RTI Investigation (part 1): How politicians use PSUs as cash-vending machines

MPs across parties get PSUs to fund boat races, magazine called Brahman Manas, and more.

WrittenBy:Sandeep Pai
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Why would a public sector undertaking (PSU) like Coal India or National Thermal Power Corporation (NTPC) place advertisements in a Marathi magazine called Brahman Manas (which roughly translates to Brahmin Mindset)?

Why would a PSU, for that matter, fund boat races in Kerala or sponsor events for a certain animal rights organisation?A four-month-long investigation using the Right to Information (RTI) Act reveals how Members of Parliament (MPs), ministers and leaders across parties use their official positions to cull favours in the form of advertisements or funds from PSUs for organisations, publications and events with which they are directly or indirectly associated.

PSUs are independent companies under the central or state governments: they have the financial and operational autonomy to decide where they want to spend their money under corporate social responsibility (CSR) or corporate communications (CC). The decision on both these expenditures must be taken independently by the designated PSU officials on whether an ad or sponsorship will bring profitability, growth or any other benefit to the PSU. But it appears that PSUs in fact have little autonomy in deciding its CSR and CC spend.

Over a five-part series, Newslaundry will detail the contents of over 2,000 letters obtained under the RTI from 12 PSUs – including well-known PSUs like NTPC, National Highway Authority of India (NHAI), Gas Authority of India Limited (GAIL) and Oil and Natural Gas Corporation (ONGC). Many of these letters point to a clear conflict of interest.

These are letters written by MPs and ministers – including the ones in the Modi Cabinet – between January 2011 and April 2015 to PSU chiefs asking for funds anywhere between Rs 10,000 and Rs 70 lakh. The letters are written on the official letterheads and form part of official communication by these elected representatives.

The RTI enquiry shows that the otherwise beleaguered PSUs have wasted several crores of public money every year by humouring requests for funds by politicians: ONGC, for instance, spent over Rs 4.3 crore between 2012 and January 2015 following requests made by MPs; Power Grid Corporation of India (PGCIL) spent Rs 90 lakh from January 2011 to April 2015; GAIL spent around Rs 80 lakh between January 2012 and March 2015.

Indian Oil Corporation spent Rs 71.4 lakh from January 2012 to February 2015.The money was spent on contributions and sponsorships, advertisements in newspapers and magazines, souvenirs and display of banners during the sponsored events. The first part of the series will look at MPs and their letters to PSU chiefs.

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Prakash Javadekar, as BJP spokesperson and Rajya Sabha MP, wrote to Rural Electrification Corporation (REC) chief in 2013 seeking “cover/back or full page colour advertisement” for the Diwali issue of Brahman Manas magazine.

Javadekar wrote that the Pune-based magazine is edited by Ravikiran Sane, “an eminent Marathi journalist of forty years standing”. Sane is also National Committee member of Akhil Bhartiya Brahman Mahasangh, which had in the 2014 Lok Sabha elections extended its support to the BJP alliance in Maharashtra.

The Mahasangh works toward the “noble cause of uniting all Brahman society”. On Sane’s Facebook page, there is a picture of him felicitating Javadekar on the anniversary celebration of Brahman Manas.

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Maneka Gandhi’s NGO People for Animals (PFA) received Rs 2 lakh from GAIL in August 2012 and Rs 5 lakh for an unspecified period, according to GAIL’s RTI response.We obtained one of the emails Gandhi sent to GAIL CMD BC Tripathi asking for sponsorship for a three-day event at The Lalit Hotel in New Delhi in August 2012 to raise funds and awareness for her organisation.

She writes the email in her capacity as chairperson of PFA. Gandhi at the time of writing the email was an MP from Aonla, Uttar Pradesh.She also wrote an email (attaching the sponsorship packages) to the CMD of NHAI, seeking NHAI’s support for organising a three-day event at a five-star hotel in August 2012.

PGCIL’s RTI response notes that it paid Rs 5 lakh in May 2011 to PFA. The note sheets accessed by this correspondent revealed that even NHAI had processed Gandhi’s request.We emailed Gandhi and asked her if she deemed it correct to use her official position as an MP to seek funds for her organisation. Our emails, text messages and calls to her remain unanswered.

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Mani Shankar Aiyar, as a Rajya Sabha MP, wrote a letter to Bharat Coking Coal Limited (BCCL) chairman in October, 2013, introducing Sekhar Basu Roy as a “talented upcoming journalist” and editor-in-chief of New Approach. The letter stated: “... Sri Shekhar Basu Roy is intimately known to me for decades now...” On the New Approach’s website, there are indeed several photo ops of Aiyar and Roy together. Aiyar informs BCCL CMD that New Approach would seek support in the form of ads and that he would be happy to “know that the same has been favourably disposed”.

