Labour party's hypocrisy on Corbyn

George Monbiot in The Guardian


Where are the nose-pegs this time? Those who tolerated anything the Labour party did under Blair tolerate nothing under Corbyn. Those who insisted that we should vote Labour at any cost turn their backs as it seeks to recover its principles.

They proclaimed undying loyalty when the party stood for the creeping privatisation of the NHS, the abandonment of the biggest corruption case in British history, the collapse of Britain’s social housing programme, bans on peaceful protest, detention without trial, the kidnap and torture of innocent people and an illegal war in which hundreds of thousands died. They proclaim disenchantment now that it calls for the protection of the poor, the containment of the rich and the peaceful resolution of conflict.

Those who insisted that William Hague, Michael Howard and David Cameron presented an existential threat remain silent as Labour confronts a Conservative leader who makes her predecessors look like socialists.

Blair himself, forgiven so often by the party he treated as both ladder and obstacle to his own ambition, repays the favour by suggesting that some should vote for Conservatives who seek a softer Brexit. He appears to believe that the enhanced majority this would deliver to Theresa May might weaken her. So much for the great tactician.

Yes, Jeremy Corbyn is disappointing. Yes, his leadership has been marked by missed opportunities, weakness in opposition and (until recently) incoherence in proposition, as well as strategic and organisational failure. It would be foolish to deny or minimise these flaws. But it would be more foolish still to use them as a reason for granting May a mandate to destroy what remains of British decency and moderation, or for refusing to see the good that a government implementing Corbyn’s policies could do.

Of course I fear a repeat of 1983. But the popularity of Corbyn’s recent policy announcements emboldens me to believe he has a chance, albeit slight, of turning this around. His pledge to raise the minimum wage to £10 an hour is supported by 71% of people, according to a ComRes poll; raising the top rate of tax is endorsed by 62%.

Labour’s 10 pledges could, if they formed the core of its manifesto, appeal to almost everyone. They promote a theme that should resonate widely in these precarious times: security. They promise secure employment rights, secure access to housing, secure public services, a secure living world. Contrast this to what the Conservatives offer: the “fantastic insecurity” anticipated by the major funder of the Brexit campaign, the billionaire Peter Hargreaves.


I would love to elect a government led by someone competent and humane, but this option will not be on the ballot paper.


Could people be induced to see past the ineptitudes of Labour leadership to the underlying policies? I would argue that the record of recent decades suggests that the quality of competence in politics is overrated.

Blair’s powers of persuasion led to the Iraq war. Gordon Brown’s reputation for prudence blinded people to the financial disaster he was helping to engineer, through the confidence he vested in the banks. Cameron’s smooth assurance caused the greatest national crisis since the second world war. May’s calculating tenacity is likely to exacerbate it. After 38 years of shrill certainties presented as strength, Britain could do with some hesitation and self-doubt from a prime minister.

Corbyn’s team has been hopeless at handling the media and managing his public image. This is a massive liability, but it also reflects a noble disregard for presentation and spin. Shouldn’t we embrace it? This was the licence granted to Gordon Brown, whose inept performances on television and radio as prime minister were attributed initially to his “authenticity” and “integrity”. Never mind that he had financed the Iraq war and championed the private finance initiative, which as several of us predicted is now ripping the NHS and other public services apart. Never mind that he stood back as the banks designed exotic financial instruments. He had the confidence of the City and the billionaire press. This ensured that his ineptitude was treated as a blessing, while Corbyn’s is a curse.

I would love to elect a government led by someone both competent and humane, but this option will not be on the ballot paper. The choice today is between brutal efficiency in pursuit of a disastrous agenda, and gentle inefficiency in pursuit of a better world. I know which I favour.

There is much that Labour, despite its limitations, could do better in the next six weeks. It is halfway towards spelling out an inspiring vision for the future; now it needs to complete the process. It must hammer home its vision for a post-European settlement, clarifying whether or not it wants to remain within the single market (its continued equivocation on this point is another missed opportunity) and emphasising the difference between its position and the extremism, uncertainty and chaos the Conservative version of Brexit could unleash.

It should embrace the offer of a tactical alliance with other parties. The Greens have already stood aside in Ealing Central and Acton, to help the Labour MP there defend her seat. Labour should reciprocate by withdrawing from Caroline Lucas’s constituency of Brighton Pavilion. Such deals could be made all over the country: as the thinktank Compass shows, they enhance the chances of knocking the Tories out of government.

Labour’s use of new organising technologies is promising, but it should go much further. No one on the left should design their election strategy without first reading the book Rules for Revolutionaries, by two of Bernie Sanders’ campaigners. It shows how a complete outsider almost scooped the Democratic nomination, and how the same tactics could be applied with greater effect now that they have been refined. And anyone who fears what a new Conservative government might do should rally behind Labour’s unlikely figurehead to enhance his distant prospects.

The choice before us is as follows: a party that, through strong leadership and iron discipline, allows three million children to go hungry while hedge fund bosses stash their money in the Caribbean and a party that hopes, however untidily, to make this a kinder, more equal, more inclusive nation. I will vote Labour on 8 June, and I will not hold my nose. I urge you to do the same.

Pakistan's Panamagate - I told you so!

Irfan Husain in The Dawn

IN a nation of some 200 million, I doubt if a handful could pinpoint Panama’s location. And yet, this tiny Central American state has dominated Pakistan’s political discourse for the last year to the point of tedium.

Finally, after nearly two months of hearings before a Supreme Court bench, the verdict is here. And, as I had predicted to friends a few weeks ago, it is a cop-out that has both sides declaring victory.

For me, the abiding image is of the Sharif brothers, Nawaz and Shahbaz, embracing and beaming at each other. In the PTI camp, we watched Imran Khan and senior party members pass sweetmeats around.

For the SC, the verdict gave the impression of balance and fairness, with something for both sides to cheer about. Imran Khan had a lot of praise for the two dissenting judges who declared the prime minister ineligible to rule because he didn’t meet the criteria of honesty and integrity laid down in the Constitution.

The ruling PML-N is gloating over a verdict that, for the time being, has let their leader off the hook. As far as the party is concerned, it has every chance of hanging on to power until the 2018 election. Here, according to opinion polls, it is most likely to win a majority. So who’s the real winner in the verdict?

When the Panama brouhaha began a year ago, I had suggested that the Sharif brothers were masters of kicking the can down the road, and would drag matters out indefinitely. Now, with a joint investigative team (JIT) being set up, expect more of the same.

Even though the SC has required the JIT to submit fortnightly progress reports, the fact remains that members of this committee will all be serving members of the civil and military bureaucracy. To expect them all to perform their tasks independently is a rather big ask.

Then there is the problem of the team having to obtain and verify information in different jurisdictions. Will they be able to force banks and government departments in Dubai and Qatar to hand over documents? And all this in two months? Forgive my scepticism, but having first-hand knowledge of the pace at which our bureaucracy works, I have some doubts.
No wonder that Imran Khan is demanding the PM’s resignation. He knows how difficult it will be to get a group of civil servants to report against a sitting PM. But he’s right in underlining Nawaz Sharif’s loss of moral authority to rule.

Irrespective of the legal rights and wrongs of the case, it is clear that the daily drip-drip-drip of corrosive evidence against Sharif and his family has done much to strip away the aura of decency he had tried to project. And his disqualification by the two dissenting judges on the bench has reinforced the impression of corrupt practices at the heart of the Sharif empire.

With supreme irony, Asif Zardari has also demanded Nawaz Sharif’s resignation, and asked if he would be taken to the local police station for questioning, or would the JIT go the PM House? The reference here was to his own vicious treatment over a decade of incarceration.

