lar ri F. Oe, ‘ MR ON————_____—___— may 18, 1998 ASIA PAKISTAN: The Heat Is On 20 Mounting evidence that her husband may have siphoned millions into Swiss bank accounts and consorted with drug dealers casts a dark cloud over Benazir Bhutto's future ‘Oh, Come Ont”: Zardari dismisses his accusers 24 ECONOMY: A Second Shock 26 Heavy debts and political instability combine to deepen Asia’s crisis, which will likely get much worse before it gets better VIEWPOINT: Show Me the Money 29 Rajeev Malik says the trouble began with too much cash ‘THE WORLD BRITAIN: Tony the Tiker 30 After a stunningly successful first year in office, Prime Minister Tony Blair has become a model for Western leaders ‘SOUTH PACIFIC: A Potent Brew 33 ant Kirin gobbles up a New Zealand brewer Japanese beer BUSINESS AUTOS: Dynamic Duo 34 The mega-merger of American stalwart Chrysler and Germany's high-end Daimler-Benz may herald a new wave of TECHNOLOGY: Great Expectations. 38 Apple stakes its future on the colorful, odd-looking iMac ‘SPECIAL REPORT HEALTH: Hope Springs Eternal 40 rhe hype that first greeted news of a potential cure for cancer has yielded to more realistic expectations. A look at what to believe about the new treatments, and an explanation of the science behind them Tough Virtue: Clinical trials dem Little Helpers: Mice p Molecular Revolution: Knowing how cancer cells multiply may nd patience 44 y @ crucial role in research. 46 Tead to new treatments 48 MEDICINE: Asia's Deadly Bug st The region's economic ills amplify dengue fever's ability to Kill THE ARTS TELEVISION: Despi Seinfeld will not me all of the fuss, the end of the sitcom he end of the world 52 THEATER: After along lll, Beijing experiences a boom in stage productions 61 LerreRs 6 NOTEBOOK. ° TECHWATCH 18 MILESTONES 18 PEOPLE 62 Is There a Cure Out There? New discoveries promise hope in the battle against cancer cells like these (see SPECIAL REPORT Hunting Season: Pakistan steps up efforts to bring corrupt charges against Benazir Bhutto and her husband (see ASIs Pakistan playing fair in its relentless pursuit of the former Prime Minister, her husband and their wealth? BY TIM McGIRK ISLAMABADUNDER SIEGE: Benazir Bhutto inna Karachi jal let; Pakistan [Accoumntabity Bareau chairman Ssitur Rehman, right, stacking up the evidence against ther eestandards. She came down to amor and ultimately o immorality” ‘The stolen documents spparently i dicate that Zardari moved millions of dol lars out of Pakistan, one of the poorest ‘countries in Asia, and stashed the money in bank accounts in Switzerland, Britain and the US. Investigators told’ Tix that through 19 shell companies in the British Virgin Islands and other offshore havens such as Panama and the Isle of Man, Zardari owned eight properties in Britain, including several of London's poshest | addresses and the 13I-hectare Rockwood estate in Surrey. (Locals say that when Zardari couldn't buy the Dog and Pheasant pub nearby he had workmen build a replica inside his mansion.) His firms also bought 'svo properties in Belgium and another two in France. (One of the French pur chases was the aptly named Manor of the White Queen.) All of this was apparently done while Pakistan was sliding deeper {nto international debt. Enough evidence of corruption and ‘money-laundering has been collected the Pakistanis to persuade Swiss authorities to freeze 17 bank accounts belonging to the Bhuttos and their partners Stung by recent accusations that its banks were hoarding funds the Nazis had stolen from Jews, Switzerland's courts have moved swiftly this time in granting judicial assistance to | Pakistan, Magistrate Daniel Devaud says that’ within a few weeks he will bring charges against several Bhutto associates “implicated in either the laundering of ‘l-gotten gains or corrupt practices” In Briain, too, authorities are now investigating Pakistani allegations that Zardari may have laundered drug money there ‘The Accountability Bureau, a new entity set up last year by the Prime Minister to investigate political corruption, alleges that Zardari plundered government