“Blessed is the nation that doesn’t need heroes" Goethe.
“Hero-worship is strongest where there is least regard for human freedom.” Herbert Spencer.
"My 80% friend isn't my 20% enemy" Ronald Reagan.
IN a nation of some 200 million, I doubt if a handful could pinpoint Panama’s location. And yet, this tiny Central American state has dominated Pakistan’s political discourse for the last year to the point of tedium.
Finally, after nearly two months of hearings before a Supreme Court bench, the verdict is here. And, as I had predicted to friends a few weeks ago, it is a cop-out that has both sides declaring victory.
For me, the abiding image is of the Sharif brothers, Nawaz and Shahbaz, embracing and beaming at each other. In the PTI camp, we watched Imran Khan and senior party members pass sweetmeats around.
For the SC, the verdict gave the impression of balance and fairness, with something for both sides to cheer about. Imran Khan had a lot of praise for the two dissenting judges who declared the prime minister ineligible to rule because he didn’t meet the criteria of honesty and integrity laid down in the Constitution.
The ruling PML-N is gloating over a verdict that, for the time being, has let their leader off the hook. As far as the party is concerned, it has every chance of hanging on to power until the 2018 election. Here, according to opinion polls, it is most likely to win a majority. So who’s the real winner in the verdict?
When the Panama brouhaha began a year ago, I had suggested that the Sharif brothers were masters of kicking the can down the road, and would drag matters out indefinitely. Now, with a joint investigative team (JIT) being set up, expect more of the same.
Even though the SC has required the JIT to submit fortnightly progress reports, the fact remains that members of this committee will all be serving members of the civil and military bureaucracy. To expect them all to perform their tasks independently is a rather big ask.
Then there is the problem of the team having to obtain and verify information in different jurisdictions. Will they be able to force banks and government departments in Dubai and Qatar to hand over documents? And all this in two months? Forgive my scepticism, but having first-hand knowledge of the pace at which our bureaucracy works, I have some doubts. No wonder that Imran Khan is demanding the PM’s resignation. He knows how difficult it will be to get a group of civil servants to report against a sitting PM. But he’s right in underlining Nawaz Sharif’s loss of moral authority to rule.
Irrespective of the legal rights and wrongs of the case, it is clear that the daily drip-drip-drip of corrosive evidence against Sharif and his family has done much to strip away the aura of decency he had tried to project. And his disqualification by the two dissenting judges on the bench has reinforced the impression of corrupt practices at the heart of the Sharif empire.
With supreme irony, Asif Zardari has also demanded Nawaz Sharif’s resignation, and asked if he would be taken to the local police station for questioning, or would the JIT go the PM House? The reference here was to his own vicious treatment over a decade of incarceration.
Indeed, the PPP has good reason to be aggrieved at what has often appeared to be its targeting by the judiciary, starting with Zulfikar Ali Bhutto’s judicial murder to the sacking of another elected PM, Yousuf Raza Gilani. In many other cases, the judiciary has displayed an apparent animus against the PPP.
And yet, despite demands for his resignation from the opposition, Nawaz Sharif isn’t going anywhere. He didn’t get to where he is by being sensitive to corruption charges. Throughout his political career, he has shown himself to be tough and opportunistic.
Imran Khan has given examples from other countries where leaders tainted by the Panama Papers have either provided full disclosure (David Cameron), or resigned (Iceland’s Sigmundur Gunnlaugsson). However, members of Putin’s and Bashar al-Assad’s inner circle have not even bothered denying the allegations against them contained in the leaks.
As we know, there is no tradition of resignations in Pakistan. Even in Israel, Bibi Netanyahu is mired in corruption charges, but is refusing to step down. But in Israel, the police are far more independent than they are in Pakistan, and have investigated similar charges against presidents and prime ministers before.
Whatever happens next, Panama is a name that will continue to resound on our TV chat shows for some time to come. But will the verdict reduce corruption? I doubt it. But it will force crooked politicians to be more careful about their bookkeeping.
A final factoid: the verdict triggered our stock exchange’s biggest bull run, with the index shooting up by 1,800 points in a single session. Do investors know something we don’t? ----The background of the case to those who don't know by Husain Haqqani
Pakistan’s Supreme Court is an arena for politics, not an avenue for resolution of legal disputes. Unlike other countries where the apex court serves as the court of last appeal, Pakistan’s Supreme Court often entertains direct applications from political actors and generates high-profile media noise. In that tradition its judgment in the so-called Panama Papers case is a classic political balancing act. It raises questions about Prime Minister Nawaz Sharif’s property in London, but does not remove him from office.
Opposition politician Imran Khan, currently a favourite of Pakistan’s establishment, initiated the case after Mr. Sharif’s name appeared in leaked documents about owners of offshore companies worldwide. The documents indicated that the Sharif family had borrowed money against four flats they own in London’s posh Mayfair district.
Show them the money
Having an offshore account is not in itself a violation of Pakistani law, but transferring money from Pakistan illegally is. Hence the case decided on Thursday revolved around the provenance of the money with which the Sharifs became owners of the property in London. In hearings that began in January, the petitioners insisted that the Sharif family’s ownership of this particular property could not have been possible without their possession of undeclared wealth or illegal transfers of money from Pakistan.
Instead of insisting on the time-honoured principle that accusers must prove their allegation beyond a shadow of a doubt and that investigations must precede judicial hearings, the Supreme Court acted politically. It asked the Sharifs to explain the source of money used to buy property abroad, forcing the Sharif family’s lawyers to offer various (sometimes contradictory) explanations at sensational hearings.
One of these explanations comprised a letter from a member of the Qatari royal family who said that he had transferred $8 million to the Sharif family as return on investments made in cash by the Prime Minister’s deceased father, Mian Muhammad Sharif, in the Qatari family’s real estate business in 1980.
The Qatar letter did not settle the matter because the Sharif family members had, at different times, given different explanations for the source of their funds. Moreover, the timelines of the acquisition of the London properties, the formation of the offshore company that was used to buy them and the apparent cash dealings in Qatar did not always align. In any case, a Qatari royal might be willing to send a letter for his friends, the Sharifs, but could not be expected to testify in person in Pakistan and submit himself to cross-examination, something that would be needed if the case ever went to proper trial.