Indeed, the PPP has good reason to be aggrieved at what has often appeared to be its targeting by the judiciary, starting with Zulfikar Ali Bhutto’s judicial murder to the sacking of another elected PM, Yousuf Raza Gilani. In many other cases, the judiciary has displayed an apparent animus against the PPP.

And yet, despite demands for his resignation from the opposition, Nawaz Sharif isn’t going anywhere. He didn’t get to where he is by being sensitive to corruption charges. Throughout his political career, he has shown himself to be tough and opportunistic.

Imran Khan has given examples from other countries where leaders tainted by the Panama Papers have either provided full disclosure (David Cameron), or resigned (Iceland’s Sigmundur Gunnlaugsson). However, members of Putin’s and Bashar al-Assad’s inner circle have not even bothered denying the allegations against them contained in the leaks.

As we know, there is no tradition of resignations in Pakistan. Even in Israel, Bibi Netanyahu is mired in corruption charges, but is refusing to step down. But in Israel, the police are far more independent than they are in Pakistan, and have investigated similar charges against presidents and prime ministers before.

Whatever happens next, Panama is a name that will continue to resound on our TV chat shows for some time to come. But will the verdict reduce corruption? I doubt it. But it will force crooked politicians to be more careful about their bookkeeping.

A final factoid: the verdict triggered our stock exchange’s biggest bull run, with the index shooting up by 1,800 points in a single session. Do investors know something we don’t?



----The background of the case to those who don't know by Husain Haqqani



Pakistan’s Supreme Court is an arena for politics, not an avenue for resolution of legal disputes. Unlike other countries where the apex court serves as the court of last appeal, Pakistan’s Supreme Court often entertains direct applications from political actors and generates high-profile media noise. In that tradition its judgment in the so-called Panama Papers case is a classic political balancing act. It raises questions about Prime Minister Nawaz Sharif’s property in London, but does not remove him from office.

Opposition politician Imran Khan, currently a favourite of Pakistan’s establishment, initiated the case after Mr. Sharif’s name appeared in leaked documents about owners of offshore companies worldwide. The documents indicated that the Sharif family had borrowed money against four flats they own in London’s posh Mayfair district.

Show them the money

Having an offshore account is not in itself a violation of Pakistani law, but transferring money from Pakistan illegally is. Hence the case decided on Thursday revolved around the provenance of the money with which the Sharifs became owners of the property in London. In hearings that began in January, the petitioners insisted that the Sharif family’s ownership of this particular property could not have been possible without their possession of undeclared wealth or illegal transfers of money from Pakistan.

Instead of insisting on the time-honoured principle that accusers must prove their allegation beyond a shadow of a doubt and that investigations must precede judicial hearings, the Supreme Court acted politically. It asked the Sharifs to explain the source of money used to buy property abroad, forcing the Sharif family’s lawyers to offer various (sometimes contradictory) explanations at sensational hearings.

One of these explanations comprised a letter from a member of the Qatari royal family who said that he had transferred $8 million to the Sharif family as return on investments made in cash by the Prime Minister’s deceased father, Mian Muhammad Sharif, in the Qatari family’s real estate business in 1980.

The Qatar letter did not settle the matter because the Sharif family members had, at different times, given different explanations for the source of their funds. Moreover, the timelines of the acquisition of the London properties, the formation of the offshore company that was used to buy them and the apparent cash dealings in Qatar did not always align. In any case, a Qatari royal might be willing to send a letter for his friends, the Sharifs, but could not be expected to testify in person in Pakistan and submit himself to cross-examination, something that would be needed if the case ever went to proper trial.

The Supreme Court’s final verdict was split 3-2 among the five-judge bench, with two ruling that Prime Minister Sharif should be disqualified from holding office for failing to explain the source of money for his property. The majority said there was insufficient evidence for such a drastic step and instead announced the formation of a Joint Investigation Team (JIT) comprising five members.

These would include appointees from the Federal Investigation Agency, the National Accountability Bureau, the State Bank of Pakistan, the Securities & Exchange Commission of Pakistan and one representative each from the Inter-Services Intelligence (ISI) and Military Intelligence (MI).

The fallout

The Prime Minister’s side breathed a sigh of relief that the court did not disqualify him from holding office, a decision it has given in the past for the removal of elected civilian Prime Ministers. Imran Khan, who wanted disqualification, declared victory even with the JIT’s creation. He and other opponents of the government are hoping that Nawaz Sharif will now bleed politically from the thousand cuts that are likely to be inflicted on him through reports emanating from the JIT.

Mr. Sharif has won elections before notwithstanding allegations of personal financial wrongdoing, but a new wave of charges could make things difficult for him in Punjab’s urban centres when Pakistan goes to the polls in 2018.

Ironically, the Supreme Court’s nearly 549-page judgment begins not by invoking some eminent jurist, but with a reference to Mario Puzo’s novel The Godfather, citing Balzac’s well-known words, “Behind every great fortune there is a crime.” But then most Pakistanis, including judges and military officers, have known for years that the fortunes of Pakistan’s uber-wealthy families come from bending or breaking laws or using political connections for private advantage. Why go looking into the origins of wealth now?

The creation of the JIT, and including two military intelligence service members who are not trained in matters relating to business and finance, says more about Pakistan’s judicial and political system than it says about the merits of this particular case. The issue in Pakistan is never corruption or failing to explain the source of funds for property. It is where someone fits into the permanent state’s scheme of things.

Nawaz Sharif was fine when he was picked up by General Zia-ul-Haq as leader of a military-backed Punjabi political elite after the coup of 1977. Courts and investigators seldom found anything wrong with the phenomenal expansion of his family’s wealth until he decided to start questioning Pakistan’s military establishment and, in recent years, even assert himself in core policy areas. Politicians can make money as long as they do not seek a role in policymaking. When Benazir Bhutto stood for a different paradigm for Pakistan, she and her husband were subjected to long-drawn legal proceedings over corruption. Asif Ali Zardari might have fewer problems on that score now after he is content to parrot the establishment’s views on national security and foreign policy. Nawaz Sharif is being put through the wringer to become more like Mr. Zardari and less like Bhutto.

As for the Pakistani Supreme Court, it intervenes to swing politics one way or another by favouring the country’s establishment against politicians or vice versa, to justify patently unconstitutional military takeovers and occasionally to embarrass one party against another. Unlike elsewhere in the world, its function is not just to determine the constitutionality and legality of judgments already given by lower courts.

As a victim of one such Commission (ironically, created on Mr. Sharif’s petition) in the so-called Memogate Case, I know that the principal damage inflicted by its proceedings is to public image. The Memogate Commission’s findings never led to criminal charges, not even an FIR, against me for any crime as none was actually committed. But its proceedings and comments created sufficient political noise for some Pakistanis to still think I am a fugitive from Pakistani law.

Signal from the deep state?

Generating smoke without fire against persons deemed difficult or uncontrollable by Pakistan’s permanent state establishment, the deep state, is often the greatest accomplishment of inquiries created by the Supreme Court on direct petitions like the one over the Panama Papers.

The JIT might still find nothing definitive for prosecution but Mr. Sharif is on notice. And that is how Pakistan’s system is designed to work.

Lessons from Amma

Shubhankar Dam in The Friday Times

From 1991 to 1996, four residents of 36 Poes Garden, Chennai—J Jayalalithaa, the chief minister of Tamil Nadu and her foster family—amassed a 3,200% increase in wealth. This staggering surge, a rate of superhuman returns, beggars belief. What begot this? Prodigious business acumen? Or a colossal abuse of public office?

In June 1996, one Subramanian Swamy filed a complaint against Jayalalithaa alleging assets in titanic disproportion to her accredited sources of income. Investigations laid bare an incestuous web of businesses and vicariously held properties. The three other residents of Poes Garden, VK Sasikala, J Elavarasi, and VN Sudhakaran, appeared deep in cahoots with the matriarch. In Jan. 1997, they, too, were arraigned alongside the alleged mastermind.

