Former Congress president Sonia Gandhi is the chairperson of RGF while other trustees include former prime minister Manmohan Singh, former finance minister P Chidambaram, Congress MP Rahul Gandhi and Congress general secretary Priyanka Gandhi Vadra.
The Ministry of Home Affairs has cancelled the Foreign Contribution Regulation Act (FCRA) license of the Rajiv Gandhi Foundation (RGF) and Rajiv Gandhi Charitable Trust (RGCT), organisations associated with the Gandhi family, for alleged violations of the law.
The action came after investigations carried out by an inter-ministerial committee, which was formed in 2020 by the MHA after the BJP alleged that RGF received funds from the embassy of the People’s Republic of China. The committed had started probing the funding of the RGF and the RGCT and they investigated funds received by these organisations with respect to a suspected violation of the Prevention of Money Laundering Act (PMLA), Foreign Contribution Regulation Act (FCRA), and the Income Tax Act.
On the RGF, BJP’s JP Nadda said in 2020 that the Congress had no moral right to talk about the country’s security after having taken money from China
The committee was headed by a special director from Enforcement Directorate (ED), along with the members from CIT, Income Tax Department; Ministry of Finance; Ministry of Urban Development and MHA.
The cancellation of the FCRA registration of the two trusts led by the Gandhi family members is the latest in a series of hard actions the government has taken on alleged violation of the Act by various not-for-profit and non-governmental organisations in India, which accept funding and donations from foreign entities.
In a statement, the MHA said in 2020, “MHA sets up inter-ministerial committee to coordinate investigations into violation of various legal provisions of PMLA, Income Tax Act, FCRA etc. by Rajiv Gandhi Foundation, Rajiv Gandhi Charitable Trust & Indira Gandhi Memorial Trust. Spl. Dir of ED will head the committee”.
The development assumes significance as both the organisations are headed by former Congress president Sonia Gandhi and have top leaders of the Congress, including Rahul Gandhi, as members. The RGF even has former prime minister Manmohan Singh and former finance minister P Chidambaram as members.
On June 25, 2020, the ruling BJP targeted the Congress by questioning a purported donation that RGF had received, with BJP president J P Nadda saying that the foundation took $300,000 from the People’s Republic of China and the Chinese embassy in 2005-06 to carry out studies that were not in the national interest. The allegations came in the backdrop of Rahul Gandhi questioning PM Narendra Modi’s leadership in context of developments at the Line of Actual Control in Ladakh.
On the RGF, Nadda said in 2020 that the Congress had no moral right to talk about the country’s security after having taken money from China. “Today I was shocked to watch on TV that in 2005-06 People’s Republic of China and the Chinese embassy gave a fat sum to RGF. This is a secret relationship between Congress and China. These people take funds from China and then conduct studies that are not in the interest of the country. These studies create the environment for that. The nation wants to know for what they were paid and what study they conducted,” he had said, addressing Madhya Pradesh Jan Samvad, a virtual rally.
Referring to the Congress raising questions over the government’s handling of the Galwan Valley standoff, Nadda had said, “All political parties said for the interest of the nation, we are with you Modi ji, you move ahead. Only one family, and its intentions and policy, began raising questions…. today they are standing against China as if there is no sentinel like them. The mistakes of one family made us lose 43,000 sq km of land.”
He added, “You take $300,000 donation and teach us nationalism. Haathi ke daant dikhaneke aur khane ke alag hote hain.”
On the same day, in a press briefing, former telecom minister Ravi Shankar Prasad, too, echoed this: “The donors list of the RGF annual report in 2005-06 clearly shows that it received a donation from the Embassy of People’s Republic of China. We want to know why this donation was taken.”
The two BJP leaders were referring to an account of donations made to RGF in 2005-06 and its annual report of the period when the RGF carried out a study on the free trade agreement between India and China and suggested it to be beneficial to India.
The RGF annual report for 2005-06 mentions the Embassy of The People’s Republic of China as one of the “partner organisations and donors”. China’s name figures in the list of donors for the Rajiv Gandhi Institute of Contemporary Studies (RGICS), a policy think tank promoted by the RGF.
The report mentioned the Embassy of The People’s Republic of China as one of the “partner organisations and donors”. China’s name also figures in the list of donors for the Rajiv Gandhi Institute of Contemporary Studies (RGICS), a policy think tank that is promoted by the RGF.
What happened after these allegations?
A fortnight later, the central government set up an inter-ministerial committee to “coordinate investigations” into the funding of the RGF, the RGCT, and the Indira Gandhi Memorial Trust.
The Home Ministry said that the committee would “coordinate investigations into violation of various legal provisions of PMLA (Prevention of Money Laundering Act), Income Tax Act, FCRA (Foreign Contribution Regulation Act) etc” by these three organisations.
This committee was headed by a special director from the Enforcement Directorate (ED), and consisted of members from the Income Tax Department, Ministry of Finance, Ministry of Urban Development, and the MHA.
They are also required to file annual returns, and they must not transfer the funds to another NGO. The Act prohibits the receipt of foreign funds by candidates for elections, journalists or newspaper and media broadcast companies, judges and government servants, members of the legislature and political parties or their office-bearers, and organisations of a political nature — except under some particular circumstances with requisite declarations.
Cancellation of the FCRA license can be over multiple grounds, such as if “in the opinion of the Central Government, it is necessary in the public interest to cancel the certificate”, or if an inquiry finds a false statement in its application.
The ministry also has the power to suspend an NGO’s registration for 180 days pending inquiry and can freeze its funds.
What happens in the case of the three trusts now?
All orders of cancellation of FCRA licence by the government can be challenged in the High Court. The Congress party is likely to approach the judiciary against the MHA’s order.
Party leaders, in 2020, termed the allegations against the three trusts as part of a “witch-hunt” against the Gandhi family and the party.
“The Rajiv Gandhi Foundation has nothing to add, nothing to fear because you have all the machinery and you can ask every question in every inquiry… But you need to be exposed fully…you don’t ask these questions of many holy cows… You are harassing each opposition segment, individual or institutional,” party spokesperson Abhishek Manu Singhvi had said.
What is foreign contribution?
As defined in Section 2(1)(h) of FCRA, 2010, “foreign contribution” means the donation, delivery or transfer made by any foreign source, ─
(i) of any article, not being an article given to a person as a gift for his personal use, if the market value, in India, of such article, on the date of such gift is not more than such sum** as may be specified from time to time by the Central Government by rules made by it in this behalf;
(ii) of any currency, whether Indian or foreign;
(iii) of any security as defined in clause (h) of section 2 of the securities Contracts (Regulation) Act, 1956 and includes any foreign security as defined in clause (o) of Section 2 of the Foreign Exchange Management Act, 1999.
Explanation 1 – A donation, delivery or transfer or any article, currency or foreign security referred to in this clause by any person who has received it form any foreign source, either directly or through one or more persons, shall also be deemed to be foreign contribution with the meaning of this clause.
Explanation 2 ‒ The interest accrued on the foreign contribution deposited in any bank referred to in sub-section (1) of Section 17 or any other income derived from the foreign contribution or interest thereon shall also be deemed to be foreign contribution within the meaning of this clause.
Explanation 3 ‒ Any amount received, by an person from any foreign source in India, by way of fee (including fees charged by an educational institution in India from foreign student) or towards cost in lieu of goods or services rendered by such person in the ordinary course of his business, trade or commerce whether within India or outside India or any contribution received from an agent or a foreign source towards such fee or cost shall be excluded from the definition of foreign contribution within the meaning of this clause.
