The rich, invisible and sinister enemy within

But why look at such indirect evidence. The Task Force on Internal Security pointed to an even more glaring device — an open source, broad daylight device, so to say. Alluding to this, the Task Force observed,

‘‘The asymmetry in the visa regimes of India and Pakistan poses an internal security threat which MHA (Ministry of Home Affairs) needs to review urgently. The ISI has been exploiting our unilaterally liberal visa policy and the inadequacy of our systems to ensure Pakistani visitors do not stay beyond the period allowed in the visa, disappear and become untraceable. It may be recalled that the Pakistani nationals who had perpetrated the hijacking of an Indian Airlines plane to Kandahar had entered India on valid visas, overstayed and carried out activities which culminated in the hijacking. As per information supplied to us by MHA, the cumulative number of Pak nationals who had overstayed till 1999 was 11,433; of these 8,873 were overstaying and 2,560 had gone underground.’’

Where were they? What were they doing? What were we doing about them? How many of them had been apprehended? How many were being traced? To its distress, the Task Force found,

‘‘MHA has no means of knowing how many, if not all, of those who are untraceable could possibly be engaged in espionage, sabotage and subversion and further extending ISI’s networks in the country.’’

The Task Force persisted.

‘‘We had sent a questionnaire to MHA to seek information, inter alia, on the (i) working of the Foreigners’ Regional Registration Offices; (ii) procedural safeguards being enforced to ensure that persons visiting India on Pakistani passports leave the country before the expiry of their visas; (iii) action taken to trace and deport those overstaying/ going underground, etc. We sought this information after examining R&AW’s reports and recognising the high potential of such missing/ untraced persons being engaged in subversive or other activities prejudicial to the security of the country.’’

The result of its efforts to get even such elementary information can be gleaned from the sentences that follow:

‘‘For want of the information sought by us we can do no more than reiterate our view that there should be symmetry between the visa regimes adopted by Pakistan for Indian visitors and that followed by India for Pakistani visitors. Further, the MHA should launch a time-bound operation to trace the missing Pakistani nationals. The matter cannot be closed by merely reporting that about 11,500 of them have just disappeared.’’

Making them self-sufficient

The Task Force on Internal Security found that through smuggling of and trading in narcotics, the ISI has made the terrorism it orchestrates in India an almost self-financing operation. It observed,

‘‘Pakistan has been systematically promoting narco-trade to fund terrorism and insurgencies in India, with the determined objective of destabilising our established systems and structures. Reports from the central Intelligence agencies indicate that drug money has been and continues to be used by Pakistan for spreading militancy and insurgency in India. This has also been corroborated by the Central Intelligence Agency (CIA) of the USA on the basis of firm evidence. As per an input made available by MHA, narcotics valuing about Rs 5,000 crores are being annually smuggled into India from the Golden Crescent countries — Afghanistan, Pakistan and Iran (75 per cent of all heroin supplied to Western Europe and 50 per cent of that which goes to USA is from this region). Pakistan’s National Development Finance Corporation estimated (August 1992) that the black economy of the nation gained US$ 32.5 billion annually from the cultivation, production and smuggling of illicit narcotics from the Golden Crescent. These illicit gains provide enormous financial support to ISI for carrying out its subversive activities in our country.’’

The scale is indeed alarming, the Task Force found. The Northeast in particular is being devastated by the operation:

‘‘An indicator of the likely scale of the illicit narco-trade is the growing high incidence of drug abuse in Manipur and Mizoram, and parts of Assam and Arunachal Pradesh where it is spreading. Heroin is being smuggled undetected from Myanmar to cater to the drug addicts in these States. There has been an alarming growth in cases of AIDS in Manipur. It is reported that most of the drug trafficking is taking place through Moreh, in Manipur, from where heroin is moved to the other States.’’

Our response?

‘‘It is relevant to note that the Narcotic Control Bureau (NCB), the nodal national agency, has a regional office in Imphal which has jurisdictional responsibility for the seven NE States. The Imphal office, with a staff strength of 11, is without any road-worthy vehicle and has no communication system; the Regional Officer does not even have a residential telephone.’’

Of course, motions are gone through:

‘‘The NCB holds quarterly meetings with officers representing Customs, DRI, State Special Branches and others connected with drug interdiction and rehabilitation programmes.’’

But the reality is very different:

‘‘We find that it is not playing a coordinating role of concerted strike action against the drug traffickers. Consequent to discussions with the officers of the NCB at the central and regional levels we found that there is no institutionalised arrangement for the sharing of intelligence between the NCB and other concerned agencies. Also there is no arrangement for even exchanging information on matters of mutual interest.’’

