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Rogue clusters in Finance Ministry make merry
MADHAV NALAPAT  New Delhi | 23rd Nov 2013

he culture of gross over-empowerment of officials at the expense of the public, which was re-introduced in 2004 by Union Finance Minister Palaniappan Chidambaram into the Ministry of Finance (MoF) after a gap of 19 years, has resulted in the "formation of cliques of venal senior, middle and junior officers, each working at the behest of a specific corporate house", say senior retired and serving officials unhappy at the growth of graft. Three of the corporates that "own" such officials are headquartered in West India, two in North India and the other in the South. The officials belonging to each of these cliques is given monetary and other inducements on a periodic basis in order to ensure their loyalty and reliability. "For senior officials, the monthly cash packet (often in foreign exchange banked in offshore havens arranged by the corporates in question) may cross Rs 1 crore, while for lower levels such payments range from Rs 25 lakh to Rs 5 lakh to Rs 50,000 each month", an official recently retired claimed, adding that "the level of corruption as measured by the bribes paid has gone up three times since 2010", the year when Anna Hazare accelerated his anti-corruption movement in the shadow of the Commonwealth Games scam.

These cliques coordinate their activities for purposes of serving their corporate masters with the Department of Revenue Intelligence (DRI), the Enforcement Directorate (ED), the Central Bureau of Investigation, as well as entities such as the Reserve Bank of India (RBI) and the Securities & Exchange Board of India (SEBI), according to a serving official who wishes to take premature retirement. "There is a seamless web of corruption linking the MoF with these agencies, the twin purposes of which are to help and protect their benefactor, while damaging the interests of their rivals," he claimed.

According to another serving officer, since 2007 "much of the material on the basis of which action gets initiated is forged". Emails are sent from cybercafes in the name of officials of a target company, who obligingly disclose "facts" relating to tax evasion and foreign exchange violations. In fact, as any verification of the source of such emails would show, most are the result of hacking into computers and sending forged messages.

What would be the purpose of such missives?

"They are immediately sent by, for example, the Department of Financial Affairs in the Finance Ministry to the Indian Banks Association (IBA), so as to blacken the reputation of a lender", said a senior official, who added that the IBA "accepts such messages without being aware that they are forgeries. In some cases, undated and unsigned sheets of paper bear the name of a senior official of a target company, who recites a litany of charges of his firm." A retired officer added that "whenever the IBA or another body gets copies of such letters from the MoF, a guarantee of authenticity should be insisted upon so that the widespread sending of forged and false communications gets curtailed". Some corporates have special teams "expert in cyber hacking and in forgery, which get used to make up false evidence against their business rivals". Such misinformation is made the basis for unwarranted enquiries and general harassment of business rivals of any of the six corporate houses "owning" the MoF officers involved in the racket.

"A check on the emails and complaints against companies and individuals circulated each week will show that most of them are false. Many do not even have names attached to them. However, despite orders to the contrary, these still get used to harass rivals of any of the six corporate houses controlling such cliques of officers," a retired official added.

Each of the six corporate houses "keeps a stable of NGOs as well as journalists" to file complaints and cases and to give publicity, a senior official claimed, adding that in some cases, Members of Parliament are asked to write against business rivals of another group. Often, a piquant situation arises where an MP who does not know the English language, nevertheless drafts page after page of complaints and charges, "which then reach specific officers, whose task it is to forward them to banks and to policing agencies so that maximum damage to reputation gets caused", according to a serving officer who has been tracking such activity. "The good news is that these six houses hate each other, so that much of the mischief each does is directed against one or more of the remaining five", an officer claimed. "Neither the PM nor the Finance Minister seems bothered about the corruption and the harassment of target companies and individuals indulged in by these corrupt cliques," he claimed. Instead, his colleague added, "The instinct of the Prime Minister seems to be to believe even bent officials rather than a member of the public."

What is needed, in their view, is far greater scrutiny of the activities, paper flow and lifestyles of officials working in sensitive agencies coming within the MoF, so that they do not become mercenaries in the corporate wars raging in the present day.

 
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