Revealed: How Ford Foundation Got the Modi Government to Back Off From Its Expulsion Move

Leaked e-mails give the first account of how one of the world's wealthiest charitable foundations negotiated to rescue its India operations.

The Intelligence Bureau may have dissuaded Modi from de-authorising the Ford Foundation. Credit: PTI, Reuters

The Intelligence Bureau may have dissuaded Modi from de-authorising the Ford Foundation. Credit: PTI, Reuters

New Delhi: In the winter of December 2014, months before the Modi government’s crackdown on over 13,000 NGOs started, the Ford Foundation’s offices in New Delhi learnt through informal sources that its funding of an organisation run by activist Teesta Setalvad had drawn the interest of Gujarat state police.

Although the funds that were granted were for routine activities related primarily to research and the building of organisations dedicated to improving communal harmony – according to Ford Foundation internal documentation of the affair – the language used in Setalvad’s initial proposal regarding the 2002 Godhra violence kicked off a series of events that plunged the foundation into a chaotic mess.

The stakes involved? According to the account pieced together by one of the world’s wealthiest charity funding organisations, Prime Minister Narendra Modi may have been initially tempted to send Ford Foundation “packing” from India.

A set of e-mails leaked by Wikileaks detail the developments after December 2014 from the perspective of Ford Foundation officials – how they grappled with the impending controversy, their view on the Modi government’s motivations, the allies they recruited and the strategy they formulated.

The e-mails are from the personal inbox of John Podesta, campaign chief chairman to Hillary Clinton, and are mainly from Darren Walker, president of Ford Foundation, as they troubleshoot their way through the sticky situation of finding themselves on the ‘watchlist’ as part of the evolving criminal investigation against Setalvad.

These emails, mostly sent from May 2015 to July 2015, show that there was a very active outreach from the Ford Foundation, not only through its senior global and India officials, but also by roping in the help of Ford Foundation trustees such as Infosys co-founder N.R. Narayana Murthy.

April 2015: How it started

On April 13, nearly six months after the Ford Foundation first learnt that its connection to Setalvad was being viewed warily by Modi government, Times Now reported that the Gujarat police had asked the Ministry of Home Affairs to look into whether the Ford Foundation had violated rules governing foreign donors and, more importantly, whether the foundation had acted in conflict with “India’s national interest”.

Two weeks later, the Times of India reported that the organisation had been put on the government watch-list. Throughout this month, the foundation’s internal communication suggests that “neither Gujarati law enforcement nor any agency of the national government formally contacted the foundation” until the month of May.

While no official government contact was in the offing, the foundation did receive a tip-off from an Indian journalist in the form of a document that confirmed its position on the Modi government’s watch-list. After learning of the government’s action indirectly, an internal Ford Foundation document notes that all grant-making within India was ceased.

By the beginning of May, officials in its New Delhi office, along with Walker, kicked into damage-control mode, reaching out to lawyers and engaging international media monitoring firms. Multiple requests for a meeting with Modi were sent out, requests that apparently “stressed the foundation’s readiness to strengthen its review procedures and find common ground in terms of programmatic priorities”. These requests ultimately proved to be unsuccessful.

However, on May 21, the trio of Walker, Infosys’ Murthy and Kavita Ramdas (Ford’s India head) met Nripendra Mishra (principal secretary to the prime minister), finance minister Arun Jaitley and what one document describes as the “influential [resident] Commissioner for Gujarat” (Bharat Lal) in separate meetings.

It’s unclear how successful these meetings were, because three days later, on May 24, Walker sent one of his first e-mails to Podesta. “I’m just back from Delhi and need your advice on a sensitive matter. Would you have time for a brief chat in the next couple of days?” the email reads.

Follow-up emails show that this is around the time that Podesta started receiving semi-regular updates from the Ford Foundation team in New Delhi. In one correspondence on May 26, Walker attaches a document of “background materials on the current controversy” – which explains in detail their short-term action plan and thanks him for reaching out to foreign secretary S. Jaishankar.

Credit: Screenshot, Wikileaks

Credit: Screenshot, Wikileaks

“Many thanks for speaking with me last night and your willingness to reach out to S Jaishankar on our behalf. As promised, please find attached background materials on the current controversy between Ford and the Indian government. I’m happy to speak further if the information contained raises questions that need clarifying,” Walker wrote.

