Allegations of receiving foreign funds were levelled by a report in the Financial Times and then to make matters worse, just a few days later, the Election Commission of Pakistan declared PTI guilty of receiving ‘prohibited funding’ from foreign individuals and companies. The verdict itself would not have been particularly damaging to the party had it not been for its relentlessly constructed image as the last bastion against corruption.
PTI and its leader, Imran Khan, have also regularly accused the opposition and other movements of being foreign-funded and imported. Hence, today the party has been pushed into a political predicament when the same labels are being associated with it.
How It All Began
Any attempt to fully understand the details of the case and its verdict requires the examination of the drawn-out duration of the case, starting from its initiation in November 2014. The foreign-funding case, now referred to as the prohibited funding case, began in November 2014 after one of the founding members of PTI, Akbar S. Babar, filed a petition with the Election Commission of Pakistan, accusing his party of financial malpractice and receiving illegal foreign funds.
However, for more than 7 years, the case did not reach a verdict. This can be attributed to the delaying tactics used by the party which included not submitting documents, challenging the case in court, and not attending the hearings. Since the initiation of the case, PTI has disobeyed more than 24 written orders from the ECP and requested adjournments 54 times.
It also filed five petitions in the Islamabad High Court in an attempt to presumably discontinue the case. These range from petitions challenging the ECP’s jurisdiction, to asking the Islamabad High Court to probe into its alleged bias in the case. On the 22nd March 2017 hearing, it had been the third consecutive time the PTI counsellor was absent, leading to the then Chief Election Commissioner lambasting it as an “abuse of the law.”
On 17th September 2017, following the ECP’s final warning to submit financial records, the party begrudgingly decided to submit its financial details including its accounts and funding. The next two years were followed by 4 attempts to ‘seek secrecy’ in the case. However, it was not until this year that the scrutiny committee of the ECP reached a conclusive stage as it published a report accusing the party of concealing more than Rs310 million.
It argues the party had under-reported received funds as Rs1.33 billion (collected from 2008-13) while the State Bank revealed the actual figure to be Rs1.64 billion. The then Federal Minister for Information and Broadcasting, Fawad Chaudhry, attributed this to an error that allegedly duplicated an Rs160 million transaction. Nevertheless, the report went further to divulge that the party held 26 accounts, 3 of which were unreported to the ECP.
Foreign funds were received from countries including the UK and Canada; $2.34 million were received from the United States and $2.2 million from Dubai.
Are Foreign Funds Prohibited?
Before conducting any further research on a case in which a political party has been accused of receiving funds from foreign nationals and companies, it is vital to view the issue through the lens of the law.
Article 6(3) of the Political Parties Order (2002) clearly states, “Any contribution made, directly or indirectly, by any foreign government, multinational or domestically incorporated public or private company, firm, trade or professional association shall be prohibited and the parties may accept contributions and donations only from individuals.”
Under this law, any funding received from a foreign government or company is to be considered prohibited and Article 6(4) declares that such prohibited funds be confiscated ‘in favour of the State’.
The Financial Times Report
On 28th July, the case was brought back into public attention after a report published by British journalist, Simon Clark, in the Financial Times claimed that PTI had received foreign funds from a charity fundraiser hosted by business magnate Arif Naqvi. Naqvi, the founder of the Abraaj Group, hosted a cricket tournament at which Imran Khan was invited to play.
According to the report, the match collected between £2,000 and £2,500 from each attending person under the pretext of “philanthropic causes.” To understand the Financial Times report, we must first refer back to the original January report of the Election Commission. In this report, it was declared that the party has received more than $2 million from Wootton Cricket Limited, a Cayman Islands-based company.
Although the ECP’s report does not reveal further how the company obtained these funds, the Financial Times article does. According to Simon Clark, these funds were acquired by fundraising charity events and were later transferred to the party before the 2013 elections. The prominent transactions included the transfer of $1.3 million from Abraaj Investment Management Limited to Wootton Cricket’s account.
