Posts Tagged ‘pmlq’

ایک پرانا لطیفہ ہے کہ ورلڈ ٹریڈ سنٹر تباہ ہوا تو امریکیوں نے دنیا کی اینٹ سے اینٹ بجا دی، اگر ورلڈ ٹریڈ سنٹر پاکستان میں ہوتا اور تباہ ہوتا تو حکومتِ کیا کرتی؟ جواب: ”ڈبل سواری“ پر پابندی لگا دیتی۔ اب اس جواب کو تھوڑا جدید کر لیں، جواب: ڈبل سواری اور موبائل نیٹ ورک پر پابندی لگا دیتی۔

ایک دفعہ جنگل میں الیکشن ہوئے اور بندروں کی تعداد زیادہ ہونے کی وجہ سے بندر بادشاہ بن گیا۔ شیر کو اپنی اس ہار پر بہت افسوس ہوا۔ ایک دن اس نے راہ چلتے ہرنی کا بچہ پکڑ لیا۔ ہرنی دوڑی دوڑی بادشاہ (بندر) کے دربار میں پہنچی اور فریاد کی کہ شیر نے میرا بچہ پکڑ لیا ہے۔ بادشاہ سلامت انصاف کیجئے اور اسے چھڑائیے۔ بندر نے کہا تم فکر ہی نہ کرو ابھی چھڑا دیتا ہوں۔ یوں بندر نے اپنی دوڑیں لگا دیں۔ شیر کے پاس جانے یا کوئی مناسب حکم نامہ جاری کرنے کی بجائے، بڑی تیزی سے ایک درخت سے دوسرے اور دوسرے سے تیسرے درخت پر چھلانگیں لگاتے ہوئے پورے جنگل کا چکر لگایا۔ پھر تھک ہار کر ہرنی کے پاس پہنچا اور کہنے لگا، دیکھو میں نے تو بہت جان مار کر دوڑ لگائی ہے، اپنی ساری توانائی لگا دی ہے، اب بھی اگر شیر تمہارا بچہ نہ چھوڑے تو بھلا میں کیا کر سکتا ہوں، شیر یقیناً دہشت گرد ہے۔ مزید بادشاہ بندر نے پریس کانفرنس کرتے ہوئے کہا کہ یہ کام دہشت گرد شیر کا کیا دھرا ہے، جو میری حکومت گرانا چاہتا ہے۔ میں نے بہت دوڑ لگائی جو آپ کے سامنے ہے۔ اب ہم نے بندروں کی کمیٹی بنا دی ہے اور مجرموں کو جلد ہی کیفرکردار تک پہنچائیں گے۔

تقریباً ہر دور میں ہمارے حکومتی بندروں کا حال بھی کچھ اس بندر جیسا ہی رہا ہے۔ جس سمت میں دوڑ لگانی چاہئے اس طرف ذرہ برابر بھی نہیں جاتے بلکہ بندر کی طرح فضول دوڑ لگاتے ہوئے ڈبل سواری پر پابندی اور اب زیادہ سے زیادہ موبائل نیٹ ورک بند کر دیتے ہیں۔ جتنی ہماری حکومتیں ہر کام پر کمیٹیاں بنا چکی ہیں اور ان کمیٹیوں کے ممبران کی تعداد اتنی زیادہ ہو چکی ہے کہ اگر ہر کمیٹی کے ممبر مختلف ہوں تو پھر یقین کرو پوری عوام کمیٹیوں کی ممبر بن جائے۔ مگر کمیٹیاں بنتی ہیں، ایک محکمے سے دوسرے محکمے میں بندے جاتے ہیں۔ الاؤنس ملتے ہیں اور پھر فائلیں بند، غریب عوام کا پیسہ ہضم۔ اس ملک کا ایک المیہ تو یہ بھی ہے کہ چند گنے چنے اچھے عہدیداران کے علاوہ جو جتنا بڑا بندر ہے وہ اتنے بڑے عہدے پر جا بیٹھتا ہے۔

کافی عرصہ پہلے ایک خبر پڑھی کہ حکومت پاکستان نے ایک بڑے پروجیکٹ پر کروڑوں روپے لگانے ہیں جس کے تحت بڑے بڑے سرکاری افسروں کو بلیک بیری موبائل لے کر دیئے جائیں گے تاکہ جدید ٹیکنالوجی کو استعمال کرتے ہوئے عوام کی اچھی خدمت کر سکیں۔ اب پتہ نہیں اس پر عمل ہوا تھا یا نہیں مگر جب میں نے یہ خبر پڑھی تھی تو مجھے بہت ہنسی آئی کہ وہ افسر جو سرکاری کاموں کی تفصیلات ای میل وغیرہ کرنے کی بجائے اپنا ”ٹی اے ڈی اے“ بنانے کے چکر میں سرکاری گاڑیاں دوڑاتے رہتے ہیں، ان کو بلیک بیری کی بجائے ”کھوتے“ لے کر دو۔ ویسے بھی گدھا کیا جانے ادرک کا سواد۔

