The fallacy of the PML-N’s allegations

[Kompromat]

The fallacy of the PML-N’s allegations​

By Daud Munir

Published: August 5, 2012

The writer is pursuing a Doctor of Law at Yale Law School and an MBA from the Yale School of Management


Democracy has a darker side, especially in a political culture still colonised by the corrupt and inept. Last week, the PML-N launched a tirade against the Shaukat Khanum Memorial Trust (SKMT), alleging mismanagement of funds by the Trust’s board. Unlike the occasion on which this party distributed laptops in Punjab costing millions in taxpayer money, the PML-N politicians appeared to have done their homework.

But, it was bad homework. And bad homework is worse than no homework, since it tends to misrepresent. And, without a doubt, the research and analysis that formed the basis of the PML-N’s attack on the SKMT was of inferior quality.

As a student of law and management at Yale, I have studied the endowment management model used by Yale University. The result of my academic inquiry was a presentation at the Yale School of Management that compared investment strategies used by organisations, including Harvard, Princeton and Yale universities, as well as sovereign wealth funds, such as Norway’s.There is a simple response to the PML-N’s allegations levelled against the SKMT. Give any first-year student of law, finance or politics two hours and access to the internet, and he or she will be able to tell you the erroneous nature of the allegations.

First, the PML-N’s leadership compared the SKMT’s method of investment with the Ponzi scheme run by ‘Double Shah’. This is a fantastic accusation. In the US, it would be akin to putting Bernard Madoff’s investment firm and Harvard’s and Yale’s endowments in the same category of fraudulent institutions. If any US politician made such an irresponsible statement, he would at least be severely chastised by his party, if not forever banished from politics.

Second, Khawaja Asif has accused the SKMT of money laundering. The SKMT’s investment would be the first instance of ‘laundering’ that has been disclosed on the organisation’s own website. International investment laws are well-defined and the kind of investment in real estate made by the SKMT does not fall into the category of money laundering, which is by definition a secretive process.

Third, Mr Asif alleges that the SKMT board “gambled” with the donor’s money. He has to be using a definition of gambling that no legal jurisdiction has recognised in modern history.

Fourth, in an interview, Mr Asif conveniently made several incorrect claims about the Harvard endowment fund. He claimed that when Harvard invests, it does so only in the US, not in foreign countries. This is inaccurate and goes against the core investment philosophy of sophisticated endowment funds, which try to minimise risk by geographical diversification. Yale, for instance, invested nearly 10 per cent of its endowment fund in foreign equity in 2011, including in emerging markets.

Fifth, Mr Asif further claims that entities such as Harvard’s and Yale’s endowments invest only in AAA investment grade securities. What he does not know is that these are bond credit ratings applicable to fixed income securities. In 2011, Yale invested only 3.9 per cent of its endowment in such securities. In fact, since the capital invested by the SKMT in Cinnabar is secured by guarantee, it is less risky than the bulk of investment strategies used by Harvard and Yale.

Sixth, the PML-N appears to have been fascinated with the idea of “offshore” jurisdictions. One of the largest and most respected endowment funds in the world is Norway’s Pension Fund Global, which has, perhaps, the highest standards for investment approval. The Norwegian endowment fund also invests in companies incorporated in offshore jurisdictions, including the British Virgin Islands. These offshore jurisdictions are not primarily havens for money launderers, which appears to be the only purpose for their existence in the minds of the PML-N leadership. They are also jurisdictions in which thousands of legitimate business firms are incorporated, including subsidiaries of some large global companies such as Coca Cola, Oracle, Seagate and Del Monte.

Seventh, Mr Asif has accused the SKMT of investing in a shell corporation, created for the special purpose of siphoning off donor’s money. In fact, the SKMT’s $3 million investment comprises 10.52 per cent of the investment fund. No corporate lawyer or judge would consider the investment firm undercapitalised from the perspective of the SKMT’s investment, given its relatively small share in the pool.

