Black Money overseas – Modi Government must keep electoral promise
JAY BHATTACHARJEE | OCT 18, 2014
Prime Minister Narendra Modi had better step in at the earliest and clear up this unholy mess.
It required the genius of the iconic French playwright Jean Giraudoux to come up with the most apposite definition of lawyers: No poet ever interpreted nature as freely as a lawyer interprets truth.
While observing the strategy on Friday of Arun Jaitley and Mukul Rohatgi, two of the most prominent Indian lawyers of our generation, I was sadly (and brutally) reminded of this aphorism. I must admit straightaway that I was distinctly underwhelmed by the actions and proclamations of both these legal luminaries who hold Constitutional positions. Jaitley is a Union Cabinet Minister who holds two portfolios and the other person is our Republic’s Attorney General (AG), the country’s Chief Law Officer.
Why am I deeply worried and disturbed by what these two worthies did? With a single act, they have sowed the seeds of deep doubt and suspicion in the minds of millions of Indian citizens and voters about the genuineness and bona fides of the new Government’s intentions to combat fraud and graft in our country’s public life. And they have given political ammunition to the previous bunch which ruled in Raisina Hill for about six decades, looted the country dry and plundered the public exchequer at every conceivable opportunity. Every Indian citizen is now wondering whether there is any substantive difference (or any difference at all) between the Gandhitopiwallah brigands and the new kids on the block in Lutyens Delhi.
Yes, I know that cynics will come up and mouth the usual platitudes about politicians and elections. About why it is necessary to change politicians and babies’ diapers frequently and that an individual rape is a crime, but raping the electorate a million at a time is not (good old Ogden Nash). All this is good copy but not adequate at this juncture. The present BJP-NDA Government was given its stunning mandate a few months ago on a clear and incontestable understanding that it would usher in a new political structure – one based largely on probity, governance, integrity and transparency. In other words, the socio-political model that would be the goal would be poles apart from the graft-ridden and tainted structure of the previous lot.
There is a little background here that is relevant for the readers. In June 2013, I had written an essay for this very forum on the shenanigans by the UPA gang on exactly the same issues that are now in the public eye. The immediate trigger was that the Government of India had just been provided the names of around 600 Indians who had illicit funds in tax havens in some Caribbean countries. To get the complete picture, we have to go back further in time.
In early 2008, Hervé Falciani, a middle-level French executive in the private banking office of HSBC in Geneva, found that many rich French citizens were parking their funds with his bank in Switzerland. They were clearly evading French taxes and violating French law. As a loyal Frenchman, Falciani decided to be a whistleblower and he furnished a list of around 3000 illegal accounts of French citizens to the French authorities in December 2008. The intrepid banker had crossed the Rubicon. He became a fugitive from Swiss law and escaped to France where the French Government ultimately provided him protection and cover. What is of interest to us, of course, is the Indian angle in this saga.
Given the fact that desi tax-dodgers and evaders are omnipresent in the international financial netherworld, the Indian connection in the Falciani episode soon emerged. France’s Ministry of Finance discovered a number of desiswho were clients of HSBC Geneva and figured in Falciani’s list. Following the principle of good partnership in international relations, Paris forwarded the Indian names to Raisina Hill in July 2011.
Initially, there was outrage in Parliament and in the media. However, the usual bunch of rogues in the UPA Government, past masters in cover-up and deception, went into overdrive and managed to stall the entire process. It is necessary to retrace the events that took place after this. Either in collusion with the GOI, or under pressure from the account holders, the Swiss Government informed Delhi that it would not initiate any action on the basis of what it termed “illegally-acquired information”.
The shadow-boxing between the Indian and Swiss authorities culminated in a deplorable tamasha in July 2012 when the Finance Ministry was said to have proposed a deal to the main figures on the Falciani list, that they would not be criminally prosecuted if they moved their slush funds from HSBC Geneva to India. This was such a brazenly illegal and sub rosa manoeuvre that only the Congress bandicoots could have thought it up. However, the more things change, the more they remain the same.
After more than two-and-a-quarter years and a momentous political earthquake, are we any nearer to the denouement? Or do we have clever lawyers and politicians still derailing the process? After all, when all this was taking place, the intrepid Ram Jethmalani had already approached the Supreme Court with a petition, asking the Government to take concrete steps to repatriate illegal Indian funds stashed abroad in secret accounts. Based on the case filed by the doughty Jethmalani, the Apex Court had ordered the Union Government to set up a special task force to repatriate the undeclared money from the overseas banks. It had also directed the GoI to disclose to Jethmalani the names of the persons having foreign bank accounts. The Supreme Court had specifically rejected the argument of the former UPA Government that Double-Taxation Avoidance Agreements (DTAAs) signed by India with various foreign countries prevented or debarred the disclosure of names of Indian account holders in overseas banks and financial institutions.
This writer is no blind admirer of the old warrior Ram Jethmalani. In fact, an “open letter” that I had the temerity to send him in October 1999 (and which was published in a Delhi newspaper) when he was in the previous NDA Government was severely critical of the man and could not have endeared me to him. On this issue, however, I unhesitatingly back him and join his corner in the ring against Jaitley and Rohatgi. Before I sign off, I must pose two questions to these two legal eagles who have made the present Government do such a volte face and landed it in a right royal boo-boo.
What is the fine distinction they are trying to draw between resident Indians holding legitimate accounts in foreign banks and those having foreign accounts that are secret and undisclosed to the RBI and the tax authorities? Is this not a deliberate smoke-screen that you two are trying to spread? After all, even a rookie banker or Chartered Accountant / Company Secretary will tell you that a resident Indian needs a slew of official permissions before he or she can open an overseas bank account. How can an undeclared bank account in a tax haven like Liechtenstein or Switzerland be ever construed as legitimate or above-board?
Secondly, how legitimate is the statement of Rohatgi that the German Government is unhappy about the disclosure of the names of Indian account holders in a Liechtenstein bank? This sounds just about as credible as a cat who has had a nice day in an unguarded mice-shop and claims to be a pacifist. Why should the German Government care a fig about Indians who are cheating the desi taxman? In any case, if Berlin is behaving as egregiously as Rohatgi says it is, India has every right to tell the master-race to go and take a running jump.
This is getting as ludicrous as the latest Pakistani soap that is running on some desi channel on the idiot box. As Mario Puzo (of “The Godfather” fame) said: “A lawyer with a briefcase can steal more than a hundred men with guns”.Imagine what two desi legal eagles can do.
Prime Minister Narendra Modi had better step in at the earliest and clear up this unholy mess.
Jay Bhattacharjee
Jay Bhattacharjee is a Senior Advisor in Corporate Laws and Finance.
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- http://www.niticentral.com/2014/10/18/black-money-overseas-modi-government-must-keep-electoral-promise-241402.html
