Swiss will not reopen graft probe into Pakistan president

Pakistan's President Asif Ali Zardari, widower of assassinated former Prime Minister Benazir Bhutto, makes a speech during the fifth anniversary of his wife's death, at the Bhutto family mausoleum in Garhi Khuda Bakhsh, near Larkana December 27, 2012.

ISLAMABAD (Reuters) - Swiss authorities will not reopen a corruption probe into the Pakistani president, officials said Sunday, laying to rest a case that cost one Pakistani prime minister his job and inflamed tensions between Pakistan's executive and judiciary.

Switzerland began investigating allegations in the late 1990s that Asif Zardari and his late wife, former prime minister Benazir Bhutto, had taken $12 million in kickbacks from Swiss cargo inspection companies and stashed the money in Swiss accounts.

"They (the Swiss) sent a letter saying he has immunity under international law," said Fawad Chowdhry, a member of the ruling party's legal team. "If they take it up after he leaves it could be time-barred."

Swiss authorities were not immediately available for comment.

The case has fuelled tensions in a long-running standoff between a government that many citizens see as corrupt and lethargic and a judiciary that is often accused of overreach.

In 2007, former military president Pervez Musharraf passed an amnesty law that threw out thousands of corruption cases as part of the preparation for returning to civilian rule. The Supreme Court ruled the law illegal two years later.

The Supreme Court also ruled the previous prime minister, Yusuf Raza Gilani, was in contempt of court in June for refusing to write a letter to the Swiss authorities demanding for the case to be reopened. The court also declared him unfit to be prime minister and disqualified him from the post.

The current prime minister, Raja Pervez Ashraf, wrote the letter in November after being directed to do so by the court.

Many citizens see the long-running saga as a sideshow in a country that suffers from daily power cuts, inflation and attacks from the Taliban insurgency.

But others say many of the country's ills stem from failing to pursue corruption cases that might hold the powerful to account.

Zardari has said corruption cases against him are politically motivated.

(Editing by Alison Williams)