Friday, April 22, 2011

The Anna Hazare Scam
by Analytical Monthly Review

Analytical Monthly Review, published in Kharagpur, West Bengal, India, is a sister edition of Monthly Review. Its April 2011 issue features the following editorial. -- Ed.

In the last weeks we have had an illuminating example of how a thoroughly corrupt regime can manipulate a thoroughly pliable media. One can hope that in time we will see some careful academic examinations of how Anna Hazare was put to use by the Manmohan Singh/Chidambaram regime in late March and early April of 2011. It is too soon to speculate how long the Anna Hazare Scam will succeed in its goal of diverting outrage at the rising exposure of crimes at the highest level of government. With Anna Hazare on the scene, supposedly now all will be well. But already by the second week in April the "non-political Gandhian social activist" gives off a stench in the embrace of the blood-soaked Narendra Modi, and well-meaning persons momentarily caught up by the media frenzy may be experiencing a bit of disgust, or at least having some second thoughts.

Before the onset of the neoliberal regime in 1991, "anti-corruption" campaigns were a regular project of the business press. Typically such reporting would involve a hero from a merchants' association, who had succeeded in trapping into a bribery case some sub-inspector from the State Excise Department or the Railway Protection Force, or some hapless underpaid official of the local Municipal Corporation. The steady drumbeat of such stories, combined with what everyone knew of the entrenched culture of real political corruption, contributed to the media campaign that accompanied the turn to neoliberalism. In this story, the obstacle to development was the "license raj" that opened up prospects for such "corruption."

No sooner had the turn to "de-regulation" and "economic freedom" been set in motion by a government that featured Manmohan Singh as finance minister and Chidambaram as commerce minister, than we were given a startling glance at the real corruption waiting in the wings. The early days of the neoliberal turn was accompanied by a stock market boom. As we have since seen ad nauseum, the business press loudly celebrated with drums and bells the rise in share prices, a proof of success for the emerging neoliberal policies. Super-stockbroker Harshad Mehta was made into a media star, the "Big Bull".

But quickly, as with every boom since, came the bust. By the summer of 1992 it became known that Harshad Mehta had engineered much of the rise in prices through fraud. The mechanism was simple enough. Agreements to sell and repurchase securities at a higher price after a period of time ("repos") are among the leading options open to banks in their dealings with each other. At the time such dealings were done through broker intermediaries. The securities did not actually change hands, rather a "bank receipt" assured the purchasing (or lending) bank that the securities existed, and on its receipt the broker was furnished with the cash. Harshad Mehta found some banks willing to issue bank receipts on non-existent securities for payment of a fee. The cash was then invested in securities, and since prices were going up the "repurchase" was easily accomplished, leaving a growing sum of money in the hands of Harshad Mehta and his backers. When the scam was exposed and prices collapsed, among the victims was president of Vijaya Bank, who committed suicide. In this single scam, a harbinger of what was to come, surely more money was lost than in a decade or more of all the "license raj" sub-inspectors' bribes put together.

It developed that among the investors in the Harshad Mehta group was none other than commerce minister Chidambaram, through an investment in the name of his wife. And it further developed that the shares had been acquired at a "promoters' price" -- a small fraction of the then market price. Chidambaram resigned in disgrace, but no CBI probe took place. When a petition for such a probe was presented, Chidambaram was successfully represented by lawyer Arun Jaitley, then BJP leader of the opposition in the Rajya Sabha. Between the Chidambarams and Jaitleys there has never been any political difference as to what really matters.

The Harshad Mehta Scam proved to be the model for the ensuing decades of neoliberal corruption. Indeed one year ago Shashi Tharoor was forced to resign in disgrace as minister of state for external affairs, having acquired shares at far below market prices in the name of a "friend", exactly following the well established Chidambaram script down to the detail that no subsequent investigation was permitted to take place.

During these many years of successive and ever larger "free market" thefts and scams, the business press and the regime have worked out the Public Relations means of deflecting attention. As with Chidambaram, and most probably the equally arrogant U.S. trained Tharoor, the resignation at the height of the scandal will insure that it is short-lived, time will pass and the tainted figure can re-emerge to boast of the glories of the ever efficient "free market" -- and the business press can be relied upon not to refresh the public's memory.

A useful distraction from the first has been "anti-corruption" campaigns of the old style, aimed at the petty oppressors of small businessmen. A mere temporal coincidence in some sense, but not in others, the BVA ("People's Movement against Corruption") was launched in Maharashtra in 1991 by one Anna Hazare. A retired soldier, he had appeared in rural Maharashtra during Emergency and organised anti-alcohol vigilante groups, given to mob violence and the flogging of drinkers and drink sellers. This "non-political Gandhian" expanded his activities with NGO funding of a "model village", promising "non-political" solutions to growing rural unrest. Following the time-tested script, the "People's Movement against Corruption" targeted such minor figures as sub-inspectors in the forest department, and proved skilled in its ability to gain press attention.