The Supreme Court’s final verdict was split 3-2 among the five-judge bench, with two ruling that Prime Minister Sharif should be disqualified from holding office for failing to explain the source of money for his property. The majority said there was insufficient evidence for such a drastic step and instead announced the formation of a Joint Investigation Team (JIT) comprising five members.
These would include appointees from the Federal Investigation Agency, the National Accountability Bureau, the State Bank of Pakistan, the Securities & Exchange Commission of Pakistan and one representative each from the Inter-Services Intelligence (ISI) and Military Intelligence (MI).
The fallout
The Prime Minister’s side breathed a sigh of relief that the court did not disqualify him from holding office, a decision it has given in the past for the removal of elected civilian Prime Ministers. Imran Khan, who wanted disqualification, declared victory even with the JIT’s creation. He and other opponents of the government are hoping that Nawaz Sharif will now bleed politically from the thousand cuts that are likely to be inflicted on him through reports emanating from the JIT.
Mr. Sharif has won elections before notwithstanding allegations of personal financial wrongdoing, but a new wave of charges could make things difficult for him in Punjab’s urban centres when Pakistan goes to the polls in 2018.
Ironically, the Supreme Court’s nearly 549-page judgment begins not by invoking some eminent jurist, but with a reference to Mario Puzo’s novel The Godfather, citing Balzac’s well-known words, “Behind every great fortune there is a crime.” But then most Pakistanis, including judges and military officers, have known for years that the fortunes of Pakistan’s uber-wealthy families come from bending or breaking laws or using political connections for private advantage. Why go looking into the origins of wealth now?
The creation of the JIT, and including two military intelligence service members who are not trained in matters relating to business and finance, says more about Pakistan’s judicial and political system than it says about the merits of this particular case. The issue in Pakistan is never corruption or failing to explain the source of funds for property. It is where someone fits into the permanent state’s scheme of things.
Nawaz Sharif was fine when he was picked up by General Zia-ul-Haq as leader of a military-backed Punjabi political elite after the coup of 1977. Courts and investigators seldom found anything wrong with the phenomenal expansion of his family’s wealth until he decided to start questioning Pakistan’s military establishment and, in recent years, even assert himself in core policy areas. Politicians can make money as long as they do not seek a role in policymaking. When Benazir Bhutto stood for a different paradigm for Pakistan, she and her husband were subjected to long-drawn legal proceedings over corruption. Asif Ali Zardari might have fewer problems on that score now after he is content to parrot the establishment’s views on national security and foreign policy. Nawaz Sharif is being put through the wringer to become more like Mr. Zardari and less like Bhutto.
As for the Pakistani Supreme Court, it intervenes to swing politics one way or another by favouring the country’s establishment against politicians or vice versa, to justify patently unconstitutional military takeovers and occasionally to embarrass one party against another. Unlike elsewhere in the world, its function is not just to determine the constitutionality and legality of judgments already given by lower courts.
As a victim of one such Commission (ironically, created on Mr. Sharif’s petition) in the so-called Memogate Case, I know that the principal damage inflicted by its proceedings is to public image. The Memogate Commission’s findings never led to criminal charges, not even an FIR, against me for any crime as none was actually committed. But its proceedings and comments created sufficient political noise for some Pakistanis to still think I am a fugitive from Pakistani law.
Signal from the deep state?
Generating smoke without fire against persons deemed difficult or uncontrollable by Pakistan’s permanent state establishment, the deep state, is often the greatest accomplishment of inquiries created by the Supreme Court on direct petitions like the one over the Panama Papers.
The JIT might still find nothing definitive for prosecution but Mr. Sharif is on notice. And that is how Pakistan’s system is designed to work.
A London summit must recognise, as the Panama Papers show, that these crimes are facilitated by the west
Illustration by Matt Kenyon.
By Thursday morning all the A-listers will have arrived. From Washington will fly in a succession of jets, bearing US secretary of state John Kerry as well as the bosses of the IMF and World Bank. Fifa and Uefa will send over their top bureaucrats. Captains of business will trail retinues of lobbyists.
All will join David Cameron and leaders from around 40 nations at an opulent London townhouse overlooking St James’s Park. Gathered there, in the slow-beating heart of Downton-ian Britain, they will launch into an almighty battle – over the meaning of a single word.
Not just any old word, mind you. It ranks among the most important terms for describing our broken-backed global capitalism. Indeed, it forms the very title of the day-long summit: corruption.
Explaining why he’s called the world’s first assembly on corruption, Cameron has said: “It destroys jobs … traps the poorest in desperate poverty, and undermines our security by pushing people towards extremist groups.” Absolutely right. What’s wrong is his definition of the term.
For Cameron, corruption equals bribery. It means greasing the palm of a bored official just to get through customs, tipping a hundred to a thuggish traffic cop so you can drive on. Or, at the luxury end of the market, a despot such as Nigeria’s General Sani Abacha, stealing billions from his home country and hiding the haul in foreign banks.
In other words, it’s something largely done by people in poor countries. As sardonic critics of this argument say, “Corruption has a black face.” That’s why the prime minister believes Thursday should be mainly about cracking down on states that take aid even while being blighted with bent officials, and tackling graft in sport.
And it is the argument of a hypocrite. Hypocrisy is the fervent agreement that bad things do happen – but Other People do them, never you or your country. On this reading, thievery is corruption. But receiving the same black money, laundering it and directing it back out to a tame tax haven or two – well, that’s just competition, isn’t it?
Time was when Britain, Europe and the US could get away with making this argument. The wealthiest countries in the world could with one hand wag a stern finger at the poorest nations, while with the other hand collecting their loot, and pushing it through their financial centres.
They could point to the surveys circulated by Transparency International in which perceptions of national corruption as reported by business leaders and “country experts” were totted up. Those publications proved, year after year, that the poorer the country, the more failed the state, the more corrupt the society. They also stated that the world’s “cleanest” countries included Switzerland, Singapore, the UK and the US.
David Cameron under pressure to end tax haven secrecy
All those breezy, boomtime justifications became exponentially harder to make after the 2008 crash. The era of austerity has left even rich governments scrabbling for tax revenues to fund their hospitals and schools. More importantly, it has prompted cash-strapped voters – from a Trump supporter in Indiana to a Corbynista in Kentish Town – to ask exactly who has been making how much money at their expense.