پچھلے دنوں سننے میں آیا کہ الیکشن کمیشن آف پاکستان اور نادرا نے کئی مہینے دن رات محنت کے بعد ووٹر فہرست تیار کیں۔ میں کوئی تیس مار خاں نہیں مگر دس منٹ میں ”کیوری“ لکھ کر دیتا ہوں۔ اگر نادرا کی ڈیٹابیس کسی بندے کے پتر ادارے یا ڈویلپر نے بنائی ہے تو پھر ہر علاقے کے حساب سے اور ووٹ دینے کی عمر کے مطابق فہرستیں خودکار نظام کے تحت بن جائیں گی۔ آپ اس دعوی کو کوئی بڑی بات نہ سمجھئے بلکہ جو بھی تھوڑا سا بھی ڈیٹابیس کے بارے میں جانتا ہے وہ یہ کام چٹکیوں میں کر سکتا ہے۔ مگر حیرانی تب ہوتی ہے جب یہ لوگ ایسے چھوٹے چھوٹے کاموں کے لئے بھی اپنے ”بندر“ دوڑاتے ہیں اور عوام کو بتاتے ہیں کہ دیکھو ہم نے کتنی دوڑ لگائی۔

آپ خود اندازہ کرو کہ جن لوگوں کے پاس ٹیکنالوجی کے اس دور میں بھی کوئی سب ڈومین یا کسی ڈومین کا کوئی خاص یوآرایل بند کرنے کا نظام نہیں انہیں بندر نہ کہیں تو اور کیا کہیں؟ موبائل نیٹ ورک کے لائسنس تو جاری کر دیئے مگر جنہوں نے مستقبل میں ہونے والے بے ہنگم موبائل نیٹ ورک پر ذرہ برابر بھی غور نہ کیا انہیں بندر نہ کہیں تو اور کیا کہیں؟

ایک ہندی فلم ”اے وینس ڈے“ میں ایک جگہ ایک بڑے افسر کو ایک عام شہری کہتا ہے کہ ”انٹرنیٹ پر بم ٹائیپ کر کے سرچ مارئیے، 352 سائیٹس ملیں گی کہ بم کیسے بنایا جاتا ہے، کیا کیا چیزیں استعمال ہوتی ہیں، ساری معلومات ملی گی، مفت میں“۔

کچھ ایسا ہی ہم اپنی حکومت کو کہتے ہیں کہ پاگلو! کاش جعلی ڈگریوں کی بجائے تھوڑی سی معلومات حاصل کر لیتے تو آپ کو پتہ ہوتا کہ ڈبل سواری پر پابندی لگانے یا موبائل نیٹ ورک بند کرنے سے کچھ نہیں ہوتا۔ انٹرنیٹ پر تلاش کرو تو ”ہزاروں“ سائیٹیں ملیں گی جو نئے سے نئے رابطے کے طریقے بتائیں گی، مفت میں۔ موبائل نیٹ ورک بند بھی کر دو تو پھر بھی کمیونیکیشن کے ایک ہزار ایک طریقے موجود ہیں اور تو اور ہال روڈ لاہور چلے جاؤ۔ نہایت ہی سستے ایف ایم ٹرانسمیٹر کے ایسے ایسے بنے بنائے سرکٹ ملیں گے جس سے چٹکیوں میں پورا ایف ایم ریڈیو سٹیشن بن جاتا ہے۔ اس کے علاوہ رنگ رنگ کی اور بہت طاقتور واکی ٹاکی مل جائیں گی۔ دور جانے کی ضروری نہیں، پی ٹی سی ایل کے ساتھ زیادہ طاقت ور کارڈلیس سیٹ لگا کر سو دو سو کلومیٹر دوری سے بھی بات کی جا سکتی ہے۔ زیادہ طاقت والے وائی فائی اومنی اینٹینے لگا کر بذریعہ لین یا انٹرنیٹ بات چیت کی جا سکتی ہے بلکہ ویڈیو تک دیکھی جا سکتی ہے۔ یہ تو چند مشہور اور عام طریقے بتائے ہیں جبکہ کمیونیکیشن کے دیگر بے شمار اور محفوظ طریقے سستے داموں مل جاتے ہیں۔

اگر آپ کو لگے کہ میری ان باتوں سے کوئی شرپسند آئیڈیا لے کر خرابی کر سکتا ہے تو عرض یہ ہے کہ یہ کوئی راز کی یا راکٹ سائنس باتیں نہیں بلکہ یہ تو وہ باتیں ہیں جو ایک معمولی سا ٹیکنالوجی کا علم رکھنے والا بھی جانتا ہے، مگر ہمارے بندروں کو معلوم نہیں۔ بالفرض اب اگر موبائل نیٹ ورک والوں نے بندروں کو چنے یا مکئی ڈالنی چھوڑ دی ہے تو اس میں عوام کا تو کوئی قصور نہیں۔ کوئی ان بندروں کو بتائے کہ ڈبل سواری پر پابندی یا موبائل نیٹ ورک بند کرنے سے کچھ نہیں ہونے والا۔ چین نے ایسے ایسے بچوں کے کھلونے بنا دیئے ہیں، جو ”کوڈیوں“ کے بھاؤ مل رہے ہیں اور چند تبدیلیوں کے بعد چلتے پھرتے بم بن جاتے ہیں۔ کوئی تو انہیں سمجھائے کہ انٹرنیٹ پر ایسی چیزوں کے بارے میں تلاش کریں تو ہزاروں طریقے اور راستے ملتے ہیں۔ اس لئے بندروں جیسی دوڑیں لگانے کی بجائے کوئی انسانوں والے کام کرو اور عوام کو مرنے سے بچاؤ۔ خود عیاشیاں کرتے پھر رہے ہو اور عوام کو دہشت گرد کتوں کے سامنے ڈال دیا ہے۔ اگر ایک بھی کسی ”پاگل سیانے“ عام شہری کا میٹر گھوم گیا تو ”اے وینس ڈے“ والے عام شہری کی طرح تمہیں ناکوں چنے چبوا دے گا۔ مانا کہ اس عوام کی اکثریت لمبی تان کر غفلت کی نیند سو رہی ہے اور اسے ابھی تک اپنے حق کا بھی نہیں پتہ مگر پھر بھی عوام کے ”صبر“ کا امتحان نہ لو، اس عوام کو نہ آزماؤ، نہیں تو پھر تمہیں چھپنے کی جگہ بھی نہیں ملے گی۔

