Bhutto Dynasty: How the Bhuttos Used Money For Political and Personal Gain

The role of money in elections and politics is generally known and understood around the world. Pakistan is no exception. In a recent book entitled "The Bhutto Dynasty" written by veteran British journalist Owen Bennet Jones, the author describes how former Prime Minister Benazir Bhutto saw "kickbacks" as an essential part of politics. Jones says that  the "amnesty she (Benazir Bhutto) secured from General Musharraf scuppered a Swiss trial in which there was a very high chance she would have been convicted of, among other things, using money from bribes to buy a necklace worth $175,000". 

The Bhutto Dynasty:

Owen Bennet Jones has described in some detail how Zulfikar Ali Bhutto and his daughter Benazir Bhutto saw the role of money in Pakistani politics. Here's an excerpt of Benazir's candid admission that "kickbacks must be taken":

"In a surprisingly unguarded interview with the American Academy of Achievement in 2000 she (Benazir Bhutto) said, while denying personal involvement, that she wished she had done more to tackle corruption: ‘We all knew kickbacks must be taken . . . these things happen.’Politicians everywhere, she argued, made money. The difference was that while Western politicians did so after they left office, their counterparts in the developing world did not have that option".

Asif Zardari-Benazir Bhutto Wedding Picture

Jones offers several specific instances of how the Bhuttos used money for political gain. One such instance was when Benazir Bhutto's husband Asif Ali Zardari helped her defeat a no-confidence motion that appeared to be all but certain to remove her from power. Here are the relevant excerpts of the book:

"Having seen politics close up when her father was in power, Benazir had long been aware that money played a part in Pakistani politics. But now it could not have been clearer: if one of her National Assembly members was being offered a bribe to switch to the opposition, she needed to be able to match it............As another of her political advisers later recalled, ‘Asif’s role became more prominent when she beat back the motion of no confidence. There was some wheeler dealing in that. Some buying of votes. The moment money transactions came into play, Asif was in his element.’ Asif Zardari has consistently denied any financial malpractice. During her second government, Benazir told an aide that you needed to have $200–300 million to go into an election so that you could fund your candidates and secure their loyalty. While many of her advisers gave her plenty of interesting suggestions about what to do, Zardari actually did things, proving himself to be a man she could rely on" 

Owen Bennet Jones has reported another instance in which Zulfikar Ali Bhutto gave away bundles of cash to a religious leader who was the last hold-out against the adoption of the 1973 constitution. Here is the excerpt:

"It was, by any standards, extraordinary that Zulfikar managed to push it through with no one in the National Assembly voting against it. Mubashir Hassan described how the final hold-out – a cleric – was persuaded to vote in favour with a payoff: ‘The amount was settled and Bhutto described the scene to me how when the fellow came to President’s House to collect the money, Bhutto threw a packet of notes on the floor and ordered him to pick it up. There the man was, moving over the carpet on all fours, picking a bundle from here and a bundle from there. Bhutto was mightily amused. By using all his political skills – bribery included – Zulfikar had made a significant contribution to Pakistan’s national story." 

The Panama Leaks: 

Pakistani politicians and their supporters use allegations of corruption in Pakistani military to distract attention from their own well-documented corruption. Just a quick look at the names in leaked Panama Papers shows that politicians, not generals, dominate these lists. Pakistani names included in Panama Papers are those of several politicians and business people, but no generals, according to media reports.

 Prime Minister Nawaz Sharif is linked to 9 companies connected to his family name. Those involved are:  Hassan Nawaz, Hussain Nawaz, Maryam Nawaz, Relatives of Punjab Chief Minister and brother of Prime Minister Shahbaz Sharif are linked to 7 companies. They are: Samina Durrani and Ilyas Meraj.

Former Prime Minister Benazir Bhutto was linked to one company. Her relatives and associates are linked to others: Nephew Hassan Ali Jaffery Javed Pasha, Close friend of Asif Ali Zardari (4 companies), PPP Senator Rehman Malik (1 company), PPP Senator Osman Saifullah’s family (34 companies), Anwar Saifullah, Salim Saifullah, Humayun Saifullah, Iqbal Saifullah, Javed Saifullah, Jehangir Saifullah. The Chaudharies of Gujrat have not been linked personally but other relatives have including: Waseem Gulzar Zain Sukhera (co-accused with former Prime Minister Yusuf Raza Gilani’s son in the Hajj scandal).

