Monday, January 09, 2012

Anatomy of a cover-up - I

Statesman Special Article
7 January 2012

Anatomy of a cover-up~I
CBI’s Handling Of The Jain Hawala Case

By Rajinder Puri

THERE has been much talk about the way in which CBI probes are subverted because the agency is not independent. One popular solution is to make the CBI accountable to a newly created Lokpal. Do most people who glibly offer solutions have a realistic idea of the problem? They should first acquaint themselves with how corruption is really covered up. They would know then that the challenge is much bigger than they realise. They would know then that the crisis is not just about corruption but about culture. They would know then that the problem is not just about the CBI but about the system. They would get some idea of this after recalling what happened in the Mother of all cover-ups ~ the Jain Hawala Case. This briefly is what happened in that case.
In 1991, a terrorist funding case was being investigated by the CBI. On 3 May 1991 a special investigating unit conducted searches in several places. One belonged to SK Jain from where Rs 58 lakh and a huge amount of foreign exchange were recovered. Along with these, proper books of accounts, as described by the Supreme Court, later popularly described as diaries, were also seized. The accounts revealed Rs 64 crore from abroad and their disbursement in India. It transpired that top politicians and bureaucrats were recipients of these foreign funds.
Among the top politicians and others were: Rajiv Gandhi, LK Advani, Devi Lal, Pranab Mukherjee, Yashwant Sinha, RK Dhawan, Arif Mohammed Khan, Kalpnath Rai, Balram Jakhar, Shiv Shankar, Moti Lal Vora, Har Mohan Dhawan, Rajesh Pilot, Natwar Singh, MJ Akbar, Jaffar Shariff, Lalit Suri, Rajesh Pilot, VC Shukla, Madhav Rao Scindia, Chiman Bhai Patel, ND Tewari, Arun Nehru, Kamal Nath, Arjun Singh, Ashok Sen, Kalyan Singh Kalvi, Ajit Panja, AK Antulay, Dinesh Singh, Madan Lal Khurana, Buta Singh, Sharad Yadav, Tajdar Babbar, Purshottam Kaushik, Krishan Kumar and many others.
There were three categories of recipients. A few received big amounts which were in fact their own monies stashed abroad brought into India by availing of the Hawala route. Secondly there were a few who received big amounts that were kickbacks paid by the Jains. But the vast majority were recipients of sometimes small amounts who accepted donations for the impending elections. In fairness, they were most likely unaware of the foreign source of the money. By accepting cash for elections they were merely acting by the prevailing political practice ~ legally wrong but morally accepted. Indeed Mr Devi Lal and Mr Sharad Yadav in the beginning were not at all secretive about having received the donations. However, after knowing the foreign source of the donations would not the recipients have felt vulnerable to blackmail? These VIP names remained outside public knowledge because the CBI did not leak them. The agency was vigorously pursuing the terrorist funding angle.
Mr OP Sharma, DIG, was in charge of the investigation. There was quick progress and seven people were arrested, among them Mool Chand Shah known as the Hawala King of Bombay. London and Interpol were contacted and foreign sources such as Mohini Jain in London and Tariq Bhai in Dubai were identified. But 20 accounts in the diary remain unidentified even till today. They could belong to anyone, including terrorists. Then something happened to derail the whole process. On the last working day of Prime Minister Chandrashekhar, 16 June 1991, one LK Kaul complained that OP Sharma had demanded a bribe from SK Jain for not arresting him. On behalf of SK Jain, Kaul claimed to have delivered Rs 10 lakh to Sharma. LK Kaul was neither an accused nor a witness.
It transpired that SK Jain later said he never knew Kaul, nor OP Sharma and he was never asked for a bribe nor did he pay one. Without contacting SK Jain the CBI quickly registered a case against DIG OP Sharma. It was the news of a top CBI officer being accused by the CBI which first attracted national media attention. Only after that gradually the details about the so-called Jain Diaries also surfaced in the media. After that operation cover-up proceeded rapidly.
With Sharma out of the probe five out of the seven arrested were released on bail. Only two Kashmiris were kept in jail. Subsequently not a single accused person was arrested and for all practical purpose they were all given amnesty. They included Mool Chand Shah who many years later was arrested by the Mumbai police for his role in funding the city’s bomb blasts in 1991! The entire investigation was buried and the public was kept in the dark. But a leak from the CBI found its way into the media. The Hindi daily, Jansatta, gave the whole story of the Jain Diaries written by Mr Ram Bahadur Rai. This was followed by exposure in Blitz weekly by Mr. Sanjay Kapur. This was followed by public interest litigation by Mr Vineet Narain and others in the Supreme Court (SC) demanding a proper probe. The petition was drafted under the direct supervision of noted lawyer Mr Ram Jethmalani. But before the court hearing he left on an urgent foreign visit. Later against established convention he appeared for one of the accused, Mr LK Advani. Did personal friendship prove too strong for observing professional norms? In Mr Jethmalani’s absence his named substitute Mr Shanti Bhushan wanted to withdraw the case from the Supreme Court and introduce it in the High Court. The petitioners disallowed this and eventually Mr Anil Dewan represented them. The SC admitted the petition and criticized the CBI for inaction stating: “This revealed a grave situation posing a serious threat even to the unity and integrity of the nation. The serious threat posed to the Indian polity could not be under-scored.”
The Jain Diaries were deposited with the Registrar of the SC. The CBI probe was subject to “continuous mandamus”, meaning that the agency had to periodically report to SC all progress in the probe. SC for all practical purpose was monitoring the investigation. Similar “continuous mandamus” is being followed by SC in the current 2G Spectrum probe. I opposed this move in the light of the experience gained in the Jain Hawala Case. Fortunately I was proved wrong. The SC in the present case is giving a better account of itself than it did in the Hawala case. What went wrong with the SC in the Jain Hawala Case?
(To be concluded)
The writer is a veteran journalist and cartoonist

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