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Looking for the lost money that belonged to the Pakistani people…
The money is gone: Pakistani people own the loans & Citibank knew where it is:
Saturday August 8, 2009
GEO TV: For the first time in YEARS, on Pakistan mainstream TV network, Dr. Shahid Masood in his “Mere Mutabiq” program reveals the facts that money from Pakistans treasury was taken by Asif Ali Zardari, the CURRENT President of Pakistan, and laundered through the Cayman Islands, finally winding up at Citibank Switzerland. Also named in the charges is former Prime Minister Shaukat Aziz (who now lives in London).
Dr. Shahid Masood reports, “As the Pakistani Army and people fight terrorists in the country, we have financial terrorists attacking in Pakistan, and present a much greater threat to the country.” (Translation).
Oil companies who have recently collected 7 billion rupees in carbon taxes (ordered by Zardari), have yet to pay a single rupee in taxes to the Pakistan treasury.
Nothing yet in print media; but here are two articles from Pakistani online news back in 2007.
Ref
Shaukat Aziz and Citibank’s Laundering of Asif Zardari’s Money
Posted: Nov 22, 2007 Thu 12:00 am
How Citibank Laundered Asif Zardari’s Money, provides a case history excerpted from a US Congress Subcommittee’s investigation of moneylaundering by private banking groups within US banks during the 1990s. The present post reproduces an interesting document, “List of meetings between Mr. Zardari and Citibank personnel, provided by Citibank,” being document “h” of a list of “Documents relating to Asif Ali Zardari” appended to the Report.
As part of its investigation, the subcommittee asked Citibank to provide a written record of meetings held between Citibank officials and four high profile Citibank account holders, including Mr. Asif Ali Zardari. Unlike the other cases, in which the names of relatively low level Citibank private banking group staff emerges in the records provided, the names of Citibank staff involved in the case of Benazir Bhutto and Asif Ali Zardari consists of men who have gone on to play a prominent role in Pakistan:
Shaukat Aziz, Until recently Prime Minister of Pakistan (close ties to CIA
Shaukat Tarin, Chairman, Board of Directors, Karachi Stock Exchange
Sajjad Rizvi
Nadeem Hussain, CEO, Tameer Bank & President, Tameer Foundation
The statement provided by Citibank lists date, participants, location, and summary of contacts between Citibank staff and the Bhuttos. This statement is reproduced below, interspersed with important events in the more detailed Asif Zardari case summary [see here] provided in the House Sub-Committee Report, inserted chronologically:
Senate Permanent Subcommittee on Investigations
Exhibit # 31h.
Meetings, Events, or Functions at which Benazir Bhutto, Asif Ali Zardari, or Both Were Present
Date: Late January/Early February 1994
Participants: William Rhodes, Shaukat Aziz, Benazir Bhutto, Asif Ali Zardari, and others
Location: Davos, Switzerland
Summary: William Rhodes and Shaukat Aziz attend Davos economic conference. During conference, they are guests at a dinner hosted by Benazir Bhutto and attended by approximately 150 others.
Date: February 1994
Participants: John Reed, Paul Collins, Shaukat Tarin, Benazir Bhutto, and Asif Ali Zardari
Location: Islamabad
Summary: Discussion of Pakistani and world affairs
NOTES on the Citibanksters:
William Rhodes: William R. “Bill” Rhodes Rhodes is the Senior Vice Chairman of Citigroup Inc. and the Chairman of Citigroup and Citibank. He is also Chairman of the Board of both the Americas Society and its affiliate, the Council of the Americas, which were originally founded by David Rockefeller in 1965, and is a board member of the Group of Thirty.
Rhodes was educated at Northfield Mount Hermon, a college preparatory school, and Brown University; he joined Citibank in 1957. As the Senior International Officer for Citigroup, Mr. Rhodes has specific responsibilities for client relationships in emerging markets worldwide, relationships with governments and other official institutions and appointments of Citibank’s senior country officers outside the U.S.
John Shepard Reed [/b] (born 1939) is the former Chairman of the New York Stock Exchange. He previously served as Chairman and CEO of Citicorp, Citibank, and post-merger, Citigroup.was asked to be interim CEO of the New York Stock Exchange after the Richard Grasso over-compensation scandal. He accepted the job for a $1 salary and set up new governance rules as the NYSE became a public corporation. Reed is on the board of directors at Altria Group.
Paul J. Collins became a director of the [Enstar Group Ltd.] on January 31, 2007 in connection with the completion of the Merger. Mr. Collins served as a director of The Enstar Group, Inc. from May 2004 through the Merger. Mr. Collins retired as a Vice Chairman and member of the Management Committee of Citigroup Inc. in September 2000. From 1985 to 2000, Mr. Collins served as a director of Citicorp and its principal subsidiary, Citibank; from 1988 to 1998, he also served as Vice Chairman of those entities. Mr. Collins currently serves as chairman of the University of Wisconsin Foundation and a trustee of the Glyndebourne Arts Trust. He is also a member of the Advisory Board of Welsh, Carson, Anderson & Stowe, a private equity firm. He was previously a director of Kimberly Clark Corporation, Nokia Corporation and BG Group and a member of the supervisory board of Actis Capital LLP.
Date: August 1994
Participants: Sajjad Rizvi, Paul Collins, Shaukat Tarin, Benazir Bhutto, and others
Location: Prime Minister’s Residence, Islamabad
Summary: General courtesy call, discussion of Citibank, macroeconomics and socio-political issues.
[Oct 1994 Mr. Zardari’s relationship with Citibank begins, with an account opened for Capricorn Trading, S.A. a British Virgin Island company, reportedly “through the services of Kamran Amouzegar, a private banker at Citibank private bank in Switzerland, and Jens Schlegelmilch, a Swiss lawyer who was the Bhutto family’s attorney in Europe and close personal friend for more than 20 years.”]
[5-6 Oct 1994 ARY International Exchange, a Dubai company owned by Abdul Razzak Yakub, alleged to have been given a gold import monopoly by Benazir Bhutto, deposits $5 million into the Capricorn Trading account on 5 Oct 1994; and another $5 million on 6 October 1994.]
Date: December 1994
Participants: Shaukat Aziz, Benazir Bhutto, Asif Ali Zardari, Benazir Bhutto’s economics advisor, Pkistani ambassador to Washington and others
Location: Prime Minister’s Residence, Islamabad
Summary: Discussion of Pakistani economy during a dinner meeting
[25 Feb 1994 A 3rd deposit, this time of $8 million, is made to the Capricorn trading account. Citibank says it does not know the source of this deposit.]
[27 Feb 1995 “Mr. Schlegelmilch, working with Mr. Amouzegar, opened three accounts at the Citibank Switzerland private bank. The accounts were opened in the name of M.S. Capricorn Trading, which already had an account at Citibank’s Dubai branch, aswell as Marvel and Bomer Finance, two other British Virgin Island PICs established by Mr. Schlegelmilch, according to Citibank. Each private bank account listed Mr. Schlegelmilch as the account contact and signatory. Citibank informed the Subcommittee that the Swiss Form A, a government-required beneficial owner identification form, identified Mr. Zardari as the beneficial owner of each PIC.”
[6 March 1995 $8.1 million, routed through Citibank, NY, transferred from Dubai to Swiss account.]
Date: March 7-10, 1995
Participants: Shaukat Aziz, William Rhodes, Benazir Bhutto, Asif Ali Zardari and others
Location: Singapore
Summary: During a state visit to Singapore by Benazir Bhutto, William Rhodes and Shaukat Aziz meet with Benazir Bhutto and her advisors in Benazir Bhutto’s hotel suite to discuss the Pakistani economy. At several official events
during this state visit, Shaukat Aziz exchanges greetings with Benazir Bhutto and Asif Ali Zardari
Date: March 7-10, 1995
Participants: Shaukat Aziz, William Rhodes, Benazir Bhutto, Asif Ali Zardari and others
Location: Singapore, Dinner hosted by the Pakistani Ambassador
Summary: Shaukat Aziz exchanges greetings with Benazir Bhutto and Asif Ali Zardari. Benazir Bhutto’s economic advisor asked Benazir Bhutto if she had ever visited Shaukat Aziz’s home in Singapore. She replied that she has never been invited. Shaukat Aziz stated that the Prime Minister was welcome.
Date: March 7-10, 1995
Participants: Shaukat Aziz, Shaukat Aziz’s wife, Benazir Bhutto, Asif Ali Zardari, protocol chiefs for Pakistan and Singapore, the Pakistani Ambassador, and numerous aides and security officials
Location: Shaukat Aziz’s home in Singapore
Summary: During state visit to Singapore Benazir Bhutto makes a surprise visit to Shaukat Aziz’s home. The Benazir Bhutto party remains for approximately one hour.
5 May 1995 $10.2 million, routed through Citibank, NY, transferred from Dubai to Swiss account. Shortly thereafter, Capricorn Trading’s Dubai account was closed. “Citibank has indicated that significant amounts of other funds were also deposited into the Swiss accounts. As described below, the $40 million cap was reached, and millions of additional dollars also passed through those accounts. However, Swiss bank secrecy law has prevented the Subcommittee from obtaining the details on the transactions in the Zardari accounts.”]