Pakistani Businessmen in Panama Leaks: Real Estate tycoon Malik Riaz Hussain’s son (Bahria Town) Ahmad Ali Riaz (1 company), Chairman ABM Group of Companies Azam Sultan (5 companies), Pizza Hut owner Aqeel Hussain and family (1 company), Brother Tanwir Hassan Chairman Soorty Enterprise Abdul Rashid Soorty and family, Sultan Ali Allana, Chairman of Habib Bank Limited (1 company), Khawaja Iqbal Hassan, former NIB bank President (1 company), Bashir Ahmed and Javed Shakoor of Buxly Paints (1 company), Mehmood Ahmed of Berger Paints (1 company), Hotel tycoon Sadruddin Hashwani and family (3 companies), Murtaza Haswani Owner of Hilton Pharma, Shehbaz Yasin Malik and family (1 company), The Hussain Dawood family (2 companies), Shahzada Dawood Abdul Samad Dawood Partner Saad Raja, The Abdullah family of Sapphire Textiles (5 companies), Yousuf Abdullah and his wife, Muhammad Abdullah and his wife, Shahid Abdullah and his family, Nadeem Abdullah and family, Amer Abdullah and family, Gul Muhammad Tabba of Lucky Textiles, Shahid Nazir, CEO of Masood Textile Mills (1 company), Partner Naziya Nazir Zulfiqar Ali Lakhani, from Lakson Group and owner of Colgate-Palmolive, Tetley Clover and Clover Pakistan (1 company) and Zulfiqar Paracha and family of Universal Corporation (1 company).

Pakistani Judges in Panama Leaks: Serving Lahore High Court Judge Justice Farrukh Irfan, Retired Judge Malik Qayyum, Pakistani Media personnel in Panama Leaks: Mir Shakil-ur-Rehman of GEO-Jang Media Group (1 company).
Politicians Dominate Panama Leaks

Political Patronage:

Pakistani civilian rule has been characterized by a system of political patronage that doles out money and jobs to political party supporters at the expense of the rest of the population. Public sector jobs, including those in education and health care sectors, are part of this patronage system that was described by Pakistani economist Dr. Mahbub ul Haq, the man credited with the development of United Nations Human Development Index (HDI) as follows:

"...every time a new political government comes in they have to distribute huge amounts of state money and jobs as rewards to politicians who have supported them, and short term populist measures to try to convince the people that their election promises meant something, which leaves nothing for long-term development. As far as development is concerned, our system has all the worst features of oligarchy and democracy put together." 

Summary:

Recently released book "The Bhutto Dynasty" details specific instances and Benazir Bhutto's candid admission of how the Bhutto dynasty has used money for political and personal gain in Pakistan. Other sources, such as leaked Panama Papers, reinforce how Pakistani political dynasties, including Bhuttos and Sharifs, have enriched themselves at the expanse of Pakistan's poor. 

Related Links:

Haq's Musings

South Asia Investor Review

Political Patronage in Pakistan

Zardari Corruption

Panama Papers

US Aid to Pakistan

1971 Debacle in East Pakistan

Is it 1971 Moment in Pakistan's History?

Mission RAW by RK Yadav: India in East Pakistan

Benazir Bhutto Gave Birth to Taliban

What if Musharraf Had Said No to US After 911?

Riaz Haq Youtube Channel

VPOS Youtube Channel

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  • Riaz Haq

    Yuen Yuen Ang
    @yuenyuenang
    .
    @reema_omer
    thank you for mentioning my 📙

    However, your summary "access money fueled growth" is misleading, so allow me to clarify

    My book clearly maintains that all corruption, like drugs, are harmful. Access money generates growth with distortions, risks, and inequality.


    https://twitter.com/yuenyuenang/status/1434542892090109952?s=20

  • Riaz Haq

    HOUSE OF GRAFT: Tracing the Bhutto Millions -- A special report.; Bhutto Clan Leaves Trail of Corruption

    https://www.nytimes.com/1998/01/09/world/house-graft-tracing-bhutto...

    Officials leading the inquiry in Pakistan say that the $100 million they have identified so far is only a small part of a windfall from corrupt activities. They maintain that an inquiry begun in Islamabad just after Ms. Bhutto's dismissal in 1996 found evidence that her family and associates generated more than $1.5 billion in illicit profits through kickbacks in virtually every sphere of government activity -- from rice deals, to the sell-off of state land, even rake-offs from state welfare schemes.

