How do Electoral Bonds threaten democracy

By M L Satyan

Coimbatore, March 16, 2024: The Election Commission has uploaded the list of the donors of electoral bonds as ordered by the Supreme Court.

Many political analysts and journalists studied the list and revealed that most donors purchased electoral bonds for two major reasons: a) they were intimidated by Income Tax and Enforcement Directorate (ED); b) they were induced to get government projects. This was indeed a shocking news to me.

Since the five-judge constitutional bench began hearings on October 31, 2023, several arguments have been made against the constitutionality and legality of the Electoral Bond Scheme and the threat it poses to Indian democracy by petitioner-lawyers, including senior advocates Prashant Bhushan, Nizam Pasha, Kapil Sibal, Vijay Hansaria, Sanjay Hegde and Shadan Farasat.

The major reasons against the electoral bond scheme are:

1) Violates Right to Information: It has been so far argued in the court that the Electoral Bond scheme violates the citizen’s fundamental right to information under Article 19 (1) a, about political parties. The citizens have the right to know about who is funding the political party.

2) Enables backdoor lobbying and quid pro quo: Bhushan told the court that there is circumstantial evidence to prove that there were kickbacks being paid by corporates via electoral bonds to political parties in power to get favours for themselves. Citing individual cases like Vedanta, the petitioners have made a case that the scheme provides curtain veil for cases of backdoor lobbying.

3) Opens doors to shell companies: It has been argued that since the government removed the limit of 7.5 percent of the annual profit for companies to make donations to political parties and allowed Indian subsidiaries of foreign companies to make donations, shell companies also made donations.

4) Opaque instrument that is not entirely anonymous: It has been argued that Electoral Bonds are opaque instruments that are not entirely anonymous. As nobody can come to know other than the government who contributed to whom. Since the SBI comes under the government, donations to the opposition can come under scrutiny by an investigative agency, which leads to selective anonymity.

Bhushan also argued that this anonymity of electoral bonds had raised suspicions of corruption and that donors may use these bonds to provide kickbacks to political parties in exchange for policy favours as the secrecy of these donations makes it difficult to trace any quid pro quo agreements.

5) Can be used for any other purpose than Elections: Sibal in his argument has submitted before the court that the name “Electoral Bond” is a misnomer as the money can be used for any purpose after it is withdrawn since no one is asking how the parties spent the money.

6) Promotes corruption: Sibal told the court that if required the account can be closed anytime by the political party. He also submitted before the court that this is a scheme to protect criminals from being prosecuted under the Prevention of Corruption Act (PCA) and Prevention of Money Laundering Act (PMLA).

Bhushan also presented before the court that in the last five years since the electoral bonds scheme was introduced, the contribution to political parties by way of electoral bonds has far exceeded any other method.

7) Eliminates level playing field for political parties in Opposition: More than 50 per cent have been received only by the ruling party at the Centre and the rest have only been received by the ruling parties in States. Not even 1 per cent has been received by opposition parties that are not ruling in opposition states,” Bhushan said in court.

He further said, “It destroys and disturbs democracy in the country. Because it does not allow a level playing field between political parties which are ruling versus opposition parties; or between political parties and independent candidates.”

8) Differentiates between corporations and citizens: Sibal while making his argument in the court highlighted that the scheme gives anonymity to corporate donors but citizens who are donating Rs 2000 in cash will disclose their names. This may also lead to the overshadowing of citizens’ voices by corporates in a democracy.

9) Unfair to the shareholder investing in Companies: Sibal argued that the shareholders in a company put in their money to ensure that the corporate company functions within the framework of the MoU. By donating to Electoral Bonds, the company is not informing the shareholders as to how their money is going to be spent.

10) No way to stop trading of electoral bonds: While listening to the arguments made by Sibal against the scheme, the CJI remarked that even as trading of electoral bonds is prohibited, there is no way to stop it. The CJI while listening to Sibal also added that the person could be an aggregator of bonds and may give the bonds to ten others.

11) Does not reduce black money: Advocate Farasat appearing for the CPI (M) submitted before the court that the electoral bonds scheme did not primarily aim to reduce black money but rather aimed to re-route non-anonymous funding from normal banking channels to anonymous Electoral Bonds. (Source: The Economic Times).

A poem in Hindi titled: Jo Ram ko laaye (Those who brought Ram) was quoted by the noted journalist Ravish Kumar in his YouTube channel. The words go like this:

“Kyon chup chup kar phirthe ho (Why do you roam around hiding yourself)
Kyon bach bach kar rahate hao (Why do you live trying to save yourself)
Ye tho bathao thum (You tell us this)
Kisliye laaye they (Why did you bring)
Kis kis se kithna thum (From whom and how much)
Chup chup kar khaaye they (You ate secretly)
Kis kis ko daraaye they (Whom all did you threaten)
Kis kis ko sathaaye they (Whom all did you harass)
Aao kulkar thum (You come out openly)
Thum bond ko laaye they (You brought the Bond)
Dhandha chande ka (The business of money collection)
Thum hi tho laaya they (You only brought)
Ab thum hi gaayab ho (Now you yourself are missing)
Jab bhanda phoota hai (When the bomb has exploded)
Desh ko bathaao na (You tell the nation)
Kis kis ne loota hai (Who all swindled)
Pooch rahe hain sab thum se (Everyone is asking you this)
Thum ithnaa hi khaaye ho (Did you eat only so much)
Yaa aur chupaaye ho (Or have you hidden something more)
Bond ki holi me (In the Holi of bond)
Thum kithna nahaaye ho (How much have you bathed)
Kis kis se khaaye ho (From whom all did you eat)
Kis kis ko khilaaye yo (To whom all did you feed)
Jhoot nahi bolo (Do not tell lie)
Sach sach kaha do thum (You tell the truth)
Thum bond ko laaye ho (You brought the bond)
Dhandha thum hi khoob (The business of money collection)
Is desh me chalaate ho (You are doing in this country)

Let this poem provoke our thoughts and enable us to do something to save the nation from the criminal money-launderers and political parties.

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