Eighth, the PML-N has blamed the SKMT for making speculative investments, which led to a loss of donor’s contributions. Anyone with the web searching skills of a teenager and the acumen of a first-year college student would have done well to check how comparable funds performed in the same time period. In 2008-2009, nearly all the best managed endowment funds lost money. Harvard’s fund lost $10 billion experiencing a 27.3 per cent decline, whereas Yale endowment shrank by 30 per cent.

In politics, anything goes, or so believe traditional politicians in Pakistan. But some public statements lie beyond the tipping point of shoddiness and inaccuracy, such that they seem uncivilised and in bad taste. One hopes that journalists and political analysts, in their role as public intellectuals, will guide society by calling spade a spade and revealing the factual and logical inaccuracies in the PML-N’s allegations. In fact, the political community must be actively informed that the SKMT’s endowment fund is not an aberration, but a standard practice used by the best non-profit institutions in the world to ensure institutional sustainability.

Pakistan is a country of talented people. Our diaspora is well-respected in the West as being solid professionals across many fields. I don’t see any reason why we should accept inferior acumen when it comes to politics and public service. The PML-N’s statements about the SKMT are based on shoddy analysis and mistaken assumptions. That research was not done prior to making the allegations shows that the actors involved may not be fit to govern the country in a complex age of globalisation.

Published in The Express Tribune, August 6th, 2012.

The fallacy of the PML-N

The above analysis , breaks down the entire defamation project by PML-N into eight layman terms. Its pretty self explanatory for even uneducated people like myself , doesn't take a rocket scientist to understand that the entire campaign has been aimed at nothing but defamation and destroying the Ramazan Zakat collection which is the biggest single charitable time of the year for SKMHT.

Starting with myself , I urge all Pakistanis , especially the diaspora to give ALL of your zakat to SKMHT this year.

 

[Hyperion]

Aero, I see you've gone thermonuclear on PML(N). Good going, keep it up

 

[Kompromat]

Aero, I see you've gone thermonuclear on PML(N). Good going, keep it up

PML-N has come down to the most degraded level of criticism , its our duty to resist and break their fallacies that they don't accomplish in their heinous designs.

 

[Patriot]

They have inept advisers and we can judge the intellectual capabilities of PML-N by just looking at the posts of some PML-N members here (Not naming anyone )

 

[Hyperion]

PML-N has come down to the most degraded level of criticism , its our duty to resist and break their fallacies that they don't accomplish in their heinous designs.

They're like "pagal kuttas," let them bark and we will put up stiff resistance. What I had actually wished for was that IK gets a bit more political experience, before he enters the PM house, but whatever, there is nothing better than present!

They have inept advisers and we can judge the intellectual capabilities of PML-N by just looking at the posts of some PML-N members here (Not naming anyone )

LOL - Nice and subtle!

 

[Kompromat]

Hyperion: Pagal Kuttas also bite , they have been biting us for 60 years , those who can't see & feel the bite , see us bleed and venom spread through our society is either a dog himself or has run out of brain processing power but the worst are those who know it but choose to ignore it.

 

[truthseer]

On a slightly depressing note, it has worked. MQM already did this once in Karachi, it worked to an extent but backfired a lot. This worked on our maid.

The sad thing is that this affects the treatment of cancer in our country since it is run on donations. If people stop donating, then for one point scoring, Pakistan will be worse off

 

[Kompromat]

On a slightly depressing note, it has worked. MQM already did this once in Karachi, it worked to an extent but backfired a lot. This worked on our maid.

The sad thing is that this affects the treatment of cancer in our country since it is run on donations. If people stop donating, then for one point scoring, Pakistan will be worse off

Remember , overseas Pakistanis are the biggest source of donations and they are not morons , they are educated and have moral judgement. You will see a "substantial rise" in donations to SKMHT from overseas Pakistani community.

I am starting with myself and request every overseas Pakistani and those living in Pakistan to donate more than usual and show these kuttas that we cannot be bitten again. We care about our cancer patients and will not allow these kuttas to hurt their treatment.

 

[truthseer]

Remember , overseas Pakistanis are the biggest source of donations and they are not morons , they are educated and have moral judgement. You will see a "substantial rise" in donations to SKMHT from overseas Pakistani community.

