The Hindu : Hawala money flows in election season

Online edition of India's National Newspaper
Friday, Apr 02, 2004

New Delhi

New Delhi

Hawala money flows in election season

By Lalit K. Jha

NEW DELHI, APRIL 1. In the wake of the recent Election Commission move to monitor flow of hard cash through airports, political parties are relying increasingly relying on "hawala'' channels to collect election funds from businessmen and industrialists and also dispatch these to the various State and district units.

"It is a well-tested channel and also safe and sound," argued a Delhi-based hawala dealer boasting of his links with major political parties here. It is estimated that during the upcoming 14th Lok Sabha elections some Rs. 3,000 crores would change hands through the hawala channel. "A large amount has already been delivered," he claimed.

"Gone are the days when hard currency was stacked into sacks and transported from one place to another in a car by leaders. No one wants to take that risk in this age," the hawala dealer argued.

However, some politicians involved in managing funds object to the use of the term hawala and instead argue that because of the changing environment they have decided to outsource the job of fund collection and its disbursement this time round.

With money power playing a crucial role during the election campaign, funds are being collected at various levels by almost all the major political parties, sources claimed, adding that normally it was divided into three layers: Central Pool, State Pool and the Constituency Pool (which is also called the candidate's Pool).

While the modus operandi varies from case to case, normally a big businessman or industrial house approaches the political party and its designated leaders expressing their willingness to donate some money to the party for the elections. In some cases, it is the political party and its leaders who approach them for the funds.

In the first instance, the businessmen and representatives of industrial houses are taken to one of the top leaders of the party where the deal is finalised with the assurance that some of their work would be done after the elections. "The amount of money being given to the party also depends on what level the deal is being finalised and it ranges from at least Rs. 50 crores at the top level to a few crores at the general secretary level," sources said.

In the second case, it is the leaders of the political party who ask businessmen and industrial houses to donate a fixed amount for the election campaign. "The amount here either is based on the percentage of the contract given to an industrial house or it depends on the requirement of the party," sources said. Major industrial houses, in fact, themselves approach important political parties and candidates who in their calculations are likely to win.

Once the donation amount is decided, the designated leader of the political party issues a direction to the donor on where and to whom the money is to be delivered.

Though the fund collection account is managed at the Central Pool level, the State Pools receive the money based on their requirement directly through hawala. While some of the State Pools make their contribution to the Central Pool, in many cases the State units have to rely on the central leadership for funds.

Party fund managers say they are relying more on the hawala money this time mainly because of the Judeo and Bangaru episodes. In fact, the major political parties have issued strict instructions to their party leaders not to accept any cash directly from any known or unknown person. "The task is to be left to only a select few and all such queries are being diverted to them," sources said.

For instance, a local leader of a major political party was recently approached by a little known multinational company with the offer of Rs. 50 crores for the elections. When the issue was brought to the notice of the senior party leaders, it was found that it was a sting operation. "This is the reason why political parties this time round have opted for the unlawful hawala channel," the fund manager said, adding that it had several benefits. "In this, you cannot be caught. Also, you remain tension-free and at the same time be sure that the money would be delivered on time. The onus is solely on the hawala dealer and not on us," the sources said.

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