The world was struck with a shocking revelation when approximately 11.5 million documents that contained financial and attorney-client information of around 214,488 entities were disclosed. The documents belonged to a law firm based in Panama named Mossack Fonseca, hence the name ‘Panama Papers’. It revealed the personal financial information about the public officials, including Politicians and other wealthy individuals who have formed shell corporations or other such entities for fraud, tax evasion, and other such activities.
The leaks were reported firstly by the journalist Bastian Obermayer who worked for the German newspaper Suddeutsche Zeitung when an anonymous whistleblower named “John Doe” (a classic way to hide name) leaked the documents. The newspapers shared it with the International Consortium of Investigative Journalism (ICIJ), which shared the same with other partners including the BBC and the Guardian.
As of now politicians, public officials and their close associates from all around the globe, excluding some parts of Africa, middle east and a few parts of South East Asia have been found implicated in the said leak. The papers named around 128 public officials and politicians, hundreds of elites and 12 current or former world leaders [Josh Hoxie, Counter Punch, American Tax Heavens: Elites Don’t Have to go to Panama to Hide Their Money – They’ve Got Delaware, 6th May 2016].
The national leaders include Ayad Allawi, former President of Iraq; Petro Poroshenko, President of Ukraine; Alaa Mubarak, son of Egypt’s former President; a trail with leads to Vladimir Putin and his close friend; Sigmundur David Gunnlaugsson, Prime Minister of Iceland and Nawaz Sharif, Prime Minister of Pakistan and his family [Luke Harding, The Guardian, What are Panama Papers? A guide to history’s biggest data leak, 5th April 2016]. Out of the list, last two are most prominence. Sigmundur David stepped down when his name was leaked, and Nawaz Sharif was recently disqualified by the Supreme Court of Pakistan in a unanimous verdict from holding the position as Prime Minister.
The latter development is of great significance considering the political weather that will culminate in Pakistan as well as the socio-political scenario of the sub-continent. Especially considering the fact that the run of the democracy in Pakistan is not a smooth one. This piece deals with the same in a detailed way.
Mossack Fonseca: What is it?
Mossack Fonseca is a Panama based law firm but has worldwide operations. It has its presence in several countries with numerous franchises. The firm operates in incorporating companies offshore, wealth management etc. It incorporates companies in tax havens like Switzerland, Cypress, British Virgin Islands etc., and charges an annual fee for administration of such offshore firms.
It is world’s 4th biggest provider of offshore services and mostly works in British administered tax heavens [Luke Harding, The Guardian, What are Panama Papers? A guide to history’s biggest data leak, 5th April 2016].
What was revealed?
There is a huge number of offshore companies and luxury properties which were owned by the family of Nawaz Sharif, details of which were revealed by the Panama Paper leaks.
What is of peculiar interest is that the alleged properties were all related to his three children – Maryam Sharif, Hasan Sharif and Hussain Sharif, and nowhere the name of Nawaz Sharif comes up. His children too have maintained that there was nothing wrong and the companies were setup by the money, which was legally obtained [Megan Specia, The New York Times, How the Panama Papers Changed Pakistani Politics, 28th July 2017].
However, the companies which were incorporated in the British Virgin Islands were listed to be owned by Maryam Nawaz, both were incorporated during the early 1990s when she was underage, thus by implication pointing that Nawaz Sharif was the one who was in an actual sense behind incorporation. Also, the time also coincides with his first term as the Prime Minister, which was brought to an abrupt end over the charges of mismanagement and sudden growth in family business [Megan Specia, The New York Times, How the Panama Papers Changed Pakistani Politics, 28th July 2017]. Hasan Sharif also ends up owning a company incorporated in the British Virgin Islands.
A Curious Case of Calibri
Nawaz Sharif and his daughter Maryam Sharif along with being engulfed in the Panama Paper scandal, also found them entangled in another major issue of forging the documents related to the scandal, the latter is also popularly named as ‘Fontgate’.
What transpired was that after the names of members of Sharif’s family were revealed and came up to be linked with offshore companies who purchased luxury properties in London. When questioned whether public funds were used to buy such properties, Sharif’s family in their defense submitted that Maryam was only a trustee of the companies that bought the flats.
However, things took an interesting turn when it was discovered that the documents dated February 2006 were actually typed in Calibri font face. The font was not introduced until January 2007 with the Microsoft Office 2007 software package. This raised a serious doubt over the genuineness of the documents. Later the Pakistani investigators dismissed them after being assessed as “falsified” by the Radley Forensic Document Laboratory, London.
Even the designer of the font Lucas De Groot said that it was highly unlikely that Calibri would be used in any official document in 2006, and questioned, “that why would anyone use a completely unknown font for an official document in 2006?”[Ben Kentish, The Independent, Pakistan’s Prime Minister may be brought down by Microsoft’s Calibri font amid corruption allegations, 14th July 2017].
