26

Mar

Is Corporate Money Dictating Governance?

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Today’s Edition

New Delhi, 26 March 2024

Prof Shivaji Sarkar

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Is it the MNC-linked corporate sector in a world of the globalised economy that is dictating the course of political establishment in India or is it the other way round? This is the basic question that has cropped up in the follow-up of the Supreme Court verdict in the electoral bonds case.

A handful of companies today hog the limelight for a reason no nation would feel proud of. Is it the beginning of a transnational corporation corporate war?

It is roiling democracies from the U.S. to India with equal elan. On March 22, two incidents rocked Delhi – the seizure of Congress funds for not filing an income tax return, though political parties are not supposed to pay income tax, and the arrest of Delhi chief minister Arvind Kejriwal for alleged involvement in a liquor scandal by Enforcement Directorate in a midnight drama.

Almost at the same time in New York, U.S. Attorney General Letitia James indicated that she could be preparing to seize former President Donald Trump's assets there, if he does not pay a $ 464 million bond in a financial fraud case. Manhattan District Attorney Alvin Bragg’s office tells Judge Juan Merchan that fewer than 270 of the 170,000 documents turned over to Trump’s lawyers pertain to the hush money case.

What a similarity! In both these cases corporate money is involved and thousands of km away they function the same way. Are the two of the greatest democracies becoming the proverbial banana republics? Is that globalisation links them?

For a mere about Rs 16000 crore electoral donations, has the country been pawned? A few select groups of companies, many with international links, have linkages with donations, deals and contracts worth billions and the people are the unknown victims debating the unsavoury practices. It calls for a deeper probe as  Deals influence decisions.

About ten political parties including the BSP and CPIM, refused bond money. The CPI-M even is a party to the cases in courts filed primarily by the Association for the Democratic Republic (ADR). Janata Dal-U and Trinamool Congress alleged that a certain amount of bonds were dumped in their offices. There is a lottery king, who showers donations to DMK, which had passed a bill banning lottery but that could not turn into law as the governor refuses to sign it.  There are strange ways of bonds travelling to centres of power in any state – BJP Rs 11,500 crore; TMC Rs 3214; BRS Rs 2278 crore; DMK Rs 1230 crore and YSR Congress Rs 662 crore and Congress Rs 1356 crore.

And there is less known development. On February 18, 2024, Jobanjot Singh Sandhu, one of the accused in the Rs 21000 crore Mundra port drugs haul case, escaped from police custody at Amritsar in Punjab. The value of one haul is greater than the total bond sale.

On January 9, 2024, Ecuador declared a state of emergency after “extremely dangerous” drug lord Jose Adolfo Macias, alias Fito, escaped from jail and unrest broke out at several prisons.  Are these incidents a pattern that democracies need to be wary of?

Hyderabad-based Megha Engineering gave Rs 584 crore to BJP and its group company Western UP Power Transmission Company chipped Rs 80 crore, a total of Rs 664 crore. Ironically, the UP power consumers have lodged extortion complaints by manipulating bills. These have gone unheard.  

Quick Supply having reported links with a large group contributed Rs 410 crore and mining group Vedanta also made contributions. Vedanta, Western Power group and MKJ owning the Keventer brand are also among the top Congress funders donating more than Rs 100 crore each.

Despite the lottery ban in Andhra, Future Gaming donated Rs 154 crore bonds to YSR Congress. Interestingly enough, the Telegu Desam Party got 55 per cent of electoral bond earnings in January 2024. It received Rs 80 crore between April 2019 and September 2023. But from October 2023 to February this year, TDP received about Rs 130 crore in bonds. Of this Rs 118 crore was received in January alone just at the nick of elections.

A loss-making Kolkata company, Avees, which shares office space with several other companies on Waterloo Street, bought Rs 112.5 crore bonds and parked with Congress Rs 53 crore and TMC Rs 45.5 crore.  It funds BJP, BJD and AAP too.

There are several names like LN Mittal of the Arcelor-Mittal group, Laxmidas Vallabhbhai Merchant, linked to a Gujarat company, Indigo’s Rahul Bhati, who fund different political parties. Is it pressure or lure?

It is a diverse link. But all are pointers that the corporates are working in tandem with the political parties to mine their future ignoring the well-being of the people.

A question nobody answers is how so much money is available in a poor country. Are they earning high by fleecing consumers? Corporate linkage is indicated by some studies in the U.S..

Is not the electoral bond based on the U.S. Supreme Court ruling?

The corporate linkage has caused concern in the U.S. since 2000. Corporate Money in Politics by Andrew Wilson, in the MITSloans Magazine writes, the Center for Responsive Politics on its website Opensecrets.Org calculated that in 2010, large public action committees (PACs) - corporate funders, spent $ 63 million. By 2020, it rose to $ 2.1 billion.

In 2010, the U.S. Supreme Court undid century-old campaign funding restrictions and enabled corporations and other outside groups to “spend unlimited funds on elections”.  This results in more centralisation of power. The top one per cent of donors now give 93 per cent of the money, with a mere 100 persons providing 70 per cent.

The U.S. has what is, essentially, legalized corruption that gives outsized influence to the wealthy and powerful. What in other countries is done in back rooms and with envelopes slipped under the table is aboveboard in the U.S., Wilson observes. “The point is that major corporations have been knee-deep in political influence for decades”. He asks the businesses to answer, “Are the politicians you support blocking progress on our biggest challenges, or are they helping us build a better world?”

Just see the similarity in pattern with India. Wilson names 24 top global companies who doled out $ 170 million to U.S. legislators over the past four years.

 Should now Indians rethink globalisation and change their political system? It is not expanding businesses but creating an alliance of murky corporate finance that influences political and electoral decisions. Must not the country end all such misty funding? (Words 1100)

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