September issue 2002
On the Billion-Dollar Trail
About a year ago, a diamond-studded hairband was bought by a Pakistani lady from a jeweller in Turkey for about one hundred thousand pounds and paid for by a credit card in a false name. A chance lead led to a meticulous investigation that spanned two continents and uncovered layers of financial veils, till the purchase was finally traced to its ultimate source of payment. And the team who tracked it down were from Broadsheet, an American asset recovery company.
Fitting together the intricate jigsaw of the complex paper trail of white collar crime is a cumbersome, tedious and highly specialised procedure. Definitely not the stuff that Pakistan’s heavy-handed and archaic investigation methods are made of. In the west, the recovery of illegal assets is a multi-billion dollar business carried out by companies that employ top-notch lawyers, accountants and investigators who charge a hefty fee for their services. One of the best in the business is Broadsheet. Many of their principal operatives have served the CIA, the Serious Fraud Office as well as various governments around the world.
With Pakistan unfortunately being one of the world’s star players in the corruption game, it was only a matter of the right people, being in the right place, at the right time, for Broadsheet to move in. And in June 2000, barely six months after the formation of the National Accountability Bureau with General Amjad as its Chairman, Broadsheet signed a contractual obligation with the government of Pakistan to track down the country’s plundered wealth abroad. For the first time in decades there was a government in place that meant business, and cracking down on corruption took on a whole new dimension.
In just two years Broadsheet, in conjunction with NAB, has already successfully frozen accounts abroad worth millions of dollars belonging to politicians, businessmen, bureaucrats and armed forces personnel. Though the total amount remains a closely guarded secret, millions of dollars in illegal assets have already been recovered, the recent Mansurul Haq case being one example. There are millions more in the pipeline, not to mention new cases on the anvil that are yet to be investigated. Currently Broadsheet is working on a list of hundreds of targets compiled by NAB. Allegedly there is anything between 30-50 billion dollars in illegal assets and corruption money outside Pakistan. “NAB is dealing with people who have the money to hire the best lawyers, the best accountants and who have the resources to fight back, particularly the politicians, who also have other areas of influence,” says a source. “The politicians have really exploited the system and between them, the PPP and the PML (Nawaz Group), have channelled billions of dollars out of the country.” Following hard on the heels of the politicians is Pakistan’s business community who occupy the second tier, then come the bureaucrats and finally armed forces personnel.
Tracking down dirty money internationally doesn’t come cheap and Broadsheet has already invested millions of dollars in Pakistan-related cases. Just to begin an investigation on an important case can notch in at a hefty half-a-million dollars and cases can last from anything between three months to three years. “They are willing to spend even more,” says an informed source. “And have by no means spent all that has been allocated for Pakistan.” Being a commercial entity, it is obvious that Broadsheet has only invested millions of dollars because they are pretty sure they are going to get a return. According to those familiar with this line of business, the initial ground work is the most difficult; forging alliances, tracking funds etc, all takes a couple of years, so Broadsheet should be almost through with that by now, at least in some of the major cases. The second phase is action and the next few months should see many cases successfully closed. Bad news for Broadsheet targets.
With an international task force of thousands of investigators operating in the US, Europe, the UK, the Middle East and the Far East, once an individual becomes a “target,” it is almost a given that Broadsheet will eventually get their man — or woman. Once Broadsheet has established the links between assets and dirty money, nailing the target legally is the job of the law firm associated with Broadsheet that employs over 700 lawyers all over the world.
