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Mainstream, VOL LII, No 7, February 8, 2014

Evolution of Political Corruption

Monday 10 February 2014, by Nikhil Chakravartty



In just about a year’s time, we shall be celebrating the fiftieth anniversary of the country’s independence when power was transferred from the unwilling hands of the British rulers to the leaders of our freedom struggle. And it is exactly fifty years now that in the last general election under colonial rule, in 1946, the leader of the Indian National Congress toured the length and breadth of this vast land promising the public that once the power was transferred, he and his party would hang every black-marketeer from “the next lamp post”.

Fifty years have passed and today the leader of the very same Congress party is facing charges of cheating and large-scale corruption before the court of a Delhi Magistrate. And he still has not given up the august post of the President of the party that was at the vanguard of our country’s freedom struggle.

Not only is this a solitary case of shocking misdemeanour on the part of a political leader who was until three months ago the Prime Minister of this great country. A whole array of political personalities—former Ministers and other leaders including the Presidents of two largest Opposition parties—face arraignment before the law court on charges of having been involved in mega-size hawala transactions. The rich harvest of political big-wigs who have figured in the Jain hawala diary reads like a VIP court circular.
Nowadays as the lid is being removed from the cesspool of corruption in public life, one is at a loss to make out how the malaise has overtaken our body politic in these five decades since independence.

The quantum of black money in circulation and how to deal with it have been discussed from time to time by economists from Kaldor downward, but no succinct analysis has so far been made by our pundits in sociology or political science or by the media seniors how this degeneration has come about, its history, its magnitude stage by stage, and what it really means for our democracy and its future. Individual monographs have come out from time to time such as the one on the ramifications of the Birla House by a journalist from Calcutta in the fifties, while the late D.R. Mankekar brought out a gallery of guilty men in the sixties. In the old days, the peponderating influence of the Birlas over the Congress leadership was widely known. That was more in the nature of an open liaison between the top leadership of the national movement and one of the nationalist-minded business houses who despite the frowns of the Raj stood by Gandhiji, who ironically breathed his last within the precincts of the Birla House.

When independence came, the Congress leadership was particularly keen on jealously guarding its own image before the public as leaders who could not be corrupted even if the new situation required a continuous demand for financial help for the party. The multifarious activities in which the Congress and other political parties were engaged required a good amount of funds flowing in regularly. Many of these activities became part of the new government’s agenda but the parties required big money to fight elections, the Congress being the largest of them had a bigger budget.

If the political parties needed funds, the business community needed government support and patronage. Thus was provided an opening for fresh opportunities for acquiring funds which the ruling parties, particularly the Congress, could thrive on. At the same time, the Congress leadership of those early years after independence, was alert about the need to retain their image of being averse to all the means of securing unearned money from the business community.

As a result, an interesting division of labour was maintained by the first generation of leaders, from 1947 to 1969, that is, upto the time of the Congress split. By this arrangement, leaders like Nehru, Sardar Patel, Pant and others who could sway the public politically, preserved their image as being above corrupt or underhand dealings, while others like S.K. Patil or Atulya Ghosh were expected to do the dirty job. And fund collection for some consideration was certainly one of them. This came out very sharply in the Mundhra scandal, over which T.T. Krishnamachari resigned because he had winked at the LIC giving him a loan which he would not have otherwise got. Mundhra did pay a good amount as quid pro quo to a senior Congress leader who was never mentioned in all the preceedings; instead, TTK took the onus upon himself for having done something irregular. The reason why the name of the actual recipient of the Mudhra bribe was held back was that the Congress party leadership was anxious that its own image before the public must not be smudged, as these top leaders were the main vote-catchers for the Congress party.

This neat division of labour within the Congress leadership, however, collapsed with the Congress split in 1969. When Indira Gandhi assumed the leadership of the Congress, she did no bother about that delicate division of labour; instead, she herself approached the business magnates and funds came from them direct to her, or through her trusted henchmen like Rajni Patel and others who were her underlings. By this arrangement, the resources of the Congress were concentrated only in Indira Gandhi’s hands who became the omnipotent dispenser of all favours and concessions while the business world too could exercise more direct influence on the government through her and her retinues. Secondly, it was not a deal between the government and the corporate sector as a collective, but one between the head of the government and specific elements of the business world whom she would favour. In the bargain, the distinction between party fund and the leader’s coffers was blurred, and individual businessmen or houses became the favourites of the establishment.

This had its impact on the shape of politics. Instead of the party holding the purse-strings, the leader became the sole dispenser of all funds, and through it came his or her power. Thus the leader’s family and favourites became all powerful. The unwholesome rise of Sanjay Gandhi as an extra-constitutional authority could be ascribed in a large measure to this new development. The early days of Maruti and the mafia that grew around it bear eloquent testimony to this. The hereditary dispensation enjoyed by Indira Gandhi’s progenies can certainly be ascribed to this new style of political financing.

