June issue 2016
End of Empire? The Panama scandal won’t go away so easily.
Agreed that way back in 1983 our longtime prime minister-in-waiting, Imran Khan, formed an offshore company, which was used by him to purchase a flat in London. In fact, the great Khan did what many other professionals and business people do even today: he thought long-term so that he could avoid the heavy taxation he would incur in the UK if he chose to sell his property any time in the future. There was nothing illegal, unlawful, unethical or immoral about this transaction. After all, Imran Khan raised the funds to purchase the 110,000 pound sterling flat by paying the amount of income tax due in Britain. And being a foreigner residing there, by setting up the offshore company, he avoided double taxation – as permitted under the British legal system.
So does Imran Khan’s purchase of a London flat more than three decades ago make the offshore wheeling-and-dealing of Prime Minister Nawaz Sharif, his two sons and a daughter justified or kosher?
Unfortunately, many of Nawaz Sharif’s close aides and mouthpieces want us to believe that Imran Khan’s confession regarding the ownership of an offshore company means that Sharif and his family members should also be allowed to get away with their multi-million pound foreign transactions, with no questions asked. But Nawaz Sharif’s supporters need to be told in no uncertain terms that there is no parallel between a public office-holder and a private citizen, which Imran was at the time of his property transaction in the UK. It is not simply a question of morality or ethics – it is about less abstract things like the legality of the transactions done by Nawaz Sharif and his family members, including his late father, Mian Sharif, way back in the early 1990s.
The seriousness of this notwithstanding, the government’s official and unofficial propaganda machine – which by the grace of money now also includes leading media houses and a number of journalists and anchorpersons – remains in full swing trying to deflect the fallout of the ‘Panama Leaks’ and absolve Nawaz Sharif and his family from all blame.
The strategy they have adopted to do this is to splash in the media the names of as many Pakistani owners of offshore companies as possible, presumably to show how most of those who matter in Pakistan are corrupt. The implication: Sharif and his family are not exceptions to the rule – rather they are only as culpable as many of Pakistan’s movers and shakers. Also, the government’s official and unofficial propaganda machine aims to take down Imran Khan – Nawaz Sharif’s biggest critic. The fact is, that while the skipper can justifiably be criticised on many counts, financial corruption is not one of them. You may call him ‘Taliban Khan,’ but not ‘Corrupt Khan,’ or ‘Offshore Khan,’ as some of Nawaz Sharif’s lackeys are trying to brand him.
Comparing Nawaz Sharif’s multi-million dollar and pound offshore businesses and property with Imran Khan’s single hard-earned flat is like an analogy between black and white. Pakistanis today know the difference between the earnings from sport and those acquired through robbing the national exchequer, tax evasion, loan defaults, kickbacks and commissions and hosts of other illegal financial activities conducted under the umbrella of governance.
The Panama scandal is a more devastating bombshell for the image and reputation of the prime minister than it is for any other political or business player. Quite a few names featuring in the Panama papers belong to Pakistan’s old political and business elite and their scions, but they are secondary players in the current game of power. The opposition has a point when it demands accountability from the top, rightfully giving those in government accused of financial misdemeanours the titles of “kings and queens of corruption” and “masters of kickbacks and commissions.”
The Supreme Court, in a way, validated the opposition’s point-of-view when it rejected the government’s terms of references (TORs) to form a judicial commission to investigate the Panama scandal, saying it was too vague and included too many names. Clearly it understood this was a strategem aimed at diluting and delaying investigations against the first family.
The crime of which Nawaz Sharif and his family are being accused is not that they established businesses abroad and purchased properties in far-flung lands. Under local law this is not a crime, and any good lawyer can vouch for that. The Sharifs are drawing flak for not disclosing the sources of funding and the money trail which enabled them to establish their grand business empire and buy valuable properties abroad.
The disclosures made in the Panama scandal are not new. They have been haunting Sharif and his clan since the mid-1990s when the Federal Investigation Agency came out with a detailed report about their offshore businesses, properties and sources of funding.
