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India elections could lift graft busters

With the conclusion of the scandal-ridden domestic cricket season (and the second-place finish of my beloved Chennai Super Kings), India is now turning to its other scandal-plagued spectator sport: politics.

Parliamentary elections are expected sometime in the first half of 2014. The ruling Congress Party is reportedly interviewing agencies to help the public forget its role in recent corruption cases and focus instead on the party’s achievements in office. That may be a tough job. In addition to several pending trials and investigations involving the party or its members, India is in a rough patch economically. The rupee is circling the bottom of the tub, the economy is sinking like a BRIC and the government has frightened foreign investors by changing its tax laws with a 50-year retrospective effect.

Those investors remain interested in India but have placed big plans on hold pending the outcome of the elections. Their favorite contender is the business-friendly chief minister of Gujarat Narendra Modi. While Modi has his own issues, and India’s parliamentary system and coalition politics do not provide a neat one-on-one match up like a U.S. presidential election, Modi is definitely seen as the leading opposition figure to Congress. Other parties have taken up corruption as an issue and are fighting on local and regional platforms.

Elections in India can be an inspiring paean to democracy — the voting process includes genuinely challenging logistics to allow isolated villages and the urban poor to participate. It is also a delightful window into the innovation spurred by corruption.

At a recent gathering of the technology innovation group in New Delhi a former election commissioner outlined some of the ways that cash gets into the hands of voters over the years. 

In earlier days political operatives went from village to village carrying briefcases of cash in their cars. Vigorous checkpoints run by election officials over the years drove the cash ever deeper: from the back seat to the trunk, from the trunk to the hollow walls of the cars and from the cars to mock ambulances with fake patients. Now, political operatives go to a village and pay off voter debts to the local moneylender or grocer, among other tactics.

The coming election is probably the most significant since the economic liberalization process began twenty years ago. Thankfully, the Supreme Court has determined that convicted criminals will not be allowed to run for election or to remain in office. Most importantly, perhaps, the coming election will be a chance for those unhappy millions who came out for candle-light vigils and other protests to show they are serious about the issue.


Russell Stamets is a Contributing Editor of the FCPA Blog. He was the first non-Indian general counsel of a publicly traded Indian company and was general counsel for a satellite broadcasting joint venture of a large Indian business house. Russ can be contacted here.

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