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Jun 13, 2012, 02.16 AM IST | Source: Reuters

Tycoon, former envoy at centre of new Pakistan turmoil

PAKISTAN-IFTIKHAR-CHAUDHRY-RIAZ:Tycoon, former envoy at centre of new Pakistan turmoil

By Qasim Nauman

ISLAMABAD (Reuters) - A Pakistani real estate tycoon on Tuesday accused the chief justice of turning a blind eye to his son's alleged corrupt financial practices, in a scandal that could damage one of the few public figures willing to take on the powerful military.

Malik Riaz, who fashions himself as a billionaire philanthropist, said he had given almost $3.6 million in bribes to Arsalan Iftikhar, son of Chief Justice Iftikhar Chaudhry.

Riaz, who has been accused of fraud, suggested that Chaudhry knew about the matter in advance of the Supreme Court's hearings on the issue this week. Riaz has denied all allegations.

"I have three questions for the chief justice of Pakistan. He should tell the nation today that in the dark of the night how many times did he (Chaudhry) meet me," said Riaz.

"He should tell us how long he has known about this case and why he did not take suo motu action."

Iftikhar has denied any wrongdoing. Chaudhry said he would not get involved in the case, which is dominating headlines in nuclear-armed Pakistan.

The Supreme Court registrar said in a statement to the media that the chief justice had met Riaz, but at a time when Chaudhry was suspended by then President Pervez Musharraf.

Chaudhry became a household name in Pakistan and gained international recognition in 2007 when he stood up to Musharraf over his legally questionable bid to hold on to power.

Since then Chaudhry has emerged as a centre of power in Pakistan, taking on the unpopular government over allegations of corruption, and more significantly the military, which has ruled the country for more than half of its 64-year history.

Chaudhry took up cases involving kidnappings and torture of suspected Islamist militants allegedly carried out by the military and intelligence agencies. They deny the charges.

Under his leadership the Supreme Court convicted Prime Minister Yusuf Raza Gilani of contempt for failing to re-open corruption cases against President Asif Ali Zardari.

CONTROVERSIAL MEMO

Hours before Riaz spoke to reporters in Islamabad, a Supreme Court commission concluded that Husain Haqqani, the country's former envoy to Washington, wrote a memo which sought U.S. help in reining in the mi l itary, findings that could re-ignite tensions between generals and the civilian leadership.

Fresh political instability gripped Pakistan during the deepest crisis in ties with Washington since the South Asian country joined the U.S.-led war on militancy in 2001.

Ties between the strategic allies have deteriorated since the unilateral raid that killed Osama bin Laden in Pakistan last year and humiliated the military.

The United States said on Monday it was withdrawing its team of negotiators from Pakistan without securing a long-sought deal on supply routes for the war in neighbouring Afghanistan, publicly exposing a diplomatic stalemate.

A senior U.S. government official told Reuters that Pakistan's civilian government should "bite the bullet" and re-open the routes in order to ease tensions with Washington.

The latest scandals to distract Pakistan from problems including a struggling economy, chronic power cuts and a Taliban insurgency are likely to reignite rivalries between competing power centres that have plagued the nation for decades.

Chaudhry, the one man with the clout to possibly keep the government and military in check, is unlikely to lose his job. But the allegations may weaken him.

"It's a big blow to the Supreme Court. It's a big blow to the court's prestige. This court, more than any other in Pakistan's history, staked its reputation on public approval," said political analyst Cyril Almeida.

"It's still only allegations. But in Pakistan, this is the way these things work, and how reputations are built and destroyed. When you have someone as powerful, influential and rich as Malik Riaz coming out himself, holding a press conference and making very, very direct allegations, that kind of mud will stick."

FURTHER INSTABILITY?

The United States, which pours billions of dollars of aid into Pakistan, will likely view the latest political saga with unease as it struggles to persuade Islamabad to re-open the supply routes to Afghanistan.

Pakistan is seen as critical to U.S. efforts pacify Afghanistan after more than a decade of war against the Taliban but it is often described as an unreliable ally.

Both the Chaudhry case and Haqqani's predicament could make it more difficult for Washington to persuade Islamabad to focus on Afghanistan before most foreign combat troops withdraw by the end of 2014.

Writing in a column in the Financial Times on October 10, Pakistani-American businessman Mansoor Ijaz said a senior Pakistani diplomat had asked that a memo be delivered to the Pentagon with a plea for U.S. help to stave off a feared military coup in the days after the U.S. raid that killed Osama bin Laden.

Ijaz later identified the diplomat as Haqqani, a close ally of President Asif Ali Zardari.

Haqqani denies any involvement in the scandal, dubbed "Memogate" in the media, but resigned over the matter.

The Supreme Court commission said that Haqqani had committed "acts of disloyalty" by seeking foreign intervention in Pakistan's affairs.

Haqqani, a member of the ruling Pakistan People's Party, could be charged with treason if the Supreme Court opens a case against him based on the commission's findings.

"It has been incontrovertibly established that the memorandum was authentic and Mr. Haqqani was the originator and architect," the commission's report said, according to a statement by the Supreme Court.

Haqqani dismissed the commission's findings as politically-motivated and said his lawyers would challenge them.

No evidence emerged that the military was plotting a coup and the Pentagon at the time dismissed the memo as not credible.

But the scandal plunged relations between Pakistan's civilian leaders and its military to their lowest point since a coup in 1999, and threatened further instability in the insurgency-hit, nuclear-armed country.

Ijaz was scheduled to testify before the commission in January, but he did not come to Pakistan because of security fears. Critics accuse of Ijaz being an attention seeker who tries to get close to powerful figures, allegations he denies.

(Additional reporting by Matthew Green and Katharine Houreld in ISLAMABAD, and Phil Stewart in WASHINGTON; Writing by Michael Georgy)

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