Nab Report Final

8/8/2019 Nab Report Final

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NABNATIONAL ACCOUNTABILITY BUREAU

BYMOHAMMAD ALI QASIM KHAN

RAO ABDULLAH IFTIKHAR KHANJUZER MODDI


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About National Accountability Bureau (NAB)

The National Accountability Bureau is Pakistan's apex anti-corruption

organization. It is charged with the responsibility of elimination ofcorruption through a holistic approach of awareness, prevention andenforcement. It operates under the National Accountability Ordinance-1999, with its headquarter at Islamabad. it has four regional offices inthe provincial capitals and one at Rawalpindi. It takes cognizance of alloffences failing within the National Accountability Ordinance (NAO).

For the initial three years, the focus of its functions was directed onlyat detection, investigation and prosecution of while-collar crime. Thoseprosecuted include politicians, public service officials and other citizens

who were either guilty of gross abuse of powers, or through corruptionhad deprived the national exchequer of millions or resorted to othercorrupt practices. In February 2002, NAB launched the NationalAnticorruption Strategy (NACS) project. The NACS team conductedbroad based surveys, studied external models of international anti-corruption agencies and involved local stakeholder. All pillars ofNational Integrity System were studied in detail. After identifying thecauses of corruption in each pillar, a comprehensive strategy and adetail action plan was recommended. Breaking away from traditionalenforcement based routines NACS has recommended a comprehensiveprocess. Relevant amendments have been made in NAO and now NAB

is empowered to undertake prevention and awareness in addition to itsenforcement functions.

VISION

The National Accountability Bureau is to be a credible, effective,efficient and dynamic anti-corruption organization creating an enablingenvironment for a corrupt free society.

MISSION

The National Accountability Bureau is to work to eliminate corruptionthrough a comprehensive approach encompassing prevention,awareness, monitoring and combating.


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OBJECTIVES

The National Accountability Bureau derives its objectives from itsapproved project document titled 'National Anti Corruption Strategy' orNACS and defines them as follows:

Short Term Setting in motion systemic improvements that willstrengthen the national integrity system and the people againstcorruption.

Long Term The elimination of corruption by engaging all thestakeholders in the fight against corruption, through a programme,which is holistic, comprehensive and progressive.

SALIENT FEATURES of the NAO

o To provide for the setting up of a National Accountability Bureau

so as to eradicate corruption and corrupt practices and holdaccountable all those persons accused of such practices andmatters.

o Take effective measures for the detection, investigation and

prosecution of cases involving corruption, corrupt practices,misuse / abuse of powers, misappropriation of property,kickbacks and commissions, ensuring speedy disposal.

o Recovery of the outstanding amount from those persons whohave committed willful default in repayments to banks,development finance institutions (DFIs), government and otheragencies.

o Implement policies and procedures for awareness, prevention,

monitoring and combating corruption in the society.

WHY

For better future of our generations.Corruption cannot be eliminated without full public participation.For speedy accountability drive.

HOWProvide evidence against CORRUPT PUBLIC OFFICE HOLDERGuide us through constructive critique & suggestions.Provide information regarding money being siphoned abroad/foreignassets of fugitives and their activities


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ORGANIZATION CHART

PGA Wing (Prosecution Wing)Headed by Prosecutor General Accountability in NAB and by DeputyProsecutors General Accountability in all Regional NABs. This Wing isresponsible for preparation filing and pursuance of a reference in acourt of law up till and including appeal stage.

IM Wing (Investigation Monitoring Wing)Investigation Wing is headed by a Director, assisted by case officer toguide and monitor the process of investigation. All investigations areconducted as a team of Case Officer, Investigation Officer, a lawyerand relevant expert. Investigation Wing at NAB monitors thecases/progress at national level.


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FCI Wing (Financial Crime Investigation Wing)Headed by Senior Executive Vice President, is a forensic accountinginvestigation team. Jointly they probe in and investigate financialirregularities/corruption in Banks/Financial Institutions. The Cellprovides active advice and assistance in assets tracing wherever

required.OS Cell (Overseas Operations Cell)Is responsible for liaison with international agencies for investigation,mutual legal assistance, extraditions and issuance/execution of RedWarrants. The section is also responsible for tracing of internationalassets of accused persons.Administration WingAdministration Wing in NAB/Regional NABs is responsible for logistics,budgets and central registry subjects.

