Corruption

ON CORRUPTION

The country’s political scenario over the past few months has been occupied mostly by the activism of a group claiming to be civil society on the issue of bringing in the Lokpal Bill to check the unprecedented growth in corruption. Those who were just fringe elements in the Indian polity have overnight became harbingers of the new movement for independence through satyagraha. The urban educated middle class are going hyper over this new phenomenon. Already Anna Hazare is being hailed as the modern Gandhi. Most of the leading members of this movement have a comparatively clean image—like Kiran Bedi, Swami Agnivesh, Kejriwal etc., and this has given some credit to their activities compared with the corrupted and disgraced political leaders. The thronging of the masses to these leaders has again vindicated the loss of faith over the established political leaders. The search for an alternative is very high in the minds of the people. The global trend presently seen in West Asia and in some of the European countries, where the masses have taken to the street and have not cowed down even when the military came rampaging, is seen as the motive force of this century by many among these civil societiers and their followers among the urban elite. There are such post modernist expectations among the large section of the urban intelligentsia. There are big debates on all the TV channels held on a daily basis and heightened euphoria. But the vast majority, the toiling masses, in whose name all this is this is done, have largely ignored this hyperactive scene.

The larger question still remains—is this movement going to bring about any hope, any plausible room for change, let alone solve the burning issues of the country? Will this give a new weapon for developing it into a movement for radical changes, so that some checks and balances come into the hands of the people? Will this self-claimed civil society deliver when it needs to stand up firmly facing severe adversities? Do those claiming to be THE civil society really represent the sentiments of the entire country? Does the hope generated by these new leaders have any chances to actually fructify? What are the chances that a Lokpal will be able to clean up the muck?

There is skepticism over this hype among the general masses and they are not totally unfounded. The actual corruption faced by the majority of the toiling masses is not at all addressed. The Lokpal bill is not at all a solution to this. It is true that the lowest strata of society faces the real brunt of this corrupt culture but there are more severe issues that they have to confront on a daily basis. Hunger, malnutrition, unemployment and under employment, survival issues, loss making agriculture, growing debts etc., which were never considered by the Anna Hazare crowd as genuine problems. The issues related to the social fabric of the society like those of caste and religious discriminations and atrocities and those emerging due to the backward Brahminic culture like dowry are surely no less relevant and pressing than the money stacked in Swiss banks.

The fact is that the continuing exposure of various scams of huge magnitude has not made the same impact on these sections of the country as on the elite class. This emerges from the alienation faced by these sections over the past 63 years. The feeling that the state is for all of us, that there will be justice done to the victims and the guilty will be punished, that we have a say and a share in this system, is long lost among the vast majority. Their faith in this system is abysmally low, especially when big corporates or big political leaders are involved in crimes. From the Bhopal Gas Tragedy to the Narmada dam issue, from the 1984 Delhi anti-Sikhs riots to Bhivandi, Gujarat, Orissa and 100s of others riots, from fodder to fertilizers to sugar to many other scams, the investigative agencies, the legislature and the judiciary have time and again failed to deliver justice. So news of one more department to look into matters of corruption is of little interest to the masses.

This disparity in the thinking of Bharat and India has been there since long. The boom in the educated middle class brought about by globalization and imperialist penetration has deepened this divide further. Today we are aliens to each others’ problems and needs. The tremendous growth in the media business and information boom is maintaining this divide to serve corporate interests. The growing middle class is its real market and is addressed and groomed to consume more and more, lead a western lifestyle and thinking. They are the base of this system; it is their confidence in this system that is holding the ruling classes. Their limited vision had always distanced Bharat as a plague. Those populating it are seen as the backward people who put the country to shame; they are corrupt and sell their votes and produce more children, drink and are lazy.

What is the issue about?

