[Letter to Zardari and Gillani] Kashmiries Campaign Against Pakistan’s Defacto Annexation of Gilgit Baltistan (POGB)

Forwarded by Nadeem

To ,
The President of Pakistan Asif Ali Zardai
The Prime Minister of Pakistan Sayed Yousaf Raza Gilini
Mr.Tariq Soomro Council General of Pakistan Bradford UK.

On the basis of under mentioned credible historical facts, the JAMMU KASHMIR NATIONAL INDEPENDENCE ALLIANCE UK (JKNIA UK) out rightly rejects Pakistani unconstitutional and colonial like aggression in Gilgit Baltistan via Empowerment and Self-Governance Order, 2009 and the recent fixed and rigged elections on 12th November 2009 in Pakistani Occupied Gilgit Baltistan POGB.

It is a historically established and recognised fact that Gilgit and Baltistan are an Integral Part of Princely State of Jammu Kashmir.
As per the credibility of 12th November 2009 elections in Gilgit Baltistan, the Pakistani opposition leader Chaudhary Nisar Ali Khan and government allied parties have challenged it in public and called the elections as fraud elections. While speaking on a point of order he said:

“the PPP had won but Pakistan and democracy had been defeated in Gilgit-Baltistan polls”

Government indulged in massive rigging in the elections, Government had made mockery of charter of democracy and people of Gilgit and Baltistan, he added. Baitul Mal was misused mercilessly during the polls, he charged. It is hypocrisy of Pakistani ruling elite.
In 21st century De facto Pakistani Province Gilgit Baltistan Empowerment and Self-governance, 2009 Act is passed over the dead body of right of self determination of Jammu Kashmir.
We demonstrate our serious reservations on imposed set up of Self-Governance Order, 2009 due to the following reasons:

· Acting Governor of GB is a MNA from Punjab;

· The PCO election commissioner are not complied with the State Subject Definition Notification 20th April, 1927;

· Bogus voter lists are used to manipulate the elctions;

· The leadership of Gigit Baltistan Democratic Alliance (GBDA), the only local political group decided to participate in elections were not allowed to do so;

· They were deported from Gilgit on 1st November 2009 on Government orders;

· Dozens of GBDA workers including candidates were arrested and sent behind the bars;

· Subsequently the GBDA was left with no option but to boycott the elections on 12th November 09.

In addition to the above mentioned malpractices, there exists a range of historical, legal and constitutional documents that have been clearly violated in OGB.
Defacto fifth province of Gilgit Baltistan is against the Article-257 Constitution of 1973 Islamic Republic of Pakistan and not acceptable for Kashmiri Diaspora. According to the Article-257 of the constitution
“When the people of the State of Jammu and Kashmir decide to accede to Pakistan, the relationship between Pakistan and that State shall be determined in accordance with the wishes of the people of that State.”
The steps Govt. of Pakistan has taken in GB as De facto fifth province of Pakistan
are claimed to be proposed under Article 2(f) described territory of Pakistan but without the mandatory approval of Pakistani Parliament (Assembly and Senate) with two third majority.

The actions of Pakistan Government are also contrary to the United Nations Resolutions. According the UNCIP Resolution adopted on 13-8-1948 (members of the Commission included Argentina, Belgium, Columbia, Czechoslovakia and U.S.A)

PART III of the resolution reads:

The Government of India and the Government of Pakistan reaffirm their wish that the future status of the State of Jammu and Kashmir shall be determined in accordance with the will of the people and to that end, upon acceptance of the Truce Agreement both Governments agree to enter into consultations with the Commission to determine fair and equitable conditions whereby such free expression will be assured.

There are other historical and legal responsibilities that have been clearly violated including:

Kashmir-Pakistan Standstill Agreement on States Relations Department, Karachi
12th August, 1947.Legal Document No 110, 15th August 1947 and Legal Document No 111.

Even the notorious Karachi Agreement does not allow Pakistan to change the status of these areas of Jammu Kashmir and treat them as separate and away from Kashmir State.

JKNIA UK says no to the fraud elections on 12th November 2009 in POGB and strongly oppose to the moves towards making OGB the fifth De facto Pakistani province and we are committed to take our struggle in our own hands for an Independent, Secular and Unified state of Jammu Kashmir with the wishes, aspirations and free will of its state subjects. We believe that such resolution of Kashmir question guarantees the regional peace and security in South Asia.