INTRODUCTION:

At around 8.30pm on 12 October 1999, General Pervez Musharraf assumedcontrol of the affairs of State. Corruption had always been prevalent inPakistan but in the last decade had reached mythic and unsustainableproportions. It was everywhere. It permeated every level of government. It

had rapidly infiltrated its way into the bureaucracy. It had swamped publicsector institutions. Bribery, favouritism, nepotism, embezzlement,misgovernance and the like were a hallmark of government and publicinstitutions. Everyday, you were exposed to it in some form or the other. Itwas common for greedy tax collectors to grossly overtax the common manand then demand a bribe to withdraw it. Bailiffs would often come knockingat your door with fake arrest warrants to scare you into giving them a bribe.Harassment by electricity workers from KESC and WAPDA was (andunfortunately still is) a fact of life. Even going to the airport was fraught withtrouble. There was a mesmerizing web of rules and red tape designed toentangle the common man and therefore, make it easy for officialdom todemand bribes and favours in exchange for getting the work done. As thewise historian Tacitus observed several centuries ago: In a state wherecorruption abounds, the laws must be very numerous. Indeed, corruptionbecame such a fact of life that it actually became expected and, moredangerously, accepted.


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Accountability of the Rulers

When Musharraf assumed control of the affairs of state, people wereclamoring for accountability: accountability of the rulers and public officeholders that had caused the country to fall into the abyss. Pakistan was onthe verge of default and being called a failed state. Our total foreign debthad tripled and at a staggering US$65 billion, was more than our GDP.Shamefully, abject poverty had risen from 11% at the beginning of the 90sto a sickening 33% by the end. People would then hear rumours of a primeministers palace in Surrey, polo horses being flown to Pakistan fromArgentina and London, a diamond necklace, or a Mr. Ten Percent whodemanded a cut on every deal or investment in the country. Andthey wereangry. If this had been France of the 1870s or Russia of the 1900s, therewould have been blood on the streets. But our people werent just angry they were dejected, despondent, disappointed and tired.

Musharrafs Seven Point Agenda

General Musharraf had to act fast if he wanted to revive the country. Thingswere in such a convoluted mess that it was hard to see what the realproblem was or to what extent the cancer had spread into the body politic.

Just a week after he assumed control, on 19 October 1999, GeneralMusharraf spelled out what he thought was the crux of the problem in his

Seven Point Agenda to the nation:

Rebuild national confidence and morale; Strengthen the federation; Revive the economy and restore investor confidence; Ensure law and order and dispense speedy justice; Depoliticize state institutions; Devolution of power to the grass roots level Ensure swift and across the board accountability.

Lack of accountability has resulted in corruption of horrendous proportion,threatening the very basis of our society, said General Musharraf in hisspeech of 19 October. In fact, accountability was a key theme of Musharrafs


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agenda. There had been an accountability body called the EhtesabCommission set up by President Farooq Leghari in 1997 but this had beenreduced to a political tool under the previous prime ministers , as Musharrafsaid in his speech to the nation on 19 October, The term Ehtesab hasbeen used to such an extent that it has become meaningless. There isthus a need to re-establish faith in the process of accountability.

It was therefore decided to do away with the word Ehtesab which had beena catch phrase of previous government, and create an entirely new, freshbody. But this as yet non-existent body had a challenge to meet even beforeits inception. Musharraf in his speech of 19 October had issued a warning:As a last chance, I urge all defaulters to come forward and settletheir debts within a period of four weeks after which their names will

be published and the law will take its due course. So, not only did thedefaulters have four weeks, so did this as yet non-existent accountabilitybody. Four weeks to create and organize itself under a suitable law; fourweeks to fill itself with staff, and four weeks to investigate and punish those

it would hold accountable.

NAB is born

A general who was known for his toughness was brought in to carry out thisunenviable task: Lt. General Mohammed Amjad. As well as being tough andhard, General Amjad was also known to be a man of personal integrity andhonesty to a fault. An able and incredibly well read man, Amjad formed ateam to formulate and draft a new accountability law for a new accountabilitybody. He was not given much guidance nor a mandate on how to proceedand, as he has frequently stated in the media, he was given a free hand. But,he and his team picked up a key word from Musharrafs speech: defaulters.

