In a countrywide crackdown on foreign donations in violation of the Foreign Contribution (Regulation) Act, the Central Bureau of Investigation (CBI) has held 14 people, including Union Home Ministry officials, middlemen and non-government organizations (NGOs) for facilitating the clearance of foreign grants.
Massive raids were held in 40 locations in Delhi, Chennai, Hyderabad, Coimbatore, Mysore and some places in Rajasthan on Tuesday and Rs 2 crore in hawala transactions were also found. The CBI has arrested at least six government officials for allegedly taking bribes for facilitating clearances of foreign donations to NGOs through middlemen.
According to the report by CNN-News18, the crackdown took place after the Home Ministry raised suspicion of corruption in its foreign division department which deals with the FCRA clearance. As per the complaint, bribes were paid to lower-level officials in the foreign division working in the department for FCRA clearance.
The issue was brought to the notice of Home Minister Amit Shah who directed strict action against those involved. The MHA alerted the CBI and an operation to catch the racket was launched.
The decision to alert the CBI regarding the matter was in line with the Modi government’s “zero tolerance for corruption” policy, officials told News18. This is the second such crackdown over corruption in the division in the last few years.
Several NGOs are under the scanner.
Who Are These Institutions?
Organizations that are facing inquiry for bribing MHA officials in violation of FCRA violations are Sreejan Foundation in Jharkhand, Jahangirabad Educational Trust in Delhi and Reformed Presbyterian Church in Churachandpur, Manipur.
Sreejan Foundation: The Jharkhand-based NGO was “formed by a group of socially committed young professionals in 1995 and formally registered on February 7, 2001, under the Indian Trust Act 1882, according to its official website. “Since inception, SF has been working directly with the community, particularly with women and children, struggling with poverty, social exclusion and gender injustice,” it read.
Jahangirabad Educational Trust: The trust was established in 2001 in Delhi “to support the cause of Technical and Professional Education with a focus isolated segments of society in general and minority community in particular,” as per its website.
Reformed Presbyterian Church: The church in Manipur’s Churachandpur states it imparts “vocational training since 1979.”
CBI sources said officials attached to these NGOs based in Ranchi, Bahraich and Manipur were questioned. Officials said the FCRA applications were denied as these NGOs claimed foreign funds citing help to tribals and minority communities but it was later found that they are utilizing the funds for other purposes.
What is FCRA?
The Foreign Contribution Regulation Act (FCRA), 2010, in its definitionis a law to consolidate regulating and prohibiting “the acceptance and utilization of foreign contribution or foreign hospitality by certain individuals or associations or companies”. .
According to the government’s FCRA guidelines, all registered organizations are required to submit an online annual report consisting of income and expenditure statement, receipt and payment account, balance sheet, etc., for every financial year within nine months of the closure of the financial year .
Any entity, or “person”, can receive foreign funds as long as it has “a definite cultural, economic, educational, religious or social program” and has received permission under FCRA rules from the Centre, among other things.
As per the law, every person who is registered and granted a certificate or given prior permission under the Act and receives any foreign contribution,—a) shall utilize such contribution for the purposes for which the contribution has been received: Provided further that the Central Government shall, by rules, specify the activities or business which shall be constructed as a speculative business for the purpose of this section; b) shall not defray as far as possible such sum, not exceeding fifty per cent of such contribution may be defrayed with prior approval of the Central Government.
The law states that government should be satisfied that the acceptance of foreign contributions do not affect the sovereignty and integrity of India, public interest, or, freedom or fairness of election to any Legislature, or friendly relations to any foreign state, harmony between religious, racial, social, linguistic or regional groups, castes or communities.
The government in 2020 amended the FCRA stating “the annual inflow of foreign contribution has almost doubled between the years 2010 and 2019… many recipients of foreign contribution have not utilized the same for the purpose for which they were registered or granted prior permission under the said Act”.
The government has clamped down on foreign funding with the cancellation of registration of more than 19,000 recipient organisations, including NGOs, between 2011 and 2019. It has also opened criminal inquiries against “dozens of such NGOs which indulged in outright misappropriation or mis-utilisation of foreign contribution”.
As per latest report, over 16,895 NGOs have registered in the country under FCRA since 2020. Over 466 NGOs have been refused FCRA license of which 100 applications were in 2020, 341 in 2021 and 25 organizations till March 2022.
Barred from receiving FCRA
Candidate for elections; correspondent, columnist, editor, owner of newspaper; judge, government servant; member of legislature; political party, official bearer; organization of a political nature; association or company engaged in mass communication and media: audio, visual and digital are barred from receiving foreign funds.
The Central government can cancel FCRA registration granted to an entity following which it is rendered inligible for registration or grant of prior permission for a period of three years. It government can also suspend the registration for a period that cannot exceed more than 180 days. After suspension, an entity cannot receive any foreign funds during the said period or use any unutilised foreign funds that it may hold without the permission of the Centre.
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