Impropriety due to conflicts of interest remain unaddressed. Sponsor names are displayed at India Foundation events but now we are told they paid nothing. An FCRA license has been secured but we are told there is no foreign funding.
Stated in its simplest form, The Wire‘s story about the India Foundation revolves around conflicts of interest along three distinct axes.
The first concerns its founder-director Shaurya Doval, who is partner in a Saudi businessman-backed financial services firm that helps clients close deals in a range of sectors, some of which may overlap with the responsibilities of ministers and officials whom he manages to get involved in the India Foundation’s activities. The second concerns the propriety of ministers working as directors for a foundation whose activities have a direct and and indirect bearing on their work in government, especially given the dependence of the India Foundation on corporate support, both Indian and foreign. The third is political: should a think-tank that is linked to a political party receive tax-payer support in the form of backing from public sector enterprises and, in some cases, ministries and government departments too?
On October 31 and then again on November 1, The Wire sent national security advisor Ajit Doval’s son, Shaurya Doval, an email with a detailed list of questions on the activities of the India Foundation, of which he is a director. Doval had earlier simply replied “Conferences, Advertisement, Journal” to a question the reporter Swati Chaturvedi posed on October 30 about the source of the foundation’s funds. This answer was clearly inadequate given the public interest involved in understanding the financing of an NGO that has cabinet ministers on its board.
Despite reminders via WhatsApp – to which he had responded the first time – Doval chose not to answer any of these questions. Ram Madhav, a co-founder and director of the India Foundation and owner of its internet domain, also chose the route of silence after promising Chaturvedi that an “appropriate person” would reply.
Questions addressed to Shaurya Doval on November 1
- With which authority is your trust registered?
- Who are its trustees?
- When did the India Foundation get its FCRA registration for the first time? The FCRA site says it was “renewed” in 2017.
- If the India Foundation got registered with FCRA for the first time in 2017, did you receive FCRA ‘prior permission’ for foreign contributions/donations in the years before that? If so, could you provide details of that?
- If the India Foundation has been registered with FCRA prior to 2017, could you tell us why the foundation has not filed its mandatory FC returns for each year? If they were filed, these are put up for public scrutiny but nothing is available for your India Foundation. In case you have filed and these have not been uploaded by the FCRA authorities for some reason, please share the same with us.
- Could we have a list of foreign companies that have given money to the India Foundation in the form of advertisements, sponsorship of events etc. And also Indian private sector companies that have been a source of revenue, direct or indirect.
- Does the India Foundation execute a service contract in such circumstances when receiving payment from foreign companies? If so, a sample copy of the same.
- On the revenue side, we can understand getting advertisements and corporate sponsorship for conferences/events/journal but what about the day to day expenses, eg. rent for premises, salary for staffers, etc.
- Do you or Ram Madhav draw a salary or any other form of remuneration from the India Foundation?
- Could you share with us what the annual budget of the India Foundation is? And its recent audited financial statements, in the interests of transparency.
- Does the India Foundation have a 12AA and 80G license?
- Is the list of directors on the India Foundation site current or have new directors joined or have any of those shown there quit?
- Please share the donation/contribution if any received from government bodies, PSUs, ministries etc.
On Wednesday, November 1, a questionnaire was sent to defence minister Nirmala Sitharaman, with copies to her ministry staff. No answer was received.
Questions addressed to Nirmala Sitharaman, defence minister and director, India Foundation
- What are the India Foundation’s sources of revenue?
- We see that foreign companies like Boeing and DBS have sponsored India Foundation events in the past and perhaps still do so. Would you accept that there is a conflict of interest involved in you serving as a Director on a foundation that receives funding, directly or indirectly, from foreign companies, especially those that have dealings with ministries you have handled such as Commerce and Industry, and now Defence?
- You are a Director of the India Foundation which has received FCRA clearance with registration number 231661683, last renewed on 6/6/2017. It is not clear whether the India Foundation had FCRA registration earlier but the FCRA website which maintains a record of the mandatory FC returns shows no return filed for the last four financial years (i.e. FY 2013-14, 2014-5, 2015-16 and 2016-17) by the India Foundation. Could you confirm when exactly the India Foundation was first registered under the FCRA?
- If the India Foundation has only just received FCRA registration for the first time, was the receipt of contributions from foreign companies in earlier years legal under the FCRA?
- The FCRA prohibits members of legislatures, government servants and office-bearers of political parties from receiving foreign contributions. We know that at least two foreign companies that fall under the purview of the FCRA – Boeing and DBS – sponsored events organised by the India Foundation and the funds given would appear to fall squarely within the purview of a ‘foreign contribution’ under the FCRA. Since you are a Director of the India Foundation and also an MP and minister, have you not violated the FCRA by accepting foreign contributions as a director?
- Wouldn’t any future foreign contributions to the India Foundation of which you are a Director also constitute a violation of the FCRA as long as you are an MP and/or a public servant? (some of the questions have been edited for the sake of brevity)
A similar set of questions was sent on November 1 to Suresh Prabhu, Jayant Sinha and M.J. Akbar. None of the three replied. A brief questionnaire was also sent to Nripendra Misra, principal secretary to the prime minister on November 2. After giving all six directors three full working days to respond, The Wire published its story at 7:30 pm on Friday, November 3 on how conflicts of interest were writ large over the India Foundation.
The story drew on information available in the public domain, including from the India Foundation’s own website and brochures, the FCRA website run by the Ministry of Home Affairs, the website of Shaurya Doval’s Gemini Financial Services, the brief answers Shaurya Doval had sent Chaturvedi on October 30 and a previous interview he had given to the Economic Times. Finally, The Wire also added the views of a former defence secretary and a former cabinet secretary on the conflicts of interest involved in ministers serving as directors of the India Foundation.
