Bhutto Dynasty: How the Bhuttos Used Money For Political and Personal Gain
The role of money in elections and politics is generally known and understood around the world. Pakistan is no exception. In a recent book entitled "The Bhutto Dynasty" written by veteran British journalist Owen Bennet Jones, the author describes how former Prime Minister Benazir Bhutto saw "kickbacks" as an essential part of politics. Jones says that the "amnesty she (Benazir Bhutto) 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".
The Bhutto Dynasty:
Owen Bennet Jones has described in some detail how Zulfikar Ali Bhutto and his daughter Benazir Bhutto saw the role of money in Pakistani politics. Here's an excerpt of Benazir's candid admission that "kickbacks must be taken":
"In a surprisingly unguarded interview with the American Academy of Achievement in 2000 she (Benazir Bhutto) said, while denying personal involvement, that she wished she had done more to tackle corruption: ‘We all knew kickbacks must be taken . . . these things happen.’Politicians everywhere, she argued, made money. The difference was that while Western politicians did so after they left office, their counterparts in the developing world did not have that option".
|Asif Zardari-Benazir Bhutto Wedding Picture|
Jones offers several specific instances of how the Bhuttos used money for political gain. One such instance was when Benazir Bhutto's husband Asif Ali Zardari helped her defeat a no-confidence motion that appeared to be all but certain to remove her from power. Here are the relevant excerpts of the book:
"Having seen politics close up when her father was in power, Benazir had long been aware that money played a part in Pakistani politics. But now it could not have been clearer: if one of her National Assembly members was being offered a bribe to switch to the opposition, she needed to be able to match it............As another of her political advisers later recalled, ‘Asif’s role became more prominent when she beat back the motion of no confidence. There was some wheeler dealing in that. Some buying of votes. The moment money transactions came into play, Asif was in his element.’ Asif Zardari has consistently denied any financial malpractice. During her second government, Benazir told an aide that you needed to have $200–300 million to go into an election so that you could fund your candidates and secure their loyalty. While many of her advisers gave her plenty of interesting suggestions about what to do, Zardari actually did things, proving himself to be a man she could rely on"
Owen Bennet Jones has reported another instance in which Zulfikar Ali Bhutto gave away bundles of cash to a religious leader who was the last hold-out against the adoption of the 1973 constitution. Here is the excerpt:
"It was, by any standards, extraordinary that Zulfikar managed to push it through with no one in the National Assembly voting against it. Mubashir Hassan described how the final hold-out – a cleric – was persuaded to vote in favour with a payoff: ‘The amount was settled and Bhutto described the scene to me how when the fellow came to President’s House to collect the money, Bhutto threw a packet of notes on the floor and ordered him to pick it up. There the man was, moving over the carpet on all fours, picking a bundle from here and a bundle from there. Bhutto was mightily amused. By using all his political skills – bribery included – Zulfikar had made a significant contribution to Pakistan’s national story."
The Panama Leaks:
Prime Minister Nawaz Sharif is linked to 9 companies connected to his family name. Those involved are: Hassan Nawaz, Hussain Nawaz, Maryam Nawaz, Relatives of Punjab Chief Minister and brother of Prime Minister Shahbaz Sharif are linked to 7 companies. They are: Samina Durrani and Ilyas Meraj.
Former Prime Minister Benazir Bhutto was linked to one company. Her relatives and associates are linked to others: Nephew Hassan Ali Jaffery Javed Pasha, Close friend of Asif Ali Zardari (4 companies), PPP Senator Rehman Malik (1 company), PPP Senator Osman Saifullah’s family (34 companies), Anwar Saifullah, Salim Saifullah, Humayun Saifullah, Iqbal Saifullah, Javed Saifullah, Jehangir Saifullah. The Chaudharies of Gujrat have not been linked personally but other relatives have including: Waseem Gulzar Zain Sukhera (co-accused with former Prime Minister Yusuf Raza Gilani’s son in the Hajj scandal).
