Exclusive: Govt Steamrolled Cong, CPI Objection to Electoral Bonds

In 2017, Congress & CPI objected to electoral bonds, saying they made donations opaque. The government ignored them.

The Quint’s investigation reveals that electoral bonds have hidden numbers printed on them.

(Photo: The Quint/Shruti Mathur)

A Right to Information (RTI) query has revealed that the Narendra Modi government took suggestions from various political parties on the introduction of electoral bond scheme – in response, the Congress and the Communist Party of India (CPI), as well as the Shiromani Akali Dal (SAD), wrote letters to the Ministry of Finance raising objections to the scheme.

The Congress and the CPI argued that the names of both recipients and donors should be made public to ensure transparency. The SAD, for its part, said only profit-making companies should be allowed to make donations through electoral bonds, while the Bahujan Samaj Party (BSP) requested a draft of the proposal.

The RTI reply, accessed by The Quint, came in response to a question filed by RTI activist Vihar Durve. The RTI application read, “Furnish me name and designations of the politicians from different political parties who had been consulted before presenting the said electoral bond scheme.”

In its reply, the Finance Ministry shared the four letters written by the four different political parties to the ministry.

Despite the strong objections raised by three out of the four political parties and a kind of abstention by the fourth, the Modi-led government introduced the electoral bond scheme in January 2018.

A series of investigations by The Quint on the electoral bonds published in April 2018 had revealed how the ruling government is secretly tracking the donors of parties by hiding unique alphanumeric sequences in the bonds. The government claims these are ‘security measures.’

The Quint also reported on the letter written by the Election Commission to the Ministry of Law and Justice raising objections on the electoral bond scheme because it makes political donations opaque.

Names of Donors and Recipients Should be Public: Congress

On 30 May, 2017, Congress treasurer Motilal Vohra wrote a letter to Finance Minister Arun Jaitley, in response to the letter sent to then Congress president Sonia Gandhi on 2 May, 2017, pertaining to the electoral bond scheme.

Vohra mentioned that based on the media reports, "the party infers that the donor's name will be known only to the bank issuing the bond and the donee's name will be known only to the Income Tax Department."

He added that this would mean that "only the government will know the names of the donors and the beneficiaries, and the people will not know who donated how much to which political party."

Calling the electoral bond an opaque mechanism, Vohra wrote:

“I am afraid that this will not ensure transparency in electoral funding; on the contrary, it will be a completely opaque mechanism.”

The Congress treasurer even emphasised on transparency in political donations.

“My party’s view is that to ensure total transparency, the names of the donors and the donees and the amounts donated must be disclosed so that the people will have the information,” he wrote.

CPI Demanded a Rollback

The Finance Ministry sought suggestions from the CPI too on the electoral bonds scheme. The party vehemently opposed the scheme and said, “we fail to understand how this scheme is transparent."

It said that the scheme will keep the donor a secret from the public eye and he/she will be "accountable only to the government", which is "exactly against transparency."

Calling electoral bonds a "secretive political bonds scheme", general secretary of the CPI S Sudhakar Reddy wrote:

There is a demand from the people that political parties funding should be transparent. It is a justified demand to understand whether ruling parties are in quid-pro-quo with vested interests or corporate houses. In fact, the present method of political funding is more transparent than the secretive amendents you (ruling party) are introducing.

It also said that the CPI was "opposing the secretive political bonds scheme", and demanded its immediate rollback.

SAD Suggested an Ethical Alternative

The Shiromani Akali Dal suggested to the Union finance minister that it "will be more ethical if only profit-making companies are allowed to donate some percentage of their profit to any political party through electoral bonds.”

Clearly, none of the objections made by the Congress or the CPI were given much weight by the government, and neither were the replies of the SAD or the BSP. Instead, the Modi-led Bharatiya Janata Party (BJP) government went ahead with its electoral bond scheme, complete with claims that it would ensure transparency – despite making donations more opaque.