India's multi-billion dollar telecom scandal, also known as 2G scandal, is continuing to grow with new revelations coming out almost every day, especially since the failure of the blackout attempt orchestrated by some of the biggest Indian TV channels and newspapers.
The main source of these leaks are over 100 tapes of 5,000 recordings made by India's Enforcement Directorate and Income Tax authorities as part of their surveillance of Ms. Nira Radia. Radia lobbied government ministers and politicians on behalf of India's business elite, including the biggest business magnates Mukesh Ambani and Ratan Tata.
NDTV journalist Barkha Dutt and Hindustan Times columnist Vir Sanghvi are among those implicated by the tapes in the growing scandal. Initially, attention was focused on Ms. Dutt, who was accused of agreeing to pass on messages from Ms. Radia to the Congress party. Ms. Dutt denied that and defended herself on Twitter, in a statement and on television, and said that at most she had made an error of judgment in how she conversed with Ms. Radia.
The focus is now on on Mr. Sanghvi's role, according a Wall Street Journal report. In one of the tapes, Mr. Sanghvi sounded on one recording as if he was agreeing to slant his column on the feuding Ambani industrialist brothers according to Ms. Radias suggestions. Ms. Radia represents elder brother Mukesh Ambani, who controls Reliance Industries. Anil Ambani, the younger brother, controls the Reliance Anil Dhirubhai Ambani Group. Mr. Sanghvi tells Ms. Radia the piece is dressed up as a plea to [Indian Prime Minister] Manmohan Singh so it wont look like an inter-Ambani battle thing except to people in the know. She responds: Very nice. In another conversation, between Ms. Radia and an employee, she asks for questions to be prepared for an interview between Mr. Sanghvi and Mukesh Ambani, saying that he has agreed to ask whatever questions we suggest.
In a court affidavit filed last week, the Indian government said it had begun tapping Ms Radia's phone after an allegation that she was spying for foreign intelligence.
Ms. Radia's telephone was tapped by the Indian government for 180 days during two separate stints in 2008 and 2009. Several hundreds of those call recordings have so far been leaked to Indian media outlets in the past few weeks. Some of these recordings have been posted on the Internet by India's Outlook and Open magazines.
Stung by the disclosures, Indian Prime Minister Manmohan Singh has asked cabinet secretary KM Chandrasekhar to investigate and report within a month. Singh said he "was aware of the nervousness in the corporate sector" over authorized phone-tapping. The Tata group chairman has taken legal action after his conversations with a lobbyist were leaked to media.
Here are some of the key revelations to date:
1. Billionaire businessman Mukesh Ambani is quoted as bragging that the ruling Congress Party is "Apni Dukan" (our shop), implying that he owns the ruling party.
2. Telecom minister Andimuthu Raja left an estimated $40 billion on the table by accepting bribes in exchange for lower bids from Indian and foreign bidders on 2G cellular spectrum auction, according to a New York Times report.
3. India's Highway Minister Kamal Nath is alleged to skim 15% on all the projects his ministry oversees.
There have long been allegations of corruption against Indian government ministers and politicians, but the tapes now confirm the extent of graft that was accidentally discovered by Indian authorities who were looking for evidence of Radia's possible involvement in spying for foreign nations.
There has long been a nexus of crime, corruption and politics in India. Of the 278 current Indian MPs for whom records are obtainable, 63 have criminal backgrounds. Of those, 11 have been charged with murder and two stand accused of dacoity (banditry). Other alleged misdemeanors range from fraud to kidnapping, according to data collected by National Election Watch, the campaign group that has put together the data.
Most Indian politicians have used their election wins to significantly enrich themselves, according to their own pre-election declarations of assets. For example, the comparison of assets of candidates who won in 2004 and sought re-elections in 2009 shows that the wealth of UP politicians has grown by 559%, over five times, in five years, second only to their Karnataka counterparts who registered a growth of 693% in the same period, according to a report..
