1. Current Pakistani politics is troubled with a flood of new stories originating from panama based offshore tax havens. To some Pakistanis, panama leaks have provided first opportunity to see through a window of the Central America a secretive world of offshore financial underworld which can be likened to Cayman Islands, Bahamas, British Virgin Island and a host of other exotic locations with low tax jurisdiction. These jurisdictions specialize in financial and banking sectors secrecies that provide legal cover through creation of multiple companies originating from these far-off islands.
2. The political governance of Panama takes place in a framework of a presidential representative democratic republic with multi-party system, whereby the President of Panama is both Head of the state and Head of the government.
3. Going back to the media history of Panama Leaks, when Daniel Ellsberg photocopied and leaked the Pentagon Papers to the New York Times in 1971, those 7,000 pages of top secret Vietnam War documents represented what then was the biggest whistleblower leak in history—a couple dozen megabytes of it were contained in a modern text file. Almost four decades later, Wiki Leaks in 2010 published Cable gate, a world-shaking, 1.73 gigabyte collection of classified State Department communications that was almost a hundred times bigger.
4. Quite recently, more than a hundred media outlets around the world, coordinated by the Washington DC-based International Consortium of Investigative Journalists, released stories on the Panama Papers, a gargantuan collection of leaked documents exposing a widespread system of global tax evasion. The leak includes more than 4.8 million emails, 3 million database files, and 2.1 million PDFs from the Panamanian law firm Mossack Fonseca which appears to specialize in creating shell companies that its clients have used to hide their assets. Mossack Fonseca is a Panama-based law firm whose services include incorporating companies in offshore jurisdictions such as the British Virgin Islands. It administers offshore firms for a yearly fee. Other services include wealth management.
5. The scandal resulting from their reporting has already touched celebrities, athletes, business executives and world leaders which include Iceland’s Prime Minister (Sigmundur Gunnlaugsson), Spanish Industries Minister (Jose Manuel Soria), and Kyrgyzstan’s Prime Minister (Sariyev) along with Pakistan’s Prime Minister Nawaz Sharif and his family members.
6. The documents trace $2 billion of hidden money tied to Vladimir Putin through accounts held in the names of his family members and his celebrated musician friend Sergei Roldugin. Icelandic Prime Minister Sigmundur Gunnlaugsson faced demands from the previous Icelandic prime minister that he resign after the Mossack Fonseca documents showed that Gunnlaugsson may have failed to disclose ownership of a stake in certain Icelandic banks under the government’s rules for officials. Consequently, the Iceland’s Prime Minister had to resign when public rallies thronged his office in Reykjavik. And the leaks dragged FIFA officials back into the news, showing that even an ethics lawyer for the world soccer body had financial ties to another FIFA official already accused of corruption.
7. The Panama Papers are an unprecedented leak of 11.5m files from the database of the world’s fourth biggest offshore law firm, Mossack Fonseca. The records were obtained from an anonymous source by the German newspaper Süddeutsche Zeitung, which shared them with the International Consortium of Investigative Journalists (ICIJ). The ICIJ then shared them with a large network of international partners, including the Guardian and the BBC. The documents show the myriad ways in which the rich can exploit secretive offshore tax regimes. Twelve national leaders including Prime Minister Nawaz Sharif of Pakistan are among 143 politicians, their families and close associates from around the world known to have been using offshore tax havens.
8. Among national leaders with offshore wealth are Nawaz Sharif, Pakistan’s prime minister; Ayad Allawi, ex-interim Prime Minister and former Vice President of Iraq; Petro Poroshenko, President of Ukraine; Alaa Mubarak, son of Egypt’s former president; and the Prime Minister of Iceland, Sigmundur Davíð Gunnlaugsson.
9. An offshore investment fund run by the father of British Prime Minister David Cameron avoided ever having to pay tax in Britain by hiring a small army of Bahamas residents to sign its paperwork. The fund has been registered with HM Revenue and Customs Service in UK since its inception and it has manipulated to file detailed tax returns every year in order to create an impression of whitened money.
10. The firm is Panamanian but runs a worldwide operation. Its website boasts of a global network with 600 people working in 42 countries. It has franchises around the world, where separately owned affiliates sign up new customers and have exclusive rights to use its brand. Mossack Fonseca operates in tax havens including Switzerland, Cyprus and the British Virgin Islands, and in the British crown dependencies Guernsey, Jersey and the Isle of Man.
