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RUEKJCS/JOINT STAFF WASHINGTON DC
RUEAIIA/CIA WASHDC
RUCPDOC/USDOC WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RHEHNSC/NSC WASHINGTON DC
RUEKJCS/SECDEF WASHINGTON DC

UNCLAS SECTION 01 OF 02 ISLAMABAD 001848 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: EFIN ECON EINV ETRD KCOR PGOV PREL PK
SUBJECT: NATIONAL ACCOUNTABILITY BUREAU EXPECTED TO REMAIN INTACT 
 
¶1. (SBU) Summary: Pakistan's anti-corruption agency, the National 
Accountability Bureau (NAB)--once one of the country's preeminent 
law enforcement institutions--has in the past two years become 
increasingly marginalized.  In a 14 July meeting with NAB Chairman, 
Nawid Ahsan, Treasury Attach and Resident Legal Advisor (RLA) were 
advised of legislation pending in the National Assembly which would 
reorganize the agency, remove top leadership, reduce sentencing 
authority, and change the organization's name.  The organization's 
core structure and mission would purportedly remain intact. 
Chairperson of the Standing Committee on Law and Justice, Nasim 
Chaudry, confirmed to Treasury Attach and RLA the pending changes, 
but maintained that any change was in response to "past abuses" by 
the NAB as it pursued politically-motivated cases against 
politicians.  Changing the law substantially, however, could be 
problematic.  Should the GOP go so far as to seriously diminish the 
NAB's authority and independence, Pakistan could be in violation of 
its obligations under the U.N. Convention against Corruption.  End 
Summary. 
 
¶2. (SBU) In a July 14 meeting, National Accountability Bureau (NAB) 
Chairman Nawid Ahsan reviewed the contents of a bill now pending in 
the National Assembly Standing Committee on Law and Justice to 
reduce the maximum punishment for corruption from 14 years to seven, 
appoint a sitting or retired justice from the Supreme Court to serve 
as Chairman of the NAB, and to rename the NAB.  The bill purportedly 
will allow the NAB to retain all existing employees and its 
operating budget of $7.3 million.  Although the Chairman expects 
passage of the bill by September, two issues could delay final 
passage.  First, the Chairman believes it is unlikely the Supreme 
Court Chief Justice, Iftikhar Chaudhry, will allow a sitting or 
retired Justice to serve as NAB Chairman.  Second, he said members 
of the Pakistan Muslim League - Nawaz (PML-N) believe the maximum 
sentence for financial crimes should be reduced further to three and 
a half years. 
 
¶3.  The Chairman reviewed what he argues are the NAB's past 
successes.  Most NAB cases fall into one of three categories: (1) 
political corruption, including bribes and embezzlement, 
(2)officials in possession of assets beyond their means (a crime in 
and of itself under Pakistani law), and (3)real estate fraud and 
pyramid schemes.  The NAB has also prosecuted at least one money 
laundering case, and works directly with Pakistan's new Financial 
Monitoring Unit at the State Bank of Pakistan.  The NAB can 
investigate politicians, government bureaucrats, former military 
officers, and military officers seconded to civilian departments. 
However, in addition to active duty military officers, the NAB does 
not investigate members of the judiciary since their activities are 
overseen by the Supreme Judicial Council.  The Chairman remarked 
that many of NAB's case referrals came from tips from private 
citizens. 
 
¶4. (SBU) Because of severe cuts in the operating budget this past 
year, NAB has not taken on any new cases and has only had enough 
staff to finish existing ones.  While the Chairman noted he would 
like to open cases addressing corruption in the energy sector, he 
simply did not have the resources.  In the energy sector, the NAB 
has only one open investigation involving government kickbacks in 
the Oil and Gas Development Agency; further efforts are dependent on 
new funding.  At the beginning of the previous fiscal year, the 
NAB's operating budget was cut to $1.8 million, from a request of 
$10 million.  Although NAB eventually received a few million dollars 
in additional funding, it was still forced to lay off approximately 
450 contract employees.  Even with these restraints, however, NAB 
was still able to recover over $36 million in seized criminal assets 
in the past year. 
 
