‘It is very obvious that the Bharatiya Janata Party spent the largest amount of money. Thousands of crores, a lot of it black money, which they have received from many of these same people holding these accounts abroad, was pumped into its election campaign.’
‘Most of the FDI coming to India in my view is this illicit money which has been laundered and brought back.’
‘I have no hope that this government will move seriously to block these routes and pursue these people (who have illegal accounts abroad).’
The second and final part of advocate Prashant Bhushan’s interview with Sheela Bhatt/Rediff.com. Bhushan is one of the petitioners in the black money case in the Supreme Court.
Part 1: 'UPA, NDA approach to black money seems similar'
On Thursday, the Supreme Court handed over a sealed cover to the Special Investigation Team and they have said let the SIT decide on the issue. What is the legal implication of what happened on the first and second day in the SC? First the SC asked the government to submit the entire list, later the government claimed that it was submitted to the SIT in June. If it was submitted before, then why doesn’t the SC know about it? What’s your understanding of it?
See, there were two parts to the proceedings before the SC. The court was hearing the government’s application to modify its earlier order asking the Indian government to disclose the names of those against whom some prima facie illegality had been found. This argument of the double taxation treaty being a bar had already been rejected by the SC. The government still moved an application to modify this order that the double taxation agreement bars them from revealing these names.
This application was firmly rejected by the SC and the government, after seeing the clear indication from the court, did not press this application. Then the court said, you have been playing hide and seek with these names, you are extending a protective umbrella to certain people, so you give us these names.
At which point the government started saying through certain newspaper articles that the revelation of these names might jeopardise some treaties etc. Therefore the court felt that rather than disclosing these names immediately, let these names be given to the SIT and let the SIT take the situation to its logical conclusion. Let the SIT give a report to the court and the court may decide.
But in any case, the previous order of the court -- that in the case of people with some prima facie illegality, those names should be revealed -- stands.
Has your case in favour of revealing of the names weakened? On the First day it looked like a victory for you guys but on the second day it was a setback. So what is the actual position?
The actual position is that the government’s application for modification has been rejected. And the previous order asking the government to reveal the names where prima facie illegality has been found, that stands today and the SIT has been given the task to carry forward the issue.
So the ball lies in the SIT’s court now?
To some extent, but the ball still lies in the government’s court also. The government is still duty bound to reveal those names where prima facie illegality has been found. And, as we pointed out, prima facie illegality has been found in many more cases, who have probably been given amnesty. Then there were many people who have admitted to the income tax department.
There are certain irreversible acts done by the United Progressive Alliance for which the National Democratic Alliance government says it is suffering. Like the DTAA was signed only to take refuge under the confidentiality clause. Do you agree with that?
It may be legitimate for double taxation agreements to have a confidentiality of names regarding legitimate account holders. It is a view that there is a right to privacy with regard to those accounts. Prima facie that may be a valid way.
However, so far as seeking the names of illegal account holders is concerned, we don’t need to invoke double taxation again. If we want to really see the names of illegal account holders, we can do so under UN’s convention against corruption.
No double tax treaty is required. All you have to do is pass a law to the effect in the country. Neither the UPA had any limitations nor does the NDA. They were only seeking false refuge under this double taxation act.
Narendra Modi got such a big mandate and one of the big election planks was corruption -- of the UPA. Now, in spite of winning such a huge mandate on such an issue and particularly black money, the stand his government took was to request the court to revise the order to not force the government to reveal the names. Why?
It is very obvious that the Bharatiya Janata Party spent the largest amount of money (on its election campaign), thousands of crores. Possibly a lot of it black money, which they may have received from many of these same people holding these accounts, was pumped into the campaign.
Also, a lot of these crony capitalists, who may also be the benefactors of the present government, are these account holders. These are also the people who launder this money and invest it in anonymous instruments such as participatory notes and through tax-saving companies.
That’s why this present government wants to not only protect them but also not stop this avenue of investing this black money in India. First thing you can do is to stop the investment of black money in India, but even that is not being done.
Tell me, from a layman’s point of view, is the SIT competent to investigate? The hawala case was monitored by the SC but no money has come back.
See, under Indian law, under the Criminal Procedure Code, even a magistrate dealing with any criminal investigation, if a complaint is made to him or if an FIR comes to him, can ask the police to investigate or anyone else other than the police to investigate.
The problem is that if someone other than the police investigates, that person does not have the power to arrest. That is the only difference. The power to investigate can be conferred on anybody by the magistrate. The SIT is a well recognised, tried and tested way of appointing an investigating body which is not the normal police or not any normal investigating agency.
You can have an SIT by appointing retired police officers, judges, by having other civilians, by even sitting police officers, and the SC has done this in many cases. Once the SC orders the constitution of an SIT to investigate a class of offences or to investigate any particular aspect which involves any criminality, that body becomes the permanent special investigation body.
And therefore for anybody to say, as Harish Salve was saying, that this SIT will not be recognised as an investigating body by foreign countries for the double taxation agreement is absurd. Of course, they have to.
During the hearing one of the judges had mentioned that they can give the cases to the Central Bureau of Investigation. Do you think that is the solution?
If some detailed criminal investigation is required then the CBI or Enforcement Directorate is the normal agency. But given the present situation with the CBI, things are not normal over there. It will be very risky now to give any investigation to the CBI.
So much is being is debated on black money by people from L K Advani to Baba Ramdev to Prashant Bhushan to Harish Salve. We want to know from a layman’s point of view, tell us five things you want this government to do which you will find objective and will add credibility to their investigation.
I had already written to the prime minister in June saying what needs to be done regarding this issue. I had said first you need to close down instruments for investing black money in India itself -- such as participatory notes. And you should make it mandatory for foreign companies wanting to invest in India to disclose who their ultimate shareholders are so that we know who is investing the money. Most of the FDI coming to India, in my view, is this illicit money which has been laundered and brought back.
Secondly, you need to pass a law which even be an ordinance, asking all Indians to disclose their assets abroad including their bank accounts. And further say that those assets which are not disclosed will be deemed acquired through corrupt means unless shown otherwise and liable for confiscation.
Once these two things are done then the Indian government can ask foreign governments like the Swiss and Mauritius governments to disclose the names of Indian account holders in their countries, who are holding assets which have not been disclosed here.
The Indian government can give them a list of all the assets disclosed by the Indian citizens, say, in Mauritius and say if there are any other Indian citizens who are holding property or have accounts in your country, then please disclose it to us. And under the UN convention against corruption, countries like Mauritius, Switzerland etc which are tax havens are obliged to disclose such information to the Indian government.
Do you see any particular strategy of this government to get the money back from these 627 accounts?
I do not see any strategy.
Do you think it is turning out to be a big joke?
I think we may need to give some more time before we come to that conclusion, but right now the signs are not very positive.
When will India get the first instalment of money?
We won’t reach the money unless the government gets tough.
Doesn’t the hawala case make you feel pessimistic about this investigation and the debates around it?
In the hawala case one basic mistake was made which the SC ought to have looked into is that the assets of the persons who were named in the hawala diaries were not investigated. If those had been investigated, probably we would have been able to catch some persons who were mentioned in the diaries.
Compared to that are you hopeful in this Swiss bank black money case?
No. I’m not very hopeful because to my mind this government is as much a beholden to many of these capitalists who hold these accounts. So I have no hope that this government will move seriously to block these routes and pursue these people.
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