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Losing the money trail: What Pakistan must do with Panama Leaks

Updated 31 May, 2017 01:37pm
Illustration by Marium Ali
Illustration by Marium Ali

The Panama Leaks case is the latest instance of trial of a politician, and a sitting prime minister at that, in a long sequence of efforts to establish the rule of probity and propriety in politics that have been going on since independence. The case came to the court through a tortuous route as, for quite some time, Prime Minister Nawaz Sharif contested the idea that he was answerable at all.

When the contents of the Panama Papers hit headlines in Pakistan, people were shocked to learn that many of their privileged countrymen, including some prominent politicians, had set up offshore companies or had links with them, and that they included Prime Minister Sharif’s three children. The people were also shocked to learn later on that Imran Khan, the Mr Clean of Pakistan’s political menagerie, had also set up an offshore company and that he was not afraid to admit that, since he was not a British national, he saw no harm in evading payment of taxes to the government of the country where he was earning good money as a much sought-after cricketer.

People were shocked by these disclosures but not outraged because they never expected their political leaders to be paragons of integrity. They had grown accustomed to corruption in politics as they got used to it in all other spheres of life, religion not excluded. They judged their leaders not by their capacity to resist corruption but by their record of doing good to the people while looking after themselves, though within certain limits. They had a soft corner for political lords who were known for sharing the spoils with the commoners, at least with their favourite commoners.

However, when they learnt that a prime minister and a couple of other politicians in foreign lands had resigned after being named in the Panama Papers they, certainly a large number among them, expected their prime minister to similarly rise to the pinnacle of glory. Sharif’s long narration of his family’s tribulations and its remarkable skill in making a financial fortune without any capital, and certainly without taking any capital out of Pakistan, did not persuade many Pakistanis to change their view of where his duty lay as the Prime Minister of Pakistan.

Sharif stuck to his defence that he had not directly been accused of any wrongdoing and that he was not responsible for his children’s doings if they had done anything improper. He also had the benefit of one of the most firmly-honoured traditions in Pakistan (in the whole of South Asia, in fact) which protects the right of a person to be elected as a legislator and to occupy a high public office so long as criminal charges against him, however serious they may be, are not proven in a court of law. The idea that occupants of public offices could acquire the means to circumvent the judicial process, at least to delay it indefinitely, has occurred neither to the lawmakers nor to the masses.

People were shocked by the Panama disclosures but not outraged because they never expected their political leaders to be paragons of integrity.

In India, lawmakers went to the extent of allowing a person who was convicted of a crime of moral turpitude, after being elected as a legislator, to complete his term. It was only before the last general election that the election commissioner there started efforts to get this law changed. Meanwhile, the chant to get the legislatures purged of known criminals off and on rises to a crescendo in both countries.

Some people nevertheless believed that Sharif had a historic opportunity of founding a noble tradition in the domain of accountability of public figures by stepping down, at least till his name was cleared of all charges beyond any shadow of doubt. These people drew inspiration from an ancient tale to the effect that good rulers/holders of high office were required to be, like Caesar’s wife, above suspicion. One could also recall the following observation by British constitutional theorist Sir Ivor Jennings, who tried to guide the government of Pakistan in constitutional matters in the 1950s.

“ ... [T]he most elementary qualification demanded of a minister is honesty and incorruptibility. It is, however, necessary not only that he should possess this qualification but also that he should appear to posses it.” (Quoted by AG Noorani in his essay, When a Minister Ought to Resign, from Jennings’ book, Cabinet Government)

It was also possible to remind the public of an obiter dictum by British jurist AV Dicey that “with us every official, from the Prime Minister down to a constable or a collector of taxes, is under the same responsibility for every act done without legal justification as any other citizen”.

The most prominent politician punished under this law [The Public and Representative Offices (Disqualification) Act (PRODA) of 1949] was Iftikhar Husain Khan of Mamdot, a former Punjab chief minister.

Had Sharif declared that, although he was completely blameless, he was ready to step down till his innocence was established through an independent and transparent probe, he would have greatly raised his and his party’s stock. His party would have remained in power under a new leader. Sharif could have returned to his post after his name had been cleared. His party’s chances of winning the next election could have improved. But this was not to be.

