Probing A Secret

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For the first time in decades, the federal investigators are probing the secret fund, triggering discussions across Jammu and Kashmir, reports Tahir Bhat

Peoples Democratic Party President (PDP) Mehbooba Mufti arrives at the Enforcement Directorate (ED) office in connection with an alleged money laundering case, at Rajbagh in Srinagar, Thursday, March 25, 2021. KL Image by Bilal Bahadur

After remaining secret for decades, the secret fund that the Chief Ministers’ of Jammu and Kashmir have been handling personally is no secret anymore. It is now front-page news after the federal investigators started probing its end use during the tenure of the erstwhile Jammu and Kashmir state’s last Chief Minister.

Secret Fund is a discretionary grant available with the Chief Minister for expenditures that are key to better governance and not taken into account by formal expenditure systems for purposes of audit. The nature of this grant is supposed to be secret and not open to any audit. The system reposes its full faith in the grant-holder about its use though at some level some officials are supposed to know where it has gone. Security and political setup usually consume most of it but part of it also trickles down to certain key social and administrative requirements on case to case basis.

These grants are slightly bigger in border areas, strategic spots and conflict-ridden belts. There is a possibility that the Chief Ministers of the states lacking any of these issues may not have or may have a minuscule grant available with them. Even though Jammu and Kashmir has been downgraded to a federally administered Union Territory (UT), it still might have a huge corpus available to the Chief Executive than most of the Chief Ministers’ running bigger states in the mainland Indian plains.

The quantum of the grant has changed with the times. Sheikh Mohammad Abdullah is understood to have not touched this grant pre-1953. Post-1990, however, this grant has remained a significant tool and has been revised more than once. Apparently, it is almost a crore of rupees a month.

Post-1990, the use of such grants was instrumental in reviving the moribund political structure. Though everybody would talk about it, the broad contours of the ‘secret fund’ have remained secret.

“The fund is distributed by the principal secretary to the Chief Minister,” one former minister, aware of the systems in place in the erstwhile state of Jammu and Kashmir, said. “He is supposed to keep the records for 90- days, sign it and then destroy it. This expenditure is not audited.”

Another officer who is privy to the system said the principal secretary signs a single line declaration that the amount has been spent. No questions asked.

In Chief Minister’s secretariat, there was an official who would handle the kitty for a long time. Identified as Rajnath, he actually retired towards the fag end of Dr Farooq Abdullah’s tenure. Given his expertise in managing this fund with utmost secrecy, he was retained by successive Chief Ministers in Jammu and Kashmir.

“Initially, he was given a yearlong extension,” one former officer, who has worked with him said. “He served for a decade later and then his costs would also come from this fund.” Finally, he decided to hang his boots and within some time, the last elected government was out of office.

File image of Tasaduq Mufti along with Mehbooba Mufti

But Rajnath’s retirement did not protect the secrecy of the particular grant. During one of the raids, a federal investigator actually recovered two handwritten diaries from a lawmaker that listed many transactions. It is this diary that is fundamental to the investigations by the Enforcement Directorate (ED) against Mehbooba Mufti, the former Chief Minister.

“After a scrutiny of 23 bank accounts and questioning and searching several key persons, the agency has made out a case of alleged “diversion” of between Rs 7-8 crore from the Government fund for “personal and political purposes,” The Indian Express reported.

Officials aware of the ongoing ED probe told the newspaper that expenditures booked under this account for May, June and November 2017, include wazwan in Delhi; the purchase of a humidifier; payments towards tailors’ bills, cable TV costs, Golf Club bills and milk supplies. It mentioned payments worth Rs 69.64 lakhs in June 2016 and Rs 53.35 lakh in October 2016.

“A scrutiny of the entries, officials said, shows monthly outflows to the former Chief Minister herself as well as payment to destitute homes,” the newspaper report said. “The ED has categorized alleged payments as per their end-use: organizing PDP rallies; providing vehicles for PDP workers and purchase of air tickets for her family.”

The newspaper, perhaps the only one offering details of the ongoing investigations, said the ED has traced cash deposits worth Rs 60 lakh between 2016 and 2018 into the bank account of Gulshan Nazir, wife of former Chief Minister, Mufti Sayeed and mother of Mehbooba Mufti. This is, in addition, to the transactions in personal accounts of Mehbooba’s daughter’s and brother.

“Along with this, there are allegations of cash from “undisclosed sources” being deposited into the accounts of members of Mehbooba Mufti’s security detail and the money being, subsequently, moved into the account of her mother,” the newspaper reported. “Similar circuitous transactions are being probed between a Srinagar hotelier who would allegedly get cash deposited into his accounts which was then transferred into accounts of the then CM’s family members, said officials.”

It is on this basis that the ED is intending to summon and investigate all the family members of the former Chief Minister. Even her security detail is expected to be investigated. “According to officials, almost all those questioned in the case so far have admitted to the cash deposits. This includes the author of the diaries who maintained the monthly accounts for the CM’s discretionary fund and is said to have confirmed the expenses, said officials,” the newspaper added.

