$30Million Bribe for Awarding Contract to a Chinese Company

Afghanistan’s chief prosecutor has thrown down a gauntlet to Hamid Karzai by announcing an unprecedented attempt to prosecute for corruption two sitting cabinet members who cannot be touched until the president strips them of their ministerial immunity.

Mohammad Ishaq Aloko, the attorney general, said he was preparing a case for the prosecution of two members of Karzai’s current cabinet as well as three former ministers, in what could become a key test of the Afghan president’s willingness to tackle corruption.

The two ministers have not been named, but speculation has focused on the minister of mines and the minister of religious affairs.

The deputy attorney general, said they had collected sufficient evidence to prosecute officials at the ministry but not the minister, Sadiq Chakar, although the investigation was continuing.

The officials allegedly overcharged for rented accommodation in Makkah to house Afghans during the annual hajj pilgrimage and pocketed the difference. They were discovered on their return from Saudi Arabia with $360,000 on them.

Afghanistan has vast, untapped mineral wealth and the ministry of mines is responsible for issuing large numbers of short-term excavation rights. Irregularities have been alleged in the issuing of a $2.9bn contract to a Chinese conglomerate to exploit the Aynak copper reserve south of Kabul – one of the world’s biggest copper stores.

The Washington Post recently reported allegations by US officials that Adel had taken a $30m bribe from the Metallurgical Corporation of China to secure the deal.

The attorney general is looking at around 40 cases, with senior officials in the high single figures.

Under Afghan law, ministers and governors cannot be investigated and must be suspended from their duties. It’s a great thing that the Afghans are finally publicising cases like this, but at the moment they have no power to bring these people in.

Adding to the frustration of international anti-corruption officials, the country’s 2005 constitution calls for special courts to be set up to hear cases against various types of officials. It is hoped that the supreme court will back the establishment of a specialised anti-corruption tribunal with secure facilities to protect the judges to hear all such cases. But no site has yet been identified.

Much international effort has gone into improving Afghanistan’s law enforcement agencies, with British lawyers helping to mentor prosecutors in a special unit of the attorney general’s office focused on high- level corruption.

Also recently set up is the Serious Crimes Task Force (SCTF), known as the “Afghan FBI” because the elite police operatives are trained by the FBI and the UK’s Serious Organised Crime Agency (Soca) to use wiretaps and other sophisticated methods to collect evidence.

ISI Investigating Corruption in PSO

ISI and MI have started investigations into some multi-million dollar oil and gas transactions, including the proposed setting up of 100 ‘autogas’ filling stations and furnace oil import. 

A  team of ISI and MI has collected record of the proposed transactions and interviewed the managing director of the Pakistan State Oil (PSO) and some senior officials of the petroleum ministry.

PSO managing director Irfan K. Qureshi said that he had shot down the proposed agreement between his company and the Associated Group owned by Iqbal Z. Ahmed for setting up LPG filling stations because it was not in PSO’s interest. “At least five clauses of the agreement prepared by the Associated Group (AG) were detrimental to the interest of the PSO. My legal team proposed certain amendments that were rejected by the AG. Therefore, I have decided to sustain all pressure and not to enter into an agreement that is against the interest of my company and the government”, he said.

“I will not accept any pressure and will re-tender the LPG project to ensure transparency,” he said.

Mr Qureshi said the autogas project was important to improve the financial position of the PSO because CNG was a dying business and he wanted to replace it with LPG filling stations to ensure smooth cash flow.

He said he was a professional and ready to face an investigation pertaining to his company’s business since March 4 when he assumed responsibilities of the PSO.

The issues of filling stations and import of furnace oil were also taken up by the Senate Standing Committee on Petroleum and Natural Resources. Members asked the PSO management questions about the transactions. Mr Qureshi told the committee that the PM’s secretariat had not stopped signing of the autogas agreement.

About the furnace oil import, Mr Qureshi said his company had been at the receiving end of the circular debt and its receivables from the power sector stood at more than Rs67 billion.

He said the Attock Oil had to pay over Rs22 billion to the Oil and Gas Development Company (OGDCL), while it had to receive about Rs18 billion from the PSO. Since the government’s revenue was held up with the OGDCL because of the Attock Refinery’s payables, the government had not been able to clear PSO’s dues, resulting in cash flow problems, he said. If the refineries cleared their dues to oil producers, cash flows of many energy sector companies would improve, he said.

