When there is an election it goes without saying that there will be hawala. The run up to the Delhi elections have been marred by mud slinging campaigns and the latest controversy to hit the polls is the allegations of hawala transactions.
A company with no address or legal validity had transferred the money and it is alleged that this was done through a hawala channel.
This has become a major racket especially after the Election Commission of India decided to watch political funding and spending like a hawk.
Get the money in for the campaign through a hawala channel and do the favour later if you come to power is what the general modus operandi in such cases.
The manner in which fake companies transfer money to political parties is very similar to what we found during the money laundering issue where bank officers themselves had advised hawala operators to open fake companies and channelize the money.
What is hawala?
While we have gone over this topic several times, let us explain in brief what is hawala.
It is an alternative money remittance system or an informal money transfer system also known as hundi.
Till date it is the most popular way of laundering money to both political parties and terrorist organizations. It is used by politicians, terrorists and businessmen.
Hawala in political donations:
During the Karnataka elections of 2013 on a campaign trail, one politician has said that there is just not enough money to fund his campaign.
Every penny is accounted for and by the time we begin the campaign, we find ourselves running out of money.
Even the donations made to political parties are accounted for and there is a cap on the same as well. This is when political donations through hawala come to their help.
A company is floated by a hawladhar. This is done just on a temporary basis and through that company two or three genuine remittances are made into the bank accounts of the political parties for which a receipt is issued.
However, it is the other two or three payments which are made through a hawala channel and this very often goes unnoticed by the authorities.
This is done in connivance with the political party which wants to move its funds from abroad into India at the time of the campaign.
This is very similar to the manner in which the banks too have helped launder around black money. In recent investigations it was found that banks had advised people to open up fake companies and remit money through it.
This way these individuals brought in the money through a hawala channel into India and remitted into banks thus making the transaction look legal.
This also gave the black money legitimacy as once remitted into the bank it turned white.
Politicians benefit the most:
Be it during an election campaign or taking a bribe to let an underworld don out of the country, hawala has been the best bet for politicians.
The money is never recorded by the government which finds it extremely difficult to track.
Politicians who are bribed often ensure that the money is parked outside the country. It is only during the elections that they bring it back.
Normally the money is brought back through a hawala channel a month before the elections are announced. It is never brought down during the elections as the scrutiny is the highest at that time.
The history of hawala in politics:
How can one ever forget the Jain hawala scam? The 18 million dollar scam brought to the forefront the hawala-politician nexus and how businessmen had used the hawala route to fund these politicians.
What was more ironic in this particular case was that the same channel which was used to route money to the Hizbul Mujahideen was used to pay off the politicians as well.
The scam involved 115 politicians and bureaucrats and this probably is the biggest ever hawala scam that the country has ever seen.
However, most of them were let off in the year 1997-98 for want of evidence which only indicates that hawala still remains a fool and trail proof manner of remitting money.