Pakistani Businessmen in Panama Leaks: Real Estate tycoon Malik Riaz Hussain’s son (Bahria Town) Ahmad Ali Riaz (1 company), Chairman ABM Group of Companies Azam Sultan (5 companies), Pizza Hut owner Aqeel Hussain and family (1 company), Brother Tanwir Hassan Chairman Soorty Enterprise Abdul Rashid Soorty and family, Sultan Ali Allana, Chairman of Habib Bank Limited (1 company), Khawaja Iqbal Hassan, former NIB bank President (1 company), Bashir Ahmed and Javed Shakoor of Buxly Paints (1 company), Mehmood Ahmed of Berger Paints (1 company), Hotel tycoon Sadruddin Hashwani and family (3 companies), Murtaza Haswani Owner of Hilton Pharma, Shehbaz Yasin Malik and family (1 company), The Hussain Dawood family (2 companies), Shahzada Dawood Abdul Samad Dawood Partner Saad Raja, The Abdullah family of Sapphire Textiles (5 companies), Yousuf Abdullah and his wife, Muhammad Abdullah and his wife, Shahid Abdullah and his family, Nadeem Abdullah and family, Amer Abdullah and family, Gul Muhammad Tabba of Lucky Textiles, Shahid Nazir, CEO of Masood Textile Mills (1 company), Partner Naziya Nazir Zulfiqar Ali Lakhani, from Lakson Group and owner of Colgate-Palmolive, Tetley Clover and Clover Pakistan (1 company) and Zulfiqar Paracha and family of Universal Corporation (1 company).
Pakistani Judges in Panama Leaks: Serving Lahore High Court Judge Justice Farrukh Irfan, Retired Judge Malik Qayyum, Pakistani Media personnel in Panama Leaks: Mir Shakil-ur-Rehman of GEO-Jang Media Group (1 company).
|Politicians Dominate Panama Leaks|
Pakistani civilian rule has been characterized by a system of political patronage that doles out money and jobs to political party supporters at the expense of the rest of the population. Public sector jobs, including those in education and health care sectors, are part of this patronage system that was described by Pakistani economist Dr. Mahbub ul Haq, the man credited with the development of United Nations Human Development Index (HDI) as follows:
"...every time a new political government comes in they have to distribute huge amounts of state money and jobs as rewards to politicians who have supported them, and short term populist measures to try to convince the people that their election promises meant something, which leaves nothing for long-term development. As far as development is concerned, our system has all the worst features of oligarchy and democracy put together."
Recently released book "The Bhutto Dynasty" details specific instances and Benazir Bhutto's candid admission of how the Bhutto dynasty has used money for political and personal gain in Pakistan. Other sources, such as leaked Panama Papers, reinforce how Pakistani political dynasties, including Bhuttos and Sharifs, have enriched themselves at the expanse of Pakistan's poor.
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In it Benazir Bhutto described her life in a way that played to Western perceptions of the East and resonated with Western mythic traditions: hers was the story..
..of a vulnerable young woman overcoming archaic tradition & deep prejudice,surviving years of hardship and exile to avenge her father’s death at the hands of a wicked, all-powerful man.
Buruma wrote that Benazir had a double life: the Larkana Bhutto and the Radcliffe Bhutto.
A 1998 exchange of letters with the highly regarded PPP senator, lawyer, and human rights activist Iqbal Haider revealed another aspect of BB's personality that even some of her most ardent supporters found difficult to defend: "the feudal mindset she never escaped."
The Double Life of Benazir Bhutto
Political autobiography, as a genre, tends to produce tiresome, self-serving, ghost-written works. But once in a while a book stands out; not necessarily because it is better written than the usual stuff, but because it is the closest thing we have to classic mythology. The message is moral; the characters stand for Good and Evil; the story is a variation of the quest for a holy grail, involving not just hardship—“tests”—but exile of one kind or another. The authorship is often anonymous—ghostwriters seldom reveal their names.
When the heroes and villains come from countries where pure myths still cast their spells, where, as a Pakistani politician recently put it to me, “words have magic,” these political fairy tales follow the traditional patterns more closely than in the modern West, where the drama tends to get lost in media buzzwords, earnest political analysis, academic jargon, or a ghastly combination of all three. Besides, the complexity of modern life leaves little room for mythical feats of heroism. Good and evil are not so clear-cut. Our politics, as puritans of all persuasions keep telling us, has lost its moral dimension.