JKNIA UK Alliance Member Organisations

1) Jammu Kashmir National Awami Party JKNAP UK

2) Jammu Kashmir National Liberation Front

3) JK Peoples National Party

4) Kashmir Freedom Movement

5) Jammu Kashmir Liberation Front (Y)

6) Jammu Kashmir Plebiscite Front

7) Kashmir Liberation Organisation

8)Association of British Kashmiries



3 Responses to [Letter to Zardari and Gillani] Kashmiries Campaign Against Pakistan’s Defacto Annexation of Gilgit Baltistan (POGB)

  1. Hunza says:

    We the people of Gilgit-Baltistan reject and condemn the unnecessarily hurdles of the Kashmiries in the affairs of GB. We dont accept their claim that GB is part of Kashmir. We have fought our war of independence on 1947 and remained succeffull. Later due to the so called KAshmiri champions and Pakistani establishments the area was declared disputed. The Kashmiries are responsible for the suffereings of the people of GB. They have never talked to give rights to GB but always created hurdles when Pakistan tried for.

    I condemn the Kashmiri leaders and suggest them to concentrate on their own territiries and if they have the ability, librate Kashmir (Pak and Indian occupied). We want to be the fifth province of Pakistan.

    Jia Gilgit-Baltistan, Jia Pakistan

  2. nadeem says:

    Please read the rports and find the real face of Pakistani ruling elite it helps us to understand that where are you going?

    INFORMATION PRESS – News Views Media – http://www.InformPress.com – USA



    U.S. CONGRESS (InformPress.com) – Pakistan Supreme Court Chief Justice
    Mr. Iftikhar Muhammad Chaudhry and all other judges of the Supreme
    Court must quickly abolish the entire National Robbers Ordinance (NRO)
    of 5 October 2007, which expired in February 2007, by declaring the
    infamous NRO as an unconstitutional, illegal, unlawful, discriminatory
    and fraudulent Ordinance of illegal president General (R) Pervez
    Musharraf; order the arrest and prosecution of over 8,000 NRO
    beneficiaries, bribers/bribees/bribists and all venal bank loan
    defaulters; form an Independent Accountability Commission (IAC) of the
    judiciary to prosecute all NRO criminals, financial loan fraudsters
    and political outlaws through special independent prosecutors; repeal
    any immunity for Zardari, President, Prime Minister, governors, chief
    ministers, ministers, MNAs, Senators, MPAs and all other government
    officials because everyone is equal under the law; and take some
    serious legal actions on the following United States Senate Staff
    Report published by the U.S. Senate Permanent Subcommittee on
    Investigations – Governmental Affairs Committee, dated 9 November
    1999, which states that “the government of Pakistan claims that Ms.
    Bhutto and Mr. Zardari stole over $ 1 billion from the country”, and
    exposes money laundering, corruption and crimes of PPP President/Co-
    Chairman Asif Ali Zardari, PPP assassinated Chairwoman Benazir Bhutto
    and other corrupt crooks:

    Private Banking and Money Laundering

    Asif Ali Zardari Case History – The Facts:

    The second case history involves Asif Ali Zardari, the husband of
    Benazir Bhutto, former Prime Minister of Pakistan. Ms. Bhutto was
    elected Prime Minister in 1988, dismissed by the President of Pakistan
    in August 1990 for alleged corruption and inability to maintain law
    and order, elected Prime Minister again in October 1993, and dismissed
    by the President again in November 1996. At various times, Mr. Zardari
    served as Senator, Environment Minister and Minister for Investment in
    the Bhutto government. In between the two Bhutto administrations, he
    was incarcerated in 1990 and 1991 on charges of corruption; the
    charges were eventually dropped. During Ms. Bhutto’s second term there
    were increasing allegations of corruption in her government, and a
    major target of those allegations was Mr. Zardari. It has been
    reported that the government of Pakistan claims that Ms. Bhutto and
    Mr. Zardari stole over $ 1 billion from the country.

    During the period 1994 to 1997, Citibank opened and maintained three
    private bank accounts in Switzerland and a consumer account in Dubai
    for three corporations under Mr. Zardari’s control. There are
    allegations that some of these accounts were used to disguise $10
    million in kickbacks for a gold importing contract to Pakistan.