funds, raked in kickbacks on aireraf and subma- tine deals, and scooped commissions off the import of everything from fertilizer to gold. Investigator Afzal also told Tie that five drug barons all extradited to the US., have confessed that Zardari was involved in narcoties. Bhutto insists her husband is “honorable” and denies the accusations. “I hhave no ill-gotten money.” she insists. “They're doing this to discredit me. The | ‘Swiss and the British have been lied to. 1 Gidn't siphon off state funds” Asked by Tine fhe had stolen $1.5 billion, as inves- | tigators claim, Zardari replied with exas- peration: “Ob, come on!” thas been a couple of weeks since she last visited her husband. Friends and party ‘workers, cowed at times by Bhutto's {queenly hauteur, never cease to be stunned by her metamorphosis into a meek and subservient wife around her husband. In traditional Pakistani style, theirs was’ an arranged marriage. Zardari father, Hakim Ali, was a small-time politician in the Pakistan People’s Party who owned some farmland and a movie theater in Karachi. The Bhuttos were rich and pow- erful feudal landlords who educated their daughter at Harvard and Oxford. One old family friend says, “Even Hakim li Zardari could not think of his son marrying Benazir” But his wife could. According to family friends, she convinced Benazit’s ‘mother that her handsome, mustachioed son was a safe match, who would not en: danger Bhutto's political rie. Zardari hardly Viewed himselfasa passive spouse, however, | Recalls his old polo instructor, Fagir Syed | Aitzazuddin: “He used to tell everyon: “Let me marry Benazir and then see who I'l De in six months" Servingas unofficial adviser in Bhuttas firstgovernment and as Investment Minister inher second one, Zardari moved in many | TIME, MAY, 1086 directions. Investigators say “ through “covert partnerships.” Zardari allegedly diverted tax revenucs, took ‘commission on big government purchases of foreign equipment and skimmed funds from power-project deals, commodity ‘operations and defense contracts, “When Benazir was in power, everything went through Zardari” says a Western arms dealer involved in several sales to Pakistan, Marvels an official at the Accountability Bureau “These people wero just phindering. ‘Why did they need so much money? Investigators say the breakthrough in their search for the missing millions eame from Geneva, There, copies of confidential bank statements were obtained from Jens Schlegelmilch, a lawyer and friend of the Bhutto family: Pakistanis are allowed to have foreign bank deposits, but what con- ‘cemed investigators were the huge sums of ‘money flowing through Zardaris alleged accounts. Schlegelmilch insists these docu- rments=which reveal that he set up off- POSTIPS SSrp us eeeresessaerreshore accounts and handled financial af- fairs for the Bhutto family-were stolen from his office; oddly, he never called police about the theft, Zardari’s name surfaces repeatedly in this trove of files, and Bhuttos initials appear once. (Bhutto claims that certain documents used by the Account- ability Bureau are forged.) Distrustful of computer bookkeeping, Schlegelmileh kept his accounts in a hand-written ledger. Bhutto may face a tough grilling by authori ties over one account in particular: that of Bomer Finance Inc, an offshore company run by Zardari in which the lawyer records “50% AAZ-50% BB” If “AAZ” stands for Asif Ali Zardari and “BB” means Benazir Bhutto, this suggests thatthe former Prime Ministor may also have been an equal partner. Among other things, Bomer Finance may have been the source of Zardar’s spending money; a $159,516 payment was made from the finns Swiss account, No, 552543 U.K. of Union Bank of Switzerland (Us),on (Oct. 13,1994 to British jeweler 2) that the ‘The Geneva lawyer emerges as a k re in one of the strongest cases against the Bhutto family. During the former Prime Minister's second term, it was dis covered that the state was losing money through the sloppy collection of customs revenue. A S131 million contract was awarded, without any international