The Electoral Bond “Scam”

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In the year 2017, the enactment of the electoral bond scheme by the BJP administration via the Finance Bill, circumventing the Rajya Sabha, notwithstanding the opposition of all opposing parties and the disapproval of the Election Commission and the Reserve Bank, represented an unparalleled endeavor to legitimize malfeasance. The apprehension of ‘quid pro quo’ (illicit transactions), as pointed out by the Supreme Court in February when deeming this scheme illicit, was vindicated entirely upon the revelation of all pertinent figures.

The unveiling of these figures elucidated the meticulousness with which the State Bank of India handled their disclosure. Initially, they requested an extension until June 30, contravening the Supreme Court’s prescribed deadline for furnishing data to the Election Commission. Essentially, every effort was made to postpone public disclosure until after the elections had concluded and a new government had been installed. When admonished by the court and instructed to furnish the data by 5 pm on March 14, under the threat of contempt of court proceedings, the State Bank of India complied, albeit ensuring that the recipients of electoral bonds remained undisclosed. This was achieved by withholding the alphanumeric codes imprinted on the purchased and redeemed bonds, thereby obfuscating the allocation of bonds from the company ‘A’ to parties ‘A’, ‘B’, ‘C’, and so forth.

Nevertheless, it became evident from the list of bond purchasers that numerous shell companies, which exist solely on paper and serve as conduits for financial transactions, were among them. Furthermore, it was apparent that many of these entities purchased bonds exceeding several times their annual earnings (the prior cap on donations, limited to seven and a half percent of total profits, having been lifted by the electoral bond scheme). The rationale behind such actions is not arduous to discern. Either these are fictitious entities established solely for money laundering purposes, or they are profit-oriented enterprises, envisioning future gains, with electoral bonds constituting their investment.

Consequently, it was incontrovertible that this scheme facilitated the legitimization of corruption. Concurrently, it also transpired that among the entities heavily investing in electoral bonds, several were under investigation by Income Tax or the Enforcement Directorate, both agencies operating under the purview of the central government. However, based on the publicly available data, it was arduous to ascertain whether these companies’ electoral bonds were directed towards the ruling BJP at the central level. The non-disclosure of this information in the public domain prompted the State Bank of India to refrain from divulging the alphanumeric codes, contending that expeditious calculation was beyond their capability. The Supreme Court, cognizant of the technological advancements of the modern era, granted an extension until 5 pm on March 21, mandating the comprehensive disclosure of all available information.

Remarkably, the State Bank of India, which purportedly lacked the capacity to furnish information earlier than June 30, complied with the court’s directive on March 21, a staggering 100 days ahead of the anticipated deadline. One cannot help but question why the State Bank of India persisted in delaying disclosure if it was indeed capable of complying earlier. Who exerted pressure upon them, compelling compliance only when subjected to greater coercion? Who cautioned them against revealing our reality?

The same entity pressuring the State Bank of India also petitioned the Federation of Indian Chambers of Commerce and Industry (FICCI) and the Associated Chambers of Commerce and Industry of India (ASSOCHAM) to advocate against disclosing the identities of bond purchasers, ostensibly citing adverse implications for business interests.

However, despite concerted efforts to mollify the Supreme Court’s stringent stance, the truth eventually surfaced. Speculations metamorphosed into reality, unveiling the BJP as not only the primary beneficiary of this opaque electoral bond system (with approximately 50 percent of funds routed to its coffers since April 2019, and a higher proportion previously), but also as the most flagrant beneficiary of corruption. It leveraged central agencies to extract concessions from business conglomerates, a feat unattainable sans the cloak of secrecy afforded by the electoral bond scheme. The acceptance of anonymous donations from business entities embroiled in money laundering and tax evasion allegations resulted in the cessation of enforcement actions against them, purportedly implicating central agencies in extortionate activities.

“In March 2022, Parliament divulged a surge of 27-fold in raids and investigations under the Modi administration. The Enforcement Directorate conducted 3010 such operations, yet only 888 resulted in charges being filed, and a mere 23 defendants were convicted by the courts. The interstice between these phases becomes more discernible through the lens of electoral bond data,” remarked Vrinda Karat in her piece ‘Who Pays Who Wins,’ published in the Indian Express on March 23, 2024.

Data analysts unearthed several instances corroborating these assertions. For instance, in September 2018, the Haryana Police initiated proceedings against Robert Vadra and the DLF Group for impropriety and malfeasance in a land transaction in Gurugram. In January 2019, the Central Bureau of Investigation (CBI) conducted searches at DLF’s premises in another case. Between October 2019 and November 2022, three subsidiaries of the DLF Group collectively purchased electoral bonds amounting to Rs 170 crore, with the BJP as the sole beneficiary. Intriguingly, in April 2023, the Haryana BJP government informed the court of no irregularities in the Vadra-DLF land deal, resulting in the case’s dismissal.

An illustrative case is that of Aurobindo Pharma, a Hyderabad-based firm implicated in the Delhi Excise Policy imbroglio. In November 2022, the Enforcement Directorate apprehended the company’s director, P Sarathachandra Reddy, five days after which the company donated Rs 5 crore in electoral bonds to the BJP. Subsequently, Mr. Reddy secured bail on health grounds in May 2023. In June 2023, he became a government informant, prompting the company to donate an additional Rs 25 crore to the BJP.

It is worth noting that Delhi Chief Minister Arvind Kejriwal was also embroiled in the Delhi Excise Policy affair. Allegations against the involved parties are supported solely by witness testimony. During a bail hearing for Manish Sisodia, the court expressed skepticism regarding the strength of the case, yet refrained from granting bail, citing insufficient evidence tracing the alleged bribe money’s path. This prompts one to ponder why Aurobindo Pharma did not channel Rs 100 crore to the Aam Aadmi Party via electoral bonds. Why opt for an alternate route when electoral bonds offer a secure conduit? As Arvind Kejriwal languishes in custody and national elections loom, the interconnections paint a disconcerting picture, albeit one deserving of further exploration.

On March 25, The Indian Express detailed the electoral bond purchases of 26 companies under the scrutiny of central agencies. Of these, 16 companies increased bond acquisitions post-scrutiny, while six augmented purchases after falling under agency surveillance. A perusal of The Indian Express’s analysis reveals that the BJP is not the exclusive beneficiary of these bonds. However, it commands

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