Daud Khan in The Friday Times
The World Happiness Report 2019, which ranks countries according to how happy their citizens are, came out recently. As usual, when such international rankings are published, the first reaction is to look at who tops the lists and where Pakistan stands. Topping the ranking were the usual suspects – Finland, Denmark, Norway, Netherlands, Switzerland and Sweden – the ones that top almost all rankings related to quality of life. No surprises here. The surprise was Pakistan. Unlike other rankings, where we are usually in the bottom quartile or quintile, we were ranked 67th out of 156 countries in the survey. We were the highest in South Asia, above Nepal (100), Bangladesh (125), Sri Lanka (130) and India (140). We also ranked higher than China (93), some European countries such as Croatia (75) and Greece (82), as well as the richer Muslim countries such as Turkey (79) and Malaysia (80).
Happiness theory came into the public discourse following the publication of a seminal book by Richard Layard of the London School of Economics – Happiness: Lessons From A New Science. The book reported a number of surveys in Britain and the U.S. that showed that people had not become happier in the post-war period despite massive economic growth. The book also reported that while incomes were important, people gave high value to things like family, friendship, social status and living in a safe society. Since the publication of the book, much work has been done to delve deeper into the issue. One of the key findings of this research is that the subjective levels of happiness-unhappiness are a legitimate measure of wellbeing. They are well correlated with objective measures of brain activity, and with events such as marriage and divorce, birth and death; and getting and losing a job.
So what makes a country happy? The report looks at six factors. Of these, two are measured quantitatively – GDP per capita adjusted for real purchasing-power and life expectancy at birth. The other four factors are measured by answers to the following question: If you were in trouble, do you have relatives or friends you can count on? Are you satisfied with your freedom to choose what you do with your life? Have you donated money to a charity in the past month? Is corruption widespread throughout the government? Is corruption widespread within businesses? These six factors explain levels of happiness in most countries. The largest single contributor to happiness comes from the existence of good social support systems which account for 34 percent, followed by GDP per capita (26 percent), life expectancy (21 percent), freedom (11 percent), generosity (five percent), and lack of corruption (three percent). In most South Asia these six factors account for 70-80 percent of the happiness score of countries.
In Pakistan, however, these six factors taken together do not explain even half of our happiness score. It is something apart for the usual things (income, health, social security) that makes Pakistanis happy. So what is it? We are free to speculate but my guess it is the music, the optimistic and cheerful nature of Pakistani people, the feeling that things are getting better, and the close relationship Pakistanis have with family, friends and community. These are things which make Pakistanis unique and something we need to recognise and cherish.
The report also compares countries’ happiness scores between 2005-8 and 2016-18. Over this period Pakistan has increased its happiness score significantly (by 0.703 on a scale from 0-10). This has placed it number 20 on the list of counties that have grown happier. Again the same question comes to mind – what has made Pakistanis happier over the last 10-12 years? Some answers come to mind such as the improved law and order situation; better roads, electricity supply and the cellular phone network; and the ability to change governments peacefully through the ballot box.
While the report does not answer the question about why Pakistanis are happy and have been getting happier, it does have two messages that are very important for families as well as policy makers. First, that the increasing amount of time spent on social media, especially by adolescents, reduces time spent on happiness enhancing activities such as being with friends and family. Pakistani families need to take note and act accordingly. Second, mental health and associated addictions for example to food, internet usage or drugs create crushing unhappiness. In Pakistan neither public health policies nor social norms recognize that metal health is as important as physical health. This is something that needs a lot more attention than it gets.
Another interesting finding from the report is that happiness in India between 2015 and 2018 fell significantly (by 1.137). This places it among the top of the league table of countries that have become unhappier alongside Venezuela, Yemen, Central African Republic and Greece.
The report suggests that unhappier people hold more populist and authoritarian attitudes. Probably the success of the BJP, and other populist and nationalist parties, has been their ability to target the unhappiness and anger of voters.
Showing posts with label corruption. Show all posts
Showing posts with label corruption. Show all posts
Friday 28 June 2019
Sunday 30 December 2018
Thursday 29 November 2018
Why we stopped trusting elites
The credibility of establishment figures has been demolished by technological change and political upheavals. But it’s too late to turn back the clock. By William Davies in The Guardian
For hundreds of years, modern societies have depended on something that is so ubiquitous, so ordinary, that we scarcely ever stop to notice it: trust. The fact that millions of people are able to believe the same things about reality is a remarkable achievement, but one that is more fragile than is often recognised.
At times when public institutions – including the media, government departments and professions – command widespread trust, we rarely question how they achieve this. And yet at the heart of successful liberal democracies lies a remarkable collective leap of faith: that when public officials, reporters, experts and politicians share a piece of information, they are presumed to be doing so in an honest fashion.
The notion that public figures and professionals are basically trustworthy has been integral to the health of representative democracies. After all, the very core of liberal democracy is the idea that a small group of people – politicians – can represent millions of others. If this system is to work, there must be a basic modicum of trust that the small group will act on behalf of the much larger one, at least some of the time. As the past decade has made clear, nothing turns voters against liberalism more rapidly than the appearance of corruption: the suspicion, valid or otherwise, that politicians are exploiting their power for their own private interest.
This isn’t just about politics. In fact, much of what we believe to be true about the world is actually taken on trust, via newspapers, experts, officials and broadcasters. While each of us sometimes witnesses events with our own eyes, there are plenty of apparently reasonable truths that we all accept without seeing. In order to believe that the economy has grown by 1%, or to find out about latest medical advances, we take various things on trust; we don’t automatically doubt the moral character of the researchers or reporters involved.
Much of the time, the edifice that we refer to as “truth” is really an investment of trust. Consider how we come to know the facts about climate change: scientists carefully collect and analyse data, before drafting a paper for anonymous review by other scientists, who assume that the data is authentic. If published, the findings are shared with journalists in press releases, drafted by university press offices. We expect that these findings are then reported honestly and without distortion by broadcasters and newspapers. Civil servants draft ministerial speeches that respond to these facts, including details on what the government has achieved to date.
A modern liberal society is a complex web of trust relations, held together by reports, accounts, records and testimonies. Such systems have always faced political risks and threats. The template of modern expertise can be traced back to the second half of the 17th century, when scientists and merchants first established techniques for recording and sharing facts and figures. These were soon adopted by governments, for purposes of tax collection and rudimentary public finance. But from the start, strict codes of conduct had to be established to ensure that officials and experts were not seeking personal gain or glory (for instance through exaggerating their scientific discoveries), and were bound by strict norms of honesty.
But regardless of how honest parties may be in their dealings with one another, the cultural homogeneity and social intimacy of these gentlemanly networks and clubs has always been grounds for suspicion. Right back to the mid-17th century, the bodies tasked with handling public knowledge have always privileged white male graduates, living in global cities and university towns. This does not discredit the knowledge they produce – but where things get trickier is when that homogeneity starts to appear to be a political identity, with a shared set of political goals. This is what is implied by the concept of “elites”: that purportedly separate domains of power – media, business, politics, law, academia – are acting in unison.
A further threat comes from individuals taking advantage of their authority for personal gain. Systems that rely on trust are always open to abuse by those seeking to exploit them. It is a key feature of modern administrations that they use written documents to verify things – but there will always be scope for records to be manipulated, suppressed or fabricated. There is no escaping that possibility altogether. This applies to many fields: at a certain point, the willingness to trust that a newspaper is honestly reporting what a police officer claims to have been told by a credible witness, for example, relies on a leap of faith.
A trend of declining trust has been underway across the western world for many years, even decades, as copious survey evidence attests. Trust, and its absence, became a preoccupation for policymakers and business leaders during the 1990s and early 2000s. They feared that shrinking trust led to higher rates of crime and less cohesive communities, producing costs that would be picked up by the state.
What nobody foresaw was that, when trust sinks beneath a certain point, many people may come to view the entire spectacle of politics and public life as a sham. This happens not because trust in general declines, but because key public figures – notably politicians and journalists – are perceived as untrustworthy. It is those figures specifically tasked with representing society, either as elected representatives or as professional reporters, who have lost credibility.
To understand the crisis liberal democracy faces today – whether we identify this primarily in terms of “populism” or “post-truth” – it’s not enough to simply bemoan the rising cynicism of the public. We need also to consider some of the reasons why trust has been withdrawn. The infrastructure of fact has been undermined in part by a combination of technology and market forces – but we must seriously reckon with the underlying truth of the populists’ charge against the establishment today. Too often, the rise of insurgent political parties and demagogues is viewed as the source of liberalism’s problems, rather than as a symptom. But by focusing on trust, and the failure of liberal institutions to sustain it, we get a clearer sense of why this is happening now.
The problem today is that, across a number of crucial areas of public life, the basic intuitions of populists have been repeatedly verified. One of the main contributors to this has been the spread of digital technology, creating vast data trails with the latent potential to contradict public statements, and even undermine entire public institutions. Whereas it is impossible to conclusively prove that a politician is morally innocent or that a news report is undistorted, it is far easier to demonstrate the opposite. Scandals, leaks, whistleblowing and revelations of fraud all serve to confirm our worst suspicions. While trust relies on a leap of faith, distrust is supported by ever-mounting piles of evidence. And in Britain, this pile has been expanding much faster than many of us have been prepared to admit.
Confronted by the rise of populist parties and leaders, some commentators have described the crisis facing liberalism in largely economic terms – as a revolt among those “left behind” by inequality and globalisation. Another camp sees it primarily as the expression of cultural anxieties surrounding identity and immigration. There is some truth in both, of course – but neither gets to the heart of the trust crisis that populists exploit so ruthlessly. A crucial reason liberalism is in danger right now is that the basic honesty of mainstream politicians, journalists and senior officials is no longer taken for granted.
There are copious explanations for Trump, Brexit and so on, but insufficient attention to what populists are actually saying, which focuses relentlessly on the idea of self-serving “elites” maintaining a status quo that primarily benefits them. On the right, Nigel Farage has accused individual civil servants of seeking to sabotage Brexit for their own private ends. On the left, Jeremy Corbyn repeatedly refers to Britain’s “rigged” economic system. The promise to crack down on corruption and private lobbying is integral to the pitch made by figures such as Donald Trump, Jair Bolsonaro or Viktor Orbán.
One of the great political riddles of recent years is that declining trust in “elites” is often encouraged and exploited by figures of far more dubious moral character – not to mention far greater wealth – than the technocrats and politicians being ousted. On the face of it, it would seem odd that a sense of “elite” corruption would play into the hands of hucksters and blaggards such as Donald Trump or Arron Banks. But the authority of these figures owes nothing to their moral character, and everything to their perceived willingness to blow the whistle on corrupt “insiders” dominating the state and media.
Liberals – including those who occupy “elite” positions – may comfort themselves with the belief that these charges are ill-founded or exaggerated, or else that the populists offer no solutions to the failures they identify. After all, Trump has not “drained the swamp” of Washington lobbying. But this is to miss the point of how such rhetoric works, which is to chip away at the core faith on which liberalism depends, namely that power is being used in ways that represent the public interest, and that the facts published by the mainstream media are valid representations of reality.
Populists target various centres of power, including dominant political parties, mainstream media, big business and the institutions of the state, including the judiciary. The chilling phrase “enemies of the people” has recently been employed by Donald Trump to describe those broadcasters and newspapers he dislikes (such as CNN and the New York Times), and by the Daily Mail to describe high court judges, following their 2016 ruling that Brexit would require parliamentary consent. But on a deeper level, whether it is the judiciary, the media or the independent civil service that is being attacked is secondary to a more important allegation: that public life in general has become fraudulent.
For hundreds of years, modern societies have depended on something that is so ubiquitous, so ordinary, that we scarcely ever stop to notice it: trust. The fact that millions of people are able to believe the same things about reality is a remarkable achievement, but one that is more fragile than is often recognised.
At times when public institutions – including the media, government departments and professions – command widespread trust, we rarely question how they achieve this. And yet at the heart of successful liberal democracies lies a remarkable collective leap of faith: that when public officials, reporters, experts and politicians share a piece of information, they are presumed to be doing so in an honest fashion.
The notion that public figures and professionals are basically trustworthy has been integral to the health of representative democracies. After all, the very core of liberal democracy is the idea that a small group of people – politicians – can represent millions of others. If this system is to work, there must be a basic modicum of trust that the small group will act on behalf of the much larger one, at least some of the time. As the past decade has made clear, nothing turns voters against liberalism more rapidly than the appearance of corruption: the suspicion, valid or otherwise, that politicians are exploiting their power for their own private interest.
This isn’t just about politics. In fact, much of what we believe to be true about the world is actually taken on trust, via newspapers, experts, officials and broadcasters. While each of us sometimes witnesses events with our own eyes, there are plenty of apparently reasonable truths that we all accept without seeing. In order to believe that the economy has grown by 1%, or to find out about latest medical advances, we take various things on trust; we don’t automatically doubt the moral character of the researchers or reporters involved.
Much of the time, the edifice that we refer to as “truth” is really an investment of trust. Consider how we come to know the facts about climate change: scientists carefully collect and analyse data, before drafting a paper for anonymous review by other scientists, who assume that the data is authentic. If published, the findings are shared with journalists in press releases, drafted by university press offices. We expect that these findings are then reported honestly and without distortion by broadcasters and newspapers. Civil servants draft ministerial speeches that respond to these facts, including details on what the government has achieved to date.
A modern liberal society is a complex web of trust relations, held together by reports, accounts, records and testimonies. Such systems have always faced political risks and threats. The template of modern expertise can be traced back to the second half of the 17th century, when scientists and merchants first established techniques for recording and sharing facts and figures. These were soon adopted by governments, for purposes of tax collection and rudimentary public finance. But from the start, strict codes of conduct had to be established to ensure that officials and experts were not seeking personal gain or glory (for instance through exaggerating their scientific discoveries), and were bound by strict norms of honesty.
But regardless of how honest parties may be in their dealings with one another, the cultural homogeneity and social intimacy of these gentlemanly networks and clubs has always been grounds for suspicion. Right back to the mid-17th century, the bodies tasked with handling public knowledge have always privileged white male graduates, living in global cities and university towns. This does not discredit the knowledge they produce – but where things get trickier is when that homogeneity starts to appear to be a political identity, with a shared set of political goals. This is what is implied by the concept of “elites”: that purportedly separate domains of power – media, business, politics, law, academia – are acting in unison.
A further threat comes from individuals taking advantage of their authority for personal gain. Systems that rely on trust are always open to abuse by those seeking to exploit them. It is a key feature of modern administrations that they use written documents to verify things – but there will always be scope for records to be manipulated, suppressed or fabricated. There is no escaping that possibility altogether. This applies to many fields: at a certain point, the willingness to trust that a newspaper is honestly reporting what a police officer claims to have been told by a credible witness, for example, relies on a leap of faith.
A trend of declining trust has been underway across the western world for many years, even decades, as copious survey evidence attests. Trust, and its absence, became a preoccupation for policymakers and business leaders during the 1990s and early 2000s. They feared that shrinking trust led to higher rates of crime and less cohesive communities, producing costs that would be picked up by the state.
What nobody foresaw was that, when trust sinks beneath a certain point, many people may come to view the entire spectacle of politics and public life as a sham. This happens not because trust in general declines, but because key public figures – notably politicians and journalists – are perceived as untrustworthy. It is those figures specifically tasked with representing society, either as elected representatives or as professional reporters, who have lost credibility.
To understand the crisis liberal democracy faces today – whether we identify this primarily in terms of “populism” or “post-truth” – it’s not enough to simply bemoan the rising cynicism of the public. We need also to consider some of the reasons why trust has been withdrawn. The infrastructure of fact has been undermined in part by a combination of technology and market forces – but we must seriously reckon with the underlying truth of the populists’ charge against the establishment today. Too often, the rise of insurgent political parties and demagogues is viewed as the source of liberalism’s problems, rather than as a symptom. But by focusing on trust, and the failure of liberal institutions to sustain it, we get a clearer sense of why this is happening now.