I am starting with myself and request every overseas Pakistani and those living in Pakistan to donate more than usual and show these kuttas that we cannot be bitten again. We care about our cancer patients and will not allow these kuttas to hurt their treatment.

Agreed. In fact, PML-N did a favour. I didn't know I could donate 20 Rs from my mobile balance. It's just a small amount that could be used to save a life. Now thanks to them, I've decided to cut down on calls and donate once a month at least

 

[Kompromat]

Agreed. In fact, PML-N did a favour. I didn't know I could donate 20 Rs from my mobile balance. It's just a small amount that could be used to save a life. Now thanks to them, I've decided to cut down on calls and donate once a month at least

No , you are wrong , those two do not match , you look at a Rs:20 donation as small because your a true Pakistani who's heart is bigger than these kuttas and your spirit and eman is higher than the height of their propaganda . I salute you

 

[Hyperion]

Hyperion: Pagal Kuttas also bite , they have been biting us for 60 years , those who can't see & feel the bite , see us bleed and venom spread through our society is either a dog himself or has run out of brain processing power but the worst are those who know it but choose to ignore it.

Don't worry, it's our destiny to take back Pakistan. We are the rightful heirs

Let's party soon

 

[Qasibr]

PML-N's accusations were very well-timed to effect SKMH's charity collection in Ramadan. This shows you their mindset.

They are perfectly willing to put the lives of countless cancer patients in jeopardy to further their political career. I hope to God that this isn't successful, but the media outreach PML-N has, they can misguide millions of people via the media. A few people trying to tell their relatives and friends to donate to SKMH cannot compete with PML-N's heavy investment in the media.

If I be completely honest, PTI's response to PML-N's attacks have in general been pretty depressing. PML-N makes vicious attacks at PTI repeatedly, and Imran Khan gives a long-winded and wordy intellectual reply that most of the awaam don't even understand. Many people start believing in the fiery and angry claims, and a silent response to that, can seem like a quiet admission of guilt. Having already seen how vicious and dirty PML-N played with PTI before, how could they have expected PML-N to do any differently this time.

Let's hope the end result is different this time, because last time, the vicious propaganda and maligning was very effective, especially in the rural areas where they don't have things like the Internet to see if the spin the party-paid for anchors are putting, is accurate or not. It is Ramadan, you people should pray for the betterment of Pakistan and PTI, another five years under the parties that are currently in power, could be disastrous.

 

[Rafael]

Brilliant! Nothing more could be said, the writer has bulldozed the entire pml-n argument.

But still the pml-n touts on this board will find some justification and to them, Khawaja Asif's words are like gospel.

 

[tarrar]

I have lost hope & faith on all the politicians of Pakistan, especially after what had happened recently between PML-N, PTI & some involvement from PML-Q leaders. You all know the story.

Lies, corruption, propaganda, killings etc it is all been done by these corrupt politicians, Pakistan needs a savior in these dark hours & look what these politicians are doing cutting each other's throats & barking at each other.

This country only deserves one thing full Military Rule at least it is at that time they work with some honesty.

 

[Rafael]

Aeronaut, this one is for you my friend:

Khawaja Asif's Trainwreck - By Fahad Hussain.

Khawaja Asif is an honourable man who has done a very dishonourable deed. Desperate measures in desperate times by desperate men usually end up badly. This is what has happened to the blistering but cringe-worthy attack on Imran Khan by the PML-N MNA from Sialkot.

The allegations themselves will slowly fade away into political oblivion, but the wound will not heal so swiftly. Khawaja Asif will find it hard to live down this sorry episode. The attack aimed to maim Imran Khan will leave deeper scars on Mr Asif’s political stature, and affect his own party’s credibility.So what was the good Khawaja thinking?

Pressure makes men do funny things. And pressure is what the PML-N is feeling. In many ways, the party leadership has made a mess of its politics. Flip-flopping on issues, blowing hot then cold against the government, threatening long marches and resignations and then retreating into hibernation, the party which was once seen as the government-in-waiting is now struggling to come up with a viable, coherent and clear message.