Date: July 1995
Participants: Shaukat Aziz, Benazir Bhutto, Asif Ali Zardari and others
Location: Kuala Lumpur, Malaysia
Summary: Shaukat Aziz exchanges greetings with Asif Ali Zardari and Benazir Bhutto at a lunch given by Malaysian foreign minister in connection with benazir Bhutto’s state visit to Malaysia. Shaukat Aziz may also have exchanged greetings with Benazir Bhutto and Asif Ali Zardari at other events during the visit.
Date: Sometime during Benazir Bhutto’s second term as Prime Minister
Participants: Shaukat Aziz, Shaukat Tarin, Asif Ali Zardari and others
Location: Prime Minister’s Residence, Islamabad
Summary: Shaukat Aziz, Shaukat Tarin meet, perhaps on two different occasions, with Asif Ali Zardari and his aides for informal discussions about the Pakistani economy.
Date: September or October 1995
Participants: Sajjad Rizvi, Paul Collins, Shaukat Tarin, Benazir Bhutto and others
Location: Prime Minister’s Residence, Islamabad
Summary: General courtesy call, discussion of Citibank, macroeconomics and socio-political issues.
Date: December 1995
Participants: Shaukat Aziz, Paul Collins, Asif Ali Zardari and 1,500 others
Location: Karachi
Summary: Asif Ali Zardari is a guest at the wedding of Shaukat Aziz’s daughter
Date: During Benazir Bhutto’s second terms as prime minister
Participants: Shaukat Aziz and representatives of various banks
Location: Karachi
Summary: Asif Ali Zardari arrives at the end of dinner gathering of bank representatives in Karachi
Date: Late in Benazir Bhutto’s second terms as prime minister
Participants: Shaukat Aziz, Benazir Bhutto, Benazir Bhutto’s Finance Secretary and other economic advisors
Location: Prime Minister’s Residence, Islamabad
Summary: Discussion of Pakistani economy
Date: February 1996
Participants: Nadeem Hussain, Shaukat Tarin, Asif Ali Zardari and Javed Pasha
Location: Prime Minister’s Residence, Islamabad
Summary: Courtesy meeting to introduce Hussain as Citibank’s new consumer bank head in Pakistan
Date: March 1996
Participants: Sajjad Rizvi, possibly Shaukat Tarin, Margaret Thatcher, Benazir Bhutto and others
Location: Prime Minister’s Residence, Islamabad
Summary: Courtesy call with Lady Thatcher, whose speaking tour was sponsored by Citibank.
Mar/Apr 1996 “Mr. Amouzegar asked that the overall limit on the Zardari accounts be increased from $40 million to $60 million, apparently because the accounts had reached the previously imposed limit of $40 million. Citibank told the Subcommittee staff that Mr. Holderbeke considered the request, but declined to increase the $40 million limit.
June 1996 UK press reports that Mr. Zardari had purchased real estate in London. Citibank claims that an internal review was done, but Mr. Schlegelmilch allegedly indicated the funds had come from the sale of some sugar mills and were legitimate,” which Citibank accepted.
Date: August 1996
Participants: Paul Collins, Citibank Country Corporate Officer for Pakistan and Benazir Bhutto
Location: Probably Islamabad
Summary: Discussion regarding Citibank, the Pakistani economy, and regional economic and political developments.
Date: Fall 1996
Participants: Shaukat Aziz, Benazir Bhutto, Nusrat Bhutto, Sanam Bhutto, Dr. Bunyad Haider and others
Location: Waldorf Astoria, New York City
Summary: Discussion of Pakistani economy. Shaukat Aziz expressed condolences regarding the death of Benazir Bhutto’s brother. Following this meeting, Shaukat Aziz,
Benazir Bhutto and 20 others have dinner at the hotel.
[Nov 1996 Zardari arrested, for the second time, on charges of corruption.]
[Jan 1997 Citibank closed the Zardari accounts.
8 Sep 1997 Swiss government issued orders freezing the Zardari and Bhutto accounts at Citibank and three other banks in Switzerland, at the request of the Pakistani government.
5 Dec 1997 Citibank prepared a Suspicious Activity Report on the Zardari accounts and filed it with the Financial Crimes Enforcement Network at the U.S. Department of Treasury. Note: So Citibank finally ‘notices’ suspicious activity – what took them so long???
Date: 1998
Participants: Shaukat Aziz, Shaukat Aziz’s wife, Benazir Bhutto, Dr. Bunyad Haider and his wife and several other couples
Location: The Haider’s New Jersey home
Summary: Meeting among Pakistanis in the New York area and Benazir Bhutto
[END]
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Source: PRIVATE BANKING AND MONEY LAUNDERING: A CASE STUDY OF OPPORTUNITIES AND VULNERABILITIES, Hearings before the Permanent Subcommittee on Investigations of the Committee on Governmental Affairs, United States Senate, One Hundred Sixth Congress, First Session, November 9 and 10, 1999. Pages 474-477.
http://www.gpo.gov/congress/senate/senate12sh106.html
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Logged
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“They who have put out the people’s eyes, reproach them of their blindness.” — –John Milton
Re: Pakistan’s Looted Treasury: Stashed in Swiss Citibank Accounts
« Reply #1 on: August 08, 2009, 05:37:46 PM »
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How Citibank Laundered Asif Zardari’s Money
Posted: Nov 7, 2007 Wed 08:53 am
http://www.chowk.com/ilogs/64054/44106
In addition to Mr. Shaukat Aziz, current Prime Minister of Pakistan, numerous former Citibankers occupy highly influential positions in the government and the private sector in Pakistan.
Citibank is one of the largest banks, and operates one of the largest private banks in the US and globally. Of the 40 private banks reviewed by the Federal Reserve during its industry wide examination of private banking in the 1990s, only one — Citibank — was reviewed in detail by Federal Reserve examiners three years in a row. It is a private bank that has struggled with a wide range of anti-money laundering issues. Although Citibank, under Shaukat Aziz’s leadership (from May 1997 to October 1999) and his successors’ has done much to tighten controls, it was beset by numerous scandals during the 1990s.
A 1999 US Congress investigation (exact reference given at end) into Citibank, provides a fascinating inside look at how Citibank helped launder the ill-gotten gains of four high profile corrupt figures: Raul Salinas, brother of the former president of Mexico, Carlos Salinas, Asif Ali Zardari, the husband of Benazir Bhutto, former Prime Minister of Pakistan (reproduced below), El Hadj Omar Bongo, the elected president of Gabon since 1967, and Mohammed, Ibrahim, and Abba Sani Abacha, three sons of General Sani Abacha, who was the military leader of Nigeria from 1993 until his death in 1998.
Of the four case histories provided in the Report, the following is a complete excerpt of the Case History for Asif Zardari. The report also provides photocopies of signed documents, banks records, etc. (listed below, at the end).
[Beginning of Excerpt]
(2) Asif Ali Zardari Case History
The Facts
The second case history involves Asif Ali Zardari, the husband of Benazir Bhutto, former Prime Minister of Pakistan. Ms. Bhutto was elected Prime Minister in 1988, dismissed by the President of Pakistan in August 1990 for alleged corruption and inability to maintain law and order, elected Prime Minister again in October 1993, and dismissed by the President again in November 1996. At various times, Mr. Zardari served as Senator, Environment Minister and Minister for Investment in the Bhutto government. In between the two Bhutto administrations, he was incarcerated in 1990 and 1991 on charges of corruption; the charges were eventually dropped. During Ms. Bhutto’s second term there were increasing allegations of corruption in her government, and a major target of those allegations was Mr. Zardari. It has been reported that the government of Pakistan claims that Ms. Bhutto and Mr. Zardari stole over $1 billion from the country.
During the period 1994 to 1997, Citibank opened and maintained three private bank accounts in Switzerland and a consumer account in Dubai for three corporations under Mr. Zardari’s control. There are allegations that some of these accounts were used to disguise $10 million in kickbacks for a gold importing contract to Pakistan.
Structure of Private Bank Relationship. Mr. Zardari’s relationship with Citibank began in October 1994, through the services of Kamran Amouzegar, a private banker at Citibank private bank in Switzerland, and Jens Schlegelmilch, a Swiss lawyer who was the Bhutto family’s attorney in Europe and close personal friend for more than 20 years. According to Citibank, Mr. Schlegelmilch represented to Mr. Amouzegar that he was working for the Dubai royal family and he wanted to open some accounts at the Citibank branch office in Dubai. Mr. Schlegelmilch had a Dubai residency permit and a visa signed by a member of the Dubai royal family. Mr. Amouzegar agreed to introduce Mr. Schlegelmilch to a banker in the Citibank branch office in Dubai.
According to Citicorp, Mr. Schlegelmilch told the Citibank Dubai banker that he wanted to open an account in the name of M.S. Capricorn Trading, a British Virgin Island PIC. The stated purpose of the account was to receive money and transfer it to Switzerland. The account was opened in early October 1994.
