Brouhaha over electoral bonds

A contentious issue in the country at the best of times, electoral funding is back hogging the headlines with allegations of corruption flying thick and fast. The Congress is demanding immediate scrapping of electoral bonds; Congress leader Rahul Gandhi has tweeted that these bonds are but another name for ‘bribes and illegal commissions’. The opposition party has alleged that of the Rs 6,128 crore worth electoral bonds purchased from March 2018 to October 2019, as much as 95 percent have gone to the ruling BJP. The matter will clear up once the BJP and Congress submit their income and audit reports on the Lok Sabha elections this year to the Election Commission.

The figures about the number and worth of bonds sold are with the State Bank (which has sole authority to sell such bonds), accessed by the NGO Association for Democratic Reforms (ADR). However, a Congress spokesperson has claimed before the media that his party got Rs 500 crore, and thereby the lion’s share went to BJP. Upping the ante, the Congress has accused the BJP-led Central government of selling off public sector undertakings “to crony capitalists and corporates who donated to the BJP” through these bonds. More seriously, the opposition party is quoting media reports that electoral bonds have turned into a mechanism for laundering black money, which the Reserve Bank and Election Commission of India had anticipated — but whose objections were ignored by the government when it decided to go ahead with the scheme. The fact that parties are selectively marshalling figures to tar each other while choosing to remain silent about their own transactions and money flows, is symptomatic of their overall secretive culture.

Whatever be their ideological moorings, they are remarkably on the same page when it comes to resisting any demand for RTI queries into their workings and funding. They claim that despite receiving facilities and subsidized offices from the government, they cannot be brought under RTI ambit as ‘public authorities’. Some parties openly argue that once political opponents know how they are funded and who their donors are, they could get squeezed. Transparency activists have been pointing out the irony — of governments sought to be brought under disclosure law like Right to Information Act, while the parties forming the government resolutely stay out of it!

Given this culture, it comes as no surprise that the ruling parties of the day seek to maximize their control over the levers of power, particularly in getting more funds to flow to their coffers in hush-hush manner away from prying eyes. It now transpires from media reports based on RTI queries that when the government in 2017 was doing the paperwork for the electoral bond scheme (launched on March 1, 2018), it was discovered that the RBI Act needed to be amended, but the Reserve Bank authority gave a negative assessment about the proposed amendments. Supposedly, the RBI found it disquieting that the electoral bonds being ‘bearer bonds’, these were therefore transferable by delivery — hence, ‘who finally and actually contributes the bond to the political party will not be known’. In other words, these bonds could serve as vehicles for money laundering.

What happened thereafter is well known — the government pushed through the scheme arguing that who paid for the electoral bond and which party got the money would be known ‘only to the issuer bank’. Critics asked whether such information accessible to bank officials and taxmen could be inaccessible to the government of the day; there were further questions about the changes enabling political parties to receive foreign funds, the removal of upper limit to how much money corporates can donate through bonds, the anonymity guaranteed to cash donors (who only needed to break down their donations to unlimited lots of Rs 2,000).

The Election Commission too is learnt to have flagged issues in year 2017 — that tweaking the Income Tax Act, Representation of the People Act and Companies Act could ‘seriously impact transparency in funding of political parties’. There are allegations that the treasury bench put a gloss over these EC misgivings while getting the amendments for electoral bonds passed in Parliament as part of a Money Bill. Whether it was right to call the legislation a Money Bill is presently under the consideration of the Supreme Court. Suffice it to say that till date, none of the disturbing questions relating to electoral bonds have been answered. The fear is that political parties may posture over funding and throw mud at each other, but at the end of the day, they will conspire to keep the system as opaque as ever. This is nothing but continued subversion of democracy itself.