The Genesis of Corruption


Corruption was alive and well when Pakistan was created in 1947 but it has been very much in fashion in South Asia (and the rest of the world) for centuries.  However, many areas of our society had remained relatively safe from its ugly tentacles. Unfortunately the many opportunities created by the inception of the new State and the early loss of credible leaders like the Quaid and Liaquat Ali Khan Shaheed allowed  corruption to gradually permeate through and subvert the whole spectrum of society.  By 1958  the civilian government had become a full partner to those engaged in corruption.  The first martial law tried to stamp out this corruption,  the style may be  different in this military regime, the substance of primary raison d’etre for clamping authoritarian rule in place of a democracy remains  the same.  The first martial law did not have as  difficult a time as the present military rulers are having four decades later, corruption is now deeply imbedded in the psyche of the entire country, almost without exception.  Forty years ago people using foul means gave bribes to overcome their competition, today almost everyone, even those using fair means, must give bribes to get things done.

The fruits of corruption can now be spirited away abroad much more easily than  in the olden days when it was invested in property or kept buried in dark places, that has acted as a “force-mulitplier” for the proliferation of corruption. Uptil 1857, the British bribed their way into power across South Asia by seducing recalcitrants among the close relatives/associates of various rulers.  After 1857, they created a new “loyal” elite by distributing vast tracts of land that became theirs by default of having defeated the vestiges of the old Mughal Empire.  This newlyélanded gentry owed their loyalty to the British Raj, who in turn promoted their new protégés into aping their customs and traditions.  As the tracts of land became smaller and the urban population became larger, smaller units of land i.e. residential and commercial plots, were used by the rulers as weapons of bribe for their own continued rule.  The political governments perfected this “art”.  In Pakistan the first great exercise of this was in Karachi when the Pakistan Employees Cooperative Housing Society (PECHS) came into being, residential plots were allotted to bureaucrats and then re-sold on the commercial market at astronomical prices, giving windfall instant riches to the “lucky” bureaucrats. Commercial areas such as I. I. Chundrigar Road, etc had already been carved up among the relatives and friends of those who succeeded Liaquat Ali Khan Shaheed.  Earlier they were responsible for the “permit” windfall, sanctions for various “commodities”, “industries”, etc that were given to favourites and sold for a premium.  A Gulberg appeared in Lahore and a Satellite Town in Rawalpindi, fore-runners to a whole host of such residential societies, formed mainly on black money.  Real estate became a haven for illegal wealth.  When the more organized Pakistan Defence Officers Cooperative Housing Society (now Defence Housing Authority (DHA) Karachi came into being, money started flowing in from the very rich for purchase of land at comparatively cheaper prices from the military beneficiaries of allotted residential and commercial plots. It was only later that the men in uniform   discovered that they could sell the real estate at higher commercial prices to supplement their meagre incomes, mainly to purchase cars and household electrical/electronic goods.  Major corruption took hold in society across the broad spectrum of the body politic involving politicians, bureaucrats, businessmen, Armed Forces personnel, etc.  Kickbacks started to proliferate in every procurement contract, every construction contract, every service contract, etc.  Of the assessed taxes only 10-15% went to the government, if any, at least 25-30% went to the tax collectors, balance was pocketed by the unscrupulous.  The situation now is that we recover only 30% of the taxes that are liable. This has put an enormous economic burden on the State, we are always depending upon loans from abroad to shore up our Budget.  We may have even reached a stage of country debt default.  With nationalization in 1973, corruption force-multiplied, remaining manageable under political control till 1977. However, things went berserk under absolute bureaucratic rule during the third martial law 1977-1985.  By the time the political government of sorts came back to power in 1985, corruption was endemic across the board, during the Bhutto/Sharif/Bhutto/Sharif 1988-1999 political period, it crossed all bounds.  Bankers also got into the act, showing means and methods to politicians how to become “instant”  businessmen by taking loans from the financial institutions without collateral and without any intention of returning the loans.  The word “loan default” came into the Pakistan lexicon. By the 80s a few people in the Armed Forces fell prey to their retired colleagues’ machinations and were rumored to have taken kickbacks in defence procurement deals.  These contracts were large but the uniformed people involved were only a handful. By the 90s, influence and contracts ran Pakistan through a network of nepotism and corruption.  When Gen Pervez Musharraf took over, the situation was horrific. The National Accountability Bureau (NAB) was a last-chance solution waiting to happen, something that Pakistan desperately needed  to ward off threats to its very existence as a nation.

National Accountability Bureau

In an article for THE NATION on Sept 16, 2000 entitled “NAB BLUES?” I wrote,   “When Amjad became the Chairman of the newly commissioned NAB last October, great things were expected from him.  In the Army he had acquired a reputation as a clean, honest (to a fault) and professionally competent soldier (and he remains one).  He  methodically set about cleaning the dirty stables of the muck-filled Pakistani farm, and if not rid us altogether of nepotism and corruption,  putting  the fear of God into a majority of the corrupt lot,  their illegal activities could no longer be carried out openly without any questions or fear.   Not only the hopes of the COAS and the Pakistan Army but that of the entire nation rested upon him. One forgave him his first “bull-in-a-China shop”  steps because of inexperience and a nation hungry that the guilty be brought to justice.  In the process a number of well-known businessmen were hauled up and subjected to extreme discomfort, if not third degree treatment.  Obviously this was playing to the gallery and the people of Pakistan were generally delighted at what they thought was just retribution for those who had looted the country’s wealth for over five decades”, unquote.

