‘A difference has to be made between tax evaders and criminals’


Supercop KPS Gill tells Sai Manish why he went to court on the issue of black money being stashed abroad

Payback time KPS Gill wants the authorities to focus on bringing the money back
Payback time KPS Gill wants the authorities to focus on bringing the money back
Photo: Shailendra Pandey

What prompted you to file your appeal in the Supreme Court on black money?
Looking at the planning process, looking at the government expenditure and the economic situation, I thought that if this money could come back, there could at least be some infrastructure development in the country. This money could provide drinking water to millions of poor people, good education to underprivileged children and great healthcare to the masses who do not even have access to basic medical care. That was what I was thinking of. This money, if pursued and got back and spent wisely, has tremendous potential to lift India’s have-nots out of their miserable existence.

What is the nature of your appeal? What do you make of the list of account holders published by TEHELKA?
We were trying to request the government to get back the black money stashed illegally abroad by individuals and various entities under different names. The government has at last given the names in a sealed cover to the Supreme Court because they say there is a secrecy clause. TEHELKA has already published the names but one does not know whether these are the same names given to the Supreme Court. The court has been saying that these names should be made public but the government is saying international treaties, which contain a secrecy clause, bind it. But if one looks at the names TEHELKA has published and other newspapers have carried, the amount of money involved is not very large. Some of the people have also kept the money as fronts in other names

Is the money in Swiss accounts really big or are these figures exaggerated?
Well, $1.4 trillion is a large amount when you put it in perspective of India’s GDP (gross domestic product) and the potential of this money to uplift the poor in India’s society. The biggest recovery till date was that of former Philippines dictator Ferdinand Marcos who alone was estimated to have held close to $3 billion under various names containing both cash and bullion. This is the kind of money an individual can hold in such accounts without being held accountable for decades. And India is the country with the largest share in the world black money pool.

But if this is just the tip of the iceberg, how big is the iceberg?
There are various estimates ranging from about $600 billion to $1.4 trillion. India’s estimated black money in foreign shores is more than three times the estimates of nations like Russia, the UK and China There was a time in our recent history when the taxation regime was unfair to those earning high incomes. That is when, I think, money started being sent out through over-invoicing, under-invoicing and other illegal means. But that was just one aspect. However, what started out as an attempt to escape being taxed heavily is assuming more dangerous forms. Now black money in secret accounts constitutes blatant money laundering and huge amounts of it is being used to fund terrorist activities against India. The use of this money for such purposes seriously jeopardises India’s security.

How long will it take to get back the money?
I look at it as a 10-year problem provided we stop the outflow. Because if we don’t stop the money outflow right now, then it is going to be a perpetual problem. This outflow of wealth will go on forever adding to the existing billions stashed abroad. But we in India are used to perpetual problems and leave them unsolved.

Why has the government not released the names of these account holders?
Is it legally bound not to do so? The Indian government says it got the names from Germany. Germany in turn got it from an informer of a bank who sold it to them. The German government expects the Indian government to keep silent because secrecy laws govern them and by revealing names India would be dishonouring this clause in their bilateral treaty. The finance minister has said that once the matter goes to court the names can be revealed. If any of these account holders have committed a criminal act like money laundering or funding terrorism, then these names can no longer be hidden from the public. They have to be revealed.

What should we be pushing for with nations we have a double tax avoidance agreement with?
What we need is a sort of a Bhoodan (land gift movement). Vinoba Bhave’s movement was effective in appealing to the conscience of people. We should also appeal to the conscience of these people and nations where the money is stashed. Tell them, you get back your money and we will help you in whatever way we can. We will keep your names secret but get the money here. Now the public wants to know who did this as they suspect some big politicians to be among the offenders. But I was surprised not to find the names of some bureaucrats and politicians in the list.

Some of these nations do pose problems by citing laws to prevent releasing their names. How do we deal with such nations?
Most of the European nations are in a financial crisis. Germany has come out of it. But the rest of Europe is reeling and their currency, the Euro, itself is on the verge of collapse. So the EU economy needs the money. They will do their best to keep the money there and not help India. They are money-hungry right now. We are all prone to suspect anything that the government does. In certain matters its own limitations and those of the western economies bind the government. There we are in a sort of a fix. Let the money come back and let the names be secret. But evolve a mechanism that prevents money from going out of India in the future. The leaks are large and we need to tighten the screws. If we don’t act now then it is going to be a never-ending process of huge money going abroad either in the guise of trade or in the form of government dealings. All this money has the potential of leaking into our system and destabilising the economy.