According to Citibank, Mr. Schlegelmilch informed the Dubai banker that he would serve as the representative of the account and the signatory on the account. Under Dubai law, a bank is not required to know an account’s beneficial owner, only the signatory. Citibank told the Subcommittee staff that Mr. Schlegelmilch did not reveal to the Dubai banker that Mr. Zardari was the beneficial owner of the PIC [Private Investment Company: an offshore company often used to launder money], and the account manager never asked him the identity of the beneficial owner of the account. Instead, according to Citibank, she assumed the beneficial owner of the account was the member of the royal family who had signed Mr. Schlegelmilch’s visa. According to Citibank, the account manager actually performed some due diligence on the royal family member whom she believed to be the beneficial owner of the account.
Shortly after opening the account in Dubai, Mr. Schlegelmilch signed a standard referral agreement with Citibank Switzerland private bank guaranteeing him 20% of the first three years of client net revenues earned by the bank from each client he referred to the private bank.
On February 27, 1995, Mr. Schlegelmilch, working with Mr. Amouzegar, opened three accounts at the Citibank Switzerland private bank. The accounts were opened in the name of M.S. Capricorn Trading, which already had an account at Citibank’s Dubai branch, as well as Marvel and Bomer Finance, two other British Virgin Island PICs established by Mr. Schlegelmilch, according to Citibank. Each private bank account listed Mr. Schlegelmilch as the account contact and signatory. Citibank informed the Subcommittee that the Swiss Form A, a government-required beneficial owner identification form, identified Mr. Zardari as the beneficial owner of each PIC.
Lack of Due Diligence. The decision to allow Mr. Schlegelmilch to open the three accounts on behalf of Mr. Zardari, according to Citibank, involved officials at the highest levels of the private bank. The officials were: (a) Mr. Amouzegar, the private banker; (b) Deepak Sharma, then head of private bank operations in Pakistan; (c) Phillipe Holderbeke, then head of private bank operations in Switzerland (who became head of the Europe, Middle East, Africa Division in February 1996); (d) Salim Raza, then head of the EMEA Division of the private bank; and (e) Hubertus Rukavina, then head of the Citibank private bank. Mr. Rukavina told the Subcommittee staff that when he was asked about opening the Zardari accounts, he did not make the decision to open them, but rather directed that the matter be discussed with Mr. Sharma. According to Mr. Rukavina, he never heard whether the accounts were ultimately opened. Mr. Rukavina left the private bank in 1996 and left Citibank in 1999.
Citibank informed the Subcommittee staff that the private bank was aware of the allegations of corruption against Mr. Zardari at the time it opened the accounts in Switzerland. However, Citibank reasoned that if the charges for which Mr. Zardari had been incarcerated for two years had any merit, they would not have been dropped. Bank officials also believed that the family wealth of Ms. Bhutto and Mr. Zardari was large enough to support a large private bank account, even though Citibank was not able to specify what actions were taken to verify the amount and source of their wealth. Citibank said that bank officials were also aware of the M.S. Capricorn Trading account in Dubai, and they were comforted by the fact that there had been no problems with that account. According to Citibank, Mr. Amouzegar informed his superiors that Mr. Zardari was the beneficial owner of the Capricorn account in Dubai when they were considering the request to open the accounts in Switzerland. Inexplicably, however, the Dubai account manager was apparently still operating under the assumption that the beneficial owner of the Dubai Capricorn account was a member of the Dubai royal family. Subcommittee staff have been unable to determine whether Citibank officials were unaware of or inattentive to the serious inconsistency between Citibank Switzerland and Citibank Dubai with respect to the Capricorn Trading account. Citibank also informed the Subcommittee staff that bank officials had some concerns that if they turned down the accounts, their actions may have implications for the corporation’s operations in Pakistan; however, they said they never received any threats on that issue.
Citibank told the Subcommittee staff the private bank decided to allow Mr. Schlegelmilch to open the three accounts for Mr. Zardari on the condition that the private bank would not be the primary accounts for Mr. Zardari’s assets and the accounts would function as passive investment accounts. Citibank told the Subcommittee staff that Mr. Holderbeke signed a memo delineating the restrictions placed on the accounts, including a $40 million aggregate limit on the size of the three accounts, and transaction restrictions requiring the accounts to function as passive, stable investments, without multiple transactions or funding pass-throughs. None of the Citibank personnel interviewed by Subcommittee staff could identify any other private bank account with these types of restrictions. Other private banks interviewed by the Subcommittee staff were asked if they had ever accepted a client on the condition that certain restrictions be imposed on the account. The banks all said they had not. One bank representative explained that if the bank felt that it needed to place restrictions on the client’s account, it didn’t want that type of client. The existence of the restrictions are in themselves proof of the private bank’s awareness of Mr. Zardari’s poor reputation and concerns regarding the sources of his wealth.
Movement of Funds. Citibank told the Subcommittee staff that, once opened, only three deposits were made into the M.S. Capricorn Trading account in Dubai. Two deposits, totaling $10 million were made into the account almost immediately after it was opened. Citibank records show that one $5 million deposit was made on October 5,1994, and another was made on October 6, 1994. The source of both deposits was A.R.Y. International Exchange, a company owned by Abdul Razzak Yaqub [since then, the owner of several ARY television channels that, incidentally, have been providing favorable coverage of Ms. Bhutto’s recent political activities], a Pakistani gold bullion trader living in Dubai.
According to the New York Times, in December 1994, the Bhutto government awarded Mr. Razzak an exclusive gold import license. In an interview with the New York Times, Mr. Razzak acknowledged that he had used the exclusive license to import more than $500 million worth of gold into Pakistan. Mr. Razzak denies, however, making any payments to Mr. Zardari. Citibank could not explain the two $5 million payments. Ms. Bhutto told the Subcommittee staff that since A.R.Y. International Exchange is a foreign exchange business, the payments did not necessarily come from Mr. Razzak, but could have come from a third party who was merely making use of A.R.Y.’s exchange services. The staff invited Ms. Bhutto to provide additional information on the M.S. Capricorn Trading accounts, but she has not yet done so.
On February 25, 1995, a third deposit of $8 million was made into the Dubai M.S. Capricorn Trading account. Records show that the payment was made through American Express, with the originator of the account listed as “Morgan NYC.” Citibank indicated it does not know who Morgan NYC is, nor does it know the source of the $8 million.
All of the funds in the Dubai account of M.S. Capricorn Trading were moved to the Swiss accounts in the Spring of 1995. On March 6, 1995, $8.1 million was transferred; and on May 5, 1995, another $10.2 million was transferred. Both transfers involved U.S. dollars and were routed through Citibank’s New York offices. Citibank informed the Subcommittee staff that M.S. Capricorn Trading closed its Dubai account shortly after the last transfer was completed.
Citibank has indicated that significant amounts of other funds were also deposited into the Swiss accounts. As described below, the $40 million cap was reached, and millions of additional dollars also passed through those accounts. However, Swiss bank secrecy law has prevented the Subcommittee from obtaining the details on the transactions in the Zardari accounts.
Account Monitoring. Citibank told the Subcommittee staff that, in 1996, the Swiss office of the private bank conducted a number of reviews of the Zardari Swiss accounts, finally deciding in October to close them.
The first review was allegedly in early 1996, triggered by increasing publicity about allegations of corruption against Mr. Zardari. Citibank told the Subcommittee staff that Messrs. Holderbeke, [Salim] Raza, Sharma and Amouzegar participated in the review, and apparently concluded that the allegations were politically motivated and that the accounts should remain open. The Subcommittee staff was told that the review did not include looking at the accounts’ transaction activity.
In March or April, 1996, Mr. Amouzegar asked that the overall limit on the Zardari accounts be increased from $40 million to $60 million, apparently because the accounts had reached the previously imposed limit of $40 million. Citibank told the Subcommittee staff that Mr. Holderbeke considered the request, but declined to increase the $40 million limit.
In June, press reports in the United Kingdom that Mr. Zardari had purchased real estate in London triggered still another review of the Zardari accounts. Citibank private bank told the Subcommittee staff that its Swiss office internally discussed the source of the funds for the property purchase. Mr. Amouzegar and Mr. [Salim] Raza then met with Mr. Schlegelmilch, who allegedly informed them that funds had been deposited into the Citibank accounts, transferred to another PIC account outside of Citibank and used to purchase the property. Mr. Schlegelmilch allegedly indicated the funds had come from the sale of some sugar mills and were legitimate. Citibank told the Subcommittee staff it is not sure if anyone at the private bank attempted to validate the information about the sale of the sugar mills. In addition, even though this account activity violated the condition imposed by Citibank that the accounts were not to be used as a pass through for funds, the accounts were kept open.
Closing the Accounts. In July 1996, after Mr. Amouzegar left the private bank to open his own company, another private banker, Cedric Grant, took over management of the Zardari accounts. Citibank told the Subcommittee staff that Mr. Grant began to review the Zardari accounts about one month later to familiarize himself with them. He also reviewed the transactions that had taken place within the accounts.
In September and October 1996, press accounts in Pakistan repeatedly raised questions about corruption by Mr. Zardari and Ms. Bhutto, as Ms. Bhutto’s re-election campaign increased its activities prior to a February election date. In September, Ms. Bhutto’s only surviving brother, Murtaza Bhutto, was assassinated, and Ms. Bhutto’s mother accused Ms. Bhutto and Mr. Zardari of masterminding the murder, because the brother had been leading opposition to Ms. Bhutto.
