A proposed retrospective amendment in Foreign Contribution Regulation Act (FCRA) will condone illegalities committed by political parties in raising foreign donations. This is ill-advised, and detrimental to the national interest and unethical, says EAS Sarma, former secretary to the Government of India (GoI) in a letter to Prime Minister Narendra Modi and Finance Minister Arun Jaitley. 

 

“If the National Democratic Alliance (NDA) government genuinely believes in what it has been professing, it should revoke all retrospective amendments made so far to FCRA 2010, revoke amendments to the Companies Act, drop the regressive idea of opaque electoral bonds and introduce stringent penalties to be imposed on all such political parties that violate the law," Mr Sarma says.

 

As per news reports, the Central Government is once again adopting the inappropriate avenue of the Finance Bill to retrospectively amend FCRA to condone illegalities committed by Congress, Bharatiya Janata Party (BJP) and a few other political parties by unethically accepting political donations from foreign sources, though prohibited under that Act. "This, in my view, is not only illegal but it runs counter to the national interest, making a mockery of your so-called campaign of bringing in electoral reforms and enhancing honesty in the electoral system," Mr Sarma says. In fact, it seems grossly unfair that various governments make retrospective amendments to penalise people and companies, but seem to close ranks when it comes to protecting their own interest and  shady actions. 

 

The former Secretary feels that to amend an existing law retrospectively to permit political parties to accept donations from foreign companies raises 'serious concerns about the government's intentions vis-a-vis the likely influence of foreign agencies over the electoral process in India and its likely adverse implications for the national interest'. 

 

He says, "Both FCRA of 1976 and FCRA of 2010 rightly prohibited political parties and their members from accepting donations from foreign sources. The Representation of the People Act echoed these prohibitive provisions. It goes to the credit of the Parliamentarians at that time to have thought about the deleterious implications that foreign donations could have on the political parties and their implications for the national interest. Despite such clear legal provisions, both Congress and BJP blatantly sought and accepted donations from foreign sources year after year."

 

Mr Sarma, along with Association for Democratic Reforms (ADR), had filed a Writ Petition [WP(C) 131/2013] before the Delhi High Court contesting the amendments. The HC in its judgement on 28 March 2014 uphold contention in the WP and directed the Union Government to act against concerned political parties within six months.

 

"Instead of complying with that judgement in an earnest and forthright manner, two political parties, perhaps with the tacit consent of your government, chose to file appeals (SLP 18190/2014 & 32626/2014) before the Supreme Court. The appeals of Congress and BJP were dismissed by the apex court on 29 November 2016. Though there was no interim order of the apex court against the High Court direction, the Union Home Ministry, for reasons best known to it, refrained from complying with the judgement dated 28 March 2014 of Delhi High Court. A contempt petition filed by us against the government is presently pending before the High Court," Mr Sarma says.

 

"Meanwhile," he says, "apparently with a view to 'regularise' illegalities committed by Congress and BJP, your government adopted the backdoor approach of introducing a retrospective amendment to FCRA of 2010 through the unusual and inappropriate instrument of the Finance Act of 2016. Not satisfied with it and apparently eager to open the floodgates to foreign company donations, your government went one step farther next year, once again through the backdoor of Finance Act of 2017 and introduced amendments to Companies Act to lift the cap on political donations even by foreign companies and introducing an element of anonymity in the donations to introduce opaqueness in company donations in favour of the political parties. BJP has since been a significant beneficiary of these amendments, clearly demonstrating how there was an inherent conflict of inherent it NDA's decision making process."  

 

The former Secretary had also pointed out to the Ministry of Finance and Ministry of Mines about possibility of several companies, especially mining companies, over-invoicing their exports, laundering the differential amounts to undisclosed foreign accounts (Panama and Paradise papers corroborate this) and re-routing the illicitly deposited amounts to India, partly by way of political donations. "Is it not ironic that the foreign black money that your government is ostensibly trying to get back for the country should indirectly fund electioneering by Congress, BJP and others?" he asks. 

 

Mr Sarma says, "I thought that, in view of Narendra Modi's repeated pronouncements to campaign against corruption, against black money and against malfeasance in electoral processes, the government would take my letters with the seriousness they deserve and ask the central investigating agencies such as Central Bureau of Investigation (CBI), Directorate of Revenue Intelligence (DRI), Enforcement Directorate (ED), to whom I had marked copies of my correspondence, to institute independent investigations. I thought that your government would plug the inflow of foreign money into electioneering. Since both BJP and Congress are co-partners in violating FCRA of 1976 as well as FCRA of 2010, perhaps, you will make sure that the amendments go through without providing an opportunity to the Parliament and the people of this country to discuss and debate! Mr Modi, I feel highly disappointed and distressed!"

 

According to the former Secretary, anyone with the national interest at heart would hesitate even to think of tinkering with the salutary provisions of FCRA of 1976 and FCRA of 2010, as well as the corresponding provisions of the Representation of the People Act.  

 

Mr Sarma says, "I write this letter with a feeling of extreme anguish and distress, as all my previous letters on the subject have failed to deter you from causing such an irreparable and long-term damage to the firewalls built by the members of the Parliament in 1976 against foreign influences on the integrity of the domestic electoral system. Looking at the track-record of your government so far, I would not be surprised if this letter too becomes a cry in the wilderness. Maybe some of us will then be constrained to seek judicial intervention to save the electoral process and the nation from the likely harm that such amendments would inflict."

 

"You should realise that the people of India are far too nationalistic to ignore the machinations of the political parties. Whoever thinks otherwise will only be deluding himself or herself. I still hope and pray that good sense will prevail on the government to desist from going ahead with the proposed statutory amendments," the former Secretary concluded.