India competes with election cycle’s dirty money problem


In this year's hotly contested national election, officials say, dirty money is out of control. India’s election commission is tracking cash seized by election observers nationally for the first time and have so far seized $45 million of illegal cash, a jump of about 31 percent compared to elections five years ago. Over five million gallons of illegal liquor has been seized. Security officials check every passing vehicle for evidence of black money or illegal alcohol, in Ludhiana, in the northern state of Punjab, India. (Rama Lakshmi/The Washington Post)

On a recent scorching afternoon, police officer Harmeet Singh was stopping every vehicle at a traffic crossing in this northern city. It was election season in India, and he was hunting for dirty cash.

In the previous two months, authorities had seized $45 million in suspected illegal campaign funds. They had discovered suspicious bundles of rupees in hearses and ambulances, in lunch boxes and in bags stashed on buses.

So when a flashy red SUV pulled up, carrying four nervous young men, Singh was ready. He looked around the dashboard, in the trunk and then under the back seat. There he spotted two duffel bags that were filled with more than $33,000 in cash. The men claimed they were simply taking their own money to the bank, but Singh wasn’t buying it.

“The car even had a sticker of a political party on its windshield,” he recounted.

For decades, India’s political candidates have plied voters with alcohol, cash and gifts. But in this year’s hotly contested national election — expected to be the most expensive in the country’s history — the government is fighting back in an unprecedented effort to detect campaign-finance violations.

Crack teams of investigators seeking “black money” are making busts on highways, in hotels, at airports and in farmhouses. The country’s election commission says the teams have seized 31 percent more dirty cash this year than during the last election five years ago, when there was not such a coordinated effort.

In addition to impounding the cash, teams are trying to monitor what candidates spend compared with what they report. The investigative teams have fanned out across India, counting the chairs, teacups, loudspeakers and floral garlands at every campaign meeting and rally.

“We want to curb the influence of money power in elections. It taints our democracy, and the use of illegal black money gives unfair advantage to some candidates over their opponents,” said P.K. Dash, head of the election commission’s expenditure monitoring office in New Delhi. It oversees the investigative teams, composed of election officials, police officers, liquor inspectors and tax officials.

Enforcing election rules

Under Indian election law, each parliamentary candidate is allowed to spend no more than $116,000 on his or her campaign. But in just one bust, police recently seized $1.3 million in two bags carried by a young man on an overnight bus from Bangalore to Hyderabad. The youth told police that he was transporting the cash for a jeweler. But the jeweler has disappeared, said C.V. Anand, a senior police official in Hyderabad.

In India, it is illegal to carry large amounts of cash during campaigns unless a person has documents that indicate a legitimate destination for the money — a business payroll, for example.

Indian candidates routinely under-report their permitted expenses for things such as advertising and travel. In addition, many politicians blatantly violate the law by offering voters not just cash but also televisions, food processors and saris to influence their vote.

They have been able to get away with such practices because election laws and monitoring have been weak, officials say. While the election commission can disqualify candidates for campaign-finance violations, few politicians have been punished.

The crack teams, established in 2010 for state-level elections and this year for national elections, say they are having success.

“We have created fear in the minds of candidates,” Dash said.

But some candidates have simply become more crafty. In the southern state of Tamil Nadu, for example, political party members recently handed out pens to voters containing hidden, rolled-up 1,000-rupee notes, each worth about $17. In the same state, campaign workers got around the problem of carrying large amounts of cash by distributing train tickets to voters and then telling them to exchange the tickets for refunds.

Obstacles to change

The drive against illegal campaign spending comes as middle-class Indians are increasingly demanding greater transparency in politics. Corruption is one of the biggest issues in the election, which occurs over a six-week period.

Opinion polls indicate that the graft-tainted Congress party, which dominates the governing coalition, may suffer significant losses to the Bharatiya Janata Party, whose prime ministerial candidate, Narendra Modi, is campaigning on his record of clean governance.

Many of the candidates can easily tap into their own cash to fund lavish campaigns. One-quarter of the parliamentary candidates this year are millionaires. And nearly one-fifth of those running face criminal ­charges, according to a nonprofit election watchdog group called the Association for Democratic Reforms. That’s not unusual in India, where suspected criminals sometimes run for office in an effort to gain immunity. Voters are pressured to elect such candidates by village chiefs, who sometimes receive payoffs.

Despite the efforts of the investigative teams, there are enormous obstacles to controlling the flood of money in Indian campaigns.

In rural India, cash transactions are common and the use of checks and credit cards is rare. Dash said that his team often ­catches people carrying large amounts of money who claim that they are paying salaries to farm laborers or rural factory workers.

Another problem is that while individual candidates are limited in what they can spend on campaigns, their parties are not. And the law does not require direct public disclosure of parties’ spending on races, although they have to eventually report to the election commission, said Jagdeep Chhokar, a member of the Association for Democratic Reforms.

“And who will change these laws? Politicians? Is it in their interests to change them?” he asked. “In fact, they are getting more and more brazen and unapologetic about the way they win elections.”

The ‘laddoo’ controversy

Many Indians welcome the seizures of dirty cash.

“This kind of clamp­­down on black money is good,” said Rohit Kumar, who operates a construction crane in Ludhiana. “But it does make me wonder: Is this just the tip of the iceberg?”

Some politicians, though, say the election-expense teams are too zealous. Recently, for example, there was a controversy over election “laddoos.”

Laddoos are a yellow, ping-pong-ball-sized Indian sweet made with flour and sugar. An election tradition in Punjab entails supporters weighing the candidates on a giant scale against heaps of laddoos. The treats are later given to villagers.

But this time, the election-expense snoopers counted every laddoo and noted their cost.

Members of a local political party, Shiromani Akali Dal, said the same pile of laddoos was carried from one village to the next.

But officials said the investigative teams had video showing the laddoos being eaten right after the weigh-in at every village.

“The election commission is going a bit too far with all this; it is seriously unfair,” said Parambans Romana, who heads the disciplinary committee of the youth wing of the Shiromani Akali Dal.

But the candidates took notice. The practice of weighing the candidates abruptly stopped, officials said.

Rama Lakshmi has been with The Post's India bureau since 1990. She is a staff writer and India social media editor for Post World.
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