India’s Diary of Corruption

For many politicians at the pinnacle in India, life seemed to have settled into an easy and lucrative routine. First get elected. Then get rich.

Of late, though, there’s a third step: Get caught.

A mushrooming payoffs-for-favors scandal, the largest in the history of the world’s most populous democracy, has been shattering the widespread assumption that the people who make India’s laws don’t have to particularly worry about obeying them.

So far, 24 politicians have been charged with being beneficiaries of $18.3 million in bribes and gifts from businessman and alleged influence-peddler Surendra Kumar Jain who, unfortunately for the recipients, kept a diary.

The accused include seven Cabinet ministers, all of whom have resigned; the president of the leading opposition Bharatiya Janata Party, who gave up his parliamentary seat; and the chief minister of the local government in New Delhi, who also quit.

The broad political gamut of the suspects--from honored stalwarts of the ruling Congress (I) Party to the conservative and Hindu nationalist BJP and leftist Janata Dal--only buttresses the scornful verdict many Indians have of those who govern them: Sab chor hain (“They are all thieves”).

While corruption in India is as ancient and solidly grounded as the Taj Mahal, this sordid episode marks the first time in independent India’s nearly 50-year existence that members of government or Parliament have been charged or hauled into court for alleged criminal acts.

“It is an earthquake in Indian politics,” one awe-struck U.S. diplomat said. And the tremors--and charges--haven’t stopped.

The hawala, or illegal foreign-exchange affair, has captured headlines and the public agenda as India prepares for a general election, expected in April. Most immediately, many pundits say, the scandal may have boosted Prime Minister P. V. Narasimha Rao, though he also has been implicated.

Rao’s increased chances for a second term will be good news for Western investors and corporations, since it was the polyglot southern Brahmin and his ministers who scrapped India’s socialist ideology and launched free-market reforms nearly five years ago.

In a wider sense, however, the daily diet of shocking headlines is a wake-up call that the self-sacrifice and abiding sense of dharma, or duty, that distinguished many Indian leaders during the anti-colonial struggle and post-independence politics are in danger of being smothered under a mountain of rupee notes.

“My regret,” laments Atal Behari Vajpayee, the BJP’s parliamentary leader, “is that politics has become more of a business than a mission.”

In 1966, for instance, when the proverbially frugal Prime Minister Lal Bahadur Shastri died, his estate was so skimpy that the government had to award a special pension to his widow. More typical these days is the parliamentarian from Pune who somehow has built himself a lavish multistory home on an official salary and expense account of less than $200 a month.

India has been rocked by corruption scandals before, including still-murky dealings behind the 1986 decision to purchase Swedish-made Bofors artillery pieces that sullied the image of then-Prime Minister Rajiv Gandhi. But according to Arun Shourie, one of the nation’s pioneer investigative journalists, politicians’ integrity hit rock bottom with the Rao government, “the most corrupt in our history.”

Since Rao’s Cabinet took office in June 1991, a dozen ministers have quit or resigned under pressure (one for a second time after being reinstated).

In 1993, without offering any independent corroboration, Bombay stockbroker Harshad Mehta claimed he had handed Rao a suitcase crammed with rupees at his official residence. Other scandals followed: government purchases of sugar and locomotives; bidding for state telecommunications franchises; a half-million-dollar loan to Rao’s youngest son; and Rao’s own alleged involvement as foreign minister in a 1989 forgery designed to smear a challenger to Rajiv Gandhi.

Early this year, however, the ground unexpectedly shifted. The seeds of change were sown as long as 2 1/2 years ago, when the Supreme Court, which had been the epitome of India’s politically obedient judiciary, began showing new independence. Public resentment and pressure to act against graft were also mounting--and may have tipped the scales.

“Corruption in public life in the past four to five years has become biting for the average citizen for the first time,” said V.A. Pai Panandiker, director of the Center for Policy Research, a New Delhi think tank. “If you want to build a house, get a phone connection, get an electricity connection, without bribery nothing moves these days.”

The current scandal began when police arrested a Kashmiri militant in March 1991 near an old Delhi mosque. He led them to a research scholar at Jawaharlal Nehru University. Both told police they were getting foreign money from a hawala agent, who--when interrogated by the Central Bureau of Investigation, India’s equivalent of the FBI--said Jain was one of 13 people receiving illegal foreign payments from abroad.

When police raided Jain’s palatial farmhouse in New Delhi in 1991, they found what they lacked in most corruption probes: hard evidence. Jain, an accused money launderer and dealer in illegal foreign exchange with still-unclear ties to Kashmiri separatist militants, kept meticulous records of the 115 politicians and bureaucrats he allegedly paid between 1988 and 1991, noting the recipients by their names or initials.

Even with that evidentiary bonanza, the investigation initially lagged as Rao’s government didn’t seem too keen on prosecuting its own. But in October 1993, two journalists filed a public-interest petition before the Supreme Court.

In a watershed decision, the justices demanded that the Central Bureau of Investigation stop stalling and report to the court monthly on its progress.

Politicians’ heads began to roll in January. So far, seven Cabinet members have been forced to resign and will face criminal charges.

They included Arif Mohammed Khan, who was in charge of power, civil aviation and tourism in the 11-month National Front government headed by V.P. Singh in 1989-90. He allegedly pocketed the fattest envelope: more than $2 million.

