Electoral Fraud

Every one of us yearns to raise our status in society, but politicians entertain hopes of great magnitude. There are many men and women of principle in the world, but once they enter politics they just forget those principles they strived for, and constantly seek money, property, and power. Except a few politicians many do not care about their deteriorating reputation.

It is now an apothegm that any candidate standing for any elections in any part of the world would use all available ploys to influence voters. Invariably, many potential voters expect the handouts from the contesting candidates.

It’s natural to think of elections when we think of political corruption. People or organisations with their own agendas can skew voting. They may secretly give parties big donations. Or parties and candidates can buy votes instead of winning them.

But political corruption isn’t just about election rigging. It can lead politicians in office to steer away from good government. Their decisions can benefit those who fund them. The public interest comes second. Political corruption can divert scarce resources from poor and disadvantaged people. This is especially common in countries where democratic institutions are weak or absent. Private rather than public interests dictate policy.

This means an ethical line has been crossed. Governments can’t act freely and democracy can’t function. Our trust in politicians is damaged. We can turn away from involvement with how we’re governed. Then political corruption continues unchecked. The solution? 

India is a nation where over 30 percent of the population lives below the poverty line, and illiteracy is around 35 percent.

All political parties in India indulge in competitive politics. Their mission does not to make life better for the average person or banish unemployment. In certain states instead of promising to provide schools and households with basic amenities such as potable water and hygienic toilets, freedom from corruption, mitigate poverty, and improve the purchasing power of the people, the political leaders promise to provide colour TVs, electronic gadgets such as mixer-grinders, fans, and laptops, to voters who scarcely get electricity for more than four hours a day. Once these parties come into power they first inflate government expenditures, impose taxes, and then hand out enticing goodies instead of worthwhile goods; and that too only to the members of their party.

Electoral politics in India has a new dimension – arrest of voters for accepting bribe.

The Election Commission has arrested 20 persons in the ongoing elections in Karnataka for accepting money to vote in favour of particular candidates – a bailable offence. If the government accepts the commission's plea, offering or accepting money for vote would land people in jail (non-bailable offence).

It is unusual because, normally, a case of bribery is registered against candidates or their nominees for giving money to voters to use franchise in their favour. The voters, who receive money, are not touched as most of them were from economically deprived section.

The practice resulted in the accused going scot-free in the absence of evidence of someone having received the bribe for voting. "There had been no conviction for years for bribing voters," a senior election commission official said. The commission found that proving such a case in court of law was almost impossible.

The commission went for a tactical change. It decided to take action against voters also so that they could have a better case in the court of law and it could also deter voters from accepting money.

The decision was the fallout of the commission's finding that both the major political parties in Tamil Nadu - DMK and AIADMK - had given money and gifts to voters in the last assembly elections but was not able to crack the whip as evidence was not available.

The commission at that time had not taken any penal action against the voters thinking it would send a wrong message that it was targeting the poor and the deprived.

Now, the commission has taken a view to initiate action for deterrence and not harassment. "We are not going whole hog on getting cases registered against voters. It is being done just to send a message that accepting money for voter is a crime under the Indian Penal Code," the commission official said, who accepted that most of voters accepting money were poor. The decision is being implemented in Karnataka polls.

Another reason for the commission failing to stop the menace of bribing voters is the weak provisions in the law, which makes offering or taking bribe a bailable offence.

The commission wants the offence to be non-bailable and has made a request to home ministry to amend the Indian Penal Code. "As many as 18 state governments have agreed to the proposal," the official said and added that the ball was now in the court of the ministry.

The commission believes that if the amendment is enacted before next general elections it can become a huge deterrent in checking the electoral malpractice of money for votes.

Black’s Law Dictionary, the most widely used law dictionary in the United States, defines bribery as an act of offering, giving, receiving, or soliciting of any item of value to influence the actions of an official or other person in charge of a public or legal duty.

On December 30, 2013, The Monitor carried news that US Federal authorities arrested a local politiquera Diana Castañeda in McAllen, Texas, United States, for paying voters in cash, beer and cigarettes during the 2012 primary and general elections as well as taking voters to buy drugs after they had cast their ballot. According to court records, Castañeda confessed that she was a politiquera for various candidates and that during the 2012 elections she was paid $125 by one candidate to get food for voters and to pay them $10 to $20 per vote. However, the name of the candidate that gave her the money was not listed in court records.

City agencies have seized over 2,064 litres of liquor in the past few days and recovered more than 63,000 bottles during the last one month – 61,500 were ‘quarter’ bottles, which are mainly meant for distribution.

Around 7,000 bottles seized on Tuesday were all of the quarter bottle size (180 ml).
 
