leaders with offshore wealth are Nawaz Sharif, Pakistan’s prime minister; Ayad Allawi, ex-interim prime minister and former vice-president of Iraq; Petro Poroshenko, president of Ukraine; Alaa Mubarak, son of Egypt’s former president; and the prime minister of Iceland, Sigmundur Davíð Gunnlaugsson.
Six members of the House of Lords, three former Conservative MPs and dozens of donors to UK political parties have had offshore assets.
The families of at least eight current and former members of China’s supreme ruling body, the politburo, have been found to have hidden wealth offshore.
Twenty-three individuals who have had sanctions imposed on them for supporting the regimes in North Korea, Zimbabwe, Russia, Iran and Syria have been clients of Mossack Fonseca. Their companies were harboured by the Seychelles, the British Virgin Islands, Panama and other jurisdictions.
A key member of Fifa’s powerful ethics committee, which is supposed to be spearheading reform at world football’s scandal-hit governing body, acted as a lawyer for individuals and companies recently charged with bribery and corruption.
One leaked memorandum from a partner of Mossack Fonseca said: “Ninety-five per cent of our work coincidentally consists in selling vehicles to avoid taxes.”

Riaz Haq said...

Names figuring in the (Panama) leak included the king of Saudi Arabia and Pakistan Prime Minister Nawaz Sharif. Ayad Allawi, ex-interim prime minister and former vice-president of Iraq was also listed, the Guardian said.
The (Panama Papers) data contains secret offshore companies linked to the families and associates of Egypt's former President Hosni Mubarak, Libya's former leader Muammar Gaddafi and Syria's President Bashar al-Assad as well.

The documents reveal many Israeli connections and disclose people with Israeli citizenship as well as Israeli banks and entities have used the offshore law firm to register companies in tax havens around the world, Haaretz reported.

Several Israeli banks appear in the files, Haaretz said. Bank Hapoalim managed some of its trusteeship activities for trust funds through the law firm. This activity, carried out by means of the subsidiary Poalim Trust Services, closed down in 2011. The documents also contains many correspondences concerning Bank Leumi activity in Jersey in the Channel Islands.

Blacklisted interests

At least 33 people and companies in the documents had been blacklisted by the US for wrongdoing, such as some Iranian interests and those of Lebanon's Hezbollah, the ICIJ said.

One of the companies exposed in the leaked documents provided fuel for aircraft used by the Syrian government to bomb and kill thousands of its citizens, Haaretz said.

"These findings show how deeply ingrained harmful practices and criminality are in the offshore world," said Gabriel Zucman, an economist at the US-based University of California, Berkeley, and author of the book The Hidden Wealth of Nations: The Scourge of Tax Havens.

Zucman, who participated in the ICIJ investigation, said that the publication of the leaked documents should encourage governments to impose “concrete sanctions” on countries where such firms are registered and on institutions that provide confidentiality for companies using tax havens, Haaretz said.

The leaked data from 1975 to the end of last year provides what the ICIJ described as a "never-before-seen view inside the offshore world."

The investigation yielded the millions of documents from about 214,000 offshore entities, the ICIJ said. The source of the documents, Mossack Fonseca, is a Panama-based law firm with offices in more than 35 countries. It is the world’s fourth-biggest offshore law firm, the Guardian said.

Though most of the alleged dealings are said by the ICIJ to be legal, they are likely to have serious political impact on many of those identified.

Among the main claims of the ICIJ investigations:

Close associates of Putin, who is not himself named in the documents, "secretly shuffled as much as $2bn through banks and shadow companies," the ICIJ said.
The files identified offshore companies linked to the family of Chinese President Xi Jinping, who has led a tough anti-corruption campaign in his country, the ICIJ said.
In Iceland, the files allegedly show Prime Minister Sigmundur David Gunnlaugsson and his wife secretly owned an offshore firm holding millions of dollars in Icelandic bank bonds during the country's financial crisis.
The leaked documents were reviewed by a team of more than 370 reporters from over 70 countries, according to the ICIJ.

The BBC cited Mossack Fonseca as saying it had operated "beyond reproach" for 40 years and had never been charged with any criminal wrongdoing.