Like the others, Khan allegedly helped Jain and his brothers, who were from an industrial family from Madhya Pradesh state, secure power, coal, steel and railway contracts. According to police, Khan used his gains to go on a buying splurge: 16 cars, trucks and vans and nine houses, apartments and properties in various New Delhi locales. When police broke open a locker belonging to his wife, they found a pile of gold and diamonds.

On a single day in February, 14 politicians were charged in the hawala case, including five former ministers. When Arvind Netam, Rao’s minister of state for agriculture, was formally accused of having accepted less than $1,400 from Jain, it was obvious that Indian politicians might need to learn to live by new rules.

This was the stern message from the three-judge Supreme Court panel, which on Jan. 30 ordered the CBI to move even faster and to heed a basic legal tenet often neglected in India of late: “Be you ever so high, the law is above you.”

In theory, this means that Rao, the alleged recipient of almost $1 million from Jain, could find himself charged in the hawala case. But the reality may be quite different. For one thing, the prime minister, India’s most powerful politician, is the direct boss of the CBI director.

For another, Rao’s name or initials apparently do not figure in the diaries, and the CBI has decided the document alone will serve as the basis of its probe. It is not enough that Jain claimed in subsequent oral testimony last March that he gave Rao money through intermediaries, the CBI decided.

Public outcry, however, might not allow the bureaucracy to protect the prime minister. In its latest issue, India Today, the country’s most influential newsmagazine, accused the CBI of “going soft” on Rao. In a groundbreaking investigation, the Telegraph of Calcutta also said it unearthed evidence that senior CBI investigator Amod Kanth was transferred after seeking permission to follow up leads implicating Rao.

All this dovetails with the opposition’s furious howls that Rao, 74, a politician famed for his patience and caginess, is exploiting the hawala scandal to purge his opponents on the eve of elections. Calling Rao “Ali Baba”--the biggest thief of all--Chaturanan Mishra of the Communist Party of India demanded his resignation.

BJP President Lal Krishna Advani, who resigned from Parliament in January in protest after being charged with taking $172,000 of Jain’s money, claims Rao is engaged in a “last desperate gamble” to blunt the BJP’s own electoral crusade against corruption.

The message Rao wants to convey, Advani contends, is, “Well, if we are corrupt, so are our adversaries.”

Unfortunately for the BJP, the No. 1 opposition party to Congress (I), that appears to be the conclusion drawn by many Indians. But the scandal conceivably could boomerang against Rao’s party, which so far has furnished the bulk of the accused. “You are riding a tiger and may find it difficult to dismount,” Ajit Jogi, a Congress (I) lawmaker from Madhya Pradesh, has warned Rao.

One final piece of evidence cited by people suspicious of a Rao-led plot is that, quite conveniently for him, leaders of a rebel faction inside the Congress (I) Party have found themselves among the two dozen politicians charged.

Other current members of the Cabinet also allegedly took money from Jain but are among 21 politicians who cannot be prosecuted under the 1988 Prevention of Corruption Act, because they were not in government or Parliament when the cash changed hands.

“Some politicians get caught, and others don’t,” is how India Today cynically summed up India’s contemporary political ethics.

But what’s been new since 1996 began is that some politicians are getting caught and the principle that they too are accountable under the law applied with vigor. In January, a former minister and Congress (I) heavyweight was arrested on charges that he incited a mob in the 1984 anti-Sikh riots that led to more than 2,000 deaths in New Delhi.

In February, a former Cabinet minister from Congress (I) and a BJP member of Parliament were charged under an anti-terrorism law with sheltering henchmen of a Bombay gangster.

Another burgeoning scandal, perhaps the biggest of all in money terms, concerns the out-of-turn allotment of more than 8,700 government bungalows and houses in exchange for bribes.

“If there are a thousand crooks, we will still not be deterred,” Supreme Court Justice Kuldip Singh vowed this month as he ordered the CBI to get to the bottom of this latest scam.

Thankfully for Indian democracy, there is a golden lining in these revelations and scandals: a rising public cry for reform. And because most major parties have found themselves besmirched, none can afford to defend the status quo.

Because of poverty and tradition, weeding out corruption would seem impossible. But for almost three decades, ideas have been circulating about how to better insulate the political system from it.

Under public pressure to clean up their acts, rival parties in India’s Parliament agreed over the weekend to resurrect the idea of creating a lok pal, or “people’s protector,” a sort of combination ombudsman and U.S.-style special prosecutor empowered to ferret out official wrongdoing.

The lok pal bill originally had been brought to the floor of Parliament in 1968, but the imperious Indira Gandhi, prime minister at the time, opposed any institution that might check her power.

After 20 years of mostly fruitless debate about another key area of reform, campaign financing, politicians may finally feel bound to act. The Election Commission has proposed boosting parliamentary candidates’ campaign spending limit from $12,400 to $41,400 and closing the legal loophole that now allows parties to spend freely on their behalf.

Unfortunately, the hawala case has so poisoned the air at the parliamentary session that opened this week that agreement across party lines now looks impossible.

Though hopeful of future reforms, Panandiker, of the Center for Policy Research, admits to wariness over Indian politicians’ ability to change their spots. “Left to themselves, all political parties would have hushed this thing up,” he said.

Meanwhile, the wheels of justice grind on. On Thursday, a special court issued arrest warrants for 10 politicians charged in the Jain payoffs scandal to force them to appear before a judge later this month.