We can be just as much enchanted by myths of course, and sometimes something approaching classic myth will occur: Winston Churchill emerging from “his years in the wilderness” (exile) to save the world from evil dragons in the name of freedom and democracy (the grail). But this could only happen in a war, and Churchill was rather exceptional in that he was the greatest narrator of his own myth—no ghostwriters for him. Today’s great leaders, the Iron Lady, the Gipper, even Gorby, might aspire to mythical status, but cannot really pull it off convincingly.
No, for the truly inspiring tales we must turn to that mythical land called The Third World. That is where we can escape from not so much the decadence as the banality of Western life, and be enchanted once again, like children, our disbelief suspended. More than that, in the third world we can retrieve the pure moral order that we feel is lost to us in the West. The story of Cory Aquino—already made into a TV miniseries, by Australians I believe—was perfect: she, a religious paragon of modesty and virtue, her opponents, symbols of villainy and greed. How enchanting it must have been in 1986 for American senators and congressmen to take a break from their daily affairs and don yellow ribbons for St. Cory of Manila.
Bennett-Jones, Owen. The Bhutto Dynasty (pp. 237-238). Yale University Press. Kindle Edition.
"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.""
The Sindh High Court on Thursday directed the provincial chief secretary to file complete details of the cases of government servants who entered into a plea bargain and voluntary return scheme with the National Accountability Bureau in graft cases by Dec 21.
The two-judge bench headed by Justice Nadeem Akhtar also issued notices to the NAB chairman, Sindh chief secretary and other respondents as well as the top federal and provincial law officers on a petition of the Muttahida Qaumi Movement-Pakistan against reappointments and promotions of officials in different departments of Sindh after entering into a plea bargain and voluntary return scheme with NAB.
MQM-P deputy convener Kanwar Naveed Jameel moved the SHC and contended that the provincial government had allowed promotions and postings of more than 500 officials after plea bargain in corruption cases.
The lawyer for the petitioner argued that it was a gross violation of law as such officials came within the ambit of misconduct and needed to be departmentally proceeded against since they admitted to having acquired assets through corruption.
MQM-P contends that over 500 beneficiaries in graft cases reappointed, promoted in violation of law
He further maintained that such officials could not hold any public office either in the federal or provincial government or in any state-owned organisation.
The counsel also questioned Section 25(a) of the National Accountability Ordinance, 1999 for authorising the NAB chairman to accept such offers and asked the SHC to examine vires of this provision since he contended that it was in conflict with the provisions of the Constitution where such powers can only be exercised by a judicial forum.
A number of political parties that form the PDM have been in power in the past and some of them still have strong stakes in the current engineered system. Each one has played the establishment’s game in the past to protect its own interests and may be willing to do so again.
While refusing to talk to the PTI government, some of the alliance leaders appear ready to negotiate with the security agencies. Back-room contacts never cease. It is not surprising that the PDM is divided on the issue of resigning from parliament. One can also understand the PPP’s refusal to give up the Sindh government as such a move could sound the death knell for the party whose political clout is restricted to the province.
For over 70 years, the country has alternated between authoritarian military regimes and ineffective elected civilian rule. But there have been no fundamental changes to Pakistan’s political power structure. A small power elite has dominated the country’s political scene under civilian as well as military rule.
The extractive nature of the state’s institutions has prevented the country from embarking on a path of economic and political progress. Despite the economic and social changes that have occurred over the past seven decades, the stranglehold of family-oriented politics remains. A limited number of influential families continue to control Pakistani legislatures.
A sense of dynastic entitlement dominates the country’s political culture impeding the development of institutional democracy. With few exceptions, political parties are an extension of powerful families with hereditary leaders. There is no concept of intra-party democracy. The only change is the transfer of leadership from one generation to the next.
Over the years, families from urban, religious and military backgrounds have also emerged on the political scene, but this has not changed Pakistan’s personalised and dynastic political culture. Studies show that a few hundred families have monopolised the political scene in Pakistan. Interestingly, hereditary politics have been strengthened under successive military governments.
