September Issue 2015

With the conviction of two army generals in the National Logistics Cell (NLC) fraud case, the Pakistan army seems to have redeemed itself in one of three major corruption scandals in which senior military officers are accused.

The other two cases include one relating to alleged kickbacks received in the leasing of Railways’ land at throwaway prices to the Royal Palm Golf and Country Club in Lahore, and the other to the ISI’s disbursement of funds to anti-PPP politicians to manipulate the 1990 elections. There is also a fourth scandal that has reared its head: that involving two brothers of the former army chief, Ashfaq Parvez Kayani.

The recently-announced convictions of two army generals — Major Gen. Khalid Zaheer Akhtar and Lt. General Muhammad Afzal Muzaffar — for their role in the four-billion rupee fraud at the military-run National Logistics Cell (NLC) is the first case of its kind in the country’s history, sending a message that finally even generals of the Pakistan army can no longer escape accountability.

The adjudication of this case has been made public, which meets a long-standing demand of civil society that all anti-graft drives should also be applied to army generals who were hitherto considered sacred cows.

In the past too, senior army officers have been accused of having received huge kickbacks in a number of purchase deals of military and logistical hardware But these cases were never probed seriously — thus providing civil services officers and politicians an opportunity to label the accountability drives against them over the years as selective and unfair.

In their own defence, armed forces personnel argue that institutional mechanisms exist within the army and the top judiciary respectively to impeach wayward members of these establishments. However, the facts speak for themselves: hardly any general or judge has been held accountable for his misdeeds, or has spent as much time behind bars as Asif Zardari or Nawaz Sharif.

Last month, the army set a precedent by dismissing Major Gen. Khalid Zaheer Akhtar, who headed the NLC, from army service, after finding him guilty of involvement in the NLC scam.  Zaheer’s dismissal from service also stripped him of his rank, decorations, medals, honours and awards and, in addition, entailed the seizure of his pension, the recovery of personal gains and the cancellation of service and allied benefits, including medical facilities.

The army court awarded Lt. Gen. (Retd.) Muhammad Afzal Muzaffar, the other officer charged, a lighter sentence: “Severe Displeasure (Recordable)” which is a disciplinary award for an offence of lesser degree, i.e. violation of procedures, but no personal gains.

Both the officers accused in the case had retired when the investigation into the scam was launched five years ago, but were recalled to service for their trial under military law. The army said the inquiry established that two retired generals and one civilian officer were responsible for making questionable decisions vis a vis investments in violation of NLC rules and regulations, thereby causing serious losses — to the tune of 1.8 billion rupees — between 2004 and 2008.

Although unexpected, there is a precedent for this. When Musharraf was in power he had former naval Chief Admiral (Retd.) Mansurul Haq extradited from the US in 2001 and arrested by the National Accountability Bureau (NAB).

The admiral was implicated in 1994, as Chief of Naval Staff, on charges of receiving commission in the Agosta submarine deal scandal, besides facing allegations of corruption in deals related to the Pakistan National Shipping Corporation (PNSC). He was retired and arrested briefly during Nawaz Sharif’s tenure in 1997, but nothing serious came of it. After being extradited in 2001, he was tried by a military court. Later, the NAB accepted an offer from Mansurul Haq to pay about Rs. 457.5 million (US$7.5 million) — an equivalent of 1,270 years of his salary as an admiral or two years salary of all naval personnel in Pakistan — in exchange for his freedom and closure of all corruption cases.

The recent sentence awarded to two high-ranking officers generates hope that the establishment will not hinder the accountability process in other similar cases such as the much-delayed Royal Palm Golf and Country Club scandal in which the NAB investigation has moved at a snail’s pace for the last 13 years.

Lt. Gen. Javed Ashraf Qazi, former ISI chief and Minister for Railways in Gen. Musharraf’s cabinet, Lt. Gen.(Retd.) Saeeduz Zafar and Maj. Gen. (Retd.) Hamid Hassan Butt have been accused of receiving huge kickbacks in 2001 for leasing 141 acres of prime Railways’ land on Canal Road to developers for a club. The losses accruing to the national kitty: at least 5 billion rupees.

In 2012, the NAB had summoned the three generals for questioning, but no reference has been filed against them to date. In July this year, NAB reviewed five corruption cases in the Pakistan Railways, but steered clear of the Royal Palm Golf and Country Club case.

In 2002, when Siddiq-ul-Farooq, a PML-N leader filed a corruption complaint with NAB against Lt. General Qazi, the general had publicly threatened on a television talk show to “sort this guy out.” A day later, Farooq was kidnapped and severely tortured.

This case has been discussed and investigated at different levels and forums since then. From 2007 to 2012, the Federal Investigation Agency (FIA) took charge of the investigation — but to no end. In 2010, an inquiry by a 20-member committee of the National Assembly had recommended to the government that the three generals be tried on corruption charges and their properties confiscated to recover the huge financial losses to the Railways. However, these recommendations were also ignored.

While the Public Accounts Committee called for cancelling the land lease, this has not been done. NAB claims that it has addressed the issue of financial liability with the renewal of the lease agreement between the Railways authorities and the club’s management, under which an additional amount of 16 billion rupees is to be paid by the latter.

The billion rupee question however, remains: if the generals involved in the NLC scam can be punished by the army, why not those in the Royal Palm Club fraud, if they are found culpable.

Another much-delayed high-profile corruption case — the Asghar Khan case — involves alleged funding by the Inter Services Intelligence (ISI) to politicians and the manipulation of the 1990 general elections. This case has been lingering at different forums for the last 21 years.

In 1996, Asghar Khan filed a human rights petition in the Supreme Court against former chief of army staff, General Mirza Aslam Beg, former chief of the Inter-Services Intelligence, Lt. General Asad Durrani and Younus Habib of Habib Bank, and later against Mehran Bank, on the charge of criminal distribution of people’s money for political purposes.

In October 2012, the Supreme Court decided this case and ordered legal proceedings against the former head of intelligence and the former army chief. The apex court directed the government to take legal action against the retired generals involved in the corruption, as well as against Younus Habib, former president of the now defunct Mehran Bank.

The court further ordered that the money that was illegally disbursed among politicians by the then president and the ISI should be recovered and deposited in Habib Bank along with accumulated interest. After a year of the court’s decision, the FIA initiated investigations into the case, but has apparently found nothing of merit so far.

There are many other serious complaints of corruption and graft against top officers in the armed forces, which have yet to be investigated.

For instance, it is alleged that in the mid-1990s, kickbacks of millions of dollars were received by some high-ranking officers from a Ukrainian tank company for the purchase of 300 Ukrainian tanks for the Pakistan army through a middleman. Former Prime Minister Nawaz Sharif appointed Major General Zulfiqar to probe the charges, but later the case was hushed up.

During the Pervez Musharraf regime, a former three-star general was also accused of dishing out many lucrative road contracts to a Punjab-based firm without any public tenders.

Had the NAB and the army’s internal accountability system conducted a transparent investigation into these allegations, it would have worked as a deterrent to civilians. Already, the
conviction of two generals in the NLC fraud has lent credibility to the anti-corruption drive underway in Sindh. But the road to across-the-board accountability is long and winding, and there are a myriad roadblocks along the way.

This article was originally published in Newsline’s September 2015 issue.