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AAP and Congress Accused of Accepting "Dirty" Money, as Government Steps Up Action Against Laundering


After the destruction of the BJP in the Delhi elections, here’s an interesting move by the government:

Income Tax Department, Ministry of Finance, Government of India had initiated investigation into issuance of cheques by companies which are acting as entry operators to convert illegal cash into legitimate money. Recently in Kolkata, this investigation led to detection of substantial unaccounted income. In these cases, the unaccounted income was sought to be converted into legitimate money with the help of non-genuine companies which were acting as entry operators.

Similarly and based on media reports, enquiry was initiated in Delhi into issuance of cheques by companies which were alleged to be non-genuine and entry operators. The companies and their Directors could not be traced at the addresses given to Banks and Ministry of Corporate Affairs. Examination of the accounts of these companies revealed that they have issued accommodation entries to several persons and entities for substantial amounts. It was also found that sources for such entries were prima facie not genuine. To carry forward the investigation process, notices were issued to about 50 persons and entities including two political parties on 9th February, 2015. These notices seek information about the identity of the contributors and other relevant details which are necessary to complete the process of investigation.

The “entry operator” or the “jama kharchi” company is a threat to the tax system, and should be investigated. (See: Jama Kharchi and the Conversion of Black to White).

We can probably guess who the two political parties are, from this NDTV article:

Arvind Kejriwal’s Aam Aadmi Party has received notice from the Income Tax department to explain funding allegations against it. The notice was sent on Monday, a day before the Delhi election results that saw AAP winning by a landslide in Delhi and ending the BJP’s winning streak since last year.

The Congress has also received a similar notice.

The Income Tax department has asked AAP to respond to seven questions by February 16, two days after Mr Kejriwal, a former taxman, takes charge as Chief Minister.

In the middle of the Delhi campaign, AAP was accused by a group of its former members of receiving Rs 2 crore in donations from bogus companies.
It was alleged that donations of Rs 50 lakh were made on the midnight of April 15 last year by four companies that had no credible business activity and fake addresses, and were possibly fronts for money laundering. The BJP dubbed it “hawala at midnight.”

Our View: Let’s get bloody honest, shall we? In this country, the fight against corruption is also fought by the people who are not clean themselves. Government officials who take bribes who get frustrated when stuff doesn’t move when they want to do something with the money. People who sell houses and keep money in black. CAs and Lawyers and Doctors who take cash and don’t declare income. The “dalals” (which Delhi is famous for) who intermediate deals for politicians and businessmen. These guys want “no corruption” also, because they think of corruption as a 3G scam, or a commonwealth games overspending, or a swiss bank account. Or as that dirty rotten scoundrel water tanker who wants more money because there is so much demand for water.

Not as their own little tiny actions which they do because oh God the government wants to tax everything.

So some of them support parties that fight against corruption. This is bound to happen. But we would say catch those businessmen, and confiscate the money. AAP should put the money into an escrow account until it finds the source within 21 days – if not, the money goes straight to the finance ministry as potentially laundered. (The congress should do the same thing, but they should be given only 21 hours given their history)

Oh and surely, we should desire that the BJP to be similarly questioned. (I am no friend of AAP, or any political party, and I absolutely detest the disgusting nature of subverting institutions like police/tax/regulators to drive a political point).


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