bidding, | to two Swiss inspection firms, the Société inérale de Surveillance (Scs) and its subsidiary Cotecna Inspection S.A. Robert Massey, then managing director of Cotecna, made no secret of his willingness to pay a commission. In a June 29, 1994 letter to a Zardari shell company, Massey writes Should we receive, within six months from today, a contract ... we will pay you 6% on the total amount invoiced and paid tous...” On the same date, Massey then wrote to Nassam Overseas Ine, an offshore ‘company managed by Schlegelmilch and linked to Zardani, promising that payment | for the Pakistani customs contract would | | be wired to the firm's Swiss account. The Accountability Bureau claims that on June 12, 1995, $100,803 was paid into this off- shore company’s account, Despite warnings from Bhutto’ finance adviser, VA. Jafarey, tate exchequer would sustain losses, the deal went ahead Investigators also are examining the possibility that Zardari: may have lau dered his money through a Pakistani gold ealer based in Dubai. A senior official from the Accountability Bureau alleges that dealer Abdul Razzak Yaqub was granted a monopoly on gold imports to Pakistan in exchange for allowing his firm, Any ‘Traders, to be used as a conduit for Zarda’s money flow. Investigators are Tooking into the possibilty that any Traders was awarded this lucrative import licen as part of a money-laundering operation ‘Again, Schlegelmilch is apparently involved. Records show two money tran fers: $10 million from any Traders to Capricorn ‘Trading, another offshore ac: ‘count linked to Zardari, and $8 million to 4 Capricorn aecount with Citibank in Dubai. Schlegelmilch then wrote request ing Citibank Dubai to move the $8 milion into Capricorn’s Swiss Citibank account. Bhutto dismissed accusations that her husband juggled illegal money through different accounts as *a wild and ridicw Tous allegation." Trader Yaqub also denies the bureau's charges. ‘The Accountability Bureau is pursuing possible links between Zardari and Pak: Istani drug traffickers. “He was always involved in drugs,” says the bureau's cha man Saifur Rehman of Zardari. The gov ‘emament knows only too well how explosive drug charges could be and are doing what ‘ever possible to exploit the possibility. No ‘concrete evidence has been unearthed of ‘Zarda’ involvement in drug running, but he is singled out in confessions made by several major Pakistani narcoties traffickers currently in U.S. prisons. Skeptics. scoff that the drug lords would say anything to lessen their long jail stretches, but Islam bad investigators insist these Pakistanis ‘were wamed by US. lawyers that there was no hope of redueing their sentences no matter what they disclosed. Affidavits by a convicted heroin smug: ler have been shown to Time, A one-time Supporter of Bhutto’ party, Sadruddin Ganji was a prominent businessman who ‘owned large shares in several Karachi hotels. Facing financial difficulties in the early 1980s, Ganji claims he was coaxed by Mushiaq Malik, a Pakistani narcotics smuggler known as the “Black Prince,’ to carry four bags containing $2 kx of heroin to London, Malik was also a money-laun: dering associate of Zardari’, according to Ganji, When he balked,“Ihave no ill-gotten money. They're ‘Zardaritold me Mushtaq was his partner in | “I was told that Asif Zardari would legalize | for & price of nearly $1 million he would all activities and that I should not hesitate | our drug money and invest it in the sugar | ensure that Pakistani criminal eases against nthe least, and he offered me all kinds of | business. [agreed othe proposaland began | him would be dropped. The Afridi clan told protection” from the law drug ventures with Fawzi [Ali Kazmi, an | Tiste they paid Iqbal $650,000 and wait Inthe end, Ganjis nerve failed him. He | alleged drugdealer]and Asifasmy partners. | Zardari had reportedly passed on. the ended up planting the drugs in the luggage | We continued doingbusiness until January | message to Afridi that all court cases ofan innocent Pakistani family. They were | 1985, From 1981 to 1985 