Saturday, June 13, 2009

Evidence of Musharraf's Family Corruption


22/03/2007 4:56 AM

From Ehtesab
www.ehtesab.org

Musharraf's Close Relative Paid in Rs 7bn Motorway project

ISLAMABAD: The first solid proof of involvement of General Pervez Musharraf’s close relative, his son Bilal’s father in law, in a multi-billion rupee road construction contract, has come to light.

The proof was provided by the owner of the construction company, Husnain Construction, at a news conference at the M-3 Motorway site near Islamabad last week. Surprisingly it has remained buried without any discussion in the mainstream Pakistani media, although leading newspaper Dawn published portions of the incriminating statement on Sept 26 in a very subdued manner, hiding the disclosures under a positive statement by the National Highway Authority Chairman, Major General Farrukh Javed.

In just under 5 weeks after SA Tribune broke the scandal of General Musharraf’s “Golfway” Project, a mix of the Rs 25 billion Golf Course in Lahore and the Rs 7 billion Pindi-Peshawar Motorway, Brig (Retd) Aftab Siddiqui’s was confirmed to be the big beneficiary. The proof came from the Horse Owner’s mouth, if not the Horse himself.

The SA Tribune first reported in our Aug 26 issue that Musharraf's "Golfway" project, conceived and launched by an ex-ISI chief, held secret from the public for ‘national security reasons’ had a real connection with his close relatives. http://www.satribune.com/archives/aug26_sep1_02/P1_Grapevinecomm.htm
On Sept 9, it was reported that the in-laws of Musharraf’s son were reportedly flying out of Pakistan “lock, stock and barrel” after their names were revealed in the Motorway project. http://www.satribune.com/archives/sep09_15_02/P1_Grapewinecomm.htm

These were Sa Tribune reports. Now comes the surprising statement by Sheikh Yousaf, owner of Husnain Construction, which is the contractor for the Pindi-Peshawar Motorway project, also known as M-3. He spoke to journalists at a Press conference and admitted everything, as reported in Pakistan’s leading Daily ‘Dawn’ on Sept 25, 2002.

Dawn’s Islamabad Staff reporter said: “Sheikh Yousaf explained the phases for which his company passed for converting the M-3 project from the Built, Operate and Transfer (BOT) plan to the government funded project.”
“When asked as to how much his company had been helped by Brig (Retd) Aftab Siddiqui father-in-law (of General Musharraf’s son), Bilal Musharraf, he said the gentleman had worked with his company as a consultant.”

“Mr Yousaf said it was originally agreed that he would get two per cent of the profit from the project for 25 years, but since the project had been converted to a government funded plan, Aftab Siddiqui was no longer with his company. The cost of M-3 is Rs7 billion.”

“He, however, said Mr Siddiqui had been paid for the 'services' which he rendered, but refused to give more details... Everything was documented, and the payments to Mr Siddiqui had been made through cheques the copies of which had been provided to "a number of government departments," he said.”

The Dawn report then added a dramatic twist: “Then his son (Sheikh Yousaf’s son) rushed to the stage and asked Mr Yousaf not to answer more queries on the subject.”

Still, “Mr Yousaf said the company was heading the consortium of the Pakistani construction companies called PAMIC, and added that they were completing the project to show that the country had the expertise to construct the motorway. He said it was the first contract of its kind which had no escalation clause.”

When asked as to how many projects his company had fetched in the period of military government, he avoided giving straight answer, and said that whatever his company had got was on merit. He admitted that he had purchased about a dozen sick industrial units.”

The dramatic Press conference raised a plethora of questions which are begging for answers. The Chairman of the company confirmed that Bilal’s father in law “had been paid for his services”, which in other words means he had delivered his part of the contract. And since he is no longer with the Company, it can be safely guessed that he is enjoying the two per cent somewhere, may be in US.

Sheikh Yousaf, revealed that Bilal’s Father-in-Law had been paid through cheques and copies had been given to various departments of the Government. That would make the job of future Accountability Bureaus much easier, it seems.

Then he was asked a very pertinent question. How many contracts his company had fetched during the Musharraf Regime? This apparently puzzled him and he could not give a straight answer. He still did not realize that some smart reporter was trying to trap him. But his son rushed to the stage and stopped him from making more disclosures.

