S Gurumurthy lecture on 'Political corruption and Indian Black money abroad'

Following are the highlights of the speech by Sri S Gurumurthy delivered on 21st May, 2011 at the Keshava Krupa auditorium. The topic of the speech was 'Political corruption and Indian Black money abroad'. Prof. Vaidyanathan of IIMB was also present at the occasion.

Sri Gurumurthy's talk was divided into different topics.

Status of Black money abroad:

· Black money is unaccounted money that is not reported to the government, nor the tax on the income is paid to the government.

· The current campaign against black money stashed abroad was started by Prof.Vaidyanathan. In 2008, he wrote a letter to Mr.Lal Krishna Advani regarding the Black Money stashed abroad and the reluctance of the Indian government in retrieving the names of Indians from the list of secret account holders, which the German government had procured from the Liechtenstein Bank by bribing a bank official.

· The list included names of Germans and other people the world over. Among them were several Indian names too. The German government was willing to give the details of the secret accounts to GOI. However, the GOI never requested such information ever and continuously denied presence of any such 'Black' money.

· But in 2008, Global Financial Integrity, a Public Policy Think Tank in Washington DC, researched and reported that an estimated $462 billion (22 Lakh crores) of India's illicit assets were stashed abroad during the period from 1948 to 2008. 67% of this amount was stashed in last 16 years, i.e. after liberalization. (Report on Indian unaccounted money abroad - http://india.gfip.org/).

· Prior to liberalization, unaccounted money was stashed abroad to avoid the high taxes in India. But after liberalization the reason to stash money abroad were huge income that was generated due to corruption, kickbacks and criminal activities and also to conceal the identity of the persons holding the account.

· In 1986, Sri Gurumurthy along with Mr.Vinod Pande and Mr. Bhure Lal started an anti-corruption campaign. Their work in this regard revealed that close to $300 billion of Indian money was stashed away in Swiss banks. However a forged letter was planted to discredit Sri Gurumurthy for availing the services of a US detective agency, Fairfax. Sri Gurumurthy was arrested on the count that he was trying to get details of Sonia Gandhi, Quattrocchi and Amitabh Bachchan and the anti-corruption movement came to a halt. (http://www.cscsarchive.org:8081/MediaArchive/audience.nsf/(docid)/3BE4371E8803F741652569400062C30D - Arrest of Gurumurthy and related news)

· Sri Gurumurthy said that the present anti-corruption movement is hijacked by the GOI itself with the blessings of Sonia Gandhi, so it will not succeed. An anti-corruption movement has to be against the government by the opposition parties and not anybody else. The opposition has to take the lead in such a movement, which is not a case currently.

Black Money and Tax Havens and western interests:

· Tax havens are tax shelters where the money kept will not be taxed. In these countries companies can be formed without even having any registered members. Panama, British Virgin Islands are some of the Tax Havens.

· There are 70 tax havens in the world today. 8 Lakh 23 Thousand companies are registered in the British Virgin Islands. In the 1980's the Western countries encouraged the third world countries to stash money in tax havens as they could earn profit out of it. Later politicians, criminals took advantage of these havens.

· Black money outside is as good as treason. The money stashed abroad could be used against the country itself and so amounts to treason. Dawood Ibrahim is known to use such stashed money abroad to fund his anti-India activities. Whereas money that is parked in India itself, though illegal, will still be used within the country for various purposes.

· Black money is not an issue with the west, as for them they are fine collecting the taxes on it. India has to get the black money back.

· World GDP in 1997 was about $30 billion. In 2009 it was $58 billion. World over Stock market capitalization in 1997 was $20 billion; in 2009 it was $48 billion. But net worth of rich individuals was $3 trillion in 97; in 2009 it rose to $33 trillion. 40% of this is held in tax havens.

· America borrows money from rest of the world so that they can spend!!! Housing debt of Americans is about $10.3 trillion. Alan Greenspan said saving money is required only in countries where people live in insecurity. The American economy became a debt economy through credits and loans.

Cause of black money:

· In 1967, it was estimated that 10% of India's GPD was black money. In 2009 it was 50% of the country's GDP!

· Corruption, bribes, kickbacks, criminal acts, etc. raise the black money.

· AG Noorani wrote in the 'Statesman'(December 31, 1988), on how Rajiv Gandhi expressed deep gratitude to KGB for the benefits accruing to the Prime Minister’s family from the commercial dealings of the firm he controls in co-operation with the Soviet foreign trade organisations. (Rajiv Gandhi's secret letters - http://defenceforumindia.com/political-%7C-social/18347-rajiv-gandhis-one-swiss-bank-account-has-%24-2-2-billion-%24-11-billion.html - Read the 'KGB Papers' section)

· Subramanium Swamy wrote to the swiss magazine, Schweizer Illustrierte, to confirm the publication of the article mentioning Rajiv Gandhi as holder of $2.2 Billion in swiss bank account (Scanned copy of the article -> http://goo.gl/0mJrr). The magazine confirmed the article (here -> http://www.janataparty.org/annexures/ann10p43.html), but the GOI did not act on this information for obvious reasons.

