Need to systematise asset disclosure by public officials

[Barun Mitra, New Delhi]

A case for sunlight laws in India
It is critical to systematise asset disclosure by public officials

Nripendra Misra & Nidhi Sen
Business Standard
March 18, 2011, 0:01 IST
http://www.business-standard.com/india/news/nripendra-misranidhi-sencase-for-sunlight-laws-in-india/428897/

The monumental corruption now manifest in the highest echelons of
government and public administration has met with strong opposition in
the form of a growing national consensus about the systemic failure of
good governance and rule of law in the country. With many public
officials accumulating assets disproportionate to their legal sources
of income, systematising asset declaration is well-nigh the need of
the hour.

Public disclosure of information and reporting are critical in
ensuring transparency and accountability. Simply put, it is a case of
“sunlight is the best disinfectant”, as US Supreme Court Justice Louis
Brandeis would say. India does not have a legal framework that
reinforces asset declaration; it follows the tradition of
institutional ethics that govern codes of conduct or disclosure rules.
However, these are not legally enforceable integrity pledges setting
out disclosure obligations. There is no ombudsman uniquely poised to
review and monitor declarations of income and assets by public
officials. In this regard, following suggestions may be considered.

Rationalising bureaucratic accountability — a call for professional
ethics: Rules requiring periodic disclosure of assets and financial
dealings by public officials serve a dual purpose: they assist both
the official concerned and the government in determining whether
conflicting interests exist and provide a baseline and means for
comparison to identify assets that may have been acquired through
corruption. Based on the recommendations of the Committee on
Prevention of Corruption headed by the late K Santhanam, the Central
Civil Services (Conduct) Rules, 1964 were notified laying down the
Code of Conduct for Central Government Employees with a view to
maintaining integrity in public services.

Rules 18 and 18-A require all Class-I (Group A) and Class-II (Group B)
public servants employed by the central government to submit a return
of assets and liabilities and movable, immovable and valuable property
owned, acquired or inherited by them and their immediate family
members on first appointment and at such intervals as may be
prescribed by the government. Statements of such returns by
bureaucrats are deemed confidential under the law. However, the
Central Information Commission in a landmark order in November 2009
decreed: “Disclosure of information such as assets of a public servant
– which is routinely collected by the public authority and routinely
provided by the public servants – cannot be construed as an invasion
on the privacy of an individual.”

Moreover, effectively enforcing and monitoring such declarations
should form part of the Department of Personnel and Training’s Annual
Confidential Reports of government servants with a view to appraising
their performance in the areas of their work, conduct, character and
capabilities. Creating a framework in which people are hauled up for
making false declarations or non-disclosure within accepted time
limits would only be wholly effective if they were then subject to
forfeiture of the undeclared property.

Ending political exceptionalism — an agenda for rule of law: An
interim report by the National Election Watch disclosed that more than
314 crorepati MPs have been elected to the 15th Lok Sabha (2009) — an
increase of 100 per cent compared to the 154 crorepati MPs elected to
the 14th Lok Sabha (2004).

Given the privileged position that elected representatives of the
country enjoy, which gives them unfettered access to public resources
and plenty of opportunities to line their pockets, a public interest
litigation was filed in 2001. This came from the People’s Union for
Civil Liberties, Association for Democratic Reforms and Lok Satta in
the Supreme Court seeking a redress of the situation. In a landmark
judgment, the Court issued a directive to the Election Commission. It
layed down that all candidates filing their nomination papers for
contesting national or state-level elections were to declare on oath
in an affidavit their assets (moveable, immoveable, bank balance and
so on), liabilities, educational qualifications, criminal antecedents
and all pending cases of offences in which cognisance has been taken
by a court of law. Not furnishing such information at the time of
nomination makes the candidate liable to rejection and is considered a
violation of the order of the Supreme Court.

Every member of both Houses of Parliament is required within 90 days
of taking the oath to submit an annual statement of assets including
moveable and immoveable property owned in India and abroad and
liabilities owed to any public finance institutions.

Also, the Rajya Sabha (Declaration of Assets and Liabilities) Rules,
2004 specify that the declarations made by MPs are required to be
updated every year and can be made available to any person with the
written permission of the Chairman. The Lok Sabha (Declaration of
Assets and Liabilities) Rules, 2004 specify that the declarations made
by the Lok Sabha MPs shall be treated as confidential and shall not be
made available to any person without the written permission of the
Speaker. Besides initial disclosure, the rules do not contain an
express provision for the declaration made by the MPs to be updated in
case there is a change in the status of their assets and liabilities.

Despite the proviso under Section 75(A)(5) of the Representation of
the People Act, 1951, which makes non-disclosure of assets tantamount
to a breach of privilege of the House, there are no penalties severe
enough to act as a significant deterrent for failing to disclose as
required or for making false or misleading disclosure. The flagrant
violations of parliamentary norms have seen 110 Lok Sabha MPs failing
to declare their assets even eight months after their election to the
15th Lok Sabha, as reported by major national dailies.

It is imperative that constitutional bodies like the Election
Commission of India play the role of an independent asset-monitoring
body for the purpose. Successful enforcement needs to be
institutionalised with the Election Commission having a clear mandate,
capacity, resources and punitive powers to build an internal system
that keeps and manages proper records, and monitors the timeliness and
the validity of the assets declared by public functionaries. It must
also have a system of checks on the accuracy of declarations,
routinely policing income tax returns of the politicians whose assets
are being monitored.

In addition, it would serve well if the election law requires
candidates seeking election to Parliament to declare on oath that they
have no undeclared wealth or property overseas. They must also declare
that if any such assets are discovered then they authorise the
government to confiscate those assets. Such a provision would empower
the government to confiscate or recover any such ill-gotten wealth
stashed away in foreign banks.

Reigning in political parties — a demand for internal democracy: The
law in India dealing with disclosure of election and party funding is
weak. The Income Tax Act exempts the income of a political party under
Section 13 (A) from taxation. Parties are bound by law to maintain
accounts regularly, record and disclose names of donors contributing
more than Rs 10, 000 and have their accounts audited by a qualified
accountant. For such disclosure norms to be institutionalised,
political parties should submit an audited statement of accounts to
the Election Commission and the Income Tax authorities each year and
after every general election. All such information on political
contributions and expenditure by parties should be made public through
print and electronic means. The Election Commission should be the
final authority to verify, audit and determine the disclosure of
financial statements. Non-compliance by political parties should
invite de-recognition and de-registration for a fixed number of years.

The institutional ability, especially of the Election Commission and
Department of Personnel and Training, to ensure that political
commitments are actually carried out needs to be buttressed.
Necessitating citizen empowerment by raising awareness and ensuring
public participation in information disclosure and reporting is
required more than ever. Therein lies the success of sustained public
action towards clean governance.

The writers are with the Public Interest Foundation, New Delhi.