That brings us back to this week’s summit – because it’s here that developing nations such as Nigeria will join campaigning groups to make the argument that modern corruption now has a white face.They will argue that the onus is on Britain and other rich countries to crack down on the tax havens in their own backyards. And they are right. Corruption of the sort that we normally discuss should be stamped out. It makes the lives of billions of the world’s poorest people harder and more insecure.
But it is peanuts compared to the much bigger sums that are raked in by the lawyers, accountants and other silky advisers who base themselves in the City of London and use Britain’s network of crown dependencies and overseas territories in Jersey, Guernsey, the Caymans and the British Virgin Islands.
Until the UK stops encouraging, advising and facilitating guilty men and women looking to stow their shady cash offshore, corruption will continue to flourish.
Modern corruption is a suit in a Panamanian office, who takes that general’s billions and sends it on to a private bank account, no impertinent questions asked along the way. It is the Mayfair estate agent who sells that multimillion-pound townhouse to an oligarch. It is that accountancy firm in the City that fills out the paperwork structuring the rich man’s affairs so that the money goes through one of their far-flung branch offices to wind up in a trust in the tax-free zones of the Caymans or the British Virgin Islands.
As yesterday’s letter from 350 top economists points out, there is no economic justification for these tax havens. They do not serve primarily to keep taxes in other countries down, but to allow very rich people to duck out of their obligations to the societies they live in. They shelter dirty cash from dictators, and siphon money out of developed countries.
Like Gordon Brown before him, Cameron claims that Britain’s offshore havens are autonomous. They do not need to accept London’s tax laws – indeed, it is unclear whether they will turn up on Thursday. Yet the havens depend on London.
Take the Caymans, which, as Nicholas Shaxson notes in his book Treasure Islands, are effectively run by a governor appointed by the Queen, on the advice of Whitehall. The governor is responsible for “defence, internal security and foreign relations; he appoints the police commissioner, the complaints commissioner, auditor general, the attorney general, the judiciary and a number of other senior public officials. The final appeal court is the Privy Council in London.” And the national anthem is God Save the Queen.
Last week I met a tax lawyer in London who mused on how little Britain actually benefited from its spider’s web of tax havens. “A few people in the City of London make huge fees – I’d love to see how much that money benefits the rest of the country.”
But weren’t we powerless to stop Jersey and the rest? The lawyer went through the precedents. Britain, he pointed out, had repeatedly imposed its law on its overseas governments. In 2000, London forced the Caribbean territories to decriminalise homosexual acts by Order in Council. He thought the same thing could be done to force the offshore havens publicly to disclose who were the ultimate “beneficial” owners of the trust funds. How long would that take? “Oh, two sides of A4. It could be done by the next morning. All it takes is the will.”
Two decades after the cold-blooded murder of “Cassette King” Gulshan Kumar, the underworld still enjoys considerable access to the Mumbai film industry. Beneath the glitz, the fabric of the underworld-Bollywood nexus has not changed much even in 2015 — actors, producers and distributors not only pay obeisance to the ‘bhais’ at offshore locations such as Dubai but also help them establish a toehold in the film business by collaborating with production houses directly funded by fugitive gangster Chhota Shakeel, show investigations by The Hindu.
Indian agencies listened in on several conversations between Chhota Shakeel, a leading organiser of Bollywood events in the UAE, and other underworld operatives that showed that arrangements were under way in full swing to welcome a Bollywood superstar at the popular Meydan Hotel in Nad Al Sheba in Dubai from May 27 to 30. The fugitive don booked a double-room in the hotel for Dawood Ibrahim’s son Moin and daughter-in-law who were keen on a photo-op with the star. One intercept reveals an aide telling Shakeel in Dubai that he and others were with one Karim Bhai and the film star had gone out. The aide assures Shakeel that he will take Dawood’s son and daughter-in-law to the star. After a few minutes, Shakeel calls the aide to ask him to give his reference to the Bollywood event organiser, and that “children” must be arranged a good photo-op.
The meeting concluded on the same day as planned by Shakeel.
Dawood’s family was introduced to the actor as “Haji Saheb’s” children. It could well be the code name for Dawood among those in the film fraternity who continues to deal with him, or a way to mislead the superstar into meeting Dawood’s family members. Sources in the security establishment said the Shakeel contact in Dubai, who arranged the meeting for Dawood’s son with the star, was closely involved in Bollywood film promotions in Dubai and was a close acquaintance of top actors and production houses in Mumbai. Close proximity of actors, or cricketers, with the criminal world during their UAE tours has been a matter of concern for intelligence agencies. The Hindu’s investigation completes an important missing link of this puzzle since the 1993 blasts: a clear synergy between Bollywood and the underworld during tours abroad continues to date.
In March, a popular Pakistani television actor, desperately in need of a visa to visit India and find work in Mumbai, approached Shakeel for arranging a meeting with top television channels. The don immediately set up meetings for the newbie with several popular production houses.
In another intercept, the same actor called up Shakeel to push for his launch in Bollywood with a leading production house. Subsequently, Shakeel called up the CEO of a movie production house that is a major player in the Indian TV world and arranged a meeting. The intercepts do not reveal if the meeting ever took place, but prove the phone call was made.
Several intercepts show Shakeel attempting to reach out on February 26 to a Bollywood director who had just finished a film on Dawood Ibrahim’s life. In 2013, the fugitive don had planned a hit on the same director. When an associate in Mumbai asked Shakeel if he found time to threaten another superstar of Bollywood, Shakeel replied that he no longer called up actors with extortion calls.
'The cuts are so severe that they risk sending the BBC into a downward spiral.' Illustration by Joe Magee
Groping for British emblems to bind together an ever more diverse and fissiparous society, politicians struggle to find cultural and emotional social glue. Make your own list from the Queen to Glastonbury, but overwhelmingly people put the NHS and the BBC right up there near the top, deep-dyed into British DNA.
But not this government. Whatever Conservatism once meant, it’s no longer about conserving precious things. The NHS staggers under the fragmenting Lansley act and the BBC is under more severe assault than ever before,threatened with licence fee cuts – and perilous charter renewal ahead. Is it payback time for Rupert Murdoch’s election support? According to BBC political editor Nick Robinson, Cameron on his battle-bus said of the BBC: “I’m going to close them down.” Joke or threat, it’s too close to what many in his party want to be laughed off. Many of the newer Tory MPs, Thatcher’s children, detest the very existence of the BBC – its phenomenal success an affront to market ideology.