Musharraf had given defaulters an ultimatum. There was little or nothing inhis speech that directed accountability towards the rulers, but, if theyhappened to fall into the defaulters category then, this ultimatum wouldalso apply to them. The process of accountability is being directedespecially towards those guilty of plundering and looting the nationalwealth and tax evaders, said Musharraf in his speech of 19 October. Itis also directed towards loan defaulters and those who have hadtheir loans rescheduled or condoned. The process of accountability

will be transparent for the public to see. My advice to the guilty is toreturn voluntarily national wealth, bank loans, pay their taxes before

the hand of the law forces them to do so with penalty.

Musharraf and his generals were not experts in finance, economics or

banking and therefore sought advice. In those early days, they were given alot of inaccurate and bad advice. White collar crime by its very nature isextremely difficult to detect. The perpetrators rarely leave a trail and in acountry like Pakistan, there is no adequate record of transactions. But, bankloan default is easy to detect as it is the only thing where the record is ingood order. The generals were advised that some Rs.210 billion wasdefaulted money owed by various individuals to various banks and if it wasreturned, the economy would fast be on the road to recovery. As they only


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had four weeks and the ultimatum only applied to defaulters, General Amjadand his team opted to catch bank defaulters first and they held meetingswith various bankers to get names of people who had defaulted. The reasonsfor default were not apparently deemed to be important. At the same time,Amjads legal team worked long hours to formulate a new law.

The National Accountability Bureau (NAB) was created on 16November 1999 under The National Accountability Bureau Ordinance1999. General Amjad was its first Chairman. The new accountability law wasbroader than that of its predecessors. Whereas previous accountability lawshad only applied to holders of public office, this new law applied to everycitizen except to serving members of the armed forces and the judiciary. Italso provided NAB with sweeping powers. Under the law, the Chairman couldarrest a person suspected of a crime under the ordinance at any stage in aninvestigation no questions asked, for a period of up to 90 days. They could

do this without even having solid evidence of the persons crime. Even moreunpalatably, no bail was allowed.

Also, under the law, it seemed that the burden of proof had shifted to theaccused which essentially meant that you were guilty till proven innocent.And, a new offence of wilful default was created.

Before people could have time to digest the new law, a few hours after it waspromulgated, NAB made its first move. After midnight on 17 November 1999,prominent businessmen in Lahore and Islamabad were arrested. The nationwas agog. What was even more shocking were the conditions of theirincarceration (which are described in the Prelude). This was felt to be whollyunnecessary. There was no proper evidence against many of them. As statedbefore, many had defaulted because they had not been paid by thegovernment and its corporations and others had defaulted because the


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government had induced them to invest under false pretences and thenchanged the goal posts.

. But, NAB didnt care about why they defaulted; they just noted that theyhad defaulted and therefore, they threw them into jail. In the meantime,they would collect evidence to make a case against them. What was evenmore galling was that other businessmen who were known to be or rather,

felt to be, really corrupt, were walking around free. This was seen as unjustand unfair and NAB was viewed by many to be a witch hunting organizationthat was usurping the powers of the judiciary. General Amjad became fearedand unpopular. Of course, Chairman NAB was bound to be a position thatattracted criticism and unpopularity but in Amjads case, the criticism wasloud. People also questioned why NAB hadnt proceeded against BenazirBhutto and Nawaz Sharif with the same energy and vigour. Why were theyliving in comfortable luxury abroad? Although Lt. Gen Amjad and the twochairmen after him, Lt. General Khalid Maqbool and Lt. General Munir Hafiezhave never said so, it appears that in Nawaz Sharifs case, a politicalagreement was reached which NAB was excluded from and in Benazir

Bhuttos case, whilst NAB does claim to be furnishing the Swiss court withevidence, not much seems to be happening in Pakistan which again appearsto be a matter of politics. A bargaining card so to speak.


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By 31 December 2001, NAB had managed to collect Rs.62.107 billion anddefaulted loans to the tune of Rs.51.252 billion were restructured orrescheduled and there were also certain high profile convictions. There werealso numerous plea bargains that were entered into. But, people weregenerally still not happy with NAB. Whether justifiably or not, it was viewedby many with suspicion and General Amjad himself as a zealot. Manynabbers at the time felt that if NAB had such a bad reputation then thatobviously meant that they were doing something right. They were thereforeeither happy about the criticism or, they dismissed it as coming from thedecedent elite and therefore, not relevant. What they didnt appreciate wasthat the criticism was largely due to NABs seemingly arbitrary and highhanded tactics which even the present NAB Chairman, Lt. General MunirHafiez acknowledges was unnecessary.