With the opening of the gates for the foreign MNCs to our economy there also came huge influx of foreign money and the ruthless imperialist corporate culture. As the MNCs went about rampaging natural resources of minerals, land and water, to clinch their deals they threw hefty amounts to babus, politicians, media persons, and agents of this already rotten corrupt system. With globalization the magnitude of corruption shot through the roof. Once in a while, in the heat of competition, some disgruntled elements within the ruling classes leak out these unholy deals.

Globalization has empowered a section of the urban middle class with immense opportunities which nobody could have imagined just a decade before. Their take home salaries increased and there are sufficient commodities in the markets and malls to spend the extra amounts and fulfill their temptations. This economic growth came with a lot of propaganda that India is becoming a super power. This boosted the otherwise slogging morale of this strata. But with scams revealed, almost on a weekly basis, their ego, morale is shaken up and so too their illusions of India being a great nation.

These computer savvy, facebook patriots were also getting inspired by what was happening in West Asia. This called for immediate intervention by the ruling classes as it did threaten to create enough trouble for the Congress led UPA government and the chances of returning to power with Rahul baba as the future PM—if there was to be a spontaneous revolt. The age-old trick was sought, the same that was employed by the British to prolong their rule—that of bringing in a docile controllable man to lead a struggle and diffuse the pent-up pressure and keep things in control. The best they could find was ‘a controversy free’ Gandhian in Anna Hazare coupled with the likes of Kiran Bedi and Kejriwal. It just needed some PR exercise and social engineering with the help of media corporates to make them popular and create a myth of Lokpal as a solution to all the evils. Thus the agitation for Lokpal Bill emerged. Smelling the opportunity the RSS flung in its self-styled yogi Baba Ramdev and directed its fronts like the BJP to support him with their organizational following.

Let’s take a look at some of the known major scams:

1) 2G Spectrum Scam

We have had a number of scams in India, but none bigger than the scam involving the process of allocating unified access service licenses. The centre of attack around this Rs.1.76-lakh crore worth of scam is the former Telecom minister A. Raja, who according to the CAG, evaded norms at every level as he carried out the dubious 2G license awards in 2008 at a throw-away price; pegging them at 2001 prices.

When Mobile first came into India none of the big players were interested in putting in the initial investment to create a market. Mostly unknown figures like Mittal of Airtel, who had been a contractor for decades with the telecom industry, jumped into the fray owing to his proximity with the top bosses of the department. Soon its potential was realised and all the big ones in the corporate world—Reliance, Tata, Birla, etc. jumped in. They too were helped by the government in power then, the BJP led NDA. For example, Tata was handed over the government owned VSNL and thus became a big time player overnight.

With 2G the stakes went high and so did the competition. There arose a tussle amongst those who had done the initial ground work and those heavyweight new comers who were edging out the others.

It is in this contradiction that the beans were spilt and the matter got exposed. Today the blame is put on one person A. Raja, while all others right from PM Manmohan Singh, Chidambaram, to the main beneficiaries who indulged in out right goondaism and frauds like the Ambanis, Tatas and others are safe and sound.

2) Commonwealth Games Scam

Another feather in the cap of Indian scandal list is the Commonwealth Games loot. Yes, literally a loot! Even before the long awaited sporting bonanza could see the day of light, the grand event was soaked in allegations of corruption. It is estimated that out of Rs. 70000 crore spent on the Games, only half was spent on Indian sportspersons.

The Central Vigilance Commission, involved in probing the alleged corruption in various Commonwealth Games-related projects, has found discrepancies in tenders—like payment to non-existent parties, wilful delays in execution of contracts, over-inflated price and bungling in purchase of equipment through tendering—and misappropriation of funds.

3) Telgi Scam

Abdul Karim Telgi had mastered the art of forgery in printing duplicate stamp papers and sold them to banks and other institutions. The tentacles of the fake stamp and stamp paper case had penetrated 12 States and was estimated at a whooping Rs. 20000 crore plus. Telgi clearly had a lot of support from government departments that were responsible for the production and sale of high security stamps and also the patronage of politicians across the States. But none of them are accused.