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The Pakistan People’s Party (PPP) and the Pakistan Muslim League-Nawaz (PML-N) seem to be heading towards a repeat of the early ‘90s. The National Accountability Bureau (NAB), recently taken over by Law Minister Farooq H Naek, has reopened three corruption cases against Nawaz Sharif within 10 days of the PML-N leaving the coalition.

According to reports, the NAB has sought the reopening of the corruption cases pending against former prime minister Nawaz Sharif, his brother Shahbaz Sharif and other members of the Sharif family. The cases include those concerning the Hudabia Papers Mills, Ittefaq Foundries and Raiwind Farms.

NAB prosecutor-general Dr Danishwar Malik filed a petition with the Court of Special Judge Central (SJC) (Rawalpindi) Shaukat Ali Sajid on Tuesday, as there was no judge present in the accountability courts at present.

The three corruption references in the Hudaibia Paper Mills, Ittefaq Foundries and Raiwind farms cases against Nawaz Sharif, Shahbaz Sharif and other family members were adjourned for an indefinite period by the accountability court on Aug 21.

The SJC fixed Thursday for initial hearing of the cases. The prosecutor stated in his application that the Aug 21 order of the accountability court about the postponement of the cases was based on the observation that the earlier submission of NAB for the re-opening of these cases in August last year was not duly signed by the bureau chairman. He said the previous submission was made by the deputy prosecutor-general as a competent authority and the point that it was not signed by the NAB chairman was not relevant. He said the bureau wants to initiate the proceedings pending against the accused.

In the Hudaibia Paper Mills case, besides Mian Nawaz Sharif, the other co-accused include Mian Shahbaz Sharif, Mian Abbas Sharif, Hussain Nawaz, Hamza Shahbaz, Haroon Pasha and Senator Ishaq Dar. The accused were charged with securing huge amounts as loan in the name of Hudaibia Paper Mills and later using the loan for some other purpose, thus causing a huge loss to the national exchequer.

In the Ittefaq Foundry reference, Mian Nawaz Sharif, Abbas Sharif, Mukhtar Hassan, Kamal Qureshi and a few other persons were accused of securing and abusing huge loans, causing a loss of millions to the national exchequer.

Similarly, in the Raiwind assets reference, the accused include Mian Nawaz Sharif, Mian Shahbaz Sharif, their late father Mian Sharif, mother Shamim Akhtar and other family members. In the reference, the Sharifs are accused of accumulating a large sum of money and assets beyond their declared means of income by allegedly misusing their authority.

According to the official spokesman of NAB, an application was filed in the NAB court in Rawalpindi on Aug 2, 2007, for reopening of the cases against Nawaz Sharif but it lingered in the court because of technical objections. “Today (Tuesday) the court decided to reopen the cases,” said the spokesman.

The cases are being reopened when Nawaz Sharif’s party has nominated Justice Saeeduzzaman Siddiqui as candidate against Asif Ali Zardari for the top slot of the countryand Punjab Governor Salmaan Taseer and Manzoor Hussain Wattoo have been accused of being active in trying to destabilise the Punjab government.

Prime Minister Syed Yousuf Raza Gilani while answering a question at a press conference at the Lahore Airport regarding the reopening of corruption cases against the Sharif family said, “NAB has no worth.”

Pervaiz Rashid, adviser to the Punjab chief minister, told The News that cases of this type were being opened and closed for the last 20 years. “We are neither worried about the opening of such cases nor are we happy over their closure,” said the PML-N leader, adding: “Those who think that they could dictate to us are living in a fool’s paradise.”

He said though the timing of the reopening of the cases against the PML-N leaders was noteworthy, those who were doing so were mistaken. “Whether or not the ground is being paved for a confrontation, neither do we take dictation nor would we accept it from anyone.”

PPP spokesman Senator Farhatullah Babar said the PPP has been saying since day one that it does not accept NAB as it has been used for political motives. He said he was not aware of the reopening of cases against the Sharif brothers.

The role of Governor Salman Taseer right from the time he assumed his office is coming under serious scrutiny and many accuse him of setting the stage for confrontation in the Punjab. According to the PML-N, the recent acts of the governor were a repetition of the 1988 strategy when the representatives of the federal government had summoned and later removed the Punjab chief secretary and the inspector general of police and issued similar orders to them against the provincial administration headed by Nawaz Sharif.