Modi’s gamble, through the eyes of Ford Foundation

“[The] PM’s initial reaction seems to have been to send us packing, de-authorize us fully” – this was the assessment of the Ford Foundation last year, based on “insider accounts and insights”, that was shared with Podesta.

Modi’s reaction was apparently influenced by the Gujarat police’s investigation into Setalvad. “When the Gujarat police contacted Home Affairs, the Intelligence Bureau also got involved and flagged Ford’s perceived transgressions in the Setalvad funding to the PM,” the Ford Foundation’s background reads.

The troubles began when the Gujarat police ordered the foundation to turn over internal documents related to Sabrang’s (Setalvad’s organisation) funding.

The original 2004 Sabrang proposal to the Ford Foundation included “strong and accusatory language” against the BJP and then-chief minister Modi for the 2002 Gujarat riots.

“Although the foundation’s funds were stipulated for routine activities related to research, public education, an online archive, and the building of a network of organizations interested in advocating for improved communal harmony, the language included in the background portion of Sabrang’s proposal was very personal with respect to Modi’s potential culpability, and once in the custody of Gujarat police became a new center of focus – and eventually the source of another allegation of foundation meddling in political affairs,” said the US group’s version of events leading up to its inclusion in the ‘watchlist’.

The “fact” that Gujarat police were eager to “find something” on “Setalvad, one of Modi’s worst critics, for some time” would have led to interpreting Ford Foundation’s past actions in “that negative light”, they calculated. “It seems it was indeed the language accusing the state government and appearing to ‘take sides’ that led the authorities to conclude there was political over-reach by the foundation”.

It was apparently the Intelligence Bureau’s evaluation which stopped Modi from following through on his initial instincts to “send us (foundation) packing”. “IIB (Indian Intelligence Bureau) warned that it did not have strong enough evidence to justify that,” the background note says. Modi’s political advisers also tallied up the “risks, of say, an embarrassing defeat for the government in court”.

“Thus the decision to place us on a watch list, a relatively standard move related to the treatment of Greenpeace and others,” it said, referring to the suspension of FCRA license and the freezing of the bank accounts of the environmental NGO.

A couple of weeks before this evaluation was shared, US ambassador to India Richard Verma had publicly expressed concern about the “challenges” being faced by NGO. “Because a vibrant civil society is so important to both of our democratic traditions, I do worry about the potentially chilling effects of these regulatory steps focused on NGOs,” he said at a lecture on May 5. In April, US state department spokesperson Marie Harf said that the US remained “concerned about the difficulties caused to civil society organisations” after suspension of Greenpeace and restrictions on Ford Foundation.

The foundation, however, felt that these public pronouncements may not have had the desired impact on the Indian government.

“It is very possible that the interventions by the USG [US government] did not go down well at all, especially those carried out in public,” it said. “Lack of subtlety and nuance—or at least none perceived,” was the denouncement from Ford Foundation.

The US’s public statements were criticised in the foundation’s background notes as being rather tone-deaf. “It was all delivered as very general concern, tied to respecting civil society and the usual American narrative about threats to democracy in other countries and how other governments should behave, not “we understand and respect your concerns about Ford, but it would be great to resolve this in ways that serve all our interests”.

Bureaucracy running amok; MHA at fault

At the same time, Ford Foundation’s troubles may have been caused by officialdom throwing out the rule-book in the absence of any clear instructions from the political leadership and the Modi government.

“Bureaucratic over-reach is an important part of the current conundrum, too. Even senior bureaucrats tend not to be sure what the highest-ups want, what would suffice in the way of a resolution. So the bureaucrats who operate the machinery lean toward the most conservative course until given some clear, unambiguous direction”.

But, there was no indication that “the Modi administration, including the PM himself, know exactly what would satisfy them”.

Acknowledging that Ford Foundation controversy may not be “their [the Modi govt] top priority”, it was assumed that the lack of clear information was the government’s strategy to keep the US group on their toes. “It’s therefore reasonable to assume that government will let the very vagueness of the MHA directive make us sweat on the financial-operational front, knowing we have limited time. Why not let us feel the squeeze some more?  We need to change that calculus”.

The darkest days, however, were over, felt the foundation.  “Some advisors  suggest that the worst – in the way of official action – has been done by now. The points have been made, the financial squeeze is in place. From the government’s perspective, why risk defeat through formal charges, for example”.