11. Mossack Fonseca is the world’s fourth biggest provider of offshore services. It has acted for more than 300,000 companies. There is a strong UK connection. More than half of the companies are registered in British-administered tax havens, as well as in the UK itself.
12. This leak is one of the biggest ever – larger than the US diplomatic cables released by Wiki Leaks in 2010, and the secret intelligence documents given to journalists by Edward Snowden in 2013. There are 11.5m documents and 2.6 terabytes of information drawn from Mossack Fonseca’s internal database.
13. Using offshore structures is entirely legal. There are many legitimate reasons for doing so. Business people in countries such as Russia, Ukraine and Pakistan typically put their assets offshore to defend them from “raids” by criminals, and to get around hard currency restrictions. Others use offshore for reasons of inheritance and estate planning.
14. In Pakistan the revelations contained in the Panama Papers remained the primary bone of contention between the PML-N and PTI as leaders from both sides accused each other of bending the truth and siphoning off funds into offshore companies. Let us talk about PML-N; most of them feel’s that there will be no immediate danger to the PML-N government, though the political temperature will increase in the days to come following PTI’s decision to launch a protest campaign after deciding that the government-announced judicial commission is a political bogey.
15. The names found in the secret files range from those of Prime Minister Nawaz Sharif’s family to Punjab Chief Minister Shahbaz Sharif’s relatives; from Benazir Bhutto to Javed Pasha; from Senator Rehman Malik to Senator Osman Saifullah’s family; and from Waseem Gulzar (a relative of the Chaudhrys of Gujrat) to Zain Sukhera, who was co-accused with former Prime Minister Yusuf Raza Gilani’s son in the Hajj scandal.
16. Businessmen featured in the record range from hotel tycoon Sadruddin Hashwani to real estate czar Malik Riaz Hussain’s son; from the Hussain Dawood family to the Abdullah family of Sapphire Textiles, Gul Muhammad Tabba of Lucky Textiles as well as Shahid Nazir of Masood Textiles and from Zulfiqar Ali Lakhani to Zulfiqar Paracha.
17. As the political history in Pakistan goes, Hassan and Hussain Nawaz have so far shown little interest in politics. Hassan and Hussain both have lived abroad since October 1999. So they are responsible for their own business concerns, and not on the behalf of their father who leads the political leadership of PML-N in Pakistan through democratically elected process. Interior Minister Chaudhry Nisar Ali Khan justifiably has said at a recent press conference that the two sons of the prime minister are there to defend their overseas business interest which has got nothing to do with their father who is a groomed politician having all loyalties with Pakistan.
18. Although PML-N government has addressed a letter to registrar Supreme Court, requesting the chief justice to constitute an inquiry commission under an old law to look into the veracity of allegations of siphoning off money from Pakistan to the accounts of Panama based offshore companies. The TORs also explain the ambit of the probe of inquiry commission, but the opposition parties led by Imran Khan are still unhappy, fearing vindication of PM Nawaz Sharif. What actually can ensure vindication of Nawaz Sharif from this political situation can be listed as follows:
a. Prime Nawaz Sharif should re-establish his public contacts with his electorates in all parts of the country, highlighting what his government has done on expanding the development and employment base of the country.
b. As to how his government plans to engage the educated youth coming out of a mushroom growth of universities and colleges in Pakistan who finally can act as his political deliverers.
c. Meanwhile, Prime Minister Nawaz Sharif should inspire and beef up his administrative machinery on media count to come out with a multi-tracked communication plan to take the people into confidence which explicitly focuses the development part of what his government is going to put in place during the remainder of his political tenure.
d. Prime Minister Nawaz Sharif should look 24/7 doing positive governance, advisably not relying on Punjab-centric political and managerial resource. He needs to diversify his management and governance team drawing upon flowers from the length and breadth of the country.
e. Since the family of Prime Minister Nawaz Sharif is conspicuous due to its political profile, his political profile needs to be variegated, attracting team workers and managers both from all sections of the polity which compulsorily should reflect that his support base is not restricted to Lahore only.
f. Finally, a renewed vote of confidence from parliament will strengthen PM Nawaz Sharif in regaining whatever has been lost during last three years.