‘There are still some honest people whose children have to work for a living. There are other people who, for generations in politics, have not worked for a living. They have learnt the art of living comfortably without working, which we have not.”
Finance Minister Arun Jaitley’s jibe was directed at the Congress First Family, a pointed allusion to how “comfortable” politics had made their lives.
His ministerial colleague Smriti Irani was more direct: “Congress may have an exception in the Gandhi family where they don’t have to sweat it out in the sun to earn their livelihood.”
Neither were factually incorrect although one could question why they did not go further. The point is if the Gandhi family has lived off politics for generations, so have countless other politicians across the political spectrum (and this includes the BJP). Check out the current Lok Sabha, it has a record 449 crorepatis up from around 300 in 2009.
Many have made their crores legitimately, but there are scores of others who while describing themselves as social workers by profession, count their fortunes in crores. How did social workers come to make so much money? Is there any way of accounting for how they came by such fortunes?
A nudge and a wink tells you all you need to know. Post liberalization India is all about making sure you are on the gravy train as it rolls and there’s money for all. But why only post-liberalization? Money was being made post-Independence too.
GOOD OLD DAYS
Old timers will recall the “jeep scandal” in 1948 when the Government of India signed a contract worth Rs.80 lakh, for the supply of 200 jeeps from a British company. Only 155 jeeps were actually delivered and the controversy embroiled India’s then high commissioner to the UK Krishna Menon. Clearly, money had been embezzled but the scandal was hushed up and Menon went on to become defence minister. Of course what the jeep scandal could not do, the 1962 war with China did, effectively ending his career!
There was even a cycle import scam in 1951 which resulted in the arrest and imprisonment of S.A. Venkataraman, secretary, commerce and industry, for accepting a bribe. In 1956 the venerable Benares Hindu University came under a cloud when investigators found that Rs.60 lakh had been misappropriated from its fund. University officials were found culpable.
The period of the 1960s passed off without any major scams coming to light but in the 1970s it began with a bang. In May 1971 the Nagarwala scandal broke when Rs. 60 lakh was withdrawn from the State Bank of India, Parliament Street branch and the amount handed over to a “Bangladesh ka babu” (man from Bangladesh). This was done by chief cashier V P Malhotra, reportedly acting on the orders of then Prime Minister Indira Gandhi, who spoke to him over the phone. The scandal died a quiet death as the Bangladesh war hogged the headlines.
Abdul Karim Telgi who printed counterfeit stamp papers and had them sold to bulk purchasers like banks, insurance companies and share broking firms. The size of the scam was pegged at about Rs. 20,000 crores
Indira Gandhi was not so lucky in 1974, when the grant of a licence to her son Sanjay, to build an indigenous people’s car, hit the headlines. The Maruti scandal ran for a while, was a talking point after the Emergency was lifted in 1977 and became an election issue as well. The project was salvaged only after roping in the Japanese partner Suzuki.
In the same decade was the Rs.2.2 crore Kuo oil scandal, where the state-owned Indian Oil Corporation signed a contract with a Hong Kong firm to import crude oil. It turned out the firm did not exist and the money paid was a kickback for other favours rendered. This scandal was a precursor to a slew of scams where allegedly kick-backs were paid to members of the Indian political class.
The 1981 scandal surrounding Abdul Rehman Antulay was quite different. A charismatic leader who became chief minister of Maharashtra after being fast tracked up the political ladder by Indira Gandhi. But he was undone when he set up the Indira Gandhi Pratibha Pratishthan, a trust that collected donations and in return doled out permits to buy cement. The Rs.30 crore scandal (chicken feed by today’s standards), was broken by a clutch of Maratha politicians uncomfortable with a Muslim chief minister.
The decade of the 1980s was notable for another more enduring scandal: the Rs. 40 crore Bofors scam which hit the heart of the Gandhi family. It involved the purchase of a number of 155mm artillery guns from the Swedish firm Bofors where, it is alleged, the Hinduja group took a bribe from the company to facilitate the deal in Delhi. Another player was Ottavio Quattrochi, head of the Italian petrochem giant Snamprogetti, who it is alleged, was a middleman in the deal. His close ties to the Gandhi family were well known.
The scam gradually undermined then prime minister Rajiv Gandhi. Daily revelations highlighted the involvement of a diverse cast of characters including political leaders, spiritual guides, businessmen and international fixers, all joining hands to loot the Indian exchequer. It led to the exit of then finance minister VP Singh, who formed his own outfit Jan Morcha, and hit every nook and corner of India with the war-cry of “ye jo gaal ki laali hai, wo Bofors ki dalaali hai (rosiness of cheeks is on account of Bofors kickback).