    Structure of Private Bank Relationship. Mr. Zardari’s relationship
    with Citibank began in October 1994, through the services of Kamran
    Amouzegar, a private banker at Citibank private bank in Switzerland,
    and Jens Schlegelmilch, a Swiss lawyer who was the Bhutto family’s
    attorney in Europe and close personal friend for more than 20 years.
    According to Citibank, Mr. Schlegelmilch represented to Mr. Amouzegar
    that he was working for the Dubai royal family and he wanted to open
    some accounts at the Citibank branch office in Dubai. Mr.
    Schlegelmilch had a Dubai residency permit and a visa signed by a
    member of the Dubai royal family. Mr. Amouzegar agreed to introduce
    Mr. Schlegelmilch to a banker in the Citibank branch office in Dubai.

    According to Citicorp, Mr. Schlegelmilch told the Citibank Dubai
    banker that he wanted to open an account in the name of M.S. Capricorn
    Trading, a British Virgin Island PIC. The stated purpose of the
    account was to receive money and transfer it to Switzerland. The
    account was opened in early October 1994.

    According to Citibank, Mr. Schlegelmilch informed the Dubai banker
    that he would serve as the representative of the account and the
    signatory on the account. Under Dubai law, a bank is not required to
    know an account’s beneficial owner, only the signatory. Citibank told
    the Subcommittee staff that Mr. Schlegelmilch did not reveal to the
    Dubai banker that Mr. Zardari was the beneficial owner of the PIC, and
    the account manager never asked him the identity of the beneficial
    owner of the account. Instead, according to Citibank, she assumed the
    beneficial owner of the account was the member of the royal family who
    had signed Mr. Schlegelmilch ‘s visa. According to Citibank, the
    account manager actually performed some due diligence on the royal
    family member whom she believed to be the beneficial owner of the

    Shortly after opening the account in Dubai, Mr. Schlegelmilch signed a
    standard referral agreement with Citibank Switzerland private bank
    guaranteeing him 20% of the first three years of client net revenues
    earned by the bank from each client he referred to the private bank.

    On February 27, 1995, Mr. Schlegelmilch, working with Mr. Amouzegar,
    opened three accounts at the Citibank Switzerland private bank. The
    accounts were opened in the name of M.S. Capricorn Trading, which
    already had an account at Citibank’s Dubai branch, as well as Marvel
    and Bomer Finance, two other British Virgin Island PICs established by
    Mr. Schlegelmilch, according to Citibank. Each private bank account
    listed Mr. Schlegelmilch as the account contact and signatory.
    Citibank informed the Subcommittee that the Swiss Form A, a government-
    required beneficial owner identification form, identified Mr. Zardari
    as the beneficial owner of each PIC.

    Lack of Due Diligence. The decision to allow Mr. Schlegelmilch to open
    the three accounts on behalf of Mr. Zardari, according to Citibank,
    involved officials at the highest levels of the private bank. The
    officials were: (a) Mr. Amouzegar, the private banker; (b) Deepak
    Sharma, then head of private bank operations in Pakistan; (c) Phillipe
    Holderbeke, then head of private bank operations in Switzerland (who
    became head of the Europe, Middle East, Africa Division in February
    1996); (d) Salim Raza, then head of the EMEA Division of the private
    bank; and (e) Hubertus Rukavina, then head of the Citibank private
    bank. Mr. Rukavina told the Subcommittee staff that when he was asked
    about opening the Zardari accounts, he did not make the decision to
    open them, but rather directed that the matter be discussed with Mr.
    Sharma. According to Mr. Rukavina, he never heard whether the accounts
    were ultimately opened. Mr. Rukavina left the private bank in 1996 and
    left Citibank in 1999.