The matter gingerly inched through India’s legal complex, wobbling from one court to another. Calendars turned, as parties wrangled over legal process. Two decades went by.

On February 14, 2017, at last, the final word. The Indian Supreme Court delivered a decisive verdict. What it enounced should put public officials, politicians and corporates, too, on alert.

Presented with fawning tributes on birthdays or other times, politicians holding public offices must turn them down: that is the only legal option now. No longer can they summon the alibi of customary practice-insistent adulation of their devotees-to fatten their bank balances

The conspiracy, the crime, the charge

Jayalalithaa was charged with criminal misconduct under the Prevention of Corruption Act, 1988: possessing, directly or through a person, while in public office, resources or property disproportionate to one’s known sources of income—something the public servant cannot satisfactorily account for. Her familial acolytes were indicted for criminal conspiracy and abetment.

Persons conspire, the Indian Penal Code, 1860, says, if two or more agree to do an unlawful act or a lawful act by unlawful means. Persons abet an offence, the code adds, if they intentionally aid others in an unlawful act.

The trial court, and later, the high court, distilled the facts, weighed the evidence, and applied the law. The first court convicted; the latter acquitted. Why? They disagreed on all counts: facts, evidence and the law. The Supreme Court stepped in, and broke new ground. Measuring disproportionate assets will never be the same again.

Tamil Nadu CM Jayalalithaa was charged with criminal misconduct under the Prevention of Corruption Act, 1988: possessing, directly or through a person, while in public office, resources or property disproportionate to one’s known sources of income-something the public servant cannot satisfactorily account for

Accounting for criminal income

Jayalalithaa and her aides asserted large incomes from assorted sources: business, agriculture, loans, interests, gifts, rentals, and sale of party literature. They produced income tax returns as proof. Income tax officials had accepted these documents. So, they sufficed as proof, all four optimistically pleaded. The Supreme Court rubbished this approach. Tax laws are distinct from anti-corruption rules. Income tax officers only assess incomes; they don’t bother with sources, the court insisted.

In Sept 1958, Indian police detained one Piara Singh as he ventured to cross into Pakistan. Searches revealed a sum of Rs65,500 on his person; interrogations revealed a gold-smuggling racket. Officials quickly seized his cash. Of the impounded sum, Rs60,500 was Singh’s income from undisclosed sources, income tax officers assessed. It was liable to tax.

Singh protested. Smuggling was his “business,” he told the Supreme Court. The impounded cash amounted to a “business loss”. It should be tax-exempt. The court agreed. Tax laws are catholic—they apply to all profits and losses, licit and illicit. The sources don’t matter. So, Singh’s business loss was indeed tax-exempt.

Anti-corruption law is different: It obsesses over sources. The 1988 Act says: If charged, a public servant must satisfactorily explain the disproportionate assets through his or her known sources of income, that is, “income received from any lawful source”.

Jayalalithaa had massive incomes but no evidence of their legality—no credible records, witnesses, explanations or inferences. The court affirmed the charge against her. A clean bill of financial health from the tax department, in other words, won’t ease matters in an anti-corruption court. Independent verification is the key.

But that’s not all. The court went further—much further. It proscribed a commonly asserted source of income, and that should alarm politicians in India even more.

Tax laws are catholic-they apply to all profits and losses, licit and illicit. The sources don’t matter. Anti-corruption law is different: It obsesses over sources

New law of public affection

Jayalalithaa’s birthdays were an annual orgy of love and presents. Cash, foreign remittances, jewelry, sarees, and silver items—her democratic devotees inundated her with them, she claimed.

Are such gifts lawful sources of income in an anti-corruption context? No, the court emphatically said. They are “visibly illegal and forbidden by law”. Gifts are bribes by another name. Legalising them would erase the bar on bribes, it reasoned.

Presents to public servants come in many forms. Some are designed to induce or reward abuse of office. Others come with no manifest motive. They are “simply” gifts. But these, too, are unlawful, the court pronounced. Why?

Gifts are “likely to influence [a] public servant to show official favour to [the] person” offering them, if opportunities arise. Opportunities, though, may arise in umpteen, unpredictable ways. Many citizens are likely to have business to transact with, say, a minister (get a policy altered), bureaucrat (get a permit issued) or police officer (get a matter investigated).

Are gifts from all citizens unlawful? Relatives, friends, acquaintances, too? The court didn’t say. But if so, a generous embargo on presents is a revolutionary piece of reasoning.

Presented with fawning tributes on birthdays or other times, politicians holding public offices must turn them down: that is the only legal option now. No longer can they summon the alibi of customary practice—insistent adulation of their devotees—to fatten their bank balances.

The bar applies to all public servants and corporates, not just politicians. Under scrutiny for purportedly spinning a web around public officials to promote business interests, the Essar Group defended its practices in an affidavit to the Supreme Court in Nov. 2015. Small gifts and favors to government servants are “common courtesies”, it claimed. They aren’t improper, much less illegal. They are illegal: The verdict makes it emphatically clear.

Declaring illegality is the easy part; proving criminal collusion is much harder. But corrupt politicians, corporates and their handlers, be warned. A new judicial zeal is doing the rounds. 

Poes Garden: house of crimes

Jayalalithaa invited her friend Sasikala to the residency at Poes Garden in 1987. Together, they ran two business partnerships. Later, Elavarasi and Sudhakaran, Sasikala’s relatives, were inducted into the home in 1991 and 1992, respectively.

The new residents had no business experience or sources of income. Yet, they acquired six companies, and held directorships. (More firms were incorporated later.) Accounts linked to Jayalalithaa and Sasikala funded the acquisitions.

The companies, originally, had nothing of worth: funds, assets, loans or anything else. Not even bank accounts in some cases. But, suddenly, they stirred into brisk action. They surveyed and negotiated deals, bought land, and executed sale deeds. They also operated some 50 bank accounts. Cash promiscuously flowed in and out. No walls separated them. Intriguingly, that is all the companies did: hoard properties and move cash around.

These were shells, not companies. It strained credulity to believe that they transacted ordinary business. The Supreme Court did not believe, either. Business registrations, deals, transfers, appointments, resignations had remarkable synchronies. These weren’t coincidences, the court inferred. The collaborators were part of an elaborate commercial incest. The firms, their holdings, and deals were shams, contrived to lend an ounce of entrepreneurial legitimacy.

Poes Garden was a conspiratorial den, and Jayalalithaa masterminded it, the court found. She funded the partnerships. These, in turn, funded the companies. Those, then, bought properties. The 50 bank accounts were effectively one: Jayalalithaa’s. Guilty, all of them, the court decided.

The verdict will resonate far beyond the immediate facts. It has an air of urgency. There’s a readiness to peel away legal facades, probe nooks and crannies, unite the dots and draw aggressive inferences. Gone are the days when judges willingly suspended disbelief, demanded impossible standards from prosecutors, and granted careless benefit of doubt to the accused.

It augurs well for corruption trials now underway. The decision puts undertrials on notice, and those plotting their next rendezvous with public corruption, too.

Altogether, it feels rosy it shouldn’t. Ominous clouds still lurk on the legal horizon.

This ain’t a happy ending

The verdict, again, betrays the rot at the heart of India’s criminal justice complex. For one, it ground ahead slowly, far too slowly. Two decades to litigate a criminal charge is inordinately long. This point isn’t worth belabouring—it is well known.

But another point is the systemic lack of investigative and prosecutorial independence, and the inability to hold serving public officials, particularly, political offices, to account. Lest we forget, anti-corruption sleuths didn’t pursue Jayalalithaa. A private complainant did: Subramanian Swamy. The director of Vigilance and Anti-Corruption, Chennai, joined in after a court directive. That Jayalalithaa’s political rival in Tamil Nadu, the Dravida Munnetra Kazhagam (DMK), held power in the state during the investigations only helped matters along.

