Hawala scandal
Encyclopedia
The Hawala scandal or hawala scam was an India
n political scandal involving payments allegedly received by politicians through four hawala
brokers, the Jain brothers. It was a US$18 million bribery scandal that implicated some of the country's leading politicians.
In 1991, an arrest linked to militants in Kashmir led to a raid on hawala
brokers, revealing evidence of large-scale payments to national politicians. Those accused included L. K. Advani, V. C. Shukla, P. Shiv Shankar
, Sharad Yadav
, Balram Jakhar
, and Madan Lal Khurana
. The prosecution that followed was partly prompted by a public interest petition (see Vineet Narain
), and yet the court cases of the Hawala scandal eventually all collapsed without convictions. Many were acquitted in 1997 and 1998, partly because the hawala records (including diaries) were judged in court to be inadequate as the main evidence. The Central Bureau of Investigation
's role was criticised. In concluding the Vineet Narain case, the Supreme Court of India
directed that the Central Vigilance Commission
should be given a supervisory role over the CBI.
India
India , officially the Republic of India , is a country in South Asia. It is the seventh-largest country by geographical area, the second-most populous country with over 1.2 billion people, and the most populous democracy in the world...
n political scandal involving payments allegedly received by politicians through four hawala
Hawala
Hawala is an informal value transfer system based on the performance and honor of a huge network of money brokers, which are primarily located in the Middle East, North Africa, the Horn of Africa, and South Asia...
brokers, the Jain brothers. It was a US$18 million bribery scandal that implicated some of the country's leading politicians.
In 1991, an arrest linked to militants in Kashmir led to a raid on hawala
Hawala
Hawala is an informal value transfer system based on the performance and honor of a huge network of money brokers, which are primarily located in the Middle East, North Africa, the Horn of Africa, and South Asia...
brokers, revealing evidence of large-scale payments to national politicians. Those accused included L. K. Advani, V. C. Shukla, P. Shiv Shankar
P. Shiv Shankar
Punjala Shiv Shankar is an Indian politician. He served as the Minister of External Affairs, Law, and Petroleum. He was a very influential minister in Indira Gandhi's and Rajiv Gandhi's cabinets and is one of the most senior politicians in India. He has also served as the governor of Sikkim and...
, Sharad Yadav
Sharad Yadav
Sharad Yadav, a politician from the Janata Dal party, is currently a Member of the Parliament of India representing the Madhepura constituency of Bihar in the Lok Sabha...
, Balram Jakhar
Balram Jakhar
Dr. Balram Jakhar Dr. Balram Jakhar Dr. Balram Jakhar (Devanagari:बलराम जाखड, IAST: Balrām (born 23 August 1923) is a well-known Indian politician and parliamentarian and former Governor of Madhya Pradesh. -Early life and education:...
, and Madan Lal Khurana
Madan Lal Khurana
Madan Lal Khurana is an Indian politician and former Chief Minister of Delhi. He has also served as the Governor of Rajasthan.-Early life:...
. The prosecution that followed was partly prompted by a public interest petition (see Vineet Narain
Vineet Narain
Vineet Narain is a prominent Indian journalist and anti-corruption activist. His exposure of the 1990s Hawala scandal led him to use a public interest petition to apply pressure on the Central Bureau of Investigation...
), and yet the court cases of the Hawala scandal eventually all collapsed without convictions. Many were acquitted in 1997 and 1998, partly because the hawala records (including diaries) were judged in court to be inadequate as the main evidence. The Central Bureau of Investigation
Central Bureau of Investigation
The Central Bureau of Investigation is a government agency of India that serves as a criminal investigation body, national security agency and intelligence agency. It was established on 1 April 1963 and evolved from the Special Police Establishment founded in 1941...
's role was criticised. In concluding the Vineet Narain case, the Supreme Court of India
Supreme Court of India
The Supreme Court of India is the highest judicial forum and final court of appeal as established by Part V, Chapter IV of the Constitution of India...
directed that the Central Vigilance Commission
Central Vigilance Commission
Central Vigilance Commission is an apex Indian governmental body created in 1964 to address governmental corruption. It has the status of an autonomous body, free of control from any executive authority, charged with monitoring all vigilance activity under the Central Government of India, and...
should be given a supervisory role over the CBI.
Further reading
- Kapoor, S. (1996), Bad Money, Bad Politics: The Untold Hawala Story, Har–Anand Publications, Delhi - cited (p.22) by Ashok V. Desai in The Economics and Politics of Transition to an Open Market Economy: India, OECD Working Paper 155 accessed at http://www.oecd.org/dataoecd/18/3/1921937.pdf May 26, 2011
- Hawala. An Informal Payment System and Its Use to Finance Terrorism by Sebastian R. Müller (Dec. 2006), ISBN 3-8655-0656-9