In October, Mr. Grant completed his review of the Zardari accounts and provided a written analysis to Messrs. Holderbeke, Sharma and [Salim] Raza, according to Citibank. Mr. Grant had found numerous violations of the account restrictions imposed by Citibank, including multiple transactions and funding pass-throughs. Citibank told the Subcommittee staff that the accounts had functioned more as checking accounts than passive investment accounts, directly contrary to the private bank’s restrictions. Apparently, well over $40 million had flowed through the accounts, though Subcommittee staff were unable to ascertain the actual amount because Swiss bank secrecy law prohibits Citibank from sharing that information with the Subcommittee. Citibank indicated that Mr. Amouzegar had either ignored or did not pay attention to the account activity. Mr. Grant recommended closing the accounts, and they were closed by January 1997.
[Note: In May 1997, Mr. Shaukat Aziz was transferred at Citibank’s New York headquarters, from his position as head of credit card operations to head of private banking. In November 1996, Mr. Farooq Laghari had dismissed the government of Ms. Benazir Bhutto-Zardari; and in February 1997, Mr. Nawaz Sharif became Prime Minister.]
Legal Proceedings. On September 8, 1997, the Swiss government issued orders freezing the Zardari and Bhutto accounts at Citibank and three other banks in Switzerland at the request of the Pakistani government. Since Citibank had closed its Zardari accounts in January 1997, it took no action nor did it make any effort to inform U.S. authorities of the accounts until late November 1997. Citibank contacted the Federal Reserve and OCC [Office of the Comptroller of the Currency, the banking supervision arm of the US Department of Treasury] about the Zardari accounts in late November, in anticipation of a New York Times article that eventually ran in January 1998, alleging that Mr. Zardari had accepted bribes, and that he held Citibank accounts in Dubai and Switzerland. On December 8 and 11, 1997, Citibank briefed the OCC and the Federal Reserve, respectively, about the accounts and the steps it had taken as a result of the Zardari matter. These steps included: closing all of the accounts that had been referred by Mr. Schlegelmilch to the private bank and terminating his referral agreement; reviewing all of the accounts opened in the Dubai office; and tightening up account opening procedures in Dubai, including requiring the Dubai office to identify the beneficial owner of all Dubai accounts. Citibank did not identify any changes made or planned for the Swiss office, even though the majority of the activity with respect to the Zardari accounts had taken place in Switzerland.
On December 5, 1997, Citibank prepared a Suspicious Activity Report on the Zardari accounts and filed it with the Financial Crimes Enforcement Network at the U.S. Department of Treasury. The filing was made fourteen months after its decision to close the Zardari accounts; thirteen months after Mr. Zardari was arrested a second time for corruption in November 1996; and nearly two months after the Swiss government had ordered four Swiss banks (including Citibank Switzerland) to freeze all Zardari accounts.
In June 1998, Switzerland indicted Mr. Schlegelmilch and two Swiss businessmen, the former senior executive vice president of SGS and the managing director of Cotecna, for money laundering in connection with kickbacks paid by the Swiss companies for the award of a government contract by Pakistan. In July 1998, Mr. Zardari was indicted for violation of Swiss money laundering law in connection with the same incident. Ms. Bhutto was indicted in Switzerland for the same offense in August 1998. A trial on the charges is expected.
In October 1998, Pakistan indicted Mr. Zardari and Ms. Bhutto for accepting kickbacks from the two Swiss companies in exchange for the award of a government contract. On April 15, 1999, after an 18-month trial, Pakistan’s Lahore High Court convicted Ms. Bhutto and Mr. Zardari of accepting the kickbacks and sentenced them to 5 years in prison, fined them $8.6 million and disqualified them from holding public office. Ms. Bhutto, who now lives in London, denounced the decision. Mr. Zardari remains in jail. Additional criminal charges are pending against both in Pakistani courts.
On December 11, 1997, Citicorp’s Chairman John Reed wrote the following to the Board of Directors:
“We have another issue with the husband of Ex-Prime Minister Bhutto of Pakistan. I do not yet understand the facts but I am inclined to think that we made a mistake. More reason than ever to rework our Private Bank.”
Mr. Reed told the Subcommittee staff that it was the combination of the Salinas and Zardari accounts that made him charge Mr. [Shaukat] Aziz [currently, Prime Minister of Pakistan], the new private bank head, with taking a hard look at the bank’s public figure policy and public figure accounts.
The Issues
The Zardari case history raises issues involving due diligence, secrecy and public figure accounts. The Zardari case history begins with the Citibank Dubai branch’s failure to identify the true beneficial owner of the M.S. Capricorn Trading account. As a result, the account officer in Dubai performed due diligence on an individual who had no relationship to the account being opened. In Switzerland, Citibank officials opened three private bank accounts despite evidence of impropriety on the part of Mr. Zardari. In an interview with Subcommittee staff, Citigroup Co-Chair John Reed informed the Subcommittee staff that he had been advised by Citibank officials in preparation for a trip to Pakistan in February 1994, that there were troubling accusations concerning corruption surrounding Mr. Zardari, that he should stay away from him, and that he was not a man with whom the bank wanted to be associated. Yet one year later, the private bank opened three accounts for Mr. Zardari in Switzerland. Mr. Reed told the Subcommittee staff that when he learned of the Zardari accounts he thought the account officer must have been “an idiot.”
Citibank has been unable to confirm that bank employees verified that Mr. Zardari had a level of wealth sufficient to support the size of the accounts that he was opening. In addition, the Swiss private banker took no action to validate the legitimacy of the source of the funds that were deposited into the account. For example, there was no effort made to verify the claims that some of the funds derived from the sale of sugar mills.
Citibank also performed no due diligence on the client owned and managed PICs that were the named accountholders. Because the PICs were client-created, the bank’s failure to perform due diligence on the PICs meant that it had no knowledge of the activities, assets or entities involved with the corporations. One of the PICs, Bomer Finance, has been determined to have been a repository for kickbacks paid to Mr. Zardari, and those kickbacks tainted funds deposited at the Geneva branch of Union Bank of Switzerland. Documentation has not been made available to determine whether Bomer Finance also used its Citibank account for illicit funds.
Another due diligence lapse was the private bank’s failure to monitor the Zardari accounts to ensure that the account restrictions imposed on them were being followed. When officials were presented with evidence in 1996 that the restrictions were being violated, they nevertheless allowed the accounts to continue.
The Zardari accounts in Switzerland were opened one day before Raul Salinas was arrested. The account was repeatedly reviewed in 1996, after the Salinas scandal became public. Yet there is no evidence that anyone in the private bank had been sensitized to the problems associated with handling an account of a person suspected of corruption.
The Zardari example also demonstrates the practical consequences of secrecy in private banking. Citibank claims that its decisionmaking in the Zardari matter cannot be fully explained or documented, since all Citibank officials are subject to Swiss secrecy laws prohibiting discussion of client-specific information. In light of the fact that U.S. banks are supposed to oversee their foreign branches and enforce U.S. law, including anti-money laundering requirements, this inability to produce documentation related to a troubling case again highlights the problems with U.S. banks choosing to operate in secrecy jurisdictions.
Pattern of Poor Account Management. The Zardari case history took place during a series of critical internal and federal audits between 1992 and 1997 of the Swiss office which, during most of that time, served as the headquarters of the private bank. The shortcomings identified in the audits included policies, procedures, and problems that affected the management of the Zardari accounts. They included:
* failure of the “corporate culture” in the Swiss office to foster ” ‘a climate of integrity, ethical conduct and prudent risk taking’ by U.S. standards”;
* inadequate due diligence;
* “less than acceptable internal controls”;
* lack of oversight and control of third party referral agents such as Schlegelmilch; and
* inadequate monitoring of accounts;
all of which resulted in “unacceptable” internal audit ratings. In December 1995, the Swiss office received the lowest audit score received by any office in the private bank during the 1990s. These audit scores indicate the office’s poor handling of the Zardari accounts was part of an ongoing pattern of poor account management.
[End of excerpt]
======
Source: MINORITY STAFF REPORT FOR PERMANENT SUBCOMMITTEE ON INVESTIGATIONS HEARING ON PRIVATE BANKING AND MONEY LAUNDERING: A CASE STUDY OF OPPORTUNITIES AND VULNERABILITIES, November 9, 1999
http://www.senate.gov/~gov_affairs/110999_report.htm
The Report features as an annex to
S. Hrg. 106-248
PRIVATE BANKING AND MONEY LAUNDERING: A CASE STUDY OF OPPORTUNITIES AND VULNERABILITIES, Hearings before the Permanent Subcommittee on Investigations of the Committee on Governmental Affairs, United States Senate, One Hundred Sixth Congress, First Session, November 9 and 10, 1999.