Threats come thick and fast. John Whittingdale, newly promoted culture secretary, called the £145 licence fee “worse than the poll tax” in his former role as head of the culture select committee. Sajid Javid, the business secretary,complained this month that the licence fee was “a large amount for many families” and “needs looking at”. Other Tories shed crocodile tears for the poor who can’t afford the TV licence, calling for non-payment to be decriminalised – a compassion not shown to twice as many prosecuted for not paying council tax.
Decriminalisation would lose the BBC an estimated £200m a year – and that’s deliberate. The BBC may lose £600m if forced to carry the Department for Work and Pensions’ cost of exempting over-75s from the licence fee. And there’s a proposed five more static years to add to the current seven-year licence fee freeze.
The risk is that these become seen as “moderate” cuts, a “compromise” with the factions that want the BBC killed off. Yet they are so severe that they risk sending the BBC into a downward spiral, where fewer good programmes mean weakened public support, allowing yet more cuts. The loss of the Olympics to Eurosport from 2022, for an unaffordable £920m, is exactly what the BBC’s head of sport warned recently: as BBC income shrivels it can’t compete – and the licence fee looks less good value.
Barely a day goes by without the Mail, Telegraph and Rupert Murdoch’s papers attacking the BBC. This week’s Sunday Times had a full page of gleeful, barely veiled encouragement to the young not to pay their licence fee if they only watch catch-up TV on iPads or smartphones. It reported 150,000 more households in the past three months abandoned traditional TV and the licence fee, claiming not to watch it live. Everyone admits there’s a growing problem with attaching the licence fee to a TV set – but that’s easily fixed with a household fee or by bringing iPlayer under the licence.
Murdoch bullies ceaselessly for a subscription system, to shrink the BBC to the tiny size of America’s PBS. His paper’s poll shows apparent “waning” public support, with only 48% saying the licence fee is value for money, slightly more preferring funding by advertising. Left out was the inconvenient answer to one poll question which found only 9% want it funded by subscription. The BBC quotes 11 other polls showing that support for the licence fee at 42% is higher than for any other form of funding. What’s astonishing is that 96% of people use the BBC every week, spending an average of 18.5 hours watching, listening or online.
This week BBC Radio 4 launched its new season with a special celebration. With strong emphasis, its director general, Tony Hall, warned in a speech: “It’s something none of us should take for granted – there’s nothing else like it in the world.” He’s right, the station is the soundtrack to the nation, a never-ending conversation of remarkable intelligence and pleasure, reaching deep among Sun and Mirror readers, defying accusations that it’s a middle-class silo. By rights, this Reithian relic should have died out long ago: instead its listeners keep growing – up from 9 million a decade ago to 11 million now.
In the kitchen, in the car or out jogging with an iPod, I can’t imagine life without it. On a desert island, isn’t the entire back catalogue what you’d choose? The Now Show, More or Less, Neil Macgregor’s History of the World in a 100 Objects – only God and gardening have me reaching for the off button. Now here comes a whole day of poetry. Even the awfulness of the Archer family has me gripped.
Those 11 million Radio 4 adherents listen for an average of 12 hours a week – and each shining hour costs just 1.4p per listener. Nothing was ever such good value. The entire BBC has half the budget of Sky and a quarter of BT’s – which offer a fraction of the quantity or quality.
Choice busts out of every new provider – Amazon, Netflix and many more to come – yet the BBC, at £12 a month, dominates the British airwaves, while Sky charges an average £47.
The other line of attack will be on BBC governance – even though its every move is already over-policed by governors, trust and all the acronyms: Ofcom, NAO,PAC, DCLG, plus many parliamentary committees. From millions of BBC words, blunders and scandals are relatively few.
The BBC’s success infuriates its enemies because it defies Hayekian laws of gravity; the market ought to offer better value but it doesn’t. Attacks on BBC “bias” rain down: James Harding, head of BBC News, protested at the “hell on wheels” “ferocity” of attacks during the election – a little faux-naive, perhaps, from a former Murdoch editor who knows the agenda from the other side.
The BBC has a near impossible task in finding unbiased truths in an ideological world – and sometimes it splits the difference to stay on the safe side when forced to choose between sense and nonsense. The establishment leans heavily, the weight of an 85% Tory and europhobic press breathes hard to push it off its foothold. There is too often a blandifying of essential arguments when intimidation by bullies drains life out of reporting on the NHS, benefits, austerity or Europe.
Pinko bias is an illusion of the right – and voters gave Cameron his win. Before wielding axes, Tory MPs should think hard about constituents who spend 18.5 hours a week with the BBC – and of its place in national life as an unmatched cultural treasure.
Traders colluded in online chatrooms to time the buying and selling of huge amounts of currency. Photograph: Ruben Sprich/REUTERS
The world’s biggest banks had been steeling themselves for months before the US Department of Justice’s rulings on manipulation in the foreign exchange markets. Last week’s announcement was, if anything, less tough than expected; £3.7bn of fines were levied on top of those announced last autumn, to bring the grand total to an astounding £6.3bn. Crucially, the banks also admitted that what they had done was criminal. The US attorney general, Loretta Lynch, declared that foreign exchange traders had exhibited“breathtaking flagrancy” in setting up a group they called “the cartel” to manipulate the market between 2007 and the end of 2013. The fine was “commensurate with the pervasive harm done. And it should deter competitors in the future from chasing profits without regard to fairness, to the law, or to the public welfare”.
Put bluntly, the world’s most prestigious banks had brazenly and systematically ripped off their clients. It was the crime of the decade. Yet the markets had been expecting worse. Only a month ago, Deutsche Bank had paid a record £1.6bn fine for manipulating and rigging prices in the currency and money markets. If this was the benchmark, thought the markets, the fines for other banks would be higher. As it was, £3.7bn seemed almost modest and the share prices of Barclays, RBS, Citigroup and JP Morgan rose sharply in relief.
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The hope in the banking world is that the worst may be over. The combination of modestly increased regulation, stronger internal compliance and clawing back pay and bonuses if there has been malpractice – together with genuine determination at board level to root out criminal practice in dealing rooms – should begin to make a difference.