The problem today is that, across a number of crucial areas of public life, the basic intuitions of populists have been repeatedly verified. One of the main contributors to this has been the spread of digital technology, creating vast data trails with the latent potential to contradict public statements, and even undermine entire public institutions. Whereas it is impossible to conclusively prove that a politician is morally innocent or that a news report is undistorted, it is far easier to demonstrate the opposite. Scandals, leaks, whistleblowing and revelations of fraud all serve to confirm our worst suspicions. While trust relies on a leap of faith, distrust is supported by ever-mounting piles of evidence. And in Britain, this pile has been expanding much faster than many of us have been prepared to admit.
Confronted by the rise of populist parties and leaders, some commentators have described the crisis facing liberalism in largely economic terms – as a revolt among those “left behind” by inequality and globalisation. Another camp sees it primarily as the expression of cultural anxieties surrounding identity and immigration. There is some truth in both, of course – but neither gets to the heart of the trust crisis that populists exploit so ruthlessly. A crucial reason liberalism is in danger right now is that the basic honesty of mainstream politicians, journalists and senior officials is no longer taken for granted.
There are copious explanations for Trump, Brexit and so on, but insufficient attention to what populists are actually saying, which focuses relentlessly on the idea of self-serving “elites” maintaining a status quo that primarily benefits them. On the right, Nigel Farage has accused individual civil servants of seeking to sabotage Brexit for their own private ends. On the left, Jeremy Corbyn repeatedly refers to Britain’s “rigged” economic system. The promise to crack down on corruption and private lobbying is integral to the pitch made by figures such as Donald Trump, Jair Bolsonaro or Viktor Orbán.
One of the great political riddles of recent years is that declining trust in “elites” is often encouraged and exploited by figures of far more dubious moral character – not to mention far greater wealth – than the technocrats and politicians being ousted. On the face of it, it would seem odd that a sense of “elite” corruption would play into the hands of hucksters and blaggards such as Donald Trump or Arron Banks. But the authority of these figures owes nothing to their moral character, and everything to their perceived willingness to blow the whistle on corrupt “insiders” dominating the state and media.
Liberals – including those who occupy “elite” positions – may comfort themselves with the belief that these charges are ill-founded or exaggerated, or else that the populists offer no solutions to the failures they identify. After all, Trump has not “drained the swamp” of Washington lobbying. But this is to miss the point of how such rhetoric works, which is to chip away at the core faith on which liberalism depends, namely that power is being used in ways that represent the public interest, and that the facts published by the mainstream media are valid representations of reality.
Populists target various centres of power, including dominant political parties, mainstream media, big business and the institutions of the state, including the judiciary. The chilling phrase “enemies of the people” has recently been employed by Donald Trump to describe those broadcasters and newspapers he dislikes (such as CNN and the New York Times), and by the Daily Mail to describe high court judges, following their 2016 ruling that Brexit would require parliamentary consent. But on a deeper level, whether it is the judiciary, the media or the independent civil service that is being attacked is secondary to a more important allegation: that public life in general has become fraudulent.
Nigel Farage campaigning with Donald Trump in 2016. Photograph: Jonathan Bachman/Getty Images
How does this allegation work? One aspect of it is to dispute the very possibility that a judge, reporter or expert might act in a disinterested, objective fashion. For those whose authority depends on separating their public duties from their personal feelings, having their private views or identities publicised serves as an attack on their credibility. But another aspect is to gradually blur the distinctions between different varieties of expertise and authority, with the implication that politicians, journalists, judges, regulators and officials are effectively all working together.
It is easy for rival professions to argue that they have little in common with each other, and are often antagonistic to each other. Ostensibly, these disparate centres of expertise and power hold each other in check in various ways, producing a pluralist system of checks and balances. Twentieth-century defenders of liberalism, such as the American political scientist Robert Dahl, often argued that it didn’t matter how much power was concentrated in the hands of individual authorities, as long as no single political entity was able to monopolise power. The famous liberal ideal of a “separation of powers” (distinguishing executive, legislative and judicial branches of government), so influential in the framing of the US constitution, could persist so long as different domains of society hold one another up to critical scrutiny.
But one thing that these diverse professions and authorities do have in common is that they trade primarily in words and symbols. By lumping together journalists, judges, experts and politicians as a single homogeneous “liberal elite”, it is possible to treat them all as indulging in a babble of jargon, political correctness and, ultimately, lies. Their status as public servants is demolished once their claim to speak honestly is thrown into doubt. One way in which this is done is by bringing their private opinions and tastes before the public, something that social media and email render far easier. Tensions and contradictions between the public face of, say, a BBC reporter, and their private opinions and feelings, are much easier to discover in the age of Twitter.
Whether in the media, politics or academia, liberal professions suffer a vulnerability that a figure such as Trump doesn’t, in that their authority hangs on their claim to speak the truth. A recent sociological paper called The Authentic Appeal of the Lying Demagogue, by US academics Oliver Hahl, Minjae Kim and Ezra Zuckerman Sivan, draws a distinction between two types of lies. The first, “special access lies”, may be better termed “insider lies”. This is dishonesty from those trusted to truthfully report facts, who abuse that trust by failing to state what they privately know to be true. (The authors give the example of Bill Clinton’s infamous claim that he “did not have sexual relations with that woman”.)
The second, which they refer to as “common knowledge lies”, are the kinds of lies told by Donald Trump about the size of his election victory or the crowds at his inauguration, or the Vote Leave campaign’s false claims about sending “£350m a week to the EU”. These lies do not pretend to be bound by the norm of honesty in the first place, and the listener can make up their own mind what to make of them.
What the paper shows is that, where politics comes to be viewed as the domain of “insider” liars, there is a seductive authenticity, even a strange kind of honesty, about the “common knowledge” liar. The rise of highly polished, professional politicians such as Tony Blair and Bill Clinton exacerbated the sense that politics is all about strategic concealment of the truth, something that the Iraq war seemed to confirm as much as anything. Trump or Farage may have a reputation for fabricating things, but they don’t (rightly or wrongly) have a reputation for concealing things, which grants them a form of credibility not available to technocrats or professional politicians.
At the same time, and even more corrosively, when elected representatives come to be viewed as “insider liars”, it turns out that other professions whose job it is to report the truth – journalists, experts, officials – also suffer a slump in trust. Indeed, the distinctions between all these fact-peddlers start to look irrelevant in the eyes of those who’ve given up on the establishment altogether. It is this type of all-encompassing disbelief that creates the opportunity for rightwing populism in particular. Trump voters are more than twice as likely to distrust the media as those who voted for Clinton in 2016, according to the annual Edelman Trust Barometer, which adds that the four countries currently suffering the most “extreme trust losses” are Italy, Brazil, South Africa and the US.
It’s one thing to measure public attitudes, but quite another to understand what shapes them. Alienation and disillusionment develop slowly, and without any single provocation. No doubt economic stagnation and soaring inequality have played a role – but we should not discount the growing significance of scandals that appear to discredit the honesty and objectivity of “liberal elites”. The misbehaviour of elites did not “cause” Brexit, but it is striking, in hindsight, how little attention was paid to the accumulation of scandal and its consequences for trust in the establishment.
The 2010 edition of the annual British Social Attitudes survey included an ominous finding. Trust in politicians, already low, had suffered a fresh slump, with a majority of people saying politicians never tell the truth. But at the same time, interest in politics had mysteriously risen.
To whom would this newly engaged section of the electorate turn if they had lost trust in “politicians”? One answer was clearly Ukip, who experienced their greatest electoral gains in the years that followed, to the point of winning the most seats in the 2014 elections for the European parliament. Ukip’s surge, which initially appeared to threaten the Conservative party, was integral to David Cameron’s decision to hold a referendum on EU membership. One of the decisive (and unexpected) factors in the referendum result was the number of voters who went to the polls for the first time, specifically to vote leave.
What might have prompted the combination of angry disillusionment and intensifying interest that was visible in the 2010 survey? It clearly predated the toughest years of austerity. But there was clearly one event that did more than any other to weaken trust in politicians: the MPs’ expenses scandal, which blew up in May 2009 thanks to a drip-feed of revelations published by the Daily Telegraph.
Following as it did so soon after a disaster of world-historic proportions – the financial crisis – the full significance of the expenses scandal may have been forgotten. But its ramifications were vast. For one thing, it engulfed many of the highest reaches of power in Westminster: the Speaker of the House of Commons, the home secretary, the secretary of state for communities and local government and the chief secretary to the treasury all resigned. Not only that, but the rot appeared to have infected all parties equally, validating the feeling that politicians had more in common with each other (regardless of party loyalties) than they did with decent, ordinary people.
Many of the issues that “elites” deal with are complex, concerning law, regulation and economic analysis. We can all see the fallout of the financial crisis, for instance, but the precise causes are disputed and hard to fathom. By contrast, everybody understands expense claims, and everybody knows lying and exaggerating are among the most basic moral failings; even a child understands they are wrong. This may be unfair to the hundreds of honest MPs and to the dozens whose misdemeanours fell into a murky area around the “spirit” of the rules. But the sense of a mass stitch-up was deeply – and understandably – entrenched.
The other significant thing about the expenses scandal was the way it set a template for a decade of elite scandals – most of which also involved lies, leaks and dishonest denials. One year later, there was another leak from a vast archive of government data: in 2010, WikiLeaks released hundreds of thousands of US military field reports from Iraq and Afghanistan. With the assistance of newspaper including the New York Times, Der Spiegel, the Guardian and Le Monde, these “war logs” disclosed horrifying details about the conduct of US forces and revealed the Pentagon had falsely denied knowledge of various abuses. While some politicians expressed moral revulsion with what had been exposed, the US and British governments blamed WikiLeaks for endangering their troops, and the leaker, Chelsea Manning, was jailed for espionage.
How does this allegation work? One aspect of it is to dispute the very possibility that a judge, reporter or expert might act in a disinterested, objective fashion. For those whose authority depends on separating their public duties from their personal feelings, having their private views or identities publicised serves as an attack on their credibility. But another aspect is to gradually blur the distinctions between different varieties of expertise and authority, with the implication that politicians, journalists, judges, regulators and officials are effectively all working together.
It is easy for rival professions to argue that they have little in common with each other, and are often antagonistic to each other. Ostensibly, these disparate centres of expertise and power hold each other in check in various ways, producing a pluralist system of checks and balances. Twentieth-century defenders of liberalism, such as the American political scientist Robert Dahl, often argued that it didn’t matter how much power was concentrated in the hands of individual authorities, as long as no single political entity was able to monopolise power. The famous liberal ideal of a “separation of powers” (distinguishing executive, legislative and judicial branches of government), so influential in the framing of the US constitution, could persist so long as different domains of society hold one another up to critical scrutiny.
But one thing that these diverse professions and authorities do have in common is that they trade primarily in words and symbols. By lumping together journalists, judges, experts and politicians as a single homogeneous “liberal elite”, it is possible to treat them all as indulging in a babble of jargon, political correctness and, ultimately, lies. Their status as public servants is demolished once their claim to speak honestly is thrown into doubt. One way in which this is done is by bringing their private opinions and tastes before the public, something that social media and email render far easier. Tensions and contradictions between the public face of, say, a BBC reporter, and their private opinions and feelings, are much easier to discover in the age of Twitter.
Whether in the media, politics or academia, liberal professions suffer a vulnerability that a figure such as Trump doesn’t, in that their authority hangs on their claim to speak the truth. A recent sociological paper called The Authentic Appeal of the Lying Demagogue, by US academics Oliver Hahl, Minjae Kim and Ezra Zuckerman Sivan, draws a distinction between two types of lies. The first, “special access lies”, may be better termed “insider lies”. This is dishonesty from those trusted to truthfully report facts, who abuse that trust by failing to state what they privately know to be true. (The authors give the example of Bill Clinton’s infamous claim that he “did not have sexual relations with that woman”.)
The second, which they refer to as “common knowledge lies”, are the kinds of lies told by Donald Trump about the size of his election victory or the crowds at his inauguration, or the Vote Leave campaign’s false claims about sending “£350m a week to the EU”. These lies do not pretend to be bound by the norm of honesty in the first place, and the listener can make up their own mind what to make of them.
What the paper shows is that, where politics comes to be viewed as the domain of “insider” liars, there is a seductive authenticity, even a strange kind of honesty, about the “common knowledge” liar. The rise of highly polished, professional politicians such as Tony Blair and Bill Clinton exacerbated the sense that politics is all about strategic concealment of the truth, something that the Iraq war seemed to confirm as much as anything. Trump or Farage may have a reputation for fabricating things, but they don’t (rightly or wrongly) have a reputation for concealing things, which grants them a form of credibility not available to technocrats or professional politicians.
At the same time, and even more corrosively, when elected representatives come to be viewed as “insider liars”, it turns out that other professions whose job it is to report the truth – journalists, experts, officials – also suffer a slump in trust. Indeed, the distinctions between all these fact-peddlers start to look irrelevant in the eyes of those who’ve given up on the establishment altogether. It is this type of all-encompassing disbelief that creates the opportunity for rightwing populism in particular. Trump voters are more than twice as likely to distrust the media as those who voted for Clinton in 2016, according to the annual Edelman Trust Barometer, which adds that the four countries currently suffering the most “extreme trust losses” are Italy, Brazil, South Africa and the US.
It’s one thing to measure public attitudes, but quite another to understand what shapes them. Alienation and disillusionment develop slowly, and without any single provocation. No doubt economic stagnation and soaring inequality have played a role – but we should not discount the growing significance of scandals that appear to discredit the honesty and objectivity of “liberal elites”. The misbehaviour of elites did not “cause” Brexit, but it is striking, in hindsight, how little attention was paid to the accumulation of scandal and its consequences for trust in the establishment.
The 2010 edition of the annual British Social Attitudes survey included an ominous finding. Trust in politicians, already low, had suffered a fresh slump, with a majority of people saying politicians never tell the truth. But at the same time, interest in politics had mysteriously risen.
To whom would this newly engaged section of the electorate turn if they had lost trust in “politicians”? One answer was clearly Ukip, who experienced their greatest electoral gains in the years that followed, to the point of winning the most seats in the 2014 elections for the European parliament. Ukip’s surge, which initially appeared to threaten the Conservative party, was integral to David Cameron’s decision to hold a referendum on EU membership. One of the decisive (and unexpected) factors in the referendum result was the number of voters who went to the polls for the first time, specifically to vote leave.
What might have prompted the combination of angry disillusionment and intensifying interest that was visible in the 2010 survey? It clearly predated the toughest years of austerity. But there was clearly one event that did more than any other to weaken trust in politicians: the MPs’ expenses scandal, which blew up in May 2009 thanks to a drip-feed of revelations published by the Daily Telegraph.
Following as it did so soon after a disaster of world-historic proportions – the financial crisis – the full significance of the expenses scandal may have been forgotten. But its ramifications were vast. For one thing, it engulfed many of the highest reaches of power in Westminster: the Speaker of the House of Commons, the home secretary, the secretary of state for communities and local government and the chief secretary to the treasury all resigned. Not only that, but the rot appeared to have infected all parties equally, validating the feeling that politicians had more in common with each other (regardless of party loyalties) than they did with decent, ordinary people.
Many of the issues that “elites” deal with are complex, concerning law, regulation and economic analysis. We can all see the fallout of the financial crisis, for instance, but the precise causes are disputed and hard to fathom. By contrast, everybody understands expense claims, and everybody knows lying and exaggerating are among the most basic moral failings; even a child understands they are wrong. This may be unfair to the hundreds of honest MPs and to the dozens whose misdemeanours fell into a murky area around the “spirit” of the rules. But the sense of a mass stitch-up was deeply – and understandably – entrenched.
The other significant thing about the expenses scandal was the way it set a template for a decade of elite scandals – most of which also involved lies, leaks and dishonest denials. One year later, there was another leak from a vast archive of government data: in 2010, WikiLeaks released hundreds of thousands of US military field reports from Iraq and Afghanistan. With the assistance of newspaper including the New York Times, Der Spiegel, the Guardian and Le Monde, these “war logs” disclosed horrifying details about the conduct of US forces and revealed the Pentagon had falsely denied knowledge of various abuses. While some politicians expressed moral revulsion with what had been exposed, the US and British governments blamed WikiLeaks for endangering their troops, and the leaker, Chelsea Manning, was jailed for espionage.