¶5. (SBU) The Chairman noted he has had mixed success in using mutual 
legal assistance agreements to repatriate illegal assets in foreign 
countries.  The NAB has had the most success with the United States 
and Great Britain, although the Chairman said the latter's 
bureaucracy is often cumbersome.  The Chairman complained that 
trying to repatriate stolen assets from countries in the Persian 
Gulf, however, is nearly impossible - despite having agreements in 
place.  For example, when NAB officials approach the UAE Government, 
they will be continuously redirected to different government offices 
with no resolution of their request. 
 
 
ISLAMABAD 00001848  002 OF 002 
 
 
¶6. (SBU) Despite these challenges and setbacks, the Chairman was 
hopeful he could still improve his cooperation with the law 
enforcement agencies in other countries, provided the NAB is not 
abolished or fundamentally altered by its critics in the National 
Assembly.  If this happened, however, Pakistan would be without a 
functioning anti-corruption agency, and according to the Chairman, 
this could jeopardize Pakistan's participation in the United Nations 
Convention against Corruption and Pakistan's existing mutual legal 
assistance agreements.  In response to whether his mandate in the 
past year has changed or narrowed, the Chairman stated it had not. 
 
 
¶7. (SBU) In a separate meeting with Chairperson of the Standing 
Committee on Law and Justice, Ms. Nasim Akhtar Chaudry, no 
indication was given that the NAB would be disbanded, but she did 
hint that future investigations against politicians would have to be 
approved by a parliamentary committee before the NAB could move 
forward.  Chaudry frequently referred to the NAB as an instrument of 
executive abuse by former President Musharraf.  Chaudry stated her 
intent is only to reform the NAB and make it "an improved 
anti-corruption agency."  Chaudhry said her committee felt the NAB's 
budget should be approximately $11.5 million. 
 
¶8. (SBU) Chairperson Chaudhry said that the exact contents of the 
bill are still being drafted, but she did confirm some of the 
changes being considered: change the name of the NAB; replace the 
chairman of the NAB with a sitting or former justice of the high or 
supreme court; require parliamentary approval for investigations of 
politicians; reduce the maximum sentence for financial crimes from 
14 years; and reduce the authority of the Governor of the State Bank 
of Pakistan. 
 
¶9. (SBU) Treasury Attach and RLA pressed Chaudry for additional 
information on this last point, and emphasized that a strong and 
independent Central Bank Governor was a critical component of any 
country's economy (Comment: Chaudry appeared unaware that the NAB 
already has authority to bypass the SBP and approach commercial 
banks directly.  End Comment).   When asked to explain how the GOP 
can place a sitting justice as the NAB Chairman when Chief Justice 
Chaudry has stated publicly he is against justices serving in 
government positions, Chairperson Chaudry conceded they may have to 
find a retired justice.  Treasury Attache and RLA also stressed to 
Chaudhry that requiring parliamentary approval for political cases 
to move forward would undermine the independence of the NAB. 
Chaudry promised to consider this issue, and acknowledged that such 
a requirement could indeed compromise the investigative independence 
of the NAB. 
 
¶10. (SBU) Comment:  Political abuse and manipulation by the previous 
government has left the NAB in disrepute and weakened popular 
respect for it as a law enforcement agency.  Nevertheless, properly 
structured and motivated, the NAB can and should play a critically 
important - and a growing - role in helping to restore confidence in 
Pakistan's governance and business climate.  The recently released 
World Bank and Asia Pacific Group Mutual Evaluation of Pakistan's 
anti-money laundering and counterterrorist financing regime 
recognized the NAB as the best financial investigative agency in 
Pakistan.  We will continue to encourage our interlocutors to find 
ways to reform the NAB and end past abuses without detracting from 
the good work it can perform potentially. 
 
FEIERSTEIN