'Foreign Funding to Parties, Which Modi Govt Greenlit, Real Danger to Democracy'

'The harassment of Harsh Mander’s Aman Biradari instead of tackling the elephant in the room is a travesty of justice,' former Union revenue secretary E.A.S. Sarma wrote to Rajiv Gauba.

New Delhi: E.A.S. Sarma, a former secretary in the Union finance ministry has written to the cabinet secretary Rajiv Gauba saying that news reports on the Union home ministry recommending a Central Bureau of Investigation inquiry against an NGO established by Harsh Mander point to a “travesty of justice.”

Sarma calls the news report “disturbing”. The letter has a link to a report on NDTV with the headline ‘Centre Recommends CBI Inquiry Against Activist Harsh Mander’s NGO’. Reports have appeared on several news media outlets on unnamed officials in the MHA calling for a CBI inquiry against Mander’s organisation over alleged violations of the Foreign Contribution (Regulation) Act.

Sarma, in his letter has said that he wishes to remind Gauba that the Narendra Modi government itself paved the way for the Bharatiya Janata Party and Congress to receive donations from foreign sources, in alleged violation of the same FCRA.

“Let me remind the present government that both the national political parties, namely, BJP and Congress, accepted donations from foreign sources year after year, in violation of the provisions of the Foreign Contributions (Regulation) Act (FCRA) of 1976 and its successor legislation, FCRA, 2010.”

He then invoked the petition filed before the Delhi high court by Sarma and others.

“The Association for Democratic Reforms (ADR) and I filed a case before the Hon’ble Delhi High Court [WP(C) 131/2013] and the court pronounced a judgement on 28-2-2014 directing the Home Ministry to take appropriate action within 6 months, against the political parties for violating the FCRA. Both BJP and Congress chose to contest the judgement before Hon’ble Supreme Court (SLP No 18190/2014) and during the proceedings before the Hon’ble Supreme Court, following detailed arguments on our behalf, the two political parties had to withdraw their SLPs, as recorded in the court’s order dated 29-11-2016.”

Sarma then said that the government should have taken action against BJP for allegedly violating the FCRA but what actually happened was that the laws were retrospectively altered.

“In the normal course, if the government had any respect for maintaining the integrity of the electoral process, it would have immediately proceeded to take action against the political parties including BJP, for violating the FCRA, especially in view of the fact that foreign donations to political parties can hurt the sanctity of our democracy, much more than in the case of anyone else receiving such donations.

“Instead of this, the present NDA government quickly took the extraordinary step of retrospectively altering the laws that stood in the way of foreign donations flowing into the bank accounts of the political parties.”

Sarma also spoke on the way the amendments were regularised, through what he calls were “backdoor means,” that enabled changes to the Finance Acts of 2016 and 2017. The Modi government also, additionally, amended the Companies Act to purportedly enable private companies to donate more to political parties.

“Ironically, the government introduced those amendments, not through a regular Bill that could be discussed by both Houses of Parliament, but through the backdoor means of the successive Finance Acts of 2016 & 2017. The amendments not only “regularised” the illegal foreign donations received in the past but also legalised all future donations flowing into the coffers of the political parties, if a foreign company could merely channel it through a subsidiary set up in India. As if this was not enough, the government went one step further to amend the Companies Act itself to relax the ceiling on private companies’ donations to political parties, opening the floodgates to both domestic and overseas business houses funding India’s elections.”

Sarma then mentioned electoral bonds, which he noted pointed to political parties’ “insatiable greed” for company donations. This also robbed Indians of the knowledge of who is funding which party and how.

The process makes mockery of the ordinary citizen, Sarma implied.

“Making no secret of the political parties’ insatiable greed for company donations, the present NDA government further introduced an opaque system of Electoral Bonds through which anyone and everyone can channel donations to political parties, without the citizens of India having an opportunity, as required in Article 19, to know who is funding the political parties.”

“It is bizarre that an ordinary citizen has to comply with all kinds of cumbersome Know-Your-Customer (KYC) requirements for a meagre account opened in a bank but the political parties should go scot-free when they blissfully receive thousands of crores of rupees without having to answer anyone!”

“While we have separately contested the propriety of the government retrospectively amending the two FCRA legislations, prima facie, there is no ethical justification for legalising an offence already committed by a political party under the FCRA and for condoning foreign donations to be received in the future, as by whatever name one may call it, foreign funding of elections is unacceptable.

“Why should companies, especially, foreign companies, give donations to political parties? Certainly not for promoting democracy, but more for quid pro quos from a willing political executive to enable them to profiteer, at the cost of the public.”

Sarma noted that he has written to the top representatives of the NDA government on the inappropriateness of the “regressive legislative amendments introduced by it” and its likely adverse impact on the sanctity of elections. He also mentions his own article on the FCRA amendments on The Wire.

Also read: FCRA: Amending a Repealed Law Retrospectively Crosses all Ethical and Legal Limits

“To my disappointment, the present government has chosen not to respond,” he said in the letter.

Then, he touches upon the Aman Biradari Trust run by activist Harsh Mander.

Mander, who is a vocal critic of the Narendra Modi government is not a stranger to government action against him. In 2021, teams of the Enforcement Directorate raided Mander’s house in Vasant Kunj, his office in Adhchini, and a children’s home in Mehrauli which his organisation, the Centre for Equity Studies (CES), helped establish.

In 2020, the National Commission for Protection of Child Right claimed to have found a host of irregularities – both financial and administrative – in a children’s home founded by Mander. Later, the Delhi Commission for Protection of Child Rights in four different surveys contradicted a majority of the claims made by the NCPCR in an affidavit submitted to the court.

Sarma said in the letter:

“To the best of my knowledge, Aman Biradari Trust, run by Harsh Mander, is doing excellent work, towards promoting fraternity and a secular attitude among the people. While I do not claim to have any details of the case made out by the MHA against Aman Biradari, the government should draw a clear distinction between mens rea (intention to commit a crime) and a mere technical violation. It looks as though the MHA is attributing ill motives to Aman Biradari, which is prima facie unacceptable.”

He then notes of his distress at the essential contradiction in such a line of action against an NGO.

“I feel distressed that the Home Ministry should recommend a CBI investigation against Aman Biradari and Harsh Mander, while many political parties are getting away with far more serious offences committed under the FCRA or otherwise!

“What is the action taken by the government against all those delivering hate speeches that tend to hurt the people’s sentiments and those that have spread false, divisive narratives? What is the action taken against big businesses laundering money, stashing ill-gotten wealth in overseas shell companies and manipulating the domestic stock market to rob ordinary citizens of their hard-earned savings?

“There cannot be one set of rules for the political parties and business oligarchs and another for an NGO like Aman Biradari! Article 14 of the Constitution mandates that all citizens shall be treated equally before the law.

“May I appeal to the government not to harass Aman Biradari and Harsh Mander but, instead, support them in their good work?”

Sarma ultimately notes in his letter that, “Foreign donations to political parties are a threat to India’s democracy.”

“It is high time that such donations are prohibited. In fact, the idea of political parties receiving donations from private companies is in itself a regressive one and the sooner we impose a ban on it, the better it would be for our democracy,” he says.

Note: EAS Sarma is a former revenue secretary in the Union Ministry of Finance and not a former finance secretary as was incorrectly stated in an earlier version of this story.