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Swiss close case against Zardari; $60 mln unfrozen

GENEVA (Reuters) - Swiss judicial authorities said on Tuesday they had closed a money-laundering case against Pakistani presidential candidate Asif Ali Zardari and released $60 million frozen in Swiss accounts over the past decade.

Supporters of the Pakistan People's Party release a sparrow whilst celebrating their leaders decision, Asif Ali Zardari, assassinated former Pakistani prime minister Benazir Bhutto's widower, to be a presidential candidate, in Karachi August 24, 2008. REUTERS/Athar Hussain

Daniel Zappelli, Geneva’s chief prosecutor, said that he had no evidence to bring Zardari, 55, the widower of former prime minister Benazir Bhutto, to trial.

Pakistan’s government recently dropped out of all related cases it had initiated in Switzerland, saying the couple could not be accused of corruption, he said.

Zappelli said the full $60 million in assets, seized at the request of the Pakistan authorities, had been released.

“All the money has been unfrozen. For money-laundering to be proven, you have to show it was the product of a crime,” Zappelli told Reuters.

“Pakistan has withdrawn its requests for judicial assistance and has said it has no claim on the frozen assets,” he said.

He declined to say exactly who owned the accounts holding the $60 million, citing confidentiality. But 3.9 million Swiss francs ($3.55 million) in commissions had reverted to the state of Geneva’s coffers after not being claimed, he said.

Zardari’s lawyer Saverio Lembo welcomed Zappelli’s decision to shelve the long-running case. “It confirms what my client has pleaded since 1997,” he told Reuters.


In February Swiss lawyers for Pakistan told a Geneva hearing that Zardari was the beneficial owner of offshore companies at the heart of criminal cases in which Pakistan was a civil party.

Geneva judicial authorities have been investigating allegations since 1997 that Bhutto and Zardari took kickbacks from Swiss cargo inspection companies and channeled some $12 million via offshore companies in Swiss bank accounts.

In addition Pakistan had asked the Swiss authorities to block further funds, so that a total of $60 million was frozen.

Pakistan did not pursue corruption allegations against Zardari at home after the Pakistan Supreme Court in 2001 annulled a 1999 conviction against the couple.

Zardari has spent altogether 11 years in prison on corruption, drug-smuggling and murder charges, which he denies.

Bhutto was assassinated on December 27, thrusting her husband into the centre of politics. Zardari is running in a September 6 presidential election to replace Pervez Musharraf.

The couple always denied the charges, calling them politically motivated, but were convicted by a Geneva court in 2003 of laundering kickbacks. That verdict was also thrown out on appeal, sparking a wider probe by an investigating judge.

Contracts to inspect Pakistan cargo were awarded to Societe Generale de Surveillance SGS and its former affiliate Cotecna, both Swiss-based, in 1994 when Bhutto was prime minister and Zardari was investment minister.

“In the SGS/Cotecna case, no funds belonging to Benazir Bhutto were found,” Zappelli said.

Pakistan’s attorney-general had recently written to Zappelli saying there had been no irregularities in awarding the contracts and it was dropping out of all cases which it said had been brought “for political reasons”, Zappelli said.

Zardari, who leads Bhutto’s Pakistan People’s Party (PPP), is caught up in a political crisis at home following Musharraf’s resignation in the face of a threat to impeach him.

The PPP has been reluctant to reinstate judges sacked by Musharraf, partly out of concern that the deposed chief justice might hear challenges to an amnesty granted to Zardari and other party leaders from graft charges last year, analysts say.

reporting by Stephanie Nebehay; editing by Jonathan Lynn and Ralph Boulton