Yet will it be enough? Our grandparents, less in hock to today’s ruling doctrines – that markets can be presumed to be infallible and egoism is always beneficial – were wiser about how to organise markets than today’s economists and regulators. It is striking, despite record fines and the sacking of the Bank of England’s head of foreign exchange operations, who knew about the collusion but never drew it to the authority’s attention (on the grounds that whistleblowing was not part of his duties), that the British approach is still softly, softly.
Minouche Shafik, deputy governor of the Bank of England, expressed her horror at the casual “misconduct” among traders and the language they used to justify what they did in a speech to the London School of Economics last autumn. (Shafik is in charge of the fair and effective market review that will propose changes to the foreign exchange markets.) She conceded that no one can talk any more of a few bad apples – the barrel is rotten. But while recognising that deep change was necessary, her proposed areas for potential remedial action are largely technical. Tonally, her comments reminded me of the infamous Bischoff report into the banking system in 2008/9, which, despite the narrowly averted banking collapse, recommended as little as possible should be done to reform the City.
In fairness, Shafik spoke before last week’s admissions of criminality. The US Justice Department has raised the stakes. What everyone has to confront is that the banks have been party to an organised, global criminal conspiracy to defraud their clients. Traders colluded in secret online chatrooms to time the buying and selling of huge amounts of foreign currency to benefit each other. As one said: “If you ain’t cheating, you ain’t trying.” The entire framework, and the economic philosophy that supported it, has been found wanting.
In terms of structure, the foreign exchange markets are the closest to a Thatcherite nirvana that has ever been devised. Governments do not manage rates to comply with an internationally agreed system, as they did after the war. The price of a pivotal financial asset is determined wholly by private supply and demand. The market makes its rules. There has been close to zero public regulation. Banks buy and sell on their account freely and for their clients. Conflicts of interest abound. The pursuit of profit is the only hallowed value.
The argument in favour of this is that it is vital for the promotion of world trade and prosperity, but daily turnover on the foreign exchange markets dwarfs the volume of world trade. To paraphrase Adair Turner when chair of the now-abolished Financial Services Authority, much of this turnover is plainly neither socially useful nor promotes public welfare. It does, however, enrich those who trade in it and, as we see, criminally.
For 30 years, the doctrine has been that state involvement would be counterproductive. Modern companies, of which banks are a sub-set, have been encouraged to define themselves not as organisations delivering economic and social good, but as profit-making machines for anonymous, tourist shareholders. Managers did not question their trading teams too hard: they knew how important the profit was to their bonuses and to the bank. As for the teams, they were prepared to trade themselves – moving from bank to bank, depending on whoever paid them best. They were not an integral part of great organisation: they were, and are, boys on the make.
In a letter to all the CEOs of Fortune 500 companies, Larry Fink, head of BlackRock Asset Management, the biggest in the world, deplored the short-term financial priorities of modern corporations, which he said had lost their way and urged a refocusing. What has happened in our currency dealing rooms is part of that story. Addressing it requires a new deal between shareholders, companies and their workforces, and between the public and the private. We need a reshaping of company law and the way companies are owned so that managers pursue less fevered, short-term amoral strategies. And we need an acceptance that in market after market there is a co-dependence between state and business.
Rather than imposing swingeing fines after the event, the state has an obligation to create, with the banks, a financial architecture in which such practices cannot happen. Conflicts of interest and opportunities for price rigging should be outlawed. Criminal currency traders should be prosecuted All bonuses should be capable of being clawed back. Currency trading should be licensed on organised, accountable exchanges.
Those rules and systems that the world’s free marketeers considered so antediluvian turn out to be wise and friendly to honest-to-god businesses. Mark Carney’s Bank of England has been quietly re-regulating mortgage finance, abandoning the free-market zealotry of the 1980s and 1990s. It should do the same in the foreign exchange markets. Our grandparents were not so stupid after all.
“It has long been an axiom of mine that the little things are infinitely the most important.” So said the fictional detective, Sherlock Holmes. Armed with his finely honed skills of backwards reasoning, his trademark ability to solve unsolvable crimes often hinged on his revealing evidence too small to be noticed.
Holmes was an inspiration for the very founders of modern day forensic science. As the decades passed and the tools in their armoury grew, so too did the sheen of invincibility that surrounded their discipline. But there was a crucial chink in their methods that had been overlooked: subjectivity.
While the likes of Holmes’s successors in detective fiction may lead us to believe that forensic evidence is based on precise deduction, all too often it relies on a scientist’s personal opinion, rather than hard fact.
Science on trial
Consider the following case. In December 2009, Donald Gates walked out of his Arizona prison with $75 and a bus ticket to Ohio. After serving 28 years for a rape and murder he didn’t commit, he was a free man. Now the spotlight began to shift to the forensic technique that put him there: microscopic hair analysis.
Human hair is one of the most common types of evidence found at crime scenes. During the 80s and 90s, forensic analysts in the US and elsewhere often looked to the physical differences between hairs to determine whether those found at a crime scene matched hairs from a suspect – like Donald Gates.
When he stood trial in 1982, an FBI analyst called Michael Malone testified that hairs found on the body of the murder victim – a Georgetown University student called Catherine Schilling – were consistent with Donald Gates’ hairs. He added that the probability they came from anyone else was one in 10,000.
“That’s very compelling evidence, particularly when it comes from a witness wearing a white laboratory coat,” says Peter Neufeld, co-founder of the Innocence Project, a New York-based non-profit organisation that uses DNA evidence to overturn wrongful convictions.
The FBI is now reviewing several thousand cases as DNA testing sheds new light on the truth (Credit: Getty Images)
However, hair analysis is not purely objective; I might think two hairs look identical, but you might disagree. Even if we agree that two hairs match, no-one has ever figured out how many other hairs might be similarly indistinguishable from one another. “When a person says that the probability is one-in-10,000, that’s simply a made-up number,” says Neufeld. “There’s no data to support it.”
Donald Gates was finally exonerated when DNA testing revealed that the hairs didn’t belong to him after all. Two similar exonerations followed soon afterwards. As a result of these cases, the FBI is now reviewing several thousand cases in which its scientists may have offered similarly misleading testimony. Last month, it announced that of the 268 cases it has reviewed so far that went to trial, 96% them involved scientifically invalid testimony or other errors by FBI agents. Among those convicted, 33 received death sentences, and nine have already been executed.