Rupert Murdoch on his way to give evidence to the Leveson inquiry in 2012. Photograph: Ben Stansall/AFP/Getty Images
In 2011, the phone-hacking scandal put the press itself under the spotlight. It was revealed that senior figures in News International and the Metropolitan police had long been aware of the extent of phone-hacking practices – and they had lied about how much they knew. Among those implicated was the prime minister’s communications director, former News of the World editor Andy Coulson, who was forced to resign his post and later jailed. By the end of 2011, the News of the World had been closed down, the Leveson inquiry was underway, and the entire Murdoch empire was shaking.
The biggest scandal of 2012 was a different beast altogether, involving unknown men manipulating a number that very few people had even heard of. The number in question, the London interbank offered rate, or Libor, is meant to represent the rate at which banks are willing to loan to each other. What was surreal, in an age of complex derivatives and high-frequency trading algorithms, was that this number was calculated on the basis of estimates declared by each bank on a daily basis, and accepted purely on trust. The revelation that a handful of brokers had conspired to alter Libor for private gain (with possible costs to around 250,000 UK mortgage-holders, among others) may have been difficult to fully comprehend, but it gave the not unreasonable impression of an industry enriching itself in a criminal fashion at the public’s expense. Bob Diamond, the CEO of Barclays, the bank at the centre of the conspiracy, resigned in July 2012.
Towards the end of that year, the media was caught in another prolonged crisis, this time at the BBC. Horror greeted the broadcast of the ITV documentary The Other Side of Jimmy Savile in October 2012. How many people had known about his predatory sexual behaviour, and for how long? Why had the police abandoned earlier investigations? And why had BBC Newsnight dropped its own film about Savile, due to be broadcast shortly after his death in 2011? The police swiftly established Operation Yewtree to investigate historic sexual abuse allegations, while the BBC established independent commissions into what had gone wrong. But a sense lingered that neither the BBC nor the police had really wanted to know the truth of these matters for the previous 40 years.
It wasn’t long before it was the turn of the corporate world. In September 2014, a whistleblower revealed that Tesco had exaggerated its half-yearly profits by £250m, increasing the figure by around a third. An accounting fiddle on this scale clearly had roots at a senior managerial level. Sure enough, four senior executives were suspended the same month and three were charged with fraud two years later. A year later, it emerged that Volkswagen had systematically and deliberately tinkered with emissions controls in their vehicles, so as to dupe regulators in tests, but then pollute liberally the rest of the time. The CEO, Martin Winterkorn, resigned.
“We didn’t really learn anything from WikiLeaks we didn’t already presume to be true,” the philosopher Slavoj Žižek observed in 2014. “But it is one thing to know it in general and another to get concrete data.” The nature of all these scandals suggests the emergence of a new form of “facts”, in the shape of a leaked archive – one that, crucially, does not depend on trusting the secondhand report of a journalist or official. These revelations are powerful and consequential precisely because they appear to directly confirm our fears and suspicions. Resentment towards “liberal elites” would no doubt brew even in the absence of supporting evidence. But when that evidence arises, things become far angrier, even when the data – such as Hillary Clinton’s emails – isn’t actually very shocking.
This is by no means an exhaustive list of the scandals of the past decade, nor are they all of equal significance. But viewing them together provides a better sense of how the suspicions of populists cut through. Whether or not we continue to trust in politicians, journalists or officials, we have grown increasingly used to this pattern in which a curtain is dramatically pulled back, to reveal those who have been lying to or defrauding the public.
Another pattern also begins to emerge. It’s not just that isolated individuals are unmasked as corrupt or self-interested (something that is as old as politics), but that the establishment itself starts to appear deceitful and dubious. The distinctive scandals of the 21st century are a combination of some very basic and timeless moral failings (greed and dishonesty) with technologies of exposure that expose malpractice on an unprecedented scale, and with far more dramatic results.
Perhaps the most important feature of all these revelations was that they were definitely scandals, and not merely failures: they involved deliberate efforts to defraud or mislead. Several involved sustained cover-ups, delaying the moment of truth for as long as possible.
Several of the scandals ended with high profile figures behind bars. Jail terms satisfy some of the public demand that the “elites” pay for their dishonesty, but they don’t repair the trust that has been damaged. On the contrary, there’s a risk that they affirm the cry for retribution, after which the quest for punishment is only ramped up further. Chants of “lock her up” continue to reverberate around Trump rallies.
In addition to their conscious and deliberate nature, a second striking feature of these scandals was the ambiguous role played by the media. On the one hand, the reputation of the media has taken a pummelling over the past decade, egged on by populists and conspiracy theorists who accuse the “mainstream media” of being allied to professional political leaders, and who now have the benefit of social media through which to spread this message.
The moral authority of newspapers may never have been high, but the grisly revelations that journalists hacked the phone of murdered schoolgirl Milly Dowler represented a new low in the public standing of the press. The Leveson inquiry, followed soon after by the Savile revelations and Operation Yewtree, generated a sense of a media class who were adept at exposing others, but equally expert at concealing the truth of their own behaviours.
On the other hand, it was newspapers and broadcasters that enabled all of this to come to light at all. The extent of phone hacking was eventually exposed by the Guardian, the MPs’ expenses by the Telegraph, Jimmy Savile by ITV, and the “war logs” reported with the aid of several newspapers around the world simultaneously.
But the media was playing a different kind of role from the one traditionally played by journalists and newspapers, with very different implications for the status of truth in society. A backlog of data and allegations had built up in secret, until eventually a whistle was blown. An archive existed that the authorities refused to acknowledge, until they couldn’t resist the pressure to do so any longer. Journalists and whistleblowers were instrumental in removing the pressure valve, but from that point on, truth poured out unpredictably. While such torrents are underway, there is no way of knowing how far they may spread or how long they may last.
In 2011, the phone-hacking scandal put the press itself under the spotlight. It was revealed that senior figures in News International and the Metropolitan police had long been aware of the extent of phone-hacking practices – and they had lied about how much they knew. Among those implicated was the prime minister’s communications director, former News of the World editor Andy Coulson, who was forced to resign his post and later jailed. By the end of 2011, the News of the World had been closed down, the Leveson inquiry was underway, and the entire Murdoch empire was shaking.
The biggest scandal of 2012 was a different beast altogether, involving unknown men manipulating a number that very few people had even heard of. The number in question, the London interbank offered rate, or Libor, is meant to represent the rate at which banks are willing to loan to each other. What was surreal, in an age of complex derivatives and high-frequency trading algorithms, was that this number was calculated on the basis of estimates declared by each bank on a daily basis, and accepted purely on trust. The revelation that a handful of brokers had conspired to alter Libor for private gain (with possible costs to around 250,000 UK mortgage-holders, among others) may have been difficult to fully comprehend, but it gave the not unreasonable impression of an industry enriching itself in a criminal fashion at the public’s expense. Bob Diamond, the CEO of Barclays, the bank at the centre of the conspiracy, resigned in July 2012.
Towards the end of that year, the media was caught in another prolonged crisis, this time at the BBC. Horror greeted the broadcast of the ITV documentary The Other Side of Jimmy Savile in October 2012. How many people had known about his predatory sexual behaviour, and for how long? Why had the police abandoned earlier investigations? And why had BBC Newsnight dropped its own film about Savile, due to be broadcast shortly after his death in 2011? The police swiftly established Operation Yewtree to investigate historic sexual abuse allegations, while the BBC established independent commissions into what had gone wrong. But a sense lingered that neither the BBC nor the police had really wanted to know the truth of these matters for the previous 40 years.
It wasn’t long before it was the turn of the corporate world. In September 2014, a whistleblower revealed that Tesco had exaggerated its half-yearly profits by £250m, increasing the figure by around a third. An accounting fiddle on this scale clearly had roots at a senior managerial level. Sure enough, four senior executives were suspended the same month and three were charged with fraud two years later. A year later, it emerged that Volkswagen had systematically and deliberately tinkered with emissions controls in their vehicles, so as to dupe regulators in tests, but then pollute liberally the rest of the time. The CEO, Martin Winterkorn, resigned.
“We didn’t really learn anything from WikiLeaks we didn’t already presume to be true,” the philosopher Slavoj Žižek observed in 2014. “But it is one thing to know it in general and another to get concrete data.” The nature of all these scandals suggests the emergence of a new form of “facts”, in the shape of a leaked archive – one that, crucially, does not depend on trusting the secondhand report of a journalist or official. These revelations are powerful and consequential precisely because they appear to directly confirm our fears and suspicions. Resentment towards “liberal elites” would no doubt brew even in the absence of supporting evidence. But when that evidence arises, things become far angrier, even when the data – such as Hillary Clinton’s emails – isn’t actually very shocking.
This is by no means an exhaustive list of the scandals of the past decade, nor are they all of equal significance. But viewing them together provides a better sense of how the suspicions of populists cut through. Whether or not we continue to trust in politicians, journalists or officials, we have grown increasingly used to this pattern in which a curtain is dramatically pulled back, to reveal those who have been lying to or defrauding the public.
Another pattern also begins to emerge. It’s not just that isolated individuals are unmasked as corrupt or self-interested (something that is as old as politics), but that the establishment itself starts to appear deceitful and dubious. The distinctive scandals of the 21st century are a combination of some very basic and timeless moral failings (greed and dishonesty) with technologies of exposure that expose malpractice on an unprecedented scale, and with far more dramatic results.
Perhaps the most important feature of all these revelations was that they were definitely scandals, and not merely failures: they involved deliberate efforts to defraud or mislead. Several involved sustained cover-ups, delaying the moment of truth for as long as possible.
Several of the scandals ended with high profile figures behind bars. Jail terms satisfy some of the public demand that the “elites” pay for their dishonesty, but they don’t repair the trust that has been damaged. On the contrary, there’s a risk that they affirm the cry for retribution, after which the quest for punishment is only ramped up further. Chants of “lock her up” continue to reverberate around Trump rallies.
In addition to their conscious and deliberate nature, a second striking feature of these scandals was the ambiguous role played by the media. On the one hand, the reputation of the media has taken a pummelling over the past decade, egged on by populists and conspiracy theorists who accuse the “mainstream media” of being allied to professional political leaders, and who now have the benefit of social media through which to spread this message.
The moral authority of newspapers may never have been high, but the grisly revelations that journalists hacked the phone of murdered schoolgirl Milly Dowler represented a new low in the public standing of the press. The Leveson inquiry, followed soon after by the Savile revelations and Operation Yewtree, generated a sense of a media class who were adept at exposing others, but equally expert at concealing the truth of their own behaviours.
On the other hand, it was newspapers and broadcasters that enabled all of this to come to light at all. The extent of phone hacking was eventually exposed by the Guardian, the MPs’ expenses by the Telegraph, Jimmy Savile by ITV, and the “war logs” reported with the aid of several newspapers around the world simultaneously.
But the media was playing a different kind of role from the one traditionally played by journalists and newspapers, with very different implications for the status of truth in society. A backlog of data and allegations had built up in secret, until eventually a whistle was blown. An archive existed that the authorities refused to acknowledge, until they couldn’t resist the pressure to do so any longer. Journalists and whistleblowers were instrumental in removing the pressure valve, but from that point on, truth poured out unpredictably. While such torrents are underway, there is no way of knowing how far they may spread or how long they may last.
Tony Blair and Bill Clinton in Belfast in April. Photograph: Charles McQuillan/Getty Images
The era of “big data” is also the era of “leaks”. Where traditional “sleaze” could topple a minister, several of the defining scandals of the past decade have been on a scale so vast that they exceed any individual’s responsibility. The Edward Snowden revelations of 2013, the Panama Papers leak of 2015 and the HSBC files (revealing organised tax evasion) all involved the release of tens of thousands or even millions of documents. Paper-based bureaucracies never faced threats to their legitimacy on this scale.
The power of commissions and inquiries to make sense of so much data is not to be understated, nor is the integrity of those newspapers and whistleblowers that helped bring misdemeanours to light. In cases such as MPs’ expenses, some newspapers even invited their readers to help search these vast archives for treasure troves, like human algorithms sorting through data. But it is hard to imagine that the net effect of so many revelations was to build trust in any publicly visible institutions. On the contrary, the discovery that “elites” have been blocking access to a mine of incriminating data is perfect fodder for conspiracy theories. In his 2010 memoir, A Journey, Tony Blair confessed that legislating for freedom of information was one of his biggest regrets, which gave a glimpse of how transparency is viewed from the centre of power.
Following the release of the war logs by WikiLeaks, nobody in any position of power claimed that the data wasn’t accurate (it was, after all, the data, and not a journalistic report). Nor did they offer any moral justification for what was revealed. Defence departments were left making the flimsiest of arguments – that it was better for everyone if they didn’t know how war was conducted. It may well be that the House of Commons was not fairly represented by the MPs’ expenses scandal, that most City brokers are honest, or that the VW emissions scam was a one-off within the car industry. But scandals don’t work through producing fair or representative pictures of the world; they do so by blowing the lid on hidden truths and lies. Where whistleblowing and leaking become the dominant form of truth-telling, the authority of professional truth-tellers – reporters, experts, professionals, broadcasters – is thrown into question.
The term “illiberal democracy” is now frequently invoked to describe states such as Hungary under Viktor Orbán or Turkey under Recep Tayyip Erdoğan. In contrast to liberal democracy, this model of authoritarian populism targets the independence of the judiciary and the media, ostensibly on behalf of “the people”.
Brexit has been caused partly by distrust in “liberal elites”, but the anxiety is that it is also accelerating a drift towards “illiberalism”. There is a feeling at large, albeit amongst outspoken remainers, that the BBC has treated the leave campaign and Brexit itself with kid gloves, for fear of provoking animosity. More worrying was the discovery by openDemocracy in October that the Metropolitan police were delaying their investigation into alleged breaches of electoral law by the leave campaign due to what a Met spokesperson called “political sensitivities”. The risk at the present juncture is that key civic institutions will seek to avoid exercising scrutiny and due process, for fear of upsetting their opponents.
Britain is not an “illiberal democracy”, but the credibility of our elites is still in trouble, and efforts to placate their populist opponents may only make matters worse. At the more extreme end of the spectrum, the far-right activist Stephen Yaxley-Lennon, also known as Tommy Robinson, has used his celebrity and social media reach to cast doubt on the judiciary and the BBC at once.
Yaxley-Lennon has positioned himself as a freedom fighter, revealing “the truth” about Muslim men accused of grooming underage girls by violating legal rules that restrict reporting details of ongoing trials. Yaxley-Lennon was found guilty of contempt of court and jailed (he was later released after the court of appeal ordered a retrial, and the case has been referred to the attorney general), but this only deepened his appeal for those who believed the establishment was complicit in a cover-up, and ordinary people were being deliberately duped.
The political concern right now is that suspicions of this nature – that the truth is being deliberately hidden by an alliance of “elites” – are no longer the preserve of conspiracy theorists, but becoming increasingly common. Our current crisis has too many causes to enumerate here, and it is impossible to apportion blame for a collective collapse of trust – which is as much a symptom of changes in media technologies as it is of any moral failings on the part of elites.
But what is emerging now is what the social theorist Michel Foucault would have called a new “regime of truth” – a different way of organising knowledge and trust in society. The advent of experts and government administrators in the 17th century created the platform for a distinctive liberal solution to this problem, which rested on the assumption that knowledge would reside in public records, newspapers, government files and journals. But once the integrity of these people and these instruments is cast into doubt, an opportunity arises for a new class of political figures and technologies to demand trust instead.
The project that was launched over three centuries ago, of trusting elite individuals to know, report and judge things on our behalf, may not be viable in the long term, at least not in its existing form. It is tempting to indulge the fantasy that we can reverse the forces that have undermined it, or else batter them into retreat with an even bigger arsenal of facts. But this is to ignore the more fundamental ways in which the nature of trust is changing.
The main feature of the emerging regime is that truth is now assumed to reside in hidden archives of data, rather than in publicly available facts. This is what is affirmed by scandals such as MPs’ expenses and the leak of the Iraq war logs – and more recently in the #MeToo movement, which also occurred through a sudden and voluminous series of revelations, generating a crisis of trust. The truth was out there, just not in the public domain. In the age of email, social media and cameraphones, it is now common sense to assume that virtually all social activity is generating raw data, which exists out there somewhere. Truth becomes like the lava below the earth’s crust, which periodically bursts through as a volcano.
