StAR - Stolen Asset Recovery Initiative - Corruption Cases - Asif Ali Zardari / Benazir Bhutto (SGS-Cotecna)

10/18/12 1:27 AM

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Asif Ali Zardari / Benazir Bhutto (SGS-Cotecna)

Case Control Number: Description : 143

Ms. Bhutto and Mr. Zardari were accused of receiving kickbacks from a government contract awarded to two Swiss companies, SGS and Cotecna, for customs inspection of goods being imported into Pakistan. Their conviction in Switzerland was overturned. In the trial court decision, Swiss Judge Daniel Devaud stated that during Ms. Bhutto's first term of office as prime minister, the Swiss company Cotecna was awarded a contract by Pakistani's ministry of finance to take over pre-shipment inspection of goods entering Karachi port. Cotecna had agreed to pay a commission of 6% of the contract receipts to Mariston Securities, Inc., an offshore company formed by Ms. Bhutto and Mr. Zardari's attorney Jens Schlegelmilch and beneficially owned by Bhutto's mother. Mariston received $1.2 million before the contract was terminated after Ms. Bhutto was first dismissed from office. 2) On her return in 1993, Ms. Bhutto appointed herself minister of finance. A contract with similar terms was awarded to SGS, a Swiss inspection company that owned much of Cotecna and had agreed to share both the revenue - and the obligation to pay the bribes. Mr. Schlegelmilch created a new offshore company, Bomer Finance Inc., whose beneficial owner was Mr. Zardari, though Ms. Bhutto controlled its assets. Two other companies were involved: Mariston and Nassam Overseas Inc., a company beneficially owned by Ms. Bhutto's then brother-in-law. The SGS-Cotecna contract took effect from January 1, 1995, and large sums were paid to both companies over the next two years. Schlegelmilch made sure that the commissions were duly paid to the various Bhutto front companies, aggregating $12 million. More than $5 million was transferred to another front company, Hospital of the Middle East, Inc.

Type of Illicit activity involving Public Official :

Bribery

Impediments to investigation:

Chains of corporate vehicles

Most recent legal action against Public Official?: Other legal action/ other prosecutions:

Jens Schlegelmilch prosecution (Switzerland)

Region: Country of Public Official: Sources:

SAR Pakistan Bhutto/Zardari case study by the International Center for Asset Recovery, including "Judgment of Swiss magistrate in SGS, Cotecna case," accessed at http://www.assetrecovery.org/kc/node/2fb39f42-5114-11de-bacdPage 1 of 2

http://star.worldbank.org/corruption-cases/node/18731

StAR - Stolen Asset Recovery Initiative - Corruption Cases - Asif Ali Zardari / Benazir Bhutto (SGS-Cotecna)

10/18/12 1:27 AM

a7d8a60b2a36.8 "Swiss drop charges against Bhutto's widower." Swissinfo.ch, Aug. 25, 2008, accessed at

http://www.swissinfo.ch/eng/politics/foreign_affairs/Swiss_drop_charges_against_B cid=6877842 Carver, Jermey. "Box 6.6: The hunt for looted state assets: the case of Benazir Bhutto." Case study in Transparency International Global Corruption Report 2004 at 102, accessed at http://www.transparency.cz/pdf/publikace/ti_gcr_2004.pdf "Pakistan asks Swiss to reopen Zardari probe." swissinfo.ch, Mar. 31, 2010, accessed at

http://www.swissinfo.ch/eng/politics/Pakistan_asks_Swiss_to_reopen_Zardari_prob cid=8590418) Pakistan v. Zardari et al, [2006] EWHC 2411 (Comm), accessed at http://www.bailii.org/ew/cases/EWHC/Comm/2006/2411.html Noorani, A.G. "Benazir in Swiss courts." Frontline, Volume 21 - Issue 07, Mar. 27 - Apr. 09, 2004, accessed at http://www.hinduonnet.com/fline/fl2107/stories/20040409000106000.htm Position of Public Official during scheme: Prime Minister (Bhutto) Member of the National Assembly, Senate, Federal Minister (Zardari) No Art. 16 Art. 23 Money laundering Implicated?: Yes 1990

Is there a pending case or appeals?: UNCAC Articles(s) Implicated:

Year scheme began: Corporate Vihecles Used Benington Management Inc. Mariston Securities Inc. Nassam Overseas Inc. Bomer Finance Inc. Hospital Middle East Inc.

http://star.worldbank.org/corruption-cases/node/18731

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