What are the difficulties in tracking this money and should the government constitute a specific agency exclusively for this purpose?
To a large extent, this is an India-specific problem. The secrecy of banking laws is sacrosanct in some countries. The government will have to adapt special laws and certain organisations have been urging the government to bring in legislation that will make the process of getting back the money easier. My guess is that the government will be more interested in getting the money back without much criminality being attributed to those who have stashed such money abroad. The government would be looking to get the money and investing it in infrastructure projects in India. They would also be wary of passing legislation that may discourage investors from outside India from pumping in money in development projects. Although there is a lot of political hullabaloo about it, one understands that the matter has not been addressed with the seriousness that it should have been. The government is also mooting the proposal of massively expanding the Enforcement Directorate so that they can track the huge sums of money in different countries. But let us not forget that the process of detection and retrieval of black money is a tedious process. What further complicates the issue is that this black money has to some extent come back to India through various routes like Mauritius and has been invested in India.

What specifically should the government do to get back this money?
The government strategy has to be cautious because India is walking a tightrope on this. The government will have to be rule out amnesty to the people whose illegal money has been used against the interests of India, the kind of people who should have criminal charges against them. They should not be spared. Then it will have to be ensured that when the money is back, it is invested carefully so that it does not lead to inflation and price rise in the economy. In this matter I see the Supreme Court more competent in handling the issue. The court can set up a committee to suggest ways of getting back this money without affecting the economy adversely.

If there is political will to get the money back, what can the government do?
Although I talked about not showing mercy to those who have engaged in criminal acts to hurt India, there are other cases that have to be tackled more sensitively. We should try to protect people who are engaged in trade that is beneficial to the country and generates employment for thousands of people in the country. Like these diamond traders engaged in polishing and export of diamonds to the world. The government would certainly not look to put the cat among the pigeons here. Because if the government cracks down on them, these traders will leave India and relocate elsewhere, hurting India even more. It’s a complicated issue. Probably the government does not have the expertise to address this issue and that is why I believe this will have to be done through a body authorised under the Constitution or the Supreme Court.

Germany was sold the list and the US arm-twisted a Swiss banking behemoth (UBS) into submission. Can we not get the money back like the Germany and the US did?
Germany and the US are financial giants. Although we call ourselves an emerging economic power, we are not that great yet so as to twist anyone’s arm. I don’t think the Government of India can do what the US did. It is exciting to imagine that. But the US economy is 14 times larger than ours. With not much financial muscle, it becomes complicated for India. At this time, the government will have to tread cautiously.

Can we at least take something from the US-UBS episode if not copy them? Even if we do, what next?
We have been unable to establish the veracity of the few facts we had from investigations into the illicit wealth of people like Hassan Ali. Now they are saying Adnan Khashoggi transferred $300 million into Hassan Ali’s account in UBS. There is so much of conjecture floating around despite detailed investigations into his UBS accounts. India should focus on plain facts and not rely on conjectures. Facts have to be collected and presented to the Supreme Court for it to decide.

Have you been following the Hassan Ali case?
Why is that man not being prosecuted? Because there is no proof. His money is also linked to some politician or the other. Proving it becomes the problem. Those who are corrupt know the system and use it to circumvent and cheat the people.

Is there a way to track fronts of big politicians in these foreign accounts?
The government has woken up to the enormous problem at hand. The fact that they want to enlarge the Enforcement Directorate and have a forum to track black money speaks a lot. But the difficulty is that we are a soft power. We do not use other methods like terrorism and force to get things done. Some say that is one reason why India is doing economically well. Tracking the money depends on the wisdom of the authorities. The foremost thing on their mind should be to get the money back. And it has to come back without hurting investments in India.

Is there a case for criminal prosecution of these account holders?
Money-laundering and tax evasion can form criminal grounds for prosecution. But that is a long process and being a soft state doesn’t help either. Initially, it would seem strange that so much money would be out. Even if it is abroad, it does benefit our economy in indirect ways. The money has to be recovered. But a difference has to be made between tax evaders and criminals who are hurting the country.

Has there been an action taken report on the list sent to the Supreme Court?
There is no action taken report on the list given to the SC. Ram Jethmalani and Anil Divan from the court have been proactive. But Jethmalani is a political person and the attempt will be to make a case against the government. Making a case against your opponents is one thing but putting things in perspective is quite another. We should not discredit the attempts being made at the moment. If you discredit the system there will be more hunger, wastage and corruption. In India we don’t know what a good delivery system is. We know that the current system is bad. But people in India should understand that it could get a lot better and efficient. I know when I was tackling terrorism, there was so much criticism all around. People could not imagine that the process of weeding out terrorists could be so good. They couldn’t fathom that we were doing better than what many other countries could do. So they thought we were doing something bad. That habit of discrediting everything should be avoided in this case.


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