At the time, the PPP had also attempted to oust Nawaz Sharif through a vote of no-confidence but failed. Agencies add: Meanwhile, NAB spokesman Ghazni Khan while taking to a private TV channel said the earlier hearing of these references against Mian Muhammad Nawaz Sharif had been adjourned sine die due to his absence from the country.

Deputy Prosecutor General Zulfiqar Bhutta submitted the application in court, which has been accepted for trial, the spokesman maintained. They were old cases and now NAB has filed an application to reopen them because Mian Muhammad Nawaz Sharif is in the country, he said.

Khwaja Haris, the lawyer of Nawaz Sharif, termed the move politically motivated, as the presidential race grew increasingly testy. “It appears to be aimed at using the accountability courts against Nawaz Sharif,” the lawyer said.”It appears to be used for political ends.”

Sharif aide Ahsan Iqbal said pursuing the cases smacked of “political bankruptcy. Sometimes, if you cannot get things done politically, then you try to blackmail the opposition,” he told a private TV channel. “I would still hope that the ruling party would refrain from such tactics,” he said.

In addition to Mr. Shaukat Aziz, current Prime Minister of Pakistan, numerous former Citibankers occupy highly influential positions in the government and the private sector in Pakistan.

Citibank is one of the largest banks, and operates one of the largest private banks in the US and globally. Of the 40 private banks reviewed by the Federal Reserve during its industry wide examination of private banking in the 1990s, only one — Citibank — was reviewed in detail by Federal Reserve examiners three years in a row. It is a private bank that has struggled with a wide range of anti-money laundering issues. Although Citibank, under Shaukat Aziz’s leadership (from May 1997 to October 1999) and his successors’ has done much to tighten controls, it was beset by numerous scandals during the 1990s.

A 1999 US Congress investigation (exact reference given at end) into Citibank, provides a fascinating inside look at how Citibank helped launder the ill-gotten gains of four high profile corrupt figures: Raul Salinas, brother of the former president of Mexico, Carlos Salinas, Asif Ali Zardari, the husband of Benazir Bhutto, former Prime Minister of Pakistan (reproduced below), El Hadj Omar Bongo, the elected president of Gabon since 1967, and Mohammed, Ibrahim, and Abba Sani Abacha, three sons of General Sani Abacha, who was the military leader of Nigeria from 1993 until his death in 1998.

Of the four case histories provided in the Report, the following is a complete excerpt of the Case History for Asif Zardari. The report also provides photocopies of signed documents, banks records, etc. (listed below, at the end).

[Beginning of Excerpt]

Asif Ali Zardari Case History

The Facts

The second case history involves Asif Ali Zardari, the husband of Benazir Bhutto, former Prime Minister of Pakistan. Ms. Bhutto was elected Prime Minister in 1988, dismissed by the President of Pakistan in August 1990 for alleged corruption and inability to maintain law and order, elected Prime Minister again in October 1993, and dismissed by the President again in November 1996. At various times, Mr. Zardari served as Senator, Environment Minister and Minister for Investment in the Bhutto government. In between the two Bhutto administrations, he was incarcerated in 1990 and 1991 on charges of corruption; the charges were eventually dropped. During Ms. Bhutto’s second term there were increasing allegations of corruption in her government, and a major target of those allegations was Mr. Zardari. It has been reported that the government of Pakistan claims that Ms. Bhutto and Mr. Zardari stole over $1 billion from the country.

During the period 1994 to 1997, Citibank opened and maintained three private bank accounts in Switzerland and a consumer account in Dubai for three corporations under Mr. Zardari’s control. There are allegations that some of these accounts were used to disguise $10 million in kickbacks for a gold importing contract to Pakistan.

Structure of Private Bank Relationship.

Mr. Zardari’s relationship with Citibank began in October 1994, through the services of Kamran Amouzegar, a private banker at Citibank private bank in Switzerland, and Jens Schlegelmilch, a Swiss lawyer who was the Bhutto family’s attorney in Europe and close personal friend for more than 20 years. According to Citibank, Mr. Schlegelmilch represented to Mr. Amouzegar that he was working for the Dubai royal family and he wanted to open some accounts at the Citibank branch office in Dubai. Mr. Schlegelmilch had a Dubai residency permit and a visa signed by a member of the Dubai royal family. Mr. Amouzegar agreed to introduce Mr. Schlegelmilch to a banker in the Citibank branch office in Dubai.

According to Citicorp, Mr. Schlegelmilch told the Citibank Dubai banker that he wanted to open an account in the name of M.S. Capricorn Trading, a British Virgin Island PIC. The stated purpose of the account was to receive money and transfer it to Switzerland. The account was opened in early October 1994.

According to Citibank, Mr. Schlegelmilch informed the Dubai banker that he would serve as the representative of the account and the signatory on the account. Under Dubai law, a bank is not required to know an account’s beneficial owner, only the signatory. Citibank told the Subcommittee staff that Mr. Schlegelmilch did not reveal to the Dubai banker that Mr. Zardari was the beneficial owner of the PIC [Private Investment Company: an offshore company often used to launder money], and the account manager never asked him the identity of the beneficial owner of the account. Instead, according to Citibank, she assumed the beneficial owner of the account was the member of the royal family who had signed Mr. Schlegelmilch’s visa. According to Citibank, the account manager actually performed some due diligence on the royal family member whom she believed to be the beneficial owner of the account.

