[Congressional Record Volume 142, Number 44 (Wednesday, March 27, 1996)]
[Extensions of Remarks]
[Pages E460-E461]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                   INDIAN PREMIER SHRUGS OFF SCANDAL

                                 ______


                        HON. GERALD B.H. SOLOMON

                              of new york

                    in the house of representatives

                       Wednesday, March 27, 1996

  Mr. SOLOMON. Mr. Speaker, I insert for the Record a recent New York 
Times article regarding the latest corruption scandal in India. The 
article makes plain that though it is an ostensible democracy, India's 
system is rotten to the core. Isn't it time the United States stops 
dumping American taxpayer money into this black hole?

[[Page E461]]

           [The New York Times International, Feb. 25, 1996]

                   Indian Premier Shrugs Off Scandal

                           (By John F. Burns)

       New Delhi.--After four resignations this week brought to 
     seven the number of Indian Government ministers who have quit 
     since the start of the year in a corruption scandal, Prime 
     Minister P.V. Narasimha Rao told a rally of his governing 
     Congress Party not to worry about the general election 
     expected in April or May.
       ``The Congress is certain to lead the country,'' Mr. Rao 
     said at a gathering on Friday of the party's youth wing in 
     Guwahati, the capital of the northeastern state of Assam.
       Indians were left to wonder whether Mr. Rao was engaging in 
     bravado or displaying the canny political instincts for which 
     he is renowned.
       In the midst of a scandal that many Indian commentators 
     have described as the worst since independence, few discount 
     the possibility that Mr. Rao may yet turn the situation to 
     his advantage.
       Opinion surveys have suggested that the Congress Party, 
     which has governed India for all but four years since 1947, 
     has been heading for a drubbing at the polls. Political 
     conjecture focused less on whether the Congress would lose 
     its majority in the 535-seat Parliament than whether it would 
     muster enough seats to lead a coalition
       Many analysts forecast a breakthrough for the main 
     opposition group, the Bharatiya Janata Party, whose brand of 
     Hindu nationalism has troubled many Indians attached to the 
     country's secular political tradition.
       The Congress Party's woes were frequently blamed on Mr. 
     Rao, who is 74, an uninspiring stump campaigner and beset 
     with what many Indians have said is a near-fatal liability in 
     a Congress leader: a lack of the popular appeal associated 
     with the Nehru-Gandhi political dynasty.
       Then came the corruption scandal, involving widespread 
     bribes and kickbacks for Government contracts in a country 
     where nearly half of all officially recorded economic 
     activity is carried out by state-owned industries.
       In addition to losing seven ministers, Mr. Rao has been 
     faced with a welter of accusations that he was a beneficiary 
     of some of the payoffs, including a transaction in 1991 in 
     which the accuser says Mr. Rao took 30 million rupees, then 
     the equivalent of $1.7 million, in return for steel 
     contracts.
       Yet throughout the weeks that the scandal has been growing, 
     Mr. Rao has remained publicly serene.
       Aides say the Indian leader believes that the payoff 
     disclosures could be the savings of the Congress Party at the 
     polls because they have snared major figures in the 
     opposition parties as well as his own, thus depriving the 
     opposition of corruption as an election issue.
       One aide, Vithal N. Gadgil, has even said that Mr. Rao will 
     present himself in the election as ``Mr. Clean.''
       What is certain is that the controversy has rocked the 
     opposition Bharatiya Janata Party, or B.J.P., at least as 
     much as the Congress. The first wave of indictments last 
     month included the B.J.P. president, L.K. Advani, who is 
     regarded as the most ardent propagator within the party's 
     upper ranks of the Hindu nationlist creed.
       Broadly speaking, this holds that India should shift away 
     from the secularism that has been a Congress principle toward 
     an approach to government that gives primacy to the 700 
     million of India's 930 million people who are Hindus.
       This week, the scandal claimed a new opposition victim in 
     the resignation of Madan Lal Khurana, who as Chief Minister 
     of the Delhi capital district was one of Bharatiya Janata's 
     most prominent elected officials.
       Like the 25 other politicians who have been indicted, Mr. 
     Khurana's name appeared in what prosecutors have described as 
     coded entries in diaries listing payoffs of more than $35 
     million that were seized in 1991 from the New Delhi home of a 
     prominent industrialist, Surendra K. Jain.
       Press accounts say Mr. Jain confessed to investigators last 
     year to having been, along with one of his brothers, the 
     principal paymaster in a web of corruption that ensnared 
     dozens of leading politicians and public officials.
       In addition to cash bribes, Mr. Jain is said to have told 
     of paying for expensive gifts that included Mercedes-Benz 
     cars, Belgian crystal and foreign trips. Details of many of 
     the payoffs were listed in the diaries, against the initials 
     of the recipients or, in some cases, their telephone numbers.
       Mr. Rao seems certain to face heavy criticism in the 
     election campaign for what opponents have described as an 
     attempted cover-up.
       Nearly four years passed after the police seizure of the 
     dairies before the Central Bureau of Investigation, which is 
     under the Prime Minister's direct control, made a sustained 
     attempt to question, Mr. Jain and others alleged to have been 
     involved in the payoffs. Even then, the investigative agency 
     delayed any indictments until the Supreme Court intervened in 
     November and set deadlines.
       When the director of the investigation bureau reported to 
     the Supreme Court this week that his agency had no 
     ``reasonable basis'' for charges to be brought against Mr. 
     Rao, the court ordered the investigators not to close the 
     probe of ``any person,'' no matter how important, until all 
     leads were explored.
       A lower court in New Delhi followed up on Friday by 
     ordering the bureau to investigate allegations that Mr. Jain, 
     on Prime Minister Rao's orders, paid out nearly $1 million in 
     1993 to bribe opposition members of Parliament into switching 
     parties, thus saving the Rao Government from defeat on a non-
     confidence motion.
       There has been widespread debate over whether Mr. Rao kept 
     the lid on the scandal until shortly before the election so 
     as to be able to use the indictments against opponents--and 
     allies whose loyalty he doubted--or whether pressure from the 
     Supreme Court forced his hand.
       In any case, many Indians say the scandal has reached 
     proportions that will lead to a far-reaching cleanup of 
     Indian politics.
       Previous scandals have subsided without a major shake-up in 
     the political establishment. But this time, many commentators 
     predict, the involvement of the Supreme Court will make it 
     hard to contain the fallout.
       ``It will not fizzle out,'' said Rajinder Puri in The Times 
     of India. ``The process of destabilizing a rotten, corrupt, 
     repressive and anti-people system will continue until reforms 
     and a new system takes its place.''

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