4) Satyam Scam

The scam at Satyam Computer Services is something that will shatter the peace and tranquility of Indian investors and shareholder community beyond repair. Satyam is the biggest fraud in the corporate history to the tune of Rs. 14000 crore.

The company’s disgraced former chairman Ramalinga Raju kept everyone in the dark for a decade by fudging the books of accounts for several years and inflating revenues and profit figures of Satyam. With a tacit understanding with the then CM of Andhra Pradesh the funds were diverted into those of YSR’s son's business and his son's company Maytas Constructions, who got premium contracts in the state and government lands at throw-away prices.

5) Bofors Scam

The Bofors scandal is known as the hallmark of Indian corruption. The Bofors scam was a major corruption scandal in India in the 1980s; this was when the then PM Rajiv Gandhi and several others including a powerful NRI family named the Hindujas, were accused of receiving kickbacks from Bofors AB for winning a bid to supply India’s 155 mm field howitzer.

The Swedish State Radio had broadcast a startling report about an undercover operation carried out by Bofors, Sweden’s biggest arms manufacturer, whereby $16 million were allegedly paid to members of PM Rajiv Gandhi’s Congress.

Though the amount is very small, the Bofors scam had a strong emotional appeal because it was a scam related to the defense services and India’s security interests and first of its kind directly involving a major leader from the Gandhi family.

6) The Fodder Scam

In this corruption scandal worth Rs.900 crore, an unholy nexus was traced involved in fabrication of “vast herds of fictitious livestock” for which fodder, medicine and animal husbandry equipment was supposedly procured. Though Laloo Prasad Yadav was directly involved in it nothing could be proved against him.

7) The Hawala Scandal

The Hawala case to the tune of $18 million, which came in the open in 1996, involved payments allegedly received by country’s leading politicians through hawala brokers. The list of those accused also included Lal Krishna Advani who was then the Leader of Opposition.

Thus, for the first time in Indian politics, among the public, it gave a feeling of open all-round loot, with all the major political players being accused of having accepted bribes and also alleged connections with payments being channelled to Hizbul Mujahideen militants in Kashmir.

8) Harshad Mehta & Ketan Parekh Stock Market Scam

Although not corruption scams, these have affected many people. There is no way that the investor community could forget the scandalous Rs. 4000 crore Harshad Mehta scam and the over Rs. 1000 crore Ketan Parekh scam which eroded the shareholders wealth in the form of a big market jolt

9) The Belekeri port scam

This relates to 3.5 million tons of confiscated iron ore that was exported illegally from Belekeri port near Karwar in Karnataka. After Deputy Conservator of Forests R. Gokul seized the ore and the high court refused to permit it to be exported, a large part of it was surreptitiously exported from the port. After persistent protests and public pressure, Karnataka Chief Minister Yeddyurappa, who is balancing political considerations with abetting corruption, admitted to an illegal iron-ore export racket at Belekeri Port involving 35 lakh metric tonnes of iron ore. It is said that the scam was worth an estimated 60,000 crore rupees (US$12 billion).

10) Bellary Mining Scam

It was found by the Lokayukta that actual mining areas are not related to the sketch given with the applications. Officials are not crosschecking them. Further, mining applicants falsely claim a prohibited forest area as a revenue area. Finally, the actual area of the mine is much bigger than the claimed area. The Indian Bureau of Mines rules which control the type of mining allow a maximum mining depth of six metres to prevent environmental degradation. But miners have flouted this rule to over-extract iron-ore. For example, if they are allowed to take 100 metric tonnes, mines take 1,000 metric tonnes. Officials at road check posts reportedly collude in a massive under-counting of lorries and trucks transporting iron-ore from the Bellary mines to the ports. News reports suggest that only 200 trucks are reported as against 4000 plying every day.