    Citibank informed the Subcommittee staff that the private bank was
    aware of the allegations of corruption against Mr. Zardari at the time
    it opened the accounts in Switzerland. However, Citibank reasoned that
    if the charges for which Mr. Zardari had been incarcerated for two
    years had any merit, they would not have been dropped. Bank officials
    also believed that the family wealth of Ms. Bhutto and Mr. Zardari was
    large enough to support a large private bank account, even though
    Citibank was not able to specify what actions were taken to verify the
    amount and source of their wealth. Citibank said that bank officials
    were also aware of the M.S. Capricorn Trading account in Dubai, and
    they were comforted by the fact that there had been no problems with
    that account. According to Citibank, Mr. Amouzegar informed his
    superiors that Mr. Zardari was the beneficial owner of the Capricorn
    account in Dubai when they were considering the request to open the
    accounts in Switzerland. Inexplicably, however, the Dubai account
    manager was apparently still operating under the assumption that the
    beneficial owner of the Dubai Capricorn account was a member of the
    Dubai royal family. Subcommittee staff have been unable to determine
    whether Citibank officials were unaware of or inattentive to the
    serious inconsistency between Citibank Switzerland and Citibank Dubai
    with respect to the Capricorn Trading account. Citibank also informed
    the Subcommittee staff that bank officials had some concerns that if
    they turned down the accounts, their actions may have implications for
    the corporation’s operations in Pakistan; however, they said they
    never received any threats on that issue.

    Citibank told the Subcommittee staff the private bank decided to allow
    Mr. Schlegelmilch to open the three accounts for Mr. Zardari on the
    condition that the private bank would not be the primary accounts for
    Mr. Zardari’s assets and the accounts would function as passive
    investment accounts. Citibank told the Subcommittee staff that Mr.
    Holderbeke signed a memo delineating the restrictions placed on the
    accounts, including a $40 million aggregate limit on the size of the
    three accounts, and transaction restrictions requiring the accounts to
    function as passive, stable investments, without multiple transactions
    or funding pass-throughs. None of the Citibank personnel interviewed
    by Subcommittee staff could identify any other private bank account
    with these types of restrictions. Other private banks interviewed by
    the Subcommittee staff were asked if they had ever accepted a client
    on the condition that certain restrictions be imposed on the account.
    The banks all said they had not. One bank representative explained
    that if the bank felt that it needed to place restrictions on the
    client’s account, it didn’t want that type of client. The existence of
    the restrictions are in themselves proof of the private bank’s
    awareness of Mr. Zardari’s poor reputation and concerns regarding the
    sources of his wealth.


    Movement of Funds. Citibank told the Subcommittee staff that, once
    opened, only three deposits were made into the M.S. Capricorn Trading
    account in Dubai. Two deposits, totaling $10 million were made into
    the account almost immediately after it was opened. Citibank records
    show that one $5 million deposit was made on October 5,1994, and
    another was made on October 6, 1994. The source of both deposits was
    A.R.Y. International Exchange, a company owned by Abdul Razzak Yaqub,
    a Pakistani gold bullion trader living in Dubai.

    According to the New York Times, in December 1994, the Bhutto
    government awarded Mr. Razzak an exclusive gold import license. In an
    interview with the New York Times, Mr. Razzak acknowledged that he had
    used the exclusive license to import more than $500 million worth of
    gold into Pakistan. Mr. Razzak denies, however, making any payments to
    Mr. Zardari. Citibank could not explain the two $5 million payments.
    Ms. Bhutto told the Subcommittee staff that since A.R.Y. International
    Exchange is a foreign exchange business, the payments did not
    necessarily come from Mr. Razzak, but could have come from a third
    party who was merely making use of A.R.Y.’s exchange services. The
    staff invited Ms. Bhutto to provide additional information on the M.S.
    Capricorn Trading accounts, but she has not yet done so.

    On February 25, 1995, a third deposit of $8 million was made into the
    Dubai M.S. Capricorn Trading account. Records show that the payment
    was made through American Express, with the originator of the account
    listed as “Morgan NYC.” Citibank indicated it does not know who Morgan
    NYC is, nor does it know the source of the $8 million.

    All of the funds in the Dubai account of M.S. Capricorn Trading were
    moved to the Swiss accounts in the Spring of 1995. On March 6, 1995,
    $8.1 million was transferred; and on May 5, 1995, another $10.2
    million was transferred. Both transfers involved U.S. dollars and were
    routed through Citibank’s New York offices. Citibank informed the
    Subcommittee staff that M.S. Capricorn Trading closed its Dubai
    account shortly after the last transfer was completed.

    Citibank has indicated that significant amounts of other funds were
    also deposited into the Swiss accounts. As described below, the $40
    million cap was reached, and millions of additional dollars also
    passed through those accounts. However, Swiss bank secrecy law has
    prevented the Subcommittee from obtaining the details on the
    transactions in the Zardari accounts.