Haaretz, however, reported that authorities in the British Virgin Islands fined Mossack Fonseca $37,500 for violating laws against money laundering - it had registered a company in the name of former Egyptian President Hosni Mubarak’s son, but did not report its relationship to the two even after both father and son were charged with corruption in their country.

It was not immediately clear who was the original source of the leaked documents.
- See more at:

Riaz Haq said...

#Iraq oil-for-food scam: #BenazirBhutto set up firm to siphon money to offshore account via @sharethis #panamapapers

A committee set up by the United Nations under former head of US federal reserves Paul Volker found in 2005 that Petrofine FZC paid US$ 2 million commission to the regime of Saddam Hussein to win oil contracts worth US$115-145 million.

Former Pakistan prime minister late Benazir Bhutto, her aide Abdul Rehman Malik and nephew Hassan Ali Jaffery Bhutto set up a company, Petroline International Inc, in the British Virgin Islands in 2001. The trio were later accused of bribing the Iraqi government to bag contracts under the United Nation’s oil-for-food programme for a similarly named company Petrofine FZC, set up in Sharjah in 2000.

A committee set up by the United Nations under former head of US federal reserves Paul Volker found in 2005 that Petrofine FZC paid US$ 2 million commission to the regime of Saddam Hussein to win oil contracts worth US$115-145 million. In 2006, Pakistan’s National Accountability Bureau claimed that Petroline FZC was owned by Bhutto, Malik and Ali Jaffery. Bhutto and her Pakistan Peoples Party denied the charges.

International law firm Mossack Fonseca’s (MF) records reviewed by The Indian Express show that the trio —Bhutto, Malik and Jaffery — set up a similarly named company in the British Virgin Islands but the political sensitivity of the association made MF eventually back out, saying that “the partners of the firm have decided not to accept Mrs Bhutto as a client”.

Riaz Haq said...

Did Benazir die because she bought 'jinxed' apartment in Manhattan?

One of the first owners of a penthouse apartment in New York's Manhattan area has said that former Pakistan premier Benazir Bhutto died because she had bought a jinxed apartment, which has a dark and mysterious history, in as much as who ever bought it met a tragic end. Seema Boesky, the ex-owner of the apartment, said that one potential buyer dropped the idea of buying the apartment at the close of the deal, only because he felt afraid he would meet the same fate. Two persons decided to finally buy it, one after the other. The first died before buying the property and the other - Benazir Bhutto - was killed a year after buying the penthouse, The News quoted Seema Boesky as saying in her article titled "The Cursed Apartment" published in The Wag magazine. Belair Apartments, a 42-storey building that houses the Bhutto-Zardari penthouse, is located on 524-E, 72nd street between York Avenue and the FDR drive. "My first buyer dropped dead at the closing. The second, with contract in hand, bolted down 47 flight of stairs, never to be heard from again," Seema writes in her article. Recalling her deal with Benazir, the final buyer of the penthouse, she said that first her husband Asif Ali Zardari took a round of the apartment, and after some days Benazir herself came to visit it. Seema writes, "a stunning woman with an engaging smile rang my doorbell. She took a full tour, including closets, and was very complimentary." "I love what you've done here. Your colour sense and style sensibility is much like mine," she quoted Benazir as saying. "She spoke of the vibrancy of New York City and how she enjoyed visiting. She took an interest in my family photos too, and, seeing pictures of my children, she commented that hers were in schools elsewhere so would not be living in the apartment," Seema further writes about Ms Bhutto's visit to the apartment. "We rode down the elevator together, and before bidding me farewell, she mentioned it was nice meeting me and felt we shared similar family values," writes Seema, the ex-wife of Ivan Boesky, the notorious Wall Street figure who became a household name in the US in the 1980s after paying 100 million dollars to settle insider-trading charges and serving two years in prison. "Driving home, I thought how much I liked her and hoped this couple would ultimately make the purchase. A few days later, they made an acceptable offer. I remember thinking how silly my broker was for believing my apartment was jinxed," she recalls.

Read more at:

Riaz Haq said...

