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Pakistan Will Seek Zardari Graft Probe After Court Climbdown

Pakistan’s Prime Minister Raja Pervez Ashraf conceded to Supreme Court demands that he seek the reopening of corruption investigations against the president, easing a confrontation that threatened his government ahead of elections and ousted his predecessor.

In an unexpected climbdown, Ashraf told senior judges today that he will instruct the law minister to withdraw an earlier direction to Swiss authorities that froze graft probes against President Asif Ali Zardari, who controls the ruling party, and his assassinated wife, Benazir Bhutto. Zardari is unlikely to face prosecution while head of state as under international laws he can expect to be granted immunity.

The tussle between the top court and the Pakistan People’s Party-led administration has distracted a government preparing for a general election that must be held by early next year, and struggling to revive an economy weighed down by a record power crisis. Ashraf is also attempting to rebuild ties with traditional rival India and its leading aid donor, the U.S.

Pakistan’s leaders concluded “it would be untenable to continue a confrontation with the court that would become politically more destabilizing with elections getting closer,” said Rasul Bakhsh Rais, a political analyst and professor at the Lahore University of Management Sciences, by phone. “The risk of Zardari getting in trouble in Swiss courts is low.”

Ashraf, accompanied by leaders of his coalition government, was appearing before the court for the second time since he took power in June.

Gilani Ouster

Former Prime Minister Yousuf Raza Gilani was found guilty of contempt and removed from office by judges after his lawyers were unable to convince the Supreme Court that the constitution grants the president immunity from prosecution while in office. Zardari says he is innocent of all charges.

In a concession to the president, whose alleged corruption during his wife’s terms in office earned him the nickname “Mr. 10 Percent,” Judge Asif Saeed Khosa said that the Supreme Court will consider the government’s assertion that Zardari can claim immunity as head of state under international law.

Zardari enjoys immunity from prosecution under both Pakistani and international law as long as he is president, according to Aitzaz Ahsan, a lawyer who defended Gilani.

The New York Times reported in April that it would be “virtually impossible” to revive the cases against Zardari in Switzerland due to his immunity demand and the European country’s 15-year statute of limitations. Cases against Zardari and his wife were initiated in 1997 by their political rival and former prime minister Nawaz Sharif.

Bribes

Bhutto and Zardari collected and laundered bribes totaling $11.7 million for awarding customs inspection contracts to Swiss companies in 1994, an investigating magistrate in Geneva recorded in 2003.

The couple received six-month suspended prison sentences the same year from a Swiss judge. The punishments were canceled by a Swiss tribunal in 2004 after Bhutto appealed. New bribery charges were then brought, the Swiss newspaper Le Temps reported. Zardari has denied all charges against him, saying they were politically motivated.

Negotiating with political parties to stay on as a civilian president, military ruler Pervez Musharraf in 2007 decreed an amnesty to halt corruption probes against 8,000 politicians and officials, including Zardari and Bhutto.

Pakistani law requires the current administration to resign at least three months before the next general election, which is scheduled to be held by March. Zardari’s five-year term as president will end in August 2013.

The five-member bench of the Supreme Court set Sept. 25 for the government to present the draft of the letter to be sent to Swiss authorities. Ashraf will not have to appear.

The impasse between the court and government had brought calls from major opposition groups, including the Pakistan Muslim League of Sharif and ex-cricket star Imran Khan’s Pakistan Justice Movement, for snap polls.

To contact the reporters on this story: Haris Anwar in Islamabad at hanwar2@bloomberg.net; Augustine Anthony in Islamabad at aanthony9@bloomberg.net

To contact the editor responsible for this story: Peter Hirschberg at phirschberg@bloomberg.net

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