Perhaps it is not fair to blame Sharif alone for the national tradition, according to which almost all party leaders consider themselves indispensable for their outfits. The factors that prevent political supremos from vacating their seats even for a short period can be traced to the underdeveloped state of national politics, especially in the country’s failure to develop a credible, efficient and democratic party system. It has been assumed that a political party owes more to its leader than what the leader owes to the party. The argument is that since all important decisions are taken by the leader on behalf of the party, their absence from the helm of affairs, even if temporary, would destroy the unity of the flock, undermine its capacity to meet unavoidable challenges, and possibly render its members vulnerable to the guiles of rival or non-political claimants to their loyalties.

Thus, it is improbable that Pakistan will have, in the near future, political leaders who would value their reputation as morally upright individuals more than the glamour of office, and consider stepping down for a moral principle a duty and not a sacrifice.

Prime Minister Nawaz Sharif addresses the media outside Shaukat Khanum Memorial Cancer Hospital on May 14, 2013 | Reuters
Prime Minister Nawaz Sharif addresses the media outside Shaukat Khanum Memorial Cancer Hospital on May 14, 2013 | Reuters

Prime Minister Sharif did, however, offer himself to be judged by a competent body. The opposition called for an independent judicial commission and the government indicated its concurrence. But the opposition stumbled into a barren exercise for agreed terms of reference (ToRs) for the commission.

The government invited embarrassment when two former chief justices of Pakistan declined the offer to head the commission. It was with considerable difficulty that it could persuade a retired judge of the Supreme Court to accept the assignment. But then the opposition parties said they wanted a sitting Supreme Court judge or judges to probe the allegations against the prime minister. They did not reject the government’s plea for investigations into charges against all political figures but insisted on the case against Sharif being taken up first. The haggle over the proposed commission’s ToRs dragged on and neither side gave way to the other.

The efforts to set up a judicial commission received a serious setback when Chief Justice of Pakistan Anwar Zaheer Jamali declined the request to create a commission on the ground that a commission formed under the Pakistan Commissions of Inquiry (Amendment) Act 1975 would be a toothless body. This was a fair indication to the government and the opposition both that a new law to establish an effective commission was needed. Subsequently, the government did table a bill in the National Assembly on the formation of commissions but, as all eyes are on the Supreme Court, nobody seems to have the time to discuss this bill.

Meanwhile, the pressure on Sharif increased as a result of two developments.

Chief of Army Staff General Raheel Sharif (now retired) suddenly issued a call for across the board accountability and took the rather unusual step of announcing the sacking of a lieutenant general, a major general, three brigadiers and a colonel for corruption. Neither the significance nor the thrust of these actions was lost on any political observer. Imran Khan, chief of Pakistan Tehreek-e-Insaf (PTI), lost his patience with his parliamentary allies and held rallies and a march to the Raiwind residence of Prime Minister Sharif.

The argument in favour of keeping political matters out of courts has been strengthened in the eyes of both legal experts and enlightened politicians by unhappy precedents.

He finally concluded that he had the means to lock down the federal capital and force the government to capitulate. But the government this time around succeeded in preventing its hands from being tied behind its back and was thus able to thwart the PTI bid to enact its entire script. The dharna of 2016 failed but Khan was enabled to save his face when the Supreme Court intervened and decided to take up his petition for Sharif’s disqualification.

This petition, as well as an earlier one filed by a lawyer, had been rejected by the registrar of the Supreme Court on grounds of it being frivolous and that the petitioners needed to approach a proper forum. Later on, Sheikh Rashid Ahmad and Jamaat-e-Islami chief Sirajul Haq also filed petitions against Sharif in the Supreme Court. The ruling party, too, filed petitions against Khan and his party’s secretary general, Jahangir Tareen, but the Supreme Court declined to club them with the petitions against Sharif.

Throughout these days of hectic activity, the inadequacies of the accountability mechanisms ever tried in the country were acknowledged on all sides.

Corruption began at independence. Quite a few experts on graft and accountability like to recall Quaid-e-Azam Muhammed Ali Jinnah’s historic address of August 11, 1947 in which he described the primary tasks of the government in this order: maintenance of law and order so that “the life, property and religious beliefs” of the citizens could be fully protected; putting down “with an iron hand” the “poison” of “bribery and corruption”; tackling the “monster” of black marketing; and crushing the “evil” of “nepotism and jobbery”. He added, for emphasis, his own resolve to “never tolerate any kind of jobbery, nepotism or any influence directly or indirectly brought to bear upon me” and also not to countenance such practices if found in vogue anywhere in the country.

The targets of the Quaid’s attack quite obviously included, besides state employees and traders, holders of political offices.

