Money as power

The use of black money dominates discussions surrounding the Assembly elections.

in New Delhi

CAMPAIGN issues that dominate the April-May elections to the Assemblies in the States of West Bengal, Assam, Tamil Nadu and Kerala and the Union Territory of Puducherry are essentially regional, but one issue that is common to the country's social, political and judicial realms is the impact and influence of illegal money in the national polity and the inability of the mainstream parties, especially the Congress, to address it.

Developments in varied fora, including the judiciary and investigative agencies such as the Enforcement Directorate (E.D.) and the Central Bureau of Investigation (CBI) have intensified the debate on illegal money. Many incidents directly related to the elections, such as the selection process of candidates and the manner in which campaigns are being organised have also come into focus in this connection. Several political parties and leaders, including Prime Minister Manmohan Singh, have figured prominently in this debate.

Questions were raised in Parliament following the exposure of WikiLeaks cables in The Hindu that Lok Sabha members were paid cash to vote in favour of the United Progressive Alliance (UPA) government in 2009 when it faced a confidence motion in its first term. Many of the Prime Minister's responses in Parliament and outside brought to the fore the question of the political leadership's role in addressing the issue.

The WikiLeaks exposure recorded an instance where a Congress functionary apparently showed a United States diplomat stacks of currency notes meant to be distributed among pliable MPs in order to gain their votes during the confidence test. The Prime Minister's initial reactions to these revelations, including the famous remark that he had not authorised anybody to purchase votes invited ridicule from the opposition parties and political observers.

The expose naturally triggered demands for a debate in Parliament from the opposition. The UPA and its leader, the Congress, sought to stall the debate for sometime, but ultimately it had to give in. The Parliament debate, including the Prime Minister's uncharacteristically strong defence of himself, his government and the party highlighted how far illegal money had penetrated the political system.

It is the same point that has been underscored by the ongoing investigation into black-money deals worth some Rs.36,000 crore (approximately $8 billion) and massive tax evasions involving Pune-based businessman Hasan Ali over two decades (story on page 41). The investigation, pursued mainly by the E.D., is the result of a Supreme Court directive on a public interest litigation (PIL) petition filed by the eminent lawyer Ram Jethmalini. A Supreme Court Bench comprising Justices B. Sudershan Reddy and S.S. Nijjar has been monitoring the investigations from time to time. It has stated in no uncertain terms that it is not happy with the vague progress reports that the investigating agency has filed in the case so far and has directed it to come up with more concrete reports in the second week of April. The Supreme Court pointed out that his arrest and interrogation have not resulted in a full-fledged investigation.

But even the vague reports of the investigating agencies present a shocking picture of the reach and spread of illegal money in the polity. According to the reported revelation made by Ali, scores of politicians at the national level and in different States had employed his services to launder ill-begotten wealth. Through his services, black money was routed to safe havens abroad and then back into the country using diverse methods. The beneficiaries of Ali's services apparently included three former Chief Ministers of Maharashtra and one Chief Minister of Andhra Pradesh. Several Ministers at the Centre and in States such as Tamil Nadu, Uttar Pradesh, Bihar, Kerala and Haryana were also apparently part of his racket.

The investigation has also revealed Ali's connections with many senior bureaucrats, including some who have retired, in several States. The bureaucrats who benefited from his transactions reportedly include three former Chief Secretaries of Maharashtra and some officials who have been named in the Adarsh Housing Society scam. Ali reportedly told the investigators that several personalities in the fields of cinema and sports, including actors, directors and cricket stars, had entrusted considerable amounts to him for money-laundering purposes.

The direct connection between elections and the use of black money has once again been underscored by Ali's reported revelations. According to the investigators, he routed cash for both the ruling party and the opposition in Andhra Pradesh in almost all elections in the past 15 years. Different parties had been in power during this period, and the total amount involved in these elections is apparently over Rs.1,000 crore. One political party alone apparently brought back to the country and to Andhra Pradesh approximately Rs.200 crore through his network in the 2009 general election. The revelations also suggest that the government's tracking of Ali's manifold operations may have had an impact in clinching some political deals. By all indications, an important beneficiary of Ali's operations was a south Indian film star-turned politician.

In the context of these revelations, two election-related happenings and their money connection have become points of discussion in Kerala and West Bengal. The decision of Congress leaders Ramesh Chennithala and Oommen Chandy to use helicopters for campaigning in Kerala generated a debate in the State. The question as to why choppers should be used in a relatively small State like Kerala was brought up by the Left Democratic Front led by the Communist Party of India (Marxist). The force of the campaign was such that the Congress leadership has been forced to take a step back on the use of choppers.

More revealingly, K.D. Singh, Trinamool Congress MP, was stopped at an airport with cash amounting to Rs.57 lakh even as electioneering was on in West Bengal. The Left parties in West Bengal alleged a connection between this money and its illegal use in the elections. The parties have also approached the Election Commission of India to inquire into the activities of K.D. Singh. The latter had stated that the money was legitimately drawn from a bank for his own business purposes. Whatever the merits of this argument, there is little doubt that the incident has added to the debate on the use of illegal money in elections.