JHARKHAND may be lagging behind in many areas of governance and development, but we are ahead of most other States in one thing, political and bureaucratic corruption, Stephen Marandi, former Deputy Chief Minister of Jharkhand, used to make this statement often, referring to many of his political colleagues and officers who run the government.
Marandis comment used to draw appreciation from those who viewed the States politics objectively. It is also widely accepted within the States political circles that he does have the moral and political authority to make such a comment. He was perhaps the only non-controversial member of two controversial Ministries one led by independent Madhu Koda between September 18, 2006, and August 27, 2008, and the other headed by Jharkhand Mukthi Morcha (JMM) chief Shibu Soren between August 27, 2008, and January 18, 2009. He was Deputy Chief Minister in both. Marandi used to refer to Kodas name in the context of his statement on corruption.
It took a year and a half after Kodas departure from office and an investigation by the income tax (I.T.) authorities and the Enforcement Directorate (E.D.) to understand the independent legislator-turned-Chief Minister had indeed operated on a scale unmatched by any other leader in the State.
According to estimates doing the rounds, Koda and his associates allegedly amassed approximately Rs.4,000 crore in his 23-month tenure as Chief Minister and laundered it using various means during this term and the period following his ouster from office. It was during an E.D. investigation into an aide of former Governor Syed Sibte Razi that the agencies stumbled on Kodas money matters.
According to investigating officials in the E.D. and the I.T. Department, Koda had amassed a large portion of the money by facilitating mining contracts for iron ore and coal. On the face of it, this was done by signing 26 Memorandums of Understanding (MoUs) and by giving recommendations, on the basis of ministerial discretion, to an equal number of applications seeking mining leases for iron ore and coal. Clearances from several Ministries are normally required for granting mining leases, but the Chief Minister and, in some cases, the Minister for Mines, had discriminatory powers to recommend that an institution or an individual could be granted a mining lease.
No Chief Minister of erstwhile Bihar (of which Jharkhand was a part until November 2000) or Jharkhand itself is known to have used these discriminatory powers as rampantly as Koda did. In the process, he allegedly charged a certain fee for signing the MoUs and making the recommendations.
Sources among the investigating officials told Frontline that Koda had charged Rs.2 crore to Rs.20 crore for signing an MoU, depending on the quantum of coal or iron ore that the respective mine would have produced. The recommendations were sold at a price of Rs.30 crore to Rs.80 crore, again depending on the produce of a particular mine. The officials point out that Koda did not handle cash directly, but got the money deposited directly or through some of his accomplices in a Mumbai-based finance company or with hawala operators.
Kodas associates in this included small-time businessmen such as Vinod Kumar Sinha and his brothers Vikas Sinha and Sunil Sinha, based in Chaibasa (Kodas constituency), and businessmen brothers Sanjay Choudhary and Dhananjay Choudhary based in Jamshedpur. The I.T. and E.D. have also listed his former Cabinet colleagues Bandhu Tirkey, Bhanu Pratap Shahi, and Kamlesh Singh as accomplices in the scam. Tirkey was an independent MLA like Koda, while Shahi belonged to the Forward Bloc and Kamlesh Singh to the Nationalist Congress Party (NCP).
While Koda was directly involved in striking the deals, the money was apparently handled by his non-political associates and laundered by financial companies. The E.D. has booked Koda under the four-year-old Prevention of Money Laundering Act (PMLA), 2005, which prescribes punishment of up to seven years of rigorous imprisonment for the guilty. The PMLA also provides for the freezing, seizure and confiscation of the proceeds of crime. It imposes obligations on banking companies, financial institutions and intermediaries to verify the identity of clients, maintain records and furnish information to the authorities. Koda is the first MP and former Chief Minister to have been booked under the PMLA and his is the biggest case lodged by the E.D. under the Act so far.
E.D. investigation has apparently revealed Kodas money-laundering exercises leading to massive deals and investments on a global scale. He had reportedly made secret visits to Switzerland and other foreign countries as part of this. The E.D. suspects that the former Chief Minister has one or several accounts in Swiss banks and other banks in tax havens. The E.D. has also reportedly collected unshakable evidence about investments by Koda in mines in Thailand and Liberia.
Some of Kodas accomplices, according to E.D. and I.T. investigations, amassed movable and immovable property worth Rs.200 crore. These include the companies Shiv Ram Sponge Iron Ltd and Rollin Mill, vast quantum of land in Jharkhand and outside as well as several flats.
The Choudharys set up two companies Blue Techno Projects Ltd and CP Manufacturing in Dubai and invested in more than a dozen ones in Thailand, Indonesia, South Africa and Dubai. Kamlesh Singh, the investigation points out, bought property worth Rs.50 crore in Mumbai, Delhi, Bangalore and Ranchi. Shahi and Tirkey, too, have property worth crores of rupees in and outside Jharkhand.
Koda, his associates among politicians and businessmen have all denied the charges made by the E.D. and I.T. investigators. There is a view among sections of the States political class and the administration that, if properly probed, the Koda scam would reveal far more damaging details than the ones that have come to light at present. It says the Koda affair is not only about taking bribes for mining deals and money-laundering but also about selling Indias iron ore cheaply to foreign countries. Some contend that it could even have another dimension: that of iron-ore smuggling. The argument is based on the premise that the quantum of money involved is too large to be a scam involving only bribes and money-laundering.
According to a senior government official, Jharkhands iron ore is reportedly rich in ferrous content and is in great demand across the globe, particularly in China where a construction boom has been for sometime now. It needs to be probed where the iron ore from these mines have gone and which are the companies that sent it abroad, the official pointed out. It remains to be seen whether this angle would be taken up by the investigating agencies or its masters.
At the political level, the Koda affair is something for which almost all political forces of the State, except the Left parties, will have to take responsibility. Koda was the Minister for Mines during the Arjun Munda-led Bharatiya Janata Party (BJP) government that ruled from March 12, 2005, to September 18, 2006. He, along with three other independent MLAs, was instrumental in bringing down that government. Immediately after that he assumed the Chief Ministers post with the support of the Congress, the JMM and Lalu Prasads Rashtriya Janata Dal (RJD).
During his tenure Koda had even publicly stated that he was into money-making. If I do not make money do you think that these big parties and leaders will allow me to continue in office? he had told mediapersons. Obviously, none of the bigger parties in the State can absolve themselves of the offence of letting Koda and associates loose on the administration.
However, at the political level, the Koda scam seems to be helping the Congress. This is partly because of the public perception that there has been a greater impetus to probe corruption cases under the current Governor K. Sankaranarayanan. There is a definitive impression that Sankaranarayanan has been sent by the United Progressive Alliance government at the Centre to correct the States mismanagement over the past few years. Some of the welfare measures taken by the Governors regime in the State, such as the strengthening of the public distribution system (PDS) and the promotion of self-help groups, particularly those among destitute women, have helped strengthen this impression.
A number of political observers, however, believe that the pro-Congress dimensions of the Koda scam could come tumbling out if the former Chief Minister, who rose from the position of a construction labourer to become one of the richest politicians in the State makes bold to expose the big parties and leaders who allowed him to continue in office, apparently for a price.
The other, and perhaps more important, question is whether the investigating agencies will be ready to probe the doubts raised by a section of the administration about iron-ore smuggling. Whether these queries evoke affirmative or negative answers, there is little doubt that the Koda story will have many more new chapters added to it in the coming days.
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