There were stories about people being caught and beaten up under NABsorders to elicit information from them and then incarcerated. If no evidence

was found then they would be released a few days later and some even gotan apology from General Amjad. One person who was subjected to similartreatment and who does not wish his name to come on the record says thatthe General personally apologized and told him that people should havepatience with NAB because it is a new organization and it is doing its best tofight corruption, in which case, he should be proud. The person in questionwas not proud and felt disgusted where a question of civil liberty and harmto ones person was concerned, patience was not what was foremost on hismind. Another story concerns a gentleman, who also doesnt wish his name


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to come on the record, and who approached NAB and asked them to free hisfriend who they had wrongly incarcerated. According to the gentleman, theresponse was: If someone is that rich, the presumption is that they arecorrupt. The gentleman didnt wish to disclose who it was he actually spoketo. At any rate, these were the type of stories making the rounds and itcertainly didnt endear NAB to the public. To be fair to General Amjad, onemust not forget that NAB was created at a time when Pakistan was on theverge of being declared a failed state. Everything had collapsed.

Amjad must have naturally felt that tough times called for tough measuresand hence, his hard line approach.

For reasons that are still not clear, General Amjad was replaced asChairman NAB by Lt. General Khalid Maqbool on 29 September 2000.

Soon after he became Chairman, Maqbool stated that businessmenwere not the prime focus of NAB. Maqbool was perhaps considered tobe softer than Amjad which was probably a factor in his appointment.General Amjad now heads Fauji Foundation. After a 13 month stint,Maqbool retired in 2001 and was appointed Governor Punjab and Lt.General Munir Hafiez was appointed in his stead.Gen Shahid Azizwas appointed as the current Chairman NAB in the late 2005

NAB is doing its utmost to improve its image. It has started training itsofficers in white collar crime detection and legal matters. It has launched a

publicity campaign to promote awareness of corruption and how to preventit. The present Chairman has stated time and again that he does not and willnot use his power of arbitrary arrest wantonly and will exercise it withdiscretion. NAB seems to be working tirelessly to portray a more professionalimage. However, there are issues that need to be addressed:1. NAB is in essence an investigation and prosecution agency as opposed to alegal agency. But, the Chairman NAB can only be (a) a retired Chief Justiceor a Judge of the Supreme Court or a Chief Justice of a High Court; or (b) a


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retired officer of the Armed Forces of Pakistan equivalent to the rank of aLieutenant General; (c) a retired Federal Government Officer in BPS22 orequivalent. Because so much power is vested in the Chairman NAB, theChairman has to be picked with care. A qualified criminologist withprofessional knowledge of white collar crime and the workings of the criminalmind would perhaps be a better choice. Members of the armed forces aregenerally not qualified criminologists and through their very training, tend tobe rather rigid and inflexible and therefore, high handed. The Chairman NABalso has to be a superb manager and spend many hours at NAB supervisingthe investigation. A judge may not be the best choice for Chairman dontforget, NAB is not there to sit in judgment, but rather to investigate andprosecute. As for the bureaucracy, they would be perceived to have vestedinterests and relations and rivalries within the bureaucracy. The bureaucracyalso comes under investigation by NAB and a bureaucrat on one hand maybe seen to protect his/her friends or on the other, witch hunt his/herenemies. Because white collar crime is a specialized field, a bureaucrat, a

judge or an army officer, would take a while to learn the ropes.

2. The trouble with the NAB law is that it simply vests too much arbitrarypower in the Chairman, especially in relation to arbitrary arrest. For thisreason, NAB can never be truly institutionlaised and will always depend onthe personality of the Chairman. For instance, Lt. General Munir Hafiezdoesnt arrest people in the same way that General Amjad did, but, he stillhas the power to do so. And, who knows how his successor will use hispowers? Is there any guarantee that future chairmen will exercise discretionand humanity and not turn into witch hunters? If a vindictive ruler comes topower, the same law will be used and abused to its full effect to unleashterror on the populace.