Illustration by Zara Contractor
Illustration by Zara Contractor

There is also the story of the Quaid’s unhappiness over plans of his young nephew, Pirbhai, to serve the new state in the capacity of a judicial officer or a legal practitioner because his success in either field could be attributed to his relationship with the Quaid. This possibility of a clash of interest was completely unwelcome to the Quaid. As a result, a frustrated Pirbhai had to go back to India.

The reasons for suspecting politicians for abuse of their power and privilege were surely rooted in the country’s feudal culture and the patron-client relationship between the elected representatives and their electors that had grown in the subcontinent under the British rule.

These tendencies were further strengthened during the stampede to grab evacuee properties in which only political workers of exceptionally strong moral character remained untainted. But that is not a point at issue in this brief article except for recording the fact that efforts to deal with corruption in services and politics began on the very morrow of independence. And seven initiatives, including five legal instruments, have been devised since 1947 to deal with this subject in addition to the provisions of the Penal Code and special laws. These initiatives are:

  1. The Prevention of Corruption Act (1947) that could be used against a public servant (including politicians wielding executive authority, such as ministers) for accepting bribe or other forms of illegal gratification or for living beyond their known sources of income. This law is still in force.

  2. The Public and Representative Offices (Disqualification) Act (PRODA) of 1949. This law was made exclusively to punish holders of public office and members of any elective body for misconduct, which included bribery, corruption, jobbery, favouritism, nepotism, wilful maladministration, wilful misappropriation or diversion of public money, any other abuse of official power/position or abetment. The most prominent politician punished under this law was Iftikhar Husain Khan of Mamdot, a former Punjab chief minister. The law was repealed in 1954 when members of the Constituent Assembly briefly enjoyed their freedom to defy Governor General Ghulam Muhammad’s authoritarian practices (including the sacking of Prime Minister Khawaja Nazimuddin), and tried to put an end to the use of the law, or the threat to use it, to frighten legislators/ministers and compel them to fall in line behind the governor general’s diktat.

  3. The Elective Bodies (Disqualification) Order (EBDO) of 1959 was the Ayub regime’s principal instrument to punish politicians for misconduct, which was defined, in addition to offences listed in PRODA, as any subversive activity, preaching of any doctrine or committing an act that contributed to political instability. In actual fact, this law was meant to demonise politicians (as a means to justify military dictatorship) and drive them into wilderness. Those who were disqualified under this order, as well as those who voluntarily accepted disqualification, were barred from taking part in politics for seven years, that is, till December 31, 1966. The law expired after meeting its immediate purpose. While leading politicians, such as Huseyn Shaheed Suhrawardy and Abdul Qayyum Khan, were ‘EBDO-ed’, in the final analysis, the measure did not help Ayub Khan much because many targeted politicians won election to the National Assembly in 1962 and forced him to abandon his scheme of non-party parliament and government.

  4. General Ziaul Haq introduced special courts and tribunals. He justified the breach of his own pledge to hold election within 90 days, that he had made after toppling Zulfikar Ali Bhutto’s government, on the ground that accountability had to precede elections. He then created 13 special courts, headed by high court judges, to try politicians, including former ministers and legislators, for a variety of offences. Subsequently, he included a serving brigadier in each special court. Many Pakistan Peoples Party (PPP) leaders were disqualified. In the long run this measure fared no better than EBDO and eventually Zia too had to make peace with politicians who had survived his plans for a partyless democracy.

  5. Sharif set up an Ehtesab Cell. Soon after the dismissal of Benazir Bhutto’s government in 1990, the government created an Ehtesab Cell under Saifur Rahman to go after politicians suspected of corruption. The cell specially targeted Benazir Bhutto and Asif Ali Zardari and sometimes ignored the requirement of due process to the extent that international legal experts were moved to protest against what they described as political vendetta.

  6. Sharif brought in the Ehtesab Act of 1997. This law was applicable to both politicians (who fell under the definition of public servants) and members of federal/provincial assemblies and was designed to punish those charged with misconduct, especially corruption. The law did not apply to members of the judiciary and armed forces except in cases in which military and judicial officers held a public office.

  7. Pervez Musharraf promulgated the National Accountability Bureau Ordinance in 1999. The bureau created under this law has wide powers to investigate complaints of corruption against holders of public offices or any other person. The scheme has come under attack for its dependence on information that the government may or may not part with and for the sweeping powers of the bureau’s chairman. The law has also attracted the Supreme Court’s strictures over its provisions for plea bargain and voluntary surrender of the public funds that have been misappropriated.