A credible investigation against a sitting chief minister in India, even now, is an absurd idea. Investigations are only the beginning. Prosecutions must follow in deserving cases. It followed in this case, and quite well. But only till the DMK was in power. By August 2000, nearly 250 witnesses had been examined; just over 10 remained. The marathon trial was in its last mile.

Suddenly, it fumbled

In May 2001, Jayalalithaa and her party returned to power. Witnesses turned hostile. Prosecutors lost their zeal. The trial went awry. In Nov. 2003, the Supreme Court, in response to a petition by a DMK leader, K. Anbazhagan, transferred the trial to Bangalore. A fair trial against a sitting chief minister was impossible within the state, the court implied. Such is the rancid reality of prosecutorial affairs in India.

The trail began anew. Even there in Bangalore, prosecutors struggled. Interference lurked at every turn. The Supreme Court routinely intervened to keep matters on track—often at the dogged insistence of Swamy and Anbazhagan. Only they seemed keen to try Jayalalithaa, not the state.

Successful anti-corruption drives marry tough rules, investigative and prosecutorial independence with judicial reasonableness. India has two of these—or at least a semblance of them. The middle one is missing; it has always been so.

Without it, the Jayalalithaa-Sasikala matter will remain a celebrated exception. Without it, prosecuting high corruption in India will remain a private pastime, always directed at opposition politicians against an obstinate state apparatus, and overly reliant on courts. Without it, only lesser mortals will endure the fury of anti-corruption rules: Those more equal than others will forever remain immune.

Indian sport’s Forever Men

Nirmal Shekar in The Hindu

Many of the sports administrative bodies are besmirched by feudal attitudes where the top guys have reigned for long and appear to claim ownership rights over their ‘property’


The best thing that has happened to sports in India in a long, long time — longer perhaps than many of us have existed on this planet — is the laudably idealistic yet remarkably pragmatic intervention of the Supreme Court into Wild West territory — the landscape of cricket administration.
So much of what the well-meaning lay people have expected of the men who control sports has been trampled under mercilessly and maliciously, that a good majority of sports-lovers in the country have found refuge in nihilism and come to believe that nothing will change in the state of affairs.

When you think that something has been transformed for the better, very soon you realise it is nothing more than chimerical and it might be foolish and useless to bravely make your way through the haze.

If sports politics is even more Machiavellian than Indian politics in general, then that should come as no surprise. For we resign ourselves to the fact that sport is not a matter quite as important as electing the country’s Prime Minister.


Sliver of hope

But just when we thought that it is a tunnel without an end, the Supreme Court, headed by its upstanding, noble Chief Justice Mr. T.S. Thakur (who retired recently) has offered us a sliver of hope here or there — in fact much, much more than what we may have come to expect 70 years after the country’s Independence.

A popular, veteran Indian sportsperson, who tried to get into the administration of his sport not long ago, put it succinctly the other day when I asked him what was wrong with sports administration in the country at a time when the nation’s richest, and perhaps one of the world’s wealthiest sports bodies, the Board of Control for Cricket in India (BCCI), was making front-page news for all the wrong reasons every day.

“You tell me what is right with it. It stinks. I shudder to think that such mismanagement, corruption, nepotism and chaos can exist in 2017,” he said.

Most well-meaning people in the world of sports, when asked the same question, not surprisingly come up with the same answer: “a total lack of professionalism.’’


Reasons for lagging

This is an over-arching judgement that seems to ignore the nuts and bolts of everyday affairs in major sports in the country. From experts down to lay fans, almost everybody has an opinion on why such a huge nation should not be among the leading performers in the world of sport. Infrastructure, money, attitude, culture…you can think of dozens of reasons why India does not stand tall in the world of sport.

Says Joaquim Carvalho, Olympian and hockey administrator “Sports governance in India lacks transparency and accountability. Most officials are not passionate about sports at all. They use this platform to keep themselves in the news and also indulge in corruption.

“I have a poor impression of sports governance because I have seen these officials as a player and later I as someone connected with the conduct of the game. They have vested interest and development of sport is never a priority for them. Basically, it helps them stay in the news, build connections and enjoy junkets. Sports governance in India is absolutely unprofessional.”

While it will be unfair to make a sweeping generalisation — there are a few sports that benefit from modern management where the administration is totally transparent in its business. But most are besmirched by feudal attitudes where the top guys have been the same since the days of your childhood, and they appear to claim ownership rights over their ‘property.’

‘Honorary’ positions are not ones manned by individuals with perfectly altruistic intentions. To even expect it is ridiculous. Even saints do what they do to get into the good books of the big, all-knowing, all-powerful man up there.


On an upward swing

There is a flip side to all this. Adille Sumariwala, IAAF executive council member and president, Athletics Federation of India, says, “Sports is on the upward swing in India. Television and the leagues in virtually all sports have increased the fan following. Children know the names of kabaddi players, not only cricketers. Television has brought sports to people, there is more awareness. It’s a matter of time before sports emerges much stronger. There are opportunities to make sport a career in life. And so sports is on the upswing’’.

But here is the catch. Do we have honest officials with a long-term goals in mind? It is indeed boom-time in Indian sports. But the launching pads, corporate support and fans’ enthusiasm may quickly evaporate if the quality of administration remains the same.

How many of our present sports administrators come in with a clear mandate and then move forward stridently to carry it out? Do they go through the same strict annual evaluation process as do brilliant business school graduates?

Success as sports administrators demands a few basic skills in areas such as communication, organisation, decision making, value system and team building.

“Indian sports administrators are special. I must admit that. They are in a category of their own,” said the late Peter Roebuck, my best friend among foreign journalists visiting India frequently, during one of our post dinner conversations.

What Roebuck referred to was mainly cricket but he was curious enough to want to know more and more about other sports. Leadership skills can be either cultivated or learned but the men and women who run our sports are keen on only one thing — staying where they are with a great love for being in the spotlight.

How many times have we seen sports bosses appearing prominently in photographs of athletes who return after world-beating success at airports across the country?

Long ago, a top Indian sportsman returning after winning the world championship told me something that was shocking. I asked him who the gentleman who was hugging him in the front page of a leading Indian English language paper? “I swear, I have never seen the guy before,” he said of a man who was a senior administrator in the sport.

Of course, the nameless one is part of the Forever Men club.

Fans of Jet Airways, BJP, Congress and Dawood Ibrahim - Please look away now!

A Feast of Vultures - Josy Joseph

At Manthan 2016

Interview in Malayalam

Corruption and the Tata empire

Geeta Anand in The New York Times

In India, where corruption is a fact of life, the Tata Group — a powerhouse conglomerate that makes Land Rovers, operates the historic Pierre Hotel in New York and sells the world Tetley tea — has been held up as the exception to the rule.

Its patriarch, Ratan Tata, 78, is a revered figure here, a cross between Warren E. Buffett and Bill Gates whom even schoolchildren know and look up to as Mr. Clean — the billionaire whose family built its name in part on zero tolerance for corruption.

His company symbolizes the role an ascendant India sees for itself on the global stage. In 2010 Mr. Tata arranged a $50 million donation to the Harvard Business School, the school’s largest gift from an international donor, and its dean sits on the board of the empire’s umbrella organization, Tata Sons. Mr. Tata has been knighted by Queen Elizabeth.

Now, however, Mr. Tata is caught up in a nasty public fight for control of the business — with the man he had chosen to succeed him as chairman. The company finds itself defending against serious allegations of wrongdoing.

Some of the claims have been raised by his chosen successor, Cyrus Mistry. Mr. Tata ousted Mr. Mistry in late October, saying it was necessary because “the board of Tata Sons lost confidence in him and in his ability to lead the Tata Group in the future.”