What role does this leave for the traditional, analogue purveyors of facts and figures? What does it mean to “report” the news in an age of reflexive disbelief? Newspapers have been grappling with this question for some time now; some have decided to refashion themselves as portals to the raw data, or curators of other people’s content. But it is no longer intuitively obvious to the public why they should be prepared to take a journalist’s word for something, when they can witness the thing itself in digital form. There may be good answers to these questions, but they are not obvious ones.
Instead, a new type of heroic truth-teller has emerged in tandem with these trends. This is the individual who appears brave enough to call bullshit on the rest of the establishment – whether that be government agencies, newspapers, business, political parties or anything else. Some are whistleblowers, others are political leaders, and others are more like conspiracy theorists or trolls. The problem is that everyone has a different heroic truth-teller, because we’re all preoccupied by different bullshit. There is no political alignment between figures such as Chelsea Manning and Nigel Farage; what they share is only a willingness to defy the establishment and break consensus.
If a world where everyone has their own truth-tellers sounds dangerously like relativism, that’s because it is. But the roots of this new and often unsettling “regime of truth” don’t only lie with the rise of populism or the age of big data. Elites have largely failed to understand that this crisis is about trust rather than facts – which may be why they did not detect the rapid erosion of their own credibility.
Unless liberal institutions and their defenders are willing to reckon with their own inability to sustain trust, the events of the past decade will remain opaque to them. And unless those institutions can rediscover aspects of the original liberal impulse – to keep different domains of power separate, and put the disinterested pursuit of knowledge before the pursuit of profit – then the present trends will only intensify, and no quantity of facts will be sufficient to resist. Power and authority will accrue to a combination of decreasingly liberal states and digital platforms – interrupted only by the occasional outcry as whistles are blown and outrages exposed.
The era of “big data” is also the era of “leaks”. Where traditional “sleaze” could topple a minister, several of the defining scandals of the past decade have been on a scale so vast that they exceed any individual’s responsibility. The Edward Snowden revelations of 2013, the Panama Papers leak of 2015 and the HSBC files (revealing organised tax evasion) all involved the release of tens of thousands or even millions of documents. Paper-based bureaucracies never faced threats to their legitimacy on this scale.
The power of commissions and inquiries to make sense of so much data is not to be understated, nor is the integrity of those newspapers and whistleblowers that helped bring misdemeanours to light. In cases such as MPs’ expenses, some newspapers even invited their readers to help search these vast archives for treasure troves, like human algorithms sorting through data. But it is hard to imagine that the net effect of so many revelations was to build trust in any publicly visible institutions. On the contrary, the discovery that “elites” have been blocking access to a mine of incriminating data is perfect fodder for conspiracy theories. In his 2010 memoir, A Journey, Tony Blair confessed that legislating for freedom of information was one of his biggest regrets, which gave a glimpse of how transparency is viewed from the centre of power.
Following the release of the war logs by WikiLeaks, nobody in any position of power claimed that the data wasn’t accurate (it was, after all, the data, and not a journalistic report). Nor did they offer any moral justification for what was revealed. Defence departments were left making the flimsiest of arguments – that it was better for everyone if they didn’t know how war was conducted. It may well be that the House of Commons was not fairly represented by the MPs’ expenses scandal, that most City brokers are honest, or that the VW emissions scam was a one-off within the car industry. But scandals don’t work through producing fair or representative pictures of the world; they do so by blowing the lid on hidden truths and lies. Where whistleblowing and leaking become the dominant form of truth-telling, the authority of professional truth-tellers – reporters, experts, professionals, broadcasters – is thrown into question.
The term “illiberal democracy” is now frequently invoked to describe states such as Hungary under Viktor Orbán or Turkey under Recep Tayyip Erdoğan. In contrast to liberal democracy, this model of authoritarian populism targets the independence of the judiciary and the media, ostensibly on behalf of “the people”.
Brexit has been caused partly by distrust in “liberal elites”, but the anxiety is that it is also accelerating a drift towards “illiberalism”. There is a feeling at large, albeit amongst outspoken remainers, that the BBC has treated the leave campaign and Brexit itself with kid gloves, for fear of provoking animosity. More worrying was the discovery by openDemocracy in October that the Metropolitan police were delaying their investigation into alleged breaches of electoral law by the leave campaign due to what a Met spokesperson called “political sensitivities”. The risk at the present juncture is that key civic institutions will seek to avoid exercising scrutiny and due process, for fear of upsetting their opponents.
Britain is not an “illiberal democracy”, but the credibility of our elites is still in trouble, and efforts to placate their populist opponents may only make matters worse. At the more extreme end of the spectrum, the far-right activist Stephen Yaxley-Lennon, also known as Tommy Robinson, has used his celebrity and social media reach to cast doubt on the judiciary and the BBC at once.
Yaxley-Lennon has positioned himself as a freedom fighter, revealing “the truth” about Muslim men accused of grooming underage girls by violating legal rules that restrict reporting details of ongoing trials. Yaxley-Lennon was found guilty of contempt of court and jailed (he was later released after the court of appeal ordered a retrial, and the case has been referred to the attorney general), but this only deepened his appeal for those who believed the establishment was complicit in a cover-up, and ordinary people were being deliberately duped.
The political concern right now is that suspicions of this nature – that the truth is being deliberately hidden by an alliance of “elites” – are no longer the preserve of conspiracy theorists, but becoming increasingly common. Our current crisis has too many causes to enumerate here, and it is impossible to apportion blame for a collective collapse of trust – which is as much a symptom of changes in media technologies as it is of any moral failings on the part of elites.
But what is emerging now is what the social theorist Michel Foucault would have called a new “regime of truth” – a different way of organising knowledge and trust in society. The advent of experts and government administrators in the 17th century created the platform for a distinctive liberal solution to this problem, which rested on the assumption that knowledge would reside in public records, newspapers, government files and journals. But once the integrity of these people and these instruments is cast into doubt, an opportunity arises for a new class of political figures and technologies to demand trust instead.
The project that was launched over three centuries ago, of trusting elite individuals to know, report and judge things on our behalf, may not be viable in the long term, at least not in its existing form. It is tempting to indulge the fantasy that we can reverse the forces that have undermined it, or else batter them into retreat with an even bigger arsenal of facts. But this is to ignore the more fundamental ways in which the nature of trust is changing.
The main feature of the emerging regime is that truth is now assumed to reside in hidden archives of data, rather than in publicly available facts. This is what is affirmed by scandals such as MPs’ expenses and the leak of the Iraq war logs – and more recently in the #MeToo movement, which also occurred through a sudden and voluminous series of revelations, generating a crisis of trust. The truth was out there, just not in the public domain. In the age of email, social media and cameraphones, it is now common sense to assume that virtually all social activity is generating raw data, which exists out there somewhere. Truth becomes like the lava below the earth’s crust, which periodically bursts through as a volcano.
What role does this leave for the traditional, analogue purveyors of facts and figures? What does it mean to “report” the news in an age of reflexive disbelief? Newspapers have been grappling with this question for some time now; some have decided to refashion themselves as portals to the raw data, or curators of other people’s content. But it is no longer intuitively obvious to the public why they should be prepared to take a journalist’s word for something, when they can witness the thing itself in digital form. There may be good answers to these questions, but they are not obvious ones.
Instead, a new type of heroic truth-teller has emerged in tandem with these trends. This is the individual who appears brave enough to call bullshit on the rest of the establishment – whether that be government agencies, newspapers, business, political parties or anything else. Some are whistleblowers, others are political leaders, and others are more like conspiracy theorists or trolls. The problem is that everyone has a different heroic truth-teller, because we’re all preoccupied by different bullshit. There is no political alignment between figures such as Chelsea Manning and Nigel Farage; what they share is only a willingness to defy the establishment and break consensus.
If a world where everyone has their own truth-tellers sounds dangerously like relativism, that’s because it is. But the roots of this new and often unsettling “regime of truth” don’t only lie with the rise of populism or the age of big data. Elites have largely failed to understand that this crisis is about trust rather than facts – which may be why they did not detect the rapid erosion of their own credibility.
Unless liberal institutions and their defenders are willing to reckon with their own inability to sustain trust, the events of the past decade will remain opaque to them. And unless those institutions can rediscover aspects of the original liberal impulse – to keep different domains of power separate, and put the disinterested pursuit of knowledge before the pursuit of profit – then the present trends will only intensify, and no quantity of facts will be sufficient to resist. Power and authority will accrue to a combination of decreasingly liberal states and digital platforms – interrupted only by the occasional outcry as whistles are blown and outrages exposed.
Sunday 25 November 2018
Saturday 3 November 2018
The Rafale Mystery Deepens : Why did Dassault Invest in An Obscure Anil Ambani Company?
Interview with Ravi Nair - the person behind this story.
Exclusive: Post-Rafale, Dassault Investment in Inactive Anil Ambani Company Gave Reliance Rs 284 Crore Profit
By Rohini Singh and Ravi Nair in The Wire
New Delhi: Even as Dassault Aviation and Anil Ambani’s Reliance group battle allegations that extra-commercial considerations drove their joint venture on Rafale, regulatory filings in France and India reveal that the French defence major followed its JV with an investment in 2017 of approximately 40 million euros in another Anil Ambani venture that is loss making and has almost zero revenues. The investment translated into a Rs 284 crore profit for the Ambani group company, Reliance Infrastructure, which sold shares in a subsidiary, Reliance Airport Developers Limited (RADL) at a premium.
It is unclear how the valuation for the RADL stake was reached between the two groups or why Dassault would buy a substantial share in an unlisted company that has little to no revenues and has nothing to do with Dassault’s core business.
Public filings by Reliance Infrastructure, a Reliance ADAG group company, show that it sold a 34.7% stake in RADL, a wholly owned subsidiary, to Dassault Aviation in FY 2017-18. The terms of the sale are not known but Reliance said it made a profit of Rs 284.19 crore on the sale of 24,83,923 shares which had a face value of Rs 10 each.
Reliance Airport Developers posted losses of Rs 10.35 lakh for the financial year ending March 2017 and earned revenues of Rs 6 lakh. In the year ending March 2016, the firm had no revenues and posted losses of Rs 9 lakh.
The company has stakes in a clutch of subsidiaries owned by the group. Most of them are loss making and are airport projects that were awarded by the Maharashtra government in 2009 for Rs 63 crore. A Business Standard report dated October 2015 quoted government officials and ministers saying that due to lack of progress in developing these projects by the company a decision was reached to take back the airports. The company also reportedly wanted to get rid of its stakes in these airports but a news report from January 2017 indicated it had changed its mind.
Ironically, while the Maharashtra Airport Development Council (MADC) was prepping to take back charge of the airports due to dissatisfaction with RADL’s progress on the projects, it speedily allotted 289 acres of its land to another group company the same year.
Dassault Aviation’s annual report for 2017 mentions the firm’s acquisition of ‘non listed securities’ including a 34.7% equity participation in Reliance Airport Developers. “In 2017, we also strengthened our presence in India through an acquisition of a 35% stake in Reliance Airport Developers Limited, which operates in the management and development of airport infrastructures,” its report said.
Oddly, the annual report of Reliance Airports posted on the Reliance Infrastructure site notes that Dassault Aviation now holds 34.79% of ordinary shares but when it comes to describing the terms and rights attached to the equity shares, the details have been blanked out.
Screenshot of RADL annual report.
The transaction finds an indirect mention in the Reliance Infrastructure annual report, buried in Note 43 under the exceptional items head, as “profit on sale of investment in Reliance Airport Developers Ltd” of Rs 284.19 crore.
In the Dassault report, the net book value of securities in RADL is stated as 39,962,000 euros. By contrast, the net book value of its securities in DRAL – the joint venture with Reliance for the Rafale – is just 962,000 euros, though presumably it will grow.
Reliance Infrastructure, Annual report for FY 2017
In a recent interview to the Economic Times, Dassault CEO Eric Trappier said Rs 70 crore had been invested in Dassault Reliance Aerospace Limited, Dassault’s JV with the the Anil Ambani group. Of this only 49% is Dassault’s stake.
Filings by Dassault Aviation in France show that besides the Rs 22 crore that Dassault pumped in as equity, it has also given a 4 million euro loan to the JV which roughly converts to Rs 32 crore in Indian rupees. This money, a source in the Anil Ambani group told The Wire off the record, was used by DRAL to pay for its hangar at Mihan. In his interview, Trappier did not mention the money spent for the purchase of a 35% stake in RADL.
How the land was acquired
Prime Minister Narendra Modi announced the Rafale deal on April 10, 2015. In July 2015, Reliance Aerostructure applied to the Maharashtra Airport Development Council for land in its Mihan SEZ in Nagpur. It was allotted 289 acres in August 2015 for Rs 63 crore.
The company later said it would take only 104 acres. While the allotment was done in August 2015, Reliance Aerostructure only paid the dues it owed on July 13, 2017, after missing several payment deadlines.
Reliance Aerostructure was incorporated on April 24, 2015, days after Modi announced the Rafale deal. It was also given a license to manufacture fighter aircraft by the defence ministry in 2016, which opposition parties allege is in violation of government guidelines.
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Filings for financial year 2017 show that Reliance Aerostructure received an inter-corporate deposit of Rs 89.45 crore from Reliance Infrastructure, the same year that Dassault aviation bought 34.79% of Reliance Infrastructure’s stake in Reliance Airport Developers.
From the sequence, it would appear that Reliance Aerostructure used the money received from Reliance Infrastructure to settle its outstanding Rs 38 crore payment with MADC for the land allotted. The dues had been outstanding for more than a year. Filings by Reliance Aerostructure state that the company’s “net worth has been eroded” but was kept as a going concern because of adequate financial support from its promoters. In FY 2017, Reliance Aerostructure posted a loss of Rs 13 crore. The year before that, it posted a loss of Rs 27 crore.
In a recent interview to CNBC, Dassault CEO Eric Trappier had claimed his company chose Reliance ADAG as its offsets partner because it had land available next to an airport. However, the land was only given to Reliance by the state government after it had reached an understanding with Dassault to collaborate on the Rafale.
According to a Dassault press release, Reliance Aerostructure’s joint venture with Dassault Aviation – Dassault Reliance Aerospace Limited (DRAL) – was formally incorporated in 2017 but goes all the way back to April 2015.
The land contribution agreement filed by DRAL with the Registrar of Companies dated July 12, 2018 talks of a sub-lease agreement between Reliance Aerostructure, DRAL and Dassault Aviation. According to this agreement, DRAL, the joint venture partner, would pay Rs 22.8 crore to Reliance as premium for 31 acres of leased property to the joint venture. This debt was converted into “non cash consideration” for 22.8 lakh equity shares of the company. Therefore, the land allotted by the Maharashtra government was used to pay for Reliance’s equity stake in the joint venture company. Dassault aviation gave Rs 21.09 crore cash for its equity stake in the firm.
The Wire has contacted Dassault and Reliance ADAG seeking greater clarity about the land transaction and Dassault’s wider dealings with the Reliance ADAG group, including the valuation of its investment in Reliance Airport Developers Ltd. The story will be be updated with their responses when received.
Note: In an initial version of this article, the euro figure corresponding to RADL’s stated profit of Rs 284 crore was mistakenly stated as 4 million at the prevailing exchange rates in 2017. It is actually 40 million.
Friday 26 October 2018
Wednesday 24 October 2018
Sunday 8 July 2018
The Billionaire Raj: A chronicle of economic India
Meghnad Desai in The FT
India is now one of the world’s economic hotspots. Stock images of starving children, miserable peasants and cheating shop owners have been augmented with those of high-tech development and booming cities. India is now the world’s fastest-growing economy. It is about to become the third-largest economy — at least in terms of purchasing power dollars if not yet real ones. Foreign investors are rushing in. In The Billionaire Raj, James Crabtree has written a compelling guide to what awaits them.