11) Bitumen scam

Leading the pack was none other than the Road Construction Minister in the last Bihar Government (who may yet get a plum portfolio) Ilias Hussain. He was also the principal accused in the Rs. 500-core bitumen scam which is being investigated by the CBI. The roads may not have had much bitumen, but its demand and procurement shot up drastically over the past few years. A CAG report of 1996-97 found out that while the Government's lack of funds forced road construction and repairs to fall to as little as 6 per cent in many cases, the bitumen procurement increased between 14 per cent and 93.7 per cent. Obviously, the bitumen either did not come or was used to make things other than roads.

12) KG Gas Scam

This is another high profile case exposing how the government takes care of its patrons and cheaply hands over the natural gas resources to the Reliance Industries. First the deals are made in such a way that there is room for manipulations later and thus siphoning out of maximum benefit.

The modus operandi was to submit a bid which shows a certain capital cost and during the operation of the contract, inflate the capital cost by a huge amount with the connivance of DGH and the Ministry of Petroleum. The capital costs in the KG Basin D-6 Block went up from $2.4 billion in the initial contract to $8.5 billion. This was the pattern followed in other gas and oil fields also, involving Reliance, Cairn Energy and others. The high price of Reliance gas—$4.2 per Million BTU (MBTU) – was set in 2007 by the Empowered Group of Ministers headed by Pranab Mukherjee. Reliance itself admitted in the Court case between it and NTPC/Anil Ambani Group that its production cost was $1.43 per MBTU. Reliance Industries Ltd. (RIL) had initially agreed to supply gas at $2.34 to both NTPC and Anil Ambani. Even then RIL would have made profits of 50% if it had supplied gas at $2.34. The government then went ahead to change the rates of other oil companies so that there remains no other option but to buy from Reliance only. The government entered into a contract with the fertiliser companies to purchase gas from Reliance, thus affecting a price hike of fertiliser. This means the government plans to fleece the farmers to feed the Ambanis.

In the face of this daily, voluminous, loot can the Lok Pal save us?

What is Lokpal Bill?

The basic idea of the Lok Pal is borrowed from the office of ombudsman, which was established to check corruption and wrong-doing in Scandinavian and other nations. In early 1960s, mounting corruption in public administration set the winds blowing in favour of an Ombudsman in India too. The Administrative Reforms Commission (ARC) set up in 1966 recommended the constitution of a two-tier machinery—of a Lokpal at the Centre, and Lokayukta(s) in the states.

The Administrative Reforms Commission (ARC) while recommending the constitution of Lokpal was convinced that such an institution was justified not only for removing the sense of injustice from the minds of adversely affected citizens but also necessary to instill public confidence in the efficacy of administrative machinery. Following this, the Lokpal Bill was for the first time presented during the fourth Lok Sabha in 1968, and was passed there in 1969.

However, while it was pending in the Rajya Sabha, the Lok Sabha was dissolved so the bill was not passed at that time. The bill was revived in 1971, 1977, 1985, 1989, 1996, 1998, 2001, 2005 and most recently in 2008. Each time, after the bill was introduced to the house, it was referred to some committee for improvements—a joint committee of parliament, or a departmental standing committee of the Home Ministry—and before the government could take a final stand on the issue the house was dissolved.

On bringing Black Money from Swiss banks.

According to the data provided by the Association of Swiss Banks in the year 2006, India has more black money than the rest of the world combined. UK has $390 billion in black money, Russia has $470 billion and India tops the list with almost $1500 billion i.e. $1.5 trillion. With India’s foreign debts amounting to around $300 billion, 5 times that amount is just stacked. This information had vindicated the general information that people had—that the top bureaucrats and politicians have stacked huge amounts in Swiss banks. Only the Indian government was 'in the dark'. After being home minister of the country for 6 years the BJP leader L.K. Advani wakes up to this reality and vows to bring that money back if ‘elected’ to power in elections during 2009.

The most pertinent question that arises is why in the first place did none of the governments think of stopping money from going out of the country. Of course, the modus operandi was well known in the intellectual circles. Even today none of the parliamentary parties including the so-called Left has a policy or a vision on how to plug these holes and has never made it a point in their election manifestos even.