Mr. Mistry, 48, told Tata’s board in a letter that an internal audit indicated that its airline joint venture, AirAsia, had made more than $3 million in “fraudulent transactions” with two companies. In recent days, India’s Directorate of Enforcement has started an investigation into the AirAsia payments. The directorate did not respond to requests for comment.

“Never before has the Tata Group, including the philanthropic objectives of the Tata Trusts, been in jeopardy to this extent and scale,” Mr. Mistry said in a public statement this month. He said he was fighting “to protect the Tata Group from capricious decision-making by the interim chairman,” a reference to Mr. Tata.

Separately, on Friday, a crusading member of India’s Parliament, Subramanian Swamy, called in a court complaint for an investigation into allegations from a government report that Mr. Tata in 2008 used a front company to apply for a telecommunications license, potentially circumventing the limits on the number of licenses one investor could hold. This is alleged to have happened at a time of furious maneuvering among companies trying to win the rights to offer cellphone service in India — a battle that resulted in one of India’s biggest corruption scandals ever.

Ultimately the scandal helped sweep India’s founding political party, the Congress party, from power in an epic defeat.

The New York Times has reviewed government documents showing that India’s Serious Fraud Investigation Office recommended prosecuting Mr. Tata in 2013. For reasons that are not clear, the government did not file a case in court.


Ratan Tata, the patriarch of the Tata Group, in Mumbai in 2009. The conglomerate’s many elements include a leading manufacturer of trucks. CreditKunal Patil/Hindustan Times, via Getty Images

The fraud office documents, which Mr. Swamy filed as part of his court complaint, say that the Tata Group invested $250 million in eight subsidiaries of a real estate firm, Unitech — a sum roughly equivalent to the telecom license application fee. Unitech used that money to apply for a license on Tata’s behalf, the report from the government’s fraud office said.

A Tata spokesman said the company made “a bona fide real estate deal” with Unitech unrelated to telecom licenses, adding that “no evidence was found which could be attributed to any criminality.”

The Tata Group was started in 1868, when the British ruled the Indian subcontinent. The founder, Jamsetji Tata, was a descendant of Persian immigrants, known as Parsis, who form a tiny and vibrant community in Mumbai. He began with a trading business, and over the decades the company grew — building India’s first steel mill, its first hydroelectric power station, its first locally made trains and its first airline.

In 1903, Mr. Tata opened India’s first luxury hotel serving Indians, the Taj Mahal Palace Hotel, which is today considered a national landmark. In 2008 the hotel was one of the targets of the dayslong Mumbai terrorist attack by Pakistani infiltrators that shocked India and the world.

The company today has its hand in almost every business imaginable, from consulting to automobiles. Ratan Tata, the cousin of his predecessor, took over the company in 1991 at the age of 53. He became the group’s fifth chairman. He widened the group’s international presence, acquiring Corus Group, the Anglo-Dutch steel company, in 2007 and the Jaguar and Land Rover brands in 2008.

Mr. Mistry — the first non-Tata family member to lead the nearly 150-year-old company — was elevated in 2012 after a two-year search. However, in India’s tight-knit Parsi community, the ties can be close. Mr. Mistry’s family, which owns a major construction business, was the biggest shareholder in Tata Sons, with 18 percent, and Mr. Mistry had been on the board since 2006. His sister is married to Mr. Tata’s half brother.

According to several people close to Mr. Mistry, the relationship between him and Mr. Tata soured in part because Mr. Mistry had begun reining in some favors that the company had previously extended to Mr. Tata’s personal friends.

In one instance, after Mr. Mistry raised the issue, the Tata board explored starting legal proceedings against C. Sivasankaran, a longtime friend and close business associate of Mr. Tata’s, to try to recover $100 million the company said it was owed from a telecom deal. Mr. Sivasankaran also had been renting a 5,300-square-foot penthouse for $11,000, less than half the market rent, from the company, according to correspondence reviewed by The Times. Mr. Mistry raised his rent to the market rate.

Mr. Sivasankaran, in an interview, said he was indeed a friend of Mr. Tata’s. He said, though, that he had suffered financially from the investment and had no intention of paying back the $100 million he owed.

“I don’t want to pay it because Tata has not managed the company properly,” he said. “Siva is alleging the Tata Group does not have management skills,” Mr. Sivasankaran said, referring to himself in the third person.

He also confirmed that he was ousted from the luxury apartment. Mr. Sivasankaran said he had a long-term contract to stay there, so he could have fought to stay, but decided to go quietly.

Another issue at Tata involved no-bid dredging, shipping and barge contracts granted to companies belonging to another of Mr. Tata’s longtime friends, Mehli Mistry, according to three people who have reviewed company documents. (He and Cyrus Mistry, the ousted Tata executive, are cousins.) Cyrus Mistry allowed the contracts to be put up for bid once they expired, according to the people who have reviewed the documents.Continue reading the main story




Photo

Outside a Tata Motors plant in Pune, India. CreditAtul Loke for The New York Times


A Tata Group spokesman referred questions to Tata Power, the unit that made the contracts. Tata Power did not respond to requests for comment.

Mehli Mistry, through a lawyer, said that the contracts were not the result of his friendship with Mr. Tata, and disputed that they were not fairly valued.
The Cellphone Allegations

From a corporate perspective, the most consequential allegations regarding Mr. Tata and the group are those contained in the 33-page report from the Serious Fraud Investigation Office asserting that Mr. Tata’s group was the real applicant behind a telecom license secured by Unitech, the New Delhi real estate company.

A decade ago, India pried open its notoriously dysfunctional telecom market. In the days before deregulation, it could take a customer years just to get a new phone number. People would hang on to their phone lines like family jewels and hand them down to relatives.

Against that backdrop, investors saw a once-in-a-generation opportunity to build an Indian phone empire. But applicants could seek only one license. And the Tata Group had already applied for a different one.

The report says that Tata, “desperate to acquire the license,” used Unitech as its front in pursuit of a second license.

Unitech was one of the eight companies granted licenses in 2008. But the Supreme Court later ruled all the licenses illegal, in part because government investigations said that the licensing fee paid by the companies was substantially below market rates.

Fourteen people — including India’s former telecom minister and several Unitech officials — have been on trial in a special court on charges of cheating the government by underselling the licenses. A verdict is expected early next year. All have said they are not guilty.

Prashant Bhushan, a lawyer and anti-corruption activist, in 2014 submitted to the Supreme Court the government’s fraud investigation report charging that the Tata Group used Unitech as a front for its telecom application. He urged the court to direct the Central Bureau of Investigation to take up the case.

Mr. Bhushan also charges in the court petition that the Tata Group, in “glaring evidence of an apparent quid pro quo” for a telecom license, transferred property valued at tens of millions of dollars to the family at the helm of the political party of the telecommunications minister at the time.

Mr. Bhushan’s actions are still pending before the court.

A. Raja, the former telecom minister, declined to comment. A spokesman for his political party could not be reached.

The bureau of investigation did not respond to requests for comment. Vivek Priyadarshi, the bureau’s investigating officer in the case at that time, declined to discuss its conclusions.

Photo

Mr. Tata and, sitting behind him, his chosen successor, Cyrus Mistry, at an auto expo in New Delhi in 2012.CreditJasjeet Plaha/Hindustan Times, via Getty Images
India Opens Its Skies

In 2012, India allowed its cash-starved airlines to accept investments from foreign carriers, as long as an Indian partner retained control. Yet another Indian market — jet travel — suddenly looked sexier. Tata and others raced in.

