By virtue of the law, corporate entities in Pakistan are forbidden to spend on lobbying or make political contributions, which become more visible during election campaigns.

Section 184 of the Companies Act 2017 prohibits companies from making political contributions. It states: “A company shall not contribute any amount or allow utilisation of its assets to any political party; or for any political purpose to any individual or body.”

The Act goes on to warn that if a company contravenes the provisions, every director and officer who is in default shall be punishable with imprisonment of a term which may extend to two years and shall also be liable to a fine of Rs1 million.

But that scarcely deters the corporate bosses from taking sides in political lobbying for one party or the other. Politics and business go hand in hand. Enterprising company bosses are always able to find a way around the law. Cash-rich individuals and big companies provide planes, helicopters, gifts, dinners, entertainment and hard cash to party leaders.

In politics, as they say, there are no permanent friends or foes. A glimpse into how men and businesses can ditch a lame horse for the one that holds the highest hopes of winning the race was given a couple of weeks ago when a major stockbroker — who supported the Muttahida Qaumi Movement (MQM) for years and even arranged the public address system on the lawns of his bungalow for party supporters to listen to the MQM leader as he spoke from London — arranged last week a breakfast meeting for businessmen to meet Imran Khan on the same lavish lawns. Many polls suggest Mr Khan is most likely to form government in the centre.

Cash-rich individuals and big companies provide planes, helicopters, gifts, dinners, entertainment and hard cash to party leaders

The politician did mention that he was pleased to see Karachi’s business community put its faith in the Pakistan Tehreek-i-Insaf (PTI), which was lacking previously. He also acknowledged the contribution of the person who convened the meeting and appreciated his previous generous contributions towards building a hospital and a college.

The donations and contributions to political parties do result in quid pro quo. Corporates and influential deep-pocket individuals can curry favour with politicians to influence policy issues later. The political party that assumes power would be obligated to return the favour by providing means that enable ease of doing business for such corporates. Subsidised gas and power and an assured supply of water would be possible returns to industrial-sector companies. Moreover, favours might be noticed in federal budgets and taxation regimes.

The law prohibits political contributions, but enterprising business tycoons can always find ways around the law. The money spent on such contributions can easily be concealed by adding it under various heads in the profit-and-loss account.

The Code of Corporate Governance encourages big, cash-rich companies to fulfil their responsibility to society by investing in health care, education, clean water and housing for company employees as well as deserving members of society. Companies can spend their funds in areas that are of interest to a political party to cement their solidarity. All such spending is quite ‘legitimate’.

Unless the political party and its leaders choose to forget the favours after winning the elections, the bread that corporates and businessmen cast on water most likely comes back as cakes.

A businessman from Lahore argued that it was not necessary just to back the right horse, but also to keep other close contenders happy so as not to earn their ire in case the calculations go awry. But many corporate executives said that since the law of prohibiting political contribution was almost impossible to implement, it made sense to scrap Section 184 altogether.

In many countries, companies and individuals openly make political contributions and even disclose the sum.

In the United States, for example, the US Chamber of Commerce was among the top 50 lobby spenders with an outpouring of $82 million during the last election campaign. The Big Four audit firms — Deloitte, Ernst & Young, KPMG and Pricewaterhousecoopers — also spend heavily in lobbying and political campaigns for either Republicans or Democrats, whoever they expect to win. But all those contributions are required to be disclosed to the tax authorities.

Closer to home, Reliance Industries Chairman Mukesh Ambani, who for a brief moment last week beat Ali Baba’s Jack Ma to stand out as the richest man in Asia, is well known for his shenanigans in keeping both Bharatiya Janata Party’s Narendra Modi and Congress Vice President Rahul Gandhi happy during the Indian elections.

“Mukesh Ambani is giving money to both Rahul Gandhi and Modi — whoever forms the government, control will be in Mukesh’s hands,” said one critic, declaring it to be ‘unconstitutional’. After the elections, no charges were ever pressed against Mr Ambani or his giant corporate.

Published in Dawn, The Business and Finance Weekly, July 23rd, 2018