Shortly after opening the account in Dubai, Mr. Schlegelmilch signed a standard referral agreement with Citibank Switzerland private bank guaranteeing him 20% of the first three years of client net revenues earned by the bank from each client he referred to the private bank.

On February 27, 1995, Mr. Schlegelmilch, working with Mr. Amouzegar, opened three accounts at the Citibank Switzerland private bank. The accounts were opened in the name of M.S. Capricorn Trading, which already had an account at Citibank’s Dubai branch, as well as Marvel and Bomer Finance, two other British Virgin Island PICs established by Mr. Schlegelmilch, according to Citibank. Each private bank account listed Mr. Schlegelmilch as the account contact and signatory. Citibank informed the Subcommittee that the Swiss Form A, a government-required beneficial owner identification form, identified Mr. Zardari as the beneficial owner of each PIC.

Lack of Due Diligence.

The decision to allow Mr. Schlegelmilch to open the three accounts on behalf of Mr. Zardari, according to Citibank, involved officials at the highest levels of the private bank. The officials were: (a) Mr. Amouzegar, the private banker; (b) Deepak Sharma, then head of private bank operations in Pakistan; (c) Phillipe Holderbeke, then head of private bank operations in Switzerland (who became head of the Europe, Middle East, Africa Division in February 1996); (d) Salim Raza, then head of the EMEA Division of the private bank; and (e) Hubertus Rukavina, then head of the Citibank private bank. Mr. Rukavina told the Subcommittee staff that when he was asked about opening the Zardari accounts, he did not make the decision to open them, but rather directed that the matter be discussed with Mr. Sharma. According to Mr. Rukavina, he never heard whether the accounts were ultimately opened. Mr. Rukavina left the private bank in 1996 and left Citibank in 1999.

Citibank informed the Subcommittee staff that the private bank was aware of the allegations of corruption against Mr. Zardari at the time it opened the accounts in Switzerland. However, Citibank reasoned that if the charges for which Mr. Zardari had been incarcerated for two years had any merit, they would not have been dropped. Bank officials also believed that the family wealth of Ms. Bhutto and Mr. Zardari was large enough to support a large private bank account, even though Citibank was not able to specify what actions were taken to verify the amount and source of their wealth. Citibank said that bank officials were also aware of the M.S. Capricorn Trading account in Dubai, and they were comforted by the fact that there had been no problems with that account. According to Citibank, Mr. Amouzegar informed his superiors that Mr. Zardari was the beneficial owner of the Capricorn account in Dubai when they were considering the request to open the accounts in Switzerland. Inexplicably, however, the Dubai account manager was apparently still operating under the assumption that the beneficial owner of the Dubai Capricorn account was a member of the Dubai royal family. Subcommittee staff have been unable to determine whether Citibank officials were unaware of or inattentive to the serious inconsistency between Citibank Switzerland and Citibank Dubai with respect to the Capricorn Trading account. Citibank also informed the Subcommittee staff that bank officials had some concerns that if they turned down the accounts, their actions may have implications for the corporation’s operations in Pakistan; however, they said they never received any threats on that issue.

Citibank told the Subcommittee staff the private bank decided to allow Mr. Schlegelmilch to open the three accounts for Mr. Zardari on the condition that the private bank would not be the primary accounts for Mr. Zardari’s assets and the accounts would function as passive investment accounts. Citibank told the Subcommittee staff that Mr. Holderbeke signed a memo delineating the restrictions placed on the accounts, including a $40 million aggregate limit on the size of the three accounts, and transaction restrictions requiring the accounts to function as passive, stable investments, without multiple transactions or funding pass-throughs. None of the Citibank personnel interviewed by Subcommittee staff could identify any other private bank account with these types of restrictions. Other private banks interviewed by the Subcommittee staff were asked if they had ever accepted a client on the condition that certain restrictions be imposed on the account. The banks all said they had not. One bank representative explained that if the bank felt that it needed to place restrictions on the client’s account, it didn’t want that type of client. The existence of the restrictions are in themselves proof of the private bank’s awareness of Mr. Zardari’s poor reputation and concerns regarding the sources of his wealth.

Movement of Funds.

Citibank told the Subcommittee staff that, once opened, only three deposits were made into the M.S. Capricorn Trading account in Dubai. Two deposits, totaling $10 million were made into the account almost immediately after it was opened. Citibank records show that one $5 million deposit was made on October 5,1994, and another was made on October 6, 1994. The source of both deposits was A.R.Y. International Exchange, a company owned by Abdul Razzak Yaqub [since then, the owner of several ARY television channels that, incidentally, have been providing favorable coverage of Ms. Bhutto’s recent political activities], a Pakistani gold bullion trader living in Dubai.

According to the New York Times, in December 1994, the Bhutto government awarded Mr. Razzak an exclusive gold import license. In an interview with the New York Times, Mr. Razzak acknowledged that he had used the exclusive license to import more than $500 million worth of gold into Pakistan. Mr. Razzak denies, however, making any payments to Mr. Zardari. Citibank could not explain the two $5 million payments. Ms. Bhutto told the Subcommittee staff that since A.R.Y. International Exchange is a foreign exchange business, the payments did not necessarily come from Mr. Razzak, but could have come from a third party who was merely making use of A.R.Y.’s exchange services. The staff invited Ms. Bhutto to provide additional information on the M.S. Capricorn Trading accounts, but she has not yet done so.