This xiv+1114 pages report is available at:
http://www.gpo.gov/congress/senate/senate12sh106.html
as TEXT [424KB] and as PDF [30MB] files
It provides (on page numbers indicated) the following:
Documents relating to Asif Ali Zardari:
a. Swiss Form A identifying Asif Ali Zardari as the
beneficial owner of the Capricorn Trading S.A.
account in the Citibank Private Bank in Switzerland
[600]…………………………………. 445
[Signed by “Asif Ali Zardari, Bilawal House, Karachi
(Pak)”]
b. Wire transfer records documenting transfers of $18
million into Mr. Zardari’s Capricorn Trading S.A.
account in Dubai and transfers of $18.3 million out
of the Dubai account into the Capricorn Trading S.A.
account in Citibank Private Bank in Switzerland
……………………………………… 446
10/5/94 transfer of $5 million from A.R.Y. International
Exchange into the Capricorn Trading S.A. account in
Citibank in Dubai [X6903-4];
10/6/94 transfer of $5 million from A.R.Y. International
Exchange into the Capricorn Trading S.A. account in
Citibank in Dubai [X6900-2];
2/24/95 transfer of $8 million from Morgan NYC into the
Capricorn Trading S.A. account in Citibank in Dubai;
3/6/95 transfer of $8.1 million from the Capricorn
Trading S.A. account in Citibank in Dubai into the
Capricorn Trading S.A. account in Citibank Private Bank
in Switzerland;
5/3/95 transfer of $10.2 million from the Capricorn
Trading S.A. account in Citibank in Dubai into the
Capricorn Trading S.A. account in Citibank Private Bank
in Switzerland;
5/4/94 record of Citibank Private Bank in Switzerland
credit of $10.2 million to account of Capricorn Trading
S.A.
c. Mandate Agreement between Asif Ali Zardari and Jens
Schlegelmilch concerning Bomer Finance, Inc.
[601-2]………………………………… 466
d. Mandate Agreement between Begum Nusrat Bhutto and Jens
Schlegelmilch concerning Mariston Securities, Inc.
[603-4]………………………………… 468
e. British Virgin Islands Certificate of Incorporation
for Capricorn Trading S.A.
[605]………………………………….. 470
f. 6/29/94 letter from Cotecna Inspection S.A., stating
that if it receives a contract from the government of
Pakistan for the inspection and price verification of
imported goods, it will pay Mariston Securities, Inc.,
6 percent of the payments made under the contract
[597]………………………………….. 471
g. 12/11/97 communication from John Reed to Citibank Board,
including a discussion of the Zardari matter.. 472
h. List of meetings between Mr. Zardari and Citibank
personnel, provided by Citibank ………….. 474
US Bank Money Laundering –
Enormous By Any Measure
By James Petras
Professor of Sociology, Binghamton University
9-1-2
There is a consensus among U.S. Congressional Investigators, former bankers and international banking experts that U.S. and European banks launder between $500 billion and $1 trillion of dirty money each year, half of which is laundered by U.S. banks alone. As Senator Carl Levin summarizes the record: “Estimates are that $500 billion to $1 trillion of international criminal proceeds are moved internationally and deposited into bank accounts annually. It is estimated that half of that money comes to the United States”.
Over a decade then, between $2.5 and $5 trillion criminal proceeds have been laundered by U.S. banks and circulated in the U.S. financial circuits. Senator Levin’s statement however, only covers criminal proceeds, according to U.S. laws. It does not include illegal transfers and capital flows from corrupt political leaders, or tax evasion by overseas businesses. A leading U.S. scholar who is an expert on international finance associated with the prestigious Brookings Institute estimates “the flow of corrupt money out of developing (Third World) and transitional (ex-Communist) economies into Western coffers at $20 to $40 billion a year and the flow stemming from mis-priced trade at $80 billion a year or more. My lowest estimate is $100 billion per year by these two means by which we facilitated a trillion dollars in the decade, at least half to the United States. Including the other elements of illegal flight capital would produce much higher figures. The Brookings expert also did not include illegal shifts of real estate and securities titles, wire fraud, etc.
In other words, an incomplete figure of dirty money (laundered criminal and corrupt money) flowing into U.S. coffers during the 1990s amounted to $3-$5.5 trillion. This is not the complete picture but it gives us a basis to estimate the significance of the “dirty money factor” in evaluating the U.S. economy. In the first place, it is clear that the combined laundered and dirty money flows cover part of the U.S. deficit in its balance of merchandise trade which ranges in the hundreds of billions annually. As it stands, the U.S. trade deficit is close to $300 billion. Without the “dirty money” the U.S. economy external accounts would be totally unsustainable, living standards would plummet, the dollar would weaken, the available investment and loan capital would shrink and Washington would not be able to sustain its global empire. And the importance of laundered money is forecast to increase. Former private banker Antonio Geraldi, in testimony before the Senate Subcommittee projects significant growth in U.S. bank laundering. “The forecasters also predict the amounts laundered in the trillions of dollars and growing disproportionately to legitimate funds.” The $500 billion of criminal and dirty money flowing into and through the major U.S. banks far exceeds the net revenues of all the IT companies in the U.S., not to speak of their profits. These yearly inflows surpass all the net transfers by the major U.S. oil producers, military industries and airplane manufacturers. The biggest U.S. banks, particularly Citibank, derive a high percentage of their banking profits from serving these criminal and dirty money accounts. The big U.S. banks and key institutions sustain U.S. global power via their money laundering and managing of illegally obtained overseas funds.
U.S. Banks and The Dirty Money Empire
Washington and the mass media have portrayed the U.S. as being in the forefront of the struggle against narco trafficking, drug laundering and political corruption: the image is of clean white hands fighting dirty money. The truth is exactly the opposite. U.S. banks have developed a highly elaborate set of policies for transferring illicit funds to the U.S., investing those funds in legitimate businesses or U.S. government bonds and legitimating them. The U.S. Congress has held numerous hearings, provided detailed exposés of the illicit practices of the banks, passed several laws and called for stiffer enforcement by any number of public regulators and private bankers. Yet the biggest banks continue their practices, the sum of dirty money grows exponentially, because both the State and the banks have neither the will nor the interest to put an end to the practices that provide high profits and buttress an otherwise fragile empire.
First thing to note about the money laundering business, whether criminal or corrupt, is that it is carried out by the most important banks in the USA. Secondly, the practices of bank officials involved in money laundering have the backing and encouragement of the highest levels of the banking institutions – these are not isolated cases by loose cannons. This is clear in the case of Citibank’s laundering of Raul Salinas (brother of Mexico’s ex-President) $200 million account. When Salinas was arrested and his large scale theft of government funds was exposed, his private bank manager at Citibank, Amy Elliott told her colleagues that “this goes in the very, very top of the corporation, this was known…on the very top. We are little pawns in this whole thing” (p.35).
Citibank, the biggest money launderer, is the biggest bank in the U.S., with 180,000 employees world-wide operating in 100 countries, with $700 billion in known assets and over $100 billion in client assets in private bank (secret accounts) operating private banking offices in 30 countries, which is the largest global presence of any U.S. private bank. It is important to clarify what is meant by “private bank.”
Private Banking is a sector of a bank which caters to extremely wealthy clients ($1 million deposits and up). The big banks charge customers a fee for managing their assets and for providing the specialized services of the private banks. Private Bank services go beyond the routine banking services and include investment guidance, estate planning, tax assistance, off-shore accounts, and complicated schemes designed to secure the confidentiality of financial transactions. The attractiveness of the “Private Banks” (PB) for money laundering is that they sell secrecy to the dirty money clients. There are two methods that big Banks use to launder money: via private banks and via correspondent banking. PB routinely use code names for accounts, concentration accounts (concentration accounts co-mingles bank funds with client funds which cut off paper trails for billions of dollars of wire transfers) that disguise the movement of client funds, and offshore private investment corporations (PIC) located in countries with strict secrecy laws (Cayman Island, Bahamas, etc.)
For example, in the case of Raul Salinas, PB personnel at Citibank helped Salinas transfer $90 to $100 million out of Mexico in a manner that effectively disguised the funds’ sources and destination thus breaking the funds’ paper trail. In routine fashion, Citibank set up a dummy offshore corporation, provided Salinas with a secret code name, provided an alias for a third party intermediary who deposited the money in a Citibank account in Mexico and transferred the money in a concentration account to New York where it was then moved to Switzerland and London. The PICs are designed by the big banks for the purpose of holding and hiding a person’s assets. The nominal officers, trustees and shareholder of these shell corporations are themselves shell corporations controlled by the PB. The PIC then becomes the holder of the various bank and investment accounts and the ownership of the private bank clients is buried in the records of so-called jurisdiction such as the Cayman Islands. Private bankers of the big banks like Citibank keep pre-packaged PICs on the shelf awaiting activation when a private bank client wants one. The system works like Russian Matryoshka dolls, shells within shells within shells, which in the end can be impenetrable to a legal process.