On the same day, this amount was transferred to a PTI account in Pakistan. The report claims examining a UAE account of Wootton Cricket showed how foreign companies and individuals gave this amount to the company. However, the most significant transaction came from Sheikh Nahyan, a minister and member of the royal family of Abu Dhabi.
The emails obtained by the Financial Times claim Naqvi told an executive to transfer $1.2 million of the ‘sheikh’s money’ to PTI while cautioning him to “not tell anyone where funds are coming from, i.e. who is contributing.”
The Election Commission’s Verdict
On 2nd August 2022, after nearly 8 years, the Election Commission of Pakistan announced the verdict in the PTI prohibited funding case. The verdict unequivocally declares the party guilty of having received funds from foreign nationals and companies. Referring to receiving prohibited money from foreign companies, the Commission states, ‘PTI Pakistan knowingly and willfully received donations.’
The foreign companies include Wotton Cricket Limited, a Cayman Island registered company, which donated $2,121,500 to the party. Under Pakistani law, not only was receiving these funds illegal and prohibited but the report also highlights how the funds were acquired under ‘philanthropic causes.’ Hence, the donation of these funds also violated UAE Law.
While referring to the affidavit signed by Naqvi in which he claims, he ‘voluntarily participated’ in ‘providing and collecting’ funds from ‘within the jurisdiction of UAE’, the ECP declares it as ‘prohibited under UAE Law.’ Moreover, the party received donations from another Cayman Island registered company trust, E-Plant Trustees, which alongside a UK-based company, donated an amount of $101,741 to PTI accounts in Pakistan.
‘Prohibited funds’ were also received from the UAE as $49,965 were donated by Bristol Engineering Services. The Election Commission also accused PTI of not disclosing ownership of 13 bank accounts which the State Bank of Pakistan revealed as actively receiving funds. According to the ECP, the accounts operated under the names of the “senior leadership of the party” including Imran Ismail, Asad Qaiser, and Qasim Khan Suri.
To summarise the verdict, the ECP has declared PTI guilty of receiving millions from 351 foreign companies, concealing 13 accounts, and receiving $35,651 from 34 foreign national citizens.
The Party’s Defence
In response to the claims made in the Financial Times report, the party strongly rejected them. In an interview, Imran Khan told ARY News that the funds came through banking channels that were disclosed. Moreover, in a tweet, Fawad Chaudhry claimed “Arif Naqvi submitted an affidavit in ECP that all funding is legal.” However, in an interview with Geo News, Clark states this claim is not supported by the evidence they collected.
The party’s defence also seemed to rely on deflecting the attention toward its opponents. Both Farrukh Habib and Khan argued for more scrutiny on the opposition parties’ funding. By quickly capitalising on the mention of an attempt to bribe the Sharif brothers with $20 million, the party was able to deviate the blame. However, this narrative was countered by Clark who, in his interview, claims to find no evidence that the amount was ever paid or the brothers were aware.
When it came to constructing the party narrative against the Election Commission’s verdict, some of its members including Farrukh Habib and Ali Muhammad Khan declared that no foreign funding could be proved. They argued that it was instead a case of prohibited funding, not foreign funding because to constitute a foreign-funded party it needed to receive funding from foreign governments.
In terms of technical legality, the argument convinced the ECP which changed the case’s name from a foreign funding case to a prohibited funding case. However, it can be seen as a disingenuous attempt to construct a false narrative among the general public which is not accustomed to legal jargon and technicality. Secondly, the party and its supporters have criticised the ECP judgement for containing some errors such as for allegedly misattributing funds donated as ‘foreign’ because they were transferred from a joint account owned by a Pakistani and Indian national couple.
They argue that the Commission has also included Pakistani companies as foreign funders like Zain Cotton Mills and National Food Processing Factory. The owners of the companies have recently come out to disavow the claims of owning foreign companies and have responded that they are Pakistani nationals with Pakistan-registered companies.
