Millennium Post

Casinos of unaccounted money

Casinos of unaccounted money
Shooting the Breeze

Following the recent sting operation in IBNLive of money laundering by top guns of Bollywood, most of my acquaintances turned up their nose saying it was no-brainer that the film industry runs almost entirely on black money. I think it is lazy thinking as it is not investing black money but its laundering that is the key of the IBNLive sting operation, and most corruption crusaders fail to see that huge unaccounted wealth per se is of little use to its holder unless he can convert it to legitimate asset.

The outline of the business model that emerges from the sting interviews may be common knowledge in Bollywood but has lessons for those who wonder how the illegally earned millions make people legally rich. In the context of the film industry, how does it pay, say, the actors in cash when the return from box-office, with entertainment tax paid, is all legit? Producer Vishnu Bhagnani [Bade Miyan Chhote Miyan] has the answer. '[If you give me] eight crore cash and two crore cheque… the [sic] paper work will be there only for two crore… [but] we’ll give you distribution rights of the film for three states'. As distributor, the investor is entitled to half of the box-office return on his territory, the other half going to producer. But the return is all white. If the film is a hit it is efficient laundering of the black money invested earlier. If it is a bomb, it’s the investor’s misfortune as he may have to wait with his dud asset for years, if not decades, nursing the hope that some people might pay to watch the movie at last.

As a whitener of black money the movie industry has always been somewhat of a casino, and will remain so, despite the talk that one hears of its getting corporatised.

The other big casino of unaccounted money is run by politicians. Unfortunately, very little is known about the ‘business model’ of investing in politicians. But there is no doubt that politicians, particularly the lawmakers among them, are the hottest favourites of those who’ve the ready cash to ‘buy’ their help in achieving material success.

It is evident from a recent study by the Association for Democratic Reforms and the National Election Watch of the affidavits of candidates for the Uttar Pradesh assembly polls earlier this year. Of the 403 winners in this year’s election, 226 contested in the previous election in 2007. So their affidavits containing inter alia their declaration of assets are ready for comparison.

Lady luck had favored them generally in these five years, as it seems, as the average asset of these 226 legislators had merrily defied the economic downturn since 2008 to clock a 213 per cent rise, from Rs 98.31 lakh on an average in 2007 to Rs 3.08 crore this year. Since it is the Bahujan Samaj Party (BSP) that ruled the state in the 2007-12 years, its 48 MLAs included in the survey have expectedly multiplied their riches, from an average of Rs 61.6 lakh to Rs 2.3 crore; it is a 274 per cent growth. But more interesting is the rise in the fortunes of the 15 Congress MLAs on the list. In 2007, though it was nowhere in power in Uttar Pradesh, just as now, it was still the party of the richest sections, the average asset size being Rs 1.79 crore. And, without being in government, the Congress legislators’ average asset spiraled to Rs 7.26 crore - 304 per cent - in the five-year period. Since the party candidates were reportedly chosen by Rahul Gandhi, the party’s reluctant number 2, as it were, it is evident that he has a nose for those endowed with the talent to get rich quick. Alternatively, it is possible that the rich ones he chose had the best chance of winning, which is in fact a general feature of the 2009 Lok Sabha elections [more notes more votes], as noticed by many poll watchers. In all fairness, though, the MLAs from other parties too increased their assets many times over. Subhash, the Samajwadi Party MLA from the Saidpur (SC) constituency in Ghazipur, was worth Rs 4.7 crore in 2007, when he belonged to the Congress. This year he has changed not only his party but class, having filed assets return of Rs 35 crore, a rise of 650 per cent.

However, the asset declaration requirements under the Representation of the People Act, though applicable to self, spouse and dependents, are not as ironclad as they appear to be. There is little or no provision to track benami assets, movable or immovable. It is doubtful if, say, a building held through a trust cannot escape declaration. Besides, the law has no penal provision daunting enough to prevent selective non-declaration. So it is all too likely that what an MLA (or MP) declares as his asset is the proverbial tip of the iceberg while he could in reality be no less moneyed than his billionaire corporate friend.

But why are his rich friends investing on him?

This issue seems best explained, in the sting job on film industry, by the big-ticket filmmaker Anees Bazmi [Singh Is King] and scriptwriter Rajeev Kaul [Dil, Beta, Ready]. To the undercover reporter’s question of how could he secure his falsely proposed investment in cash, Anees says, 'When we buy a flat, if it is Rs 10,000 a square foot, we give cash Rs 4,000 and on agreement it is just Rs 6,000 per square foot.' The reporter says 'yeah, but that’s property', to which the director replies 'it’s [a film] exactly similar to the property business'.

So is an MLA or MP. An investment on him is no doubt a gamble, as one on a stock or a horse, but the rewards are high. At the state level, though the government’s powers are limited, there are still so much that it can do or undo - be it a land allotment or a supply contract. If the ‘investor’ is lucky, the MLA on whom he has put his wager can become a minister, or at least member of a useful assembly committee. In Delhi, the citadel of black money, business empires have been built with the help of lawmakers purchased on the side. Black money is never wasted in the capital as there is a ‘no’ for every yes, and vice versa. If your minister friend can’t deliver, take a look at the empowered group of ministers. You’ll see light.
Sumit Mitra

Sumit Mitra

Our contributor helps bringing the latest updates to you


Share it
Top