But his answer, reported in Dawn, at least gave an insight of how much they had already made. “He admitted that he had purchased about a dozen sick industrial units,” was his reply to one question. This seems to be an impressive record which would beat any Sharif or Zardari hands down.

However many questions are now being raised. What are the rates at which he has purchased these units? Who else bid for them? What were the terms of purchase? Was there any competitive bidding? Was any undue government influence used for these purchases? What was the role of Bilal Musharraf’s father-in-law in these purchases? Is this not corruption? Is this what General Musharraf means by good governance?

60 % perceive political parties highly corrupt

The Nation-Published: June 06, 2009

ISLAMABAD (PPI) - Almost 60 percent Pakistanis think the level of corruption in political parties is high or very high, followed by parliament (57%) and private/business sector (41%), according to a Gilani Research Foundation survey carried out by Gallup Pakistan.

It is interesting to note that religious organizations are perceived to have little or no corruption by 58%, followed by the Pakistan Army (41%) and Media (32%). It must be noted that we are dealing with perceptions, which may or may not match reality.

Those seen as cleanest might have the most compromised behavior and vice versa. Our data only deals with, as Pakistanis perceive them to be, said the Survey. A nationally representative sample of men and women from across the country were asked to evaluate the level of corruption in a number of public and private organizations. Political parties were perceived as corrupt by the highest percentage of respondents.

Sixty percent (60%) believe they have high or very high levels of corruption; only 11% think there is little or no corruption and 18% think there is some corruption. Eleven percent (11%) were unsure or gave no response.

Unfortunately, political parties are followed by the Parliament, seen as highly corrupt by 57% of the respondents. Only 14% said there is little or no corruption while 21% claimed there is some corruption in the parliament. Eight percent (8%) were unsure or gave no response, it said.

It said private sector/businesses is considered to have a high level of corruption by 41% of the respondents and 29% believe private sector is corrupted to some extent; 22% of the respondents claimed there is little or no corruption. Eight percent (8%) were unsure or gave no response.

It said non-governmental organizations and the media enjoy mixed reputation. NGOs are seen as highly corrupt by 35% and media by 33% of the respondents. On a five-point scale, 25% believe that there is little or no corruption in NGOs, 24% said there is some corruption but the majority, 35% of the respondents, still thinks NGOs have a high or a very high level of corruption. Fifteen percent (15%) of the respondents were unsure or gave no response.

As for media 32% perceive it to be mostly corruption free, 25% believe it has some corruption, but again a third of the respondents (33%) consider it to be highly corrupt. Eleven percent (11%) were unsure or gave no response.

Interestingly the Pakistan Army is believed to be corruption free by the majority (41%) of the respondents. A third (32%) thinks there is high or very high level of corruption while 19% said it has some corruption. Nine percent (9%) were unsure or gave no response, the Survey said.

Amongst all these organizations listed, religious groups were ranked to be the least corrupt as 58% of the respondents claimed these groups have little or no corruption while only 15% said religious groups have high or a very high rate of corruption. In the survey, eighteen percent (18%) said there is some corruption in these religious groups. Ten percent (10%) were unsure or gave no response.

It is interesting to notice that proportionately high percentage frugalities as compared to urbanites consider religious groups as corruption free.

Corruption in Pakistan: An Overview

Authored by: Marie ChĂȘne
U4 Helpdesk
Date: 08 August 2008

Corruption trends in Pakistan over the past 10 years

Most governance indicators show an unchanging situation in Pakistan, with corruption perceived as widespread, systemic and deeply entrenched at all levels of society and government. Based on research done for this query and consultations with TI Pakistan, corruption is viewed as being equally pervasive within federal, provincial and local governments.

Since first being included in 1995, Pakistan has consistently performed poorly on the Corruption Perception Index (CPI) of Transparency International, and is among the countries with the most perceived corruption each year.

According to the 2007 CPI, Pakistan scored 2,4.(Please see: http://transparency.org/policy_research/surveys_indices/cpi/2007).

The Worldwide Governance Indicators (WGI) of the World Bank have also shown very little progress over time, with weak scores in most areas. Most troubling has been the rapid decline in indicators for political stability, which have deteriorated rapidly since 1998: 1.0 in 2007 compared to 5.8 in 2003 and 11.11 in 1998.