Economy and Accountability

The Economy and Accountability can never be separated from each other because of the opportunities the public sector in a burgeoning economy offers for those engaged in corruption.  In ‘THE INSEPARABLE TWINS” in THE NATION on Jan 22, 2000, to quote “One cannot forsake public perception, for the sake of our present rulers NAB has to come good quickly. Given that investigation and prosecution of white-collar crime is not a piece of cake, NAB should have first gone for those easily nabbed.  All politicians, who took part in the 1990, 1993 and 1997 elections, have had to declare their assets”, unquote.

The present government went wholesale after loan defaulters. In their enthusiasm to show some results, a part of the exercise became counter-productive. This gave an excuse for vested interest among defaulters (and those bankers who willfully engineered that default) to start a vicious adverse propaganda against NAB about the effect on business in the country.  Unfortunately for them the rampaging stock market not only belied such apprehensions but  also exposed them as false doomsday prophets.

The second object of collective public anger  NAB went after were those members of the bureaucracy who not only enriched themselves at public expense but flouted their illegal wealth with impunity.  This exercise was done in two phases; the first phase reconciled their income/wealth tax returns with a declaration of assets presently held by them, the second investigated whether they were living within their means. A law enacted by the Quaid as far back as 1947 makes any bureaucrats found living beyond their means guilty of misconduct,  bureaucrats were asked to prove the difference between their known income/wealth as declared by them and their expenditures. Detailed scrutiny, thereafter, has served to ascertain as to how the person had acquired wealth beyond his known income. Necessarily such as an exercise begins from the top, a gradual process of elimination filtering down to the lowest rung in the ladder of public employment.

Curbing Perjury most important facet of accountability

A few months ago I sat and watched in increasing frustration and disgust as two senior executives of Pakistan TV, a semi-government corporation, lied through their teeth while giving evidence under oath.  Almost  every sentence of their affidavits was an absolute fabrication,  answers to every question was a blatant untruth. Even though this was before one of the best judges ever produced by the judiciary in Pakistan, one could see why the judiciary seems to have become helpless to prevent perjury.  The case being subjudice, one cannot ethically take names, however one can understand the reason why accountability is so difficult in a country where almost all statements or cross-examinations under oath are badly tainted. For personal gain, whether monetary or otherwise, false representation of facts and distortions, a gentlemanly phrase for “outright lies”, is the order of the day.  The Oxford Dictionary very correctly gives the meaning of perjury as “an act of willfully telling an untruth when on oath”, and goes on to use the words, “lying, mendacity, mendaciousness, falsification, deception, untruthfulness, dishonesty, duplicity”.  In simple terms, a perjurer is a criminal.  In most countries, perjury carries exemplary punishment, ruthless enough for people to try and avoid giving a statement under oath lest that statement (or part thereof) be detected to be false.  The system is so credible that depositions under oath save the time of the courts in long-drawn out examination of witnesses.  Automatic and severe punishment acts as a deterrent of sorts, a search of the legal history all over the developed world will show that because of repeated convictions due to perjury, the drop in corruption has been commensurate with that of perjury. This is something to concentrate upon, NAB will remain strait-jacketed until  exemplary punishment is mandated for those who make false accusations and/or falsify their statements.  Obviously such deliberate misinformation  is for personal gain or personal vendetta.  White-collar crime by itself is not easy to pursue, with public servants and private citizens both confident that even if they perjure themselves no one is going to take action against them, investigations are unlikely to succeed.   NAB should give the highest priority to perjury cases, making it impossible to tell lies, whether  under oath or not.

In ”TRUE OR FALSE” on Sept 2, 2000 in THE NATION I discussed the effect of perjury, quote,  “To put it bluntly, most of our problems can be traced to the willingness of those under oath to tell lies with impunity, to forge documents, to erase, alter, deface, mutilate, etc evidence as may be required. And unless we do something about this it will be downhill all the way for us as a nation and it may well cost our children their future. Things are in such a state that a frustrated common citizen very rarely consents to bear any witness, for fear of being persecuted by the forces of evil. And what about lawyers who are sworn to uphold the law? It should be made incumbent upon the lawyers to carefully satisfy themselves about the cases of their clients and not present false evidence or misleading arguments on their behalf. In fact NAB must also satisfy itself that unwittingly it has not engaged such lawyers on contract, scoundrels can manage to camouflage themselves behind the cover of the name of good English sounding legal firms. Are lawyers not duty bound to only represent before the court what is truthful?  It should also be included in the statute  books that lawyers who do not present the truth before the court knowing it to be false and/or fabricate the truth to support the client’s lies, should also be prosecuted for misrepresentation and punished on the same basis as aforementioned except that they should also pay the supreme penalty of not being able to practice any more.  NAB would do well to do an internal enquiry to rid itself of such shysters.