    Account Monitoring. Citibank told the Subcommittee staff that, in
    1996, the Swiss office of the private bank conducted a number of
    reviews of the Zardari Swiss accounts, finally deciding in October to
    close them.

    The first review was allegedly in early 1996, triggered by increasing
    publicity about allegations of corruption against Mr. Zardari.
    Citibank told the Subcommittee staff that Messrs. Holderbeke, Raza,
    Sharma and Amouzegar participated in the review, and apparently
    concluded that the allegations were politically motivated and that the
    accounts should remain open. The Subcommittee staff was told that the
    review did not include looking at the accounts’ transaction activity.

    In March or April, 1996, Mr. Amouzegar asked that the overall limit on
    the Zardari accounts be increased from $40 million to $60 million,
    apparently because the accounts had reached the previously imposed
    limit of $40 million. Citibank told the Subcommittee staff that Mr.
    Holderbeke considered the request, but declined to increase the $40
    million limit.

    In June, press reports in the United Kingdom that Mr. Zardari had
    purchased real estate in London triggered still another review of the
    Zardari accounts. Citibank private bank told the Subcommittee staff
    that its Swiss office internally discussed the source of the funds for
    the property purchase. Mr. Amouzegar and Mr. Raza then met with Mr.
    Schlegelmilch, who allegedly informed them that funds had been
    deposited into the Citibank accounts, transferred to another PIC
    account outside of Citibank and used to purchase the property. Mr.
    Schlegelmilch allegedly indicated the funds had come from the sale of
    some sugar mills and were legitimate. Citibank told the Subcommittee
    staff it is not sure if anyone at the private bank attempted to
    validate the information about the sale of the sugar mills. In
    addition, even though this account activity violated the condition
    imposed by Citibank that the accounts were not to be used as a pass
    through for funds, the accounts were kept open.

    Closing the Accounts. In July 1996, after Mr. Amouzegar left the
    private bank to open his own company, another private banker, Cedric
    Grant, took over management of the Zardari accounts. Citibank told the
    Subcommittee staff that Mr. Grant began to review the Zardari accounts
    about one month later to familiarize himself with them. He also
    reviewed the transactions that had taken place within the accounts.

    In September and October 1996, press accounts in Pakistan repeatedly
    raised questions about corruption by Mr. Zardari and Ms. Bhutto, as
    Ms. Bhutto’s re-election campaign increased its activities prior to a
    February election date. In September, Ms. Bhutto’s only surviving
    brother, Murtaza Bhutto, was assassinated, and Ms. Bhutto’s mother
    accused Ms. Bhutto and Mr. Zardari of masterminding the murder,
    because the brother had been leading opposition to Ms. Bhutto.

    In October, Mr. Grant completed his review of the Zardari accounts and
    provided a written analysis to Messrs. Holderbeke, Sharma and Raza,
    according to Citibank. Mr. Grant had found numerous violations of the
    account restrictions imposed by Citibank, including multiple
    transactions and funding pass-throughs. Citibank told the Subcommittee
    staff that the accounts had functioned more as checking accounts than
    passive investment accounts, directly contrary to the private bank’s
    restrictions. Apparently, well over $40 million had flowed through the
    accounts, though Subcommittee staff were unable to ascertain the
    actual amount because Swiss bank secrecy law prohibits Citibank from
    sharing that information with the Subcommittee. Citibank indicated
    that Mr. Amouzegar had either ignored or did not pay attention to the
    account activity. Mr. Grant recommended closing the accounts, and they
    were closed by January 1997.

    Legal Proceedings. On September 8, 1997, the Swiss government issued
    orders freezing the Zardari and Bhutto accounts at Citibank and three
    other banks in Switzerland at the request of the Pakistani government.
    Since Citibank had closed its Zardari accounts in January 1997, it
    took no action nor did it make any effort to inform U.S. authorities
    of the accounts until late November 1997. Citibank contacted the
    Federal Reserve and OCC about the Zardari accounts in late November,
    in anticipation of a New York Times article that eventually ran in
    January 1998, alleging that Mr. Zardari had accepted bribes, and that
    he held Citibank accounts in Dubai and Switzerland. On December 8 and
    11, 1997, Citibank briefed the OCC and the Federal Reserve,
    respectively, about the accounts and the steps it had taken as a
    result of the Zardari matter. These steps included: closing all of the
    accounts that had been referred by Mr. Schlegelmilch to the private
    bank and terminating his referral agreement; reviewing all of the
    accounts opened in the Dubai office; and tightening up account opening
    procedures in Dubai, including requiring the Dubai office to identify
    the beneficial owner of all Dubai accounts. Citibank did not identify
    any changes made or planned for the Swiss office, even though the
    majority of the activity with respect to the Zardari accounts had
    taken place in Switzerland.