A few MLAs revealed that liquor bottles are generally distributed a day before the polls. The police and excise department have seized over 63,000 bottles of alcohol in Delhi over the past month after seeing a record-breaking amount of illegally supplied liquor.

The illegal supply of liquor has crossed all records in the run-up to the Delhi assembly elections. 

“Quarter bottles are distributed among slum dwellers and in resettlement colonies. Politicians ask their workers to keep a stock of bottles at secret locations,” a sitting MLA said.

Delhi chief electoral officer Vijay Dev said the Election Commission has asked all the agencies to crack down heavily on the illegal supply of liquor in Delhi.

Politicians use subtle methods to distribute alcohol to avoid run-ins with the police.

“The voter is given a chit to be deposited with a selected liquor vendor to get alcohol. Many candidates also finance parties hosted by other people and distribute liquor in such parties,” said an excise official.

On March 28, 2013, as his indefinite fast against “inflated” power bills entered the sixth day, AAP leader Arvind Kejriwal alleged both Congress and BJP were winning elections through bribing voters and using muscle power. He told his supporters:

“This is because BJP and Congress are both worried as a different kind of politics is slowly emerging in India. So far they are used to winning on the basis of bribing voters, money power and muscle power but now the voters have awakened. The elections will not be elections but revolution.” 

In conversations with US diplomats, the son of India’s powerful home minister P. Chidambaram and an aide to a senior leader of one of the main coalition partners allegedly explained how the main parties in Tamil Nadu state routinely bribe voters to clinch close elections.

One allegedly said they had widely distributed envelopes containing 5000 Rupees in cash (£70) hidden inside voters’ morning newspapers.

The disclosures highlight the nature of electoral fraud in the world’s largest democracy, and its widespread acceptance. Indian political parties, in particular in the south, often offer televisions, refrigerators, and computers to voters to win elections.

American diplomat Frederick Kaplan, a principal officer in its Madras consulate, was surprised at how freely senior politicians apparently admitted paying bribes for votes.

In a cable dispatched on May 13, 2009, the last day of India’s general election, he explained the system to his colleagues in Washington: “Bribes from political parties to voters, in the form of cash, goods, or services, are a regular feature of elections in South India. Poor voters expect bribes from political candidates, and candidates find various ways to satisfy voter expectations. From paying to dig a community well to slipping cash into an envelope delivered inside the morning newspaper, politicians and their operatives admitted to violating election rules to influence voters. The money to pay the bribes comes from the proceeds of fund-raising, which often crosses into political corruption. Although the precise impact of bribery on voter behaviour is hard to measure, it no doubt swings at least some elections, especially the close races,” he wrote.
 
 “Weeks before the elections agents of the parties come to the neighbourhood with cash carried in rice sacks. They have copies of the voter lists and they distribute the money based on who is on the list.” The deliveries are made between “two and four in the morning, when the Election Commission is asleep,” he added.

One aide is quoted as revealing details of bribes paid by his boss. “It is no secret at all [he] paid 5,000 rupees per voter in Thirumangalam,” he said.

Prashant Bhushan, a senior lawyer who has led a crusade against corruption, said the cables revealed the “corruption of democracy” in India.

“These facts show the corruption and monetisation of the electoral process in India and therefore the corruption of the democracy in this country, where democracy essentially exists in a formal sense on paper, [but] effectively it is owned by those people who have money,” he said. “The money comes from all kinds of corruption which is rampant in India,” he added.

Tax Treatment of Bribes

Corruption is a complex phenomenon. Its roots lie deep in bureaucratic and political institutions, and its effect on development varies with country conditions. But while costs may vary and systemic corruption may coexist with strong economic performance, experience suggests that corruption is one of the most severe impediments to development and growth in emerging and transition economies.

Corruption is widespread in many developing and transition economies, not because their people are different from people elsewhere, but because conditions are ripe for it. The motivation to earn income through corrupt practices is extremely strong, exacerbated by poverty and by low and declining civil service salaries. Coupled with a strong motivation is the fact that there are ample opportunities available to engage in corruption. Corruption flourishes where distortions in the policy and regulatory regime provide scope for it and where institutions of restraint are weak. The problem of corruption lies at the intersection of the public and the private sectors. 

It is a two-way street. Private interests, domestic and external, wield their influence through illegal means to take advantage of opportunities for corruption and rent seeking, and public institutions succumb to these and other sources of corruption in the absence of credible restraints. Even if detection is possible, punishments are apt to be mild when corruption is systemic—it is hard to punish one person severely when so many others are likely to be equally guilty.