On February 25, 1995, a third deposit of $8 million was made into the Dubai M.S. Capricorn Trading account. Records show that the payment was made through American Express, with the originator of the account listed as “Morgan NYC.” Citibank indicated it does not know who Morgan NYC is, nor does it know the source of the $8 million.

All of the funds in the Dubai account of M.S. Capricorn Trading were moved to the Swiss accounts in the Spring of 1995. On March 6, 1995, $8.1 million was transferred; and on May 5, 1995, another $10.2 million was transferred. Both transfers involved U.S. dollars and were routed through Citibank’s New York offices. Citibank informed the Subcommittee staff that M.S. Capricorn Trading closed its Dubai account shortly after the last transfer was completed.

Citibank has indicated that significant amounts of other funds were also deposited into the Swiss accounts. As described below, the $40 million cap was reached, and millions of additional dollars also passed through those accounts. However, Swiss bank secrecy law has prevented the Subcommittee from obtaining the details on the transactions in the Zardari accounts.
Account Monitoring.

Citibank told the Subcommittee staff that, in 1996, the Swiss office of the private bank conducted a number of reviews of the Zardari Swiss accounts, finally deciding in October to close them.

The first review was allegedly in early 1996, triggered by increasing publicity about allegations of corruption against Mr. Zardari. Citibank told the Subcommittee staff that Messrs. Holderbeke, [Salim] Raza, Sharma and Amouzegar participated in the review, and apparently concluded that the allegations were politically motivated and that the accounts should remain open. The Subcommittee staff was told that the review did not include looking at the accounts’ transaction activity.

In March or April, 1996, Mr. Amouzegar asked that the overall limit on the Zardari accounts be increased from $40 million to $60 million, apparently because the accounts had reached the previously imposed limit of $40 million. Citibank told the Subcommittee staff that Mr. Holderbeke considered the request, but declined to increase the $40 million limit.

In June, press reports in the United Kingdom that Mr. Zardari had purchased real estate in London triggered still another review of the Zardari accounts. Citibank private bank told the Subcommittee staff that its Swiss office internally discussed the source of the funds for the property purchase. Mr. Amouzegar and Mr. [Salim] Raza then met with Mr. Schlegelmilch, who allegedly informed them that funds had been deposited into the Citibank accounts, transferred to another PIC account outside of Citibank and used to purchase the property. Mr. Schlegelmilch allegedly indicated the funds had come from the sale of some sugar mills and were legitimate. Citibank told the Subcommittee staff it is not sure if anyone at the private bank attempted to validate the information about the sale of the sugar mills. In addition, even though this account activity violated the condition imposed by Citibank that the accounts were not to be used as a pass through for funds, the accounts were kept open.

Closing the Accounts.

In July 1996, after Mr. Amouzegar left the private bank to open his own company, another private banker, Cedric Grant, took over management of the Zardari accounts. Citibank told the Subcommittee staff that Mr. Grant began to review the Zardari accounts about one month later to familiarize himself with them. He also reviewed the transactions that had taken place within the accounts.

In September and October 1996, press accounts in Pakistan repeatedly raised questions about corruption by Mr. Zardari and Ms. Bhutto, as Ms. Bhutto’s re-election campaign increased its activities prior to a February election date. In September, Ms. Bhutto’s only surviving brother, Murtaza Bhutto, was assassinated, and Ms. Bhutto’s mother accused Ms. Bhutto and Mr. Zardari of masterminding the murder, because the brother had been leading opposition to Ms. Bhutto.

In October, Mr. Grant completed his review of the Zardari accounts and provided a written analysis to Messrs. Holderbeke, Sharma and [Salim] Raza, according to Citibank. Mr. Grant had found numerous violations of the account restrictions imposed by Citibank, including multiple transactions and funding pass-throughs. Citibank told the Subcommittee staff that the accounts had functioned more as checking accounts than passive investment accounts, directly contrary to the private bank’s restrictions. Apparently, well over $40 million had flowed through the accounts, though Subcommittee staff were unable to ascertain the actual amount because Swiss bank secrecy law prohibits Citibank from sharing that information with the Subcommittee. Citibank indicated that Mr. Amouzegar had either ignored or did not pay attention to the account activity. Mr. Grant recommended closing the accounts, and they were closed by January 1997.

[Note: In May 1997, Mr. Shaukat Aziz was transferred at Citibank’s New York headquarters, from his position as head of credit card operations to head of private banking. In November 1996, Mr. Farooq Laghari had dismissed the government of Ms. Benazir BhuttoZardari; and in February 1997, Mr. Nawaz Sharif became Prime Minister.]

Legal Proceedings.

