Indian opposition hit by corruption scandal

The anti-corruption campaign of the biggest Indian opposition party has suffered a serious blow with the arrest of a senior minister in a scandal involving improper sale of government land.

The Hindu-nationalist Bharatiya Janata Party (BJP), the main opposition to the ruling Congress, has been deeply critical of the government's lack of effort on tackling corruption. It has jumped on the bandwagon of a national anti-graft campaign led by civil society activist Anna Hazare, taking advantage of widespread anger about corruption for political advantage. BJP leader LK Advani has just begun a huge nationwide tour to speak out against corruption and rally support for the party.

That strategy appears to have backfired, as with unfortunate timing a court ordered the arrest of BS Yeddyurappa, chief minister of Karnataka state until he resigned in August. Yeddyurappa was arrested for his alleged involvement in a scam to sell prime government-owned real estate in exchange for kickbacks or to companies owned by members of his family. The sums involved are extremely large – the court claims that the deals cost the state US$95 million, whilst they earned Yeddyurappa around US$38 million.

The day after he was arrested, he was admitted to hospital after complaining of feeling ill. He is likely to remain there until his court appearance on 22nd October. The arrest is a major embarrassment to Advani and the BDP leadership as they begin their five-week tour, which is being seen as potentially laying the groundwork for the 2014 general elections.

Advani sought to deflect questions on the corruption scandal, before declaring that “We had cautioned Yeddyurappa earlier... When the report came he had to leave. No party can fight corruption when its own house is not in place”. Public opinion is likely to be sceptical about this attempt to gain the moral high ground, and the BJP tour has yet to make much of an impact.

Neither of the main parties can claim to be particularly clean. The BJP has previously been dogged by corruption rumours, and it is likely that Yeddyurappa is just the tip of the iceberg. Congress has been engulfed in multiple scandals, including a multi-billion dollar scheme to grant telecoms licences in exchange for huge bribes which has claimed the scalp of telecommunications minister Andimuthu Raja.

The BJP scandal will hurt the opposition but will not particularly help Congress: the most likely outcome is simply to contribute to widespread fatigue and cynicism in Indian politics.

Sources: BBC, AFP, Times of India

Corruption threatening India's future, say industry leaders

A group of senior Indian businessmen, judges and economists have warned that corruption is strangling the country's prospects for growth, and called for widespread reform to increase transparency.

The fourteen leading figures made their warnings in an open letter published in local media. It follows an earlier 'call to action' which they made in January and which focused on the 'governance deficit', corruption, the need to distinguish between dissent and disruption, and environmental issues.

Although the previous letter sparked debate in Indian media, it failed to dent India's rampant corruption. A widely-publicised campaign against graft by veteran civil society activist Anna Hazare has brought wider public attention to the issue, and it is in this context that the 14 writers decided to publish their second letter.

The signatories include the founder of the software giant Wipro Azim Premji and former central bank governor Bimal Jalan. In the letter they support the need for a Lokpal Bill, given impetus by Hazare's campaign, which would set up an independent ombudsman to investigate corruption, but stress that this is only part of the solution intended to address “episodic corruption”. They underline that ordinary Indians suffer most from corruption.

The signatories call for urgent land, judicial, electoral and police reforms to overhaul India's “antiquated laws”, but insist that debate on such reforms must be conducted civilly so as to avoid eroding public confidence. They also suggest that India should follow the UK's example of a comprehensive Bribery Act which would break the nexus between politicians and corporate interests in India.

Thirdly, the letter calls for better redressal mechanisms for victims of corruption, citing the fact that in India there are just ten judges per million people, compared to 50 in the UK and 107 in the US – without a better ratio, India's sclerotic judicial system will continue to be sluggish, making it even more difficult to tackle corruption.

The signatories are realistic about the scale of the challenge, writing that activity in India is “vitiated by corruption in almost every sphere”. Although the country's graft problem will not be solved through this letter, it does continue to keep the subject in the public discourse and put pressure on the government of Prime Minister Manmohan Singh to take action.

