THE BUSINESS OF POLITICS

by Harish Gupta, National Editor, Lokmat Group

While the Supreme Court has, in its indisputable wisdom, held it unnecessary to probe the mysterious scribbling on confiscated files of Sahara and Aditya Birla Group officials regarding payments made to politicians, the cloud of suspicion will not lift anytime soon. It is largely because that politics in India is fuelled almost entirely by illicit financing from corporate. In the 2013 CBI raid on Hindalco, the ABG company, a set of documents was recovered from the computer of the CEO which read: “Gujarat CM—Rs. 25 crore. 12 paid. 13?” Yet another Income-Tax Department raid in November 2014 on the Noida office of the Sahara Group led to seizure of computer data pointing to distribution of Rs 115 crore to political leaders specifically identified. Rs 40 crores given at Ahmedabad to “Modiji”. Rs 10 crores given to “CM Madhya Pradesh”. Rs 4 crore to “CM of Chattisgarh”. Rs 1 crore to “CM of Delhi” (Shiela Dixit at that time). The attempts by the companies to make these appear to be innocuous business transactions were ludicrous. The Hindalco CEO told investigators all he meant by “Gujarat CM” was “Gujarat Alkalis and Chemicals.” Then what did “C” and “M” stand for? The official had no answer.

Published in LokmatTimes on 17th Jan

The honourable Supreme Court, however, has found these papers to be of “little evidentiary value” as there was no “corroborating evidence”. In the context of Indian politicians, I don’t see how rational it is to expect that politicians would accept illegal payments and issue signed receipts. Nor will the alleged payment show up on the list of assets of the payee. Even if it did, it would not be an easy job for the investigator to access the VIP account book. On the other hand, the practice followed from Jain Hawala case in the 90’s is to let investigators carry on with their job regardless of proof of receipt. In the Jain Hawala case, the court issued “continuousmandamus” to CBI to find evidence for prosecution. It is another thing that the exercise was a blot on the judiciary as everything was done at the instance of the SC and it was thrown into the dustbin by the SC later.

More significantly, to close investigation into such doubtful payments on the ground of their inadmissibility as evidence may weaken the government’s case against, say, the Trinamool Congress (TMC) in West Bengal. The party’s MPs Sudip Bandyopadhyay and Tapas Pal were in CBI custody and now in judicial lock up. Their detention is largely due to jottings in a diary reportedly belonging to Gautam Kundu, owner of Rose Valley Corporation, a Ponzi-scheme firm (much like Sahara) which is alleged to have had collected nearly Rs 20,000 crore by duping the public with promises of unrealistic returns. Until sufficient evidence is obtained to prosecute the MPs, it will not only weaken CBI’s case but add credence to TMC chief and West Bengal chief minister Mamata Banerjee’s charge. It was Ms Banerjee who charged that her party is a victim of witch hunt as she was the first to oppose Prime Minister Narendra Modi’s November 8 decision to scrap 500- and 1000-rupee notes.

Published in LOKMAT on 17th Jan

It is obvious that the ‘great Indian swindle’ of winning elections and extending political influence with corporate slush funds and, increasingly, with money collected from ordinary people by modern avatars of fraudster Charles Ponzi a century ago, is not easy to go. It is linked with a section (29C) in the Representation of the People Act that allows donors under Rs 20,000 to go anonymous. It is not difficult to see that the invisible donors, who contribute nearly 70-80 per cent of the funds of political parties, are channelling either tax-evaded cash of business houses, or it is, as is increasingly evident, a large share of ordinary people’s savings.

Can this evil be fought off by streamlining the election law? The Prime Minister has lent (verbal) support to a move to bring down the limit of ‘anonymous donation’ to political parties from Rs 20,000 to its one-tenth, Rs 2,000. Alternatively, there are suggestions to change the law by making all political donations open to public viewing, as is the practice in most western democracies. It may be a good beginning for cleansing the political system. But is it enough?

Published in Lokmat Samachar on 17th Jan

I doubt it. Electoral politics in India was always expensive due to the country’s size, not to speak of its topographic and cultural diversity. Over the decades, it has been witnessed that mere cost of election campaign is a fraction. On the other hand, it involves coaxing and cajoling pressure groups to stay on board, which is costly. Caste leaders or clan heads need to be kept happy. The hands of support are extended to the highest bidder. Election also involves winning over a sizeable chunk of the bureaucracy. On the election day, a ‘friendly’ police chief or an ‘amiable’ magistrate is worth a thousand ordinary party workers.

It is obvious that the funds required for such a gigantic operation cannot be sourced from nameless ‘well-wishers’. Nor can corporate houses alone bear the cost, as the chief source of their expendable black wealth, is shrinking following trade contraction worldwide. The tax evasion through over-invoicing or under-invoicing is becoming extremely difficult world-wide. The future of political funding will, therefore, rest on Ponzi operations like those of Sahara, Rose Valley or the infamous Saradha Finance, also involving the TMC party. Investigation of Saradha and Rose Valley have shown that their tentacles have spread far and wide—to Haryana, Odisha, Andhra Pradesh, Telangana, Assam and Jharkhand, not to speak of West Bengal. The ordinary Indian has strong saving instincts but few instruments to save. Banks are rare, a stark fact that came to light in the wake of the recent demonetisation. Poor man is dependable on these swindlers in every nook and corner of the country as banks were never for the poor. That makes the common man a prey of fund swindlers, so long as they are ready to share the booty with politicians powerful enough to protect them.