|Dr. Ikramul Haq & Hassan Aslam Shad
Based upon the most expansive leak of tax haven files in history, the Pandora Papers investigation reveals the secret deals and hidden assets of more than 330 politicians and high-level public officials in more than 90 countries and territories, including 35 countries’ leaders. The Pandora Papers lay bare the global entanglement of political power and secretive offshore finance—the largest investigation in journalism history exposes a shadow financial system that benefits the world’s most rich and powerful, International Consortium of Investigative Journalists (ICIJ).
What the Pandora Papers reveal
A new investigation published on October 3, 2021, by ICIJ, titled, Offshore havens and hidden riches of the world leaders and billionaires exposed in the unprecedented leak, called The Pandora Papers, reads: “Millions of leaked documents and the biggest journalism partnership in history have uncovered financial secrets of 35 current and former world leaders, more than 330 politicians and public officials in 91 countries and territories, and a global lineup of fugitives, con artists and murderers.
The secret documents expose offshore dealings of the King of Jordan, the presidents of Ukraine, Kenya, and Ecuador, the prime minister of the Czech Republic, and former British Prime Minister Tony Blair. The files also detail the financial activities of Russian President Vladimir Putin’s “unofficial minister of propaganda” and more than 130 billionaires from Russia, the United States, Turkey, and other nations.”
The Offshore havens and hidden riches of the world leaders and billionaires exposed in the unprecedented leak contains “the leaked records reveal that many of the power players who could help bring an end to the offshore system instead benefit from it—stashing assets in covert companies and trusts while their governments do little to slow a global stream of illicit money that enriches criminals and impoverishes nations.”
The ICIJ obtained the “trove of more than 11.9 million confidential files and led a team of more than 600 journalists from 150 news outlets that spent two years sifting through them, tracking down hard-to-find sources and digging into court records and other public documents from dozens of countries. The leaked records come from 14 offshore services firms from around the world that set up shell companies and other offshore nooks for clients often seeking to keep their financial activities in the shadows. The records include information about the dealings of nearly three times as many current and former country leaders as any previous leak of documents from offshore havens”.
The Pandora Papers, according to ICIJ, “in an era of widening authoritarianism and inequality,” provides “an unequaled perspective on how money and power operate in the 21st century—and how the rule of law has been bent and broken around the world by a system of financial secrecy enabled by the U.S. and other wealthy nations”. It is clear from the reading of the greatest leak so far the “deeply secretive finance has infiltrated global politics—and offer insights into why governments and global organizations have made little headway in ending offshore financial abuses.
According to ICIJ’s “analysis of the secret documents identified 956 companies in offshore havens tied to 336 high-level politicians and public officials, including country leaders, cabinet ministers, ambassadors, and others. More than two-thirds of those companies were set up in the British Virgin Islands, a jurisdiction long known as a key cog in the offshore system”.
In fact, The Pandora Papers is larger and more global than even ICIJ’s landmark Panama Papers investigation, which rocked the world in 2016, spawning police raids and new laws in dozens of countries and the fall of prime ministers in Iceland and Pakistan.
The Panama Papers legacy and Pakistan
The following part is relevant for Pakistan:
- “The Panama Papers revealed that the children of Pakistan’s prime minister at the time, Nawaz Sharif, had ties to offshore companies. This gave Khan an opening to hammer Sharif, his political rival, on what Khan described as the “coalition of the corrupt ravaging Pakistan.”
- “It is disgusting the way money is plundered in the developing world from people who are already deprived of basic amenities: health, education, justice, and employment,” Khan told ICIJ’s partner, The Guardian, in 2016. “This money is put into offshore accounts, or even western countries, western banks. The poor get poorer. Poor countries get poorer, and rich countries get richer. Offshore accounts protect these crooks.”
- “Ultimately, Pakistan’s top court removed Sharif from office as a result of an inquiry sparked by the Panama Papers. Khan swept in to replace him in the next national election”.
- “ICIJ’s latest investigation, the Pandora Papers, brings renewed attention to the use of offshore companies by Pakistani political players. This time, the offshore holdings of people close to Khan are being disclosed, including his finance minister and a top financial backer”.
The Prime Minister’s new challenge
The Pandora Paper is thus a challenge for the Prime Minister, who has been reiterating time and again his resolve against corruption and retrieving of looting of national wealth. Now that his own people of Pakistan Tehreek-i-Insaf (PTI) are allegedly involved in the same nefarious activities, what will be his next move? The Prime Minister has ordered the creation of a ‘High Powered Cell’ (hereafter ‘Cell’) to investigate offshore firm owners.
Reportedly, a separate probe will also be launched by the Ministry of Information and Broadcasting and the Pakistan Electronic Media Regulatory Authority (PEMRA) to investigate if any media owners who established companies in the “safe tax havens” had committed any wrongdoings.