These few examples of the purported error have significantly strengthened the main narrative of the party which uses the fact that PTI is primarily funded by overseas Pakistanis to distort the verdict as inaccurate. As in the party’s words, the overseas Pakistanis are being considered foreign-funded. Although the law does not prohibit political parties from receiving funds from overseas Pakistanis, it has nevertheless become the main argument of PTI.
In the public’s eyes, this clever manoeuvre effectively reduces the affluent Cayman Island-based foreign companies to hard-working mom-and-pop stores funding their native country’s party for a more prosperous future.
While Article 6(3) of the Political Parties Order (2002) outlines the prohibition of foreign funds and its subsequent clause declares the confiscation of such funds, law experts argue that PTI is in much more legal danger than just having its funds confiscated. Article 15 of the same Order states that if the federal government reaches the judgement that a political party is foreign-aided, it can refer the matter to the Supreme Court which, in light of Article 15(1), holds the ultimate decision and power to dissolve a party they deem ‘foreign-aided’.
Federal Minister Maryam Aurangzeb’s recent announcement that the government has called on the Federal Investigation Agency (FIA) to conduct a thorough investigation into the case, can be seen as an attempt to lay the groundwork for the dissolution of the party. Although the Election Commission did not find it within its jurisdiction to pass judgement on whether the party falls under the label of ‘foreign-aided,’ we can find some important legal details in the case of Muhammad Hanif Abbasi vs. Imran Khan Niazi (PLD 2018 SC 189).
The Supreme Court’s judgement declared PTI not foreign-aided as the ECP’s declaration of receiving funds from foreign nationals did not meet the criteria of a foreign-aided party. However, there is another legal disaster that has the potential to be lethal to the party and its leader. The Election Commission’s declaration that Khan submitted a ‘false affidavit’ and ‘grossly inaccurate’ forms allows proceedings to be initiated against him under the Constitution’s Article 62(1)(f).
Through this, Khan can be disqualified if declared as no longer ‘sadiq and ameen’. Although PTI can easily recover from getting banned by launching a new party under a different name, as National Awami Party (NAP) did in 1975, it is difficult to imagine a future for the party without Imran Khan.
While the Financial Times report and the Election Commission’s verdict on the nearly 8-year saga have been crystal-clear in holding the party responsible for receiving prohibited funds from foreign nationals and companies, it does not necessarily mean the party’s political popularity is at risk. On the contrary, the party reported gaining record donations the very next day.
In his true essence as a populist capitalising on the desperation and apathy of a population disillusioned by mainstream political parties, Khan’s support seems immune from almost anything. The party remains enthusiastic to pin any potential flaw on foreign conspiracies and agendas when under scrutiny. Hence, in terms of the party or Khan’s popularity, it seems abundantly clear that it will make little if no difference.
However, that is not to say the party or its leader’s unwavering support among the general populace makes them immune to the law. After all, it was his predecessor, Nawaz Sharif, who despite his popularity could not evade the grasp of the law. Today, in these circumstances, Ansar Abbasi has drawn parallels between Khan’s circumstance and Nawaz’s, stating that Nawaz was disqualified for not disclosing “unwithdrawn receivables”.
Meanwhile, Khan has been accused of submitting ‘grossly inaccurate’ forms and a ‘false affidavit’. Thus, the burning question is, if required, will the Supreme Court follow its precedent? In this matter, lawyer Reema Omer states that the Supreme Court’s interpretation of Article 62(1)(f) lacks reliability, therefore it is a risky proposition to encourage the court to interfere on the ‘subjective grounds’ of an MP’s honesty.
As can be seen in the Supreme Court’s controversial interpretation of article 63A which created the environment for the political and legal crisis in Punjab. After examining the history of the case, the Financial Times report and the Election Commission’s verdict combined with a legal analysis of the situation, we can conclude that while there is no ambiguity in the ECP’s verdict, it is unlikely to create the devastating effect the opposition was expecting.
A vain hope that it would hurt Khan’s popularity or incur legal wrath; for now, the most likely scenario remains the confiscation of the prohibited funds.
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