Commenting on the scandal, Wharton's Professor Jitendra Singh says corruption in India is "heterogeneous and multifaceted," ranging from a simple bribe to systemic corruption, "where retrograde cultural norms get well-established in specific settings, such that a non-corrupt newcomer may well find it impossible to survive." Inferior cultural norms are the toughest to tackle, and those values could prove very difficult to unhinge, according to Singh. "In its abstract form, the gains in a transaction get disproportionately appropriated by actors in relation to their role in the creation of this value," he says. "This distorts incentives and, ultimately, values in a society and leads to inequitable distribution of income and wealth, and inefficient allocation of capital." He warns of "collective consequences such as the institutionalization of inferior cultural norms [for example, 'in order to succeed, you have to be dishonest, because everyone else is dishonest'] that may take generations, even centuries, to sort out meaningfully."
The telecom scandal may just be the tip of the iceberg. A broader and more serious independent inquiry is now necessary to find any evidence of widespread corruption as powerful Indian businessmen like Ambanis and Tatas use their power, influence and cash to garner resources or projects, whether mining rights, gas fields, land, infrastructure projects or the electromagnetic waves known as spectrum that carry cellphone service.
As to the role of the media, the US Supreme Court Justice Louis Brandeis once said that "sunlight is the best disnifectant". Transparency is not possible when the mass media join the effort to block sunlight, as has been the case in India's telecom scandal. Instead of playing their role as watchdogs in a democracy, many in the Indian media have chosen to collaborate with corrupt politicians and greedy businessmen to enrich themselves. The Indian media are guilty of manufacuring consent in a favor of the powerful few against the interests of the vast majority of India's population that is among the poorest and the most deprived in the world.
To protect the future of democracy, sustain economic growth and ensure that the benefits of growth are shared equitably by India's population, emergence of an honest, transparent and ethical media are absolutely essential. I hope the sane members of the Indian media will now find a way to clean up their ranks and begin a serious self-policing effort based on a new set of sound standards of professional ethics.
Haq's Musings: Growing 2G Scandal Exposes India's Crony Capitalism
The main source of these leaks are over 100 tapes of 5,000 recordings made by India's Enforcement Directorate and Income Tax authorities as part of their surveillance of Ms. Nira Radia. Radia lobbied government ministers and politicians on behalf of India's business elite, including the biggest business magnates Mukesh Ambani and Ratan Tata.
NDTV journalist Barkha Dutt and Hindustan Times columnist Vir Sanghvi are among those implicated by the tapes in the growing scandal. Initially, attention was focused on Ms. Dutt, who was accused of agreeing to pass on messages from Ms. Radia to the Congress party. Ms. Dutt denied that and defended herself on Twitter, in a statement and on television, and said that at most she had made an error of judgment in how she conversed with Ms. Radia.
The focus is now on on Mr. Sanghvi's role, according a Wall Street Journal report. In one of the tapes, Mr. Sanghvi sounded on one recording as if he was agreeing to slant his column on the feuding Ambani industrialist brothers according to Ms. Radias suggestions. Ms. Radia represents elder brother Mukesh Ambani, who controls Reliance Industries. Anil Ambani, the younger brother, controls the Reliance Anil Dhirubhai Ambani Group. Mr. Sanghvi tells Ms. Radia the piece is dressed up as a plea to [Indian Prime Minister] Manmohan Singh so it wont look like an inter-Ambani battle thing except to people in the know. She responds: Very nice. In another conversation, between Ms. Radia and an employee, she asks for questions to be prepared for an interview between Mr. Sanghvi and Mukesh Ambani, saying that he has agreed to ask whatever questions we suggest.
In a court affidavit filed last week, the Indian government said it had begun tapping Ms Radia's phone after an allegation that she was spying for foreign intelligence.
Ms. Radia's telephone was tapped by the Indian government for 180 days during two separate stints in 2008 and 2009. Several hundreds of those call recordings have so far been leaked to Indian media outlets in the past few weeks. Some of these recordings have been posted on the Internet by India's Outlook and Open magazines.