To make India more accessible to the western investor, Crabtree draws an analogy between America’s Gilded Age at the end of the 19th century — that plutocratic moment of the Vanderbilts, Goulds, Rockefellers — and the newest of India’s billionaires. Did you know that India now has more billionaires than Russia?
This sudden enrichment was the result of the long boom of globalisation from 1991-2008. India had initiated reforms to escape from four decades of conservative socialism, initiated by Jawaharlal Nehru, which did not trust private business and put the state in command. The Indian state is inefficient as it is, but disastrous in running business. Its airline Air India has racked up billions in losses; its banks are mired in non-performing loans.
In 1991, Manmohan Singh, then finance minister, bit the bullet and began to liberalise the economy. Tariffs were cut, import licensing was removed, and the rupee was devalued twice within a week. He had little choice because India had run out of foreign exchange reserves and had to pawn its gold to secure a loan from the International Monetary Fund.
The reforms took time to work but, from 1998 onwards, the economy secured high single-digit growth rates, triple the so-called “Hindu growth rate” of 3 per cent per year that prevailed during the first 30 years of independence. With a decade-long growth spurt from 1998 to 2008 came the vast fortunes generated in a crony-capitalist relationship between the ruling Congress party and its private sector clients and financiers. Crabtree, a former FT Mumbai correspondent, gives us a detailed treatment of the links between the politicians needing money to finance elections that were both costly and cheap. (The 2014 elections cost $5bn — or $6 per voter.)
Crabtree gives entertaining portraits of some billionaires. The opening chapters cover Mukesh Ambani and his towering residential extravaganza Antilla, the most expensive house ever built in India, which now dominates the Mumbai skyline; the fugitive Vijay Mallya, a drinks tycoon who was once known as the King of Good Times; the reticent Gautam Adani, an infrastructure entrepreneur who owns ports, mines and refineries. Dhirubhai Ambani, the patriarch of the Reliance group, figured out how to negotiate government regulations and expand his business while keeping the ruling party on his side. Mallya went so far as to be voted into a seat in the Rajya Sabha, the upper house of parliament, after a reported donation of 550m rupees ($10m in those days). Adani prospered in Gujarat with the reported blessings of Narendra Modi while he was chief minister of the state in India’s north-west, where the politician enjoyed both a clean reputation and business-friendly credentials.
Crabtree shows both how deep corruption reaches into electoral politics — but also how functional it is
Beyond the personalities lies another part of the puzzle. Corruption has gone deep in the system. Elections cannot be financed with just legally declared donations. The donors want to escape attention of the tax man, as do the party leaders. It is a symbiotic relationship. Not even Prime Minister Modi, as he has been since 2014, is about to change it, though he has moved against crony capitalism. Armed with an electoral majority, he has set about breaking the political mould, ending the near 70-year hegemony of Congress. He has sundered the crony ties that the top echelon of government enjoyed with the “promoters” of infrastructure projects during the Congress years. Back then the nationalised banks had to lend money to a favoured few and it was understood that the money would not be repaid. No more. Insolvency procedures have been toughened. Debtors can no longer shield their assets from creditors. It was this that sent Mallya abroad.
This book was written before these drastic changes. But whether he wins or loses the next elections, Modi has made revival of crony capitalism difficult.
There are also other concerns. Crabtree worries over Modi’s dual persona as a development enthusiast as well as a Hindu nationalist. The fear is that this may increase intolerance towards minorities — Muslims and Christians — and disrupt peaceful economic progress.
Crabtree’s vivid portrayal of the corruption of politics is very informative, and thought-provoking. He travels the country to show both how deep corruption reaches into electoral politics — but also how functional it is. When an economy is regulated, riddled with permits needed to do business, a few palms may need to be greased. A payment — or rent, as economists call it — may be required. But the rewards are considerable. The corruption market works. It may be immoral but it is not inefficient.
It would be better if India became less corrupt. Crabtree thinks so. That would require a lot of courage and an ability to pursue radical reform. The leader who embarks upon it risks unpopularity — as Modi is now finding out.
These are matters that cannot be settled in a single book. Crabtree has given us the most comprehensive and eminently readable tour of economic India, which, as he shows, cannot be understood without a knowledge of how political India works.
India is now one of the world’s economic hotspots. Stock images of starving children, miserable peasants and cheating shop owners have been augmented with those of high-tech development and booming cities. India is now the world’s fastest-growing economy. It is about to become the third-largest economy — at least in terms of purchasing power dollars if not yet real ones. Foreign investors are rushing in. In The Billionaire Raj, James Crabtree has written a compelling guide to what awaits them.
To make India more accessible to the western investor, Crabtree draws an analogy between America’s Gilded Age at the end of the 19th century — that plutocratic moment of the Vanderbilts, Goulds, Rockefellers — and the newest of India’s billionaires. Did you know that India now has more billionaires than Russia?
This sudden enrichment was the result of the long boom of globalisation from 1991-2008. India had initiated reforms to escape from four decades of conservative socialism, initiated by Jawaharlal Nehru, which did not trust private business and put the state in command. The Indian state is inefficient as it is, but disastrous in running business. Its airline Air India has racked up billions in losses; its banks are mired in non-performing loans.
In 1991, Manmohan Singh, then finance minister, bit the bullet and began to liberalise the economy. Tariffs were cut, import licensing was removed, and the rupee was devalued twice within a week. He had little choice because India had run out of foreign exchange reserves and had to pawn its gold to secure a loan from the International Monetary Fund.
The reforms took time to work but, from 1998 onwards, the economy secured high single-digit growth rates, triple the so-called “Hindu growth rate” of 3 per cent per year that prevailed during the first 30 years of independence. With a decade-long growth spurt from 1998 to 2008 came the vast fortunes generated in a crony-capitalist relationship between the ruling Congress party and its private sector clients and financiers. Crabtree, a former FT Mumbai correspondent, gives us a detailed treatment of the links between the politicians needing money to finance elections that were both costly and cheap. (The 2014 elections cost $5bn — or $6 per voter.)
Crabtree gives entertaining portraits of some billionaires. The opening chapters cover Mukesh Ambani and his towering residential extravaganza Antilla, the most expensive house ever built in India, which now dominates the Mumbai skyline; the fugitive Vijay Mallya, a drinks tycoon who was once known as the King of Good Times; the reticent Gautam Adani, an infrastructure entrepreneur who owns ports, mines and refineries. Dhirubhai Ambani, the patriarch of the Reliance group, figured out how to negotiate government regulations and expand his business while keeping the ruling party on his side. Mallya went so far as to be voted into a seat in the Rajya Sabha, the upper house of parliament, after a reported donation of 550m rupees ($10m in those days). Adani prospered in Gujarat with the reported blessings of Narendra Modi while he was chief minister of the state in India’s north-west, where the politician enjoyed both a clean reputation and business-friendly credentials.
Crabtree shows both how deep corruption reaches into electoral politics — but also how functional it is
Beyond the personalities lies another part of the puzzle. Corruption has gone deep in the system. Elections cannot be financed with just legally declared donations. The donors want to escape attention of the tax man, as do the party leaders. It is a symbiotic relationship. Not even Prime Minister Modi, as he has been since 2014, is about to change it, though he has moved against crony capitalism. Armed with an electoral majority, he has set about breaking the political mould, ending the near 70-year hegemony of Congress. He has sundered the crony ties that the top echelon of government enjoyed with the “promoters” of infrastructure projects during the Congress years. Back then the nationalised banks had to lend money to a favoured few and it was understood that the money would not be repaid. No more. Insolvency procedures have been toughened. Debtors can no longer shield their assets from creditors. It was this that sent Mallya abroad.
This book was written before these drastic changes. But whether he wins or loses the next elections, Modi has made revival of crony capitalism difficult.
There are also other concerns. Crabtree worries over Modi’s dual persona as a development enthusiast as well as a Hindu nationalist. The fear is that this may increase intolerance towards minorities — Muslims and Christians — and disrupt peaceful economic progress.
Crabtree’s vivid portrayal of the corruption of politics is very informative, and thought-provoking. He travels the country to show both how deep corruption reaches into electoral politics — but also how functional it is. When an economy is regulated, riddled with permits needed to do business, a few palms may need to be greased. A payment — or rent, as economists call it — may be required. But the rewards are considerable. The corruption market works. It may be immoral but it is not inefficient.
It would be better if India became less corrupt. Crabtree thinks so. That would require a lot of courage and an ability to pursue radical reform. The leader who embarks upon it risks unpopularity — as Modi is now finding out.
These are matters that cannot be settled in a single book. Crabtree has given us the most comprehensive and eminently readable tour of economic India, which, as he shows, cannot be understood without a knowledge of how political India works.
Tuesday 7 November 2017
Saturday 28 October 2017
Friday 1 September 2017
Demonetisation has totally failed to curb black money
Editorial in The Hindu
On November 8, 2016, when Prime Minister Narendra Modi announced to the nation that ₹500 and ₹1,000 currency notes would cease to be legal tender from midnight, he was unequivocal in asserting that the measure was aimed at breaking “the grip of corruption and black money”. Explaining how the shock move would work, he said: “The... notes hoarded by anti-national and anti-social elements will become just worthless pieces of paper.” The premise then was that a sizeable part of the ₹15.44 lakh crore of the two high-value banknotes would remain in the hands of the holders and would not be tendered back into the banking system due to fear of punitive government action. There were hints that the windfall gains made from the scrapped currency notes that couldn’t be deposited in banks, estimated at anything between ₹3 lakh crore to ₹5 lakh crore, would be deployed for larger purposes — social welfare schemes and infrastructure projects, for example. This would be effected with the Reserve Bank of India, which bears the liability to honour the value of the country’s currency, paying as dividend to the government the majority, if not all, of its extinguished liabilities. But with the RBI’s annual report, released on August 30, showing that as much as 98.96% of the demonetised currency had returned to the central bank as of June 30, the gains in the form of cancelled liability from the note ban have been piffling.
For the Finance Minister to now claim that the “confiscation of money” had not been an objective, and for his Ministry to say that the government “had expected all the SBNs [specified bank notes] to come back to the banking system to become effectively usable currency,” is disingenuous. If that were indeed the case, the rationale behind the various stop-go announcements that followed in the wake of the November 8 decision are hard to fathom. For instance, the RBI circular setting a ₹5,000 limit on deposits of withdrawn notes unless done under the government’s amnesty scheme, tendered for the first time or explained otherwise was clearly a measure intended to dissuade bank customers from returning the demonetised currency. True, demonetisation has had some beneficial spin-offs such as arguably fostering greater compliance with the tax laws and reducing the economy’s reliance on cash through increased adoption of digital payments. But such gains could have been achieved by other and less self-defeating ways. As things stand, it is unclear how many of those who have laundered their black money will be punished. Despite the large amounts that were deposited in banks post-demonetisation, it is doubtful whether the Income Tax authorities have the necessary resources to track down and penalise the corrupt. All in all, the costs of demonetisation, which has resulted in robbing the country of its economic momentum, are far greater than the benefits it has bestowed.
On November 8, 2016, when Prime Minister Narendra Modi announced to the nation that ₹500 and ₹1,000 currency notes would cease to be legal tender from midnight, he was unequivocal in asserting that the measure was aimed at breaking “the grip of corruption and black money”. Explaining how the shock move would work, he said: “The... notes hoarded by anti-national and anti-social elements will become just worthless pieces of paper.” The premise then was that a sizeable part of the ₹15.44 lakh crore of the two high-value banknotes would remain in the hands of the holders and would not be tendered back into the banking system due to fear of punitive government action. There were hints that the windfall gains made from the scrapped currency notes that couldn’t be deposited in banks, estimated at anything between ₹3 lakh crore to ₹5 lakh crore, would be deployed for larger purposes — social welfare schemes and infrastructure projects, for example. This would be effected with the Reserve Bank of India, which bears the liability to honour the value of the country’s currency, paying as dividend to the government the majority, if not all, of its extinguished liabilities. But with the RBI’s annual report, released on August 30, showing that as much as 98.96% of the demonetised currency had returned to the central bank as of June 30, the gains in the form of cancelled liability from the note ban have been piffling.
For the Finance Minister to now claim that the “confiscation of money” had not been an objective, and for his Ministry to say that the government “had expected all the SBNs [specified bank notes] to come back to the banking system to become effectively usable currency,” is disingenuous. If that were indeed the case, the rationale behind the various stop-go announcements that followed in the wake of the November 8 decision are hard to fathom. For instance, the RBI circular setting a ₹5,000 limit on deposits of withdrawn notes unless done under the government’s amnesty scheme, tendered for the first time or explained otherwise was clearly a measure intended to dissuade bank customers from returning the demonetised currency. True, demonetisation has had some beneficial spin-offs such as arguably fostering greater compliance with the tax laws and reducing the economy’s reliance on cash through increased adoption of digital payments. But such gains could have been achieved by other and less self-defeating ways. As things stand, it is unclear how many of those who have laundered their black money will be punished. Despite the large amounts that were deposited in banks post-demonetisation, it is doubtful whether the Income Tax authorities have the necessary resources to track down and penalise the corrupt. All in all, the costs of demonetisation, which has resulted in robbing the country of its economic momentum, are far greater than the benefits it has bestowed.
Wednesday 16 August 2017
Adani mining giant faces financial fraud claims as it bids for Australian coal loan
by Michael Safi in The Guardian
Exclusive: Allegations by Indian customs of huge sums being siphoned off to tax havens from projects are contained in legal documents but denied by company
Details of the alleged 15bn rupee (US$235m) fraud are contained in an Indian customs intelligence notice obtained by the Guardian, excerpts of which are published for the first time here.
The directorate of revenue intelligence (DRI) file, compiled in 2014, maps out a complex money trail from India through South Korea and Dubai, and eventually to an offshore company in Mauritius allegedly controlled by Vinod Shantilal Adani, the older brother of the billionaire Adani Group chief executive, Gautam Adani.
Vinod Adani is the director of four companies proposing to build a railway line and expand a coal port attached to Queensland’s vast Carmichael mine project.
The proposed mine, which would be Australia’s largest, has been the source of years of intense controversy, legal challenges and protests over its possible environmental impact.
Abbot Point, surrounded by wetlands and coral reefs, is set to become the world’s largest coal port should the proposed Adani expansion go ahead. Photograph: Tom Jefferson / Greenpeace
Expanding the coal port to accommodate the mine will require dredging an estimated 1.1m cubic metres of spoil near the Great Barrier Reef marine park. Coal from the mine will also produce annual emissions equivalent to those of Malaysia or Austria according to one study.
One of the few remaining hurdles for the Adani Group is to raise finance to build the mine as well as a railway line to transport coal from the site to a port at Abbot Point on the Queensland coast.
To finance the railway Adani hopes to persuade the Northern Australia Infrastructure Facility (Naif), an Australian government-backed investment fund, to loan the Adani Group or a related entity about US$700m (A$900m) in public money.
While it awaits the decision on the loan, in Delhi the company is also expecting the judgment of a legal authority appointed under Indian financial crime laws in connection to allegations it siphoned borrowed money overseas.
The Adani Group fully denies the accusations, which it has challenged in submissions to the authority.
The investigation
News of the investigation was first reported in India three years ago, but the full customs intelligence document reveals forensic details of the workings of the alleged fraud which have not been publicly revealed.
The 97-page file accuses the Adani Group of ordering hundreds of millions of dollars’ worth of equipment for an electricity project in western India’s Maharashtra state using a front company in Dubai.
To read the pdf click here.
The Dubai company allegedly sold the exact same equipment back to Adani Group-controlled businesses in India at massively inflated prices, in some instances said to be eight times the sale price.
According to the allegations in the file, the effect of these transactions was that the Adani Group spent an average 400% more for the materials. That money was allegedly paid to a company Indian authorities allege was owned through a series of shell companies leading to a Mauritius trust controlled by Vinod Adani.
If true, one effect of the alleged scheme would have been to move vast sums of money from the Adani Group’s domestic accounts into offshore bank accounts where it could no longer be taxed or accounted for.
Because tariffs for using electricity transmission networks are determined partly by what they cost to build, if the DRI’s accusations are correct, the overvaluation of capital goods would have been likely to have led to higher power prices for Indian consumers.
