Graft and Corruption in Pakistan: Asif Zardari, Mr. 10 Percent, is back

Posted on March 14, 2008

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Pakistani court has quashed the last remaining graft case against the husband of slain Benazir Bhutto, his lawyer has said.

Asif Ali Zardari was acquitted by the anti-corruption court in the garrison city of Rawalpindi, near Islamabad, in the last of seven cases that had been hanging over him for more than a decade, lawyer Farooq Naik said.

Note from Rafik Beekun: Pakistan had not yet learnt the heavy price of promoting corrupted leaders. Continuously promoting such persons to be leaders of Muslim countries may explain why these countries lag the remainder of the world in ethics, transparency and investor friendliness. Besides losing the trust of their own countrymen, research shows that such leadership affect the amount of direct foreign investment coming into their countries. Please read the article below from the New York Times:

House of Graft: Tracing the Bhutto Millions

By JOHN F. BURNS
Published: January 9, 1998

decade after she led this impoverished nation from military rule to democracy, Benazir Bhutto is at the heart of a widening corruption inquiry that Pakistani investigators say has traced more than $100 million to foreign bank accounts and properties controlled by Ms. Bhutto’s family.

Starting from a cache of Bhutto family documents bought for $1 million from a shadowy intermediary, the investigators have detailed a pattern of secret payments by foreign companies that sought favors during Ms. Bhutto’s two terms as Prime Minister.

The documents leave uncertain the degree of involvement by Ms. Bhutto, a Harvard graduate whose rise to power in 1988 made her the first woman to lead a Muslim country. But they trace the pervasive role of her husband, Asif Ali Zardari, who turned his marriage to Ms. Bhutto into a source of virtually unchallengeable power.

In 1995, a leading French military contractor, Dassault Aviation, agreed to pay Mr. Zardari and a Pakistani partner $200 million for a $4 billion jet fighter deal that fell apart only when Ms. Bhutto’s Government was dismissed. In another deal, a leading Swiss company hired to curb customs fraud in Pakistan paid millions of dollars between 1994 and 1996 to offshore companies controlled by Mr. Zardari and Ms. Bhutto’s widowed mother, Nusrat.

In the largest single payment investigators have discovered, a gold bullion dealer in the Middle East was shown to have deposited at least $10 million into an account controlled by Mr. Zardari after the Bhutto Government gave him a monopoly on gold imports that sustained Pakistan’s jewelry industry. The money was deposited into a Citibank account in the United Arab Emirate of Dubai, one of several Citibank accounts for companies owned by Mr. Zardari.

Together, the documents provided an extraordinarily detailed look at high-level corruption in Pakistan, a nation so poor that perhaps 70 percent of its 130 million people are illiterate, and millions have no proper shelter, no schools, no hospitals, not even safe drinking water. During Ms. Bhutto’s five years in power, the economy became so enfeebled that she spent much of her time negotiating new foreign loans to stave off default on $62 billion in public debt.

A worldwide search for properties secretly bought by the Bhutto family is still in its early stages. But the inquiry has already found that Mr. Zardari went on a shopping spree in the mid-1990’s, purchasing among other things a $4 million, 355-acre estate south of London. In 1994 and 1995, he used a Swiss bank account and an American Express card to buy jewelry worth $660,000 — including $246,000 at Cartier Inc. and Bulgari Corp. in Beverly Hills, Calif., in barely a month.

In separate interviews in Karachi, Ms. Bhutto, 44, and Mr. Zardari, 42, declined to address specific questions about the Pakistani inquiry, which they dismissed as a political vendetta by Ms. Bhutto’s successor as Prime Minister, Nawaz Sharif. In Karachi Central Prison, where he has been held for 14 months on charges of murdering Ms. Bhutto’s brother, Mr. Zardari described the corruption allegations as part of a ”meaningless game.” But he offered no challenge to the authenticity of the documents tracing some of his most lucrative deals. [more]

Please click here to read the sordid tale of corruption from the New York Times.

Five cases of corruption of Sardari

The five cases against Zardari that were dismissed last week ranged from charges that he took $10 million in kickbacks from a gold importing company to allegations that he improperly used government funds to build a polo ground at the prime minister’s residence in Islamabad.

In the gold case, Zardari was charged with taking bribes from ARY International Exchange, a gold bullion dealership based in Dubai, in exchange for awarding the company an exclusive license in 1994 to import more than $500 million worth of gold that was used in Pakistan’s jewelry businesses.

A report on private banking and money laundering in the United States Congress in 1999 said Zardari had accumulated $40 million in Citibank accounts. In describing the ARY case, the report cited allegations that some of Zardari’s Citibank accounts were used to “disguise $10 million in kickbacks for a gold importing contract in Pakistan.” Zardari always denied the charges, and the head of the company, Abdul Razzak Yaqub, denied he had paid bribes.

Another case that was dismissed by the anticorruption court involved charges that Zardari had received illegal commissions from two Swiss companies, Cotecna, and Société Générale de Surveillance, after the companies were awarded a contract for pre-shipment inspections for imports to Pakistan.

That case is also being tried in Switzerland. In 2003, a Swiss magistrate found him and Bhutto guilty on money laundering charges, and ordered them to return $12 million to the Pakistani government. The couple fought the charges vigorously and appealed the case, prompting a new investigation by the Swiss authorities that resulted in new charges of aggravated money laundering.Zardari, who has various health problems and declined to show up at hearings in Geneva after his release from prison in 2004 on the grounds that he was too ill, has continued to appeal the case, now being heard by the court of appeals there.

In Britain, Zardari faces a civil case brought in connection with a country manor with hundreds of acres in southern England where he made extensive renovations, including the installation of an imitation of a local pub.

The Pakistani government is seeking to recover the money that Zardari used to pay for the manor on the grounds that it was ill-gotten gains. People involved in the case said last week that the case was still active and being contested by Zardari.

The corruption charges against Zardari stem from his actions during Bhutto’s two terms as prime minister, a time when he was known as “Mr. 10 Percent” because of allegations that he demanded a cut of contracts after his wife assumed office in 1988.

Please click here to read the remainder of the article from the International Herald and Times.

Video on Sardari Corruption

Please click here to watch the video (in urdu language).

Please also read CNN’s article on Sardari.

Please also read the Op-Ed piece by Arnaud de Borchgrave in the New York Times.

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Posted in: Ethics & Morals