A relentless attention seeker, Hazare developed the tactic of announcing "fast unto death" that always seemed to end after a few days with press releases announcing a marvelous success. A 2003 "fast unto death" ended with the announcement of an investigation of his charges against local politicians in Maharashtra. A 2006 "fast unto death" against a proposed amendment to the Right to Information Act 2005, ended after some days with a press release when the amendment was modified.

In early 2011 the Manmohan Singh regime was reeling from the revelations of ever more immense corruption involving Union ministers -- and the business press -- on a scale never before seen. The 2G Scam, involving resigned Union communications minister Andimuthu Raja, is believed to have cost the nation tens of thousands of crores, or more! Hazare, who had not managed to catch the public eye for some time, announced his intention to "fast unto death" unless a bill was drawn to create some investigatory authority. But in the crush of other more interesting news, from Japan earthquake to Arab revolts to cricket matches, Hazare was largely ignored.

Then on March 17, The Hindu published an account of secret cable #162458 sent by the U.S. embassy to the U.S. State Department on July 17, 2008, days before the Lok Sabha vote of confidence on the nuclear deal. As we now all know, the U.S. embassy's political counselor reported having been shown, by a political aide to Congress leader Satish Sharma, "two chests containing cash" that he was told was part of a fund of 50 to 60 crore Rs. that the party had put together to buy votes. Details of the vote buying scheme were set out in the cable, and evidently involved the entire regime, from the top down.

Even for the most gullible and trusting, a line had been crossed. Despite all desperate efforts coming from the regime, including a flat denial from Manmohan Singh himself, there is no credible reason why the U.S. embassy should mislead the State Department.

The verdict on the Manmohan Singh-Chidambaram regime is rendered. From its origin in the days of Harshad Mehta, through the ever increasing series of thefts and corruption up to the most recent and vast 2G scam, and now with proof of their successful corruption of what remains of Indian democracy, combined with proof of lickspittle servility to their U.S. masters, an honest future shall turn away from the memory of this crew in disgust.

But they still rule, and they still have the business press, and they still have vast amounts of money, and they still have the best Public Relations experts that can be rented on the "free market".

And so we now have the Anna Hazare Scam. Between March 14th and March 22nd, 2011, a search in GoogleNews limited to Indian sources yields a total of three (3) articles that mention his name. On Wednesday, March 23rd, Anna Hazare announced that the Prime Minister's Office had that very day called him. The Prime Minister's Office said they would enter into negotiations with Hazare about the "Lokpal" bill, the "anti-corruption" legislation he was demanding on pain of yet another "fast unto death". From March 24th through 31st a search on GoogleNews limited to Indian sources yields a total of four thousand two hundred and eighty-one (4,281) articles that mention his name. And then in April the final act played out in a non-stop media frenzy. The performance featured a few days of "fast unto death", appeals from Sonia Gandhi and various Bollywood personalities, and then the regime "gives in" and agrees to form a commission and pass anti-corruption legislation, and so on.

So let us make one point as clearly as we can: the regime did not "give in" to mass pressure caused by the latest Anna Hazare "fast unto death". No-one was paying any attention to this smug "Gandhian non-political" self-promoting voice of "civil society" and "fast unto death" publicity artist until the Prime Minister's Office called him. The regime created the publicity storm in order to give in to it.

It has been difficult to view the mass media during this period without gagging. But even the best of arranged scams eventually unwind, and this one is coming apart already. One cannot imagine that those well-meaning people who fell for the arranged media furor, Medha Patkar and Swami Agnivesh for two, are feeling very comfortable in the arms -- one degree removed -- of Narendra Modi.

So let us return to some basics. In the world of Manmohan Singh and Chidambaram and their U.S. masters, the only crimes are to be poor and -- especially -- to resist the rule of the rich. Everything is for sale in the "free market" and that includes: the votes of MPs, the mass media, Union ministers, "justice", "democracy", "civil society" and "Gandhian non-political social activists". The Anna Hazare Scam worked for the moment precisely because there are still many decent people who want to believe that this system can, despite the overwhelming evidence, be reformed by commissions and legislation. Our advice? Wake up, face facts, and do not permit yourself to be manipulated by the Public Relations wizards of the PMO and the mass media. Things have gone far past reformation by commissions and legislation, the regime is rotten to the core.

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