Dynastic control has dire implications for our political and economic institutions. It reduces the legitimacy of a government, impacts the quality of government policies, promotes patronage and corruption and has negative consequences through the selection effect.
Most of these dynastic political groups have actively collaborated with successive military regimes in order to protect their vested interests and receive state patronage. The control of a narrow oligarchic elite and the patriarchal political system have impeded critical structural reforms that are needed for sustainable economic development and to strengthen democratic and economic institutions.
UNDER THE CHARTERED INSITUTE OF ARBITRATION RULESBETWEEN:
- and -
(1) The Islamic Republic of Pakistan (2) The National Accountability Bureau
PART FINAL AWARD (Quantum)
Sir Anthony Evans 24 Lincoln’s Inn Fields London
Date: Dec 17, 2018
Stroz Friedberg was instructed to carry out a ‘forensic audit’ (or ‘inventory’) of the JIT Report. This consisted of identifying potentially recoverable assets of the Sharif Family that were referred to in it and ascribing a valuation to each. This resulted in a list of 76 items of property in three overseas jurisdictions, namely, Saudi Arabia, the UAE and the United Kingdom, as well as in Pakistan, with total values that were corrected in the Revised SF Report to take account of Mr. Bezant’s comments on it. The revised total was US$820.8 million. The third instruction was “to apply the 20% rate due Broadsheet as outlined in the ARA” – a mechanical application of the 20% rate provided four in the ARA clause 4 – which resulted in a total ‘Loss of Revenue’ for Broadsheet of US$164.2 million. The fourth was to establish a ‘borrowing rate of interest’ for each of the 76 items of loss and to apply it from what they considered was the appropriate date. The interest calculation increased the total of ‘Broadsheet’s Entitlement’ to US$304.6 million.
The 2017/8 proceedings, however, in the Supreme Court of Pakistan, including the JIT Investigation and Report, have produced a very different situation where (subject to pending appeals) there is an authoritative listing of personal and family assets totalling (as corrected) US$820 million, both in Pakistan and abroad, and where certain real property in the United Kingdom valued at US$13 million (“the Avenfield flats”) has been forfeited to the Pakistan State as having been acquired with corrupt assets. These call for separate consideration in this Award.
As stated above, the total value of assets both in Pakistan and overseas listed by the JIT is agreed by the expert witnesses as US$820 million. Whilst accepting that this figure must be discounted to take account of many factors, not least the costs of recovery etc., Claimant’s representatives have put it forward as what might be called the gross amount of possible recoveries by NAB for the purpose of calculating Broadsheet’s potential entitlement to 20 per cent, under the ARA Clause 4.
Taliban were initially funded by President Burhanuddin Rabbani.
Pakistanis were later aided/funded by Pakistan ISI in 1994-95.
United States, and, according to Ramirez, in China in the 2000s as well.17 Yet this argument considers only the decline of illegal corruption, such as bribery, as captured by media reports in Figure 7.1. Crucially, it overlooks the qualitative evolution of corruption toward legalized exchanges – access money – as countries grow richer and more sophisticated. Although present-day first-world economies are not overrun by thugs and thieves, they do have corruption. As Whyte observes in the context of the United Kingdom, “We are not Afghanistan or Russia,” but “it is the pursuit of institutional interests that characterizes British corruption.”18 Similarly, the historian White underscores continuities in the money politics of the nineteenth-century Gilded Age and the 2008 financial crisis: “As in the nineteenth century, highly leveraged corporations, marketing dubious securities that were more inventive than comprehensible even to their creators, precipitated massive losses, receivership, government rescues, and severe economic downturns. The present seems so nineteenth century.”19 One striking difference, however, is that whereas influence peddling entailed bribes during the Gilded Age, no bribes were exchanged and few individuals were indictable in the present day. How did access money in the United States become institutionalized and legal? The Progressive Era laid a foundation for this process by clearly demarcating certain forms of corruption – including bribery and embezzlement – as illegal and morally unacceptable. Progressives dismantled the spoils system and gradually instituted a professional and adequately paid civil service that no longer relied upon petty bribes and fees for income.20 They also passed laws that broke up powerful monopolies, banned corporate contributions to political campaigns, and required the disclosure of campaign finance. Rules-based budgeting and accounting, meanwhile, replaced arbitrary collection and spending of public monies.
