IN recent weeks, PTI’s “foreign funding” case has made a comeback in our political discourse. Opposition parties are relying on the case to question Prime Minister Imran Khan’s patriotism, whereas after years of opposing scrutiny of PTI’s financial records, the PM is now calling for open hearings before the Election Commission of Pakistan to demonstrate the party’s innocence.

Briefly, the “foreign funding” case against the PTI is primarily based on claims that in 2010 and 2013, the party appointed limited liability companies in Texas and California respectively as its agents. These companies were registered under the Unites States Forei­­gn Agents Registration Act (FARA), to fundraise for the PTI, and allegedly collected and transferred 2.3 million US dollars from the United States to PTI Pakistan between 2010 and 2013. It is also alleged a number of foreign nationals made donations to the PTI through these companies. A more general allegation is that the ruling party failed to account for these, as well as other donations, in accordance with law.

Foreign funding case is more than just a legal question

This case has been pending since 2014, when Akbar Sher Babar filed a complaint before the ECP. Notably, the PTI responded to the allegations by challenging ECP’s jurisdiction before the commission as well as the Islamabad High Court on multiple occasions. Among other things, the PTI argued — unsuccessfully — that this matter is a past and closed transaction; the petitioner did not have standing to file the petition; and the case is politically motivated.

The PTI also petitioned to keep ECP’s proceedings secret (which was rejected by the Election Commission) — a plea that is in stark contrast with the party’s calls for a public hearing of the foreign funding case now.

In 2016, Pakistan Muslim League-Nawaz’s Hanif Abbasi also filed a petition before the Supreme Court under Article 184(3) citing similar grounds, calling for the PTI to be declared a foreign-aided party and Mr Khan to be declared unqualified to be a member of the National Assembly. The apex court dismissed the petition in 2018, after finding that the ECP and the federal government were the competent forums to adjudicate on these matters.

The first legal question that arises in this case is what constitutes prohibited funding for political parties.

The relevant law is the Political Parties Order (PPO) 2002, which in 2017 was replaced by the Elections Act. Article 6(3) of the PPO provides: “Any contribution made, directly or indirectly, by any foreign government, multinational or domestically incorporated public or private company, firm, trade or professional association shall be prohibited and the parties may accept contributions and donations only from individuals.”

The ECP, therefore, has to decide whether the funds collected on behalf of the PTI by its agents registered under FARA in the US (which allegedly include donations by foreign nationals) constitute “prohibited” foreign funding.

What happens if the ECP decides that the ruling party received prohibited foreign funding? Article 6(4) of the PPO, as well as Rule 6 of the PPO Rules, provide that such funds shall be confiscated. No other penalties are expressly provided under the PPO; however, depending on the nature of violations found by the ECP, cause for legal action under other laws in the country could potentially arise.

The next question that arises is that if the PTI is found guilty of receiving prohibited foreign funds, does it be­come a “foreign-aided political party”?

Article 2 of the PPO defines “foreign-aided political party” to include a party that “receives any aid, financial or otherwise, from any government or political party of a foreign country, or any portion of its funds from foreign nationals” (emphasis added).

Notably, this definition includes receiving “a portion of funds from foreign nationals”, which is not mentioned in Article 6(3) of the PPO that defines prohibited funding.

Article 15 of the PPO, which lays down the procedure to declare a party “foreign-aided”, provides that where the federal government is satisfied a “political party is a foreign-aided party”, it shall make such a declaration and within 15 days refer the matter to the apex court. If the court upholds the declaration, such party shall stand dissolved.

It is clear, therefore, that the procedure for declaring a party foreign-aided and its dissolution entails a number of steps — the ECP is not the competent authority to make such an order, even if it finds a party has received prohibited foreign funding.

Opposition parties should also be cautious in calling for a political party to be declared “foreign-aided” and dissolved without any evidence that it is acting in a manner prejudicial to the sovereignty and integrity of Pakistan. The threshold to declare a party foreign-aided is and must remain very high. As stated by the Supreme Court in the Hanif Abbasi case, a finding by the ECP that foreign nationals have made donations to a party on its own does not meet this threshold.

Another question that arises from this case is whether PM Khan would cease to be “honest and ameen” under Article 62(1)(f) of the Constitution if the ECP finds the PTI had received foreign funding, given that as head of the party, he issued certificates pledging that the PTI received no funds from any source prohibited under the law.

Supreme Court’s interpretation of Article 62(1)(f) has been arbitrary and inconsistent, which makes it difficult to predict how such a plea would be decided. However, given the dangers inherent in the SC disqualifying members of parliament on vague and subjective grounds and making declarations about their honesty, such a provision should be construed narrowly. It is time laws such as Article 62(1)(f) are repealed or read down — not given more teeth.

It appears that the legal consequences of an adverse finding by the ECP might not be as dire for the PTI as is being made out. However, this case should not be seen from a myopic legal lens alone. The fact that the PTI refused scrutiny of its financial records for six years raises many questions, and even without a decision against it, is already an indictment for the ruling party’s claims of transparency and accountability.

The writer is a lawyer

Published in Dawn, January 27th, 2021