Another stage was reached in the eighties, that is, when Indira returned to power, after the devastation she had brought upon herself during the Emergency. This time a new style was followed for clearing the target for raising funds. So long the traditional style of the Congress fund collection for the election was to approach the business houses on the eve of the election campaign. However, in 1984-85 this seasonal drive for funds was far less conspicuous. Under the new style of fund collection, the leader in authority turned more to mega purchases on government account, and would charge a cutback on such purchases. For obvious reasons, this involved dealing with foreign companies, particularly in the field of defence. This way came the kickback from the German submarine deal (which is yet to be unearthed) and after this came the Bofors scandal under Rajiv Gandhi. Such deals are transcontinental by nature, and despite exposures, and the establishment of the fact of kickback money having been given to individual operators, nobody has been punished, as the matter is supposed to be still under investigation.

The importance of the Bofors scandal in the evolution of political corruption in our country needs to be understood in all its implications. First, it directly involved the Prime Minister, as the needle of suspicion has been definitely pointed at some of his cronies and members of his family. Secondly, it involved arms supply. Although the Bofors gun is widely established, the fact that kickbacks from a foreign arms company could have major political repercussions contributed to a large extent to the ruling Congress party having lost the elections in 1989. Thirdly, it opened up tremendous possibilities for foreign companies intervening into our politics through the sordid channel of bribery and kickbacks. The fact that even to this day the Bofors scandal has not been fully unearthed enhances the danger of foreign firms intervening into our politics.

It is important to note that just in this period, agents of big foreign interests have become conspicuous in our politics. To comprehend this, one has only to recall the enormous clout that the Italian giant, Snam Progetti’s local agent could wield in the Rajiv establishment in the eighties. What role Quattrocchi has played in the inner recesses of the Rajiv establishment is yet to be assessed, but nobody doubts that it is of far-reaching consequence.
It is precisely in this background that one has to take into account a phenomenon like Chandraswami. Despite several warnings, Narasimha Rao did maintain close relations with him. This could be seen not only in the recent disclosures about Chandraswami’s misdoings, but in the fact that he kept close to Narasimha Rao, despite the gentle warnings that the then Prime Minister received from friends and well-wishers. And Chandraswami’s circle of devotees is a very extensive one—comprising not only Narasimha Rao but former Prime Minister Chandra Shekhar, and even T.N. Seshan, the Chief Election Commissioner who has been talking about our countrymen having lost their character. It is not enough to say that Chandraswami dabbles in politics: within the network of his shady activities on an international scale, one finds Adnan Khasoggi, the Sultan of Brunei and Tiny Rowlands—a worldwide mafia involved in a variety of excursions from high finance to arms sales and one would not be surprised to find it having been involved in drug trafficking. The infamous St Kitts cook-up to frame V.P. Singh’s son which was designed by Chandraswami during Rajiv Gandhi’s term, in which Narasimha Rao was involved, brought out the type of dangerous politics that was being pursued behind the facade of the so-called good man. It is after years of notoriety—when he got protection and immunity from his political patrons—Chandraswami is now finding himself in difficulty before the law court, and he would have no hesitation today implicating his VIP political patrons.

It is not in the least surprising that in the very period in which Chandraswami’s antecedents are coming to light, the country has learnt a lot also from the Jain hawala deal which has taken a heavy toll of politicians. What needs to be stressed is that the exposure of these rackets of Jains and Chandraswamis and their tribe tells us that not only were big money deals involved, but these are into-related with harbouring terrorists and underworld characters who could be a threat to our security. The fact that persons occupying high offices in our democracy have not hesitated to make use of these shady characters makes it clear not only that they themselves have been wallowing in corruption but also that they allow the country’s security to be endangered through such contacts. Corruption is not just a moral issue but equally involves a threat to the country’s interest and security.

What is disturbing is that the allegations of corruption have ceased to be a matter of disgrace in public life. Hence, one sees the Congress leaders have yet to insist that they could not afford to have as their leader one who is facing charges of corruption in the company of the disreputable Chandraswami and that a hawala tainted politician could sneak back into the present government as a full-fledged Cabinet Minister. What is yet to be realised by our political leaders is that in the public eye, corruption is looked down upon and anybody tarred with it carries no authority whatsoever in the judgement of the common public. Politicians may look at corruption as a manageable private affair but the wider public getting more and more awakened, regards corruption of Chandraswami and the Hawala dimension as an undoubted curse to be purged out of our politics.

(Mainstream, July 20, 1996)

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