Pakistan: Broadsheet Scandal and Accountability

It is extremely difficult to reconstruct what happened in Pakistan's Broadsheet scandal because the text and terms of the contract and the subsequent actions not being disclosed fully and honestly. Those responsible have never been held accountable.

Posted on 03/6/21
By Ikram Sehgal | Via ViewsWeek
(Photo by Philip Schuler / World Bank, CC license)

Many of the foreign contracts that seem badly framed are actually motivated so.  Manipulated by corrupt elements to line their own pockets, they have now come to haunt us legally and financially, Broadsheet is the latest of several sorry examples of large amounts of our precious foreign exchange have been wasted in paying penalties.

It is extremely difficult to reconstruct what happened in the Broadsheet scandal because the text and terms of the contract and the subsequent actions not being disclosed fully and honestly. Those responsible have never been held accountable. An honest and competent professional soldier Lt Gen Mohammad Amjad was mandated by Gen Musharraf to form the National Accountability Bureau (NAB). Notwithstanding an initial display and sincerity for accountability, that commitment was systematically compromised in later years by Musharraf because of self-survival requirements.

Amjad engaged two firms, Broadsheet and International Asset Recovery (IAR), in 2000 to find out the assets of 200 Pakistanis that were suspected of having illegally taken out ill-gotten and untaxed money of Pakistan to acquire properties abroad in the UK and elsewhere. Given our limited forensic capability and the known expertise of foreign entities engaged in tracing out illegal assets and bank accounts, this was a correct and legitimate undertaking.

Amjad’s mistake was trusting the likes of Farouk Adam Khan, Saeed Akhtar Malik, etc, his schoolmates from Lawrence College.  The character qualities of these Gallians changed for the worse while serving jail sentences.  The first to get rid of an impediment to their designs, another known honest professional soldier, Maj Gen Inayat Ullah Khan Niazi, Amjad’s No 2 as Director-General. Incidentally, he actually symbolizes the tremendous character most Gallians are made of.  After his departure from NAB, they ran riot with the wielding of the “plea bargain” for lining their pockets.  According to Amjad what do you expect from the Broadsheet agreement if Farook Adam’s son was employed by their associate company?    Unfortunately, Amjad discovered their perfidy too late.

The main target of Musharraf’s action was Nawaz Sharif, his family, and the billions that they had stolen over the decades. The names of Ms. Benazir Bhutto, her husband Asif Ali Zardari, and others belonging to PPP were included later in that list. The contract signed with Broadsheet stipulated that 20% of the discovered assets as payment for the company. To establish political legitimacy the Musharraf government realized that they needed the cooperation of some of the politicians and bureaucrats mentioned in the NAB list given to the contractors, Broadsheet and IAR. Those were instructed to be taken out of the list. However, removing the names from the list that had been agreed upon in the contract violated the substance of the contract and could not have been done by one side only. This created trouble that led to the suspension of the contract pending negotiations.  When that turned out not to be possible, the NAB suspended the contract with Broadsheet and IAR, three years later in 2003.

On 5 October 2007, Musharraf derailed accountability and institutional corruption by enacting an NRO that granted amnesty to politicians, political workers, and bureaucrats who were accused of corruption. In November 2009, the Government of Pakistan released a list of the beneficiaries of the NRO on the directives of Prime Minister Syed Yousuf Raza Gilani. The total list comprised 8041 most of whom were bureaucrats.  It did include some high-ranking politicians, such as the then President Asif Ali Zardari and Prime Minister Yousuf Raza Gillani himself, Rehman Malik, Hussain Haqqani, the Sharif family, etc, some of those names had been on the Broadsheet list as well. But on 16 December 2009, the Supreme Court of Pakistan declared NRO unconstitutional making it null and void, all the 8041 persons became again legally responsible for their corruption.