Corruption violates the public trust and corrodes social capital. A small side payment to obtain or speed up a government service may seem a minor offense, but it is not the only cost. Unchecked, the creeping accumulation of seemingly minor infractions can slowly erode political legitimacy to the point where even non-corrupt officials and members of the public see little point in playing by the rules. Credibility, once lost by the state, is very difficult to regain.

Corruption is both a major cause and a result of poverty around the world. It occurs at all levels of society, from local and national governments, civil society, judiciary functions, large and small businesses, military and other services and so on.

Corruption affects the poorest the most, in rich or poor nations, though all elements of society are affected in some way as corruption undermines political development, democracy, economic development, the environment, people’s health and more.

Around the world, the perception of corruption in public places is very high.But it isn’t just in governments that corruption is found; it can permeate through society.

The issue of corruption is very much inter-related with other issues. At a global level, the “international” (Washington Consensus-influenced) economic system that has shaped the current form of globalization in the past decades requires further scrutiny for it has also created conditions whereby corruption can flourish and exacerbate the conditions of people around the world who already have little say about their own destiny. At a national level, people’s effective participation and representation in society can be undermined by corruption, while at local levels, corruption can make day to day lives more painful for all affected.

A difficult thing to measure or compare, however, is the impact of corruption on poverty versus the effects of inequalities that are structured into law, such as unequal trade agreements, structural adjustment policies, so-called “free” trade agreements and so on. It is easier to see corruption. It is harder to see these other more formal, even legal forms of “corruption.” It is easy to assume that these are not even issues because they are part of the laws and institutions that govern national and international communities and many of us will be accustomed to it—it is how it works, so to speak. Those deeper aspects are discussed in other parts of another web site’s section on trade, economy, & related issues.

That is not to belittle the issue of corruption, however, for its impacts are enormous too.

Several governments saw no reason to disagree and offered favourable tax treatment for bribery payments, which could be written off as expenses.

These governments argued that making bribes to foreign public officials non-deductible contradicted the principle that all expenses associated with earning taxable income should be taken into account for tax purposes. A second argument they cited was that non-deductibility would be an ineffective deterrent against bribery of foreign officials anyway, even if it changed the effective cost of a bribe. Both arguments were flawed. On the first argument of taxation principles, there are already exceptions for certain legal costs, such as entertainment expenses and gifts, as well as certain payments that are illegal under domestic law. As for deterrent effects, if companies could get a tax deduction for bribes, what incentive would they have for not offering one?

The OECD has developed a simple argument: disallowing the tax deductibility of bribes serves as a strong and politically visible symbol of the common international commitment to combat bribery. And if combined with the criminalisation of bribery, non-deductibility becomes a potent force. 

Therefore, in April 1996 the OECD adopted a Recommendation on the Tax Deductibility of Bribes to Foreign Officials calling on those member countries which allowed the tax deductibility of bribes to foreign public officials to review their legislation with the intention of denying that deductibility. A Recommendation on Combating Bribery in International Business Transactions adopted on 23 May 1997 reinforced that call.

Not all OECD countries at the time treated bribery favourably for taxation purposes; in fact, about half of them disallowed the deductibility of bribes to foreign officials, though not all for the same reasons. In 1996 only 14 denied the deductibility of bribes to foreign public officials as a general rule. Canada, the United Kingdom and the United States denied it because of the illicit nature of the bribe in their own countries. In fact, if any part of the offence was committed in the United Kingdom, for example, whether the offer, the agreement to pay, the soliciting, the acceptance, or the payment itself, it would be covered by the corruption laws and would then not qualify for tax relief. Under Poland’s law, bribery is illegal and an offence for both the briber and the recipient of the bribe and both are punishable.

Other countries adopted approaches that were perhaps a little less explicit. The Czech Republic, for example, classified all bribes as gifts, which were mostly not deductible. In Japan, bribes were categorised as entertainment expenses, which by definition made them non-deductible anyway. 

In several countries – Finland, Greece, Hungary, Ireland, Italy, Korea, Mexico, Spain and Turkey – bribes of foreign officials simply did not qualify as a deductible expense, and were thus not allowed, even if there were no explicit provisions against them in some of these countries. In Denmark, Iceland, Norway and Sweden, bribes paid to foreign public officials were only deductible if they were documented business expenses and if they were a customary practice in the country of the recipient.

In the remaining countries – Australia, Austria, Belgium, France, Germany, Luxembourg, Netherlands, Portugal, New Zealand and Switzerland – bribes to foreign public officials were still as deductible as any other business expense, at least in principle. In practice, a deduction for a bribe was often disallowed because of insufficient documentation to support the fact that the expense was a necessary part of the transaction in question. Moreover, the deductibility of bribes to foreign officials was generally conditioned upon disclosing the identity of the recipient to the tax authorities, which taxpayers are naturally reluctant to do.