· During 2009 Lok Sabha elections, Jairam Ramesh, refused to even acknowledge the presence of Black money abroad and rubbished all claims by Individuals and various other leaders as 'mostly bogus sources'.

· In case, we get back the 22.5 Lakh crore of black money stashed abroad, each one of the 400 million people below the poverty line will get over 56,000 rupees if evenly distributed.

Hasan Ali case:

· Hasan Ali was raided on the 5^th of January 2007. IT dept. and ED, recovered docs that showed he has $8 billion dollars in USB account. Ali's Swiss bank accounts were not frozen despite the proof of his holdings of about $8 billion.

· He was arrested in December 2008. He was absconded for almost 2 years. Further investigations were hampered as ED and IT dept. claimed helplessness as Hasan Ali was absconding.

· Hasan Ali is protected by the people in power currently at the centre.

· A sting on him by Ashok Deshbhratar, a DCP who was probing the case, exposed Ali. Ashok was forced to do the sting as Hasan Ali never revealed anything during official interrogation. However, Deshbhratar was suspended (Cop who conducted 'sting operation' on Hasan Ali faces suspension -> http://goo.gl/lIa0w) for the 'unofficial' sting. Deshbhratar today is forced to go on indefinite leave. However, Ashok Deshbhratar filed an affidavit in the SC mentioning the sting operation and its details.

· Sri Gurumurthy read out a portion of Ashok Deshbhratar's affidavit in the SC at the lecture.

• Between Feb and May 2008, Hasan Ali stayed at Yusuf Lakdawala’s bungalow in Mad Islands, to escape his arrest in Pune.
• Commissioner of Mumbai was changed within a month of the registration of the Hasan Ali case. FIR against Hasan Ali was registered in Jan 2008 and the commissioner was changed in February 2008.
• Hasan Gafoor, who was appointed the Commissioner of Mumbai, visited Hasan Ali at Lakdawala’s bungalow at a party. At the instance of Sonia Gandhi, the Mumbai police commissioner was changed that derailed the process of investigation.
• Yusuf Lakdawala is close to Ahmed Patel, who is the political advisor to Sonia Gandhi and Vilas Rao Deshmukh, former CM of Maharashtra.

· This shows that the Congress president was interested in protecting Hasan Ali. It also raises doubts about powerful people wanted to derail the probe.

· The transactions of the UBS account of Hasan Ali showed that it summed up to $25 billion. All of this did not belong to Hasan Ali, as he was only a money launderer and earned commission/brokerage through this.

Conclusion:

· The opposition is not targeting Sonia Gandhi as they claim they do not have sufficient proofs, despite several proofs that already exist.

· Even in the Quattrocchi case, the frozen money was released by the Solicitor General going to London and requesting the officials to defreeze his account. No other reason can be seen for this act, other than the fact that Quattrocchi was close to Sonia Gandhi.

· Between 1991 and 1993, in 2 years Quattrocchi visited Sonia Gandhi 22 times, which is evidence on record and nobody seems to question her on this fact.

· The issue of black money is not only a moral and legal issue but also affects the country’s future and security. M.K.Narayanan, former national security advisor, said that black money is being used for terrorism. Gopal Subramaniam, who is the solicitor general, has written to Pranab Mukherjee to investigate the Hasan Ali case in the national security perspective.

· Investigations are underway in cases where Indians residing in Middle Eastern countries have stashed huge caches of money in Switzerland, which means that the money has been physically transported from India.

· Today when the whole world is in the pursuit of retrieving black money, and small countries like Philippines, Zaire have succeeded in securing the same, Indian government has not even acknowledged the presence of black money nor is it accepting the names the German government is ready to offer.

· The session concluded by Sri Gurumurthy requesting the public, right thinking individuals, intellectuals to put pressure on the opposition to question Sonia Gandhi and ask GOI to get the black money back.

The lecture was followed by a short 15mins Q&A session. The day ended with a soulful rendition of 'Vande Mataram' by a Swayamsevak.

PS:

- Articles related to Sri Gurumurthy's talk

· Read more about the 'Anti-Corruption Front' here -> http://www.haindavakeralam.com/HKPage.aspx?PageID=13559&SKIN=B

· Sonia Gandhi - A DANGEROUS POLITICIAN GUIDED BY VENDETTA - AG Noorani : http://gandhiheritage.org/index.php?option=com_content&task=category&sectionid=5&id=26&Itemid=27 (Read all three parts)

· Hasan Ali case - Ram Jethmalani and Ashok Deshbhratar in SC : http://www.asianage.com/india/sc-probe-threat-iit-prof-ed-496