Mr Qureshi said the decision to import furnace oil in large quantities was taken by the product review committee headed by the director general of oil to meet higher power sector requirements.  

It is noteworth that institutions — specifically, institutions linked to and run by the military — are once again acting outside their remit and probing into affairs where they may have absolutely no legal authority to do so.

Who authorised the ISI and MI to investigate alleged irregularities in the oil and gas sector? Under what law did intelligence agents confiscate documents and interrogate the managing director of PSO and senior officials of the petroleum ministry? To whom will the intelligence team present its findings?

Corruption is a real and pervasive fact of life in Pakistan and since the inception of Pakistan, officials have enriched themselves at the state’s and the people’s expense.

The oil and gas deals under scrutiny must be shown to be transparent, fair and legal — and if they are not, officials involved in wrongdoing must be taken to task. But we must beware of those taking it upon themselves to investigate corruption, especially when they are uniformed officers acting possibly without the authority of an elected civilian government. We are only too familiar with where unsolicited ‘help’ of this sort can lead to. Keep in mind that if the military and its intelligence agencies were in fact driven by the noble goal of eradicating corruption in the country, they had ample opportunity in the decade that Gen Musharraf (retd) ruled the country. But such matters did not seem to concern the ISI and MI then.

The country is racked by violence and facing security issues on its borders. Should not the full energies of the ISI and MI be directed there instead?

Babar Awan Takes Rs 4 Crore from Haris Steel Scammer

On Nov 24, 2009, the owner of Haris Steel Mills and main accused in the Rs9 billion Bank of Punjab loan scam disclosed in the Supreme Court that he had ‘bought’ a whole lot of ‘worthy’ people in order to get a favourable verdict and get out of the country.

Sheikh Mohammad Afzal informed a three-judge bench comprising Chief Justice Iftikhar Mohammad Chaudhry, Justice Mian Shakirullah Jan and Justice Tariq Parvez that he had paid Rs35 million to federal minister Dr Babar Awan, Rs10 million to former adviser and senior counsel Sharifuddin Pirzada, Rs20 million to former attorney general Malik Mohammad Qayyum and Rs7.5 million to Ali Waseem, son of Advocate Waseem Sajjad, to get the verdict in his favour. It is nothing short of shocking that these names invariably come out when one talks of corruption in Pakistan.

He said he had paid Rs400-500 million as bribe to ex-BoP president Hamesh Khan, Rs30 million to the bank’s control risk manager Aziz Ahmed, Rs50 million to Haroon Aziz, Rs10 million to Shoaib Qureshi, Rs40 million to the bank’s treasury head Saleem Mirza and Rs5 million to Fazeel Asghar to help him escape the country because his name was on the exit control list.

Sheikh Afzal, who was recently arrested by the International Police (Interpol) in Malaysia, along with his son Sheikh Haris, tendered an apology stating that he had been misguided by certain elements and advised not to appear before the court.

At the last hearing, the court had ordered confiscation of his property after duly publicising it in newspapers.

Sheikh Afzal said he was ready to settle legitimate claims of the bank, but requested that his family members, including his wife who was in the custody of NAB and sons Haris and Hamza, should not be harassed.

The court ordered the National Accountability Bureau not to harass any member of his family. The Court somehow is going soft with this case when such a huge amount is involved and urgent steps should be taken to recover the money.

Director Law of the Federal Investigation Agency Azam Khan submitted a report praising measures taken to get Hamesh Khan extradited form the US.

The Justice Department in Washington has already received necessary documents but has not yet responded.

The court praised the FIA for its efforts to bring back fugitives and said: “The success made by the FIA should be used as a precedent in future by the NAB and other law-enforcement agencies to bring back to the country people who, after the committing offences and plundering nation’s wealth, feel that they will be safe out of the country and amount looted by them will not be refundable.”

NAB prosecutor general Dr Danshwar Malik and Khawaja Haris, the counsel for Bank of Punjab, also appeared before the court which ordered that the names of all accused be placed on the ECL.

Advocate Waseem Sajjad, the counsel for Seth Nisar, brother of Sheikh Afzal, said his client was ready to surrender but sought protection. The court ordered the authorities not to arrest him.

According to NAB record, the loan sanctioned by the Bank of Punjab to Haris Steel Industries, Ali Ejaz of Haider Steel Industries and Waris Malik of Prime Steel Industries swelled to Rs9 billion after inclusion of interest.

