Pakistan has a long history of political corruption which has been interwoven with military coup and resulted in political paralysis. Susan (1997) has argued that since its inception in 1947, political corruption has been remained part and parcel of Pakistan and has consequently politically plagued and paralyzed it. Following the same line, the incumbent government of Pakistan under the Prime Minister Nawaz Sharif has been entangled in the Panamagate scandal revealed to the public on April 3, 2016 by the International Consortium Investigative Journalists (ICIJ).
The scandal has created an uproar, and a case was filed in the Pakistan Supreme Court against PM Sharif by Imran Khan, the opposition leader of Pakistan Tehreek-e-Insaf (PTI). After long hearings and the grilling of PM Sharif and his family members, including his brother CM Shehbaz (Punjab), the verdict has been put on hold. After examining the actions and reactions on part of both plaintiff and defendant, it is anticipated that there will be serious implications not only for Pakistan but also for the region. Against this backdrop, this article will examine the Panamagate scandal to unfold its implications for Pakistan.
Pakistan has a long history of corruption. In his address to the first Constituent Assembly of Pakistan on August 11, 1947, Muhammad Ali Jinnah, the founder of Pakistan, acknowledged that corruption is a curse for the nation. In this context, it is worth mentioning his quote here: “Corruption is a curse in India and amongst Muslims, especially the so-called educated and intelligentsia. Unfortunately, it is this class that is selfish and morally and intellectually corrupt. No doubt this disease is common, but amongst this particular class of Muslims it is rampant.” These prophetic words of Jinnah have proved to be true beyond an iota of doubt.
As per the report of Transparency International’s 2016 Corruption Perception Index, Pakistan stands at 116 out of 176 countries. Dawn explains that this score indicates the “high level” of political corruption in the country. The scale and scope of corruption in Pakistan is massively prevalent in political corruption, procurements (particularly in defense and public sector corporations), development projects, and bank loan write-offs (National Anti-Corruption Strategy 2002).
In order to check the high prevalence of political corruption in the country, Pakistan has well established anti-corruption mechanism — federal laws (Prevention of Corruption Acts: 1947, 1950 and 1958); provincial right to information; and three sets of courts. Apart from this, at the federal level the organizational setup includes the Federal Investigation Agency (FIA) and National Accountability Bureau (NAB); at the provincial level are the Anti-Corruption Establishments (ACEs). Despite the well placed anti-corruption mechanisms, corruption has been remained part and parcel of the political system. Thus, the Panamagate case has not surprised anyone.
Since it was uncovered by the ICIJ, the Panamagate scandal, also known as the Panama Papers, has made headlines throughout the globe and in Pakistan in particular. As far as Pakistan is concerned, the house of Sharif is named in the Panama Papers. The eight offshore companies listed in the Panama Papers are linked to PM Sharif’s family members including one daughter, two sons, and the in-laws of his brother Shehbaz Sharif, the incumbent Chief Minister of Punjab. As per the records of the Panamanian law firm Mossack Fonseca, which specializes in offshore tax havens, the family members hold the ownership of four offshore companies, such as Nescoll Limited, Nielson Holdings Limited, Coomber Group Inc, and Hangon Property Holdings Limited. The PM’s daughter Mariam and his sons Hassan and Hussain were “owners or had the right to authorize transactions for several companies’ owners.” The companies acquired luxury real estate in London in 2006-07, and according to the Panama Papers, this real estate was used as collateral for loans amounting to USD 13.8 million.
Taking note of the leaked reports, which identified PM Sharif, the CM, and their family members, the case Civil Petition No. 29 of 2016 was filed in the Supreme Court by PTI leader Imran Khan. It was alleged by the plaintiff that this is a case of money laundering and corruption, and in order to counter this, the PM Sharif has given contradictory statements about the Panama Papers’ establishment of links between his family and the eight offshore companies.
The Panamagate Case was started in the Supreme Court of Pakistan on November 1, 2016. The case was headed by the Chief Justice on a bench with Justices Asif Saeed Khan Khosa, Amir Hani Muslim, Sh. Azmat Saeed, and Ijaz-ul-Ahsan. PTI leader Imran Khan has been represented by Bokhari and Hamid Khan, and the legal counsel for PM Sharif and his family are senior lawyers Salman Aslam Butt and Akram Sheikh. Other petitions filed by other opposition leaders like Jamaat-e-Islami leader Siraj-ul-Haq and Sheikh Rashid Ahmad were also heard by the court.