Before their contract expired Broadsheet and IAR had already detected considerable assets abroad some of thereof listed persons abroad, the reward stipulated in the contract had thus to be paid regardless. The matter ended up in front of UK courts. By that time the Musharraf government was on its way out and in 2008 a PPP government was installed. In an ill-devised attempt to settle the matter, the PPP paid a US$1.5 million payment to the wrong company. That certainly didn’t help with the pending court matter. At one point, IAR was paid out and only Broadsheet remained to be settled. All arbitration proceedings regarding Broadsheet’s claims were held during the subsequent governments of PPP and PML-N. It was during the rule of PML-N in 2016 that the proceedings came to a conclusion and a verdict was given. It is not surprising that it was kept secret by the Nawaz government despite the fact that Nawaz assets were the main bone of contention. The court ruled that Broadsheet had to be paid $20.5m for the information the company had gathered about the Sharif family’s ill-gotten assets, including the Avenfield property.

The PTI govt thus inherited the mess from the previous governments. Explaining the problem to the Senate members, Adviser to the Prime Minister on Accountability Shahzad Akbar informed them that the second part of the liability award, out of the total $21.5m, was fixed at $1.5m for tracing Avenfield properties of the Sharif family. He said another $19m liability was fixed for the Sharif family’s other assets. The total liability was $21. 5m and the government had to pay the remaining amount out of a total of $29m in the form of interest due to the pendency of the matter. PTI government made this payment on Dec 31, 2020, because no other forum for appeal had been left and $5,000 per day had been fixed as the penalty for any delay in the payment.

The Federal Cabinet has formed an inquiry committee with one of the most renowned and honest retired Justices of the Supreme Court, Justice Azmat Saeed, nominated to head the Commission.   Any guesses why the Opposition is protesting loudly? With the task to investigate in 45 days the fresh revelations in a verdict of a British court in the UK-based asset recovery firm Broadsheet LLC case and fix the responsibility on those Pakistanis who, according to the firm, had illegally benefited themselves and laundered money to off-shore banks.

The idea of accountability is not well established in Pakistani minds. Pakistan is not alone in the world with this problem, but that others have the same or similar problems should not pacify us. Accountability means that one has to take responsibility for his (or her) dealings in life, professional and private. From an early age, children have to learn that the consequences of their actions are theirs, too. If they break window glass or do any other harm to others, they are responsible and have to make up for it. The lack of being made to take responsibility for actions that harm others is a serious fault. In professional life, it leads to financial or material harm of the institution for which one works. The higher the position a person occupies in his or her professional life the more is the responsibility he or she has to take. It certainly requires for the responsibility to be well established beforehand so that one knows what is coming.

One part of taking responsibility is connected to contracts. A contract is a written, sometimes even oral agreement between two or more sides to provide a certain service and receive a certain reward. To keep the contract intact is the responsibility of all the contract takers. There are sanctions defined for violating the terms of the contract which is why it is essential to read the small print before a contract is signed and the responsibility is taken. In the West, over the years and decades if not centuries the idea of the invulnerability of a contract has been established. A contract once concluded is sacrosanct and getting out of it is possible only with the sanctions established in the contract. In Pakistan and other countries where capitalism and the connection with it contract philosophy is new and not well established the old practice of looking at a contract as merely an option that can be re-negotiated and changed even one-sidedly is common. But such an attitude and practice bring high risks for the contract takers, especially the weaker side of it. Under such circumstances when conditions of a contract and their application are vulnerable and become kind of optional, the contract bears high risks for the sides. These risks have been experienced by Pakistan and we have paid a high price for our juggling of contracts and the missing idea of accountability.

The drama that has been playing out mainly behind closed curtains for the general public shows that fighting corruption and installing accountability – a task that the PTI govt has made one of its main goals is a difficult process and needs hard decisions. Everybody is accountable and has to be made accountable, this needs process without political considerations, friendly or family ties.  Our Client-Patron relationship syndrome must end.  Huge amounts of money that rightfully belong to the Pakistani people have been stolen by corrupt politicians and bureaucrats and had to be paid for an abused contract – money that should have been used to fight poverty, bring the economy on track and educate our people. All legal action to recover ill-gotten assets from the 8041 on the NRO list (and all those who are involved in corruption ever since) should be taken by clamping down on their properties within reach. People will understand their responsibility only when it hurts.

The writer is a defense and security analyst.

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