On September 8, 1997, the Swiss government issued orders freezing the Zardari and Bhutto accounts at Citibank and three other banks in Switzerland at the request of the Pakistani government. Since Citibank had closed its Zardari accounts in January 1997, it took no action nor did it make any effort to inform U.S. authorities of the accounts until late November 1997. Citibank contacted the Federal Reserve and OCC [Office of the Comptroller of the Currency, the banking supervision arm of the US Department of Treasury] about the Zardari accounts in late November, in anticipation of a New York Times article that eventually ran in January 1998, alleging that Mr. Zardari had accepted bribes, and that he held Citibank accounts in Dubai and Switzerland. On December 8 and 11, 1997, Citibank briefed the OCC and the Federal Reserve, respectively, about the accounts and the steps it had taken as a result of the Zardari matter. These steps included: closing all of the accounts that had been referred by Mr. Schlegelmilch to the private bank and terminating his referral agreement; reviewing all of the accounts opened in the Dubai office; and tightening up account opening procedures in Dubai, including requiring the Dubai office to identify the beneficial owner of all Dubai accounts. Citibank did not identify any changes made or planned for the Swiss office, even though the majority of the activity with respect to the Zardari accounts had taken place in Switzerland.

On December 5, 1997, Citibank prepared a Suspicious Activity Report on the Zardari accounts and filed it with the Financial Crimes Enforcement Network at the U.S. Department of Treasury. The filing was made fourteen months after its decision to close the Zardari accounts; thirteen months after Mr. Zardari was arrested a second time for corruption in November 1996; and nearly two months after the Swiss government had ordered four Swiss banks (including Citibank Switzerland) to freeze all Zardari accounts.

In June 1998, Switzerland indicted Mr. Schlegelmilch and two Swiss businessmen, the former senior executive vice president of SGS and the managing director of Cotecna, for money laundering in connection with kickbacks paid by the Swiss companies for the award of a government contract by Pakistan. In July 1998, Mr. Zardari was indicted for violation of Swiss money laundering law in connection with the same incident. Ms. Bhutto was indicted in Switzerland for the same offense in August 1998. A trial on the charges is expected.

In October 1998, Pakistan indicted Mr. Zardari and Ms. Bhutto for accepting kickbacks from the two Swiss companies in exchange for the award of a government contract. On April 15, 1999, after an 18-month trial, Pakistan’s Lahore High Court convicted Ms. Bhutto and Mr. Zardari of accepting the kickbacks and sentenced them to 5 years in prison, fined them $8.6 million and disqualified them from holding public office. Ms. Bhutto, who now lives in London, denounced the decision. Mr. Zardari remains in jail. Additional criminal charges are pending against both in Pakistani courts.

On December 11, 1997, Citicorp’s Chairman John Reed wrote the following to the Board of Directors:

“We have another issue with the husband of Ex-Prime Minister Bhutto of Pakistan. I do not yet understand the facts but I am inclined to think that we made a mistake. More reason than ever to rework our Private Bank.”

Mr. Reed told the Subcommittee staff that it was the combination of the Salinas and Zardari accounts that made him charge Mr. [Shaukat] Aziz [currently, Prime Minister of Pakistan], the new private bank head, with taking a hard look at the bank’s public figure policy and public figure accounts.

The Issues

The Zardari case history raises issues involving due diligence, secrecy and public figure accounts. The Zardari case history begins with the Citibank Dubai branch’s failure to identify the true beneficial owner of the M.S. Capricorn Trading account. As a result, the account officer in Dubai performed due diligence on an individual who had no relationship to the account being opened. In Switzerland, Citibank officials opened three private bank accounts despite evidence of impropriety on the part of Mr. Zardari. In an interview with Subcommittee staff, Citigroup Co-Chair John Reed informed the Subcommittee staff that he had been advised by Citibank officials in preparation for a trip to Pakistan in February 1994, that there were troubling accusations concerning corruption surrounding Mr. Zardari, that he should stay away from him, and that he was not a man with whom the bank wanted to be associated. Yet one year later, the private bank opened three accounts for Mr. Zardari in Switzerland. Mr. Reed told the Subcommittee staff that when he learned of the Zardari accounts he thought the account officer must have been “an idiot.”

Citibank has been unable to confirm that bank employees verified that Mr. Zardari had a level of wealth sufficient to support the size of the accounts that he was opening. In addition, the Swiss private banker took no action to validate the legitimacy of the source of the funds that were deposited into the account. For example, there was no effort made to verify the claims that some of the funds derived from the sale of sugar mills.

Citibank also performed no due diligence on the client owned and managed PICs that were the named accountholders. Because the PICs were client-created, the bank’s failure to perform due diligence on the PICs meant that it had no knowledge of the activities, assets or entities involved with the corporations. One of the PICs, Bomer Finance, has been determined to have been a repository for kickbacks paid to Mr. Zardari, and those kickbacks tainted funds deposited at the Geneva branch of Union Bank of Switzerland. Documentation has not been made available to determine whether Bomer Finance also used its Citibank account for illicit funds.

Another due diligence lapse was the private bank’s failure to monitor the Zardari accounts to ensure that the account restrictions imposed on them were being followed. When officials were presented with evidence in 1996 that the restrictions were being violated, they nevertheless allowed the accounts to continue.

The Zardari accounts in Switzerland were opened one day before Raul Salinas was arrested. The account was repeatedly reviewed in 1996, after the Salinas scandal became public. Yet there is no evidence that anyone in the private bank had been sensitized to the problems associated with handling an account of a person suspected of corruption.

