While Benazir Bhutto hated the 
generals for executing her father, Nawaz Sharif early on figured out that they 
held the real power in Pakistan. His father had established a foundry in 1939 
and, together with six brothers, had struggled for years only to see their 
business nationalized by Ali Bhutto’s regime in 1972. This sealed decades of 
enmity between the Bhuttos and the Sharifs. Following the military coup and 
General Zia’s assumption of power, the business—Ittefaq—was returned to family 
hands in 1980.Nawaz Sharif became a director and cultivated relations with 
senior military officers. This led to his appointment as finance minister of 
Punjab and then election as chief minister of this most populous province in 
1985. During the 1980s and early 1990s, given Sharif ’s political control of 
Punjab and eventual prime ministership of the country, Ittefaq Industries grew 
from its original single foundry into 30 businesses producing steel, sugar, 
paper, and textiles, with combined revenues of $400 million, making it one of 
the biggest private conglomerates in the nation. As in many other countries, 
when you control the political realm, you can get anything you want in the 
economic realm.
With Lahore, the capital of Punjab, serving as the seat of the family’s power, 
one of the first things Sharif did upon becoming prime minister in 1990 was 
build his long-dreamed-of superhighway from there to the capital,Islamabad. 
Estimated to cost 8.5 billion rupees, the project went through two biddings. 
Daewoo of Korea, strengthening its proposals with midnight meetings, was the 
highest bidder both times, so obviously it won the contract and delivered the 
job at well over 20 billion rupees.
A new highway needs new cars. Sharif authorized importation of 50,000 vehicles 
duty free, reportedly costing the government $700 million in lost customs 
duties. Banks were forced to make loans for vehicle purchases to would-be taxi 
cab drivers upon receipt of a 10 percent deposit.Borrowers got their “Nawaz 
Sharif cabs,” and some 60 percent of them promptly defaulted. This left the 
banks with $500 million or so in unpaid loans. Vehicle dealers reportedly made a 
killing and expressed their appreciation in expected ways. Under Sharif, unpaid 
bank loans and massive tax evasion remained the favorite ways to get rich. Upon 
his loss of power the usurping government published a list of 322 of the largest 
loan defaulters, representing almost $3 billion out of $4 billion owed to banks. 
Sharif and his family were tagged for $60 million. The Ittefaq Group went 
bankrupt in 1993 when Sharif lost his premiership the first time. By then only 
three units in the group were operational, and loan defaults of the remaining 
companies totaled some 5.7 billion rupees, more than $100 million.
Like Bhutto, offshore companies have been linked to Sharif, three in the British 
Virgin Islands by the names of Nescoll, Nielson, and Shamrock and another in the 
Channel Islands known as Chandron Jersey Pvt. Ltd. Some of these entities 
allegedly were used to facilitate purchase of four rather grand flats on Park 
Lane in London, at various times occupied by Sharif family members. Reportedly, 
payment transfers were made to Banque Paribas en Suisse, which then instructed 
Sharif ’s offshore companies Nescoll and Nielson to purchase the four luxury 
suites.
In her second term, Benazir Bhutto had Pakistan’s Federal Investigating Agency 
begin a probe into the financial affairs of Nawaz Sharif and his family. The 
probe was headed by Rehman Malik, deputy director general of the agency. Malik 
had fortified his reputation earlier by aiding in the arrest of Ramzi Yousef, 
mastermind of the 1993 World Trade Center bombing. During Sharif ’s second term, 
the draft report of the investigation was suppressed, Malik was jailed for a 
year, and later reportedly survived an assassination attempt, after which he 
fled to London. The Malik report, five years in the making, was released in 
1998, with explosive revelations:
The records, including government documents, signed affidavits from Pakistani 
officials, bank files and property records, detail deals that Mr. Malik says 
benefited Mr. Sharif, his family and his political associates:
At least $160 million pocketed from a contract to build a highway from Lahore, 
his home town, to Islamabad, the nation’s capital.
At least $140 million in unsecured loans from Pakistan’s state banks.
More than $60 million generated from government rebates on sugar exported by 
millscontrolled by Mr. Sharif and his business associates.
At least $58 million skimmed from inflated prices paid for imported wheat from 
the United States and Canada. In the wheat deal, Mr. Sharif ’s government paid 
prices far above market value to a private company owned by a close associate of 
his in Washington, the records show. Falsely inflated invoices for the wheat 
generated tens of millions of dollars in cash.
The report went on to state that “The extent and magnitude of this corruption is 
so staggering that it has put the very integrity of the country at stake.” In an 
interview, Malik added: “No other leader of Pakistan has taken that much money 
from the banks. There is no rule of law in Pakistan. It doesn’t exist.”
What brought Sharif down in his second term was his attempt to acquire virtually 
dictatorial powers. In 1997 he rammed a bill through his compliant parliament 
requiring legislators to vote as their party leaders directed. In 1998 he 
introduced a bill to impose Sharia law (Muslim religious law) across Pakistan, 
with himself empowered to issue unilateral directives in the name of Islam. In 
1999 he sought to sideline the army by replacing Chief of Staff Pervez Musharraf 
with a more pliable crony. He forgot the lessons he had learned in the 1980s: 
The army controls Pakistan and politicians are a nuisance. As Musharraf was 
returning from Sri Lanka, Sharif tried to sack him in midair and deny the 
Pakistan International Airways flight with 200 civilians on board landing rights 
in Karachi. Musharraf radioed from the aircraft through Dubai to his commander 
in Karachi, ordering him to seize the airport control tower, accomplished as the 
plane descended almost out of fuel. Musharraf turned the tables and completed 
his coup, and Sharif was jailed.
But Sharif had little to fear. This, after all, is Pakistan. Musharraf needed to 
consolidate his power with the generals, and Sharif knew details about the 
corruption of most of the brass. Obviously, it is better to tread lightly around 
the edges of your peer group’s own thievery. So Musharraf had Sharif probed, 
tried, convicted, and sentenced to life in prison, but then in 2000 exiled him 
to Saudi Arabia.Twenty-two containers of carpets and furniture followed, and, of 
course, his foreign accounts remained mostly intact. Ensconced in a glittering 
palace in Jeddah, he is described as looking “corpulent” amidst “opulent” 
surroundings. Reportedly, he and Benazir Bhutto even have an occasional 
telephone conversation, perhaps together lamenting how unfair life has become.