In other words, the party is haunted by its own contradictions. What does the PML-N stand for today? Even within the party, many may not have the answer.
Add to this, the woes of performance anxiety in Punjab. Chief Minister Shahbaz Sharif may be the hardest working politician of all, but he has precious little to show for his four-year reign. His men would list out forgettable achievements, but what stands out in public memory are disasters like Sasti Roti scheme. If governance pressures were not bad enough, fissures within the party have ruptured like a wound stitched up by a bad doctor. The very bitter and acrimonious divorce from the Khosas has dented the party more than it is willing to admit.

All is clearly not well in the House that Sharif built.Outfoxed by the wily President, and squeezed within their own backyard by the menacing rise of Imran Khan, the Sharifs have been forced to play on other people’s wicket. Gone are the swagger and the uber-confidence that party stalwarts exuded before the PTI juggernaut rammed into them on October 30 last year. Khawaja Asif epitomised this cocksure attitude that his party men wore on their sleeves.

He’s had reason to. Since the early 1990s Mr Asif has been digging out scams and exposing them in Parliament. In the process, he acquired a reputation of a man in the know of things. With a solid professional background in finance, he knew where to look for irregularities and how to make sense of them. As a backbencher in the parliaments of the 1990s, he was hyperactive and effective, and slowly emerged as a frontline leader for his party. Competent, clean and conscientious, Mr Asif was taken very seriously whenever he spoke on the floor of the House, or in the media. Within the party too, he gradually acquired centre stage and was admitted into the very close Sharif circle. The Musharraf years burnished his credentials even more as a forceful and vocal parliamentarian.

By the time Sharifs returned to Pakistan, Mr Asif had become a heavyweight in Pakistani politics. Always confident - bordering on cocky - he relentlessly pursued corruption cases in the Supreme Court, and won repeatedly. It seemed the man could do no wrong.

Until now. Ever since Imran Khan’s blockbuster rally in Lahore, the PML-N leaders were going around saying PTI was a seasonal phenomenon that would blow over. First they dismissed Khan as an ISI creation, then they condescendingly called him a political flyboy who had peaked too soon, and finally they branded him an ‘Establishment’ child whose popularity would wither away once General Ahmad Shuja Pasha faded from scene. But this public posturing did not hide a growing concern within the party that the Imran threat had been taken too lightly.
He had to be sorted out the traditional way.

And who better to dig up financial dirt than Mr Asif. The objective was clear: hit Imran where it hurts. The logic went like this: if “Mr Clean” can be damaged through allegations of financial impropriety, the very foundations of his politics would start to crumble. Once Imran is perceived as just another politician, he would lose his political sheen and will be forced to play on the traditional wicket. The PML-N had in mind the devastating impact of the Sita White scandal, which the party had hurled at Imran in 1997. The scandal had crippled Imran’s electoral prospects in 1997. If the PML-N could do it then, why not now?

But times change. Situations change. Men change. PML-N did not. Khawaja Asif did not. Now they are paying for this humungous blunder.

The charges framed by Mr Asif against Imran Khan are not just laughable, they betray a poor understanding of how charitable institutions and their endowment funds work. One did not expect Mr Asif to be so shoddy with his homework, and so short-sighted and malicious in his approach. It is now clear that Imran Khan had no say in the decisions made by the board of the fund to make investments. Equally clear is the fact that no corruption or money laundering was involved anywhere. At the worst, some bad investment decisions were made, but this is hardly the stuff that scandals are made of.Khawaja Asif swung blindly, and punched himself in the face.

The fiasco has exposed many. Mr Asif has diminished his own stature and depleted his credibility as someone who knows what he is talking about. His gravitas has shrunk. His party has also confirmed its desperation in face of the PTI threat. In doing so, it has reignited fears that it will stop at nothing to damage its opponents, and that worse may be in store. The PML-N has enveloped itself in a very foul political smell. And finally, Khawaja Asif’s blunder has provided PTI and Imran Khan a higher moral ground, which he and his party are now using with devastating effect to damage Sharifs’ financial standing.

So next time you want to know what it feels like to bite off more than you can chew - and then choke on it - go ask Khawaja Asif!