THE much-discussed seven-year-old foreign funding case reached a major milestone about a month ago when the scrutiny committee constituted by the Election Commission of Pakistan (ECP) submitted its report. It had been tasked, among other things, to “conduct scrutiny of the financial statements and …. accounting records of Pakistan Tehreek-e-Insaf for … 2009 to 2013 for finding out the defects and omissions in the disclosure of funds and their sources, received from abroad”.

The committee was formed in March 2018, after a former PTI central information secretary approached the ECP to probe what he termed as “internal mismanagement, misuse of party funds … and failure of the party leadership to account for the source of its funds in accordance with Political Parties Order 2002 …”. It was originally given one month to complete the assigned task. The deadline was later extended by another month but the three-member committee consisting of an ECP director general and two other officials took 44 months to submit its report.

The committee collected and compiled an impressive amount of data and conducted a detailed review of the relevant, historical and international legal framework of party funding in the report but stopped just short of reaching a definitive conclusion, probably leaving the delicate job to the ECP. The committee did point out some discrepancies in the annual audited financial statements submitted by the PTI and also raised questions about the professional standard of the audit carried out by the auditors appointed by the party.

Arguably, however, the most serious question raised by the committee was about the origin — meaning the status of citizenship, whether Pakistani or foreign — of hundreds of individual PTI donors. Equally serious was the question about hundreds of other donors which “appear to be” companies incorporated in foreign countries. An appendix of the report, for example, lists 47 individual donors in a single year, 2013, who “appear to be” foreign nationals. Another appendix lists 119 entities which, according to the report, “appear to be companies” incorporated in foreign lands which donated varying amounts of money to the PTI during 2013. Most notable and the largest donor is an entity named Wootton Cricket Ltd, Dubai which contributed in excess of $2 million to the PTI. It is widely believed that the company was owned by a well-known Pakistani businessman, Arif Naqvi, who is also the founder of Abraaj Group and is facing serious charges for financial irregularities in the US.

Has the experience of dealing with the foreign funding case made the ECP any wiser?

The ECP plans to hold open proceedings from next week to hear arguments from the lawyers representing both the complainant and the respondent. This phase may hopefully take the case towards a much-awaited pronouncement by the commission in a matter of weeks, if not days. The awaited ECP order, however, may not be the closure of the case as either of the two parties may challenge the outcome in a superior court and that may drag the case on for several months.

One of the immediate outcomes of the case, after the ECP proceedings, is expected to be a verdict on whether any portion of the PTI funds were from “prohibited” sources as defined in the Political Parties Order (PPO) 2002. If so, such funds will be confiscated in favour of the state. If the prohibited funds are also found to include those from prohibited foreign sources such as a multi-national or other such foreign source as defined in Articles 2c (iii) and 6 (3), the case may take a far more serious turn. Article 2c (iii) of the PPO 2002 defines a “foreign-aided political party” as one that also “receives any aid, financial or otherwise, from any government or political party of a foreign country or any portion of its funds from foreign nationals”.

This particular definition sets a very low threshold for determining what is a foreign-aided political party because of such words as “any” and “foreign nationals” which means that even a small amount of funds contributed by a foreign national may drag a political party into the fold of a “foreign-aided political party”.

There can, however, be several interpretations of the law and some of the past court pronouncements such as the Supreme Court’s judgment in the Hanif Abbasi case of 2017 may come into play. However, some of the findings of the scrutiny committee have the potential to seriously worry the PTI leadership because the ultimate consequence of being a foreign-aided political party is its dissolution and the disqualification of its elected legislators in addition to its extremely damaging political fallout. Such a scenario close to a general election may seriously damage the much-projected clean image of the party.

The proverbial silver lining for the PTI, however, is the legal provision in Article 15 of the PPO 2002 that only the federal government has the authority to determine whether a political party is foreign-aided and make a declaration accordingly. The SC can take up the case only after such a declaration by the federal government. It is quite obvious that a federal government led by the PTI is not going to make a declaration against itself. The current Elections Act, 2017 provides for the ECP to file a reference.

Should one hope that, irrespective of the final outcome, the experience of dealing with the foreign funding case during the past seven years has made the ECP and the political parties any wiser? Can the ECP, instead of just acting as a post office, take the trouble of scrutinising even a small, randomly selected sample of audited annual statements of accounts submitted by political parties and address the discrepancies, misreporting or gaps every year instead of dealing with it many years later and that too when someone files a complaint?

This, of course, requires a political finance wing at the ECP staffed with qualified chartered accountants experienced in matters relating to political finance. Unless these reforms are undertaken, our politics, like in many other democracies, runs the risk of getting hijacked by money.

The writer is president of the Pakistan Institute of Legislative Development And Transparency.
president@pildat.org
Twitter:@ABMPildat

Published in Dawn, January 14th, 2022