It has been reported that Law Minister Farogh Naseem would head the Cell and that it would comprise officials of the NAB, FBR, and FIA. Moreover, the terms of reference of the Cell are expected to be announced in a few days.
The Cell and the agencies it would be supported by would be another non-starter unless the right team of individuals heads this lawfare against corruption. As suggested by us in our joint article titled “China’s lawfare against corruption—lessons for Pakistan—I” Daily Times, November 9, 2018, and “China’s lawfare against corruption—lessons for Pakistan—II” Daily Times, November 10, 2018, China’s lawfare against corruption succeeded because of a vertical top-down purge of corrupt officials of all ranks (regardless of their role and clout) who were taken to task through a relentless anti-corruption drive.
The Prime Minister, despite having the sincere resolve and unshakeable belief of uprooting the corruption, is, in the end, trapped by the so-called electables. The vast majority is suffering from a policy of appeasement towards the rich and mighty.
The skyrocketed inflation and lack of justice are pushing the marginalized and weaker section of society to the wall. In these circumstances, the slogan of establishing an egalitarian society and process of selected accountability will lead the country towards more instability, economic meltdown, and diplomatic isolation.
The path is to take all to task and make the country a place worth living for all. It is not possible with present policies of appeasement and amnesties for real estate tycoons and elites. Tax evasion is rampant, and the nation is deprived of funds required for schools, hospitals, roads, and other public services.
How to institutionalize Pakistan’s lawfare against corruption
It is humbly submitted that the Cell set up by the Prime Minister is not capable of getting to the bottom of this rabbit hole of corruption that afflicts Pakistan. Some of those who are a part of the Cell would either be direct beneficiaries of corruption, or the inclusion of certain individuals in the Cell would further entrench corruption once they receive large sums of money to exonerate the corrupt.
Most importantly, Pakistan’s lawfare against corruption should now be treated as a vital national security threat. Corruption has been weaponized against Pakistan by Pakistan’s elite. This is akin to the human body going into a mode of self-destruction when the cells start preying on the vital organs. Needless to say, the weaponization of corruption in Pakistan has weakened the rule of law and institutions to the point of decay.
It is, therefore, time to adopt an aggressive and offensive lawfare against corruption. This lawfare must be well-thought-out, well-calibrated, ‘across the board’ and conducted by individuals of repute (yes, a few still remain) and those with the required technical, legal, and other skills. The individuals must be carefully vetted to make sure they have no conflict of interest that would prevent them from discharging their duties with honesty and integrity.
As the Cell and the associated agencies would have limited to no resources to get to the bottom of the alleged corruption underscored in the Pandora Papers, the Cell must acquire the services of an international team of experts (forensic, financial, legal, etc.) with a proven track record of confirming the veracity or lack thereof of the explanations offered by Pakistanis named in the Pandora Papers.
Pakistan’s NAB would also need to consider entering into a robust asset recovery agreement that enables Pakistan to recover the looted wealth uncovered by the lawfare. (It would, however, be very important to avoid the Broadsheet saga mistakes and to ensure that previously engaged “legal experts” who drafted the worst possible agreement between Pakistan/NAB and Broadsheet have no role in this lawfare).
Since the ‘affectees’ of the investigation would include high profile elites with considerable clout across the entire spectrum and who would inevitably hold sway over the legal system of Pakistan, the Prime Minister should consider promulgating an Ordinance that strategizes the lawfare, sets out the objects and purposes of the lawfare in a manner that it becomes a “parallel” legal process that is unscathed by the existing legal and judicial system of Pakistan that has failed to deliver results.
The Pandora Papers have revealed, yet again, how this country has been literally raped by the elites. Since Pakistan aspires to follow China, it is time that Pakistan adopts an aggressive lawfare against corruption like China did to stand on its feet and, as a result, took millions out of poverty. Only an aggressive no holds barred lawfare against corruption can lessen corruption’s capacity of mayhem for Pakistan. We stand exposed yet again. However, this time around, we can expose all those who have looted this country’s wealth and breached the sacred trust reposed in them by this nation. The time to act is now.
Dr. Ikram ul Haq, Advocate Supreme Court, is a member of the Advisory Board and Visiting Senior Fellow of Pakistan Institute of Development Economics (PIDE) and Adjunct Faculty at Lahore University of Management Sciences (LUMS). Email: firstname.lastname@example.org; Twitter: @drikramulhaq.
Hassan Aslam Shad is an international lawyer based in the Middle East and a graduate of Harvard Law School, U.S.A. He can be reached at: email@example.com.
The views expressed in the article are the authors’ own and do not necessarily reflect the editorial policy of Global Village Space.