Perception against the truth

NAB suffered at the hands of the media because the media basically lacked knowledge about the scope of NAB’s mission and not being exposed to media reality NAB never tried to educate the media or enhance their own media image despite their excellent accomplishments recorded in the short span of one year. A total 173 cases have been filed in Court, 81 in Punjab, Sindh 47, NWFP 25 and Balochistan 20, of these 10 cases have been decided in Punjab, 13 in Sindh, 14 in NWFP and 9 in Balochistan, a total of 46 cases while 127 cases are in various stages of judicial process. And who are these people facing accountability? Among them there are 37 politicians from PML (N), 22 from PPP and 10 belonging to other parties i.e. a total of 69 politicians. 39 bureaucrats (22 of Grade 20 and above) who have been charged in court while only 17 businessmen are under NAB investigation i.e. 10 of their cases have been placed before a court of law. This gives lie to the perception that because businessmen are being targeted, investors remained shy of the country. If the 173 cases, only 27 are of “bank default”, 73 cases are because of “misuse of authority” and 39 due to “embezzlement”. There are 460 cases under investigation, of which 152 (i.e. 33%) have been completed and 308 are under progress. Again in the investigations 211 are politicians, the next large number 170 is that of bureaucrats, businessmen constitute only 32 cases i.e. a bare 7%. Yet why is it that the everyone seems to be up in arms against accountability? This is because of a vested interest among those most affected, politicians (46%) and bureaucrats (38%), that 83% keeps a drumbeat of false rumours and accusations going against NAB. Unfortunately for them, truth will always ultimately prevail. Against the real achievements of NAB such fiction cannot stand.

NAB and the genesis of corruption

As stated earlier, corruption had reached endemic proportions by Oct 1999 and despite some effort from time to time there was no real attempt to control this disease. Mian Nawaz Sharif’s government initially seemed to be committed to this by the establishing of the Ehtesab Bureau but by putting a politician-in-charge, Senator Saifur Rehman, someone who was so partisan that he publicly vowed to go after only the leaders of the opposition parties or those who were considered “enemies” of Mian Nawaz Sharif, the credibility of the entire exercise was undermined. Gen Pervez Musharraf and his colleagues were faced with the imminent collapse of the economy if things were not brought under control, the first priority, therefore, was to effect genuine accountability in this country for the first time. From a standing start and within a short time of 365 days what has achieved is nothing short of a miracle – and all this while handicapped with respect to experienced personnel. Only an institution founded in integrity like NAB was steeped in could fight corruption as institutionalized in Pakistan. A superhuman effort was required and in the course of a “learning curve”, focus was finally adjusted to the correct objectives. Very incorrectly NAB was perceived to be anti-business, in fact the studies show that not only have business people been targeted very little, by targeting a combined 83% of politicians and bureaucrats, NAB has got its focus right. Unfortunately this is not the public perception and must be corrected. Above all, valuable experience and knowledge has been gained. Instead of acting like a lynch mob and delivering French justice “guilty until proven innocent”,  NAB has conducted the judicial process in a reasonable, if expeditious manner. Something extremely important has gone completely unnoticed by the public and the media, the strict adherence to the rule of law when it was easy for NAB to use martial law percepts. That by itself has been a tremendous achievement for NAB’s credibility, both locally and internationally.

One has no doubt that for Pakistan the Rs 26 billion or so NAB has recovered (approximately 5% of the annual Federal Budget) will go up to Rs 100 billion in the next year (or 20% approximately of the Federal Budget). That does not count the fact that almost double that amount must have been saved because of the fear of NAB’s accountability, NAB thus has a dominant role in the economy as a deterrent against endemic corruption that subverts progress and development. Unfortunately because of this responsibility, to keep its credibility NAB must keep its personnel and their functioning under constant internal review. The new Chairman NAB Lt Gen Khalid Maqbool, seems to have a different, more genial style from his more intense predecessor Lt Gen Muhammad Amjad but the substance and the intensity of the campaign against corruption remains the same. In fact it will be further enhanced. Make no mistake, the National Accountability Bureau (NAB), despite all the hiccups associated with its birth and the first few hesitant steps, has developed into a crime-fighting institution that the people of Pakistan have been waiting for with growing desperation for over 50 years. NAB has now to ensure that its image remains clean and its credibility is enhanced by focusing on corruption without fear or favour, it is vital for Pakistan that NAB keeps its Pakistan’s “crime-fighter extraordinary” status. NAB is this military government’s most potent success story. The bottom line is that within one year NAB has proved its worth in stemming, if not eradicating, corruption in Pakistan.

Mr. Ikram Sehgal is Publisher and Managing Editor of Defence Journal (Pakistan). He was Chairman APSAA for the year 2000, now acting in adhoc capacity pending elections for the year 2001.

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