Adani Power company thermal power plant at Mundra, India. Photograph: Sam Panthaky/AFP/Getty Images
A significant proportion of the money the Adani Group allegedly siphoned out of India was provided by taxpayers in the form of loans from the publicly-owned State Bank of India and ICICI, a private bank. There is no suggestion either bank was aware of or involved in any illegal activity.
‘We are cooperating with investigating agencies’
The Adani Group said in a statement to the Guardian on behalf of itself, its subsidiaries, and Vinod Adani that it “strongly denies the allegations of overvaluation”.
Government loan to Adani could be tainted by interference, economists say
“It is a standard procedure for the group to follow international competitive bidding route for major capital expenditures to ensure transparency and competitiveness in the process. All our transactions are always conducted within the framework of extant regulatory guidelines and provisions,” it said.
“The fact that our projects have incurred the lowest cost across central, state and private utility players has gone to establish the robustness of the processes followed by our group.
“It may be noted that Mr Vinod Adani who is the elder brother of Mr Gautam Adani has been a non-resident Indian for about 30 years and has his own established business interests outside India,” the statement said.
“Adani Group is aware of the investigations being conducted by the DRI, and has fully cooperated, and shall continue to cooperate with the investigating agencies.”
The Australian loan
The Adani Group, or a linked entity, has reportedly been granted “conditional approval” for the US$700m (AU$900m) concessional loan from Naif, the Australian government investment fund.
But due to secrecy around the operation of the investment fund, it is not clear whether the loan application discloses the existence of the DRI notice or the ongoing legal proceedings, or whether the applicant is required to do so under the Naif’s anti-money laundering provisions.
Adani Group chairman Gautam Adani meets with Queensland premier Annastacia Palaszczuk in 2016. Photograph: Cameron Laird/AAP
Adani Group did not clarify whether it had informed Naif about the allegations when asked by the Guardian.
Naif’s investment mandate includes a clause preventing it from “act[ing] in a way that is likely to cause damage to the commonwealth government’s reputation, or that of a relevant state or territory government”.
Vinod Adani is currently listed as the sole director of four Singapore-based companies which, through their Australian subsidiaries, are proposing to build the railway line using the government loan. The companies also control a project to expand the Abbot Point port.
All four entities are ultimately owned by Atulya Resources Limited, an Adani-controlled company in the Cayman Islands.
Status of the Indian investigation
The Guardian understands the allegations of over-invoicing have been passed from the DRI to the Enforcement Directorate (ED), an Indian agency tasked with investigating financial crimes.
The Adani Group says the case is currently before a legal authority, the Adjudicating Authority, indicating that Indian officials are pressing either to seize assets they regard as being connected to money laundering or to levy a fine up to three times the sum allegedly siphoned overseas.
The company declined requests to clarify what if any penalty the authorities are seeking, but a spokesman said a decision was expected shortly. “We follow the process of corporate governance and comply with the applicable laws,” he said.
“All our transactions are always conducted within the framework of law. We have already submitted our detailed reply. Adjudication process on the subject is going on and we expect the order in near future.”
The Guardian is publishing excerpts from the DRI file in the interests of ensuring Naif, as well as the public, have access to as much relevant information as possible in assessing whether Adani or linked companies would be suitable recipients of public money.
In a separate case last year, six Adani subsidiaries were listed among 40 other companies being investigated for allegedly running a similar price-inflation scheme. The companies are accused of inflating the price of coal imports from Indonesia to hide profits in overseas tax havens.
The DRI and the ED did not respond to a request to clarify the status of the investigations.
The alleged money trail
India is electricity-starved. More than 240 million Indians – enough people to form the fifth-largest country on Earth – lack access to regular power.
In the early 1990s, to encourage power companies to build electrical infrastructure, the Indian government eliminated import tariffs on technical equipment such as reactors and transformers. Profit margins on these projects increased overnight.
Adani saw the business opportunity. In 2010, the Maharashtra Eastern Grid Power Transmission Company Limited (MEGPTCL), a wholly owned subsidiary of Adani Enterprises, was granted a license to develop two electricity transmission networks in the north-east of the state.
The company used another Adani subsidiary, PMC Projects, to source the equipment it would need to build the networks. In turn, PMC, subcontracted the work to a company in Dubai.
According to the investigators’ report, bank records suggest that that company, Electrogen Infra FZE (EIF), charged significant – and to Indian authorities, suspicious – markups on the equipment it sold to PMC.
In one of the 57 invoices cited in the report, EIF is alleged to have ordered equipment from Hyundai Heavy Industries in South Korea. Bank records allegedly show the company paid Hyundai about US$65m.
According to the DRI, it sold the same equipment to PMC for about US$260m – a mark-up of nearly 400%.
Extract from page 14-15 of the Directorate of Revenue Intelligence file on Adani Group. Photograph: The Guardian
“[This] appears to be an abnormal and gross inflation, contrary to ordinary economic logic and prudence,” investigators concluded.
In total, the report alleges EIF made about 26 orders from Hyundai Heavy Industries and sold them onto PMC for an average mark-up of more than 400%, making a profit margin of US$189m.
There is no suggestion Hyundai Heavy Industries or any other supplier was aware of or involved in any illegality.
Extract page 19-20 of the DRI file, section 4.1.16. Photograph: The Guardian
EIF allegedly purchased another 25 shipments of equipment from three companies in China. According to the report, these were sold to the Adani Group for an average markup of about 860%.
Investigators calculated the total assessable value of the allegedly marked-up invoices to be nearly 15bn rupees.
Extract from page 78-79 of the DRI file, section 15.4. Photograph: The Guardian
“Given the scale and extent of invoice inflation, it is apparent that it [was done] with fraudulent intent of siphoning money from India,” the DRI said.
Who controls the companies?
Key to the alleged fraud, according to investigators, is that EIF, the company subcontracted to purchase the equipment from manufacturers in South Korea and China, was directly controlled by the Adani Group and its associates.
Investigators claim EIF was partly staffed by ex-Adani Group employees who had recently left the company.
According to a letter from the company to an Indian bank that is cited in the notice, EIF was owned by another company called Electrogen Infra Holding Pvt Ltd (EIH). The trail of ownership eventually leads to a trust based in Mauritius – headed by Vinod Adani.
Extract from page 21-22 of the DRI file, section 4.2.3. Photograph: The Guardian
Investigators concluded: “From the above information given to the bank by EIF, it appears that Vinod Adani had a direct control over the activities of EIF through the Asankhya Resources Family Trust.”
Vinod Adani is also listed as having been the director of EIH between January 2010 and May 2011, though the notice states he told investigators he had no involvement in the day-to-day running of the company.
Investigators also claim to have discovered that an employee of the Adani Group subsidiary PMC had been granted permission by EIF staff to sign multimillion-dollar supply contracts on its behalf.
“All these go to show that there is no distinction between PMC and EIF, they are only working for common interest as part of a large modus-operandi for siphoning off money from India by invoice inflation,” investigators concluded.
The DRI and the ED were both contacted for comment. Attempts were made to contact EIF but the company could not be reached on its listed email or phone number.
Hyundai Heavy Industries did not respond to a request for comment.
It is unclear when the allegations of invoice inflation will be resolved in Delhi other than the Adani spokesman saying that they expected an order “in near future.” In Queensland, Naif’s decision on whether to grant Adani the nearly A$1bn loan is expected by the end of this year.
Exclusive: Allegations by Indian customs of huge sums being siphoned off to tax havens from projects are contained in legal documents but denied by company
Men wearing masks of Australian prime minister Malcolm Turnbull and Adani chairman Gautam Adani protest outside Parliament House in Canberra. Photograph: Lukas Coch/AAP
A global mining giant seeking public funds to develop one of the world’s largest coal mines in Australia has been accused of fraudulently siphoning hundreds of millions of dollars of borrowed money into overseas tax havens.
Indian conglomerate the Adani Group is expecting a legal decision in the “near future” in connection with allegations it inflated invoices for an electricity project in India to shift huge sums of money into offshore bank accounts.
A global mining giant seeking public funds to develop one of the world’s largest coal mines in Australia has been accused of fraudulently siphoning hundreds of millions of dollars of borrowed money into overseas tax havens.
Indian conglomerate the Adani Group is expecting a legal decision in the “near future” in connection with allegations it inflated invoices for an electricity project in India to shift huge sums of money into offshore bank accounts.
Details of the alleged 15bn rupee (US$235m) fraud are contained in an Indian customs intelligence notice obtained by the Guardian, excerpts of which are published for the first time here.
The directorate of revenue intelligence (DRI) file, compiled in 2014, maps out a complex money trail from India through South Korea and Dubai, and eventually to an offshore company in Mauritius allegedly controlled by Vinod Shantilal Adani, the older brother of the billionaire Adani Group chief executive, Gautam Adani.
Vinod Adani is the director of four companies proposing to build a railway line and expand a coal port attached to Queensland’s vast Carmichael mine project.
The proposed mine, which would be Australia’s largest, has been the source of years of intense controversy, legal challenges and protests over its possible environmental impact.
Abbot Point, surrounded by wetlands and coral reefs, is set to become the world’s largest coal port should the proposed Adani expansion go ahead. Photograph: Tom Jefferson / Greenpeace
Expanding the coal port to accommodate the mine will require dredging an estimated 1.1m cubic metres of spoil near the Great Barrier Reef marine park. Coal from the mine will also produce annual emissions equivalent to those of Malaysia or Austria according to one study.
One of the few remaining hurdles for the Adani Group is to raise finance to build the mine as well as a railway line to transport coal from the site to a port at Abbot Point on the Queensland coast.
To finance the railway Adani hopes to persuade the Northern Australia Infrastructure Facility (Naif), an Australian government-backed investment fund, to loan the Adani Group or a related entity about US$700m (A$900m) in public money.
While it awaits the decision on the loan, in Delhi the company is also expecting the judgment of a legal authority appointed under Indian financial crime laws in connection to allegations it siphoned borrowed money overseas.
The Adani Group fully denies the accusations, which it has challenged in submissions to the authority.
The investigation
News of the investigation was first reported in India three years ago, but the full customs intelligence document reveals forensic details of the workings of the alleged fraud which have not been publicly revealed.
The 97-page file accuses the Adani Group of ordering hundreds of millions of dollars’ worth of equipment for an electricity project in western India’s Maharashtra state using a front company in Dubai.
To read the pdf click here.
The Dubai company allegedly sold the exact same equipment back to Adani Group-controlled businesses in India at massively inflated prices, in some instances said to be eight times the sale price.
According to the allegations in the file, the effect of these transactions was that the Adani Group spent an average 400% more for the materials. That money was allegedly paid to a company Indian authorities allege was owned through a series of shell companies leading to a Mauritius trust controlled by Vinod Adani.
If true, one effect of the alleged scheme would have been to move vast sums of money from the Adani Group’s domestic accounts into offshore bank accounts where it could no longer be taxed or accounted for.
Because tariffs for using electricity transmission networks are determined partly by what they cost to build, if the DRI’s accusations are correct, the overvaluation of capital goods would have been likely to have led to higher power prices for Indian consumers.
Adani Power company thermal power plant at Mundra, India. Photograph: Sam Panthaky/AFP/Getty Images
A significant proportion of the money the Adani Group allegedly siphoned out of India was provided by taxpayers in the form of loans from the publicly-owned State Bank of India and ICICI, a private bank. There is no suggestion either bank was aware of or involved in any illegal activity.
‘We are cooperating with investigating agencies’
The Adani Group said in a statement to the Guardian on behalf of itself, its subsidiaries, and Vinod Adani that it “strongly denies the allegations of overvaluation”.
Government loan to Adani could be tainted by interference, economists say
“It is a standard procedure for the group to follow international competitive bidding route for major capital expenditures to ensure transparency and competitiveness in the process. All our transactions are always conducted within the framework of extant regulatory guidelines and provisions,” it said.
“The fact that our projects have incurred the lowest cost across central, state and private utility players has gone to establish the robustness of the processes followed by our group.
“It may be noted that Mr Vinod Adani who is the elder brother of Mr Gautam Adani has been a non-resident Indian for about 30 years and has his own established business interests outside India,” the statement said.
“Adani Group is aware of the investigations being conducted by the DRI, and has fully cooperated, and shall continue to cooperate with the investigating agencies.”
The Australian loan
The Adani Group, or a linked entity, has reportedly been granted “conditional approval” for the US$700m (AU$900m) concessional loan from Naif, the Australian government investment fund.
But due to secrecy around the operation of the investment fund, it is not clear whether the loan application discloses the existence of the DRI notice or the ongoing legal proceedings, or whether the applicant is required to do so under the Naif’s anti-money laundering provisions.
Adani Group chairman Gautam Adani meets with Queensland premier Annastacia Palaszczuk in 2016. Photograph: Cameron Laird/AAP
Adani Group did not clarify whether it had informed Naif about the allegations when asked by the Guardian.
Naif’s investment mandate includes a clause preventing it from “act[ing] in a way that is likely to cause damage to the commonwealth government’s reputation, or that of a relevant state or territory government”.
Vinod Adani is currently listed as the sole director of four Singapore-based companies which, through their Australian subsidiaries, are proposing to build the railway line using the government loan. The companies also control a project to expand the Abbot Point port.
All four entities are ultimately owned by Atulya Resources Limited, an Adani-controlled company in the Cayman Islands.
Status of the Indian investigation
The Guardian understands the allegations of over-invoicing have been passed from the DRI to the Enforcement Directorate (ED), an Indian agency tasked with investigating financial crimes.
The Adani Group says the case is currently before a legal authority, the Adjudicating Authority, indicating that Indian officials are pressing either to seize assets they regard as being connected to money laundering or to levy a fine up to three times the sum allegedly siphoned overseas.
The company declined requests to clarify what if any penalty the authorities are seeking, but a spokesman said a decision was expected shortly. “We follow the process of corporate governance and comply with the applicable laws,” he said.
“All our transactions are always conducted within the framework of law. We have already submitted our detailed reply. Adjudication process on the subject is going on and we expect the order in near future.”
The Guardian is publishing excerpts from the DRI file in the interests of ensuring Naif, as well as the public, have access to as much relevant information as possible in assessing whether Adani or linked companies would be suitable recipients of public money.
In a separate case last year, six Adani subsidiaries were listed among 40 other companies being investigated for allegedly running a similar price-inflation scheme. The companies are accused of inflating the price of coal imports from Indonesia to hide profits in overseas tax havens.
The DRI and the ED did not respond to a request to clarify the status of the investigations.
The alleged money trail
India is electricity-starved. More than 240 million Indians – enough people to form the fifth-largest country on Earth – lack access to regular power.
In the early 1990s, to encourage power companies to build electrical infrastructure, the Indian government eliminated import tariffs on technical equipment such as reactors and transformers. Profit margins on these projects increased overnight.
Adani saw the business opportunity. In 2010, the Maharashtra Eastern Grid Power Transmission Company Limited (MEGPTCL), a wholly owned subsidiary of Adani Enterprises, was granted a license to develop two electricity transmission networks in the north-east of the state.
The company used another Adani subsidiary, PMC Projects, to source the equipment it would need to build the networks. In turn, PMC, subcontracted the work to a company in Dubai.
According to the investigators’ report, bank records suggest that that company, Electrogen Infra FZE (EIF), charged significant – and to Indian authorities, suspicious – markups on the equipment it sold to PMC.
In one of the 57 invoices cited in the report, EIF is alleged to have ordered equipment from Hyundai Heavy Industries in South Korea. Bank records allegedly show the company paid Hyundai about US$65m.
According to the DRI, it sold the same equipment to PMC for about US$260m – a mark-up of nearly 400%.
Extract from page 14-15 of the Directorate of Revenue Intelligence file on Adani Group. Photograph: The Guardian
“[This] appears to be an abnormal and gross inflation, contrary to ordinary economic logic and prudence,” investigators concluded.
In total, the report alleges EIF made about 26 orders from Hyundai Heavy Industries and sold them onto PMC for an average mark-up of more than 400%, making a profit margin of US$189m.
There is no suggestion Hyundai Heavy Industries or any other supplier was aware of or involved in any illegality.