Sources: BBC, AFP, The Hindu

Tullow denies Uganda bribery claims

UK firm Tullow Oil has strongly denied accusations made by Ugandan MPs that it paid bribes to influential members of the country's elite – an accusation which has contributed to the suspension of all new oil deals.

As well as the graft accusations, parliament has also criticised the government's dealings with Tullow on tax grounds, arguing that Tullow's sale of stakes intended to raise capital for further investment should be blocked until a dispute over a US$472 million tax bill is resolved.

Allegations of corruption were aired in a stormy session of the Ugandan legislature on 11th October by Gerald Karuhanga, an MP for the ruling National Resistance Movement. Karuhanga tabled documents alleging that Tullow paid Prime Minister Amama Mbabazi, Foreign Minister Sam Kutesa and former Energy Minister Hilary Onek multi-million dollar sums for favourable decisions.

The officials involved all strenuously deny the accusations, as does Tullow. In a statement by chief executive Aidan Heavey, the company said that it “rejects the outrageous and defamatory accusations of corruption” and would “examine all possible legal action to protect the reputations of the company and its employees”. Heavey added that the accusations “appear to be founded on misunderstandings about how the global oil and gas industry works”.

Tullow currently owns three blocks in Uganda, and is seeking to sell off two-thirds of its stakes in the blocks to Total and the Chinese state-owned firm CNOOC. The move follows the purchase of Heritage Oil's stakes in the country's oil and gas blocks.

The legislature has now voted to suspend all new deals in the sector, including the sell-off of Tullow's stakes, until a 2010 bill regulating the oil sector – and promoting greater transparency – is passed.

The support which the suspension gathered from ruling party MPs suggests that long-time President Yoweri Museveni, who has backed the Tullow deals, is losing control of his party. He has come under increased pressure this year following a February poll marred by fraud and stirrings of popular unrest. The attack on key ruling figures suggests that domestic politics as much as concern for transparency is a key factor in the row.

The UK government, in line with the 2010 Bribery Act, has announced that it will investigate the allegations. The High Commission in Kampala told reporters that “Bribery of foreign public officials is of course an offence under UK law, and it would therefore be for the British Police to decide whether to open an investigation into allegations made against a British company”.

Sources: BBC, Wall Street Journal, Daily Monitor

Peruvian President dismisses top police in corruption purge

Peru's president Ollanta Humala has sacked 30 of the country's top police generals for corruption, in a major offensive in a war on corruption he announced in July.

The purge has forced two-thirds of the country's top police officers into retirement, including the director. His replacement Raúl Salazar has sworn to “banish any act of corruption that stains the name of the police” and continue the crackdown in the force.

Humala, a former military man, came to power in July partly because of his strong anti-corruption message. This resonated in a country which had grown used to years of massive embezzlement by the ruling elites; with approval ratings of 65 per cent, his campaign appears to have widespread public support.

In early October this message was echoed at an International Anti-Corruption Conference was held in Lima, at which the president of Congress declared that the government had the will to launch an all-out war against graft.

Critics of the government have warned that the police purge may be more complex than it seems, however. Some have accused Humala of cleaning out old officers and replacing them with his own favoured candidates in a bid to increase his influence over the police force. The promotion of dozens of army officers has also led to allegations that the president is looking to politicise the security services rather than root out corruption.

Despite concerns among the opposition and intelligentsia, many ordinary Peruvians are likely to support Humala's war on corruption. During the election campaign against Keiko Fujimori, daughter of ex-President Alberto Fujimori, he repeatedly promised more equitable division of Peru's resources and an end to the nepotism which has afflicted the country for decades.

In many polls the police has been viewed as the most corrupt institution in the country. It is likely that the population will support his efforts to eliminate corruption despite concerns over the political motivations behind the purge. Truly effective anti-corruption efforts, however, will require root-and-branch reform – not simply retiring the men at the top.

Sources: BBC, Guardian, Wall Street Journal