Crucifying Axact Won’t Change Pakistan

S. Mubashir Noor

All of Pakistan now wants a piece of the Axact pie. Altaf Hussain, the Muttahida Qaumi Movement (MQM) leader, demands that company CEO Shoaib Shaikh be tried for treason, while Pakistan’s Interior Minister, Ch. Nisar Ali, rues another ding to the country’s “good image.” Popular opinion suggests that Shaikh be made an example of, but the question is to what end? “Scruples” and “morals” are worthy ideals, but in the poor third-world, money always trumps philosophy. A case in point is Pakistan’s 2007 National Reconciliation Ordinance (NRO). This legislation pardoned, albeit temporarily, a scarcely believable 8000-plus corrupt politicians and bureaucrats. You wonder if there is an honest soul left in the country.

In 2011, the International Cricket Council (ICC) banned three Pakistani cricketers for spot-fixing, in a clear message against corruption. Yet in 2013, two Indian cricketers were indicted and sentenced for the same crime; their lust for wealth obviously exceeding the fear of getting caught. Shoaib Shaikh may be a crook, but he is also a financial genius. If convicted, Pakistan should liquidate his assets, reimburse the victims, and give Shaikh the option to work for the government, or go to jail for a very long time. Casting him into the correctional system willy-nilly would be a gross waste of talent.

There are international precedents should Pakistan choose this route, most obviously in America. Frank Abagnale.Jr, a master forger and impostor, and subject of the Hollywood film Catch Me If You Can, eventually became a Federal Bureau Of Investigation (FBI) consultant. Similarly, the U.S Department of Defense has a long history of hiring hackers to combat their ilk. As recently as March 2015, the Pentagon sought “cyber-security personnel” with “unique skills”: a codename for white-hat hackers. Pakistan has an “informal” economy almost the size of the real one, so a repurposed Shoaib Shaikh adds value in chasing white-collar crime.

Regardless of Axact’s shady nature, you have to admire the singular game-plan. From scratch, Shoaib Shaikh built an empire awe-inspiring in its villainous scope, cloaked in multilayered secrecy, and highly litigious to face down interference. Whether you are peddling a pencil or an airplane, the sales methodology is the same. Creating a multimillion dollar bottom-line takes a lot more than two-bit hustling, it takes real business skills. Also, unlike Bernie Madoff, Shaikh did not have a looting list of rich potential targets to get started.

It is curious that, considering the scale of the allegations, Axact managed to stay off the radar for this long. Part of the answer lies in institutional failure. In a May 20 editorial, the whistle-blowing New York Times (NYT) accused the Pakistan government of willful ignorance. Local commentators were quick to point that the NYT is not God’s word, but it sure felt that way. Within a day of the original story, Pakistan’s red-taped Federal Investigation Agency (FIA)  had mobilized with unseen rapidity to shut down the company offices.

Theoretically, the National Accountability Bureau (NAB) has jurisdiction to tame corporate fraud, or at least will once it stops being a political tool to harass opponents. The Federal Board of Revenue (FBR), and the Securities and Exchange Commission of Pakistan (SECP) have been similarly inept. Going by recent reports, both were aware of Axact’s financial misdeeds, but sat on the evidence until Declan Walsh shamed them into action. With the FBI focused on domestic terrorism, America is happy to let Pakistan do the legwork for now. Forgery and impersonation are both federal crimes, and Axact won’t get a free pass once the legal fog lifts.

The remaining answer lies with the company’s clients and employees. Axact’s use of legal muscularity to shut down criticism is well documented. However, it is inconceivable that a majority of the fake degree holders did not understand the business model. Whether for professional or personal reasons, these individuals willingly took an educational short-cut. Anyone half-serious about learning, and an internet connection, would have immediately spotted the discrepancies. More worrisome is the ignorance of the Axact-affiliated BOL Television staff. Journalistic stalwarts like Kamran Khan and Iftikhar Ahmed have made careers out of uncovering scams, yet they could not smell the con right under their noses?

Nothing screams diligence in an investigation like the FIA using rickshaws to haul away Axact assets. In a recent interview with ARY television, Shoaib Shaikh presented a compelling defense in between mock-hysterics. In short, Axact provided information technology support to the degree-mills, but had no knowledge of how such support featured in their sales practices. It all comes down to Declan Walsh, and fellow NYT reporter Griff Palmer, who made the original connection. If their material evidence is not ironclad, then Axact will chug along on stay orders like every other wrongful enterprise in Pakistan.