These are some of the popularly known routes: over-invoicing/under-invoicing of exported and imported goods and the hawala route. Apart from these, there are other nefarious means through illegal export of foreign currencies etc. The oldest being the import–export route whereby the goods exported are accounted at lesser than the actual price while the goods imported are accounted at higher the price. The difference is thus transferred to secret accounts.

The hawala racket and the other methods are carried out by the mafia and inability to control it can be overlooked but the international trade is done very much under the nose of the vigilance departments, yet this has been going on for decades. The case of Hassan Ali whose entire activities was known to the Enforcement Directorate years back but nothing was done is an example. And there must be scores of Hassan Ali(s) still undetected.

It is a Systemic problem and not just a Policy matter.

The State serves as an instrument of the ruling classes in furthering and protecting their interest. This is same for every country and no different here. The US which swears by private ownership and competition as the foundation of the capitalist system and is strongly opposed to any State intervention in private affairs went on to give state support to the fraudster banks to the tune of $10 trillion at the cost of people. For the past 63 years the Indian State had done just this though the Constitution defined this state as socialist. It is under the tutelage of this state that the Tatas, Ambanis, Goenkas, Godrejs have flourished to this level. The state had been finding ways to fund and subsidise the rich at the cost of the toiling poor. The reduction of corporate taxes alone has saved the corporate world a whopping 75,000 crore rupees last year and it is estimated to save 88,500 crore this year.

Take a small example—the total spending for the 2009 Lok Sabha elections is ‘officially’ pegged at a whopping Rs. 10,000 crore. The real amount is a staggering 10 times higher than this. The break-up of this spending throws up some interesting insights too.

Rs 1,300 crore by the Election Commission,

Rs 700 crore by the Centre and State governments and

Rs 8,000 crore were spent by political parties and individual candidates.

Where does this huge amount come from? Obviously it is the corporate and the feudal lords that have thrown in this amount as an investment to reap benefits once the government is installed. Which they do reap. We repeat—this state serves the interest and only the interests of the big corporates and big feudal lords at the service of the imperialists, that’s all. It is done in the guise of democracy, with your vote as permission, as a sanction from you. In this sense, most of the scams are not really acts of corruption. They are the justified acts of this state in favor of the classes they represent. They were termed scams once they got exposed—otherwise, it was business as usual. It is not that one Madhu Koda or one Raja is to blame for the state of affairs; as the ruling classes and even the civil society, think tanks and defenders of this system would want us to believe. Whoever had been in power the story would have been the same. If there is an opportunity, then whoever is the minister in charge, he/she will not miss the chance to serve the ruling classes and in turn get good returns for oneself and the party. The Radia tapes expose the nexus between the ruling and the opposition parties, with the help of media, in unitedly serving the interest of Reliance honcho Mukesh Ambani and the lengths they would go to achieve it.

To hide these facts the loot has to be shared and so an efficient system of bribing got evolved during the past 63 years. Right from PMO’s office to the lowest in the rung, the peons at the panchayat offices, all are to be oiled with bribe. The recruitment itself is being done by taking hefty sums, which they are later allowed to recover from bribes. If it is a problem of policy it could be corrected by bringing in reforms and changing the policy. But the foundation of this system itself is based on corruption, deceit and lies and meant to hide the reality from the people.

Furthermore, the type of capitalism that is growing here, scientifically named bureaucratic capitalism, is crony capitalism. It acquires strength and spread, it becomes monopoly-like, in direct relation and proportion to proximity with the power centers in government. Lack of transparency, accountability and consistency, as well as institutional weaknesses such as in the legislative and judicial systems, provide fertile ground for its growth. Systemic corruption occurs when corruption is an integrated and essential aspect of the economic, social and political system. Systemic corruption is not a special category of corrupt practice, but rather a situation in which the major institutions and processes of the state are routinely dominated and used by corrupt individuals and groups, and in which people have no alternatives to dealing with corrupt officials.

