KARACHI, Pakistan, 4 June-2014, WSJ: London police arrested powerful Pakistani politician Altaf Hussain on Tuesday for suspected money laundering, a move that sparked panic in his hometown of Karachi and pushed the sprawling metropolis into violent unrest.
Mr. Hussain, a Pakistani-born naturalized U.K. citizen and former Chicago cabdriver, has long lived in self-imposed exile in London and had been the subject of a lengthy British police investigation.
A figure with near-cult following in many parts of Karachi, he heads the Muttahida Qaumi Movement, a political party that dominates Pakistan’s biggest city and represents Muslims who migrated there from what is now India at partition in 1947. The party rejected the money-laundering allegation.
Mr. Hussain couldn’t be reached in custody, and his lawyer in London, Robert Brown, said he was unable to immediately answer questions about the arrest and said he wasn’t planning to issue a statement.
MQM, whose followers have been involved in frequent acts of violence, is part of the government in the southern Sindh province, of which Karachi is the capital, and was an important partner in the previous federal government. An opponent of Islamists, the party traditionally has advocated liberal values and called for friendly ties with the West and India.
Though the MQM appealed for calm as news of the arrest broke Tuesday, Karachi quickly went into lockdown amid sporadic incidents of violence.
Bus companies suspended their operations. Roads quickly became choked with traffic as workers tried to get home early. There was a rush at grocery stores as residents stocked up on essential items. Petrol pumps shut down.
“We can’t get anything in Karachi right now. We might as well be living in a jungle,” said Rashid Aslam, a frustrated motorist in central Karachi, complaining that he couldn’t fuel his car.
The Karachi Stock Exchange lost 786 points, or nearly 3%, within minutes of the first reports of the arrest but later pared its losses.
As the news of Mr. Hussain’s arrest spread, MQM activists began protests in the city. Thousands marched to express their anger.
“It’s part of a Western conspiracy against the MQM, as we don’t toe their line on Karachi,” says one of the protesters, who gave his name as Arshad. Many in the MQM believe a conspiracy theory that claims Western powers are targeting the party to enable them to pursue a peace deal with the Afghan Taliban, which has a significant presence in Karachi.
Three buses were set on fire and several others damaged, witnesses said. Amid incidents of gunfire, mobs attacked passing vehicles. In some parts of Karachi, protesters set up roadblocks with burning tires, locals said. At least three people were seriously injured, police said.
At MQM headquarters in north Karachi, there were emotional scenes, as followers chanted and clapped in a rising crescendo “Only Altaf,” and “Who owns Karachi? Altaf!”
Yet the immediate reaction on the ground in Karachi was far more muted than initially feared, given the street power and ability to generate violence that MQM activists have demonstrated in the past decades.
“We do not support any acts of violence and disown any individuals who may be involved,” said Khawaja Izhar ul Hassan, an MQM provincial lawmaker in Karachi. “Despite our big force and strength, we have channeled our workers’ anger into peaceful protest.”
Amid the unrest, the British consulate in Karachi was closed to the public Tuesday, British diplomats said. A spokesman for the British mission said they “hope to resume a full service again shortly.” The U.S. Consulate in Karachi will be closed for visa interviews Wednesday, U.S.
MQM initially told its members that Mr. Hussain hadn’t been arrested, but only questioned, by British police, a maneuver that blunted the initial response by the party faithful. “You cannot imagine the reaction if they find out he has been arrested,” one senior MQM member said. “No one would be able to control them.”
No charges have been filed against Mr. Hussain. Under the laws of England and Wales, a person can be detained without being charged, usually up to 48 hours, while police investigate further. British police don’t release the names of individuals they have detained before charging them.
In a statement, the London Metropolitan Police said officers had arrested a 60-year-old man on suspicion of money laundering at a residential address in northwest London. Mr. Hussain has long lived in the northwest London neighborhood of Edgware, and other British officials said he was the person referred to by the Metropolitan Police.
In a statement issued hours later, MQM in London said Mr. Hussain “has been taken to the police station where the police doctor will examine his health and decide if Mr. Hussain is fit to be interviewed.”
Mr. Hussain’s activities in London have been under investigation since the murder of a senior MQM politician, Imran Farooq, who had become estranged from the party, on the city’s streets in 2010.
As part of that probe, police have examined allegations of money laundering, too, according to British officials. Mr. Hussain denies any link to the killing of Mr. Farooq, whose murder he condemned.
Officials from Mr. Hussein’s party interviewed in northern London confirmed that police from the U.K. capital’s counterterrorism unit searched both the party offices and Mr. Hussein’s house Tuesday. The police confiscated GBP140,000 ($234,500) in cash from the party offices and GBP240,000 from Mr. Hussein’s residence, according to one party official.
The party officers said the cash was legally acquired via donations from party officials in Pakistan and sent to London, largely via travelers between the two countries. They said they were compelled to operate with cash because of stringent banking regulations for money transfers between Pakistan and the U.K.
Party officials said Mr. Hussein had been admitted to a hospital in London several hours after his detention because he suffers from diabetes and a heart condition.
Other MQM leaders confirmed that an application for bail had been submitted and said they were hopeful Mr. Hussain could be released within hours.
Meanwhile, in Karachi, a massive sit-in continued late Tuesday near the mausoleum of Pakistan’s founder Mohammad Ali Jinnah, close to the city center. Thousands of party workers chanted and clapped as slogans and songs praising Mr. Hussain played on massive loudspeakers. Some openly wept.
Karachi police allege the MQM raises millions of dollars every year through a well-organized extortion system in Karachi, which sees shops and businesses pay protection money to avoid being attacked by party workers. MQM denies any criminal activity.
Mr. Hussain controls the party from London, running it in minute detail, according to party workers, and often delivering fiery speeches to party rallies in Karachi via a telephone link.
Earlier this year, a court in Sindh convicted several men who the judges said were MQM members for the killing of journalist Wali Khan Babar in Karachi.
In recent weeks, Mr. Hussain had applied for a Pakistani passport, according to the MQM and government officials, raising speculation that he planned to leave the U.K., possibly to return to Pakistan or go elsewhere.
The MQM had staged protests over the delay in issuing him the passport and a national identity card. British police arrested Mr. Hussain before he could get a Pakistani passport. Mr. Hussain left Pakistan in 1991, citing threats to his life, and was made a British citizen in 2002. He no longer has a valid Pakistani passport.
Qasim Nauman in Islamabad and Margaret Coker in London contributed to this article.
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