The FBI’s review won’t necessarily overturn the convictions, but it does mean that they need to be reconsidered carefully. Lawyers scrutinising these cases must work out what other evidence was presented in court; if they hinged on flawed hair testimony, retrials and exonerations may follow. In cases where the original physical evidence still exists, that DNA testing may shed new light on the truth.
Damning report
Even trusted lines of evidence, such as fingerprint analysis, are not water-tight. Research has shown that the same fingerprint expert can reach a different conclusion about the same fingerprints depending on the context they’re given about a case.
Based in part on these findings, in 2009 the National Academy of Sciences in the US published a report on the state of forensic science. Commissioned in response to a string of laboratory scandals and miscarriages of justice, its conclusions were damning. “Testimony based on faulty forensic science analyses may have contributed to the wrongful conviction of innocent people,” it said. “In a number of disciplines, forensic science professionals have yet to establish either the validity of their approach or the accuracy of their conclusions.”
The report was a wake-up call, not just for forensic scientists in the US, but around the world. “What it exposed were significant scientific deficiencies across many of the different methods that we use, both to examine and interpret different types of evidence,” says Nic Daeid, a professor of forensic science at the University of Dundee in Scotland.
Of all lines of forensic evidence, DNA analysis was considered to be the most objective. Resting on complex chemical analysis, it seems stringently scientific – a gold-standard for how forensic science should be done. Yet perhaps juries should not be too quick to trust the DNA analyses they see in court.
Even trusted lines of evidence, such as fingerprint analysis, are not water-tight (Credit: Thinkstock)
In 2010, while working as a reporter for New Scientist magazine, I teamed up with Itiel Dror from University College London, and Greg Hampikian from Boise State University in Idaho, to put this idea of DNA’s objectivity to the test.
We took DNA evidence from a real-life case – a gang-rape in Georgia, US – and presented it to 17 experienced analysts working in the same accredited government lab in the US.
In the original case, two analysts from the Georgia Bureau of Investigation concluded that the man who was ultimately convicted of the crime, Kerry Robinson, "could not be excluded" from the crime scene sample, based on his DNA profile. But when the evidence was shown to our 17 analysts, they reached very different conclusions; just one analyst agreed that Robinson "cannot be excluded". Four analysts said the evidence was inconclusive and 12 said he could be excluded.
Yet just because forensic science is subjective, this doesn’t mean it should be disregarded; it can still yield vital clues that can help to catch and convict murderers, rapists, and other criminals. “Subjectivity isn’t a bad word,” says Dror. “It doesn’t mean that the evidence isn’t reliable, but it is open to bias and contextual influences.”
Blind judgement What’s needed are additional safeguards to shield forensic examiners against irrelevant information that might skew their judgement. A first step is to ensure they aren’t given irrelevant information, such as knowing that witnesses have placed the suspect at the crime scene, or that he has previous convictions for similar crimes. Another safeguard is to reveal the relevant information sequentially – and only when it is needed. “We need to give them the information that they need to do their job when they need it, but not extra information that’s irrelevant to what they’re doing and which could influence their perception and judgement,” says Dror.
In the US at least, this is starting to happen: a national commission on forensic science has been established, with the goal of strengthening the field – and this includes looking at human factors like cognitive bias. But similar strategies are needed elsewhere if forensic science is to rebuild its tattered reputation.
When it comes to deduction and proof, there is still much we can learn from Arthur Conan Doyle’s hero. As Sherlock Holmes also once said: "Eliminate all other factors, and the one which remains must be the truth."
Jan 14, 2015 12:21 AM , By Devdutt Pattanaik in The Hindu |
Emotional violence is not measurable. Physical violence is, which makes it a crime that can be proven and hence a greater crime, especially when emotional violence is directed at something as notional as religion
When the Pandavas invited Krishna to be the chief guest at the coronation of Yudhishtira, Shishupala felt insulted and began abusing Krishna. Everyone became upset, but not Krishna who was listening calmly. However, after the hundredth insult, Krishna hurled his razor-sharp discus and beheaded Shishupala. For the limit of forgiveness was up.
Charlie Hebdo, a French satirical weekly, published cartoons; offensive cartoons that I have never seen, and would never have, had someone not killed its staff. With that Charlie became a person, a victim, a martyr to the cause of the freedom of expression. We became heroes by condemning the killing. And so millions have walked in Paris to declare that they are Charlie.
Will there be a march where people identify themselves with Charlie’s killers? Is that allowed? Who are the killers? Muslim, bad Muslim, mad Muslim, un-Islamic Muslim? The editorials are undecided, as in the attack in Peshawar on schoolchildren. The victims there did not even provoke; their parents probably did.
The provocation in Charlie’s case was this: perceived insult to the Prophet Muhammad, hence Islam. Charlie, however, was functioning within the laws of a land renowned for the phrase, “Liberty, Equality and Brotherhood!” Islam is also about brotherhood (Ummah, in Arabic) and equality, though not so much about liberty since Islam does mean submission, a submission to the word of god that brings peace.
Managing the measurable
The two siblings, believers in equality and their own version of liberty decided to hurt each other, one emotionally, the other physically. Emotional violence is not measurable. Physical violence is. That makes the latter a crime that can be proven, hence a greater crime, especially when emotional violence is directed at something as notional as religion. Because we are scientific, you see.
And here is the problem — measurement, that cornerstone of science and objectivity.
We can manage the measurable. But what about the non-measurable? Does it matter at all? Emotions cannot be measured. The mind cannot be measured, which is why purists refer to psychology and behavioural science as pseudoscience. God cannot be measured. For the scientist, god is therefore not fact. It is at best a notion. This annoys the Muslim, for he/she believes in god, and for him/her god is fact, not measurable fact, but fact nevertheless. It is subjective truth. My truth. Does it matter?
Where do we locate subjective truth: as fact or fiction? Some people have given themselves the “Freedom of Expression” and others have given themselves a “God, who is the one True God.” Both are subjective truths. They shape our reality. They matter. But we just do not know how to locate them, for they are not measurable.
We cannot measure the hurt Charlie’s cartoons caused the Muslim community. We cannot measure the Muslim community’s sensitivity or over-sensitivity. But we can measure the outcome of the actions of the killers. We can therefore easily condemn violence. That it caused hurt, rage, humiliation, enough for some people to grab guns, is a non-measurable assumption, a belief. Belief is a joke for the rational atheist.