The complicity of the state in big bank money laundering is evident when one reviews the historic record. Big bank money laundering has been investigated, audited, criticized and subject to legislation; the banks have written procedures to comply. Yet banks like Citibank and the other big ten banks ignore the procedures and laws and the government ignores the non-compliance. Over the last 20 years, big bank laundering of criminal funds and looted funds has increased geometrically, dwarfing in size and rates of profit the activities in the formal economy. Estimates by experts place the rate of return in the PB market between 20-25% annually. Congressional investigations revealed that Citibank provided “services” for 4 political swindlers moving $380 million: Raul Salinas – $80-$100 million, Asif Ali Zardari (husband of former Prime Minister of Pakistan) in excess of $40 million, El Hadj Omar Bongo (dictator of Gabon since 1967) in excess of $130 million, the Abacha sons of General Abacha ex-dictator of Nigeria – in excess of $110 million. In all cases Citibank violated all of its own procedures and government guidelines: there was no client profile (review of client background), determination of the source of the funds, nor of any violations of country laws from which the money accrued. On the contrary, the bank facilitated the outflow in its prepackaged format: shell corporations were established, code names were provided, funds were moved through concentration accounts, the funds were invested in legitimate businesses or in U.S. bonds, etc. In none of these cases – or thousands of others – was due diligence practiced by the banks (under due diligence a private bank is obligated by law to take steps to ensure that it does not facilitate money laundering). In none of these cases were the top banking officials brought to court and tried. Even after arrest of their clients, Citibank continued to provide services, including the movement of funds to secret accounts and the provision of loans.
Correspondent Banks: The Second Track
The second and related route which the big banks use to launder hundreds of billions of dirty money is through “correspondent banking” (CB). CB is the provision of banking services by one bank to another bank. It is a highly profitable and significant sector of big banking. It enables overseas banks to conduct business and provide services for their customers – including drug dealers and others engaged in criminal activity – in jurisdictions like the U.S. where the banks have no physical presence. A bank that is licensed in a foreign country and has no office in the United States for its customers attracts and retains wealthy criminal clients interested in laundering money in the U.S. Instead of exposing itself to U.S. controls and incurring the high costs of locating in the U.S., the bank will open a correspondent account with an existing U.S. bank. By establishing such a relationship, the foreign bank (called a respondent) and through it, its criminal customers, receive many or all of the services offered by the U.S. big banks called the correspondent.
Today, all the big U.S. banks have established multiple correspondent relationships throughout the world so they may engage in international financial transactions for themselves and their clients in places where they do have a physical presence. Many of the largest U.S. and European banks located in the financial centers of the world serve as correspondents for thousands of other banks. Most of the offshore banks laundering billions for criminal clients have accounts in the U.S. All the big banks specializing in international fund transfer are called money center banks, some of the biggest process up to $1 trillion in wire transfers a day. For the billionaire criminals an important feature of correspondent relationships is that they provide access to international transfer systems – that facilitate the rapid transfer of funds across international boundaries and within countries. The most recent estimates (1998) are that 60 offshore jurisdictions around the world licensed about 4,000 offshore banks which control approximately $5 trillion in assets.
One of the major sources of impoverishment and crises in Africa, Asia, Latin America, Russia and the other countries of the ex-U.S.S.R. and Eastern Europe, is the pillage of the economy and the hundreds of billions of dollars which are transferred out of the country via the corresponding banking system and the Private Banking system linked to the biggest banks in the U.S. and Europe. Russia alone has seen over $200 billion illegally transferred in the course of the 1990s. The massive shift of capital from these countries to the U.S. and European banks has generated mass impoverishment and economic instability and crises. This in turn has created increased vulnerability to pressure from the IMF and World Bank to liberalize their banking and financial systems leading to further flight and deregulation which spawns greater corruption and overseas transfers via private banks as the Senate reports demonstrate.
The increasing polarization of the world is embedded in this organized system of criminal and corrupt financial transactions. While speculation and foreign debt payments play a role in undermining living standards in the crisis regions, the multi-trillion dollar money laundering and bank servicing of corrupt officials is a much more significant factor, sustaining Western prosperity, U.S. empire building and financial stability. The scale, scope and time frame of transfers and money laundering, the centrality of the biggest banking enterprises and the complicity of the governments, strongly suggests that the dynamics of growth and stagnation, empire and re-colonization are intimately related to a new form of capitalism built around pillage, criminality, corruption and complicity.
James Petras is a Professor of Sociology at Binghamton University in Binghamton, New York. He is the author of 57 books. His latest, Globalization Unmasked: Imperialism in the New Millenium
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Ref
Imran Khan should NEVER come to power in Pakistan’s upcoming elections. That is the key objective of NATO, Western Think Tanks and Feudal/Industrialist/Military entente in Pakistan. A populist leader cannot rule Pakistan. He/she needs to be eliminated, because he/she will not serve the interests of Western Powers. Pakistan’s history tells us that populist leaders had a short life span in a country like Pakistan. Liaquat Ali Khan, Zulfiqar Ali Bhutto, Benazir Bhutto and even Murtaza Bhutto were eliminated mysteriously. Not a single of these assassination were ever investigated by neutral observers or commissions. Populist leadership in Pakistan is either eliminated physically or by political assassination and intrigues. The belief of a common Pakistani that his nation has been hijacked by foreign powers has a kernel of truth to it.
At present, Imran Khan is a thorn on the side of its ISAF allies and US. There is a concerted effort to remove him from the political scene by demonizing his character. Presstitutes like GEO, ARY, AAJ, and Dunya, plus several popular newspaper have received millions of rupees in funds from the Western embassies, among them are US, UK, Netherland, France, Norway, UAE, Saudi Arabia and others in Islamabad. Many members of Pakistan Tehrik Insaf are enticed with financial and commercial incentives to leave the party. These are the stealthily corrupt individuals, who came into the PTI to ride the tide of its popularity. An in depth searches of these individuals’ background reveals their feudal or Jagirdarana roots. These opportunists had a choke hold on Pakistan’s politics and they are back in action to claim, which they consider is rightfully their inheritance: an inherent right to rule Pakistan and steal whatever is left in the country. Spearheading this movement is a nexus of strange bedfellows, PML (N)-PPP-US Interests in Pakistan, represented by Jagirdars, Waderas, Industrialists, and fifth columnists in the Pakistan Media, led by GEO, AAJ, ARY, and Dunya. The scions of the Mir Khalil-ur-Rahman family represent the media business interests, who put their own financial interests above that of the nation.
How does this propaganda work? As election strategies progress, so is the use of political campaigning.
1. Direct personal attacks on TV, opposed to surrogates doing the attacking
Result: The effects it can have on “someone who is uneducated,” like the majority of electorate or voting public in Pakistan. Historically speaking, even in the US Elections, “Name-calling and invective are themselves nothing new in American political life. Washington was called a “Whore Master” and would-be-monarch; Jefferson a coward and atheist; Lincoln, a “rail-splitting baboon.” Franklin O. Roosevelt, Jr., as a surrogate for John Kennedy in the West Virginia primary in 1960, declared Hubert Humphrey was a draft dodger.
2. Bribe media owners, commentators (exceptions are Talat Hussain, Shahzeb Khanzada, Iftikhar Ahmed and a handful of others) and reporters. A Report from London Institute of South Asia (2) described these activities in details below:
Results:
Pakistan Media Corrupted
Starting 2010 the Obama administration made plans to spend nearly $50 million on Pakistani media to reverse anti-American sentiments. This has done wonders as one sees the erstwhile hostile (anti US policy) TV anchors changed like chameleon changes its colors. In the perception of many Pakistanis, the card being played right now by US establishment and its allied media is to weaken the only institution left intact in Pakistan; its military. Pakistani media that has immature anchors, journalists and some of the opportunist politicians who are trying to settle their score with the military establishment is reinforcing the military-bashing campaign
Only in Pakistan do the media champion the cause and lionize traitors and terrorists that act against their country. Would the British media have acted in the same way in the case of IRA or the Spanish for ETA or the Indians for the Kashmiris, Sikhs and Naxalite?
The media is ideally perceived as the fourth pillar of the state (alongside the judicial, legislative and executive powers), but in Pakistan, most people have come to distrust the media and those who practice journalism. Presently, Pakistanis are demanding that star anchors of various current affairs programmes and other journalists be held accountable for their actions.
US- Afghanistan-Pakistan
The war in Af- Pak did not progress as planned by the US. The US – Pakistan standoff over a range of issues worsened the situation where Pakistan is well placed to extract maximum leverage from US towards a Taliban friendly dispensation backed and dominated by Pakistan. However this may not be forthcoming because of weakened establishment and a corrupt and pliant government in Pakistan. The dirty picture emerging in Af- Pak has US fighting for influence with major stakeholders such as China backed Pakistan and Iran. Both these countries can be instrumental in finding a face saving formula for the US to resolve the crisis and affect a graceful exit.
In his article ‘The Lost War’ Patrick Cockburn writes that it is an extraordinary turn-around that in a decade the Americans are departing and the Taliban are back in business. A leaked NATO report on interrogations of 4,000 captured Taliban, Al-Qaeda, foreign fighters and civilian shows that Taliban prisoners are in a confident mood. They believe their popular support is growing, Afghan government officials secretly collaborate with them, and, once foreign troops are gone, they believe they are going to win.
Afghans like to bet on winners, and the US action will convince many that these are increasingly likely to be the Taliban and Pakistan rather than the Afghan government. No wonder NATO officials looked as anxious as they pretended that the US action had not come as a nasty surprise.
The US has failed in Afghanistan and the Taliban will become stronger. But it is unlikely they can win a total victory. The non-Pashtun communities, a majority of the population, will resist them. Reconciliation will be very difficult in a country as deeply divided as Afghanistan. In the foreseeable future the war may soon be over for the Americans, but not for Pakistanis and certainly not for the Afghans.
