HOUSE OF GRAFT: Tracing the Bhutto Millions -- A special report.; Bhutto Clan Leaves Trail of Corruption Published: January 9, 1998 (Page 5 of 6) Similar letters, dated March and June 1994, were sent by Societe Generale de Surveillance promising consultancy fees of 6 percent and 3 percent to two other offshore companies controlled by the Bhutto family. According to Pakistani investigators, the two Swiss companies inspected more than $15.4 billion in imports into Pakistan from January 1995 to March 1997, making more than $131 million. The investigators estimated that the Bhutto family companies made $11.8 million from the deals, at least a third of which showed up in banking documents taken from the Swiss lawyer. For Societe Generale de Surveillance, with 35,000 employees and more than $2 billion a year in earnings, the relationship with the Bhutto family has been painful. In addition to doing customs inspections, the company awards certificates of technical quality. In effect, its business is integrity. In an interview in Geneva, Elisabeth Salina Amorini, president of Societe Generale, said the Pakistan contracts had been the subject of an internal company inquiry. But Ms. Salina Amorini, a 42-year-old lawyer, said the company had reorganized its government contracts division under a new executive and had sold Cotecna, acquired in 1994, back to the family that had previously owned it. The internal inquiry, she told reporters in Geneva last month, had shown a number of inadequacies which enabled certain irregularities to take place. Ms. Salina Amorini said in the interview that a study of Societe Generales dealings with Pakistan had uncovered a $650 million shortfall in customs revenues that the Bhutto Government was supposed to have collected over a 21-month period in 1995 and 1996. She said the company had reported the shortfall to Washington-based officials of the monetary fund and the World Bank, which monitor customs revenues to check Pakistans compliance with conditions set for emergency loans. The conditions are meant to help the country avoid default on its foreign debt. Officials at the two financial institutions are investigating the Swiss companys report to determine whether the customs system was corrupted at both ends -- from commissions paid to Bhutto family companies on the preshipment inspection contracts and, later, in illicit payments by Pakistani importers seeking to avoid the customs duties that the Swiss companies had determined they owed. The Gold Connection Granting a License, Reaping a Profit Pakistans Arabian Sea coast, stretching from Karachi to the border with Iran, has long been a gold smugglers haven. Until the beginning of Ms. Bhuttos second term, the trade, running into hundreds of millions of dollars a year, was unregulated, with slivers of gold called biscuits, and larger weights in bullion, carried on planes and boats that travel between the Persian Gulf and the largely unguarded Pakistani coast. Shortly after Ms. Bhutto returned as Prime Minister in 1993, a Pakistani bullion trader in Dubai, Abdul Razzak Yaqub, proposed a deal: in return for a license to import gold, Mr. Razzak would help the Government regularize the trade. In January 1994, weeks after Ms. Bhutto began her second term, Mr. Schlegelmilch established a British Virgin Island company known as Capricorn Trading, S.A., with Mr. Zardari as its principal owner. Nine months later, on Oct. 5, 1994, an account was opened at the Dubai offices of Citibank in the name of Capricorn Trading. The same day, a Citibank deposit slip for the account shows a deposit of $5 million by Mr. Razzaks company, ARY Traders. Two weeks later, another Citibank deposit slip showed that ARY had paid a further $5 million. In November 1994, Pakistans Commerce Ministry wrote to Mr. Razzak informing him that he had been granted a license that made him, for at least the next two years, Pakistans sole authorized gold importer. In an interview in his office in Dubai, Mr. Razzak acknowedged that he had used the license to import more than $500 million in gold into Pakistan, and that he had traveled to Islamabad several times to meet with Ms. Bhutto and Mr. Zardari. But he denied that there had been any secret deal. I have not paid a single cent to Zardari, he said. Mr. Razzak offered an unusual explanation for the Citibank documents that showed his company paying the $10 million to Mr. Zardari, suggesting that someone in Pakistan who wished to destroy his reputation had contrived to have his company wrongly identified as the depositor of the money. Somebody in the bank has cooperated with my enemies to make false documents, he said. The Documentation Erasing the Proofs Of Secret Power The Pakistani investigation of Ms. Bhuttos two terms in office has tied a range of overseas properties to her husband and other family members. Among these are Rockwood, a 355-acre estate south of London, and a $2.5 million country manor in Normandy. The listed owners of the manor, which is known as the House of the White Queen, are Hakim and Zarrin Zardari. Other properties that Pakistani investigators have linked to members of the Bhutto family include a string of luxury apartments in London. Pakistan has asked the United States Justice Department to investigate still more bank accounts and properties, including a country club and a polo ranch in Palm Beach County, Florida, said to be worth about $4 million, that were bought by associates of Mr. Zardari in the mid-1990s.
Posted on: Fri, 10 Oct 2014 12:50:57 +0000
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