According to the World Bank’s WGI, governance actually seemed to improve slightly under the first military government (1999-2002) following Musharraf’s coup. In 2003, the country even performed slightly better in terms of controlling corruption, rule of law and government effectiveness. However, all the country’s indicators have since collapsed (based on 2007 results) except for those related to regulatory quality and voice and accountability.

Please see: http://info.worldbank.org/governance/wgi2007/sc_chart.asp). Further surveys conducted in recent years confirm the finding that corruption in the country has worsened:

Forms of corruption

Corruption manifests itself in various forms in Pakistan, including widespread financial and political corruption, nepotism, and misuse of power. Both petty and grand corruption are prevalent in the country. Citizens commonly face demands for bribes in their dealings with government institutions to access basic public services. The frequency of petty bribery is alarming and has shown little improvement over time, as evident in the national corruption surveys conducted by TIPakistan in 2002 and 2006.

Survey results for 2002 indicated that a remarkable 100 percent of the respondents who had any type of contact with the police over the previous year were confronted with corruption. In terms of basic services, 44 percent of the respondents were only able to access electricity by paying a bribe, while the rest had to rely on other forms of influence to obtain a connection. When it came to the country’s tax authorities, nearly every respondent (99 percent) had encountered corruption.

According to respondents of the 2006 survey, the three most corrupt government agencies were the police, (64 percent), power sector (11 percent) and judiciary (9 percent). The three main reasons for corruption, as viewed by the respondents, were the lack of accountability, low salaries and discretionary powers. Measures suggested for combating corruption included more adequate salaries and a speedier judicial process.

The public procurement process in Pakistan is an example of where corruption can take place. In principle, the law in Pakistan provides for open and competitive bidding in awarding government contracts. However, information on government expenditures and decisions is not always made public. As signalled by TI-Pakistan’s survey work, public sector services — such as for power and utilities as well as infrastructure and public works — are the most affected by corruption. Public works kickbacks are estimated to constitute approximately 25 percent of the budget. (http://www.business-anticorruption. com/normal.asp?pageid=464).

With Pakistan a major recipient of grants and loans from international donor agencies, corruption in procurement has affected poverty, aid and development projects. A World Bank Country Assistance Evaluation of projects and programmes in Pakistan has confirmed the problem. The World Bank and the Auditor General of Pakistan have repeatedly cited governance problems in recruitment, site selection, absenteeism and corruption for development projects. As a result, some of the World Bank’s projects were(partly) suspended or cancelled, such as the Baluchistan Primary Education Project. In addition, the disbursement of other loans was withheld after irregularities were uncovered.(Please see: http://www.oecd.org/dataoecd/63/31/36494011.pdf).

In response, the World Bank and the Asia Development Bank are assisting Pakistan in establishing e-governance in order to promote transparency and reduce corruption in procurement processes and other areas of governance. The Board of Investment (BOI), for example, is now publishing tender invitations on their website. (Please see, for example: http://info.worldbank.org/etools/BSPAN/PresentationView.asp?PID=1978&EID=911 and http://www.pakboi.gov.pk/

Corruption prone institutions

The wide consensus across surveys points to the police as being one of the most corrupt institutions in Pakistan. According to the organisation Global Integrity (http://www.globalintegrity.org/reports/2006/PAKISTAN/index.cfm), appointments in the police force are often based on political considerations. Police officers frequently have conflicts of interest due to personal loyalties and family connections. It is also well known that in Pakistan, influential landlords decide the appointment of law enforcement officers in their area, with police officers acting on their behalf. Unlawful police methods do not solely affect poor people. Businesses also complain that they suffer from extortion by the police, for instance in the form of bogus traffic fines.

The other sector in Pakistan which is seen as notoriously inefficient and corrupt is the judiciary. According to TI Pakistan’s 2006 survey, 96 percent of the people who came in contact with the judiciary encountered corruption and 44 percent of them reported having to pay a bribe to a court official. The judiciary is also viewed as lacking independence from the executive and contributing to a general culture of impunity. Again, according to Global Integrity, the procedure for selecting judges at the national level is not transparent and selection procedures are often made in exchange for political favors.