we sent morethan | against him would stop within two months caught by Frankfurt authorities-who also 600 kx of heroin and about five tons of | They didn’. By 1995, Afridi had no option arrested Ganji. He was sentenced to 13 | hashish to various countries around the | buttoturn himselfin to U.S. oficials, hoping ment. Paroled in 1988, | world. .. [Kazmi] told me that we were | that his sentence might be lightened. “We Ganji never forgive Zardari. His yenom | going to become very rich because of Asif | were becoming frustrated,” says Babu rises in Accountability Bureau transcripts. | Zardari’s marriage to the future Prime | Khan, one of Afridis nephews. The Aftidis Says Ganji: "He has pleasant manners but | Minister of Pakistan: then again contacted Zardari brother-in is obsessed with money and power at any | Zardari did't hesitate offering his | law, who promised immediate action~-but cost and is undoubtedly ruthless beyond | wife's influence to help big-time drug trf- | only when the balance ofthe $1 million was imagination fickers, investigators say. US. drug agents | paid, The Afridi grew suspicious. "We said The “Black Prince,” who was extradited | were determined to extradite an alleged | ‘0.K°and asked him to come to Landikotal to the WS. explained how he first met | trafficker named Haji Ayub Afridi, who | [in Pakistan's tribal areas). Then we took Zardari in 1982, four years before he mar- | lived in a walled mansion in the Khyber | him hostage, This is our custom for setting nied Bhutto. In an unsigned statement | Pass, Clan members allege that Zardari, | property disputes; shrugs Khan. Iqbal was writen to the Accountability Bureau from | through his brother-in-law Iqbal Habib, | seized in 1994 but, as Khan says, “The a Massachussetts federal prison, he wrote: | approached the dealer with a proposition: | strange thing is, nobody has asked for him _ “They Said, ‘We'll Hang You if You Stand for Elections” Shackled and hustled along by police, Asi Ali) rw longi Nas Shr peur on wrfany Zardari appeared at a Karachi court hearing last | continue? month on charges that he was responsible for the | Zarda: Ithappens everytime theyre in power. This is ome- 1996 murder of his oe wife's brother, politi- 2 me: But why is that you cian Mir Murtaza ee Bhutto, Outside. the reel yur ein ea courtroom, Zardari ‘cerned, iis nobody’s business pike wit haa FS atall Why should I tell them? porter Ghulam Hasnain: . «aie oatseron at TIME: Has Pakistani account, who does not have Prime Minister Naw property abroad, Sharif offered you an Benazir Bhutto any deal in return for your freedom? Zardari: That offers there A blank check. Leave [ country} and you'll be all right, Ifyou don't, well do what we ean against you, Last time they said, "Well hang you if you stand for | elections” They ke ng this, but we're not in terested. Why should we give up? We have to live land die here Time: The Pakistani govern rment’s investigators claim that you have hoarded bi lions of dollars. Zardari: Oh, come on! TIME: Have these accusations put much ofa sirain on your Zardart: No. We are both ma: ture people. We understand that everybody has got to take things on his owm shoulders and hack itore t . ig t di li t ” | fied» Keeping complain sae the Afridis. Forgotten. in captivity, Iqbal has ‘grown a beard and "become a good Muslim,” Says Khan. Farooq Naek, Zardari lawyer, | denies all these drug charges. Says Nack: “He is not involved in drugs. These are cooked-p accusations. It was the govem= ment of Benazir Bhutto which extra- dited these drug barons” ‘The only case in which an arrest ‘warrant has been issued for Bhutto involves the illegal appointment of 1,600 Pakistan “International Ais lines employees. But even though the warrant was issued, no one ‘ever presented it to her. Bhutto found herself in the odd position last month ofhaving to plead with the Sindh High Court to be isin power does its best to make lif hel for the opposition. Nawaz Sharif is earrying on that tradition with a vengeance against | Bhutto, probably because she had done it to him. In