This scandal, along with all other events played a major role in shaping the verdict that was given by the Supreme Court of Pakistan. This also comes as a lesson (though being hard learned by the Sharifs) that in the age of technology even forgery is not that simple.
Based on the allegations of corruption and financial mismanagement over the issue related to Panama Papers, a Joint Investigation Team was constituted. This committee conducted a probe into the matter and prepared a report.
Based on the report the Supreme Court ruled and disqualified Nawaz Sharif and any of his family members including his two sons and daughter Maryam from holding political office. The Court has further ordered the Anticorruption agency to look into and investigate the matter.
The Court held that Nawaz Sharif showed ‘dishonesty’ in income disclosure by not declaring the monthly salary of $2,700 that he got from a company owned by his son. This decision was based on, the very rarely used provisions of Article 62 of the Constitution of Pakistan and Section 99 of the Representation of the People Act. The aforesaid provisions require the elected officials to be honest and truthful [Nyshka Chandran, C.N.B.C., While you were paying attention to North Korea another Asian nuclear power was destabilizing, 2nd August 2017].
The decision has been received well and welcomed by the opposition parties, whereas there is a certain sect of people who raise a shadow of doubt over how all the matter was proceeded with, and hence not appreciates the judgment much.
The Counter Narrative
Where there are people who are rejoicing the dismissal of Nawaz Sharif and hailing the same as a victory over corruption prevalent in the nation, there is another faction of people who do not see it the same way and see it more as a plan to ouster the Prime Minister, hailing the decision to be a dangerous precedent.
It is a fact that the Prime Minister Nawaz Sharif was not named specifically in the Panama Paper leaks, rather it was his family members who were named. It is further alleged that the judges show a disdain for elected leaders.
Several questions are raised over the fact that the JIT that was constituted had members from the opposition parties, military intelligence, and ISI, thus the inquiry to the very least cannot be dubbed as impartial. It is also alleged that the complaints about witness harassment and wire-tapping were, at best ignored.
The other side puts forward that all this was done because of the inclination which Nawaz showed towards better relations with India and tightening the noose on military and ISI [Aqil Shah, The New York Times, Pakistan’s Court Sets a Dangerous Precedent, 28th July 2017].
However, what draws attention is the fact that the same bench was split in dismissing Sharif earlier in April and now has decided to do so, doing so on the basis of the provision which itself dubbed as a “nightmare” in an earlier decision [Nasir Iqbal, The Dawn, Articles 62, 63 need scrutiny, argues PM lawyer, 14th January 2017] [See also, Ishaq Khakwani case, 2015 Pakistan S.C.].
The political scenario in Pakistan is of the most peculiar nature, none of the Prime Minister in the democratic history of the nation has been able to successfully complete their tenure of 5 years. Nawaz Sharif was not an exception too, yet he is one of those who came closest to complete it, albeit in this third attempt to do so. Many of the prime minsters were overthrown in coups by the military. Military ended up ruling the nation for almost half of the time since its independence [Asad Hashim, Aljazeera, Pakistan Supreme Court disqualifies Nawaz Sharif, 28th July 2017].
Narratives are present from both the sides, those welcoming the decision and the other one those who call the decision of judiciary as the one that will undermine the perception of justice and will be bad for democracy in general.
What hurt Nawaz Sharif the most was his inability to put forward a consistent and credible defense over the allegation placed on him, in front of both the court and the masses. Rather he resorted to some baseless defenses, playing the victim card and contrary accounts by various members, this all put together created this “grand” fiasco.
Politics in Pakistan has developed in quiet various facets, there is a more independent press, strong opposition and a judiciary that is empowering and flexing its muscles. But there is a silver lining attached to it too, this is neither the last case of corruption, but is also not an end to democracy [Mosharraf Zaidi, Foreign Policy, The Downfall of Nawaz Sharif and the Triumph of Stupidity, 3rd August 2017].
Whatever be the nature of recent developments, good or bad, they provide a switch in who called shots in the Pakistan. A few things to watch out for are as follows:
Firstly. The switch may put a person who is more amicable to persuade in matters related to terrorism and relations with India, or on the contrary not so amicable one.
Secondly. With elections due next year, citizens of Pakistan will have a chance to introspect as well as debate on what form of governments and leaders they want to be ruled by.
Thirdly. Will the decision open a Pandora box of litigation with opposite parties bringing politicians of other parties in court rooms?
Fourthly. Will military try to benefit and ascertain its supremacy back in the backdrop of all this?
The blame game will always be there, but in fact, it was not military which accumulated Nawaz Sharif’s family’s ill gotten wealth, it was not the one which stopped him from declaring his assets and it did not stop him from defending himself more strongly. Blame games apart, it is an onus now upon the media, opposition, judiciary and the citizens at large to help democracy flourish and cherish.