While all investigation cases are unique, the most interesting and convoluted are those of the politicians. Broadsheet first works on establishing a roadmap of how a particular individual operates before proving that the funds are ill-gotten. Their job is to unveil off-shore companies, money laundering tactics, hundi, where there is no record of any financial transaction at all, etc. Once the links are established, Broadsheet’s legal team steps in. Their first line of approach is to negotiate and bring the target to agree to plea-bargain with the government of Pakistan. If, as was the case with Mansurul Haq, the target is over confident of his or her own strengths and does not take this offer seriously, then the dogs are let loose. Broadsheet have pitched their best international lawyers, particularly in England and Switzerland, in the cases against Benazir Bhutto and Asif Zardari. Their legal team in these cases is headed by an eminent lawyer with many successful cases to his credit. Apparently the cases in the UK and off-shore jurisdictions are going very well and there are also ongoing investigations in the US, the Middle East and Europe which are making good headway. It seems that all NAB needs is one good judgement abroad and all reports indicate that this time around NAB is ahead of them.
The same goes for the Sharifs. According to Lt. General Munir Hafiez, the present Chairman NAB, “They made a deal with the government, but we have their cases. They are adjourned sine die and are currently lying dormant. If they violate their agreement and come back to the country, they will be proceeded against, according to the law.”
Broadsheet, meanwhile, has not stopped their investigations. The Sharif files are wide open and Broadsheet has selected one case which it is actively pursuing and has already gathered enough concrete evidence to pin down the Sharif brothers sooner, rather than later. During the course of their investigations, Broadsheet uncovered a long and complex paper trail that led to Nawaz Sharif. According to an informed source, Broadsheet reported that a Swiss bank allegedly accepted incoming payments for Sharif; this bank apparently also held a US dollar account at an American bank, which in turn reportedly held funds for Sharif in an off-shore entity, named “Hamid,” controlled through a trust held in a bank in the Virgin Islands. This, in turn, was controlled by a private bank in Vaanz, Liechtenstein. Assets in the name of the off-shore company, “Hamid,” reportedly exceeded one million dollars at the time of the original investigation. As far as the Sharif family’s London properties — 16,16A, 17 and 17A Avenfield House and 118-127 Park Lane — are concerned, Broadsheet reported that they were funded by various fraudulent schemes including bank accounts in false names operated in the USA, Pakistan and Saudi Arabia. Allegedly the Sharif family are the beneficial owners of several nominee companies whose total asset veil exceeds 50 million US dollars.
Uncovering and linking such complex trails is beyond the reach of most governments, who do not have access to off-shore markets, or the resources and technical expertise to swing deals with various governments and institutions abroad. All such operations are funded solely by Broadsheet with no expense to the Pakistani government. Broadsheet takes twenty per cent as their commission from the recovered funds returned to Pakistan, which is probably the only country paying this commission rate. Normally Broadsheet charges anything from thirty to fifty per cent. It was General Amjad, former chairman of NAB, who met with the principals of Broadsheet, and persuaded them to settle for a lower commission in Pakistan’s case.
While the government of Pakistan has identified quite a few major business groups who they believe have taken illgotten funds out of the country, Broadsheet has to tread carefully in this area, which has led to perceptions that various businessmen have been let off by NAB and are continuing both with their businesses and their high-living lifestyles. Says a source: “This is not the case at all. Every significant corruption case has been registered by NAB with Broadsheet. For example there is a major business group which the government was, and still is, very seriously pursuing. They are holding one of the major industrial sectors in Pakistan employing thousands of people, which is why the government has allowed them to continue with their business. But that has not stopped the investigation. It might take a couple of years but Broadsheet is mapping out their structure: how they made their money, moved it out and where it is.” The case is apparently progressing satisfactorily and when Broadsheet acquires enough evidence, their assets — both abroad and in Pakistan — will be frozen. NAB will do it in Pakistan and Broadsheet abroad. “We don’t operate like the Ehtesaab Bureau who got their hands on one photocopy and printed it in every newspaper,” says an inside source. “We are profiling almost every important businessman. We plan to get everything. Not just pennies. When a businessman is discredited for some paltry sum, one faces accusations of spoiling the business environment for nothing. Last time around, the government recovered very little and harmed the business environment.”