#Pakistan overtakes #India for money stashed in #Swiss bank accounts

This is the first time in the last three years that the funds linked to Pakistan in Swiss banks have exceeded that of Indians.
In case of China, the total funds declined from CHF 8.16 billion to CHF 7.4 billion. A number of other major countries also saw their funds falling in Swiss banks amid a global clampdown against the erstwhile banking secrecy walls in the Alpine nation.
The money of US clients in Swiss banks fell to CHF 195 billion in 2015, from CHF 244 billion a year ago, though the same for the UK clients surprisingly rose from CHF 321 billion to CHF 345 billion.
However, these official figures disclosed by SNB do not include the money that the foreign clients of Swiss banks might have kept in the name of shadow entities or shell companies.
Also, these figures do not indicate towards the quantum of alleged black money, which has been a matter of a major political debate in various countries including India and Pakistan.
As per the SNB data, the total funds linked to Pakistan in Swiss banks stood at a record high level of CHF 3.43 billion in the year 2001, but has come down considerably since then.
By 2013, it fell to as low as CHF 1.23 billion, the lowest since 1996 since when this data is available. However, it has risen by 6 per cent and 16 per cent during the last two years 2014 and 2015, respectively.
In case of India, the quantum of such funds has fallen in the last two years.

Riaz Haq said...

#Pakistan's Khanani group launders billions of dollars: US report. #UAE, #US, #UK, #Canada, #moneylaundering

In its section on Pakistan, the report notes: “The Altaf Khanani money laundering organisation (Khanani MLO) is based in Pakistan. The group, which was designated a transnational organised crime group by the United States in November 2015, facilitates illicit money movement between, among others, Pakistan, the United Arab Emirates (UAE), United States, UK, Canada, and Australia.”

The group “is responsible for laundering billions of dollars in organised crime proceeds annually. The Khanani MLO offers money laundering services to a diverse clientele, including Chinese, Colombian, and Mexican organised crime groups and individuals associated with designated terrorist organisations”, the report adds.

It describes Pakistan as strategically located country at the nexus of south, central and western Asia, with a coastline along the Arabian Sea. The report notes that Pakistan’s porous borders with Afghanistan, Iran and China facilitate the smuggling of narcotics and contraband to overseas markets.

“The country suffers from financial crimes associated with tax evasion, fraud, corruption, trade in counterfeit goods, contraband smuggling, narcotics trafficking, human smuggling/trafficking, terrorism and terrorist financing,” the report points out.

“There is a substantial demand for money laundering and illicit financial services due to the country’s black market economy and challenging security environment.”

The report notes that money laundering in Pakistan affects both the formal and informal financial systems. Pakistan does not have firm control of its borders, which facilitates the flow of illicit goods and monies into and out of Pakistan.

The report, however, acknowledges that most Pakistanis living abroad use legal channels for sending money home. From January to December 2016, the Pakistani diaspora remitted $19.7 billion back to Pakistan via the formal banking sector, up by 2.3 per cent from 2015.

The report notes that while it is illegal to operate a hawala without a licence in Pakistan, the practice remains prevalent because of poor ongoing supervision efforts and a lack of penalties levied against illegally operating businesses. “Unlicensed hawala/hundi operators are also common throughout the broader region and are widely used to transfer and launder illicit money through neighbouring countries,” the report adds.

Common methods for transferring illicit funds include fraudulent trade invoicing, unlicensed hundis and hawalas and bulk cash smuggling.

The report says that criminals exploit import/export firms, front businesses and the charitable sector to carry out their activities. Pakistan’s real estate sector is another common money laundering vehicle, since real estate transactions tend to be poorly documented and cash-based, it adds.

The report notes that in January 2015, Pakistan launched the National Action Plan (NAP), addressing primarily counter-terrorist financing. The government’s implementation of the NAP “has yielded mixed results, which is in part due to the lack of institutional capacity as well as political will,” the report adds.

“Unlicensed hawaladars continue to operate illegally throughout

Pakistan, particularly in Peshawar and Karachi, though under the NAP Pakistan has reportedly been pursuing illegal hawala/hundi dealers and exchange houses.”

The report says that Pakistan’s Federal Investigation Agency, which is responsible for investigating money laundering cases, lacks the capacity to pursue complicated financial investigations.

Riaz Haq said...