3. The most unpalatable part of the NAB law is the power of arrest withoutbail. The NAB Chairman can order the arrest of anyone, without havingsufficient evidence as to their guilt and detain them for 90 days without bail.A bail application has to be made to the High Court and the period of arrestcan be renewed. This seems rather excessive. NAB investigates cases ofwhite collar crime. Locking someone up for that without sufficient evidenceand then denying them bail is rather like swatting a fly with chainsaw. Bail iseven allowed in criminal cases an accused is allowed out on bail until theprosecution collates sufficient evidence to take before a court and get adefinite pronouncement on guilt. It is only for really heinous crimes such asserial murder or even drugs when an accused is seen as a threat to society,

that bail is generally denied. Also, a suspect under the NAB law is placed onthe ECL so he cant technically flee the country. Rather than arrest someonefor long periods in C Class jails, NAB should perhaps consider institutingreporting requirements i.e. that a suspect has to report to NAB every day ata particular time; or perhaps keep them under watch. But arresting someoneindefinitely is akin to a pronouncement of guilt and keeping them detainedwhile NAB collects evidence can take a while, especially considering that theNAB team are not highly trained in detection of white collar crime. The


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Nabbers should realize that liberty once taken away even for a short periodcan not be given back whereas looted money can.

4. For every loan default that NAB recovers on behalf of a bank, it gets a 3%percentage of the returned monies. What happens is that a bank complainsto NAB about a defaulter and NAB is said to negotiate an agreement. Theanomaly here is that if the arbitrator, in this case NAB, has a vested interestin seeing the money returned, this is again impinging on natural justice. A

judge or arbitrator cannot have an interest in the case. NAB strenuouslydenies that taking 3% is in any way wrong and that it doesnt influence itsimpartiality in the matter. That the 3% is more like a service fee. But whenthe service fee is a percentage of the disputed amount, NAB (the arbitrator)clearly has a stake in the case. As the saying goes, justice must not only bedone, it must also be seen to be done.

5. The vast majority of NABs money recovery comes from bank loan defaultand coupled with the fact that NAB is not being seen to go against rulers and

public officials with the same vigour, some feel it has reduced itself to a debtcollection agency. It is unclear why the banks themselves go to NAB in casesof default why cant they just apply to the court and file an application forbreach of contract?

6. The government is also damaging NABs image in that public officials whoare under investigation are holding ministerial or other public office. Also,making political deals with former rulers and by-passing NAB calls intoquestion NABs utility. Although NAB claims that it does indiscriminateaccountability of everyone high and low, because the high appear to havereached agreements with the government, the accountability drive is seen as

selective. The government and the government alone has to remedy this.

7. The NAB law being widened to include everybody except the servingmilitary and the judiciary in its ambit can lead to problems especially bearingin mind that ordinary citizens can file anonymous complaints. In a poorcountry like ours, jealousy is not uncommon. If my neighbour sees that Ihave a bigger house than he does and he wonders where I got the money orhe has an axe to grind, he can easily report me to NAB. NAB would thenwaste its time investigating into the affairs of the ordinary citizen rather thanpublic officials on whom accountability is a fundamental duty.

8. Who holds NAB accountable? Because it has powers of arbitrary arrest

without need for sufficient evidence, it too should be subject to accountabilitybefore Parliament and the judiciary. In other jurisdictions, it is possible tosue the police for wrongful arrest. There have also been many stories aboutlower NAB officials using blackmail and threats to extort money from aperson. NAB should also be held accountable for its actions saying sorryisnt sufficient.Accountability isnt something which NAB on its own can tackle. Thegovernment and its policies play a pivotal role. The government has to have


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the political will to institute wide ranging reforms such as better education,increased salary for civil servants, independence of judicial, legislative andexecutive functions amongst others. The rulers and public officials must be

held accountable for it is they that have most contributed to and made itpossible for corruption to flourish in the country. That is why proceedingagainst low grade officers who feel they have to resort to corruption in orderto survive is felt to be unfair. Honesty in most people gives way when hungeris at stake as Shakespeare says, Misery makes for strange bedfellows.


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Bibliography

An article by Hamayyun Gauhar in THE CAPITAL NEWS

Most of the information and facts (specially statistical figures)have been gathered by visiting the NAB Headquarters Karachiand interviewing Brigadier Javed Iqbal & Brigadier Abbasi.

An article by Saniyya Sikandar Wali Mohmand in BLUE CHIPBUSINESS MAGAZINE.

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