In addition, four regimes – headed by Ayub Khan, Yahya Khan, Zulfikar Ali Bhutto and Ziaul Haq – dismissed/demoted thousands of state employees for corruption or for being seen to be corrupt.

Commenting on the failure of these laws and schemes to curb corruption, Karachi-based political economist Asad Sayeed, in his admirable paper, Contextualising Corruption in Pakistan, observes that the most common lament about laws and investigation agencies is that they “are seen to be discriminatory and particularly focused on politicians (in the main) and civil bureaucrats”. He adds: “As such politicians have often questioned the legitimacy of anti-corruption mechanisms, citing it as a form of victimisation in a country where the civil-military tensions have dominated politics.

Their recriminations get further credence from the fact that these legislations consistently exclude the military and the judiciary.” Sayeed might as well have taken notice of the Zia-made provision in Article 63 of the Constitution that renders any legislator liable to disqualification for defaming the judiciary or the armed forces. That demonisation of politicians carries a premium is no secret.

Unfortunately the practice of holding ministers accountable through parliamentary commissions or tribunals or judicial/quasi-judicial probe bodies, which have been quite popular in England and India, has not developed in Pakistan.

Roadblocks set up on the motorway to block a protest by Imran Khan over the Panama Leaks | AFP
Roadblocks set up on the motorway to block a protest by Imran Khan over the Panama Leaks | AFP

The inability of the National Accountability Bureau (NAB) to take up the case against Sharif was found extremely distasteful by all concerned. The Supreme Court censured the NAB in no uncertain terms for its uselessness. Here, again, the government missed an opportunity of establishing its commitment to an honest probe by making changes in the NAB law so as to remove any excuse for not investigating the allegations against the prime minister.

It can be said that, by its failure to demonstrate the existence of a credible accountability mechanism, the government pushed the matter into the hands of the Supreme Court. The case has come up before the Supreme Court at a time when more and more people have come to believe that the judiciary should not be burdened with deciding political issues. Also, this is the time when the apex court is recovering from the legacy of Justice (retd) Iftikhar Chaudhry.

The argument in favour of keeping political matters out of courts has been strengthened in the eyes of both legal experts and enlightened politicians, as well as a wide section of the lay public, by unhappy precedents set by judicial verdicts in political matters.

The Supreme Court gave a verdict against the military establishment only in the Asma Jilani case and declared General Yahya Khan a usurper, but this was after Yahya Khan had been abandoned by his own fellow officers and was confined to a house in Rawalpindi.

Khawaja Nazimuddin did not go to the court when he was sacked by Governor General Ghulam Muhammad but Maulvi Tamizuddin did when the Constituent Assembly was dissolved. He won his case in the Sindh High Court but Justice Muhammad Munir came to the governor general’s rescue with a federal court judgment that has caused endless embarrassment to the judiciary.

The same court covered itself with ignominy when it legitimised a martial law regime and ruled against the people’s right to democratic governance.

Then came the Nusrat Bhutto case in which the Supreme Court dismissed a plea against the chief martial law administrator for want of jurisdiction and relief was awarded to the respondent by giving him a licence to amend the Constitution.

The Supreme Court that heard the challenge to General Pervez Musharraf’s coup against Sharif’s government in 1999 went beyond the decision in the Nusrat Bhutto case in giving the military ruler – in the guise of a chief executive officer – the power to clip even fundamental rights.

The Supreme Court gave a verdict against the military establishment only in the Asma Jilani case and declared General Yahya Khan a usurper, but this was after Yahya Khan had been abandoned by his own fellow officers and was confined to a house in Rawalpindi. However, the Supreme Court did oblige the Sharif government when the judges overturned President Ghulam Ishaq Khan’s decision to dissolve the National Assembly and thereby get rid of the prime minister who had defied the president publicly.

The most serious blow struck by the judiciary in favour of coups was the development of the myth that the military had a right to intervene when the Constitution offered no solution to a political crisis. The fact is that there can be no situation that cannot be resolved in accordance with the state’s basic law.

Two instances will be sufficient to prove the point.

The Lahore High Court struck down Zia’s order whereby he had dissolved the National Assembly in order to sack his hand-picked Prime Minister, Muhammad Khan Junejo, but did not restore his government by arguing that a general election was about to take place and it was advisable to let the will of the people prevail. The decision was upheld by the Supreme Court. Political dynamics were, thus, allowed to overrule judicial strictures.

