New Delhi: When Ashwani Kumar took over as the country’s top anti-corruption official last year, Prime Minister Manmohan Singh, his new boss, advised him, “Follow the righteous path.”
Yet, the job before him had frustrated many others. India ranks 85th in a corruption perception index created by the non-profit anti-graft group Transparency International, worse than China, Mexico or Brazil.
Kumar, 58, a career policeman and director of the Central Bureau of Investigation (CBI), has taken his Sisyphean task head on. In just a few months, he has heightened the visibility of India’s fight against complex corporate crimes and enlisted public support for his programmes to battle corruption in the government.
New challenges: Ashwani Kumar says traditional crimes are fading into the background in favour of digital crimes and credit card fraud. Harikrishna Katragadda / Mint
Most notably, his agency’s business investigative skills gained acclaim internationally, after the founder and chairman of information technology company Satyam Computer Services confessed to falsifying its balance sheet in January, the country’s largest and broadest modern fraud.
Just 45 days after taking the case, CBI had charged six people and produced a thorough account of how investigators suspected the fraud had occurred, based on hundreds of interviews and backed by thousands of pages of documents. The bureau even described the minutiae of the accounting tricks and dual invoicing tactics used to commit the fraud.
In contrast, the US department of justice took years to put together a compelling case against top executives of Enron, the now-bankrupt energy company. The comparison may not be completely parallel, because a confession unveiled the fraud at Satyam. But the scale of the accounting scheme has led analysts and academics to label Satyam “India’s Enron”.
Sudhakar V. Balachandran, an assistant professor of accounting at Columbia Business School, said the US could learn a lot from India’s rapid response to Satyam.
Foreign investors “know that swift decisive actions were taken”, Balachandran said. “If I’m an investor looking at an emerging market, I’m going to look for signs that it functions well.” That includes undertaking a swift criminal investigation at the first sign of corruption or fraud, he said.
Some rights advocates say that the bureau has been overzealous and has ignored due process. Under CBI’s guidance, two of Satyam’s accountants have been in jail for seven months without trial, even though they maintain their innocence and have yet to be convicted of any crime. But Kumar’s office contends that their incarceration is justified.
Beyond Satyam, Kumar has big ambitions for the bureau. With just 5,000 agents, it is less than half the size of its closest American equivalent, the Federal Bureau of Investigation, although India’s population is at least four times that of the US. But CBI is trying novel methods to fight graft and bribery that may help make up for what it lacks in numbers.
For example, the bureau is embarking on a countrywide campaign to curb corruption that enlists support from the public by asking for people to use their cellphones to text in details of corruption.
Economic growth, increasing industrialization and globalization mean that economic crime is rising, Kumar said. “Traditional crimes are fading into the background” in favour of digital crimes and credit card fraud, he said.
Since Kumar took office, the bureau has arrested dozens of bank managers, bureaucrats, engineers and contractors on suspicion of crimes including accepting bribes, forging documents and stealing petroleum. A recent investigation into top officials at the All India Council for Technical Education, a group created to improve the vocational skills of the country’s youth, uncovered 36 bank accounts that were used to hide illicit cash.
At a meeting this year with private sector bankers, Kumar pledged that CBI would act as a “facilitator in the growth of the financial sector”, by curbing something that US regulators had failed to stop—mortgage fraud and risky lending.
Kumar seems, at first, an unlikely crusader against complex financial fraud. He spent much of his 35-year career in the forests of Himachal Pradesh fighting illegal logging and poaching. But he quickly rose through the ranks of the country’s civil service, becoming director general of police in the state. His success there caught the eye of the Singh administration.
Kumar says his prominent cases have earned him enemies. And he cautions that the bureau cannot halt corruption on its own. The bureau deals with the investigation, “but the punishment is given by the courts”, he said.
And he willingly acknowledges that corruption sometimes occurs within the bureau. “Human beings are always frail, and such incidents do happen,” he said. “The question is, ‘Do we tolerate this kind of behaviour?’ The answer is, ‘Absolutely no’.”
Corruption specialists say that his fight can be effective, even if he is surrounded by a corrupt system.
“One person can make a difference, just as all leaders can make a difference,” said Christiaan Poortman, global programmes director for Transparency International. In Kumar’s case, Poortman said his anti-corruption efforts may bear fruit. “If he has the ear of the Prime Minister, who knows? It might work.”
©2009/THE NEW YORK TIMES