Islamabad, diplomats, politicians and. journalists express. disappointment and constemmation over the one-sidedness of the Accountability Bureau, which is tar geting only Bhutto's family and asso- ites and not poli ie NSTON secu, ah. ace cee saan eae SET Sea 0 an "Savy immediately 50 that she could -r+., getan early hearing, This casei ‘not likely to make her look bad. ‘The way many Pakistanis see it, doling out jobs to friends ie and supporters isa perquisite “ ‘of power, “That was giving people jobs.” she says em- phatically, “not financial im- propriety. Ibis nota erime: Yet, for all her denials sayy rae as NEA, af wrongdoing, some ob- Nair servers believe Bhutto 2 po may have harmed her Semone ‘own credibility by refus- ing to specify which Pak istani government cases against her and her hus- band might be false, Nor has she consistent ly denied her hus- band’s involvement in, these foreign ac ‘counts and companies. The ac- esations, she ays, are a ploy to drive her ‘out of politics, and she doesn't want a me- | from ia trial” During a court appearance in | parties. Karachi, Zardari told TOME that Nawaz | pointed an old friend, Senator Saify Sharif'scohortshad offered torelease him | Rehman, to oversee the investigative teamn and has armed him with new ant corruption Isws to nail the Bhuttos Nawaz Sharif declined Time's request for an interview. Along the way, corruption cases against | members of the ruling Pakistan Muslim | League—and there are myriad such eases were conveniently ignored by the bureau. Im one instance, Nawaz Sharif is accused ithe could persuade Bhutto ta leave Pak- isan for good. "That offers there. A blank cheek. But We're not interested Why should we ive up?” asks Zarda attired in fresh clothes that are brought | ty servants, starched and ironed, every morning to his prison ell from bome The one constant in Pakistan's tum twous poles hasbeen that whatever party TIME Mav 8.195 by Bhutto’ party of accepting an illegal payment of $90,000 for his 1990 election ceamapaign from a military chief who wanted to keep Bhutto from election victory. As Prime Minister, Nawaz. Sharif aso lifted import duties on serap metal this benefited his family’s foundries but killed off the country’s sizable shipbreaking industry, patting 50,000 people out of work. The Inquiry team's methods have also been crit icized; the Human Rights Commission of Pakistan reported that torture has been used 0 ensure cooperation against Bhutto. senior bureauerat associated with Bhutto, Riffat Askari, reportedly died of a heart attack while in custody. ‘So why does Bhutio stand by her man? Some Pakistani and Western news: Papers have suggest- ed that Zardari may have tried to take a second, younger wife, without bothering to tell Bhutto. “If the mar- riage is functioning, because of Benazir” cor fides one of her Karachi friends. “Being a Muslim and a Pakistani woman politician, she ear't afford the stigma of divorce” Oth- ers argue that the stigma of boeing attached toa man fac ing serious accusations of crime is probably worse, and they advise Bhutto to save her political eareer by leaving Zardari. She will hear none of it. “To jettison your spouse goes against my sense of moral val ues,” she says. “I don't want or need the power” Once inside thejail, Bhutto is led to a large room where she is allowed to sit and talk with her hhusband_ without bars between them. “They discuss Zardaris health (his three daily meals are brought from home) and how their three chiléren are faring in Dubs, where Bhutto has sent them for sa ty. The couple assume that the guards hovering nearby are reporting. theit ‘conversations back to Nawaz Sharif’ advisers. Her brief prison visit ov Bhutto returns to her eat. “They may im. prison me. I've had to come to terms with that,” Bhutto says. “Nobody around us is safe?” Inspirational music’ may lit her ‘mood a bit, but Bhutto still has plenty to ‘worry about tomorrow. —With reporting by ‘Hannah BlochIslamabad, Ghulom Hasnain’ Karachi, Robert Kroon/Genevs, Kate NoblelLon- don, Tala Shari” Paris and. Rahimuoh Yesuteai Peshawar