The intellectual can hurt with his/her words. The soldier can hurt with his/her weapons. We live in the world where the former is acceptable, even encouraged. The latter is not. It is a neo-Brahminism that the global village has adopted. Those who think and speak are superior to those who beat and kill, even if the wounds created by word-missiles can be deeper, last longer and fester forever. Gandhi, the non-violent sage, is thus pitted against Godse, the violent brute. I, the intellectual, have the right to provoke; but you, the barbarian who only knows to wield violence, have no right to get provoked and respond the only way you know how to. If you do get provoked, you have to respond in my language, not yours, brain not brawn, because the brain is superior. I, the intellectual Brahmin, make the rules. Did you not know that?
Non-violence is the new god, the one true god. When we say violence, we are actually referring only to the physical violence of the barbarian. The mental violence of the intellectual elite is not considered violence. So, one has sanction to mock Hinduism intellectually on film (PK by Rajkumar Hirani and Aamir Khan) and in books (The Hindus: An Alternative History by Wendy Doniger), but those who demand the film be banned and the books be pulped are brutes, barbarians, enemies of civic discourse, who resort to violence. They are not as bad as the Charlie killers, but seem to be on the same path.
Role of the thinker
We refuse to see arguments as brutal bloodless warfare, mental warfare. We don’t see debating societies as battlegrounds. Mental torture, we are told, is merely a concept, not truth: difficult to measure hence prove. The husband who mentally tortures can never be caught; the husband who strikes the wife can be caught. We empathise with the latter, not the former (she is over-sensitive, we rationalise). Should the mentally tortured wife kill her husband, it is she who will be hauled to jail, not the husband. Her crime can be proved. Not his.
The thinker we are told is not a doer. The killings provoked by the thinker thus goes unnoticed. The thinker — the seed of the violence — chuckles as the barbarian, whose only vocabulary is physical, will be caught and punished while mental warfare will go on with brutal precision. When the ill-equipped barbarian even attempts to fight back using words, we mock him as the troll.
In Sanskrit, the root of the world maya is ma, to measure. We translate the word as illusion or delusion but it technically means a world constructed through measurement. Thus, the scientific word, the rational world, based on measurement, is maya. And that is neither a good or bad thing. It is not a judgement. It is an observation. A world based on measurement will focus on the tangible and lose perspective of the intangible. It will assume measured truth as Truth, rather than limited truth.
Those who felt gleeful self-righteousness in mocking the Prophet are in maya. So are those who took such serious offence to it. The killer is in maya and so is the killed. Those who judge one as the victim and the other as the villain are also in maya. We all live in our constructed realities, some based on measurement, some indifferent to measurement, each one eager to dismiss the other, rendering them irrelevant: The other is the barbarian who needs to be educated. The other is also the intellectual who is best killed.
Essentially, maya makes us to judge. For when we measure, we wonder which is small and what is big, what is up and what is down, what is right and what is wrong, what matters and what does not matter. Different measuring scales lead to different judgments. Wendy Doniger is convinced she is the hero, and martyr, who fights for the subaltern Indian in her writings. Dinanath Batra is convinced he is the hero who opposes her wilful misunderstanding of sanatana dharma. Baba Ramdev feels he has a right to demand the banning of PK. And the producers of the film respond predictably about the freedom of speech and rationality, as they laugh their way to the bank. Everyone is right, in his or her maya.
Every action has consequences. And consequences are good and bad only in hindsight. The age of Enlightenment was also the age of Colonisation. The most brutal wars of the 20th century, from the world wars to the Cold Wars, were secular. Non-violent thought manifests itself in non-violent words which give rise to violent action. The fruit is measurable, not the seed. To separate seed from fruit, thought from action, is like separating stimulus from response. It results in a wrong diagnosis and a wrong prescription. The killer does not kill thought. The thought creates more killers.
What goes around always comes around. Outrage over violence feeds outrage over cartoons. Hindu philosophy (not Hindutva philosophy) calls this karma. We don’t want to break the cycle by letting go of either non-violent outrage or violent protests. Ideas such as maya and karma annoy the westernised mind for they disempower them: they who are determined to save the world with measuring tools dismiss astute observation of the human condition as fatalism.
In his past life, Shishupala was the doorkeeper Jaya of Vaikuntha who was cursed by the Sanat rishis that he would be born on earth, away from Vishnu, for daring to block their entry. The doorkeeper Jaya argued that he was doing his job but the curse stuck and Jaya was reborn as Shishupala. Vishnu had promised to liberate him and to expedite his departure, Shishupala practised viparit-bhakti, reverse-devotion, displaying love through abuse. So he insulted Krishna, knowing full well that Krishna was Vishnu and would be forced to act. There is a limit to forgiveness. But there should be no limit to love.
Ched Evans is a footballer trying to resurrect his career. He is also a convicted rapist. Evans says he is innocent and since his release from prison he is looking for a new football team. First, he made plans to train with his old club, Sheffield United, but the public outcry was such that Sheffield United distanced themselves from him. Any subsequent opportunities with other clubs have ended abruptly following protests and threats by sponsors to end deals. Evans and his supporters argue that he deserves a chance at rehabilitation.
A few weeks ago, Ramiz Raja questioned the rush to return Mohammad Amir to professional cricket. The crimes of Amir and his fellow spot-fixers are different to that of Evans, of course, but the principle championed by Amir's supporters is the same, that he deserves a chance at rehabilitation. Ramiz spoke from the heart, of how it would feel for other players to welcome back a cheat. Pakistan's linguistic innovator has also worked as chief executive of the Pakistan Cricket Board. He speaks from board and broad experience.
Rehabilitation of offenders is an important principle that has benefits for individuals and society. No doubt that Evans and Amir and other sportsmen who commit a crime during their sporting careers have every right to be rehabilitated, but the question is whether or not they have an automatic right to be rehabilitated back into the sport they have dishonoured?
Some professions take criminal conduct so seriously that practitioners can be disbarred or struck off. The medical and legal professions are prime examples. Decisions to end careers are difficult. Professional bodies, for example the General Medical Council and the Bar Council in the United Kingdom, are responsible for making judgements on whether or not individuals are fit to practise. Hence, a barrister who has committed rape or a doctor who has made fraudulent financial claims for patient treatments will probably be judged by the relevant professional council to be unfit to remain in the profession. A doctor or barrister can be rehabilitated into society, find alternative work, but any career as a doctor or barrister will be finished.
