"Mr. Ten Percent". Here's the NY Times ten years ago, on January 8, 1998, on the extraordinary corruption of Benazir Bhutto's husband, Asif Ali Zardari, named today as the caretaker head of the Pakistan People's Party until their 19 year old son can run the party.

A decade after she led this impoverished nation from military rule to democracy, Benazir Bhutto is at the heart of a widening corruption inquiry that Pakistani investigators say has traced more than $100 million to foreign bank accounts and properties controlled by Ms. Bhutto's family.

Starting from a cache of Bhutto family documents bought for $1 million from a shadowy intermediary, the investigators have detailed a pattern of secret payments by foreign companies that sought favors during Ms. Bhutto's two terms as Prime Minister.

The documents leave uncertain the degree of involvement by Ms. Bhutto, a Harvard graduate whose rise to power in 1988 made her the first woman to lead a Muslim country. But they trace the pervasive role of her husband, Asif Ali
Zardari, who turned his marriage to Ms. Bhutto into a source of virtually unchallengeable power.

In 1995, a leading French military contractor, Dassault Aviation, agreed to pay Mr. Zardari and a Pakistani partner $200 million for a $4 billion jet fighter deal that fell apart only when Ms. Bhutto's Government was dismissed. In another deal, a leading Swiss company hired to curb customs fraud in Pakistan paid millions of dollars between 1994 and 1996 to offshore companies controlled by Mr. Zardari and Ms. Bhutto's widowed mother, Nusrat.

In the largest single payment investigators have discovered, a gold bullion dealer in the Middle East was shown to have deposited at least $10 million into an account controlled by Mr. Zardari after the Bhutto Government gave him a monopoly on gold imports that sustained Pakistan's jewelry industry. The money was deposited into a Citibank account in the United Arab Emirate of Dubai, one of several Citibank accounts for companies owned by Mr. Zardari.
Together, the documents provided an extraordinarily detailed look at high-level corruption in Pakistan, a nation so poor that perhaps 70 percent of its 130 million people are illiterate, and millions have no proper shelter, no schools, no hospitals, not even safe drinking water. During Ms. Bhutto's five years in power, the economy became so enfeebled that she spent much of her time negotiating new foreign loans to stave off default on $62 billion in public debt.

A worldwide search for properties secretly bought by the Bhutto family is still in its early stages. But the inquiry has already found that Mr. Zardari went on a shopping spree in the mid-1990's, purchasing among other things a $4 million, 355-acre estate south of London. In 1994 and 1995, he used a Swiss bank account and an American Express card to buy jewelry worth $660,000 -- including $246,000 at Cartier Inc. and Bulgari Corp. in Beverly Hills, Calif., in barely a month.

In separate interviews in Karachi, Ms. Bhutto, 44, and Mr. Zardari, 42, declined to address specific questions about the Pakistani inquiry, which they dismissed as a political vendetta by Ms. Bhutto's successor as Prime Minister, Nawaz Sharif. In Karachi Central Prison, where he has been held for 14 months on charges of murdering Ms. Bhutto's brother, Mr. Zardari described the corruption allegations as part of a "meaningless game." But he offered no challenge to the
authenticity of the documents tracing some of his most lucrative deals. [...]

The Pakistani officials say their key break came last summer, when an informer offered to sell documents thatappeared to have been taken from the Geneva office of Jens Schlegelmilch, whom Ms. Bhutto described as the family's attorney in Europe for more than 20 years, and as a close personal friend. ...

Mr. Schlegelmilch, 55, developed his relationship with the Bhutto family through links between his Iranian-born wife and Ms. Bhutto's mother, who was also born in Iran. In a series of telephone interviews, he declined to say anything about Mr. Zardari and Ms. Bhutto, other than that he had not sold the documents. [...]

The documents [obtained by the NYT] included: statements for several accounts in Switzerland, including the Citibank accounts in Dubai and Geneva; letters from executives promising payoffs, with details of the percentage payments to be made; memorandums detailing meetings at which these "commissions" and "remunerations" were agreed on, and certificates incorporating the offshore companies used as fronts in the deals, many registered in the British Virgin Islands.

The documents also revealed the crucial role played by Western institutions. Apart from the companies that made payoffs, and the network of banks that handled the money -- which included Barclay's Bank and Union Bank of Switzerland as well as Citibank -- the arrangements made by the Bhutto family for their wealth relied on Western property companies, Western lawyers and a network of Western friends.....

Notes a former US official who served in Pakistan, "Mr. 10% running it until the boy king comes of age. So much for democracy."

(Incidentally, the Swiss company referenced above is Cotecna - the same one that apparently put Kofi Annan's son on the payroll and got a lot of attention during the oil for food investigation.)

Posted by Laura at December 30, 2007 03:25 PM