During the 1994 crisis caused by the tug of war between President Ghulam Ishaq Khan and Prime Minister Sharif, General Abdul Waheed Kakar resorted to extra-constitutional intervention by sending both the contenders packing and facilitated the holding of a general election. It became the only example so far of a military chief’s intervention in a political crisis without advancing his personal or group ambition.

Evidence from history suggests that, by and large, the judiciary has been able to rule only against civilian governments/politicians while it has been unable to curb the military’s appetite for endless powers, to say nothing of the court’s inability to enforce Article 6 of the Constitution that concerns high treason for abrogating, subverting or suspending the Constitution or even holding it in abeyance.

While Justice Munir was looking for a theory to legitimise the usurpation of power by Ayub Khan, a story, apparently apocryphal, became popular in gossip parlours. When asked as to why he had chosen to validate the military regime, Justice Munir was reported to have pointed to the sergeant standing outside the courtroom and his extraordinary powers. (This was much before Hamid Khan revealed in his History of the Judiciary the intrigue that led to the appointment of Justice Munir as head of the Federal Court by depriving the senior most judge of this honour.) It seems the sergeant has never been recalled.

Whatever the outcome of the case, the government will come under increased pressure to remove inadequacies and flaws in its accountability regime.

The fact that the Supreme Court is dealing with the Panama Leaks case at a time when it is going through a transition is not without significance. Had the matter come up before Justice Chaudhry’s court, its approach to the case could have been anticipated and the outcome predicted, for that court derived vicarious pleasure from putting the politicians on the mat. Neither the muted voices of protest at home nor the friendly advice of external observers, such as the Special Rapporteur on the independence of judges and lawyers, to avoid appearing to be vindictive, could dampen its messianic zeal to clean up all the Augean stables single-handedly.

But Justice Chaudhry’s successors, at least two of them, successfully strove to tamper judicial activism with due exercise of restraint and thus made the court’s policy of infrequent interventions in the affairs of other organs of the state not only more effective but also more satisfying. While the court will have reason to avoid looking like its pre-2000 predecessor or the Chaudhry court, it might find it hard to give up the possibility of a meaningful intervention that the situation all too clearly demands. At the same time, it might not like to be known, in view of earlier decisions against Yousuf Raza Gilani and Raja Pervez Ashraf, as the chopping block for prime ministers’ heads. For that reason, Chief Justice Anwar Zaheer Jamali has declared that extreme action against Prime Minister Sharif will be taken only if it is justified by 100 per cent credible evidence.

Although all sorts of comments on the case are being made in the media, respect for the Supreme Court demands avoidance of speculation on the course of events. Fortunately, the relevant issues have been reduced to two questions: Did any money go out of Pakistan and whether the prime minister was a party to it; and has the prime minister failed to file a correct statement of his assets?

The question as to where the burden of proof should lie will, of course, receive due attention. The court will no doubt weigh the evidence presented by the parties and decide on the basis of facts established before it. In case of lack of conclusive evidence, the court will be free to accept the prayer to create a commission to investigate the matter or it may refer the issue to the people.

Whatever the outcome of the case, the government will come under increased pressure to remove inadequacies and flaws in its accountability regime. Nothing short of an independent, autonomous institution, duly protected under the Constitution, enjoying all necessary powers and being answerable only to the parliament, is likely to satisfy the public demand for effective accountability.

However, neither stiff laws nor efficient institutions will succeed in establishing the rule of propriety in politics in due measure until the people can mobilise a social force to guide and oversee a transformation of the country’s politics in favour of a genuinely representative and responsible dispensation. Such a force can materialise only if the society is freed of the feudal culture and the mindset that obliges the people to suffer corrupt and inefficient rulers and tolerate the denial of their rights.

Until that happens, the people will have neither true democracy nor an impeccable system of accountability. Nor perhaps even a justice system capable of upholding the rights of all the people, regardless of their belief, gender, social status or domicile, in accordance with the highest standards of fair play and equity.

Wisdom warns against delaying legal reform till the society begins to accept its challenges or putting off social change priorities till an accountability mechanism is perfected. Both undertakings must be taken up simultaneously for they are interdependent; success on either front will yield dividends on the other one. If that happens, the time and resources expended on the Panama Leaks affair will not have been in vain.

This article was originally published as the cover story in the Herald's December 2016 issue. To read more subscribe to the Herald in print.