|The writer is a lawyer based in Islamabad.
Mohammad Ali is celebrated as a great fighter because other than being a tremendous athlete he knew when to hold his punches. But most fighters worry little about their legacy and focus squarely on winning. Elections are a fight too. They produce winners and losers. And like in all other fights some chose to fight dirty. At the end of the day, the support or lack-thereof for tactics employed in politics is a matter of taste. Politics is a dirty business. In an election year you see a lot of dirt smeared around even in mature democracies. Some judge those who are smeared. Others judge those doing the smearing. Elections campaigns whether negative or positive bring forth information into public domain. And as constituents we have a right to judge the information, those bringing it and the manner in which it is brought.
By now it is settled that someone who vies for public office doesn’t have the same right to privacy as an ordinary citizen, as privacy must give way to the public’s right to information. If someone paddles lies about you, you can take them to court for defamation. If someone expresses an opinion about that paints you black, you respond with your arguments and let people decide who is right. The theory of democracy suggests that in a marketplace of ideas where political leaders have more or less equal access to the media, the superior argument wins. Thus in reacting to the accusations levelled by the PML-N, there is no room for Imran Khan and the PTI to mount a high horse. If they want the job of managing this country, voters have a right to seek answers to all prickly questions.
In trying to make sense of the accusations by the PML-N, within all the mudslinging, there seem to be three identifiable issues that need to be considered: Is Imran Khan laundering the funds of Shaukat Khanum hospital? Did the board of Shaukat Khanum illegally and recklessly gamble away charitable donations meant for the sick and the poor of this country? And was there a conflict of interest in assigning the responsibility of investing funds to an investment manager who was part of the decision-making process? Anyone faintly acquainted with the purpose and functioning of endowment funds and the risks that attach to investments generally would find the first two questions preposterous.
You don’t need to be a finance wizard to know that educational, charitable and religious institutions that rely on donations and don’t generate enough income to sustain their expenses create endowment funds. While some portion of the investment income is taken out to cater for ongoing expenses, the rest is reinvested with the objective that the principal amount should stay intact and the fund income should grow to offset pressures imposed by inflation and economic downturns. Such funds are managed by financial specialists and invested across a range of investment classes (stocks, bonds, real estate etc.) some of which are low-risk-low-reward and others that are riskier but offer higher returns.
Let’s also get out of the way the argument that investment or endowment fund losses are contingent on some wrongdoing. During the last six months of 2008 alone, the US endowments on the whole lost over 24 percent of their value. This is a staggering number. The top Ivy-league universities in the US have had to streamline their budgets due to the economic meltdown of 2008-09 and now expect to be poor for a while, even though the most celebrated gurus in the business manage their endowment funds. The point is that in a recession almost everyone loses money. In face of an event such as the dot-com bubble burst in the early 2000s, the more conservative investors who did not invest in this asset class might have been saved. But in 2008-09 when all asset classes went belly up, all investors lost some.
So here is why the PML-N is wrong. If it is contributions by foreign donors that go into the endowment fund (and not Imran Khan’s account), which is then managed by a specialised board of experts and not the board of directors of Shaukat Khanum, accusing Imran of laundering money to offshore accounts makes no sense. Second, the board of Shaukat Khanum should not be stepping into the shoes of the board of the endowment fund to micromanage decisions. That is not how institutions function. If the managers of the endowment fund establish a steady record of making imprudent investment decisions that lose money, the Shaukat Khanum board should consider changing the managers. But the argument that the Shaukat Khanum board ought to have taken such action because the PML-N fears that one odd investment might lose money doesn’t wash.
Was there a conflict of interest in letting a Middle East-based investment expert manage a $3 million investment for Shaukat Khanum’s endowment fund? If this expert had a dominant role in the decision making process that handed him the money, there could be an argument. Shaukat Khanum claims he wasn’t. If Warren Buffet was on the board of a charity, the charity might actually beg Buffet to manage its endowment in view of Buffet’s record of making money. This expert managing funds for the Shaukat Khanum might be no Buffet, but no one seems to be saying that he has made a killing on his management fee while Shaukat Khanum’s money was lost or that any laws or codes of corporate governance have been breached.
Let’s add some perspective. We’re living in an environment where our for-profit public-sector entities such as the PIA, the Steel Mill and the Railways are all rotting monstrosities. Their losses aren’t a product of external fiscal environment but of outright loot and cronyism. The record of the PML-N itself, especially in health management during its present tenure (with the Punjab Institute of Cardiology scandal, kids dying in hospitals catching fire and young doctors going on strikes etc.), has been an unmitigated disaster. The sasti roti scheme and Danish Schools are threatening to bankrupt the Punjab government. In this backdrop, the PML-N’s pointing fingers at an investment, even if flawed, made by a privately managed charity with imitable governance structures is audacious to put it mildly.
The argument in favour of Pakistani democracy is not that it is perfect or functional, but that there is no viable alternative. Democracy is presented as a solution to our problems not on the basis that practice will make the existing politicos perfect, but that continuity of the process will weed out the rotten ones, find and nurture new ones and force the remaining the reform themselves. The present state of democracy is hard to distinguish from a dictatorship because party structures are autocratic and at election time the range of options for the voter is limited. The barrier to entry for new mainstream political parties in our polity is sky high, which creates a monopoly of existing ones, and an alignment of interest in shutting our new players.
What are the political compulsions that force a politician as intelligent, clean and bold as Khawaja Asif to sling mud at Imran Khan that in all probability will not stick? Is fighting dirty a pre-requisite to establish political loyalty? Do we, the general voters and consumers of politics, acquiesce in and encourage such form of politics and consequently pick sides on the basis of who is making the argument and not the merit of argument itself? Let us ask Imran Khan all the hard questions and hold him to the standard that he has set for himself. But let us also ask Khawaja Asif and Chaudhary Nisar all those hard questions about the PML-N and Nawaz Sharif and hold them to a similar standard. After all both Imran Khan and Nawaz Sharif are competing for the same job.