The government cancelled the FCRA licence of the RGF

Source: By The Indian Express

The Ministry of Home Affairs (MHA) has cancelled the Foreign Contribution Regulation Act (FCRA) licence of the Rajiv Gandhi Foundation (RGF) and Rajiv Gandhi Charitable Trust (RGCT), organisations associated with the Gandhi family, for alleged violations of the law.

In 2020, the central government had set up an inter-ministerial committee to “coordinate investigations” into the funding of three trusts linked to the Nehru-Gandhi family — the RGF, RGCT and the Indira Gandhi Memorial Trust.

The BJP had alleged at the time that the RGF had received funds from China to “conduct studies that are not in the interest of the country”. Alongside, investigations into violation of various legal provisions of PMLA (Prevention of Money Laundering Act), Income Tax Act, FCRA etc., were to be conducted as well.

All three organisations are headed by Sonia Gandhi. Former Prime Minister Manmohan Singh and Congress leaders P Chidambaram, Rahul Gandhi, and Priyanka Gandhi Vadra are among the trustees at the RGF.

Here is what the case is about, and what the cancellation of licenses can mean.

What are the allegations against the RGF?

In June 2020, after the Congress party criticised the government over its handling of border issues with China in Ladakh, the BJP had said that the Congress had no moral right to talk about the security of the country after having accepted 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, BJP president J P Nadda had said. You take $300,000 donation and teach us nationalism, Nadda said.

Former Telecom Minister Ravi Shankar Prasad said: “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 senior BJP leaders were referring to 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 would be beneficial to India.

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.

How does FCRA work, and what happens in cases of violations?

The FCRA was enacted during the Emergency, with the aim of curbing foreign entities from pumping money into organisations in India for achieving their own aims. The law has been amended over the years, such as in 2020, and the government is now able to extend tighter control and scrutiny over the receipt and utilisation of foreign funds by NGOs.

Broadly, the FCRA requires every person or NGO seeking to receive foreign donations to be (i) registered under the Act, (ii) to open a bank account for the receipt of the foreign funds in State Bank of India, Delhi, and (iii) to utilise those funds only for the purpose for which they have been received and as stipulated in the Act.

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.