The 1990s was another fertile decade for scamsters. Witness the “fodder scam” in Bihar where according to the CBI, Rs. 950 crore was misappropriated from the treasury. This was achieved by the simple method of “inventing vast herds of livestock”, and catering to their fodder, medical and other needs. Then chief minister Lalu Prasad Yadav had to resign and was convicted and spent time in jail.
In the same decade was the hawala scandal involving the Jain brothers. Their diligently noted diaries contained details of payments to the tune of Rs. 32 crore being made to sundry politicians. Their activities were discovered quite by chance, when militants arrested in Kashmir indicated large scale money being paid to national level politicians. Among those who had to resign his membership of the Lok Sabha was LK Advani, whose name figured in the Jain diaries.
This was also the high noon of Harshad Mehta, master manipulator of the stock market. Working through two small banks, Bank of Karad and Metropolitan Cooperative Bank, he handed out fake bank receipts that were not backed by any government securities. Other banks did not know that and gave money to Mehta, assuming they were lending against government securities. The money was used to drive up prices on the stock market. By the time the scandal came to light, many banks found they had been cheated, managers of two reputed banks committed suicide.
On a different scale was Madhu Koda, who made a fortune as Jharkhand state came into being. His was the unique case of an independent MLA becoming chief minister and it didn’t take long for the income tax department to figure out what he was up to. He was taking huge bribes for allotting coal and iron ore mining contracts to business houses, and racked up a fortune of Rs. 4000 crore. When his residence was raided, five currency counting machines were found. He used the money to buy hotels, mines, and companies in Thailand, Liberia and Dubai.
On a smaller scale was the centre’s decision to buy the Israeli Barak-1 missile for Rs. 20 crore. The story is the deal went ahead despite objections from several quarters including members of the team that had actually visited Israel to observe the performance of the missile. The Kargil coffin scam also hit the headlines when it turned out that coffins bought for $2500 each, were actually available for $172. It cost defence minister George Fernandes his job.
Sukh Ram, telecom minister in Narasimha Rao’s cabinet, was forced to quit after irregularities were detected in the award of telecom contracts and Rs.3.6 crore was recovered from his residence. There was also Abdul Karim Telgi who printed counterfeit stamp papers and had them sold to bulk purchasers like banks, insurance companies and share broking firms. The size of the scam was pegged at about Rs. 20,000 crores.
But the mother of all corporate scams was the shenanighans of Ramalinga Raju of Satyam in 2008. He caused loss to investors to the tune of Rs.14,162 crore by falsifying company accounts, showing fake sales invoices and forging bank statements. Inflated revenue results resulted in the company’s share price going up on the stock exchange, which also encouraged more investors to park their money with Raju.
The CAG pegged the loss to the exchequer at Rs. 1,76,369 crore. The Supreme Court on Feb. 2012 ordered all 122 licences issued to be cancelled. Telecom minister A. Raja lost his job and went to jail
The 2010 Delhi Commonwealth Games (CWG) was permanently tainted by the greed that overtook politicians and government officials. Work was shoddy and left incomplete even as the Games opened, there was overcharging alleged on a large scale, poor quality of imported equipment and corruption by the organizing committee of the games.
There followed the Adarsh Housing scam in Mumbai, where land allotted to widows of the Kargil war and for retired military personnel, was taken over by a clutch of top politicians and bureaucrats. Rules were bent and acts of commission and omission were carried out to build flats in premium South Mumbai for the favoured few.
India’s saga of scandal can end with the CAG report that put the loss to the treasury over coal block auctions at Rs. 1,85,591 crore. The coal blocks were allotted to firms that had no expertise or interest in mining, including those manufacturing briefs and vests. The coal-block expose came on the heels of another gargantuan scam uncovered by the CAG in the allotment of spectrum. The scam involved issuing frequency allocation licenses to the telephone companies on a first come first served basis. The CAG pegged the loss to the exchequer at Rs. 1,76,369 crore. The Supreme Court on Feb. 2012 ordered all 122 licences issued to be cancelled. Telecom minister A. Raja lost his job and went to jail.
Can we come to any figure as to how much public money has been looted in the years from 1992 to 2004? According to one estimate, it is around Rs. 80 lakh crore (Rs 80 trillion)! Another point: the loot was “secular and inclusive” with India’s elected guardians choosing to steal from their own country.
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