Extract page 19-20 of the DRI file, section 4.1.16. Photograph: The Guardian
EIF allegedly purchased another 25 shipments of equipment from three companies in China. According to the report, these were sold to the Adani Group for an average markup of about 860%.
Investigators calculated the total assessable value of the allegedly marked-up invoices to be nearly 15bn rupees.
Extract from page 78-79 of the DRI file, section 15.4. Photograph: The Guardian
“Given the scale and extent of invoice inflation, it is apparent that it [was done] with fraudulent intent of siphoning money from India,” the DRI said.
Who controls the companies?
Key to the alleged fraud, according to investigators, is that EIF, the company subcontracted to purchase the equipment from manufacturers in South Korea and China, was directly controlled by the Adani Group and its associates.
Investigators claim EIF was partly staffed by ex-Adani Group employees who had recently left the company.
According to a letter from the company to an Indian bank that is cited in the notice, EIF was owned by another company called Electrogen Infra Holding Pvt Ltd (EIH). The trail of ownership eventually leads to a trust based in Mauritius – headed by Vinod Adani.
Extract from page 21-22 of the DRI file, section 4.2.3. Photograph: The Guardian
Investigators concluded: “From the above information given to the bank by EIF, it appears that Vinod Adani had a direct control over the activities of EIF through the Asankhya Resources Family Trust.”
Vinod Adani is also listed as having been the director of EIH between January 2010 and May 2011, though the notice states he told investigators he had no involvement in the day-to-day running of the company.
Investigators also claim to have discovered that an employee of the Adani Group subsidiary PMC had been granted permission by EIF staff to sign multimillion-dollar supply contracts on its behalf.
“All these go to show that there is no distinction between PMC and EIF, they are only working for common interest as part of a large modus-operandi for siphoning off money from India by invoice inflation,” investigators concluded.
The DRI and the ED were both contacted for comment. Attempts were made to contact EIF but the company could not be reached on its listed email or phone number.
Hyundai Heavy Industries did not respond to a request for comment.
It is unclear when the allegations of invoice inflation will be resolved in Delhi other than the Adani spokesman saying that they expected an order “in near future.” In Queensland, Naif’s decision on whether to grant Adani the nearly A$1bn loan is expected by the end of this year.
Wednesday 14 June 2017
Wednesday 7 June 2017
Why we inject cricket with a greater moral purpose
Suresh Menon in The Hindu
We pour into sport our highest emotions and our greatest passions because that is a way of rescuing it from meaninglessness
It is facile to say that Indians do not understand the concept of “conflict of interest”. We have had in a parliamentary panel on anti-tobacco legislation an MP known as the “beedi king of Maharashtra”. Vijay Mallya, of Kingfisher Airlines, served on the parliamentary panel on civil aviation.
It is not that we don’t understand the concept — we merely turn a blind eye to it, arguing that parliamentary panels, for instance, need “experts” in the field. Our faith in the integrity of our businessmen and politicians is touching.
Why therefore should we make such a big deal about conflicts of interest in cricket?
Undermining the spirit
The simple answer, of course, is that just because it is condoned elsewhere, it does not follow that cricket should too. It is ethically wrong, even if sometimes it is legal, as in the case of Rahul Dravid and others who are given a ten-month contract with the BCCI so they can then sign a two-month contract with an IPL team. Contracts with in-built loopholes are a testimony to the nudge-nudge, wink-wink style of the BCCI’s functioning. They go against the spirit of the game.
Many greats have played the dual game, but that doesn’t make it right. In 1956, as selector, Don Bradman picked the Australian team to England. He then wrote on the series for the Daily Mail. “He set an unusual precedent,” wrote his biographer Irving Rosenwater subtly.
In a clear-headed letter following his resignation from the Committee of Administrators, Ramachandra Guha makes a forceful point: “The BCCI management is too much in awe of the superstars to question their violation of norms and procedures. For their part, BCCI office-bearers like to enjoy discretionary powers, so that the coaches or commentators they favour are indebted to them and do not ever question their own mistakes or malpractices.”
Guha’s indictment of the system
Guha’s letter indicts the system, and if the BCCI (or the CoA, which sometimes looks and acts like the BCCI in different clothes) has the interests of the game at heart, then it will have to be acted upon. It has brought into focus another aspect of cricket corruption — the ethical one. It has taken a fan of cricket — and not just a fan of cricketers, which is what most Indians are — to point out the anomalies.
Guha has made the sensible suggestion that conflicts of interest which exist from the highest level to the lowest are best dealt with at the top, saying, “This would have a ripple effect downwards.”
So why cricket? Why should the sport — which is believed to mirror society — answer to a higher morality than other fields of human endeavour?
To understand this, one must acknowledge the essential nature of sport. It is artificial, it is in the large sense meaningless, it is “something that does not matter but is performed as if it did,” to quote Simon Barnes.
The very artificiality of sport gives us the right to inject it with a greater moral purpose than, say, business or politics. Even politicians who are otherwise known to be shady are expected to be honest on the sports field. Bill Clinton might have cheated on his wife, but had he cheated on a golf course, there would have been no redemption.
Being artificial means sport is not of the real world; the sharp practices of the real world should not be allowed to seep into sport. Thus sport cannot be a mere reflection of society, but has to belong to a higher realm, a fantasy world where everything is perfect. Or should aim to be.
Aspire for perfection
The argument here is not that cricket is perfect, but that it ought to aspire towards perfection, both on and off the field. The process is important even if the product sometimes disappoints.
We pour into sport our highest emotions and our greatest passions because that is a way of rescuing it from meaninglessness. It is relevant because our emotions make it relevant — and it gives us an opportunity to coat the essential artificiality of the activity with the reality of our most positive feelings.
Cricket is full of contradictions. Administrators who should be preserving its status as a touchstone of goodness cheat and lie, and live for the bottom line. Players who understand its place in society and owe everything to it, compromise for the extra dollar. It is a sickening win-win situation: the BCCI keeps the players happy in return for their silence.
One or the other group has to ensure they are guardians of the sport. In India, it was finally the Supreme Court which took upon itself that role because neither officials nor players had the inclination.
Guha’s letter has raised some fundamental questions. Not just about the BCCI or the CoA. But about our relationship with cricket. And how much we are willing to ignore uncomfortable truths so long as a Kohli scores a hundred or an Ashwin claims five wickets. Passion should be made of sterner stuff.
We pour into sport our highest emotions and our greatest passions because that is a way of rescuing it from meaninglessness
It is facile to say that Indians do not understand the concept of “conflict of interest”. We have had in a parliamentary panel on anti-tobacco legislation an MP known as the “beedi king of Maharashtra”. Vijay Mallya, of Kingfisher Airlines, served on the parliamentary panel on civil aviation.
It is not that we don’t understand the concept — we merely turn a blind eye to it, arguing that parliamentary panels, for instance, need “experts” in the field. Our faith in the integrity of our businessmen and politicians is touching.
Why therefore should we make such a big deal about conflicts of interest in cricket?
Undermining the spirit
The simple answer, of course, is that just because it is condoned elsewhere, it does not follow that cricket should too. It is ethically wrong, even if sometimes it is legal, as in the case of Rahul Dravid and others who are given a ten-month contract with the BCCI so they can then sign a two-month contract with an IPL team. Contracts with in-built loopholes are a testimony to the nudge-nudge, wink-wink style of the BCCI’s functioning. They go against the spirit of the game.
Many greats have played the dual game, but that doesn’t make it right. In 1956, as selector, Don Bradman picked the Australian team to England. He then wrote on the series for the Daily Mail. “He set an unusual precedent,” wrote his biographer Irving Rosenwater subtly.
In a clear-headed letter following his resignation from the Committee of Administrators, Ramachandra Guha makes a forceful point: “The BCCI management is too much in awe of the superstars to question their violation of norms and procedures. For their part, BCCI office-bearers like to enjoy discretionary powers, so that the coaches or commentators they favour are indebted to them and do not ever question their own mistakes or malpractices.”
Guha’s indictment of the system
Guha’s letter indicts the system, and if the BCCI (or the CoA, which sometimes looks and acts like the BCCI in different clothes) has the interests of the game at heart, then it will have to be acted upon. It has brought into focus another aspect of cricket corruption — the ethical one. It has taken a fan of cricket — and not just a fan of cricketers, which is what most Indians are — to point out the anomalies.
Guha has made the sensible suggestion that conflicts of interest which exist from the highest level to the lowest are best dealt with at the top, saying, “This would have a ripple effect downwards.”
So why cricket? Why should the sport — which is believed to mirror society — answer to a higher morality than other fields of human endeavour?
To understand this, one must acknowledge the essential nature of sport. It is artificial, it is in the large sense meaningless, it is “something that does not matter but is performed as if it did,” to quote Simon Barnes.
The very artificiality of sport gives us the right to inject it with a greater moral purpose than, say, business or politics. Even politicians who are otherwise known to be shady are expected to be honest on the sports field. Bill Clinton might have cheated on his wife, but had he cheated on a golf course, there would have been no redemption.
Being artificial means sport is not of the real world; the sharp practices of the real world should not be allowed to seep into sport. Thus sport cannot be a mere reflection of society, but has to belong to a higher realm, a fantasy world where everything is perfect. Or should aim to be.
Aspire for perfection
The argument here is not that cricket is perfect, but that it ought to aspire towards perfection, both on and off the field. The process is important even if the product sometimes disappoints.
We pour into sport our highest emotions and our greatest passions because that is a way of rescuing it from meaninglessness. It is relevant because our emotions make it relevant — and it gives us an opportunity to coat the essential artificiality of the activity with the reality of our most positive feelings.
Cricket is full of contradictions. Administrators who should be preserving its status as a touchstone of goodness cheat and lie, and live for the bottom line. Players who understand its place in society and owe everything to it, compromise for the extra dollar. It is a sickening win-win situation: the BCCI keeps the players happy in return for their silence.
One or the other group has to ensure they are guardians of the sport. In India, it was finally the Supreme Court which took upon itself that role because neither officials nor players had the inclination.
Guha’s letter has raised some fundamental questions. Not just about the BCCI or the CoA. But about our relationship with cricket. And how much we are willing to ignore uncomfortable truths so long as a Kohli scores a hundred or an Ashwin claims five wickets. Passion should be made of sterner stuff.
Friday 2 June 2017
‘Superstar culture afflicts Indian cricket,’ writes Ram Guha as he resigns from panel
Dear Vinod,
It has been a pleasure working with Diana, Vikram and you in the Supreme Court Committee of Administrators. It has been an educative experience, spending long hours with three top-flight professionals from whom I have learned a lot in these past few months. However, it has been clear for some time now that my thoughts and views are adjacent to, and sometimes at odds with, the direction the Committee is taking as a whole. That is why I eventually decided to request the Supreme Court to relieve me of the responsibility, and submitted my letter of resignation to the Court on the morning of the 1st of June.
For the record, and in the interests of transparency, I am here listing the major points of divergence as I see it:
1. The question of conflict of interest, which had lain unaddressed ever since the Committee began its work, and which I have been repeatedly flagging since I joined. For instance, the BCCI has accorded preferential treatment to some national coaches (read Dravid) , by giving them ten month contracts for national duty, thus allowing them to work as IPL coaches/mentors for the remaining two months. This was done in an adhoc and arbitrary manner; the more famous the former player-turned-coach, the more likely was the BCCI to allow him to draft his own contract that left loopholes that he exploited to dodge the conflict of interest issue.
I have repeatedly pointed out that it is contrary to the spirit of the Lodha Committee for coaches or the support staff of the Indian senior or junior team, or for staff at the National Cricket Academy, to have contracts in the Indian Premier League. One cannot have dual loyalties of this kind and do proper justice to both. National duty must take precedence over club affiliation.
I had first raised this issue to my COA colleagues in an email of 1st February, and have raised it several times since. I had urged that coaches and support staff for national teams be paid an enhanced compensation, but that this conflict of interest be stopped. When, on the 11th of March, I was told that that there was a camp scheduled for young players at the National Cricket Academy but at least one national coach was likely to be away on IPL work and might not attend the camp, I wrote to you:
No person under contract with an India team, or with the NCA, should be allowed to moonlight for an IPL team too.
BCCI in its carelessness (or otherwise) might have drafted coaching/support staff contracts to allow this dual loyalty business, but while it might be narrowly legal as per existing contracts, it is unethical, and antithetical to team spirit, leading to much jealousy and heart-burn among the coaching staff as a whole. This practice is plainly wrong, as well as antithetical to the interests of Indian cricket.
I would like an explicit and early assurance from the BCCI management that such manifestly inequitous loopholes in coaching/support staff contracts will be plugged.
Yet no assurance was given, and no action was taken. The BCCI management and office-bearers have, in the absence of explicit directions from the COA, allowed the status quo to continue.
2. I have also repeatedly pointed to the anomaly whereby BCCI-contracted commentators simultaneously act as player agents. In a mail of 19th March to the COA I wrote:
Dear Colleagues,
Please have a look at this news report:
http://indianexpress.com/article/sports/cricket/pmg-signs-up-shikhar-dhawan-for-3-years-2776329/
Sunil Gavaskar is head of a company which represents Indian cricketers while commenting on those crickters as part of the BCCI TV commentary panel. This is a clear conflict of interest. Either he must step down/withdraw himself from PMG completely or stop being a commentator for BCCI.
I think prompt and swift action on this matter is both just and necessary. COA’s credibility and effectiveness hinges on our being able to take bold and correct decisions on such matters. The ‘superstar’ culture that afflicts the BCCI means that the more famous the player (former or present) the more leeway he is allowed in violating norms and procedures. (Dhoni was captain of the Indian team while holding a stake in a firm that represented some current India players.) This must stop – and only we can stop it.
Yet, despite my warnings, no action has been initiated in the several months that the Committee has been in operation.
As the mail quoted above noted, one reasons the conflict of interest issue has lingered unaddressed is that several of the game’s superstars, past and present, have been guilty of it. The BCCI management is too much in awe of these superstars to question their violation of norms and procedures. For their part, BCCI office-bearers like to enjoy discretionary powers, so that the coaches or commentrators they favour are indebted to them and do not ever question their own mistakes or malpractices. But surely a Supreme Court appointed body should not be intimidated by the past or present achievements of a cricketer, and instead seek to strive to be fair and just.
Conflict of interest is rampant in the State Associations as well. One famous former cricketer is contracted by media houses to comment on active players while serving as President of his State Association (read Ganguly). Others have served as office-bearers in one Association and simultaneously as coaches or managers in another. The awarding of business contracts to friends and relatives by office-bearers is reported to be fairly widespread.
Had we been more proactive in stopping conflict of interest within the BCCI (as per Lodha Committee recommendations, endorsed by the Court), this would surely have had a ripple effect downwards, putting pressure on State Assocations to clean up their act as well.
3. Unfortunately, this superstar syndrome has also distorted the system of Indian team contracts. As you will recall, I had pointed out that awarding MS Dhoni an ‘A’ contract when he had explicitly ruled himself out from all Test matches was indefensible on cricketing grounds, and sends absolutely the wrong message.
4. The way in which the contract of Anil Kumble, the current Head Coach of the senior team, has been handled. The Indian team’s record this past season has been excellent; and even if the players garner the bulk of the credit, surely the Head Coach and his support staff also get some. In a system based on justice and merit, the Head Coach’s term would have been extended. Instead, Kumble was left hanging, and then told the post would be re-advertised afresh.
Clearly, the issue has been handled in an extremely insensitive and unprofessional manner by the BCCI CEO and the BCCI office-bearers, with the COA, by its silence and inaction, unfortunately being complicit in this regard. (Recall that the Court Order of 30 January had expressly mandated us to supervise the management of BCCI.) In case due process had to be followed since Kumble’s original appointment was only for one year, why was this not done during April and May, when the IPL was on? If indeed the captain and the Head Coach were not getting along, why was this not attended to as soon as the Australia series was over in late March? Why was it left until the last minute, when a major international tournament was imminent, and when the uncertainty would undermine the morale and ability to focus of the coach, the captain and the team? And surely giving senior players the impression that they may have a veto power over the coach is another example of superstar culture gone berserk? Such a veto power is not permitted to any other top level professional team in any other sport in any other country. Already, in a dismaying departure from international norms, current Indian players enjoy a veto power on who can be the members of the commentary team (read departure of Harsha Bhogle). If it is to be coaches next, then perhaps the selectors and even office-bearers will follow?