One case close to conclusion is that of Dr. Shahzad Munawar currently residing in the US who has defrauded the government of 60 million dollars in textile quotas. In September 2001, the then chairman NAB requested the US Department of Justice for legal assistance in their case against Shahzad Munawar. According to a NAB report: “The criminal investigation of Dr. Shahzad Munawar undertaken by NAB has established that Dr. Shahzad Munawar has been engaged in a continuing course of conduct during the tenure of his first cousin and business partner, Chaudhry Ahmed Mukhtar as federal minister of commerce… aiding and abetting the latter in the embezzlement of and the fraudulent and illegal distribution of textile quota in the open market…” Behind Shahzad Munawar are other local businessmen who were part of the scam.
Despite NAB’s sincerity in actively pursuing most registered targets, working with a government body has its frustrations. A commercial company like Broadsheet, which has invested millions of dollars in Pakistan-specific cases, would obviously like a return on their investment as fast as possible, so their pace of work is much faster. “NAB is run by armed forces personnel who are new to this game and this is really not their field,” says an informed observer. “Then they are assisted by various local intelligence agencies who, apart from lacking the technical legal expertise in gathering solid information that can stand in a court of law, often have their own priorities, goals and agendas, which may often be at divergence with NAB or Broadsheet’s objectives.” Reportedly, quite often the quality of information provided is seldom of any use. Broadsheet have a team of over a dozen lawyers in Pakistan checking and cross-checking all the files they get.
The government of Pakistan’s legendary slow work ethic has often caused unnecessary delays in moving against targets. It has, at times, taken the government up to a year to decide whether they want to go after a certain individual or not, even after they have been presented with the evidence. For Broadsheet this is a waste of time and money. One such case is that of Jamil Ansari, an arms dealer who turned witness in the Mansurul Haq case, but who still has much more to answer for. Earlier this year, Broadsheet made a formal request to NAB to register Jamil Ansari as a target. Says a Broadsheet report: “The evidence available to us does not end however, with Ansari’s corruption of Haq. The evidence suggests that Haq was only one of many officers corrupted by Ansari… Having established the criminal conduct of Ansari, formal registration of him as a Registered Target is warranted… various vehicles and ventures have been set up by Ansari in connection with his money laundering activities… the proceeds held in these accounts in various countries may now lawfully be seized… The time to act is now…”
However, despite this strongly worded request, Broadsheet has still not been given the green signal to move against Ansari. It is clear that behind Ansari lie many trails leading to, among others, armed forces personnel.
According to informed sources, cases related to the Bhutto and the Zardaris were moving at an inordinately slow pace last year. “There were constant complaints from the prosecution team abroad over the inaction of the Pakistani prosecuting teams,” says an insider. “When the pace slows it is tantamount to helping the other party. There were also inherent procedural difficulties which have since been rectified by General Munir Hafiez, and now the pace has picked up again. He is running a much tighter ship.” Today the Bhutto cases in London are proceeding full steam ahead and both Broadsheet and NAB are confident that a conviction in the UK is on the cards in the very near future. The Zardari cases, too, are being tracked and monitored in Switzerland, Poland, the UK, the US and Spain.
Security leaks are another concern and in certain cases Broadsheet does not even alert local intelligence agencies as to the identity of their targets. In a few sensitive cases the information is only for the ears and eyes of the NAB chairman. And with good reason. Broadsheet lost a juicy target, days away from extradition in Monaco, allegedly due to a security leak. Many registered targets are continuing to give Broadsheet the slip because Pakistan has extradition treaties with very few countries, so targets often skip from one country to another with Broadsheet chasing close behind. “Opening an extradition treaty is a complicated legal process,” says a legal expert. “It takes weeks to make up a formal request which often has to have an accompanying text in the language of the particular country, so lawyers conversant in both English and French, for example, have to be employed and that is a lengthy and expensive procedure.”