The loan was approved against a collateral of Rs11 billion whereas the actual worth of property shown as collateral was Rs40 million.

If Indians are Behind the Balochistan Insurgency Then What is the Need for a Package?

Salient Points of the Package Proposals Announced in the Joint Session of Parliament on November 24, 2009:

Constitution-related matters
* Constitutional amendments about provincial autonomy being considered by the parliamentary committee be addressed immediately.

* The committee considering deletion of the concurrent list, the Police Order of 2002 and the Balochistan Local Government Ordinance of 2001, effective implementation of article 153 on the Council of Common Interests, and implementation of articles 160 (NFC award), 154 (council functions and rules of procedure), 155 (interference with water supplies), 156 (National Economic Council), 157 (electricity projects), 158 (priority of requirements of natural gas) and 159 (broadcasting and telecasting).

* After change in the NFC award formula based on population, other criteria such as inverse population ratio, backwardness, poverty and resource generation be taken into consideration. Political matters

* The federal government, in consultation with the provincial government, immediately release all political workers, except those charged for heinous crimes.

* Dialogue with all major stakeholders in the political spectrum of the province to bring them into the mainstream of politics.

* Facilitation of political exiles returning to Pakistan, except those involved in ‘acts of terrorism’.

* Unanimously passed provincial assembly resolution from 2002 to date relating to the province be implemented ‘within the legal framework of the constitution’.

* The Local Government Ordinance be amended by the provincial government ‘in view of the needs of the province’.

Administrative matters
* The federal government immediately review the role of federal agencies in the province and ‘stop all such operations that are not related to the pursuit of fighting terrorism’.

* The federal government announce withdrawal of army from Sui, to be replaced by the Frontier Corps (FC) and no proposals be formulated to construct new cantonments ‘except in frontier areas wherever required’.

* A commission to be constituted in respect of missing persons, to be headed by a sitting superior judiciary judge from Balochistan with federal defence and interior ministers and the provincial home minister as members to hold proceedings in camera.

* Missing persons to be identified, with release of those against whom there are no charge and trial of others before a competent court.

* An inquiry by the superior judiciary into the murder of Baloch political workers Ghulam Moammad, Lala Munir and Munir Ahmed.

* A fact-finding commission headed by a retired judge of the Supreme Court or a high court to determine ‘the circumstances leading to the death of Nawab Akbar Bugti Shaheed’.

* Halt to the construction of new cantonments in Sui and Kohlu ‘for the time being’ and the army to be withdrawn from Sui after handing over to FC, which also to take over the already constructed Sui cantonment.

* Review from time to time of the policy of conversion of ‘B’ areas into ‘A’ areas and urban areas may have regular police.

* The FC’s law-enforcement role to be under the chief minister, powers conferred under the customs act to be withdrawn and the coastguard to perform its primary duty of checking arms and narcotics smuggling.

* Checkposts of civil armed forces and other related agencies, other than those in border areas, to be in accordance with provincial government directions.

* An inquiry by the superior judiciary into allotment of land in Gwadar port area.

* Special quota of scholarships for Balochistan by the Higher Education Commission. Economic matters

* While rationalisation of the royalty formula and gas development surcharge having been done, the concept of public-private ownership to be followed in areas of a district granted for exploration.

* All new mega projects to be initiated with the consent and approval of the provincial government and Gwadar to have a free economic zone with political activities there to be regulated by law framed in consultation with all stakeholders.

* Special economic package for Sui and armed forces to be systematically withdrawn from there.

* The federal government to immediately create 5,000 jobs for the province.

* The federal government to pay arrears of gas development surcharge (GDS) from 1954 to 1991, amounting to Rs120 billion, in 12 years.

* The province to be able to buy up to 20 per cent of right shares offered in open market in organisations like PPL, OGDCL and Sui Southern.

* The federal government to immediately give 20 per cent from its 30 per cent shares in Saindak project to the province, which will exclusively own it on completion and after withdrawal of the foreign company.

* Uniform gas price throughout the country for the calculation of GDS.

* Fishing trawlers to be restricted to 33km from the coast, to help small fishermen.

* Special incentives to local tribes to facilitate oil/gas exploration in Kohlu district now closed owing to security concerns.

* Allocation of the province in all poverty alleviation schemes to be proportional to percentage of people living below poverty line.

* The federal government to provide Rs1 billion for the rehabilitation of internally displaced persons of Dera Bugti.