India Getting Trapped
In the new Cold War between US and China, India is being groomed to play the role Pakistan played as a US ally in the cold war with Russia. (And look what happened to Pakistan.) Many of those columnists and “strategic analysts” who are playing up the hostilities between India and China, can be traced back directly or indirectly to the Indo-American think tanks and foundations. India must understand and learn from Pakistan’s case that being a “strategic partner” of the US means collaboration (interference) at every level. It means hosting US Special Forces on Indian soil (a Pentagon Commander recently confirmed this to the BBC). It means sharing intelligence, altering agriculture and energy policies, opening up the health and education sectors to global investment. It means opening up retail. It means an unequal partnership in which India is being held close in a bear hug and waltzed around the floor by a partner who will dump her the moment she refuses to dance.
There is certainly more of the smell of war in the air around the Persian Gulf this year than any other year in recent times. This is driven by fear that Iran is inching ever closer to actually getting its hands on the bomb and that its window of vulnerability to an Israeli attack may be closing rapidly. The prospect of an Iranian nuclear bomb is not so much an existential threat to Israel as an end to Israeli nuclear hegemony and full-spectrum dominance over all other countries in the Middle East.
India has good relations with Iran based on shared trade and security interests. Iran supplies about 12 percent of India’s oil imports. Delhi has also had a long-standing interest in building a gas pipeline from Iran to India, but that would have to run through Pakistan. US pressure on India to cut its reliance on Iran oil and gas has created a complex situation for India. India has to balance a complex array of interests in the region. Some Indian independent strategists are of the view that there has been an equally long-standing convergence of strategic interests with Iran in Afghanistan and Pakistan that will outlast the Western military involvement in Afghanistan.
Supreme Court a Forlorn hope of hapless Pakistanis
It appears that the Supreme Court of Pakistan has inadvertently fallen prey to these schemes as the timings of hearing the Mehran Bank scandal suggests. Since the hearing of this case was commenced by the Supreme Court the media went berserk in a relentless attack on the institution of the Army and ISI. Never in the history of Pakistan or for that matter any nation in the world, the local media and politicians have maligned, humiliated and insulted their own armed forces with no holds barred.
An independent judiciary would pose a threat to the corrupt. The picture looked promising when an independent judiciary (Supreme Court) was reinstated after a truly memorable struggle and thus the expectations were high. In the perception of many its judgments are slow and it has failed to enforce its own judgments. Ikram Sehgal, a journalist with high integrity and repute writes: All cases are pending for unknown reasons! The nation is losing confidence in the judiciary. “Justice delayed is justice denied “.
Agreed, The Supreme Court did not have guns or armored divisions or special service group to force subservience to its edicts. But, it had a surfeit of moral authority and the active public support to back it if the need for that ever arose. Ikram Sehgal goes to the extent of saying that the Supreme Court should have been able to call on all institutions including the instrument of last resort, the armed forces. Pakistan government and its Prime Minister and The President take pride in its open and willful defiance /disobedience of the judiciary. Most Pakistanis subscribe to the view that there were countless opportunities for the judiciary to assert its authority through a combination of issuing expeditious judgments and following up on their implementation through the use of constitutional powers vested in it. It is on both these fronts that the judiciary has been found wanting. As a consequence of this failing, the proponents of the corrupt status quo have become more daunting in their misdemeanors, thus adding to the woes of a beleaguered people most of whom are incessantly fighting for a few miserly morsels every day.
When President Zardari and his son Bilawal openly attacked the Supreme Court (specifically the Chief Justice of Pakistan) and the Army, only then perhaps His Lordship understood the game plan and stated that he shall not allow anyone to defame the Armed Forces or the Judiciary of Pakistan. Too late too little My Lord, the damage has been done and may we have the audacity to suggest that such comments are unnecessary and meaningless coming from the highest judicial officer unless they are translated in appropriate timely judgment that court has the will and wherewithal to implement.
Pakistan- Besieged or Held on Ransom?
Raoof Hassan befittingly remarks in his article in the News International that Pakistan is a besieged country in the hands of its leadership and their crude machinations solely crafted for their vile advancement.
Pakistan’s misery can be traced to the incompetence, woeful lack of sincerity, an inherent defiance of the rule of law and deep-rooted corruption of its rulers who have adorned its throne playing out a ghastly sequence of masquerades. Exploiting an economically captive electorate is rather easy to bring forth a coterie of people who control their purse strings. Is this democracy by any stretch of imagination? Crimes are being perpetrated in the name of democracy and religion while the relatively clean higher judiciary and the Army are sitting placidly watching this sordid drama of plunder and loot.
A Ray of Hope
Imran Khan has emerged in Pakistan as a light at the end of tunnel. A survey conducted by the institution in the urban center revealed that 80% of educated elite would support him in future election. However, well over 55% conceded that winning at polls is different ball game. Whereas the current rulers PPP along with a very friendly opposition of PML (N) would easily exploit an economically captive electorate in towns and rural areas fully supported by the feudal lords in Punjab and Sindh and the warlords /Sardars of Balochistan would capture enough seats.
Many suggest the only way out for Pakistanis is to come out in the streets and launch a people’s movement to Islamabad to topple the masquerading plunderers of this hapless country. Imran has the ability and charisma to start this movement for restoration of true democracy in Pakistan. He need not worry about the establishment. This time around there is little chance of telephone call from General Kayani to call off the march to Islamabad as he did during the long march (for restoration of the superior judiciary).
3. Pakistani Newspapers Banned in Afghanistan by ISAF and at India’s Insistence
Afghanistan has issued a nationwide ban against Pakistani newspapers to stop what security officials consider anti-government propaganda aimed at Kabul.
Ihsanuddin Taheri, a government spokesman, told the Reuters news agency on Saturday that Pakistani newspapers are often “misleading” in their reporting of the Afghan administration and wrongly accuses NATO-led forces of “occupying” the country, rather than offering security support.
He added that some papers have also published speeches by Taliban leaders, hampering the government’s effort to bring the Taliban into peace talks aimed at ending the country’s 11-year conflict.
“We totally reject these statements and the ban is to show them this,” Taheri said.
Afghan border police have been ordered to sweep shops in the eastern provinces of Nuristan, Kunar and Nangarhar near the Pakistan border to seize copies of Pakistani papers, he said.
The east of the country has been the focus for foreign and Afghan security operations against fighters over the summer months ahead of a NATO pullout of most combat troops by 2014.
Ties between Afghanistan and Pakistan have been strained by months of cross-border shelling which officials in Kabul have blamed on Pakistan’s military.
Islamabad accuses Afghanistan of failing to stop anti-government fighters operating from mountain havens on Kabul’s side of the border.
On Thursday, the Afghan foreign minister told the UN Security Council in New York that diplomatic ties with Pakistan were under threat.
The newspaper ban, which is likely to worsen already tense cross-border ties, could only be reversed by a ministerial decree.
4.How Propaganda is used as a Tool to Influence nations like Pakistan. Fortunately for Pakistanis with less than 58 percent literacy rate, these cutting edge propaganda tools fail miserably. You cannot win hearts and minds of people by sophisticated marketing deception or propaganda.
References
http://www.lisauk.com/view.php?i=86&em=1
http://tribune.com.pk/story/442395/education-endowment-pakistans-literacy-rate-needs-to-improve/
http://www.beyondintractability.org/bi-essay/propaganda
Posted by aka in Asif Zardari Crook Par Excellance, BOOT THE SCOUNDRELS OR SHOWDAZ, Pakistan Security and Defence: Enemy & Threats (Internal & External), PPP Choor on April 17th, 2013
Hussain Haqqani was Pakistan’s most reviled ambassador to the US–often derisively called “the US ambassador to Pakistan based in Washington“.
Mr. Haqqani’s latest rhetoric against Pakistan is nothing new–he has spent a lifetime deriding the Pakistani state. In the aftermath of the 911 attacks, Haqqani the opportunist jumped on the Neoconservative bandwagon and made a buck.
He even wrote a memo to the US which has been liked to a “traitor’s confession”. For that “Memo” he has been indicted in court. The Chief Justice of the Supreme court has demanded his appearance for his sins, and he is absconding. The noose is tightening around him, and soon he will be standing in Pakistani court which will send him to jail for being a foreign spy and a traitor.
Haqqani lives in his own world where “Blame Pakistan First” is his mantra. His philosophy has been rejected by Pakistanis and Americans alike, yet his hatred for the Pakistani state finds venues which will pay him.
Mr. Haqqani has often been described as a scoundrel and a thief. He has no backing and no one listens to his advice. His current article is another attempt to get cheap publicity and find a limelight which he has lost and craves for.
He will soon find his day in court.
Reference
Posted on 19 March 2013.
Posted by ali rehan munir in Pakistan Security and Defence: Enemy & Threats (Internal & External) on April 17th, 2013
WHAT MILITARY LESSONS HAVE WE LEARNT FROM THE SOVIET AND US DEBACLES
IN AFGHANISTAN?
Afghanistan: the Smell of Defeat
by MIKE WHITNEY
“These two visions, one of tyranny and murder, the other of liberty
and life, clashed in Afghanistan. And thanks to brave US and coalition
forces and to Afghan patriots, the nightmare of the Taliban is over
and that nation is coming to life again.”
– George W. Bush, The War College Address, 2004
Not so fast, George.