Nor is that the worst of it. The Task Force talked to defence personnel in the area. And reported,

‘‘We also found that the Army and CPMF (Central Para Military Force) officers were not even aware that any central agency responsible for taking action against drug traffickers was located in the NE states! Our discussions with the zonal and regional level officers further revealed that the working of the NCB is severely handicapped for want of vehicles, the necessary equipments and gadgets and adequate Secret Service Fund to develop a proper network of sources of information. Thus, as presently structured and functioning, the NCB does not have the capacity to play the role of an apex central coordinating agency for carrying out interdictions and strike actions against the syndicated operations of drug traffickers. Consequently, it has failed to satisfy the primary objective for which it was created. Such a state of affairs provides the ISI easy entry points.’’

But a law — with the sternest provisions. A Board — with wide representation. Quarterly meetings.

Another funnel, another law

Money generated through the drug trade is channeled into India — through ‘‘laundering’’ operations, often as ‘‘gifts’’ and ‘‘donations’’ to ‘‘voluntary organisations’’. As the Task Force summarising the intelligence inputs it had received said,

‘‘The drug money acquired from direct shipments abroad by the ISI and its cohorts is collected from the foreign drug pushing outlets, and is laundered through varied ‘placements’ in order to disguise its origin and, thereafter, made available in very large amounts to the Gulf and other countries. From these countries the drug money moves, through banking channels, to various individuals and associations of Muslim organisations in India ostensibly for supporting religious cultural and educational activities as are covered under the FCRA (Foreign Contributions Regulation Act). The recipients usually utilise the contributions for investment-oriented activities and the profits accruing therefrom, which are legitimate, can be employed to further expand and diversify. Such funds, at the secondary or tertiary stage, which are beyond the regime of controls of the FCRA, are made available to the Muslim organisations, which may include fundamentalist groups, for supporting and spreading subversive activities. While it is indeed difficult to detect and prevent the diversion of foreign contributions for terrorist/ subversive activities at the secondary or tertiary stage of the movement of funds, we apprehend that, considering the existing level of monitoring, such funds can be diverted to support unlawful activities even at the primary stage itself without any chance of detection.’’

If you go by the formal provisions of the law, they are stern and watertight as can be:

‘‘It is relevant to note that under the FCRA no organisation of a political nature, not being a political party, and no association, other than the aforesaid organisation, having definite cultural, economic, educational, religious or social programme, can accept a foreign contribution without the prior permission of or registration with the MHA. The law provides for auditing/ inspection of the donees’ accounts and also punitive action for violations.’’

The volume of these ‘‘contributions’’ has been growing by leaps and bounds, the Task Force noted — between 1991/92 and 1997/98, it had more than doubled. The amount that had come in — officially, through formal banking channels — through this single funnel was more than Rs 14,000 crore.

And what kind of surveillance is being exercised? the Task Force asked officials of the Ministry of Home Affairs, the Ministry without the prior permission of which no contribution can be received. The answer?

‘‘A number of specific issues were raised with MHA regarding the enforcement of FCRA. We could not get the requisite responses on the ground that the relevant information could be supplied after the ongoing computerisation process is completed. This law was enforced 24 years ago; by now at least the essential data should have been available in MHA. We also gathered the impression that the functionaries responsible for handling this important area of work were not adequately sensitive to what exactly is required to be monitored and how.’’

Further inquiries revealed that six years earlier, the Reserve Bank of India had in fact sent out an instruction to all commercial banks. The fate of the instruction is best told in the words of the Task Force itself:

‘‘At MHA’s instance the Reserve Bank of India addressed a letter (No. BP.BC.88/21.01.023/94) dated 15th July, 1994 to all commercial banks in the country stating, inter alia, that:

(a) some of the banks are allowing credit to associations which have neither been registered nor have obtained prior permission for accepting foreign contributions; and

(b) that quarterly statements, giving details of foreign contributions received by various associations, are not being furnished to MHA.

‘‘The above quoted RBI communication reflects MHA’s passive approach in administering FCRA. In our view, in such cases penal action under the FCRA should have been initiated against the offending associations for receiving foreign contributions without prior permission or registration, and dealing with the defaulting banks for not regularly forwarding the prescribed quarterly statements to MHA. And this was over six years ago! It is not evident whether MHA has since established effective mechanisms to enforce FCRA. If this serious situation is not urgently brought under control, MHA would have no means of knowing how the growing and large number of recipient organisations/ institutions are actually utilising the funds received, some of which are reportedly supporting the spread of sabotage and subversion in the country.’’

