Anonymous electoral bonds allow funding by dubious entities

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Published: November 27, 2019 12:39:09 AM

The government needs to pay heed to the Election Commission’s suggestions on junking the anonymity provision and re-introducing the provision that limits the donations to profitable companies with established track-records.

bonds, electoral bondsGiven how the electoral bonds programme allows for largely anonymous donations—only the bank issuing the bonds and the government of the day know the identity of the donors.

There can be no doubt that the electoral bonds programme was a step up from the days when black money could be routed to political parties given how the purchase of the bonds from the State Bank of India triggers a paper trail. But, much of the criticism the programme has been facing recently is quite justified. Based on the BJP’s filings with the Election Commission, it has been alleged that the party received donations in 2014-15 from RKW Developers, a firm that is linked to Dawood Ibrahim aide and terror accused Iqbal Mirchi and his family, as well as from firms that have had business dealings with RKW. Given how the electoral bonds programme allows for largely anonymous donations—only the bank issuing the bonds and the government of the day know the identity of the donors, and the parties encashing the bonds—tracing an RKW’s contribution to a party would be that much more difficult. Besides, given that the programme does away with the earlier requirement that only profitable companies be allowed to donate to parties, use of shell firms to make donations becomes a distinct possibility. This complicates matters further because, even if it is argued that the government and the bank will have knowledge of the particulars of the donor, money getting routed through a chain of shell companies will make deciphering the identity of the real donor nearly impossible.

The Election Commission has also voiced similar apprehensions on the matter, telling the Supreme Court in a 2017 affidavit that the bonds would have “serious repercussions/impact on the transparency aspect of political finance/funding of political parties.” Indeed, it had written to the government earlier that year to make its stand clear on the matter: “any donation received by a political party through an electoral bond has been taken out of the ambit of reporting under the Contribution Report as prescribed under Section 29C of the Representation of the People Act 1951 and therefore, this is a retrograde step as far as transparency of donations is concerned.” While many argue that the anonymity of electoral bonds allows a corporate house to donate to a party without being harassed by the latter’s rivals or fearing reprisal if they come to power, it also makes tracking quid pro quo nearly impossible. At the same time, given how the government of the day will always know to which party a company donated and how much, the programme is skewed towards favouring the party in power.

The government needs to pay heed to the Election Commission’s suggestions on junking the anonymity provision and re-introducing the provision that limits the donations to profitable companies with established track-records. Else, the programme will not only remain clouded by doubts on quid pro quo but also could become a vehicle for funds from entities possibly inimical to the country’s interests.

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