The reserved verdict of Panama Case, likely to come in the coming week, had heightened political tensions between the ruling PML-N and the opposition parties.
In their defense of PM Sharif and his family, the lawyers have put up the arguments that although the PM’s daughter and sons owned properties abroad, they have been running a business lawfully for decades. Maryam Nawaz is neither dependent on her father for her business, nor is she a beneficiary of the cited offshore companies Nielsen and Nescoll, but is instead a trustee. In this respect, Justice Khosa asked how was the money earned and transferred lawfully. At the same time, Justice Saeed questioned the authenticity and validity of the plaintiff’s evidence of newspaper clippings.
On April 20, 2017, the Sharif family felt some relief and PML-N declared victory when the Supreme Court delivered a split verdict. Justice Asif Saeed Khosa and Justice Gulzar Ahmed decided against PM Sharif. They were of the opinion that he should be disqualified and cannot be taken as “honest” and “truthful.” The other three judges decided in favor of PM Sharif, holding back his disqualification. However, the Supreme Court ruled that the PM and his children had to face a further investigation by a specially constituted six-man joint investigation team (JIT).
During the last two months, a probe was carried out on PM Sharif, CM Shahbaz, their family members, various ministers, and officials by the JIT team and a report was submitted to the Supreme Court on July 10. By July 21, the Supreme Court concluded its hearings of the case. However, the court has reserved its verdict, which is expected to be announced next week.
An uproar is expected in Pakistan over the verdict, as shown by statements from leaders and ministers and the ruling and opposition parties. As per media, at the party level (Pakistan Muslim League-N), the decision has already been taken not to accept the findings of the JIT probe. At the individual level, blunt views have been stated. PM Sharif said: “The report is a pack of lies.” Talking to the media outside of the SC, Railway Minister Khwaza Saad Rafique said: “We will fight political and legal battle over the Panama Case.” He sees the Panama case as a conspiracy against Pakistan which was hatched abroad to prevent Pakistan from becoming strong and stable, and that a verdict in favor of removal and disqualification would be “a judicial coup.”
PTI Chief Imran Khan has argued that PML-N's decision to reject the JIT report stems from its fear that the investigation will lead to the disqualification of PM Sharif. Imran Khan anticipates that the bench will recommend the immediate removal of PM Sharif under Articles 62 and 63 of the Constitution, which makes disqualification obligatory for lawmakers who are found to be dishonest. Reacting to this, Minister of State for Law and Justice Zafarullah Khan said: “There is no precedent of the court using Article 62 and 63.” But “if a new history is to be made, I cannot say, but there is not a single precedent.” PM Sahrif has stated that at any cost he would not quit the office.
The reserved verdict of Panama Case, likely to come in the coming week, had heightened political tensions between the ruling PML-N and the opposition parties. Relations between PML-N and the Pakistani military has also lost cordiality and congeniality. PM Sharif and his cabinet ministers have alleged from the first day the Panama Papers were revealed that conspiracies had been hatched to topple down the democratically-elected government, and they bluntly blamed the military establishment who used to call the shots in civil, political, and foreign affairs. The government also openly declared that they are not going to accept the verdict of the Supreme Court. Thus, the government is likely to come into direct conflict with the establishment and the judiciary.
Against this background, PM Sharif may invite serious implications in terms of political paralysis for Pakistan. Moreover, the political environment may be further complicated. On July 14, the opposition leaders put pressure on the PM to quit and nominate a new Prime Minister. Moonis Elahi, an opposition politician said: “The situation is very serious for Nawaz Sharif.” Sensing the critical situation, PM Sharif held back-to-back consultative meetings with his legal team and close aides to discuss how to deal with the probable political situation in case of disqualification. Defense Minister Khawaja Asif has emerged as the “most potential candidate” to replace PM Sharif. However, he is also a strong critic of the military establishment. The unfolding situation indicates an ominous outlook for Pakistan.
Pakistan and political corruption have been interwoven since its inception. Despite having a well-established anti-corruption mechanism existing at all levels of the administration, this has failed to check corruption. Political corruption cases have consistently happened in Pakistan. It is anticipated that the Panamagate case is going to politically paralyze Pakistan. The ruling and opposition parties have been on tenterhooks levelling charges and counter-charges. The case has created a wide gulf between the legislative, executive, and judicial arms of government and the army. Out of this infighting, political instability and chaos may emerge, which is likely to create more problems for the common people, and which could in turn lead to violence and law-and-order problems. The country’s interests are larger than the individual and hence efforts should be made to resolve the issue through the due process of law.