Despite these problems, judges are exempt from oversight and investigations by Pakistan's national anticorruption agency, the National Accountability Bureau. The business community generally lacks confidence in the capacity of the judiciary to enforce rules and laws, and the settlement of disputes often involves paying bribes. (http://www.business-anticorruption. com/normal.asp?pageid=464). For example, the judiciary takes an average of 880 days to settle a business dispute at a cost of 24 percent of the claim (www.doingbusinesss.org).

The country’s tax and public finance administration has also been affected by corruption. The World Bank’s 2004 Public Expenditure Management report on the country showed widespread collusion between taxpayers and tax officials, a situation that has led to tax evasion and lack of tax compliance (See: http://www.oecd.org/dataoecd/63/31/36494011.pdf). In addition, a financial accountability assessment undertaken by the World Bank in 2003 showed that, although good progress had been achieved in public sector accountability, major gaps and weaknesses remain in the accountability chain. These have arisen mainly from low institutional and staff capacity and uneven implementation of reform measures.
The report emphasised the urgent need to strengthen financial reporting, to institute adequate controls at all levels of government — especially at the provincial level1 —and to maintain effective tracking of social spending. (Please see:http://siteresources.worldbank.org/PAKISTANEXTN/Resources/Pakistan-Development-Forum- 2004/PakCFAA2004.pdf).

A more recent report on public sector accounting in Pakistan further shows its public sector accounting and auditing does not comply with international standards. More attention needs to be paid to summary tables of outstanding public sector accounting and to good reporting and disclosure processes following audits. (Please see: http://siteresources.worldbank.org/SOUTHASIAEXT/Resources/Publications/448813-
1195243379044/sar_report-pakistan-summary.pdf)

The high prevalence of corruption in the sectors covered in the national survey suggest that the problem likely cuts across federal, provincial and local administrations since service delivery is divided between different political levels. Moreover, the country is administratively structured in such a way that there are 100 times more junior-level civil servants than senior officers, creating a ready group to engage in the petty abuses currently plaguing Pakistan.

Part 3:Further Reading and Resources on Pakistan

INDICES

Bertelsmann Transformation Index 2008

The BTI is a global ranking of transition processes, in which the state of democracy and market economic systems as well as the quality of political management are analyzed in 125 transitional and developing countries. Pakistan is included in the analysis and the rankings. The country reports can be found at: http://www.bertelsmann-transformationindex. de/28.0.html?&L=1
For ranking please see: http://www.bertelsmann-transformation-index.de/27.0.html?&L=1.

The Global Integrity Index (2007)
TI Corruption Perceptions Index 2007
For the latest CPI survey data please see:
http://transparency.org/policy_research/surveys_indices/cpi/2007.

Pakistan: Integrity Scrorecard (The Global Integrity Report)

The Global Integrity Report (report.globalintegrity.org)

Pakistan:Integrity Scorecard
2008 Assessment

Pakistan: Integrity Indicators Scorecard
Overall Score: 72 (+/- 0.70) - Moderate


Category I
Civil Society, Public Information and Media = 79 (Moderate)

I-1 Civil Society Organizations =91 Very Strong
I-2 Media= 72 Moderate
I-3 Public Access to Information=73 Moderate

Category II - Elections= 63 Weak

II-1 Voting & Citizen Participation= 66 Weak
II-2 Election Integrity=80 Moderate
II-3 Political Financing=42 Very Weak

Category III-Government Accountability=69 Weak

III-1 Executive Accountability=59 Very Weak
III-2 Legislative Accountability=68 Weak
III-3 Judicial Accountability=69 Weak
III-4 Budget Processes=81 Strong

Category IV Administration and Civil Service=68 Weak

IV-1 Civil Service Regulations=62 Weak

IV-2 Whistle-blowing Measures=75 Moderate
IV-3 Procurement=62 Weak
IV-4 Privatization=75 Moderate

Category V-Oversight and Regulation=78 Moderate

V-1 National Ombudsman=82 Strong
V-2 Supreme Audit Institution= 81 Strong
V-3 Taxes and Customs= 83 Strong
V-4 State-Owned Enterprises=80 Moderate
V-5 Business Licensing and Regulation=63 Weak

Category VI-Anti-Corruption and Rule of Law=78 Moderate

VI-1 Anti-Corruption Law=100 Very Strong
VI-2 Anti-Corruption Agency=69 Weak
VI-3 Rule of Law=74 Moderate
VI-4 Law Enforcement= 69 Weak