The Task Force persisted. What has happened since the Reserve Bank sent its letter? it inquired. The result?

‘‘We were unable to get a confirmation about how the situation stands since RBI issued its aforesaid letter of July 1994. If it largely remains as it was six years ago the actual quantum of foreign receipts could be very much larger. In this context, we share R&AW’s observation that most of the foreign contributions received under FCRA are being diverted for funding terrorist organisations.’’

The Task Force turned to the other organisation that, if description of duties is to be any guide, would be tracking down hawala transactions, as well as doubtful ‘‘contributions’’ — the Directorate of Enforcement. To what effect?

‘‘In response to our queries, the DE reported that they are unable to detect linkages between the activities of Hawala operators and subversive elements as no mechanism exists for this Directorate to be provided the required intelligence by the IB, R&AW, State Special Branches and CPMEs.’’

As a result, the Task Force was compelled to record,

‘‘We were most concerned to find that there is no concerted system for the collection, collation, analysis and dissemination of economic intelligence, or for launching a coordinated strike action against economic offenders in cases requiring multi-agency involvement. Each organisation is working in its own watertight compartment and exchanging information at subsequent stages only in respect of cases which were detected earlier. This is a major drawback on account of which the economic offenders escape the full and timely rigours of the obtaining economic laws.’’

And to urge what must have been urged times without number:

‘‘We recommend that MHA should urgently move to organise the required coordination between all concerned agencies. Urgent steps would also need to be taken to ensure that DRI and DE work with the required efficiency and effectiveness.’’

Money laundering? The situation turned out to be no different:

‘‘We have had discussions with the concerned officers of the various wings of the Department of Revenue, Ministry of Finance, about the mechanism established for detecting money laundering. We find that no such system exists; none of the officers we met appeared to be aware of or specifically concerned about the problem. The Income Tax Department concerns itself with the collection of tax where leviable, irrespective of the source/ origin of the taxable money. The inward remittances through banking channels, whether by way of ‘gifts’ and/ or trade accounts are tax-free. The Enforcement Directorate has no cause to be concerned as the laundered money is received through banking channels; they get interested only if there is a specific case suggesting linkage with outward Hawala transmission of a particular inward remittance. The Revenue Intelligence and Customs Department officers are also not concerned unless there is a link-up with invoice manipulation. And worse still, as of now, no law has been promulgated to specifically deal with money laundering which goes on unchecked.’’

The Task Forces also inquired about another device that the ISI is using doggedly — sending fake currency to unsettle the economy, and no doubt to pay some of its operatives! Its finding?

‘‘In an attempt to destabilise our economy, the ISI is pumping in large amounts of Fake Indian Currency (FIC) notes of 500 and 100 rupee denominations. FIC is being smuggled across Pakistan’s land borders with J&K, Punjab, Rajasthan and Gujarat as well as across the Indo-Bangladesh and Indo-Nepal borders. Carriers from Gulf countries, particularly from Dubai and Sharjah (who travel by air to Ahmedabad, Mumbai, Kozhikode, Thiruvananthapuram and Chennai) carrying FIC have been apprehended by the Customs authorities. FIC smuggled from Bangladesh has been seized while in circulation in the NE states, particularly in Assam. The staff of the Pakistan Embassy at Kathmandu, who were subsequently apprehended, had been acting as the conduits for pumping in FIC from Nepal into Uttar Pradesh and Bihar. Seizures of FIC have also been made from Pakistanis and Indian Muslims coming from Pakistan by the Samjhauta Express at Attari (Amritsar). Recently (29th July, 2000) the follow-up investigations of the so far single largest seizure of FIC… have brought out the existence of a widespread network in Gujarat and Maharashtra which pumps FIC into the Indian economy.’’

What are we doing to blunt this device?

‘‘Our discussions with the concerned Deputy Governor, Reserve Bank of India, have revealed that, regrettably, there is so far no system for all seizures of FIC being reported to a designated central agency. Consequently, a validated statement on the total seizures of FIC made so far is not available. However, the reported seizures made by the various agencies indicate that FIC valuing crores of rupees has been inducted into the Indian markets.’’

In a word, even the system to get just the information about how much has been seized has yet to be put in place. Some way to deal with the effort of a determined and hostile agency ‘‘to destabilise our economy’’!

The writer is a BJP MP and former Union minister.

PART I

PART III

PART IV