The “suggested talking points” drafted for Podesta to take forward the issue with the Indian leadership were built on this analysis.

The Ford Foundation wanted Podesta to convey to Indian interlocutors that a “long and rudderless process driven only by the bureaucracy won’t play out well”. The message was clear: “Your Home Affairs Ministry has made it all but impossible for Ford to operate although senior officials – including the PM’s Principal Secretary – have assured the foundation’s president and Narayana Murthy that India wants Ford to continue to operate in India”.

The line to be pursued by Podesta was that an over-eager bureaucracy should not push India into joining the international community’s rogues’ gallery. “If that’s indeed to case, I have to say, unintended bureaucratic snarls could lead this to spiral in a direction that’s very difficult to walk back. It would be a shame if India ended up in the tiny ‘club’ of nations that have forced the Ford Foundation to depart – Mugabe’s Zimbabwe, Pinochet’s Chile, Nigeria under military dictatorship,” said the section under ‘talking points’.

Dawn of a resolution

As part of their Podesta briefing, internal documentation also shows how Ford officials approached a possible resolution with the Modi government. At the heart of the resolution was the notion that it should be a “face-saving way out for the government”.

“[In] the absence of any specific request or guidance from the government on a resolution, the onus is on the foundation.  We must diplomatically propose a face-saving way out for government,” the note says.

Any forthcoming resolution, the organisation’s officials felt, would have three key components.

The first would be a formal apology for any procedural sloppiness seen in the Setalvad case, even though this was not a “general pattern or practice” carried out by the Ford Foundation.

The second component would have the foundation conceded its “exceptional status” within India and register formally under the appropriate law. “This would support the political and bureaucratic narrative that government ‘won’ something once it detected inappropriate behavior by a long-privileged American donor, and it would help remove the sense of undeserved special privileges that apply to Ford alone, not Gates or others,” foundation officials note.

The last aspect of reassurance would be the promise of “tougher internal oversight”. This oversight would include things that the foundation would do internally “over and above legal requirements” to avoid similar mistakes in the future.

When The Wire contacted the Ford Foundation for a statement and with specific enquiries on the internal documentation found in the leaked e-mails, an organisation spokesperson pointed out that Podesta was merely one adviser who came from a “broad spectrum of well-respected and trusted people in India and the United States” that the foundation had consulted.

“Over the past year and a half, we have worked with the Indian government to update our legal status to operate in the country. As part of this process, we sought advice and counsel from a broad spectrum of well-respected and trusted people in India and the United States. With his experience and deep knowledge of the region, John Podesta was one such adviser. In seeking his advice, we shared updates gathered during routine media scanning that we conduct in all 11 of the regions of the world where we work,” the statement says.

Resolution and conclusion

The draft resolution that Ford Foundation appears to have been a blueprint for what eventually did happen; albeit with Podesta’s help. On June 13th, an e-mail from Walker to Podesta has nothing in the body, while the subject line reads: “Much improvement coming from PMO, thank you! thank you! Will keep you posted. Darren.”

A month later, on July 16th, a Times of India report declares that the stand-off between the Ford Foundation and the government has ended, with the organisation agreeing to register its India arm under the FEMA Act – a concession that the foundation’s draft resolution had agreed to make in May as a “face-saving measure” for the Modi government.

It is unclear at this point whether a formal apology over funding Setalvad’s organisation was tendered and whether the stricter internal oversight proposed has made its way into the foundation’s current operational standards. The foundation’s spokesperson did not answer specific queries in this regard.

Credit: Screenshot, Wikileaks.

Credit: Screenshot, Wikileaks.

One day before the TOI report was published, however, an e-mail from Ford Foundation board trustee Thurgood Marshall Junior profusely thanks Podesta for his intervention.

“I learned from Foundation President Darren Walker during a sidebar discussion of your pivotal assistance with the Indian Prime Minister. Remarkable – You never cease to amaze. Thanks – I remain a loyal member of the Podesta Fan Club and in your debt for being one of my best bosses and colleagues,” the e-mail reads.

In March 2016, almost a year after the troubles surrounding Ford Foundation India began, the situation  finally returned to a state resembling normalcy. A week before Modi was set to leave to Washington for the nuclear security summit, the ministry of home affairs decided to remove the foundation from the “prior approval” category. Simply put, it meant Ford Foundation no longer had to get clearances from the government before handing out any grants, putting an end to its year-long tussle with the Modi government.