The United States hasn’t liberated Afghanistan. It hasn’t rebuilt
Afghanistan. It hasn’t removed the warlords from power, curtailed
opium production, established strong democratic institutions, or
improved life for ordinary working people. The US hasn’t achieved any
of its strategic objectives. The Taliban are stronger than ever, the
central government is a corrupt farce, and, after 11 years of war, the
country is in a shambles.
This is what defeat looks like. The US military has been defeated by a
poorly-armed militia which has demonstrated a superior grasp of modern
warfare and asymmetric engagement. The Taliban has shown that they are
more adaptable, more motivated, and smarter. That’s why they
prevailed. That’s why they beat the world’s most celebrated army.
Americans don’t like to hear that kind of talk. They’re very proud of
their military and are willing to pay upwards of $1 trillion per year
to keep it outfitted in the most advanced weaponry on earth. But
weapons don’t win wars, neither does propaganda. If they did, the US
would have won long ago, but they don’t. What wins wars is tactics,
operations, and strategy, and that’s where the emphasis must be if one
expects to succeed.. Here’s an excerpt from an article by William S.
Lind explaining why the US mission in Afghanistan failed:
“A general rule of warfare is that a higher level trumps a lower, and
technique is the lowest level of all. Our SEALs, Rangers, Delta, SF,
and all the rest are vastly superior to the Taliban or al-Qaeda at
techniques. But those opponents have sometimes shown themselves able
at tactics, operations, and strategy. We can only defeat them by
making ourselves superior at those higher levels of war. There,
regrettably, Special Operations Forces have nothing to offer. They are
just another lead bullet in an obsolete Second Generation arsenal.”
(“What’s so special about Special Ops?”, William S. Lind, The American
Conservative)
The US military’s high-tech gadgetry and pilotless drones merely
disguise the fact that America is still fighting the last war and
hasn’t adapted to the new reality. Here’s more from Lind expanding on
the same theory:
“The greatest intellectual challenge in Fourth Generation war—war
against opponents that are not states—is how to fight it at the
operational level. NATO in Afghanistan, like the Soviets three decades
ago, has been unable to solve that riddle. But the Taliban appears to
have done so….
The Soviet army focused its best talent on operational art. But in
Afghanistan, it failed, just as we have failed. Like the Soviets, we
can take and hold any piece of Afghan ground. And doing so brings us,
like the Soviets, not one step closer to strategic victory. The
Taliban, by contrast, have found an elegant way to connect strategy
and tactics in decentralized modern warfare.
What passes for NATO’s strategy is to train sufficient Afghan forces
to hold off the Taliban once we pull out. The Taliban’s response has
been to have men in Afghan uniform— many of whom actually are Afghan
government soldiers or police—turn their guns on their NATO advisers.
That is a fatal blow against our strategy because it makes the
training mission impossible. Behold operational art in Fourth
Generation war……
The Taliban know this technique is operational, not just tactical.
They can be expected to put all their effort into it. What counter do
we have? Just order our troops to pretend it is not happening—to keep
trusting their Afghan counterparts. That order, if enforced, will put
our soldiers in such an untenable position that morale will collapse.”
(“Unfriendly Fire”, William S. Lind, The American Conservative)
Lind does not underestimate the Taliban or dismiss them as “ignorant
goat herders”. In fact, he appears to admire the way they have
mastered 4-G warfare and routed an enemy that has vastly superior
technology, communications and firepower. It helps to prove his basic
thesis that tactics, operations, and strategy are what matter most.
For more than a decade, the Taliban have been carrying out an
impressive guerrilla war frustrating attempts by the US to establish
security, hold ground or expand the power of the central (Karzai)
government. In the last year, however, the militia’s efforts have paid
off as so-called “green on blue” shootings–where coalition troops have
been killed by Afghan soldiers or policemen–have dashed US plans to
maintain a client regime in Kabul when US combat operations end and
American troops withdraw. The Taliban found the weak-link in the
Pentagon’s strategy and has used it to full advantage. “As American
Security Project Central and South Asia specialist Joshua Foust puts
it, ‘The training mission is the foundation of the current strategy.
Without that mission, the strategy collapses. The war is adrift, and
it’s hard to see how anyone can avoid a complete disaster at this
point.’” (“The Day we lost Afghanistan”, The National Interest)
TIME TO CUT AND RUN?
The persistent green on blue attacks have convinced US and NATO
leaders that the war cannot be won which is why President Barack Obama
has decided to throw in the towel. Here’s a clip from a speech Obama
gave in May at a NATO confab in Chicago:
“I don’t think that there is ever going to be an optimal point where
we say, this is all done, this is perfect, this is just the way we
wanted it and now we can wrap up all our equipment and go home…Our
coalition is committed to this plan to bring our war in Afghanistan to
a responsible end.”
The political class is calling it quits. They’ve decided to cut their
losses and leave. Here’s how the New York Times summed it up:
“After more than a decade of having American blood spilled in
Afghanistan…it is time for United States forces to leave Afghanistan
….. It should not take more than a year. The United States will not
achieve even President Obama’s narrowing goals, and prolonging the war
will only do more harm….
Administration officials say they will not consider a secure
“logistical withdrawal,” but they offer no hope of achieving broad
governance and security goals. And the only final mission we know of,
to provide security for a 2014 Afghan election, seems dubious at best
…
…the idea of fully realizing broader democratic and security aims
simply grows more elusive….More fighting will not consolidate the
modest gains made by this war, and there seems little chance of
guaranteeing that the Taliban do not “come back in..
Post-American Afghanistan is likely to be more presentable than North
Korea, less presentable than Iraq and perhaps about the same as
Vietnam. But it fits the same pattern of damaging stalemate. We need
to exit as soon as we safely can.
America’s global interests suffer when it is mired in unwinnable wars
in distant regions.” (“Time to Pack Up”, New York Times)
Notice how the Times fails to mention the War on Terror, al Qaida, or
Bin Laden, all of which were used to garner support for the war. What
matters now is “America’s global interests”. That’s quite a reversal,
isn’t it?
What happened to the steely resolve to fight the good fight for as
long as it takes; to liberate Afghan women, to spread democracy to
far-flung Central Asia, and to crush the fanatical Taliban once and
for all? Was it all just empty posturing aimed at ginning up the war
machine and swaying public opinion?
And look how easy it is for the Times to do a 180 when just months ago
they were trying to persuade readers that we should hang-in-there to
protect Afghan women. Take a look at this August 2012 editorial titled
“The Women of Afghanistan”:
“Afghanistan can be a hard and cruel land, especially for women and
girls. Many fear they will be even more vulnerable to harsh tribal
customs and the men who impose them after American troops withdraw by
the end of 2014.
Womens’ rights have made modest but encouraging gains over the past
decade. But these could disappear without a strong commitment to
preserve and advance them from Afghan leaders, Washington and other
international partners….
…all Afghans should be invested in empowering women. As Mrs. Clinton
has argued, there is plenty of evidence to show that no country can
grow and prosper in today’s world if women are marginalized and
oppressed.” (“The Women of Afghanistan”, New York Times)
Ahh, but lending a hand to “marginalized and oppressed” women doesn’t
really hold a candle to “America’s global interests”, now does it? As
one might expect, the Times most heartfelt feelings are shaped by
political expediency. In any event, the Times tacit admission proves
that the war was never really about liberating women or spreading
democracy or even killing bin Laden. It was about “America’s global
interests”, particularly, pipeline corridors, mineral extraction and
the Great Game, controlling real estate in thriving Eurasia, the
economic center of the next century. That’s why the US invaded
Afghanistan, the rest is propaganda.
There’s one other glaring omission in the Times article that’s worth
noting. The editors tiptoe around the one word that most accurately
summarises the situation: Defeat. The United States is not leaving
Afghanistan voluntarily. It was defeated. The US military was defeated
in the same way that the IDF was defeated by Hezbollah in the summer
of 2006, by underestimating the tenacity, the skill, the ferocity, the
adaptability, and the intelligence of their adversary. That’s why
Israel lost the war in Lebanon. And that’s why the US lost the war in
Afghanistan.
There’s a reason why the media won’t use the term defeat however
applicable it may be. It’s because your average “Joe” understands
defeat, the shame of defeat, the sting of defeat, the anger of defeat.
Defeat is a repudiation of leadership, proof that we are ruled by
fools and scoundrels. Defeat is also a powerful deterrent, the idea
festers in people’s minds and turns them against foreign
interventions, police actions and war. That’s why the Times won’t
utter the word, because defeat is the antidote for aggression, and the
Times doesn’t want that. None of the media do.
But the truth is, the United States was defeated in Afghanistan. If we
can grasp that fact, then maybe can stop the next war before it gets
started.
Posted by Fawad Mir in Foreign Policy, Pakistan Security and Defence: Enemy & Threats (Internal & External) on April 15th, 2013
| And hold fast, all together, by the rope which God (stretches out for you), and be not divided among yourselves; and remember with gratitude God’s favour on you; for ye were enemies and He joined your hearts in love, so that by His Grace, ye b ecame brethren; and ye were on the brink of the pit of Fire, and He saved you from it. Thus doth God make His Signs clear to you: That ye may be guided. |
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