Thursday, June 4, 2020
Home Fact-Check Huffington Post report on Electoral Bonds: Unlimited sensationalism with little to no sense

Huffington Post report on Electoral Bonds: Unlimited sensationalism with little to no sense

Donors can purchase EBs which will not reflect the identity of the donors. Those EBs can be handed over to political parties of the donor’s choice which can be encashed by those parties in their bank accounts.

Also Read

Kartikeya Tanna
Lawyer licensed in India, England & New York (US immigration law). Write columns on politico-legal developments.

What happens when you have a path-breaking decision like the Electoral Bonds by an elected government which is initially met with skepticism from autonomous agencies, when cash as campaign finance is sought to be replaced by funds through the banking route, when its implementation needs initial tweaks not envisaged during conception, when bureaucrats, grappling with interpretation of this measure, make good faith errors?

As a multi-part report in HuffPost India and other outlets would tell you, we have a “scam” whose execution is replete with “illegalities”.

The basics

All political parties need money for campaigning. The big money comes typically from corporate or individual businesses.

Ideally, businesses should donate funds through the banking route (i.e., cheque or bank transfer). However, donors to specific political parties routinely run the risk of being targeted by rival political parties who didn’t get donations from those donors.

What businesses then end up preferring in order to maintain their anonymity is hard cash. The pitfalls of cash, largely unaccounted, need not be explained. Cash is, after all, a bearer note, an instrument of value owned by one who holds it thereby making it difficult to identify the original owner or even changes in ownership from time to time.

No one then really knows which party received what amount of cash, even if the identity of the donors is required to be kept confidential.

A solution – a balance

For the Modi government, this balance came in the form of electoral bonds (EBs). Donors can purchase EBs which will not reflect the identity of the donors. Those EBs can be handed over to political parties of the donor’s choice which can be encashed by those parties in their bank accounts.

Now, while the identity of the owner of these notes remains confidential from political parties and from the public at large, two distinct elements make them significantly different from cash:

Regulated traceability– Section 7(4) of the Electoral Bond Notification permits disclosure of the path of the bonds when demanded by a competent court or upon registration of a criminal case by a law enforcement agency thereby providing a safeguard mechanism in case of illegality or criminality.

Banking route– The funds underlying EBs (except amounts below Rs. 2,000 which can be contributed in cash) travel entirely through the banking route. Section 11 of the Notification enlists the limited banking routes through which payment for the EBs can be done. Moreover, under Section 4 of the Notification, the RBI’s rather stringent KYC norms apply to the buyers of EBs.

I, therefore, prefer to call EBs semi-bearer notes. Cash neither has traceability nor is there a banking route underlying these currency notes once printed.

Additionally, businesses would actually be required to make accounting entries in their books reflecting the purchase of electoral bonds and political parties would need to report on their statements how many donations they received through EBs. Pursuant to Section 80GGB of the Income Tax Act, donors would be able to get tax deductions.

The senseless attempt at sensation by Huffington Post

There are several bizarre surmises in the HuffPost series, some of which are as follows:

  • The report made much of the fact that BJP received 95% of the funding through EBs in the first subscription thereby concluding that this Scheme was brought in just to benefit one party. Is HuffPostsaying that Congress and other political parties went about their campaigning with just 5% of the remaining funding through EBs? Is it HuffPost’s case that BJP’s rivals didn’t use unaccounted cash at all in their campaigning?

The very fact that 95% of the EBs went to BJP shows that, firstly, we actually know under the EB system how much parties received; secondly, the funds went through the banking route (hence, fully tax paid funds) and, thirdly, those EBs have regulated traceability as explained earlier.

  • The report also decries the fact that RBI and Election Commission weren’t on board with this decision. While the EC continues to oppose the electoral bond scheme in the ongoing Supreme Court case (which actually refutes arguments of BJP’s rivals that EC is a puppet of the Modi government), RBI later did offer suggestions to strengthen the purpose of the EB Scheme some of which were implemented by the government. In fact, the Modi government implemented more of RBI’s suggestions in the Electoral Bond scheme than those put forth by its own party BJP as elaborated by the author here.

The fact that Modi government didn’t align completely with the RBI or at all with the EC is portrayed as a virtual crime in the HuffPost series, again to sensationalize. This is neither the first time nor the first government which has taken a path different from the one preferred by these agencies.

  • It also made much of the fact that the PMO asked the Finance Ministry to permit the issuance of bonds outside of the windows originally mentioned in the Notification in order to fund state assembly elections in 2018. HuffPostloosely throws around words such as “illegality”. Why, one wonders, is this problematic? Campaign funding during state/local elections suffers from the same problem of unaccounted illegal cash floating around and dubious funding. Is it the case that regulations are not amenable to change as one starts implementing them and notices aspects which need tweaking?