Tata teamed up with AirAsia Berhad, a budget airline from Malaysia, and set up AirAsia India. This happened during Cyrus Mistry’s tenure — but he has distanced himself from the deal. In a letter to the Tata board after his ouster, he said that he opposed the deal, but that Mr. Tata pressured him to proceed, and that Mr. Tata himself negotiated the terms with AirAsia.

“My pushback was hard but futile,” Mr. Mistry said in the letter, which The Times has reviewed.

The allegations of questionable payments to two companies came after whistle-blower complaints prompted AirAsia’s board to order a forensic audit. That audit, delivered by Deloitte India in September and reviewed by The Times, identified the payment of more than $3 million to two such companies. Neither company appears to have offices, the audit found.

Mr. Mistry had shared the audit summary with the Tata Sons board members before the October meeting when he was fired, a person close to Mr. Mistry said.

A spokesman for Tata referred questions to AirAsia, which did not respond.
Friends in Business

At the time of Mr. Mistry’s ouster, he was also confronting an issue with Mr. Tata’s friend, Mr. Sivasankaran, whose company owed the Tata Group more than $100 million.

Mr. Sivasankaran in 2006 had invested in a Tata telecom start-up that also received a big investment from NTT DoCoMo, a Japanese company. In 2014, DoCoMo exercised its right to sell back its shares to Tata. The money Mr. Sivasankaran refuses to pay back represents his portion of that buyback expense, according to correspondence between the two sides.

Mr. Sivasankaran, in an interview, said he had invested in the company purely out of friendship with Mr. Tata. He said neither he nor anyone else had influenced Mr. Tata’s decision to fire Mr. Mistry.

A spokesman for Tata said it was pursuing “all legal options” to recover the money.

Mr. Tata’s friend Mehli Mistry maintained a lengthy financial relationship with the Tata Group. Over the last two decades, his companies were granted contracts for dredging, barging and shipping by Tata Power, often renewing them without a bidding process.

But after Cyrus Mistry took over, Tata Power put Mehli Mistry’s contracts out to bid. Other companies won those contracts, according to two people familiar with the bidding process.

Mehli Mistry was so disappointed at losing the contracts that he sent a message this year to Cyrus Mistry through a family member, people close to the former executive said. A person familiar with the message said that Mehli Mistry told Cyrus Mistry to stop interfering in his contracts or he would take steps to defend himself.

People close to Cyrus Mistry say he thinks his ouster was, in part, Mehli Mistry’s retaliation. In his letter to the board, Cyrus Mistry wrote, “I had to ease out hangers-on.”

Mehli Mistry, his lawyer said, “emphatically denied” sending any message regarding contracts to Cyrus Mistry and played no role in his ouster.

Narendra Modi is a fraud

Markandey Katju - former Indian Supreme Court judge

What next for the BCCI?

Sharda Ugra in Cricinfo

There is no knowing whether anyone in the BCCI is a fan of either Charles Darwin, Benjamin Franklin or Albert Einstein. Supreme Court judges definitely are, going by the opening paragraphs of the 143-page judgement issued by the two-man bench of Chief Justice TS Thakur and Justice FMI Kalifullah. The three mighty minds were quoted when discussing humankind's resistance to change, with the bench recognising that the BCCI's strident objections to the Lodha committee recommendations were meant to protect a "continuance of the status quo".

The Supreme Court's final order directly addresses and proceeds to upturn the BCCI's objections to the Lodha recommendations, which detailed organisational reform within India's richest sporting body and cricket's strongest board. The court accepted both the Lodha report and its recommendations with a handful of minor "modifications and clarifications". This marks the end of three years of miscalculations by individual office-bearers, and collective decision-making by the BCCI that began with the arrest of three cricketers in May 2013.

What happens next? In real terms, the day-to-day operations of Indian cricket will keep running. Like the Lodha report, the Supreme Court order once again separates governance from operations. The operational BCCI continues on its way, now armed with a CEO, an ombudsman, an ethics officer, and a full-time professional auditor. What has been rigorously shaken, with nuts and bolts now left rattling, is the existing frame of the BCCI, which is less stainless steel and more rusted metal.

The order lays down a fairly watertight list of strictures for aspiring cricket officials, focusing on what posts they can hold in cricket administration, particularly at the highest level, and for how long. The much-advertised "love for cricket" of many seasoned, or indeed newly appointed, cricket officials will now be put to the test. The court has ordered that the recommendations be implemented within six months - by the time Justice TS Thakur serves his full term and hands charge for the BCCI's restructuring to the very individuals who held up a mirror to the board: Team Lodha.

The Supreme Court's order was fairly considerate when hammering home a few disputed recommendations. Fussed about how to fund a players' association? the court asked. The funding is your prerogative, but there has got to be an association. Angry about a "cooling-off period" between two terms in top BCCI posts? Arrive at a conclusion on how to handle this, but the cooling-off period stays. IPL franchises on the all-powerful IPL governing council? Let's ask the Lodha committee to work out if this is not a conflict of interest and then see what they say.

The court divorced itself from issuing unyielding orders on matters that were not strictly within the Lodha panel's reformative and recommendatory ambit. Like controlling the amount and nature of advertising on cricket broadcasts on television by reworking existing deals (this recommendation was dead on arrival on the grounds of common sense alone), or knotty legislative issues like legalising betting or placing the BCCI under the ambit of the Right to Information Act.

Weighty, monumental (and cataclysmic for the BCCI), the Lodha report order carries much significance. If the BCCI, a financially self-sufficient, self-sustaining and globally significant sports body - and therefore an anomaly among Indian sports bodies - can be made answerable to writ jurisdictions, its functioning taken apart in court, so can any other Indian national sports federation. These bodies that run India's Olympic sports, largely supported by public money, have previously been considered untouchable, backed as they are by political bigwigs and legal luminaries.

The Thakur-Kalifullah bench has cited the government's National Sports Development Code 2011 - which applies to all nationally recognised sports bodies - in setting an age limit of 70 for the BCCI's office-bearers. What applies to other sports bodies must work for the BCCI. So too, what has been ordered upon the BCCI, could be wrought upon any other Indian sports body.

An example has been made of the BCCI, until now considered well above these shambolically run associations, both financially and organisationally. No matter how much financial strength and global clout a sports body can acquire, it must work alongside with, rather than supplant, good governance, transparency and accountability.

The BCCI's response in this affair from the outset - despite the presence of many weighty shining legal lights on its roster and on its side - was heavy-handed. Both in court and in the public. The board's first response was to let out a few high-volume sound bites: that the recommendations were not binding, that the BCCI was a private body and so it could not be approached as if it were a public enterprise. It was this line of argument that occupied far too much of the court's time, and must have set the judges' teeth on edge.

One of the more revealing parts of the order says: "Neither BCCI nor anyone else has assailed the findings recorded by the Committee insofar as the deep rooted malaise that pervades in the working of the BCCI is concerned… either in the affidavits filed or in the course of arguments at the bar." Which in layman's language means that neither the BCCI nor anyone else has strongly criticised the Lodha committee's findings with reference to the flaws in the BCCI's functioning, neither in written affadavits filed or verbal arguments made before the bench. The BCCI was not righteously claiming to having been unfairly criticised with reference to its functioning. What it was saying to the highest court of the country - and the highest judge in that court - was that you do not have the right to tick us off.

The better option could have been to respond strategically to the Lodha committee report from the very beginning, by picking out early the recommendations they thought were the least amenable to implementation, or inconvenient, and work with that, approaching the court with humility rather than habitual hubris. They had a better chance of arguing the age limit and tenure continuity at length than they did about private vs public and the freedom of association as pertaining to the state associations. That too in a climate surrounding the BCCI's laissez faire attitude to the Goa Cricket Association's multiple scandals until the last month or so and theshenanigans of DDCA, also exposed in court.

