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By spook or by crook

India’s spy agencies like RAW and IB and police forces have a secret fund meant for cloak and dagger activities. With no one looking, those with access to the money often succumb to the temptation to simply pocket it.

delhi Updated: Oct 31, 2010 01:49 IST
Sanjib Kr Baruah
Sanjib Kr Baruah
Hindustan Times

Amitabh Bachchan' must have cheered on Tuesday after the Jharkhand government okayed a CBI probe into alleged irregularities in the police Secret Service Fund (SSF). Except, in this case, 'Amitabh Bachchan' is not the Bollywood superstar but a secret informer helping the police with information on Maoist activity in the troubled state.

The fund probe began after the Jharkhand Accountant General expressed doubts in SSF expenditures incurred by the former state DGP Dayal Ram and the then additional DGP Rajiv Kumar. And 'Amitabh Bachchan' alleged that the police made him sign vouchers in the superstar's name for R10,000, while the police DGP actually withdrew Rs21 lakh.

Later, a probe report by state chief secretary AK Singh claimed that the then Jharkhand police chief and his deputy Rajiv Kumar had actually withdrawn Rs8 crore from the SSF and had failed to submit vouchers.

Under normal circumstances, the money from the SSF is never scrutinised by an audit authority, but as Jharkhand is still governed by Bihar Financial Rules, the money has to be audited and has to be certified by the accountant general.

A secret stash
So how much money does the secret service fund contain? Up till now, no figures have emerged from the shadowy depths of India's spy bureaucracy and they continue to remain outside the public domain. For 2010-11, Rs1,200 crores has been kept aside for 'special diplomatic expenditures' under the ministry of external affairs which is meant for 'discretionary' expenditures', while R731 crores was set aside for the Intelligence Bureau.

What exactly is special diplomatic expenditures?

The external affairs ministry officials declined to comment. Hidden from the public at large under a shroud of strict secrecy and privy only to senior government officials, the misuse and misappropriation from the secret service expenditures account is a widely rampant and a closely guarded secret in the country.

Many central and state government departments and agencies including those from the home ministry, finance ministry, railways and others receive such funds annually.

Waging a lonely and hopeless battle is former Research and Analysis Wing (RAW) operative RK Yadav (60). As a field officer in Assam in 1988-89, he had taken head-on the powers-that-be by voicing his opposition to a RAW operation to impart weapons and combat training to Bodo militants. These militants who later on formed the Bodo Liberation Tigers, created havoc in the state with bomb blasts and gun fights.

"RAW is an agency meant for external intelligence and operations. Instead, Bodo youths were trained from the money from the secret fund. There were many air sorties which transported either Bodo militants or RAW officials." It proved to be Yadav's nemesis. He was dismissed from RAW that year.

Yadav also raised serious allegations about senior agency officials siphoning money from the SSF. "Many senior RAW officials built their personal assets like houses, land etc from this fund."

Largely transacted in cash, the mode of SSF account maintenance varies from agency to agency and from state to state. The more shadowy and secretive the agency is, more opaque the transactions. In case of RAW, no questions are asked. There are no whens and hows.

Since the Intelligence Bureau has much less access to the SSF, less funds have been siphoned off, atleast that is what former joint director of the IB, MK Dhar, believes. "While I had personally detected few cases in our agency, RAW has access to huge funds because of the nature of its work," he says. "When I was posted to Canada in the 1980s, I worked in tandem with RAW colleagues. I had very strong reasons to believe that a lot of financial SSF bungling was going on."

In the IB, the home secretary examines the SSF accounts produced by the IB director. Likewise the responsibilities float down to the lower rungs. Similar is the system in the state police departments with the DGP or equivalent rank officers at the apex of the pyramid and the district police chiefs as the main lynch pins.

The normal requirement in each state for the upkeep of the accounts is that generally a controlling officer is nominated, who conducts an administrative audit of the expenses incurred and then furnishes a certificate to that effect with the state accountant and auditor general.

"But in most states, this procedure is not followed," says Jitin Sahni, a Supreme Court lawyer. Last month, the apex court quashed Sahni's public interest litigation seeking a CBI enquiry into the misuse of SSF by state police heads of nine states from 2001 to 2010. The court order ruled that the petition stood dismissed for want of statutory provision.

Who's got the money?
Obviously misappropriation of the funds is widespread, especially since hardly any state conducts financial audits. Says a police superintendent of a district in Assam, "Kutcha bills work fine. No one submits where and how he spent the money." So far he has already received R1 lakh as SSF expenses for 2009-2010. Multiply that with 625 — the districts in the country.

"It is difficult to quantify the exact amount of SSF money. The SSF funds for IB or for RAW is hedged in the overall funds given to the agencies under the respective ministries," says Dhar.
Early this year vice-president Hamid Ansari, in an address to senior RAW officers had underlined the need for a parliamentary committee on intelligence to introduce a system of "oversight and accountability" in the functioning of intelligence agencies. He had said, "The practice of subsuming allocations is not conducive to transparency; it may even encourage misuse. The proposed standing committee could fill this void; it could also function as a surrogate for public opinion and thus facilitate wider acceptance of the imperatives of a situation."

From the tax-payer's pocket
Perhaps that is why, in a first step of its kind, the Comptroller and Auditor General had taken up a "special audit" of the National Technical Research Organisation (NTRO), India's premier technical intelligence-gathering unit.

Citing the case of Assam, a senior police official says, "The SSF amount allotted to just the Special Branch of the police in Assam is about Rs2 crore per annum. There is already a move to take out the control for this amount from the DGP to the special branch itself so that it can be more easily used to serve the political masters of the day."

The SSF money allocation in each state is determined by many factors like the nature of threats faced, size of the police force, geographical boundaries of the state, the kind of intelligence and infrastructure required, etc.

Last year, the Kerala government had issued a circular to all departments lamenting the fact that rules were not being followed in incurring secret expenditures.

Yadav's tirade continues amid obstacles. "My complaint on SSF money embezzlement by top ex-RAW officials has been on a roller coaster ride. I had approached the CBI, vigilance commission and the courts. Two years ago, the CBI even told me in a RTI response that the relevant files were missing. But the case is back on track now."
So where has all the money gone?

Spy vs spy | 'The funds are definitely misused'

First Published: Oct 30, 2010 21:28 IST