March 31, 2010 / 9:37 AM / 10 years ago

Zardari back in spotlight in Pakistan graft cases

ISLAMABAD (Reuters) - Pakistan President Asif Ali Zardari faced more political turmoil on Wednesday as a lawyer for the anti-corruption agency said it had asked Switzerland to reopen old graft cases against him, signaling a Supreme Court challenge to his immunity as head of state.

Pakistan's President Asif Ali Zardari waits to speak at the International Institute for Strategic Studies in London, September 18, 2009. REUTERS/Stephen Hird

But in an apparent setback to the court’s prosecution of top officials for perceived corruption, the Swiss prosecutor-general said any case against Zardari could not be reopened — because of his immunity.

The dramatic back and forth comes after the Supreme Court last year ordered the National Accountability Bureau (NAB) to revive corruption cases against Zardari, many senior government officials and thousands of political activists.

“In light of directions of the court on the revival of the Swiss cases, the NAB has initiated the process,” said Abid Zuberi, an NAB lawyer.

Swiss Prosecutor-General Daniel Zappelli also said his office had not yet received any request from Pakistan to reopen the case.

At the heart of the issue is a 2007 amnesty law, which was thrown out by the Supreme Court in December on the grounds that it was unconstitutional. The amnesty had protected several thousand people — including Zardari — from old corruption charges and allowed their return to politics.

Zardari spent 11 years in jail on various charges but was never convicted.

The revival of the cases is set to herald a destabilizing face-off between the judiciary and the government. Because while Zardari may be shielded by his office, his friends and associates are not and there seems little evidence the Supreme Court will ease off on prosecuting the remaining local corruption charges.

The amnesty law, known as the National Reconciliation Ordinance, was passed under former military president Pervez Musharraf and widely seen as the basis for a power-sharing deal between himself and former prime minister Benazir Bhutto.

She was assassinated in December 2007 after returning from self-imposed exile.

Both Zardari and Bhutto were convicted by a Geneva court in 2003 of laundering $13 million linked to kickbacks. But that verdict was overturned on appeal.

Swiss judicial authorities in August 2008 said they had closed the money-laundering case against Zardari and had released $60 million, frozen for a decade in Swiss accounts, after Pakistan dropped out of all cases it had initiated there.

That’s where things stood until Tuesday, when a senior official of the police’s top investigation agency, Ahmed Riaz Sheikh, who was also a close associate of Zardari, was detained on the orders of the court after a similar case was revived against him.

Though Zardari’s aides say he is protected by presidential immunity, he may be vulnerable to legal challenges to his 2008 election as president on the grounds that other old corruption charges against him — in addition to the Swiss case — made him ineligible to stand for office in the first place.

Zardari has had tense relations with the independent-minded Supreme Court chief, Iftikhar Chaudhry, who was sacked in 2007 by Musharraf.

Zardari promised to reinstate Chaudhry after his party formed a government in 2008 but dragged his feet and only did so in March 2009 when protesting lawyers and opposition supporters were converging on the capital for a protest rally.

ECONOMIC FALLOUT

The political wrangling is hampering the government’s ability to focus on economic issues, Moody’s Investors Service said Wednesday, but it does not pose an immediate risk to its sovereign ratings.

Moody’s has a B3 sovereign rating for Pakistan with a stable outlook.

And as a reminder of the violence that brought Zardari to power, a U.N. panel’s report on Bhutto’s assassination was due to be presented Tuesday but was delayed until April 15 at Zardari’s request.

“We requested them to include the views of three countries which had warned (Bhutto) after her return that she should take extra precaution because they had information she would be assassinated,” said presidential spokesman Farhatullah Babar.

He declined to identify the three countries he said had warned Bhutto.

Bhutto was killed in a gun and suicide bomb attack after an election rally in the city of Rawalpindi on December 27, 2007, weeks after she came back from eight years in self-imposed exile.

In the Khyber tribal region near the Afghan border meanwhile, 20 Taliban militants and five Pakistani soldiers were killed in a firefight in which dozens of militants carrying automatic weapons and rockets attacked a security post Tuesday night, an official said.

The official added that in addition to the 20 militants killed, Pakistani forces wounded 35 Taliban.

There is no way to independently confirm the government’s statements.

(Additional reporting by Kamran Haider, Zeeshan Haider, Augustine Antony and Michael Georgy; Editing by Robert Birsel and Nick Macfie)

For more Reuters coverage of Afghanistan and Pakistan, see: here

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