    On December 5, 1997, Citibank prepared a Suspicious Activity Report on
    the Zardari accounts and filed it with the Financial Crimes
    Enforcement Network at the U.S. Department of Treasury. The filing was
    made fourteen months after its decision to close the Zardari accounts;
    thirteen months after Mr. Zardari was arrested a second time for
    corruption in November 1996; and nearly two months after the Swiss
    government had ordered four Swiss banks (including Citibank
    Switzerland) to freeze all Zardari accounts.

    In June 1998, Switzerland indicted Mr. Schlegelmilch and two Swiss
    businessmen, the former senior executive vice president of SGS and the
    managing director of Cotecna, for money laundering in connection with
    kickbacks paid by the Swiss companies for the award of a government
    contract by Pakistan. In July 1998, Mr. Zardari was indicted for
    violation of Swiss money laundering law in connection with the same
    incident. Ms. Bhutto was indicted in Switzerland for the same offense
    in August 1998. A trial on the charges is expected.

    In October 1998, Pakistan indicted Mr. Zardari and Ms. Bhutto for
    accepting kickbacks from the two Swiss companies in exchange for the
    award of a government contract. On April 15, 1999, after an 18-month
    trial, Pakistan’s Lahore High Court convicted Ms. Bhutto and Mr.
    Zardari of accepting the kickbacks and sentenced them to 5 years in
    prison, fined them $8.6 million and disqualified them from holding
    public office. Ms. Bhutto, who now lives in London, denounced the
    decision. Mr. Zardari remains in jail. Additional criminal charges are
    pending against both in Pakistani courts.

    On December 11, 1997, Citicorp’s Chairman John Reed wrote the
    following to the Board of Directors:

    “We have another issue with the husband of Ex-Prime Minister Bhutto of
    Pakistan. I do not yet understand the facts but I am inclined to think
    that we made a mistake. More reason than ever to rework our Private

    Mr. Reed told the Subcommittee staff that it was the combination of
    the Salinas and Zardari accounts that made him charge Mr. Aziz, the
    new private bank head, with taking a hard look at the bank’s public
    figure policy and public figure accounts.

    The Issues:
    The Zardari case history raises issues involving due diligence,
    secrecy and public figure accounts. The Zardari case history begins
    with the Citibank Dubai branch’s failure to identify the true
    beneficial owner of the M.S. Capricorn Trading account. As a result,
    the account officer in Dubai performed due diligence on an individual
    who had no relationship to the account being opened. In Switzerland,
    Citibank officials opened three private bank accounts despite evidence
    of impropriety on the part of Mr. Zardari. In an interview with
    Subcommittee staff, Citigroup Co- Chair John Reed informed the
    Subcommittee staff that he had been advised by Citibank officials in
    preparation for a trip to Pakistan in February 1994, that there were
    troubling accusations concerning corruption surrounding Mr. Zardari,
    that he should stay away from him, and that he was not a man with whom
    the bank wanted to be associated. Yet one year later, the private bank
    opened three accounts for Mr. Zardari in Switzerland. Mr. Reed told
    the Subcommittee staff that when he learned of the Zardari accounts he
    thought the account officer must have been “an idiot.”

    Citibank has been unable to confirm that bank employees verified that
    Mr. Zardari had a level of wealth sufficient to support the size of
    the accounts that he was opening. In addition, the Swiss private
    banker took no action to validate the legitimacy of the source of the
    funds that were deposited into the account. For example, there was no
    effort made to verify the claims that some of the funds derived from
    the sale of sugar mills.