Ang, Yuen Yuen. China's Gilded Age (pp. 190-191). Cambridge University Press. Kindle Edition.
that, they’re going to think of things we can’t think of to do.”21 Over time, the expanding menu of legal access money rendered bribery unnecessary and indeed undesirable. Moving into the twenty-first century, money politics metastasized in an increasingly complex financial system, obfuscated by technicalities and contorted leveraging schemes that few can decipher. Meanwhile, financial institutions aggressively lobby for lax regulations that enable their risk-taking behavior. According to the United States Financial Crisis Inquiry Commission, “From 1999 to 2008, the financial sector expended $2.7 billion in reported federal lobbying expenses; individuals and political action committees in the sector made more than $1 billion in campaign contributions.”22 Regulatory capture in a supersized black box led up indirectly but eventually to the 2008 financial crisis.23 Indeed, lenders who lobbied engaged in more risk-taking, faced higher delinquency rates, and were more likely to be bailed out, as one study finds.24 Comparing China’s trajectory with the West, the two appear similar in their evolution of corruption toward access money. Yet China’s style of access money still remains crude and personal, whereas it became sophisticated and institutionalized in Western politics (see Chapter 2). In addition, to curb crony capitalism, Xi deploys a top-down disciplinary apparatus to hunt down individual corrupt politicians and capitalists, while rejecting democratic checks.25 The American Progressive Era, on the other hand, successfully mitigated illegal forms of corruption through democratic means: investigative journalism, electoral competition, secret ballots, and transparency policies.
Ang, Yuen Yuen. China's Gilded Age (pp. 191-193). Cambridge University Press. Kindle Edition.
Ang, Yuen Yuen. China's Gilded Age (pp. 7-9). Cambridge University Press. Kindle Edition.
thank you for mentioning my 📙
However, your summary "access money fueled growth" is misleading, so allow me to clarify
My book clearly maintains that all corruption, like drugs, are harmful. Access money generates growth with distortions, risks, and inequality.
Those named include top cabinet members, ministers, media moguls, relatives of army officers and powerful businessmen.
Politicians or politically exposed persons:
Finance Minister Shaukat Tarin and his family
Minister for Water Resources Moonis Elahi
Ex-federal minister and Senator Faisal Vawda
Son of PM’s former adviser for finance and revenue Waqar Masood Khan, Abdullah Masood Khan
Family of Minister for Industries and Production Khusro Bakhtiyar
PTI leader Abdul Aleem Khan
PPP’s Sharjeel Memon
PML-N’s Ishaq Dar’s son Ali Dar
PTI donor Arif Naqvi
PTI donor Tariq Shafi
Wife of PML-Q boss Chaudhry Pervez Elahi
Former FBR chairman and finance secretary Salman Siddiq’s son Yawar Salman
Army officers or their family members
Wife of retired Lt Gen Shafaat Ullah Shah
Raja Nadir Pervez, retired army officer and former minister
Retired Maj Gen Nusrat Naeem, former ISI director general of counterintelligence
Umar and Ahad Khattak, sons of former Pakistan Air Force chief Abbas Khattak
Retired Lt Gen Habibullah Khan Khattak's daughter Shahnaz Sajjad Ahmad (also the sister of retired Lt Gen Ali Kuli Khan and sister-in-law of former federal minister Gohar Ayub Khan)
Retired Lt Gen Muhammad Afzal Muzaffar’s son Muhammad Hasan Muzaffar
Retired Lt Gen Khalid Maqbool’s son-in-law Ahsan Latif
Retired Lt Gen Tanvir Tahir’s wife Zahra Tanvir
Axact CEO Shoaib Sheikh
National Bank of Pakistan President Arif Usmani
National Investment Trust Managing Director Adnan Afridi
Peshawar Zalmi owner and renowned industrialist Javed Afridi
Jang Group publisher Mir Shakil-ur-Rahman
Dawn Media Group CEO Hameed Haroon
Express Media Group publisher Sultan Ahmed Lakhani
Pakistan Today publisher (late) Arif Nizami
The Gourmet Group, which also owns the GNN TV channel
Header image: (From L-R) Senator Faisal Vawda, PPP leader Sharjeel Memon and Axact CEO Shoaib Sheikh are among the Pakistanis named in the Pandora Papers. — DawnNewsTV/Online/File
While owning offshore companies or bank accounts per se does not automatically imply culpability, it is incumbent on all the named, especially those holding senior governmental positions, to provide evidence of transparent money trails and of the declaration of such assets with the tax authorities in Pakistan.