As far as armed forces personnel go, Broadsheet has full authority from NAB to go after anyone perceived to be living beyond their means. Currently Broadsheet is moving against a dozen senior retired armed forces personnel including generals as well as airforce and navy chiefs. “There is accountability at the highest level in the armed forces,” says General Hafiez. “In the past, three star generals have been sent home. Those who are serving are beyond NAB’s jurisdiction, as is the judiciary. There are also cases of retired army personnel in the courts, which I cannot touch.” According to a source in Lahore, NAB is actively pursuing Lt. General (retd) Zahid Ali Akbar, the former Chairman of WAPDA. Once Broadsheet submits all relevant documents and evidence, the case is actively pursued by NAB. “There are no holy cows any more,” says a source. And neither have corrupt bureaucrats like Salman Farooqui been forgotten. “NAB has given Broadsheet a ‘go’ on him and he is high on their priority list,” says an insider. “He’s on the run and has fled America but they are tracking him down.”
While at times, NAB’s apparent inaction has given rise to public speculation that many big fish are being allowed to swim free and escape the net, it is actually Broadsheet that has requested NAB to put on the brakes in certain cases where Broadsheet feels it would jeopardise the case if NAB were to go public or move too soon. So, much against the basic military grain of quick action, NAB has allegedly been reluctuantly persuaded to follow the sensible, but undoubtedly frustrating, Confucian adage: “slowee, slowee, catchee monkey!”
Broadsheet’s experience in Pakistan-specific corruption has revealed that there are only a few major groups operating and that most corrupt people are linked, even though they might be operating independently. So if they hit one target, that individual opens up a treasure chest of names and beneficiaries. As is common practice in such investigations, Broadsheet has targeted and compromised some relatively insignificant cases linked to more important ones and turned them into double-agents. “They have insiders working for them in many of their high-priority cases,” says a source. “It’s just a question of money. These agents were being paid by one individual, now they are being paid by somebody else, or may even be on the payroll of both.” Broadsheet employs a number of under-cover operatives in Pakistan, in both business and social circles. Apparently their most effective undercover operatives in Pakistan are women and they have close to 50 female operatives working in social circles in Karachi, Lahore and Islamabad. Pakistan is apparently one of the easiest places in the world as far as intelligence gathering is concerned — everybody is willing to talk and there is no shortage of aggrieved parties.
However, despite all its years of international experience in asset recovery, in Pakistan, one prominent businessman has given them — and NAB — a run for their money — and they are still running after this elusive and highly connected financial Machiavelli, who so far is still master of the game. “We know he pays just 25 or 30 thousand rupees tax a year and has laundered millions, but he operates within an amazingly complex web of off-shore and dummy companies in dozens of countries,” says an informed source. “We have peeled away countless layers but have yet to get to the core. One day we’ll get him.” Meanwhile he continues to run a business empire that stretches from Karachi to the Khyber.
Broadsheet appears to be confident that now after investing two years of time and money, the recovery ball will soon start rolling and they will eventually be able to recover at least 20 billion dollars of the government of Pakistan’s stolen funds. It might take five or 10 years but they are confident of success. However, five or 10 years in Pakistan is a lifetime. Can Broadsheet survive in a country where elected prime ministers are sent packing overnight? It seems that unlike prime ministers, Broadsheet is here to stay — at least till they’ve accomplished what they set out to do in June 2000.
When they approached the government of Pakistan, Broadsheet was more than aware that their major targets would be politicians and that those same politicians — now in exile — may well come back to power. So the contract was accordingly designed to continue even if a government hostile to Broadsheet comes to power. “If they are chasing a former PM now and he, or she, becomes a sitting PM again, they can still chase them,” says an inside source. “They operate outside the country and have an omnibus power of attorney which is irrevocable till Broadsheet is satisfied with the outcome of the case. Nothing can stop Broadsheet as far as the list of registered targets is concerned. Even if the contract itself is cancelled by any future government, they will still be free to investigate and prosecute abroad.”
Nobody, it seems, can get away from Broadsheet. And perhaps, finally, there is a chance that between Broadsheet and NAB, a major chunk of Pakistan’s plundered wealth will find its way home.