#Pakistan NAB recovers Rs2.12 billion thru plea bargain. #Sindh #PPP took bribes for Illegal favors to Technomen Kinetic and Others in Projects of Sindh Nooriabad Power Company and Sindh Transmission and Dispatch Company (STDC). #corruption #OmniGroup National Accountability Bureau (NAB) Rawalpindi has recovered Rs 2.12 billion through Plea Bargain (PB) from the accused Asif Mahmood, Arif Ali Directors – Technomen Kinetics (Pvt) Ltd involved in collusive bidding, exorbitant rates, corruption and corrupt practices in power generation projects of Sindh.

According to NAB spokesman, plea bargain has been approved in case of Investigation Against Holder of Public Office, Legal Person and Others Involved in Fake Bank Accounts Scam Regarding Extending Illegal favours to M/S Technomen Kinetic (Pvt) Ltd, and Others in Projects of Sindh Nooriabad Power Company and Sindh Transmission and Dispatch Company (STDC) and Misappropriation of Funds.

As per details, Accused Asif Mahmood S/o Syed Irfan Ali and Accused Arif Ali, Directors – Technomen Kinetics (Pvt) Ltd, Sindh Nooriabad Power Company (Pvt) Ltd, Sindh Nooriabad Power Company (Pvt) Ltd Phase-II in connivance with Government officials and others were proved to be involved in collusive bidding, exorbitant rates, Corruption and Corrupt practices in power generation projects of Sindh.

During investigation both accused submitted plea bargain application of Rs. 2.12 Billion to NAB authorities, which will be submitted to Accountability Court for final approval by the Investigation team comprising Younis and Hammad Kamal.

NAB Rawalpindi has once again resolved to vigorously pursue all the corruption cases on merit and with objectivity irrespective of the status of accused in pursuance to Chairman’s vision of Look at cases and not faces.

Riaz Haq said...

Ex #French PM Balladur to stand trial over 'arms deal kickbacks' from #Pakistan. The investigation was launched after 11 French submarine engineers were murdered in #Karachi in a 2002 bomb attack on the bus carrying them. #corruption via @telegraphnews

ormer French prime minister Edouard Balladur is to stand trial at a special court over charges that kickbacks from the sale of submarines to Pakistan helped finance his 1995 presidential election campaign.

The trial comes over years of investigations into the "Karachi Affair", a series of nebulous dealings by middlemen involving possible "retro-commissions" linked to the sale of Agosta class submarines by the French government to Pakistan in the 1990s.

The investigation was launched after 11 French submarine engineers were murdered in Karachi in a 2002 bomb attack on the bus transporting them. It was initially blamed on al-Qaeda terrorists, but investigating judges also looked into whether the blast was to punish France for failing to pay part of €80 million (£71m) in sweeteners to senior Pakistani officials.

When Jacques Chirac beat Mr Balladur, now 90, to become French president in 1995, it is alleged that he punished his one-time ally for running against him by halting the remaining payments to Pakistani middlemen.

Ex-president Nicolas Sarkozy, who was budget minister and spokesman for Mr Balladur's presidential campaign at the time, has previously angrily rejected media speculation that he might have known of the payments as “grotesque".

Mr Balladur will stand trial before the Court of Justice of the Republic, set up to try cases of current and former ministers. He and his former defence minister, François Léotard, face charges of “complicity in the abuse of public funds” and concealing this alleged crime. They had been under official investigation since 2017.

In all, investigating magistrates believe that Mr Balladur received 13 million francs (around £1.8m) for the sale of submarines to Pakistan but also frigates to Saudi Arabia. Mr Léotard is notably accused of setting up an “opaque circuit” of arms dealers linked to both countries.

Mr Balladur is accused of receiving some 10 million francs of the kickbacks "in cash", said François Molins, the prosecutor general, in a statement.

Both defendants deny any wrongdoing.

François Martineau et Félix de Belloy, Mr Balladur’s lawyer, said his client was “confident in the outcome of this trial in that he never committed any of the acts held against him”.

Riaz Haq said...

By the time he was ousted from power, Zulfikar had become so convinced of his own greatness and indispensability that he did not believe the generals would dare hang him. As I shall describe, there is good reason to believe that he only came to realise that he would actually be hanged a few hours before it happened. As for Benazir, her continued engagement in politics was not just a case of giving up the comforts of Dubai and New York so that she could fight for her ideals. Her political comeback in 2007 also enabled her to get all the legal cases against her overturned. The amnesty she secured from General Musharraf scuppered a Swiss trial in which there was a very high chance she would have been convicted of, among other things, using money from bribes to buy a necklace worth $175,000.