GAIL’s RTI response notes that it paid G Files, a Delhi-based magazine, Rs 6 lakh worth of ads following Aiyar’s request. We reached out to Aiyar and asked him if using his official position as an MP to seek funds from PSUs for an organisation that is run by a friend amounts to conflict of interest.

Aiyar said he supports New Approach because it’s really good: “New Approach is a completely unusual magazine and they do very in-depth stories. I have no hesitation in saying that I had asked for advertisements for them. While I write [letters], I don’t force anyone to give advertisements. Whether BCCL or any other PSUs gave or not I don't know. The PSUs have to decide whether they want to pay or not. I even supported them in getting three people for their India-Pakistan issue. I don’t know about G-files magazine and I don’t remember anything about it.”

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Corporate sponsorship for a trade union might sound absurd, but Dasgupta managed it as a Lok Sabha MP from Ghatal, West Bengal.

Sail, GAIL and NHPC gave a total of Rs 35 lakh after Dasgupta sought sponsorships for the 40th National Congress of the AII India Trade Union Congress (AITUC) held in Mumbai, 27-30 November, 2012.

Incidentally, Dasgupta is the General Secretary of the AITUC which is the trade union wing of the Communist Party of India.Letters written by Sail and NMDC officials state that they will grant Rs 20 lakh and Rs 10 lakh, respectively, following Dasgupta’s request.

We asked Dasgupta how AITUC hopes to fight for the rights of the workers while receiving funds from the management and if it amounts to political funding. “There is nothing wrong in asking for advertisements from PSUs. I don’t think there is any conflict of interest,” he told us. “Not every time that we ask that the PSUs give us the advertisements. We can ask for advertisements, get it and still fight with the management for the workers’ rights."

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PJ Kurien, as a Rajya Sabha MP from Kerala, wrote to NTPC Chairman Arup Roy Chowdhary in August 2013, seeking funds for “Uthradam Thirunal Pamba Boat Race” organised in Pathanamthitta district of Kerala. In his letter he says, “To conduct this renowned water regatta in all its glory... the organising committee anticipates expenditure of Rs. 70 lakhs... In order to encourage and sustain such colourful events, encouragement from the reputed Corporations, like NTPC, is always essential. I would, therefore, request for the whole-hearted support, sponsorship and all possible assistance, from the NTPC, to this year’s Pampa boat race a grand success.”

Incidentally, Kurian along with former ministers Kodikunnil Suresh and Shashi Tharoor are chief patrons of this boat race organisation. NTPC’s internal note obtained under RTI reveals that the PSU has extended financial support to other boat racing organisations like the Mahatma Gandhi Boat Club (Rs 50,000) on Kurien’s recommendation. Kurien in response to our questions told us that there was no conflict of interest in taking funds from a PSU for a boat race. “All boat races are sponsored by companies, it is a public event. I have not gained anything from it,” he said.

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In January 2015, PGCIL gave ads worth Rs 5 lakh for a special supplement of Dainik Bhaskar newspaper following a reference from Shanta Kumar, senior BJP MP and former Chief Minister of Himachal Pradesh. "I only suggested because I thought it’s a good cause done by Dainik Bhaskar. They had approached me and then I wrote to PGCIL. MPs and Ministers only suggest, it is the PSUs who decide," said Kumar when we asked him why he used his official position to get funds for a media organisation.

But why do PSUs oblige? A December 2011 circular issued by the Department of Personnel & Training under the UPA regime states that letters written by MPs to PSUs have to be treated as “VIP references”. The circular also states that these letters have to be replied to “politely” within 15 days from the date of acknowledgement.

The rule further says, “Government servants should show courtesy and consideration to Member of Parliament and state legislators.” The order states, “Any violation of relevant conduct rules in this regard, which violation is established after due enquiry, will render the government servant concerned liable for appropriate punishment as per the rule.”

“In total, there are 250 central government PSUs in India. Among just them, we will find that, conservatively, each PSU spends about Rs 40 lakh a year on requests. This means that the diversion of public money on the recommendation of the MPs is about Rs 100 crore every year,” said AK Jain, board member of Transparency International India and a whistle-blower, who exposed such dealings while working for Damodar Valley Corporation.

With the RTI Act making it possible to get access to such documents that allow us to scrutinise how and why public money is being spent, it is no surprise that the current government just like its predecessor is doing all it can to make the RTI ineffective.

Additional reporting: Manisha Pande

Part two of this series will detail how a Congress MP used his official capacity to get ads for his media conglomerate. Part 3 will detail letters from ministers in the Modi Cabinet and the former UPA government asking PSUs for funds.

Update: A previous version of this story incorrectly expanded ONGC as Oil and Nation Gas Corporation. This has been corrected to Oil and Natural Gas Corporation.


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