The Zardari example also demonstrates the practical consequences of secrecy in private banking. Citibank claims that its decisionmaking in the Zardari matter cannot be fully explained or documented, since all Citibank officials are subject to Swiss secrecy laws prohibiting discussion of client-specific information. In light of the fact that U.S. banks are supposed to oversee their foreign branches and enforce U.S. law, including anti-money laundering requirements, this inability to produce documentation related to a troubling case again highlights the problems with U.S. banks choosing to operate in secrecy jurisdictions.

Pattern of Poor Account Management.

The Zardari case history took place during a series of critical internal and federal audits between 1992 and 1997 of the Swiss office which, during most of that time, served as the headquarters of the private bank. The shortcomings identified in the audits included policies, procedures, and problems that affected the management of the Zardari accounts. They included:

  • failure of the “corporate culture” in the Swiss office to foster ” ‘a climate of integrity, ethical conduct and prudent risk taking’ by U.S. standards”;
  • inadequate due diligence;
  • “less than acceptable internal controls”;
  • lack of oversight and control of third party referral agents such as Schlegelmilch; and
  • inadequate monitoring of accounts;

all of which resulted in “unacceptable” internal audit ratings. In December 1995, the Swiss office received the lowest audit score received by any office in the private bank during the 1990s. These audit scores indicate the office’s poor handling of the Zardari accounts was part of an ongoing pattern of poor account management.

[End of excerpt]

Source: MINORITY STAFF REPORT FOR PERMANENT SUBCOMMITTEE ON INVESTIGATIONS HEARING ON PRIVATE BANKING AND MONEY LAUNDERING: A CASE STUDY OF OPPORTUNITIES AND VULNERABILITIES, November 9, 1999
http://www.senate.gov/~gov_affairs/110999_report.htm

The Report features as an annex to S. Hrg. 106-248
PRIVATE BANKING AND MONEY LAUNDERING: A CASE STUDY OF OPPORTUNITIES AND VULNERABILITIES, Hearings before the Permanent Subcommittee on Investigations of the Committee on Governmental Affairs, United States Senate, One Hundred Sixth Congress, First Session, November 9 and 10, 1999.
This xiv+1114 pages report is available at: http://www.gpo.gov/congress/senate/senate12sh106.html as TEXT [424KB] and as PDF [30MB] files

It provides (on page numbers indicated) the following:

Documents relating to Asif Ali Zardari:

a. Swiss Form A identifying Asif Ali Zardari as the beneficial owner of the Capricorn Trading S.A. account in the Citibank Private Bank in Switzerland [600]…………………………………. 445 [Signed by “Asif Ali Zardari, Bilawal House, Karachi (Pak)”]

b. Wire transfer records documenting transfers of $18 million into Mr. Zardari’s Capricorn Trading S.A. account in Dubai and transfers of $18.3 million out of the Dubai account into the Capricorn Trading S.A. account in Citibank Private Bank in Switzerland ……………………………………… 446

10/5/94 transfer of $5 million from A.R.Y. International Exchange into the Capricorn Trading S.A. account in Citibank in Dubai [X6903-4];

10/6/94 transfer of $5 million from A.R.Y. International Exchange into the Capricorn Trading S.A. account in Citibank in Dubai [X6900-2]

2/24/95 transfer of $8 million from Morgan NYC into the Capricorn Trading S.A. account in Citibank in Dubai;

3/6/95 transfer of $8.1 million from the Capricorn Trading S.A. account in Citibank in Dubai into the Capricorn Trading S.A. account in Citibank Private Bank in Switzerland;

5/3/95 transfer of $10.2 million from the Capricorn Trading S.A. account in Citibank in Dubai into the Capricorn Trading S.A. account in Citibank Private Bank in Switzerland;

5/4/94 record of Citibank Private Bank in Switzerland credit of $10.2 million to account of Capricorn Trading S.A.

c. Mandate Agreement between Asif Ali Zardari and Jens Schlegelmilch concerning Bomer Finance, Inc. [601-2]………………………………… 466

d. Mandate Agreement between Begum Nusrat Bhutto and Jens Schlegelmilch concerning Mariston Securities, Inc. [603-4]………………………………… 468

e. British Virgin Islands Certificate of Incorporation for Capricorn Trading S.A. [605]………………………………….. 470

f. 6/29/94 letter from Cotecna Inspection S.A., stating that if it receives a contract from the government of Pakistan for the inspection and price verification of imported goods, it will pay Mariston Securities, Inc., 6 percent of the payments made under the contract [597]………………………………….. 471

g. 12/11/97 communication from John Reed to Citibank Board, including a discussion of the Zardari matter.. 472

h. List of meetings between Mr. Zardari and Citibank personnel, provided by Citibank ………….. 474

Mushahid asks Zardari to quit presidential race in national favour
Mushahid asks Zardari to quit presidential race in national favour Presidential candidate of Pakistan Muslim League(Q) Mushahid Hussain Syed said that Pakistan is passing through a critical phase and its president should be a non-controversial personality.

Talking to media persons outside parliament house, Mushahid Hussain said that president should be identified with the reference of Pakistan. I am ready to debate Asif Zardari.

There were numerous reports published in local and international press about Zardari’s corruption and mental health. He appealed Zardari to withdraw his candidature from president polls in national interest, to strengthen democracy and for Peoples Party’s future. Mushahid has thanked Nelofir Bakhtyar for her support in presidential polls.