A heated debate is going on in the media, parliament and elsewhere, revolving around the best way to investigate the disclosures contained in the Panama Papers about the prime minister, chief minister of Punjab and others.
While there are demands for a commission headed by the chief justice of Pakistan as well as for conducting a forensic audit from the opposition, Hussain Nawaz, the son of the prime minister, has admitted to owning offshore companies and properties in London. In his address to the nation, the prime minister also categorically said that nothing illegal had been done by him or his family.
The issue is that of verifying the claims of those who own the offshore companies. There is no allegation in the Panama Papers that the prime minister or any member of his family had purchased property from unlawful sources. The prime minister has yet to make public the details of the companies, the exact dates of purchase of the properties or the sales of the steel mill based in Saudi Arabia that purportedly generated billions to be invested in the UK by Hussain Nawaz.
By making the tax declarations filed in the UK public, Hussain Nawaz can easily bail out his father. He was certainly not obliged to file any tax return in Pakistan, being a resident of the UK, but his link with Pakistan is well-established. In the papers filed by Nawaz Sharif before the Election Commission of Pakistan in 2013 and the tax returns submitted to Federal Board of Revenue (FBR), “gifts” were claimed to have been received from Hussain Nawaz. The question is whether or not these gifts were declared in UK returns by Hussain Nawaz.
In a report (‘Sharif family to answer questions about assets before commission’, The News, April 12, 2016), it was revealed that Nawaz Sharif never owned any property in London and that “the Sharif family has answers to all the questions which will be presented before the judicial commission and the whole nation will be satisfied with the answers and explanation of the facts”.
The issue has another angle, which was pointed out by Ansar Abbasi of The News in a tweet on April 4, 2016: “If the ruling Sharifs are shy to bring their money to Pakistan, why should others invest here.” Umar Cheema of The News and member of the International Consortium of Investigative Journalists (ICIJ), observed in his report that the “family of Prime Minister Nawaz Sharif is conspicuous due to its political profile. The record identifies four companies in the ownership of Maryam Nawaz, Hussain Nawaz and Hassan Nawaz. Chief Minister Shahbaz Sharif’s mother-in-law from second marriage, Samina Durrani and brother-in-law from the first marriage, Ilyas Mehraj, have also been figured in the documents examined.”
According to documents released by the ICIJ, Pakistan’s two-time prime minister and chairperson of the PPP Benazir Bhutto was also among the clients of Mossack Fonseca, along with her close aide Senator Rehman Malik and nephew Hassan Ali Jaffery Bhutto. The leak said that Bhutto and her partners paid huge bribes to the then Iraqi government in 2000, to win oil contracts for their Sharjah-based company, Petrofine FZC, and later established a company named Petroline International Incorporation in the British Virgin Islands in 2001. Mossack Fonseca’s records suggest that Benazir Bhutto’s second company, Petroline International Incorporation, was refused to be taken as a client by the law firm for being a politically sensitive group.
These disclosures in the Panama Papers have led to worry about the transfers and accumulation of money outside Pakistan. These worries are just about the amount of money that has allegedly been secreted away in foreign banks, but also the manner in which it may have been taken out of the country and the nature of the activities that may have engendered its accumulation.
There is also concern about the extent of the incapacities in terms of institutional resources, skills and knowledge, as well as incapacities of an ethical nature, in keeping an account of the money generated by various facets of social action in the country and thereby developing effective mechanisms of control. These incapacities go to the very heart of the constitutional imperatives of governance. Whether such incapacities are on account of not having devoted enough resources, or on account of a broader culture of venality in the wider spheres of social and political action, they run afoul of constitutional imperatives.
Large amounts of unaccounted funds, stashed away in banks located in jurisdictions that thrive on strong privacy laws, protecting the bearers of those accounts to avoid scrutiny, raise all the concerns highlighted above. First and foremost, the fact that such large funds are stashed abroad and are unaccounted for raises the suspicion that they have been generated through unlawful activities. In addition, such large amounts of unaccounted funds would also lead to a natural suspicion that they have been transferred out of the country in order to evade taxes, thereby depleting the capacity of the nation to undertake many tasks that are in the public interest.
In order to address the above worries and protect those who are innocent, it is imperative that the Supreme Court of Pakistan take cognisance under Article 184(3) of the constitution and order the government to form a special investigation team (SIT) comprising representatives of the SBP, NAB, FIA, FBR, ANF, independent foreign experts and retired judges to investigate all those whose names have been disclosed in the Panama Papers.
The SIT should be given access to all official documents and the authority to approach the United Nations Office of Drugs and Crime for cross verification of the records of the countries where the funds/assets are stashed. The SIT should submit its report to the Supreme Court and thereafter, action (if warranted by law) should be taken against the accused.
The writer is an advocate of the Supreme Court and adjunct faculty at LUMS.