Stung by the disclosures, Indian Prime Minister Manmohan Singh has asked cabinet secretary KM Chandrasekhar to investigate and report within a month. Singh said he "was aware of the nervousness in the corporate sector" over authorized phone-tapping. The Tata group chairman has taken legal action after his conversations with a lobbyist were leaked to media.
Here are some of the key revelations to date:
1. Billionaire businessman Mukesh Ambani is quoted as bragging that the ruling Congress Party is "Apni Dukan" (our shop), implying that he owns the ruling party.
2. Telecom minister Andimuthu Raja left an estimated $40 billion on the table by accepting bribes in exchange for lower bids from Indian and foreign bidders on 2G cellular spectrum auction, according to a New York Times report.
3. India's Highway Minister Kamal Nath is alleged to skim 15% on all the projects his ministry oversees.
There have long been allegations of corruption against Indian government ministers and politicians, but the tapes now confirm the extent of graft that was accidentally discovered by Indian authorities who were looking for evidence of Radia's possible involvement in spying for foreign nations.
There has long been a nexus of crime, corruption and politics in India. Of the 278 current Indian MPs for whom records are obtainable, 63 have criminal backgrounds. Of those, 11 have been charged with murder and two stand accused of dacoity (banditry). Other alleged misdemeanors range from fraud to kidnapping, according to data collected by National Election Watch, the campaign group that has put together the data.
Most Indian politicians have used their election wins to significantly enrich themselves, according to their own pre-election declarations of assets. For example, the comparison of assets of candidates who won in 2004 and sought re-elections in 2009 shows that the wealth of UP politicians has grown by 559%, over five times, in five years, second only to their Karnataka counterparts who registered a growth of 693% in the same period, according to a report..
Commenting on the scandal, Wharton's Professor Jitendra Singh says corruption in India is "heterogeneous and multifaceted," ranging from a simple bribe to systemic corruption, "where retrograde cultural norms get well-established in specific settings, such that a non-corrupt newcomer may well find it impossible to survive." Inferior cultural norms are the toughest to tackle, and those values could prove very difficult to unhinge, according to Singh. "In its abstract form, the gains in a transaction get disproportionately appropriated by actors in relation to their role in the creation of this value," he says. "This distorts incentives and, ultimately, values in a society and leads to inequitable distribution of income and wealth, and inefficient allocation of capital." He warns of "collective consequences such as the institutionalization of inferior cultural norms [for example, 'in order to succeed, you have to be dishonest, because everyone else is dishonest'] that may take generations, even centuries, to sort out meaningfully."
The telecom scandal may just be the tip of the iceberg. A broader and more serious independent inquiry is now necessary to find any evidence of widespread corruption as powerful Indian businessmen like Ambanis and Tatas use their power, influence and cash to garner resources or projects, whether mining rights, gas fields, land, infrastructure projects or the electromagnetic waves known as spectrum that carry cellphone service.
As to the role of the media, the US Supreme Court Justice Louis Brandeis once said that "sunlight is the best disnifectant". Transparency is not possible when the mass media join the effort to block sunlight, as has been the case in India's telecom scandal. Instead of playing their role as watchdogs in a democracy, many in the Indian media have chosen to collaborate with corrupt politicians and greedy businessmen to enrich themselves. The Indian media are guilty of manufacuring consent in a favor of the powerful few against the interests of the vast majority of India's population that is among the poorest and the most deprived in the world.
To protect the future of democracy, sustain economic growth and ensure that the benefits of growth are shared equitably by India's population, emergence of an honest, transparent and ethical media are absolutely essential. I hope the sane members of the Indian media will now find a way to clean up their ranks and begin a serious self-policing effort based on a new set of sound standards of professional ethics.
Haq's Musings: Growing 2G Scandal Exposes India's Crony Capitalism