Welcoming the release of the Pandora Papers, Prime Minister Imran Khan stated that it once again exposed “the ill-gotten wealth of elites, accumulated through tax evasion & corruption & laundered out to financial ‘havens’… ”. He also highlighted that the UN Secretary General’s panel on International Financial Accountability, Transparency and Integrity (FACTI) estimates that as much as $7 trillion of stolen assets are parked in largely offshore tax havens. The Papers include names of politicians in high office as well as retired military officials, businessmen and media owners.
.... In a move that lives up to his crusade against corruption, Prime Minister Imran Khan set up a high-level cell under the Inspection Commission to investigate the matter with the objective of holding “everyone involved in the Pandora leaks accountable” and promised to make the investigation public. It would also be consistent with the PM’s earlier stance that those implicated in the leaks should not be in positions that can in any manner influence the investigation while it is being carried out.
...It is also argued that Pakistan’s anti-corruption campaign is ineffective and used more as an instrument of political victimization than toward improving overall governance. While there is some validity in questioning the effectiveness and motives of the anti-corruption efforts, the ‘greasing the wheels’ reasoning, in toto, does not stand up to scrutiny.
In China it has been argued that corruption — euphemistically also called access money — has helped speed up economic growth. However, the renowned political scientist, Yuen Yuen Ang, who has extensively examined the matter, states in a recent article that corruption “spurred government officials to promote construction and investment aggressively, regardless of whether it was sustainable. Luxury properties that enriched colluding state and business elites have mushroomed across the country, while affordable housing remains in short supply…”. More ominously she points out that “Corruption, inequality and financial meltdowns can trigger social unrest and erode the legitimacy of the Chinese Communist Party...”.
Corruption has distorted incentives and market forces, and acted as a tax on business that has raised production costs and reduced the profitability of investments. Even more perversely it has dissuaded international investors from considering Pakistan as an investment destination, thereby suppressing the inflow of foreign direct investment (FDI) into the country. On the basis of a survey of 390 senior executives in 14 countries, a PricewaterhouseCoopers study reported that 45 percent of respondents refused to enter markets where corruption risks were perceived to be high.
Corruption’s corrosive influence on the overall governance and business environment as well as the extraction of resources into offshore accounts such as those disclosed in Pandora Papers has undermined Pakistan’s growth prospects and poverty alleviation efforts. It has denuded already scarce resources available for investment in health and education, thereby limiting human capital development and enhancement of its productive capabilities. It is therefore indisputable that all forms of corrupt practices, both direct and indirect, must be eliminated. While some of that will require structural change and take time, in the near-term international enforcement mechanisms must be mobilized to shut down avenues that facilitate illicit financial flows.
Officials leading the inquiry in Pakistan say that the $100 million they have identified so far is only a small part of a windfall from corrupt activities. They maintain that an inquiry begun in Islamabad just after Ms. Bhutto's dismissal in 1996 found evidence that her family and associates generated more than $1.5 billion in illicit profits through kickbacks in virtually every sphere of government activity -- from rice deals, to the sell-off of state land, even rake-offs from state welfare schemes.
The Pakistani officials say their key break came last summer, when an informer offered to sell documents that appeared to have been taken from the Geneva office of Jens Schlegelmilch, whom Ms. Bhutto described as the family's attorney in Europe for more than 20 years, and as a close personal friend. Pakistani investigators have confirmed that the original asking price for the documents was $10 million. Eventually the seller traveled to London and concluded the deal for $1 million in cash.