Some professions take criminal conduct so seriously that practitioners can be disbarred or struck off. The medical and legal professions are prime examples
Society rightly demands high standards of doctors and barristers since they hold positions of influence and power. A professional sportsman is influential too, even powerful, especially in a privileged position as a role model to thousands and millions of adoring fans. Why then should a sportsman have an automatic right to return to a profession? Why shouldn't he be judged by high standards too? Role models are immensely powerful in sport and brushing over serious misdemeanours risks diminishing the gravity of the crimes. Rehabilitation back into the sport might cause offence to team-mates, fans and victims. Being disqualified from a sport might be the most powerful deterrent to future spot-fixers and rapists.
None of this reduces the onus on society and professions to support the rehabilitation of offenders. Each case requires careful consideration by a suitably qualified governing body equipped to make judgements on the seriousness of offences. But just like other professions of influence and power, rehabilitation shouldn't necessarily mean rehabilitation back into a sport. Unlike medicine and law, sport isn't geared up to make such sensitive and profound decisions. The ICC, FIFA, and national bodies like the PCB and the FA, must ensure that codes of conduct for standards of behaviour are in place and that they are enforceable.
Ramiz began to articulate that Amir and other fixers from Pakistan and elsewhere should not be rehabilitated back into professional cricket. Dissenters in England argue that Evans should not be rehabilitated back into professional football. The governing bodies of cricket and football must consider mechanisms to put the honour, reputation and values of their sports before individual and corporate gain.
This will be an unpopular view for fans who have an emotional attachment to a tainted star. Amir's case is a perfect example, tugging at our heartstrings. His role in the spot-fixing of 2010 might be judged to be too minor to bar him from cricket? But the unseemly haste to return him to international cricket reflects poorly on the PCB and ICC. A code of conduct panel for cricket might judge that other spot-fixers and match-fixers should never return to the sport. It might even decide the same for Amir?
Either way, the current systems and processes of the ICC and PCB, like the governing bodies of other sports, seem to miss the point on rehabilitation. Sport, as we are reminded each time a great player retires or moves on, is far bigger than any individual.
She died alone and terrified in one of the bleakest parts of the country, and after the collapse of Shrien Dewani’s trial her family still has no answers
Anni Dewani, a young woman shot dead in Cape Town, has haunted South Africa for four years. After the collapse of the trial of her husband, Shrien Dewani, accused of masterminding her murder, she will continue to do so. Not only because she was young, beautiful and just married; not only because her heartbroken, desperate parents have been taken into so many South African hearts; but also because the country, its police force and its justice system failed her so completely.
Anni and Shrien honeymooned in South Africa after an extravagant wedding in India in 2010. After going on safari they came to Cape Town and, on Saturday 13 November, went out for dinner. On their return their taxi was hijacked. The taxi driver, Zolo Tongo, and Shrien claimed they were forced out of the car and that the hijackers drove off with Anni. Her body was found in the abandoned vehicle at dawn the next day. She had been shot at close range in the neck.
Shrien was apparently a victim of the criminal violence that plagues South Africa. The police, goaded as they were by the press frenzy, were under huge pressure to find the killers because hijacking and murder are so commonplace, but there were anomalies from the start. Gugulethu, where the hijacking occurred, is notorious for its murder rate. Why would Tongo take them there at night? Shrien, allegedly forced through a window, did not have a scratch on him, and neither did Tongo.
Whispers of disbelief quickly began to swirl. Shrien looked less and less innocent as detectives and journalists picked apart the sequence of events described, and the statements he had made. The police, however, allowed him to return to England before the inconsistent aspects of the case – and his possible involvement in his wife’s murder – were properly investigated.
Tongo was soon arrested. He pleaded guilty to being party to the murder but, in return for a reduction of sentence, said he would tell the truth and claimed that Shrien had asked him to organise the killing. The hitmen, Mziwamadoda Qwabe and Xolile Mngeni, were subsequently arrested, tried and jailed. Monde Mbolombo, the receptionist at the luxury Cape Grace hotel where the Dewanis were staying, said that he had put Tongo in contact with the hitmen. In exchange for immunity from prosecution – now under review due to the case collapsing – he agreed to testify against Shrien.
It is notable that Anni’s murder took place just four months after South Africa had successfully hosted the football World Cup, when the country was under intense scrutiny because of its record of violent crime. This coloured the investigation from the start.
The then-commissioner of police, Bheki Cele, is reported to have said: “A monkey came all the way from London to have his wife murdered here. Shrien thought we South Africans were stupid.” There seemed to be a great sense of relief that responsibility for this awful murder, a public relations disaster for South Africa, lay elsewhere.
Shrien was charged and four years later returned to stand trial. Everyone seemed to have a view on his innocence or guilt. It was revealed early on that perfect wedding photographs masked Anni’s doubts about marrying Shrien. There were sensational revelations about Shrien’s bisexuality and his involvement, both online and offline, in sadomasochistic sex with male prostitutes. “At last,” people thought, “a clear motive!”
Shrien’s sexual orientation and sexual practices clearly indicated a double life. But when put forward by the lacklustre prosecution as the reason for the murder, the judge, Janet Traverso, ruled this testimony irrelevant and the state’s case unravelled rapidly. This may not have been a popular move, but prejudice about a gay lifestyle should not subvert the need for hard evidence.
During the trial it became apparent that the investigation had been botched, and that much of the police work had been shockingly incompetent: lost paperwork, incomplete statements and unreliable ballistics reports.
Traverso chastised the National Prosecuting Authority. “You have had four years to prepare,” she told them when she dismissed the case. The evidence of the main witnesses was “riddled with contradictions” and fell “far below the threshold” of what a reasonable court could convict on.
Anni’s family, the Hindochas, have said that they – and by implication Anni – have been failed by South Africa’s justice system. They are right. Their daughter came here on her honeymoon and died alone and terrified in one of the bleakest parts of the country. Her grieving relatives have sought answers, as have South Africans.
In a country with such high levels of violence, there are so many who have failed to receive a robust investigation followed by the satisfaction of justice. As the Hindochas stood tearfully outside the courtroom after the verdict, there would have been so many South Africans sharing the family’s anguish at not knowing how or why a loved one died.