The BCCI's legal eagles should also have been able to sense two moods - that the BCCI's public image was far from the best to start with, particularly in terms of its engagement with the judiciary. Secondly, in the past few years, India's courts have been particularly forceful in handing out judgements pertaining to governance or administration, a trend that has been referred to as "judicial activism" (or, in the words of policy academic Pratap Bhanu Mehta, "judicial exasperation"). For the BCCI it was certainly not the right time to show what would be called "attitude". But show it they did.

What might the BCCI's options now be? To start with, they could consider hiring a new legal team. A short-term response would be to disband the board and resume operations under a new name. Or dash off a letter to the ICC saying the Supreme Court has ordered them to accept government interference - in the form of the nominee from the Comptroller and Auditor General's Office - at both national or state levels. Or attempt some off-court filibustering in front of Lodha to try and stall any action, till Justice Thakur retires in January and they can begin the legal roundabout all over again.

But each of these counters has its counter-arguments. Besides, Monday's order says clearly that "should any impediments arise" the Supreme Court can be approached once again by a status report being filed.

Many within the BCCI - and there are several who are well-intentioned and committed - may find their positions now rendered non-existent and their powers severely curtailed, and may well ask, "How did we get here?" The answer to that is simple - one mistake at a time.

Corrupt elites will fight hard to stop the dismantling of the looting machines from which they draw their vast wealth

States that get all their revenues from selling their oil, gas and minerals could easily turn into kleptocracies where the majority stay poor

Patrick Cockburn in The Independent

A shooper at the Olaya mall in the Saudi capital of Riyadh. Ordinary citizens may be hit by efforts to tackle global corruption and patronageGetty


Can corruption be controlled by reform or is it so much the essential fuel sustaining political elites that it will only be ended – if it ends at all – by revolutionary change?

The answer varies according to which countries one is talking about, but in many - particularly those relying on the sale of natural resources like oil or minerals - it is surely too late to expect any incremental change for the better. Anti-corruption drives are a show to impress the outside world or to target political rivals.

The anti-corruption summit in London this week may improve transparency and disclosure, but it can scarcely be very effective against politically well-connected racketeers, busily transmuting political power into great personal wealth.

This is peculiarly easy to do in those countries in the Middle East and Africa which suffer from what economists call “the resource curse”, where states draw their revenues directly from foreign buyers of their natural resources. The process is described in compelling detail by Tom Burgis in his book, The Looting Machine: Warlords, Tycoons, Smugglers and the Systematic Theft of Africa’s Wealth. He quotes the World Bank as saying that 68 per cent of people in Nigeria and 43 per cent in Angola, respectively the first and second largest oil and gas producers in Africa, live in extreme poverty, or on less than $1.25 a day. The politically powerful live parasitically off the state’s revenues and are not accountable to anybody.

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This is the essay on corruption that Cameron didn't want you to read

Burgis explains the devastating outcome of a government acquiring such great wealth without doing more than license foreign companies to pump oil or excavate minerals. This “creates a pot of money at the disposal of those who control the state. At extreme levels the contract between rulers and the ruled breaks down because the ruling class does not need to tax the people – so it has no need for their consent.”

He writes primarily about Africa south of the Sahara, but his remarks apply equally to the oil states of the Middle East. He rightly concludes that “the resource industry is hardwired for corruption. Kleptocracy, or government by theft, thrives. Once in power, there is little incentive to depart.” Autocracy flourishes, often same ruler staying for decades.

Most, but not all, of this is true of the Middle East oil producers. A difference is that most of these have patronage and client systems through which oil wealth funds millions of jobs. This goes a certain way in distributing oil revenues among the general population, though the benefits are unfairly skewed towards political parties or dominant sectarian and ethnic groups.

In Iraq there are seven million state employees and pensioners out of a population of 33 million who are paid $4bn a month or a big chunk of total oil income. Often these employees don’t do much or, on occasion, anything at all, but it is an exaggeration to imagine that Iraq’s oil money is all syphoned off by the ruling elite.

I remember in one poor Shia province in south Iraq talking to local officials who said that they had just persuaded the central government to pay for another 50,000 jobs, though they admitted that they had no idea what these new employees would be doing.

Reformers frequently demand that patronage be cut back in the interests of efficiency, but a more likely outcome of such a change is that a smaller proportion of the population would benefit from the state income.

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Saudi is about to attempt its own version of Mao's Great Leap Forward

This could be the result of Deputy Crown Prince Mohammed bin Salman’s radical plans to transform the way Saudi Arabia is run and end its reliance on oil by 2030. He may well find that the way Saudi society works has long gelled and face strong resistance to changing a system in which ordinary Saudis feel entitled to some sort of job and salary.

The “resource curse” is not readily reversible, because it eliminates other forms of economic activity. The price of everything produced in an oil state is too expensive to compete with the same goods made elsewhere so oil becomes the only export. Migrants pour in as local citizens avoid manual labour or employment with poor pay and conditions.

A further consequence of the curse is that the rulers of resource rich states – like many an individual living on an unearned income – get an excessive and unrealistic idea of their own abilities. Saddam Hussein was the worst example of such megalomania, starting two disastrous wars against Iran and Kuwait. But the Shah of Iran was not far behind the Iraqi leader in grandiose ideas, blithely ordering nuclear power stations and Concorde supersonic passenger aircraft.

Muammur Gaddafi insisted that Libyans study the puerile nostrums of the Green Book, and those failing that part of the public examinations about the book, were failed generally and had to re-take all their exams again.

Can “the looting machine” in the Middle East, Africa and beyond be dismantled or made less predatory?

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Catholic leaders are undoing the good work of Pope Francis on migrants

Its gargantuan size and centrality to the interest of ruling classes probably makes its elimination impossible, though competition, transparency and more effective bureaucratic procedures in the award of contracts might have some effect. The biggest impulse to resistance locally to official corruption has come because the fall in the price of oil and other commodities since 2014 means that the revenue cake has become too small to satisfy all the previous beneficiaries.

The mechanics and dire consequences of this system are easily explained though often masked by neo-liberal rhetoric about free competition.

In authoritarian states without accountability or a fair legal system, this approach becomes a license to loot. Corruption cannot be tamed because it is at the very heart of the system.

Corruption can no longer be dismissed as a developing world problem

Aditya Chakrabortty in The Guardian

A London summit must recognise, as the Panama Papers show, that these crimes are facilitated by the west

 

Illustration by Matt Kenyon.


By Thursday morning all the A-listers will have arrived. From Washington will fly in a succession of jets, bearing US secretary of state John Kerry as well as the bosses of the IMF and World Bank. Fifa and Uefa will send over their top bureaucrats. Captains of business will trail retinues of lobbyists.

All will join David Cameron and leaders from around 40 nations at an opulent London townhouse overlooking St James’s Park. Gathered there, in the slow-beating heart of Downton-ian Britain, they will launch into an almighty battle – over the meaning of a single word.

Not just any old word, mind you. It ranks among the most important terms for describing our broken-backed global capitalism. Indeed, it forms the very title of the day-long summit: corruption.

Explaining why he’s called the world’s first assembly on corruption, Cameron has said: “It destroys jobs … traps the poorest in desperate poverty, and undermines our security by pushing people towards extremist groups.” Absolutely right. What’s wrong is his definition of the term.

For Cameron, corruption equals bribery. It means greasing the palm of a bored official just to get through customs, tipping a hundred to a thuggish traffic cop so you can drive on. Or, at the luxury end of the market, a despot such as Nigeria’s General Sani Abacha, stealing billions from his home country and hiding the haul in foreign banks.

In other words, it’s something largely done by people in poor countries. As sardonic critics of this argument say, “Corruption has a black face.” That’s why the prime minister believes Thursday should be mainly about cracking down on states that take aid even while being blighted with bent officials, and tackling graft in sport.