The identity of the seller remains a mystery. Mr. Schlegelmilch, 55, developed his relationship with the Bhutto family through links between his Iranian-born wife and Ms. Bhutto's mother, who was also born in Iran. In a series of telephone interviews, he declined to say anything about Mr. Zardari and Ms. Bhutto, other than that he had not sold the documents. ''It wouldn't be worth selling out for $1 million,'' he said.
The documents included: statements for several accounts in Switzerland, including the Citibank accounts in Dubai and Geneva; letters from executives promising payoffs, with details of the percentage payments to be made; memorandums detailing meetings at which these ''commissions'' and ''remunerations'' were agreed on, and certificates incorporating the offshore companies used as fronts in the deals, many registered in the British Virgin Islands.
The documents also revealed the crucial role played by Western institutions. Apart from the companies that made payoffs, and the network of banks that handled the money -- which included Barclay's Bank and Union Bank of Switzerland as well as Citibank -- the arrangements made by the Bhutto family for their wealth relied on Western property companies, Western lawyers and a network of Western friends.
As striking as some of the payoff deals was the clinical way in which top Western executives concluded them. The documents showed painstaking negotiations over the payoffs, followed by secret contracts. In one case, involving Dassault, the contract specified elaborate arrangements intended to hide the proposed payoff for the fighter plane deal, and to prevent it from triggering French corruption laws.
Govt can exempt judiciary, armed forces’ members from disclosure
The government is walking a tight rope to implement all conditions by end of this month, if it is keen to get the IMF Board’s approval for the loan tranche on January 12.
The sources said that the IMF has imposed another condition that the high-level public office holders and the civil servants of basic pay scale (BPS) 17 and above, their spouses, children or benamidars, or any person in relation to whom these persons are beneficial owners will file their asset declarations with the Federal Board of Revenue. These assets will be then made public.
The government has also defined the high-level public officials who will be required to file their declarations which will be made public. An amendment is being drafted where only politically exposed persons defined by a rule, regulation, executive order or instrument; or under any law for the time being in force would be required to file their declarations, the sources said.
The government had resisted the demand to ensure compulsory declaration on the grounds that these people were already required to submit their asset details in the Establishment Division. However, the IMF did not agree to it and instead asked Pakistan that such declarations should be filed with the tax authorities.
However, many bureaucrats did not file their asset declarations, nor did they submit their annual income tax returns, including many taxmen.
The IMF’s view was that any important position holder drawing salary from the budget should disclose assets to ensure transparency.
“The disclosure of information in respect of high-level public officials is proposed in line with the requirements of the development partners, rule of law and integrity,” the note sent by the FBR chairman to the finance adviser about changes being made in the tax laws read.
However, the government has found a way out where the declarations filed by members of the armed forces would not be made public, the sources said, adding that the exception has been created by Law Minister Barrister Farogh Naseem.
Barrister Naseem was not available for comments.
The sources said that the requirement of non-disclosure of the asset declarations would not be applicable on those who were currently exempted from the applicability of the National Accountability Ordinance.
A proviso is likely to be inserted in the law that will state that nothing in clause (t) shall apply to those who are expressly exempted under clause (iv) of sub-section (m) of Section 5 of the National Accountability Ordinance, 1999.
What Clause 5 (m) (iv) says?
A person who is holding, or has held, an office or post in the service of Pakistan, or any service in connection with the affairs of the Federation, or of a province, or of a local council constituted under any federal or provincial law relating to the constitution of local councils, or in the management of corporations, banks, financial institutions, firms, concerns, undertakings or any other institution or organisation established, controlled or administered by or under the federal government or a provincial government, other than a person who is a member of any of the armed forces of Pakistan, or for the time being is subject to any law relating to any of the said forces, except a person who is, or has been a member of the said forces and is holding, or has held, a post or office in any public corporation, bank, financial institution, undertaking or other organisation established, controlled or administered by or under the federal government or a provincial government.