On November 4, a full 24 hours after The Wire‘s story was published, the India Foundation posted a ‘Response to the article in ‘The Wire‘ on its homepage. Curiously, neither Doval nor the India Foundation made any attempt to draw the attention of The Wire or Chaturvedi to this ‘response’. The contents of the ‘response’, issued by Shaurya Doval, are reproduced below in full:
The article in The Wire dated November 4, 2017 by Ms Swati Chaturvedi suggesting conflict of interest between the Foundation and its Directors is without basis.
The article in question is speculative and clearly intends to insinuate wrong-doing where there is none.It strikes a maleficent tone without any basis other than surmise. The India Foundation deplores the surmises and innuendos used to attack its legacy, reputation and credibility.
The India Foundation is a premier organisation with a track record of consistent work in nation building and building cultural and social awareness of the potential of the country, since 2009.
The directors concerned have been associated with the India Foundation long before they became Ministers or even Members of Parliament.
In a democracy, think tanks which provide a platform for the exchange and evolution of ideas play an important role. The India Foundation has already clarified that lobbying is not and has never been a part of its agenda. Lobbying which has been the bane of this country, is the kind undertaken in the shadows and back rooms and not in public forums.
It is clarified and reiterated that:
1. No foreign funding has ever been received by the Foundation from any overseas private corporation or individual.
2. The Foundation and its Directors have not furthered the commercial or private interests of any company, domestic or foreign. The agenda of its meetings are concerned with culture, geo-politics, and macro-economics such as the investment climate in India and development of the North East.
3. The Foundation is in complete compliance with all statutory requirements and the activities of the Foundation which are public and transparent, faithfully adhere to its charter.
Director, India Foundation
As should be apparent to anyone who has read The Wire‘s original story, Shaurya Doval’s response raises more questions than it answers.
Photographs from the India Foundation’s own publicity material clearly show Boeing and DBS as sponsors of its Indian Ocean event, while Magal is shown as a sponsor of the Smart Border Management event. Anticipating Doval’s possible line of defence, Chaturvedi’s original story reproduced the photographs showing their names on stage and added “though the nature of this sponsorship – how much was paid and to whom, the India Foundation or a ‘partner’ – is not known.”
If Doval’s statement that “no foreign funding has ever been received by the Foundation from any overseas private corporation or individual” is taken at face value, this means either that Boeing, DBS and Magal were listed as “sponsors” without actually providing any actual sponsorship, or that the “foreign funding” they provided was received not by the India Foundation but by a partner organisation. Either way, the Foundation needs to explain what form the sponsorship took.
Since NGOs run by critics of the Modi government have been investigated and prosecuted for what the MHA and CBI have alleged are violations of the Foreign Contributions Regulation Act, it is only fair and proper that an investigation be conducted into the India Foundation’s finances, especially its events. Only an investigation – ideally under the Supreme Court’s supervision – can establish whether it is in full compliance with the law.
The FCRA mystery
Doval’s response also sidesteps the fact that the India Foundation applied for and received an FCRA certificate (No. 231661683) from the MHA in June 2017. Since NGOs apply for an FCRA certificate precisely in order to receive foreign funding from foreign private corporations, individuals, governments and organisations, it must be assumed that even if – as Doval claims – the foundation has not so far received foreign funding, it has every intention of doing so in the future. Doval’s denial, therefore, brings into even sharper relief the conflict of interest involved in ministers serving as directors of a foundation that has chosen to set itself up as the recipient of contributions from foreign corporations and other entities that would, in all likelihood, have dealings with the government of India.
Doval’s response to this very real conflict of interest is to say: “The directors concerned have been associated with the India Foundation long before they became Ministers or even Members of Parliament”.
Prior association can hardly be a mitigating circumstance when conflict of interest is manifest. That the government itself and some of the ministers concerned were aware of this conflict is apparent from a November 24, 2014 report on the India Foundation in Outlook magazine, which noted that Nirmala Sitharaman had “left the foundation’s board of directors after joining the ministry amidst speculation that it could have been an office of profit.” Outlook either jumped the gun or Sitharaman changed her mind; in any case, the impropriety of ministers serving as directors of a think-tank that organises events where government policies are discussed and corporate sponsorship – Indian, if not foreign (again, taking Doval’s denial at face value) – is solicited hardly needs elaboration. The directors should have resigned as soon as they became ministers.
Doval is right that think-tanks play a vital role in a democracy. The India Foundation too is entitled to play such a role. But given the presence of ministers as directors, his own role as a partner in a big financial services firm whose client base might also enjoy having a ringside view of the “platform for the exchange and evolution of ideas” that he runs on the side, and the complete lack of transparency in the think-tank’s financials, he cannot expect the media to keep averting its gaze from the conflicts of interest involved.
The idea that the India Foundation is just another think-tank was refuted by none other than Ram Madhav, when he boasted at an India-Bangladesh event in Delhi in 2015: “Do not think that this (India Foundation engagements) is back-channel or track II. These engagements are as important as official engagements and government takes it very seriously.”
Shaurya Doval can start by making a complete disclosure of the India Foundation’s revenue and expenditure, at least from 2014 onwards, and explain why he applied for and received an FCRA license if the foundation is not interested in foreign funding. In his Economic Times interview from 2015, he said, “We raise sponsorship and get endowments from various sources.” At the very least, given the presence of ministers as directors, he must disclose who these endowers and sponsors are and what is the amount of support they provide.
The article has been edited to add a new introductory paragraph setting out the broad contours of the controversy and to add a 2015 quote from Ram Madhav.