    The Pakistani officials say their key break came last summer, when an informer offered to sell documents that appeared to have been taken from the Geneva office of Jens Schlegelmilch, whom Ms. Bhutto described as the family's attorney in Europe for more than 20 years, and as a close personal friend. Pakistani investigators have confirmed that the original asking price for the documents was $10 million. Eventually the seller traveled to London and concluded the deal for $1 million in cash.

    The identity of the seller remains a mystery. Mr. Schlegelmilch, 55, developed his relationship with the Bhutto family through links between his Iranian-born wife and Ms. Bhutto's mother, who was also born in Iran. In a series of telephone interviews, he declined to say anything about Mr. Zardari and Ms. Bhutto, other than that he had not sold the documents. ''It wouldn't be worth selling out for $1 million,'' he said.

    The documents included: statements for several accounts in Switzerland, including the Citibank accounts in Dubai and Geneva; letters from executives promising payoffs, with details of the percentage payments to be made; memorandums detailing meetings at which these ''commissions'' and ''remunerations'' were agreed on, and certificates incorporating the offshore companies used as fronts in the deals, many registered in the British Virgin Islands.

    The documents also revealed the crucial role played by Western institutions. Apart from the companies that made payoffs, and the network of banks that handled the money -- which included Barclay's Bank and Union Bank of Switzerland as well as Citibank -- the arrangements made by the Bhutto family for their wealth relied on Western property companies, Western lawyers and a network of Western friends.

    As striking as some of the payoff deals was the clinical way in which top Western executives concluded them. The documents showed painstaking negotiations over the payoffs, followed by secret contracts. In one case, involving Dassault, the contract specified elaborate arrangements intended to hide the proposed payoff for the fighter plane deal, and to prevent it from triggering French corruption laws.

  • Riaz Haq

    Asset declarations to be made public under IMF condition
    Govt can exempt judiciary, armed forces’ members from disclosure

    https://tribune.com.pk/story/2334492/asset-declarations-to-be-made-...


    The government is walking a tight rope to implement all conditions by end of this month, if it is keen to get the IMF Board’s approval for the loan tranche on January 12.


    The sources said that the IMF has imposed another condition that the high-level public office holders and the civil servants of basic pay scale (BPS) 17 and above, their spouses, children or benamidars, or any person in relation to whom these persons are beneficial owners will file their asset declarations with the Federal Board of Revenue. These assets will be then made public.

    The government has also defined the high-level public officials who will be required to file their declarations which will be made public. An amendment is being drafted where only politically exposed persons defined by a rule, regulation, executive order or instrument; or under any law for the time being in force would be required to file their declarations, the sources said.

    The government had resisted the demand to ensure compulsory declaration on the grounds that these people were already required to submit their asset details in the Establishment Division. However, the IMF did not agree to it and instead asked Pakistan that such declarations should be filed with the tax authorities.

    However, many bureaucrats did not file their asset declarations, nor did they submit their annual income tax returns, including many taxmen.

    The IMF’s view was that any important position holder drawing salary from the budget should disclose assets to ensure transparency.

    “The disclosure of information in respect of high-level public officials is proposed in line with the requirements of the development partners, rule of law and integrity,” the note sent by the FBR chairman to the finance adviser about changes being made in the tax laws read.

    However, the government has found a way out where the declarations filed by members of the armed forces would not be made public, the sources said, adding that the exception has been created by Law Minister Barrister Farogh Naseem.

    Barrister Naseem was not available for comments.

    The sources said that the requirement of non-disclosure of the asset declarations would not be applicable on those who were currently exempted from the applicability of the National Accountability Ordinance.

    A proviso is likely to be inserted in the law that will state that nothing in clause (t) shall apply to those who are expressly exempted under clause (iv) of sub-section (m) of Section 5 of the National Accountability Ordinance, 1999.

    What Clause 5 (m) (iv) says?

    A person who is holding, or has held, an office or post in the service of Pakistan, or any service in connection with the affairs of the Federation, or of a province, or of a local council constituted under any federal or provincial law relating to the constitution of local councils, or in the management of corporations, banks, financial institutions, firms, concerns, undertakings or any other institution or organisation established, controlled or administered by or under the federal government or a provincial government, other than a person who is a member of any of the armed forces of Pakistan, or for the time being is subject to any law relating to any of the said forces, except a person who is, or has been a member of the said forces and is holding, or has held, a post or office in any public corporation, bank, financial institution, undertaking or other organisation established, controlled or administered by or under the federal government or a provincial government.