The opposition parties asked some basic questions of Prime Minister Nawaz Sharif and his family, including year-wise details of the income tax paid by them since 1985 and the assets in of each of their names. The query regarding when the five Mayfair, London apartments were purchased and the source of taxable income used to buy them, should not cause Mr. Sharif any major concern. After all, our businessman-turned-politician prime minister would know how to manage tax documents with an able accountant like Ishaq Dar at his disposal. The opposition’s demand for the details of property held by the Sharifs between 1985 and 2016 and the source of taxable income to buy those is also a straight and simple question.
But the manner in which the prime minister and his camp are evading these questions and attempting to mitigate the seriousness of the corruption charges clearly indicate that the government camp is nervous and feeling the heat.
The four contradictory statements regarding the ownership of the Mayfair flats by the Sharifs did not help the family’s case. Nor did the prime minister’s two addresses to the nation on television and his rare appearance in Parliament on May 16. His speech in the House, in fact, raised more questions. The tone and message of the speech suggested that Sharif wants to take on the opposition rather than yield to their fair demand for answers to even the few fundamental questions about the origin of his offshore wealth and property. And Sharif’s call for “comprehensive accountability” in his speech was clearly a threat to the opposition. The bottom line: the prime minister is not likely to play ball with the opposition.
In this case, chances are that the political temperature and polarisation will increase in the coming days and weeks – both inside and outside parliament. This is indeed bad news for Pakistan, its fragile democracy, and the system, because prolonged periods of instability and confrontation can prove lethal for any country.
Sharif and his ruling party must acknowledge the fact that the Panama scandal is a graver challenge than the twin dharnas by Imran Khan and Tahirul Qadri in 2014. The Panama scandal has discredited not just the prime minister, but also thrown into question the legitimacy of our entire political system, in the process exposing its inherent weaknesses which allow the most corrupt and the most ineligible to rise to the highest echelons of power.
The scandal also underlines the fact that the system lacks an inbuilt, independent and autonomous system of accountability, which can auto-correct itself and throw out the rotten eggs. The FIA, the National Accountability Bureau, the anti-corruption departments and the police all have been politicised and stand compromised because they all lack operational autonomy and independence.
In our parliamentary system, the prime minister has emerged as a dictator, as there is no way other than judicial activism – or extra-constitutional methods – to oust him from power if he crosses the red line and indulges in mega-corruption or stands accused of misrule, poor governance and working against the national interest. Any meaningful reforms aimed at empowering the president, institutions, including the judiciary, and the system, do not suit the major political parties which operate more as personal fiefdoms than as democratic entities.
Any system can implode from within if it is unable to hold the corrupt accountable and cannot permanently close the door to their return to power and the holding of public office.
While many people see the Panama issue as a make-or-break situation for Sharif and his politics, there are also other growing concerns that corrupt politicians, including those in the opposition, could backtrack on their demand for accountability because of the fear that they could be embroiled in what this could throw up. If this were to happen, it would aggravate the crisis for the state in the mid-to-long-term.
Pakistan remains in the grip of a cycle of unending instability, the politics of confrontation and a tussle within key institutions, including tense civil-military ties since Sharif returned to power for the third time in 2013. Going by the public perception and the ground reality, this government – like its predecessor – has overwhelmingly failed to provide good and honest governance, manage the economy, empower local governments and protect Pakistan’s core interests on the security and foreign relations fronts. The sooner the source of instability is removed then, the better it will be for the system and the state.
And there can be no denying that it is the Sharifs and their self-serving ways of governance and the politics of vengeance that have become the cause of instability.
The only way to end the impasse and cleanse the system is to ensure transparent accountability – and that should begin with the prime minister.
The ground reality is this: if public and media pressure do not work, if the opposition cannot cage the lion, someone else may choose to. And that may put paid to the political system altogether.
The views expressed in Viewpoint do not necessarily reflect Newsline’s editorial policy.
Amir Zia is a senior Pakistan-based journalist who has worked for leading international and national media organizations, including Reuters, AP, Gulf News, The News, Samaa TV, and Newsline. He currently works for the Bol media group.