Bennett-Jones, Owen. The Bhutto Dynasty (pp. 14-15). Yale University Press. Kindle Edition.

Ghulam Murtaza’s experience entrenched the Bhuttos’ view that there was always a way around legal cases. It is a view that has recurred across the generations. By working within the legal system to secure acquittals, the Bhuttos were taking advantage of what many colonial administrators saw as a weakness in their judicial arrangements. If a British official such as Mayhew made accusations against someone such as Ghulam Murtaza and the court found him innocent, then Mayhew’s authority was undermined. From the point of view of the Bhuttos, however, the system meant they could behave in their locality much as they always had and then work on securing exoneration in the courts. Some landowners tried to reject the British system altogether. The Bhuttos played a subtler game of securing their objectives by working within it. For over a century now, many Bhuttos, from Ghulam Murtaza through to Bilawal, seem to have believed that making legal accusations against them is a political tool wielded by opponents.

Bennett-Jones, Owen. The Bhutto Dynasty (p. 31). Yale University Press. Kindle Edition.

Riaz Haq said...

As normal, she stood on the back seat, her head and shoulders sticking out of the emergency hatch above the roof. It was ten past five in the afternoon. Having waited all day, Bilal saw that his moment had come. He moved first to the front of the car and then to the side where there were fewer people, took out his pistol and pointed it at Benazir’s head. One of the guards clawed at the young man but, although he touched his arm, he was slightly too far away to get a firm grip. Bilal fired three shots in less than a second. As the second shot rang out, Benazir’s headscarf, or dupatta, moved away from her face. After the third, she fell like a stone, through the escape hatch, into the vehicle. As she did so, Bilal set off his suicide bomb. ‘I turned my face and she was on my lap,’ recalled Naheed Khan, who had been sitting on the car’s back seat, beside Benazir. ‘And her blood was oozing like I can’t explain to you. I have no words to say. Her blood was oozing. My hands, my – she was soaked in blood. My whole clothes were soaked in blood.’ Naheed Khan’s medically trained husband, Dr Safdar Abbasi, was also in the vehicle. ‘You know, I was trying to see her pulse and I was finding it very difficult, you know, to get to her pulse. But naturally, we had to take her to hospital. By that time, you know, the Jeep was all alone. There was no police car. There was no

Bennett-Jones, Owen. The Bhutto Dynasty (p. 11). Yale University Press. Kindle Edition.

backup car.’5 There was no backup car because, inexplicably, Benazir’s security chief, Rehman Malik, had driven away. He later gave a bewildering number of different accounts of his actions in those moments. In a TV interview shortly after the blast he said his car had been just 4 feet away from Benazir’s vehicle when Bilal had blown himself up. He claimed he then led Benazir’s car to the hospital and remained there. In a different interview shortly afterwards, he said that his car was moving in front of Benazir’s and that immediately after the bomb went off they accelerated, fearing another attack. Initially Benazir followed, but, after some time, they saw that Benazir’s car was no longer behind them; so they did a U-turn and returned. Both accounts – and other versions he gave – were completely untrue. In fact, Rehman Malik, together with others who were sharing his car, simply left the scene and headed for Islamabad. A decade later, when asked why he had done this, Malik said he had been following police instructions. Another occupant of the car, Benazir’s longstanding and famously loyal spokesman, Farhatullah Babar, gave a similar account, although he added that allowing himself to be driven away that day was the greatest regret of his life.6

Bennett-Jones, Owen. The Bhutto Dynasty (pp. 11-12). Yale University Press. Kindle Edition.

Riaz Haq said...

Benazir Bhutto's interview with Alice Winkler in year 2000 (at 22:52):

"Now I say that when there were these demands, why didn't I have the — I did say make an information act but didn't follow it through, so I wish I had given more freedom of information. I wish I had tackled the so-called corruption issues more deeply. It was a precedent, you know. We all knew
kickbacks must be taken. Not personally, but on the level that, "Well, these things happen." And it wasn't like, "Well, we're here to change it." It was like, "This is how business is done.""