Pakistan's Supreme Court Delays Graft Case Threat to Zardari's Government

Pakistan’s Supreme Court postponed a hearing on corruption cases facing President Asif Ali Zardari and thousands of current or former officials, delaying the latest challenge to Zardari’s administration.

The court accepted a government appeal and set Oct. 13 to hear a case in which judges last year ordered the scrapping of an amnesty law that they said illegally protected Zardari and other officials from corruption cases dating back to the 1990s. Then, the court told the government to formally ask Swiss authorities to reopen a Geneva money-laundering case against Zardari, a step Prime Minister Yusuf Raza Gilani has declined to take, saying a sitting president is immune from prosecution.

The court challenge to Zardari “is part of a campaign by dissatisfied elements in the military, judiciary and the media who want to force Zardari out because of what they see as corruption and ineffective government, notably over the economy and the response to the floods” that have caused billions of dollars in damage and killed more than 1,800 people, said political analyst Talat Masood in the capital, Islamabad.

While parliament this year stripped Pakistan’s presidency of many powers accumulated by Zardari’s predecessor, the military President Pervez Musharraf, Zardari is the top official who has cooperated most closely with U.S. efforts to improve Pakistan’s relations with neighboring Afghanistan and India, Masood and other analysts have said.

‘Serious Challenge’

“Zardari is facing a serious challenge, with some of his opponents quietly urging the military leadership to force a change in government,” said Masood, a retired lieutenant general from the army, which has directly ruled Pakistan for 32 of Pakistan’s 63 years. Armed forces chief General Ashfaq Pervez Kayani “won’t go along with that,” Masood said in a telephone interview, “so I think the government will survive.”

Zardari, Gilani and Kayani met today and agreed “to defend and protect the democratic process and to resolve all issues in accordance with the constitution,” a statement from Zardari’s office said.

Zardari summoned the leadership of his ruling Pakistan Peoples Party to a meeting this evening as Gilani told reporters in Islamabad that “those people who are talking of change” in the government “will be disappointed.” The administration will serve its full term, which runs until 2013, he said.

Pakistan’s annual inflation rate surpassed 13 percent in August. Flood damage and high interest rates fueled partly by government deficits may impede investment and undermine economic growth, which Gilani estimated at 2.5 percent in the year through June, 2 percentage points less than the government’s target.

Bhutto Killing

The Supreme Court last year ruled unconstitutional a 2007 National Reconciliation Ordinance by Musharraf that offered amnesty against criminal and corruption cases to more than 8,000 politicians and officials. Musharraf implemented the pardon as he negotiated with Zardari’s wife, former Prime Minister Benazir Bhutto, for a way to retain office.

Musharraf resigned in 2008 and the amnesty has remained controversial. Gilani told the Senate on Sept. 24 he has ordered all government officials protected by the ordinance to step down in what Masood called a concession meant to “show cooperation with the spirit of the Supreme Court’s order.”

Bhutto was assassinated weeks after Musharraf ordered the amnesty, and after the Peoples Party won 2008 elections, Zardari helped force Musharraf from power and was elected president in September last year.

To contact the reporter on this story: Farhan Sharif in Karachi at fsharif2@bloomberg.net; James Rupert in Islamabad at jrupert3@bloomberg.net

To contact the editor responsible for this story: Bill Austin at billaustin@bloomberg.net

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