In the wake of the Panama Papers’damaging disclosures, Rahimullah Yusufzai assesses the extent and repercussions of graft in Pakistan

The revelations resulting from the Panama Papers’ leaks about offshore companies secretly maintained by more than 650 Pakistanis, including the three children of Prime Minister Nawaz Sharif, and by his major political rival Imran Khan, dominated the country’s political scene and the media throughout April and May. This was despite other major events during the same period, such as the military’s claim that the last stronghold of the militants in Shawal valley in North Waziristan had been destroyed, or the recovery of former Prime Minister Yousaf Raza Gilani’s son Ali Haider Gilani,who had been held by kidnappers for three months.

The Panama leaks issue is still unresolved, and it is not known whether the money kept in distant offshore firms was legally earned or illicitly stashed away to evade taxes. After weeks of wrangling and name-calling in and outside Parliament, the Nawaz Sharif government and the combined opposition finally agreed to establish a 12-member parliamentary committee with equal representation from the two sides. It will decide the terms of reference of a proposed judicial commission to probe the issue of offshore companies owned by wealthy Pakistani politicians, businessmen, celebrities, judges and at least three media tycoons.

CALLED TO ACCOUNT: Mushtaq Raisani, Balochistan’s formerSecretary of Finance
CALLED TO ACCOUNT: Mushtaq Raisani, Balochistan’s formerSecretary of Finance

Earlier, the government and the joint opposition had prepared their own terms of reference for the workings of the judicial commission, rejecting each other’s. The government claimed that the opposition was primarily targeting Sharif, while the nine opposition parties maintained that the government was involved in delaying tactics to protect the Prime Minister.

Sharifwas forced by the joint opposition to ask the Chief Justice of Pakistan to set up a judicial commission to investigate the issue. In his third speech to the nation within three weeks, the Prime Minister announced his decision to let the Supreme Court Chief Justice, Anwar Zaheer Jamali, form a three-member judicial commission for the purpose. The Prime Minister said emotionally that he and his family had selflessly served the nation, despite suffering persecution and imprisonment at the hands of the former military ruler, General Pervez Musharraf. He offered to resign should the allegations of wrong-doing be proved.

The Chief Justice took time to discuss the issue with his fellow judges before replying to the government. He said he was unable to form a commission to probe such a wide range of corruption issues under a weak law, and argued that it would take a long time to arrive at any conclusions. Both the government and opposition interpreted this in their own way, declaring it a vindication of their respective viewpoints. In an earlier remark during the hearing of another case in the Supreme Court, the Chief Justice argued that “investigations”are the job of the government, not the Supreme Court. Even if he finally agrees to set up a fully empowered judicial commission under mutually agreed terms of reference, it is widely believed that investigating the issue will be a challenge and take a long time.

Tough disciplinary action taken by the Pakistan Army chief, General Raheel Sharif, against six senior officers on charges of corruption and misuse of powerput extra pressure on the Prime Minister. He faces calls to come clean on the issue, revealed by the Panama Papers, of offshore companies owned by his twosons, Hussain and Hasan,who have been living abroad for a long time, and daughter Maryam, his political heir apparent.

It is unprecedented for the Army chief to initiate action against six serving officers

, including a Lieutenant General, a Major General, a Brigadier and three Colonels, and to make it public, as in the past such things were done quietly without going to the media. The six were dismissed from service and all benefits except their pensions were withdrawn. The message was that the Prime Minister should also take action against politicians and others involved in corruption and misuse of power, and implied that Sharif should himself be accountable.

To add further force to his message, General Sharif had earlier said that there should be across-the-board accountability in the country, as there was a strong link between corruption and instability. This came at a time when the Prime Minister was dithering over demands by the combined opposition that the judicial commission should be headed by a serving Supreme Court judge instead of a retired one.

To deflect the growing pressure on him to resign, Nawaz Sharif embarked on a countrywide tour, speaking at public meetings to rebut the corruption allegations against him and announce major development projects to win popular support and oblige fellow politicians. He adopted an aggressive stance againstImran Khan,leader of Pakistan’s second biggest political party after the ruling PML-N, who demandedthe Prime Minister’s resignationat his public rallies. Imran Khanwas put on the defensive when it was revealed that he too had set up an offshore company to avoid taxes in the UK, and to buy a house in London years ago, when he was playing Test cricketfor Pakistan. His response was that he had brought moneyearned abroad to Pakistan,while accusing Nawaz Sharif of illegally shiftingfundsout of Pakistan and depositingthem in the offshore companies of his children.

Corruption has long been a major issue in Pakistan, and civil and military rulers promising accountability have received much public support. Even so, the recovery of bagfuls of local and foreign currency, bonds and jewellery valued at around Rs700 million ($6.7 million) from the house of a bureaucrat in Balochistan provincestill stunned the nation. When personnel from the anti-graft organisation, theNational Accountability Bureau (NAB),raided the house of Mushtaq Raisani, the province’s formerSecretary of Finance, they found so much currency they had to send for machines to count it.

NAB officials believe Raisani, now under interrogation in custody,planned to send the cash abroad through informal channels. They feel he wasn’t working alone, as the money seems to have been embezzled from development funds by people in positions of power.

Tax evasion by smuggling money abroad, hiding it or keeping it in offshore companies or Swiss bank accounts, thus paying little or no income tax,is common in Pakistan. The Panama Papers leaks have brought these and many other issues to the surface and prompted the people to demand full accountability. They have also put the Nawaz Sharif government on the defensive as demands are growingfor the Prime Minister to make his position clear and, if found guilty, to resign. The issue will not go away quietly.

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