And it is the argument of a hypocrite. Hypocrisy is the fervent agreement that bad things do happen – but Other People do them, never you or your country. On this reading, thievery is corruption. But receiving the same black money, laundering it and directing it back out to a tame tax haven or two – well, that’s just competition, isn’t it?

Time was when Britain, Europe and the US could get away with making this argument. The wealthiest countries in the world could with one hand wag a stern finger at the poorest nations, while with the other hand collecting their loot, and pushing it through their financial centres.

They could point to the surveys circulated by Transparency International in which perceptions of national corruption as reported by business leaders and “country experts” were totted up. Those publications proved, year after year, that the poorer the country, the more failed the state, the more corrupt the society. They also stated that the world’s “cleanest” countries included Switzerland, Singapore, the UK and the US.

David Cameron under pressure to end tax haven secrecy



All those breezy, boomtime justifications became exponentially harder to make after the 2008 crash. The era of austerity has left even rich governments scrabbling for tax revenues to fund their hospitals and schools. More importantly, it has prompted cash-strapped voters – from a Trump supporter in Indiana to a Corbynista in Kentish Town – to ask exactly who has been making how much money at their expense.

That brings us back to this week’s summit – because it’s here that developing nations such as Nigeria will join campaigning groups to make the argument that modern corruption now has a white face. They will argue that the onus is on Britain and other rich countries to crack down on the tax havens in their own backyards.
And they are right. Corruption of the sort that we normally discuss should be stamped out. It makes the lives of billions of the world’s poorest people harder and more insecure.

But it is peanuts compared to the much bigger sums that are raked in by the lawyers, accountants and other silky advisers who base themselves in the City of London and use Britain’s network of crown dependencies and overseas territories in Jersey, Guernsey, the Caymans and the British Virgin Islands.

Until the UK stops encouraging, advising and facilitating guilty men and women looking to stow their shady cash offshore, corruption will continue to flourish.

Modern corruption is a suit in a Panamanian office, who takes that general’s billions and sends it on to a private bank account, no impertinent questions asked along the way. It is the Mayfair estate agent who sells that multimillion-pound townhouse to an oligarch. It is that accountancy firm in the City that fills out the paperwork structuring the rich man’s affairs so that the money goes through one of their far-flung branch offices to wind up in a trust in the tax-free zones of the Caymans or the British Virgin Islands.

As yesterday’s letter from 350 top economists points out, there is no economic justification for these tax havens. They do not serve primarily to keep taxes in other countries down, but to allow very rich people to duck out of their obligations to the societies they live in. They shelter dirty cash from dictators, and siphon money out of developed countries. 

Like Gordon Brown before him, Cameron claims that Britain’s offshore havens are autonomous. They do not need to accept London’s tax laws – indeed, it is unclear whether they will turn up on Thursday. Yet the havens depend on London.

Take the Caymans, which, as Nicholas Shaxson notes in his book Treasure Islands, are effectively run by a governor appointed by the Queen, on the advice of Whitehall. The governor is responsible for “defence, internal security and foreign relations; he appoints the police commissioner, the complaints commissioner, auditor general, the attorney general, the judiciary and a number of other senior public officials. The final appeal court is the Privy Council in London.” And the national anthem is God Save the Queen.

Last week I met a tax lawyer in London who mused on how little Britain actually benefited from its spider’s web of tax havens. “A few people in the City of London make huge fees – I’d love to see how much that money benefits the rest of the country.”

But weren’t we powerless to stop Jersey and the rest? The lawyer went through the precedents. Britain, he pointed out, had repeatedly imposed its law on its overseas governments. In 2000, London forced the Caribbean territories to decriminalise homosexual acts by Order in Council. He thought the same thing could be done to force the offshore havens publicly to disclose who were the ultimate “beneficial” owners of the trust funds.
How long would that take? “Oh, two sides of A4. It could be done by the next morning. All it takes is the will.”

Tax havens have no economic justification, say some top economists

Thomas Piketty and Jeffrey Sachs among signatories of letter urging world leaders at UK anti-corruption summit to lift secrecy

 

The British Virgin Islands. More than half of the companies set up by Mossack Fonseca, the law firm in the Panama Papers leak, were incorporated in British overseas territories such as BVI. Photograph: Alamy


Patrick Wintour in The Guardian



More than 300 economists, including Thomas Piketty, are urging world leaders at a London summit this week to recognise that there is no economic benefit to tax havens, demanding that the veil of secrecy that surrounds them be lifted.

David Cameron agreed to host the summit nearly a year ago, but the event is in danger of simply turning a spotlight on how the British government has failed to persuade its overseas territories to stop harbouring secretly stored cash.

British officials are locked in negotiations with the crown dependencies and overseas territories, trying to persuade them to agree to a form of automatic exchange of information on beneficial ownership of companies. So far the overseas territories have only agreed to allow UK law enforcement agencies access to a privately held register of beneficial ownership, but the automatic exchange agreement would give a wider range of countries access to information on the ownership of shell companies.

Many overseas territories including the Cayman Islands are resisting the idea, and their attendance at the summit is in doubt.

Apart from Piketty, author of the bestselling Capital in the Twenty-First Century, the impressive roll call of economists includes Angus Deaton, the Edinburgh-born 2015 Nobel prize-winner for economics, and Ha-Joon Chang, the highly regarded development economist at Cambridge University.

Other signatories include Nora Lustig, professor of Latin American economics at Tulane University, as well as influential experts who advise policymakers, such as Jeffrey Sachs, director of Columbia University’s Earth Institute and an adviser to UN secretary general Ban Ki-moon, and Olivier Blanchard, former IMF chief economist.

In total 47 academics from British universities, including Oxford and the London School of Economics, have signed the letter which argues that tax evasion weakens both developed and developing economies, as well as driving inequality.

The signatories state: “Territories allowing assets to be hidden in shell companies or which encourage profits to be booked by companies that do no business there are distorting the working of the global economy.”

To counter this, they are urging governments to agree new global rules requiring companies to publicly report taxable activities in every country in which they operate, and ensure all territories publicly disclose information about the real owners of companies and trusts. A concerted drive by the EU is now under way to require companies to declare where their profits are made, and to ensure tax is paid there rather than in the country in which it is declared.

In a tough broadside against the British prime minister, Jeffrey Sachs said: “Tax havens do not just happen. The British Virgin Islands did not become a tax and secrecy haven through its own efforts. These havens are the deliberate choice of major governments, especially the United Kingdom and the United States, in partnership with major financial, accounting, and legal institutions that move the money.

“The abuses are not only shocking, but staring us directly in the face. We didn’t need the Panama Papers to know that global tax corruption through the havens is rampant, but we can say that this abusive global system needs to be brought to a rapid end. That is what is meant by good governance under the global commitment to sustainable development.”

More than half of the companies set up by Mossack Fonseca, the law firm at the centre of the Panama Papers leak, were incorporated in British overseas territories such as the British Virgin Islands.

The signatories admit: “Taking on the tax havens will not be easy; there are powerful vested interests that benefit from the status quo. But it was Adam Smith who said that the rich ‘should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion’. There is no economic justification for allowing the continuation of tax havens which turn that statement on its head.”

Oxfam, which coordinated the letter, is urging the UK government to intervene to ensure that Britain’s offshore territories follow its lead by introducing full public registers showing who controls and profits from companies incorporated there. 

Oxfam estimates that Africa loses about $14bn (£10bn) in tax revenues annually – enough money to pay for healthcare that could save 4 million children’s lives a year and employ enough teachers to get every African child into school.

Mark Goldring, chief executive of Oxfam GB, said: “It’s not good enough for information about company owners in UK-linked tax havens to be available only to HMRC – it needs to be fully public to ensure that governments and people around the world can claim the money they are owed and hold tax dodgers to account.”