Syed Farooq Andrabi

Ms Mufti has admitted she was shown the diaries during her 5-hour long questioning at the ED office in Srinagar. “I know the people mentioned but I cannot certify what they write in their notes,” she told the newspaper, asserting it cannot be taken as gospel truth. She has also admitted that “though it is not audited, I have kept accounts and maybe I should not have.”

 

Ms Mufti and the PDP has maintained for a long time that it has been taking care of the families, rendered destitute by the conflict.

The nature of the fund being secret does offer the spender flexibility in spending. A former officer, who has served a number of Chief Ministers, said the fund has traditionally been spent on multiple fronts and nobody can ever rule out that part of the funds are spent on the family of the Chief Minister.

Sartaj Madni

For most of the time, most of the fund would be utilised by the Jammu and Kashmir Police. “There were two interventions, one during Dr Farooq Abdullah’s government and second in Mufti Sayeed’s government in which some rationalisation was made,” one officer said. “During Dr Abdullah’s time, devolution from the fund to the police was restricted to a level and later in Mufti era, the police was specifically told that the transfer of these funds must trickle down to district levels.”

“A small-time government employee was taking his daughter to schools and a vehicle hit her resulting in an amputation of her both legs and when the girl was seen by the then Chief Minister, he broke down, and extended her a good amount,” one officer, who has witnessed the scene and processed the file said. “In another case, a young boy was fired upon and he lost his leg and when the case reached the Chief Minister, Omar Abdullah sanctioned a good amount from his fund to see him rehabilitated.” In yet another case, another chief minister funded the surgery costs of his peon.

The officer said that the fund has traditionally been taking care of some logistical requirements of the public meeting and it is true with all political parties.

There are, however, some interesting expenditures that were actually made from the fund. When a key infrastructure was coming up during the 2019 turmoil, the skilled labour was flown and lodged in circuit house for a month and their rent costs were paid from this fund. “In two cases, some top dignitaries received gifts and in both cases, the payments were made from this fund,” one officer said. “In one case, the dignitary was given a not so costly Kashmiri carpet that valued about a lakh of rupees.” The officer said these expenditures could have been managed from routine funds but for possible auditory issues and cumbersome process of purchase, the fund was used.

Three former Chief Ministers’ who have cumulatively ruled Jammu and Kashmir for almost a quarter-century are leading the Peoples’ Alliance for Gupkar Declaration. KL Image: Bilal Bahadur

This, however, is not the only issues that Mehbooba Mufti and her party are embroiled with. Another federal investigator, National Investing Agency (NIA) has linked a key PDP functionary, Waheed-ur-Rehman Parra with the militancy. Filing a supplementary charge sheet (under section 120B (criminal conspiracy) of the IPC, sections 17, 18, 38, 39 and 40 of the Unlawful Activities (Prevention) Act, and section 25 (1AA) of the Arms Act and section 6 of the Explosive Substances Act) in the DySP Devender Singh case (01/2020/NIA/JMU), the NIA accused Parra of being involved with militant outfits, Hizbul Mujahideen and Lashkar-e-Toiba. Parra was formally arrested on November 25, 2020, a day after he filed his nomination papers for the DDC from the home segment of Pulwama. He won his election while being in prison.

Termed to be “a crucial player” in sustaining the “political-separatist-terrorist” nexus in Jammu and Kashmir, the NIA has accused Parra of paying Rs 5 crore to Syed Ali Geelani’s aide and relative, Syed Altaf Ahmad Shah Fantoosh “for keeping secessionist activities alive” during the 2016 unrest triggered by Burhan Wani’s killing and having sought the help of Hizbul Mujahideen fugitive Naveed Mushtaq alias Naveed Babu “for campaigning of party workers during Parliamentary elections in 2019”. He has also been accused of smuggling arms for militants using his protected and escorted vehicle.

Detailing the allegations, Jammu based Daily Excelsior reported that Parra had met Hizb conduit Irfan Shafi Mir at his official Gupkar Road residence where he paid him Rs 10 lakh for Naveed Mushtaq for “purchasing arms and ammunition”.

“Para talked to Naveed Babu and asked him to take care of his party workers campaigning for Parliamentary elections in Pulwama district,” it quoted NIA saying. It also alleged paying Rs 10 lakh to Lashkar militant, Abu Dujana in 2016.

Parra’s lawyer, however, has denied these charges alleging his arrest has political reasons. “He was granted bail by the NIA court, which said there was no reference to him in the original, as well as the supplementary charge sheets presented in July and October last year respectively,” The Hindu reported. “The court said “there was not even whisper” regarding Parra’s involvement in the original charge sheet, adding that there was a statement in February 2020 of an accused that allegedly implicated him.”

Ms Mufti has insisted that Parra, once very close to the then Home Minister Rajnath Singh, is a victim of political vendetta.

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