Indeed, as desirable as it is that such measures be elaborately thought through before implementation, big-impact measures introduced by the Modi government such as demonetization and GST have witnessed constant changes in implementation to suit the needs as felt from time to time. Inconvenient, it may be. How does that make it “illegal” as HuffPostrepeatedly claims? Another classic case of sensation over sense.

  • Also, the HuffPostseries is riddled with a major contradiction. The byline to each part of this expose claims it is an investigation into “how the Modi government brought untraceable funds” into Indian politics. Part four, on the other hand, bears the headline “Electoral Bonds Are Traceable” and goes on to lament the traceability of the bonds.

So, are they untraceable or traceable? And, what exactly is wrong with the EB system? Traceability of EBs or their untraceability? Or, is it simply a case of heads I win, tail you lose? This tweet by the author documents this contradiction.

  • The lament behind the traceability of EBs is that the government of the day could gain access to the confidential information from these agencies which are “caged parrots”. While this is a possibility, there are courts to seek redress to this breach of privacy even if the efficacy of this action may have its own limitations. Regardless, does that mean we go back to the cash-based system where funding goes completely under the radar?

 

  • Part five of the HuffPostseries completely obsesses over the fact that a political party was permitted to encash expired bonds. Reading the story is when you realize that a mountain is made out of something that isn’t even a molehill. Under the Electoral Bond Scheme, EBs had a validity period of 15 days. One political party went to the SBI to encash bonds assuming that the validity period was 15 business days (as opposed to 15 calendar days). As a one-time exception, the Finance Ministry, upon being asked by SBI to offer clarity, permitted encashing of bonds. The SBI was categorically told to inform everyone concerned that, for the future, the words “15 days” in the Notification would mean 15 calendar days. How was that an “illegal” act? In fact, bonds which had expired beyond the 15 business days were not allowed to be encashed. If rules had been tweaked for those bonds, an allegation of illegality could be sustained.

 

  • Part six is entirely focused on the fact that no business made a formal representation to the Central Government to keep their identity confidential when they choose to donate to a political party. This is, again, bizarre due to the fact that such representations aren’t made formally in writing, that too, to a government official. The vengeance and abuse of power exercised by political parties when in power is an open secret.

Read: Investigation: The lies and the nexus of foreign organisations behind vilification of Rafale deal and Electoral Bonds

And, this happens in democracies with a strong rule of law like the U.S. too. Citing illustrations in the U.S. of how both Republican and Democrat parties have abused their power to intimidate those who donated to the other, Bradley A. Smith, former U.S. Federal Election Commission chairman writes in a piece titled In Defense of Political Anonymitythat “disclosure has resulted in government-enabled invasions of privacy—and sometimes outright harassment—and it has added to a political climate in which candidates are judged by their funders rather than their ideas.”

TheHuffPostseries is riddled with many more errors which evidences a rush to arrive at predetermined conclusions. For example, Part one mentions that foreign companies could now route money to Indian political parties. The Scheme is only for Indian individuals and companies as elaborated in this tweet. Indeed, if foreign money does get funnelled in some way, the regulated traceability of EBs can unveil the path. Another example is that the series misrepresents rather simple words of a bureaucrat as noted here. An incorrect provision of the Scheme is referenced without basic fact-checking.

All of this goes to show that the HuffPost series, far from being a real investigative story like stories on the Bofors or 2G scams were, is but a lazy attempt at inventing sensation from a set of documents obtained through RTI applications. The applicable word for such stories is – “clickbait”.

  Support Us  

Whether NDTV or 'The Wire', they never have to worry about funds. In name of saving democracy, they get money from various sources. We need your support to fight them. Please contribute whatever you can afford

Kartikeya Tanna
Lawyer licensed in India, England & New York (US immigration law). Write columns on politico-legal developments.

Trending now

The Wire report claims Tripura govt paid less amount to students for mid-day meal scheme, data shows govt paid 50% more

Tripura govt debunks The Wire report saying less amount was paid to students under mid-day meal scheme during lockdown

Food Corporation of India fact-checks Scroll, calls out its deliberately misleading report claiming 65 lakh tonnes food grains wasted amid lockdown

The FCI has slammed Scroll after the latter published a report claiming that India had let 65 lakh tonnes of grains go to waste.

Delhi anti-Hindu riots: Tablighi Jamaat, PFI, Jamia links emerge as Delhi Police files charge sheet

The Tablighi Jamaat links have emerged in the charge-sheet filed by the Crime Branch of Delhi Police pertaining to violence in Shiv Vihar area during the Anti-Hindu riots in Delhi.