This is systemic in nature and not just a problem of few individuals or the policy of this or that government. True, neo liberal policies of the government of India are the major, immediate, cause of such big financial frauds. But it has just aggravated what already existed in magnitude due to the amount of money available with globalization. This is certainly not the outcome of neo-liberal policies. Any attempt to cover up this reality only tends to further hoodwink the masses and strengthen their illusions. The revisionists CPI and CPI (M), who are now part of the ruling classes, have been doing the same over the years. It is the need of the hour to proclaim openly that this is a systemic problem and no amount of Lokpal(s) will solve the problem.

Some of the progressive intellectuals and organisations believe that if getting a Lokpal is better than nothing let’s go for it. Very true, we have to be with the masses in their sentiments and spirit at this juncture of struggle. But we should also clearly show them its limits and show them the systemic causes. If this is not done, we will be toeing the backward line present among the masses.

Promising the heavens.

The overtly enthusiastic ‘civil society leaders’ of both the camps—Anna and Baba— are promising the moon. That if the black money stacked in foreign banks is brought back then there will be no poor man in this country and everyone will be rich. That if the culprits are known, then they can be punished and the country can be rid of the entire nuisance and then on will march forward to be the leaders of the world. This is nothing but naivety or just day-dreaming.

First of all there is little chance that Swiss bank will allow anyone to take away 1.5 trillion dollars. They will just collapse. Again, even if an agreement is achieved whereby the concerns of the bank is addressed there is no chance that the culprits who are ruling the country for six decades will just let themselves and their families and friends get exposed and punished. 1.5 trillion dollars is no small amount and it cannot be the handiwork of a few, the numbers of people involved may go up to 10s of 1000s. Almost all the top brass of all the 3 arms of the state and all the departments are involved for sure. Who will arrest whom and who will take the responsibility to judge them and who will punish them? They are all beads woven in the same string, feathers of the same bird.

These claims are nothing but a fine example of the naivety of this ‘civil society’ or they are out to hoodwink the people on a massive scale. The whole tamasha is the creation of the ruling classes itself. See the way the corporates themselves jumped in with cash.

According to its press statement (http://articles.economictimes.indiatimes.com/2011-04-15/news/29421992_1_iac-donation-assets-and-liabilities) till April 15, India Against Corruption received a total donation of Rs 82.88 lakh. It received donations of Rs 5,000 to Rs 20 lakh from 102 donors with Jindal Aluminum giving the maximum single donation of Rs 20 lakh. About Rs 7.35 lakh were collected from 2,871 donors giving less than Rs 5,000. This means the overwhelming bulk of its funds are from the well-heeled. We should also know that this Jindal is none other than the chief patron and benefiter of the Raman Singh BJP government in Chhattisgarh, notorious for its suppression of Maoists and attack on human rights activists like Dr. Binayak Sen. There, Jindal and his ilk are busy promoting killing of people to open up the way to unrestricted plunder and exploitation. Can you even imagine that he is able to do this without fattening the pockets of Raman Singh et al? And now in Delhi, he is chief patron of a crowd of civil societiers, a rather strange one this genus, who are out to end corruption! Heads I win, tails you lose. And so it will go on till the real society, the people step out to finally sweep out all the anti-people elements, their servitors and henchmen, their state and its repressive machinery, from the stage of history once and for all.

There certainly are a number of well meaning people in this current anti-corruption crowd and their supporters throughout the country. We wish them well in their efforts. But we would also advise them to draw a strict line of demarcation with those in the play to white wash the system, to act as safety valves and also to provide an acceptable visage to anti-people marauders like Jindal.

1. How can you weed out corruption from the sea of corrupts?

2. Corruption - It’s not individual’s degeneration but that of the whole system’s.

3. Let the soil breeding corruption be spaded out in lieu of cropping ends of

poisonous weeds.

4. Let’s not be deceived by Lokpal Bill.

5. Down with corruption; Down with the corrupt social system!

(Pamphlet issued by executive committee of Struggle India on 25.06.11)