5. Ever since the Supreme Court announced the formation of the COA, we have been inundated, individually and collectively, by hundreds of mails asking us to address various ills that afflict Indian cricket and its administration. While many of these issues were trivial or clearly beyond our purview, there was one concern that we should have done far more to address. This concerns the callous treatment to domestic cricket and cricketers, namely, those who represent their state in the Ranji Trophy, the Mushtaq Ali Trophy, and other inter-state tournaments. The IPL may be Indian cricket’s showpiece; but surely the enormous revenues it generates should be used to make our domestic players more financially secure? There are many more Indian cricketers who make their living via the Ranji Trophy than via IPL; besides, for us to have a consistently strong Test team (especially overseas) we need a robust inter-state competition and therefore must seek to compensate domestic players better.
And yet, shockingly, Ranji match fees have remained at a very low level (a mere Rs 30,000 odd for each day of play); moreover, cheques for match fees sent by the BCCI are sometimes not passed on by the state associations to the players. We need to learn from best practices in other countries, where domestic players are awarded annual contracts like those in the national team, while their match fees are reasonably competitive too.
Several months ago, the experienced cricket administrator Amrit Mathur prepared an excellent note on the need for better and fairer treatment of domestic players. Both Diana and I have repeatedly urged action, but this has not happened.
6. I believe it was a mistake for the COA to have stayed silent and inactive when the Supreme Court judgment was being so flagrantly violated by people clearly disqualified to serve as office bearers of state and even BCCI run cricket bodies. The disqualified men were openly attending BCCI meetings, claiming to represent their state association, and indeed played a leading role in the concerted (if fortunately in the end aborted) attempt to get the Indian team to boycott the Champions Trophy. All these illegalities were widely reported in the press; yet the COA did not bring them to the notice of the Court, and did not issue clear directions asking the offenders to desist either.
7. I believe that the lack of attention to these (and other such issues) is in part due to the absence of a senior and respected male cricketer on our Committee. Allow me to quote from a mail I wrote on 1 February 2017, before our first full meeting:
Dear fellow members,
I much look forward to meeting you all later today. I know Vikram already and greatly admire both Vinod and Diana for their remarkable work in their chosen fields, and am truly honoured to be working with them as well.
I presume apart from discussing IPL, etc, with the BCCI representative we will get some time to discuss the way forward separately. I have several ideas which I wish to share with you about our collective responsibility, and wanted in this mail to flag what is most important of these. This is that we must incorporate into our committee of administrators, either as a full member or as a special invitee, a senior male cricketer with the distinction and integrity that Diana has. That will greatly enhance both our credibility and our ability to make informed decisions.
The absence of a respected male cricketer in the COA has attracted a great deal of criticism already, much of it from important stakeholders in Indian cricket. It must be addressed and remedied. The amicus curae had suggested two outstanding names, Venkat and Bedi, both of whom were rejected because they were over seventy. However, there are some cricketers of the right age and experience who fit the bill. Based on my knowledge of the subject, I would say Javagal Srinath would be an excellent choice. He is a world-class cricketer, was a successful and scandal-free Secretary of the Karnataka State Cricket Association and is an ICC match referee, and comes from an educated technical background to boot. I strongly urge the Chairman and the other members to consider approaching him in this regard. He would complement Diana perfectly, and the combination of these two respected and top class former cricketers would enhance our credibility and effectiveness enormously.
While Srinath is in my view the best choice, there are other alternative names too. I hope we can set aside some time at our meeting to discuss and resolve the issue.
With regards
Ram
p.s. Needless to say, I have not discussed this with Srinath or with anyone else.
I raised this issue in a formal meeting of the COA as well, but unfortunately my proposal to invite a senior male cricketer to join the committee was not acted upon. We should have approached the Court to take necessary action, or else incorporated a senior, respected, male cricketer as a special invitee. With such a person on board the COA would have gained in experience, knowledge, understanding, and, not least, credibility. Indeed, had we such a person on board, the BCCI management and the office-bearers would have been compelled to be far more proactive in implementing the Lodha Committee recommendations than they have been thus far. As the only cricketer on the COA, Diana’s contributions have been invaluable; on many issues of administration and the rights of players she has brought a perspective based on a first-hand experience that the rest of us lacked. A male counterpart would have complemented and further enriched her contributions; but perhaps it is not too late to make amends.
8. While all our meetings were held in a cordial atmosphere, between meetings perhaps there was not adequate consultation, and there were several crucial decisions made where all the COA members were not brought into the loop. For instance, a capable, non-political Senior Counsel representing the COA and the BCCI in the Supreme Court was abruptly replaced by another Senior Counsel who is a party politician. Surely other COA members should have been consulted by email or by phone before this important change was made.
I have taken too much of your time already, but permit me to make one last suggestion. This is that the place vacated by me on the Committee of Administrators be filled by a senior, respected, male cricketer with administrative experience.
Let me in conclusion thank you for your courtesy and civility these past few months, and wish you and the Committee all the best in your future endevours.
With best wishes
Ramachandra Guha
It has been a pleasure working with Diana, Vikram and you in the Supreme Court Committee of Administrators. It has been an educative experience, spending long hours with three top-flight professionals from whom I have learned a lot in these past few months. However, it has been clear for some time now that my thoughts and views are adjacent to, and sometimes at odds with, the direction the Committee is taking as a whole. That is why I eventually decided to request the Supreme Court to relieve me of the responsibility, and submitted my letter of resignation to the Court on the morning of the 1st of June.
For the record, and in the interests of transparency, I am here listing the major points of divergence as I see it:
1. The question of conflict of interest, which had lain unaddressed ever since the Committee began its work, and which I have been repeatedly flagging since I joined. For instance, the BCCI has accorded preferential treatment to some national coaches (read Dravid) , by giving them ten month contracts for national duty, thus allowing them to work as IPL coaches/mentors for the remaining two months. This was done in an adhoc and arbitrary manner; the more famous the former player-turned-coach, the more likely was the BCCI to allow him to draft his own contract that left loopholes that he exploited to dodge the conflict of interest issue.
I have repeatedly pointed out that it is contrary to the spirit of the Lodha Committee for coaches or the support staff of the Indian senior or junior team, or for staff at the National Cricket Academy, to have contracts in the Indian Premier League. One cannot have dual loyalties of this kind and do proper justice to both. National duty must take precedence over club affiliation.
I had first raised this issue to my COA colleagues in an email of 1st February, and have raised it several times since. I had urged that coaches and support staff for national teams be paid an enhanced compensation, but that this conflict of interest be stopped. When, on the 11th of March, I was told that that there was a camp scheduled for young players at the National Cricket Academy but at least one national coach was likely to be away on IPL work and might not attend the camp, I wrote to you:
No person under contract with an India team, or with the NCA, should be allowed to moonlight for an IPL team too.
BCCI in its carelessness (or otherwise) might have drafted coaching/support staff contracts to allow this dual loyalty business, but while it might be narrowly legal as per existing contracts, it is unethical, and antithetical to team spirit, leading to much jealousy and heart-burn among the coaching staff as a whole. This practice is plainly wrong, as well as antithetical to the interests of Indian cricket.
I would like an explicit and early assurance from the BCCI management that such manifestly inequitous loopholes in coaching/support staff contracts will be plugged.
Yet no assurance was given, and no action was taken. The BCCI management and office-bearers have, in the absence of explicit directions from the COA, allowed the status quo to continue.
2. I have also repeatedly pointed to the anomaly whereby BCCI-contracted commentators simultaneously act as player agents. In a mail of 19th March to the COA I wrote:
Dear Colleagues,
Please have a look at this news report:
http://indianexpress.com/article/sports/cricket/pmg-signs-up-shikhar-dhawan-for-3-years-2776329/
Sunil Gavaskar is head of a company which represents Indian cricketers while commenting on those crickters as part of the BCCI TV commentary panel. This is a clear conflict of interest. Either he must step down/withdraw himself from PMG completely or stop being a commentator for BCCI.
I think prompt and swift action on this matter is both just and necessary. COA’s credibility and effectiveness hinges on our being able to take bold and correct decisions on such matters. The ‘superstar’ culture that afflicts the BCCI means that the more famous the player (former or present) the more leeway he is allowed in violating norms and procedures. (Dhoni was captain of the Indian team while holding a stake in a firm that represented some current India players.) This must stop – and only we can stop it.
Yet, despite my warnings, no action has been initiated in the several months that the Committee has been in operation.
As the mail quoted above noted, one reasons the conflict of interest issue has lingered unaddressed is that several of the game’s superstars, past and present, have been guilty of it. The BCCI management is too much in awe of these superstars to question their violation of norms and procedures. For their part, BCCI office-bearers like to enjoy discretionary powers, so that the coaches or commentrators they favour are indebted to them and do not ever question their own mistakes or malpractices. But surely a Supreme Court appointed body should not be intimidated by the past or present achievements of a cricketer, and instead seek to strive to be fair and just.
Conflict of interest is rampant in the State Associations as well. One famous former cricketer is contracted by media houses to comment on active players while serving as President of his State Association (read Ganguly). Others have served as office-bearers in one Association and simultaneously as coaches or managers in another. The awarding of business contracts to friends and relatives by office-bearers is reported to be fairly widespread.
Had we been more proactive in stopping conflict of interest within the BCCI (as per Lodha Committee recommendations, endorsed by the Court), this would surely have had a ripple effect downwards, putting pressure on State Assocations to clean up their act as well.
3. Unfortunately, this superstar syndrome has also distorted the system of Indian team contracts. As you will recall, I had pointed out that awarding MS Dhoni an ‘A’ contract when he had explicitly ruled himself out from all Test matches was indefensible on cricketing grounds, and sends absolutely the wrong message.
4. The way in which the contract of Anil Kumble, the current Head Coach of the senior team, has been handled. The Indian team’s record this past season has been excellent; and even if the players garner the bulk of the credit, surely the Head Coach and his support staff also get some. In a system based on justice and merit, the Head Coach’s term would have been extended. Instead, Kumble was left hanging, and then told the post would be re-advertised afresh.
Clearly, the issue has been handled in an extremely insensitive and unprofessional manner by the BCCI CEO and the BCCI office-bearers, with the COA, by its silence and inaction, unfortunately being complicit in this regard. (Recall that the Court Order of 30 January had expressly mandated us to supervise the management of BCCI.) In case due process had to be followed since Kumble’s original appointment was only for one year, why was this not done during April and May, when the IPL was on? If indeed the captain and the Head Coach were not getting along, why was this not attended to as soon as the Australia series was over in late March? Why was it left until the last minute, when a major international tournament was imminent, and when the uncertainty would undermine the morale and ability to focus of the coach, the captain and the team? And surely giving senior players the impression that they may have a veto power over the coach is another example of superstar culture gone berserk? Such a veto power is not permitted to any other top level professional team in any other sport in any other country. Already, in a dismaying departure from international norms, current Indian players enjoy a veto power on who can be the members of the commentary team (read departure of Harsha Bhogle). If it is to be coaches next, then perhaps the selectors and even office-bearers will follow?
5. Ever since the Supreme Court announced the formation of the COA, we have been inundated, individually and collectively, by hundreds of mails asking us to address various ills that afflict Indian cricket and its administration. While many of these issues were trivial or clearly beyond our purview, there was one concern that we should have done far more to address. This concerns the callous treatment to domestic cricket and cricketers, namely, those who represent their state in the Ranji Trophy, the Mushtaq Ali Trophy, and other inter-state tournaments. The IPL may be Indian cricket’s showpiece; but surely the enormous revenues it generates should be used to make our domestic players more financially secure? There are many more Indian cricketers who make their living via the Ranji Trophy than via IPL; besides, for us to have a consistently strong Test team (especially overseas) we need a robust inter-state competition and therefore must seek to compensate domestic players better.
And yet, shockingly, Ranji match fees have remained at a very low level (a mere Rs 30,000 odd for each day of play); moreover, cheques for match fees sent by the BCCI are sometimes not passed on by the state associations to the players. We need to learn from best practices in other countries, where domestic players are awarded annual contracts like those in the national team, while their match fees are reasonably competitive too.
Several months ago, the experienced cricket administrator Amrit Mathur prepared an excellent note on the need for better and fairer treatment of domestic players. Both Diana and I have repeatedly urged action, but this has not happened.
6. I believe it was a mistake for the COA to have stayed silent and inactive when the Supreme Court judgment was being so flagrantly violated by people clearly disqualified to serve as office bearers of state and even BCCI run cricket bodies. The disqualified men were openly attending BCCI meetings, claiming to represent their state association, and indeed played a leading role in the concerted (if fortunately in the end aborted) attempt to get the Indian team to boycott the Champions Trophy. All these illegalities were widely reported in the press; yet the COA did not bring them to the notice of the Court, and did not issue clear directions asking the offenders to desist either.
7. I believe that the lack of attention to these (and other such issues) is in part due to the absence of a senior and respected male cricketer on our Committee. Allow me to quote from a mail I wrote on 1 February 2017, before our first full meeting:
Dear fellow members,
I much look forward to meeting you all later today. I know Vikram already and greatly admire both Vinod and Diana for their remarkable work in their chosen fields, and am truly honoured to be working with them as well.
I presume apart from discussing IPL, etc, with the BCCI representative we will get some time to discuss the way forward separately. I have several ideas which I wish to share with you about our collective responsibility, and wanted in this mail to flag what is most important of these. This is that we must incorporate into our committee of administrators, either as a full member or as a special invitee, a senior male cricketer with the distinction and integrity that Diana has. That will greatly enhance both our credibility and our ability to make informed decisions.
The absence of a respected male cricketer in the COA has attracted a great deal of criticism already, much of it from important stakeholders in Indian cricket. It must be addressed and remedied. The amicus curae had suggested two outstanding names, Venkat and Bedi, both of whom were rejected because they were over seventy. However, there are some cricketers of the right age and experience who fit the bill. Based on my knowledge of the subject, I would say Javagal Srinath would be an excellent choice. He is a world-class cricketer, was a successful and scandal-free Secretary of the Karnataka State Cricket Association and is an ICC match referee, and comes from an educated technical background to boot. I strongly urge the Chairman and the other members to consider approaching him in this regard. He would complement Diana perfectly, and the combination of these two respected and top class former cricketers would enhance our credibility and effectiveness enormously.
While Srinath is in my view the best choice, there are other alternative names too. I hope we can set aside some time at our meeting to discuss and resolve the issue.
With regards
Ram
p.s. Needless to say, I have not discussed this with Srinath or with anyone else.
I raised this issue in a formal meeting of the COA as well, but unfortunately my proposal to invite a senior male cricketer to join the committee was not acted upon. We should have approached the Court to take necessary action, or else incorporated a senior, respected, male cricketer as a special invitee. With such a person on board the COA would have gained in experience, knowledge, understanding, and, not least, credibility. Indeed, had we such a person on board, the BCCI management and the office-bearers would have been compelled to be far more proactive in implementing the Lodha Committee recommendations than they have been thus far. As the only cricketer on the COA, Diana’s contributions have been invaluable; on many issues of administration and the rights of players she has brought a perspective based on a first-hand experience that the rest of us lacked. A male counterpart would have complemented and further enriched her contributions; but perhaps it is not too late to make amends.
8. While all our meetings were held in a cordial atmosphere, between meetings perhaps there was not adequate consultation, and there were several crucial decisions made where all the COA members were not brought into the loop. For instance, a capable, non-political Senior Counsel representing the COA and the BCCI in the Supreme Court was abruptly replaced by another Senior Counsel who is a party politician. Surely other COA members should have been consulted by email or by phone before this important change was made.
I have taken too much of your time already, but permit me to make one last suggestion. This is that the place vacated by me on the Committee of Administrators be filled by a senior, respected, male cricketer with administrative experience.
Let me in conclusion thank you for your courtesy and civility these past few months, and wish you and the Committee all the best in your future endevours.
With best wishes
Ramachandra Guha
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