    Citibank also performed no due diligence on the client owned and
    managed PICs that were the named accountholders. Because the PICs were
    client-created, the bank’s failure to perform due diligence on the
    PICs meant that it had no knowledge of the activities, assets or
    entities involved with the corporations. One of the PICs, Bomer
    Finance, has been determined to have been a repository for kickbacks
    paid to Mr. Zardari, and those kickbacks tainted funds deposited at
    the Geneva branch of Union Bank of Switzerland. Documentation has not
    been made available to determine whether Bomer Finance also used its
    Citibank account for illicit funds.

    Another due diligence lapse was the private bank’s failure to monitor
    the Zardari accounts to ensure that the account restrictions imposed
    on them were being followed. When officials were presented with
    evidence in 1996 that the restrictions were being violated, they
    nevertheless allowed the accounts to continue.

    The Zardari accounts in Switzerland were opened one day before Raul
    Salinas was arrested. The account was repeatedly reviewed in 1996,
    after the Salinas scandal became public. Yet there is no evidence that
    anyone in the private bank had been sensitized to the problems
    associated with handling an account of a person suspected of

    The Zardari example also demonstrates the practical consequences of
    secrecy in private banking. Citibank claims that its decisionmaking in
    the Zardari matter cannot be fully explained or documented, since all
    Citibank officials are subject to Swiss secrecy laws prohibiting
    discussion of client-specific information. In light of the fact that
    U.S. banks are supposed to oversee their foreign branches and enforce
    U.S. law, including anti-money laundering requirements, this inability
    to produce documentation related to a troubling case again highlights
    the problems with U.S. banks choosing to operate in secrecy

    Pattern of Poor Account Management. The Zardari case history took
    place during a series of critical internal and federal audits between
    1992 and 1997 of the Swiss office which, during most of that time,
    served as the headquarters of the private bank. The shortcomings
    identified in the audits included policies, procedures, and problems
    that affected the management of the Zardari accounts. They included:

    Failure of the “corporate culture” in the Swiss office to foster ” ‘a
    climate of integrity, ethical conduct and prudent risk taking’ by U.S.
    standards”; inadequate due diligence; “less than acceptable internal
    controls”; lack of oversight and control of third party referral
    agents such as Schlegelmilch; and inadequate monitoring of accounts;
    all of which resulted in “unacceptable” internal audit ratings. In
    December 1995, the Swiss office received the lowest audit score
    received by any office in the private bank during the 1990s. These
    audit scores indicate the office’s poor handling of the Zardari
    accounts was part of an ongoing pattern of poor account management.

    These allegations were also discussed in the press. See, e.g., “The
    Troubled Reign of Bhutto II,” Los Angeles Times (5/17/1994) (“Many
    Pakistanis blame Bhutto’s abrupt removal in August, 1990, on the
    unsavory reputation acquired by her husband, Asif Zardari, a polo-
    playing contractor dubbed ‘Mr. Ten Percent’ for the rake-off he was
    said to take from government contracts.”)

    Because of their central role in drug trafficking and organized crime,
    money laundering activities have been the subject of eight prior
    investigations of the Permanent Subcommittee on Investigations.
    Despite increasing international attention and stronger anti-money
    laundering controls, some current estimates are that $500 billion to
    $1 trillion in criminal proceeds are laundered through banks worldwide
    each year, with about half of that amount moved through United States

    This report summarizes the Minority Subcommittee staff investigation
    to date into U.S. private banks and their vulnerability to money
    laundering. The investigation has found that the products, services
    and culture of the private banking industry present opportunities for
    money launderers, and that without sound controls and active
    enforcement, private banking services have been and will continue to
    be used by those intent on laundering money.

    [Mr. Syed Adeeb is an investigative journalist, Chief Editor of the
    Information Press, TV-Video Documentary Film Producer, IT Consultant
    and human rights advocate based in Virginia, U.S.A.
    http://www.SyedAdeeb.net – Monday, 23 November 2009]

    – TIP: http://www.transparency.org.pk
    – PTI: http://www.insaf.pk
    – NAB: http://www.nab.gov.pk

  3. Karim says:

    Dear Hunza, Why do you forget the message and actions of your Pakistani masters. They are not less criminals than Kashmiries for Gilgit-Baltistan. Pakistanis themselves attached Gilgit-Baltistan with Kashmir and listen to recent statement of Prim Minister of Pakistan Gilani in the National Assembly where he said ‘Giglit-Baltistan is part of Kashmir’. It is both Kashmiries and Pakistanies who are trying to push us back politically on all fronts.


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