Amul pumped in Rs 8,000 crore back into rural economy during lockdown, increased milk collection by 15% with seamless supply chain

Dairy cooperative AMUL stood tall as the coronavirus crisis hit the country and against all odds managed to ensure that milk distribution is not impaired and supply chain management is seamless.

LGBT Community condemns pride march at Lal Chowk, abandons Pride Kashmir even as radical Muslims give them death threats

LGBT Community is now saying that holding pride marches during pride month is worthy of condemnation.

‘Muslim Lives Matter’ at a time of BLM: Biggest lesson from this development is that Indian liberals and Western progressives are devotees of the...

Indian liberals decided that it was a good opportunity to equate Indian Muslims with the Black population in the USA and trend 'Muslim Lives Matter'.

Recently Popular

Woman ‘protestor’ poops on an overturned police car in middle of riots in America. Watch the video (or maybe not)

A woman was seen defecating on a damaged police car in USA, an act video recorded and photographed by onlookers

“Chacha hai, aisa kabhi nahin kar sakte,” Nawazuddin Siddiqui’s niece alleges torture, sexual assault by his brother, says the actor did not support her

She further alleged that when she told Nawazuddin about the childhood trauma she went through, even he did not believe her.

Hindustani Bhau files police complaint against Ekta Kapoor for ‘inappropriate sex scene’ in her erotic web series XXX 2

Hindustani Bhau took to Instagram on Monday to share a video from outside Mumbai's Khar Police station stating that he has filed the complaint against Ekta and Shobha Kapoor 'for disrespecting our Indian military, national emblem, colonel tag and defaming our country'.

Meerut: Shakib posed as Hindu to trap Punjab girl who eloped with him with jewellery worth Rs 25 lakh, beheads her after revealing his...

Meerut police solves one-year old mysterious murder case, finds Muslim Shakib had eloped with Hindu girl pretending to be Hindu and then killed her

Delhi riot charge-sheet: Tahir Hussain met Umar Khalid, Pinjra Tod activists sent messages asking Muslims to keep acid, petrol, hot water, stones ready

The Delhi riot charge-sheet prove beyond doubt that the violence was well planed and organised by Islamist and leftist activists

Standup comedian apologises for insulting Hanuman Chalisa, says he is a Hindu too and will never repeat such acts

A video of Alokesh Sinha's performance had gone viral on social media recently, where he was seen using derogatory words for the Hanuman Chalisa.

Family of deceased Coronavirus positive doctor says that reports of him having to wait 10 hours in Mumbai hospital to get a bed is...

Deceased Mumbai doctor Chittaranjan Bhave's daughter says he didn't had to wait 10 hours to get COVID-19 treatment as per reports

Internet security firm Malwarebytes Labs report says coronavirus campaigns causing a surge in malware attacks

Tech security report says cyber criminals are using work from home and coronavirus campaigns to launch malware attacks

Civil liberties group sues US President Donald Trump for his executive order to regulate social media, alleges the order curbs free speech

NGO Centre for Democracy and Technology files federal lawsuit against Donald Trump's order to regulate social media

Maharashtra governor overrules CM Uddhav Thackeray’s decision to cancel final year university exams, calls it ‘violations of University Act’

Maharashtra CM in an address to the State on Sunday evening announced that the state had no choice but to promote final-year students based without exams

Amid the coronavirus pandemic, nurses of AIIMS Delhi continue to protest for better facilities

The Union of nurses in AIIMS Delhi is demanding better facilities for nursing staff especially female staffers

Indian Railways refunds Rs 1,885 crore to passengers against cancellation of trains due to coronavirus lockdown

On May 21, Indian Railways had announced to restart services of 200 passenger trains that it will operate from June 1.

India lodges strong protest over desecration of Buddhist carvings in PoK’s Gilgit-Baltistan, asks Pakistan to vacate illegally occupied territories

India has lodged a strong protest with Pakistan over the destruction of Indian-Buddhist heritage in the Gilgit-Baltistan region

Sweden’s Coronavirus response hailed by Indian liberals was flawed, admits country’s response in-charge

Sweden remains the only Scandivanian country with an outsize number of cornavirus infection and fatalities, much higher than those witnessed in Finland, Denmark and Norway

Supreme court refuses to entertain a plea seeking India to be officially renamed only as ‘Bharat’

Dismissing plea to rename the country as only Bharat, CJI said that it is not the job of the court to consider such issues

The Wire report claims Tripura govt paid less amount to students for mid-day meal scheme, data shows govt paid 50% more

Tripura govt debunks The Wire report saying less amount was paid to students under mid-day meal scheme during lockdown

Connect with us

229,422FansLike
361,000FollowersFollow
245,000SubscribersSubscribe