A money laundering case against Asif Ali Zardari, the former national president and Pakistan People’s Party (PPP) supremo, has put the opposition’s plans for a ‘grand alliance’ to challenge new Prime Minister Imran Khan in jeopardy.

Prior to the election late last month, the Federal Investigation Agency claimed that a huge money laundering scam – allegedly bigger than the Panama Leaks and implicating the central leaders of PPP and close aides of the party’s co-chairperson Zardari – had been discovered in Sindh province.

A coalition led by Khan’s Pakistan Tehreek-e-Insaaf (PTI) won the July 25 general election with a comfortable majority and has now formed a government despite a highly controversial electoral process.

Within days of the election, a six-party opposition alliance was formed and they demanded a parliamentary commission to look into the alleged violation of election rules, pre-poll and poll day rigging, as well as the alleged use of state institutions to help the PTI-led alliance to win the election.

Mainstream opposition forces, such as the Pakistan Muslim League-Nawaz (PML-N), PPP, Muttahida Majlis-e-Amal (MMA), Awami National Party (ANP), Pashtoonkhwa Milli Awami Party (PKMAP) and Qaumi Watan Party (QWP), attended a meeting at the residence of outgoing National Assembly Speaker Ayaz Sadiq.

Cracks in the grand alliance 

After much debate, the major opposition parties agreed to form a “grand opposition alliance” to field joint candidates for the slots of Prime Minister, Chief Minister of Punjab, and speaker of the National Assembly. They unanimously agreed that the PML (N) would field a candidate to be Prime Minister, while the PPP would contest the speaker’s post and Muttahida Majlis-e-Amal would nominate a member for the post of deputy speaker of the National Assembly.

But after the Federal Investigation Agency’s move to arrest Zardari’s associates, the PPP backed down and said that the PML (N) should change its nominee to be prime minister, Shahbaz Sharif. But it was too late to field another candidate at that time.

Two days before the ballot for the leader of the house in the Parliament, the Federal Investigation Agency arrested Anwar Majeed, another close friend of Zardari and co-accused in the money laundering case. Majeed, chairman of the Omni group, and his son Abdul Ghani Majeed were both arrested. A banking court then remanded them in custody till August 24.

Chairman of the Pakistan Peoples Party (PPP) Bilawal Bhutto Zardari (L) is flanked by his father and former Pakistani president Asif Ali Zardari as he presents the party manifesto presentation for the forthcoming general election during a press conference in Islamabad on June 28, 2018.Pakistan will hold a general election on July 25 pitting the Pakistani Muslim League-Nawaz (PML-N) against its main rival, the Pakistan Tehreek-e-Insaf party, led by cricket star-turned-politician Imran Khan. / AFP PHOTO / AAMIR QURESHI
Chairman of the Pakistan People’s Party Bilawal Bhutto Zardari, left, is flanked by his father and former national president Asif Ali Zardari as he presents the party manifesto for the election in Islamabad on June 28. Photo: AFP / Aamir Qureshi

The PPP eventually abstained from voting for the leader of the house. And Muttahida Majlis-e-Amal’s component party, Jamaat-e-Islami, also preferred not to vote.

“We had already told the PML-N to suggest another name for the leader of the house, as Shahbaz Sharif is not acceptable to the party. But they insisted on Shahbaz. Therefore, we abstained from voting,” Faisal Karim Kundi, a PPP leader and former deputy speaker of the National Assembly told Asia Times. Shahbaz is the brother of former PM Nawaz Sharif, who has been jailed for corruption.

Kundi played down speculation that the Federal Investigation Agency’s action against the top leadership played a role in the party changing its stance. He said abstaining from the vote for leader of the house was purely a political matter, and that was conveyed to the PML-N as well.

“The name of Shahbaz Sharif as a joint opposition candidate for the PM slot was proposed by the PPP leadership themselves and they insisted that Shahbaz has the stature and standing to run the show,” Senator Musadik Masood Malik, a PML-N leader and a former adviser to the prime minister, said. He thought it surprising that the PPP changed its mind the moment their members took the oath of office.

“If they had reservations about Shahbaz Sharif, why did they participate in the formation of the opposition alliance, which was a brainchild of Shahbaz Sharif?” Malik said.

Pressure on PPP

However, the PPP was under tremendous pressure from the unearthing of corruption cases against its top brass and their associates.

Days before the election, the Federal Investigation Agency revived an old money-laundering case against the PPP leadership, senior bankers, a UAE national and a number of business tycoons who allegedly laundered over Rs 36 billion (US$290 million) through fake bank accounts. The amount could rise to Rs 100 billion ($800 million) in the final tally, the investigation agencies believe.

The next day, the Federal Investigation Agency registered a case against Summit Bank president and chairman of Pakistan Stock Exchange Hussain Lawai and co-accused Taha Raza. The agency had taken them into custody for remand until July 11. Lawai is also said to be a confidant of Zardari.

The First Investigation Report claimed that the accused allowed 29 fake accounts to be opened in the Summit Bank, Sindh Bank, and United Bank Ltd before billions of rupees of “kickbacks” were made by renowned builders and business tycoons. This huge sum of money was allegedly relayed to 13 beneficiaries, including accounts owned by Zardari and his sister Faryal Talpur.

Their names have also been put on the Exit Control List along with the other account owners and beneficiaries, as per an order of the Supreme Court of Pakistan. Later, the caretaker interior minister denied putting the PPP leaders on the said list.

On Friday, when lawmakers were busy electing a new prime minister in the parliament, a banking court in Karachi issued non-bailable arrest warrants against Zardari and 15 other accused in the bank accounts case. Zardari’s sister, Faryal Talpur is already on bail. The court ordered the accused to appear on September 4.

Mounting pressure on the PPP leadership seemed to affect its political stance. The party backed down on its former plan and suddenly said its MPs would not vote for Sharif.