A plea has been moved at the Supreme Court, on Wednesday, April 24, by two non-profit organisations seeking the court to constitute a Special Investigation Team (SIT) and conduct a court-monitored investigation into the apparent quid pro quo between political parties, corporates and officials of investigation agencies through the Electoral Bonds Scheme. The scheme was struck down as unconstitutional by the apex court in February 2024, and the court directed the Election Commission of India (ECI) to disclose all data pertaining to the scheme. The petition, filed by Common Cause and Centre for Public Interest Litigation (CPIL), alleges that the data disclosed by the ECI reveals that there are “overwhelming evidence” of multiple forms of quid pro quo arrangements between corporates and political parties, including that of companies facing ongoing ED/IT/CBI probe donating large sums to the ruling parties.
The petitioners have alleged that there are evidences of five types of apparent quid pro quo arrangement:
For acquiring contracts/licences/leases/clearances/approvals and other benefits
donations made as “protection” money by corporate entities facing ongoing investigations by ED/IT/CBI or other regulatory authorities to the ruling party at the Union or the states
Cases where the government in power at the Union or state brought about a substantive policy change to provide undue benefit to a particular corporate around the time the said corporate donated huge sums of money as donation through EBs.
Even loss-making companies and shell companies have donated huge sums of money; the source of such money donated through electoral bonds prima facie would amount to the offence of money laundering and has to be investigated.
Companies donating huge amounts as electoral bonds within 3 years of incorporation in violation of the Companies Act, 2013.
“The data as published by the ECI on its website exposed how quid pro quo arrangements have potentially been made between large corporates and political parties in the last 6 years through the use of electoral bonds. The data shows private companies have paid crores of funds to political parties either as ‘protection money' for protection against agencies under the central government or as a ‘bribe’ in return for undue benefits. In some instances, it has been seen that the political parties in power at the centre or in states have apparently amended policies and/or laws to provide benefits to private corporates at the cost of public interest and the public exchequer… the arrangements of quid pro quo under the aegis of ‘donation’ are marred with conflict of interest and are in clear violation of the Prevention of Corruption Act, 1988," the petitioners contended.
They further added, “Data suggests that after the introduction of electoral bonds, shell companies mushroomed and were used as medium to launder illicit money by corporate houses.”
The petitioners sought the court to order a court-monitored SIT investigation into the instances of “apparent quid pro quo”; direct the authorities to investigate the source of funding of shell companies and loss-making companies that donated bonds to various political parties; recover the amounts from political parties that were donated by companies as part of quid pro quo arrangements; and take action against companies that donated within three years of incorporation.
Electoral bonds were introduced in 2018 and are similar to promissory notes, which can be purchased by anyone from the State Bank of India (SBI) - which was the sole issuer of the bonds - and donate it to a political party. The parties can encash them at the banks. The Modi-led Union government, when introducing the scheme, claimed that electoral bonds would help prevent circulation of black money by allowing donors to contribute money to parties anonymously. However, there were several questions raised about the anonymity and the Supreme Court finally struck down the scheme on February 15, 2024, citing that it was unconstitutional on grounds that the public had the right to know who gave money to political parties. The court also ordered SBI to disclose information on both the buyers and the beneficiaries of the bonds to the ECI by March 6, which was then directed to make it public.
On March 4, SBI asked for an extension till June but the court rejected the plea and ordered it to disclose data by March 12.
The ECI uploaded two sets of data on its website, revealing the names of the buyers of each and every bond purchased and encashed between April 12, 2019 and January 2024. The list showed that the largest buyer of the bonds was a lottery company, and an infrastructure and a pharmaceutical company were major donors, and that Reliance-linked firms bought bonds. The data also showed that 21 companies bought bonds after they were raided by central agencies like the Enforcement Directorate. The data also revealed that the ruling-BJP got over half of the electoral bonds donations - Rs 8,250 crore of Rs 16,492 crores.
