Hidden money, Covert operations
Legal European trust practices allow multinationals to hide finances and operate covertly, Jody Ray Bennett writes
In 1995, then-US President Bill Clinton signed an executive order prohibiting American companies from doing business in Iran. When the decision was made to extend Washington’s unilateral economic sanctions against Tehran, multinational companies bemoaned the move and criticised the policy, claiming that American businesses would be punished for Iran’s actions.
Speaking before the CATO Institute in 1998 as the CEO of Halliburton, Dick Cheney complained about the company’s inability to penetrate the Iranian market: “[This] has to do with efforts to develop the resources of the former Soviet Union in the Caspian Sea area. It is a region rich in oil and gas. Unfortunately, Iran is sitting right in the middle of the area and the [US] has declared […] sanctions against that country. […] Iran is not punished by this decision. There are numerous oil and gas development companies from other countries that are now aggressively pursuing opportunities to develop those resources. That development will proceed, but it will happen without American participation.”
Just a few years after Cheney’s statement, Halliburton was under investigation for doing business in Iran through one of its subsidiaries registered in the Cayman Islands, a well known tax haven utilised by businesses to hide and protect profits offshore. More recently, Halliburton’s ties to Iran were shown to involve more than just an offshore letterbox business with no employees that exploits a loophole in the US sanction policy that “allow[s] foreign subsidiaries of foreign companies to work in Iran as long as they [are] completely independent of their parent in America.”
How was Halliburton able to do business in Iran through a completely independent company with no ties to its headquarters in the US?
The process occurs through a little known practice in European trust law called Hidden Treuhand, which “submits to legal local
customs in Austria, Germany, Liechtenstein, Luxemburg and Switzerland, but due to globalisation, has moved beyond European borders via corporations and individuals, who put it to personal use.”
In a new book titled Hidden Treuhand: How Corporations and Individuals Hide Assets and Money, author Shelley Stark details the history of the Hidden Treuhand, how it operates, who it benefits and its implications for the global economy.
Yog Guru Swami Ramdev wants the money deposited by Indians in Swiss banks back in India just as the administration in the US has done.
“What are the policies of our national political parties when it comes to black money deposited in Swiss banks?” he asked in the course of an interaction with reporters on the sidelines of the foundation laying ceremony of a mega food park his Patanjali Yog Peeth is setting up near here with aid from the Ministry of Food Processing Industries.
“If this money has to be brought back to India, then these parties should announce that they will bring this money back to India whatever it takes,” he said.
Challenging the parties to issue a statement on their stand on black money parked in Swiss banks, he said: “According to one estimate, money ranging from Rs 50-75 lakh crore (Rs 50-75 trillion/$1-1.5 trillion) is parked in Swiss bank accounts. So I dare them (political parties) to reply to this question.”
Referring to the US administration’s recent move to get details of Swiss bank accounts of American citizens, he said: “To bring about a change in its economy following the global meltdown and to bring in liquidity, the US has handed over a list of people with alleged financial irregularities to the internal revenue department. A federal commission there is seeking details of the accounts these people have in Swiss banks.”
The US administration had last week filed a lawsuit seeking the identities of thousands of possible US tax cheats who had allegedly hid billions of dollars in assets at the Swiss-based bank UBS AG. The Swiss government has, however, pledged to maintain the country’s bank secrecy laws.
How Treuhand works
In Austria, the legal code §1002 defines a Treuhand contract as a contract coupled with a power of attorney, where someone – usually a lawyer referred to as a Treuhänder – conducts business duties in his name. According to Stark, the relationship begins with a non-public agreement between one party (referred to as a ‘Giver’) who transfers profits or assets to another (‘Taker’).
“The Giver appoints the Taker to be his direct representative in the inner relationship and controls the Taker’s actions as regards the asset with the ‘secret power of attorney’. This inner relationship is only described in the documentation between the Taker and Giver and is created separately so that no legal relationship between the Taker and Giver can be proven. Thus, a Taker’s function as a trustee morphs into the property owner and his function as the Giver’s lawyer is hidden by virtue of the ‘secret power or attorney’,” Stark told ISN Security Watch.
“The Hidden Treuhand can exist without any public record and concluded by any two people capable of being party to a contract. It is a civil contract not regulated by law, but is based on the general principal that one has the right to make contracts as one pleases. It gives the appearance that an asset belongs to another. The true beneficiary’s identity is not publicly apparent, nor is it outwardly recognisable an asset is in a Treuhand. Thus, any kind of asset: corporate shares, financial instruments such as derivatives, stock, and bonds, bank accounts, hedge funds, real estate, even an offshore subsidiary of a publically traded company can be owned completely in secret,” said Stark.
According to Stark’s research, it is virtually impossible to apply law to a contract or business situation that is not transparent.
“Lawyers are often called upon to act as a ‘trustee’ in a hidden ‘Treuhand’. But there is no law regulating hidden Treuhand, only laws specifying that the lawyer cannot divulge any secrets pertaining to the client,” Stark said.
Stark explained how it all works: A notary public notarises the names of all shareholders and registers them in the public corporate register. Anybody wishing not to be evident in this public registry engages a lawyer to represent his shares or ownership. Anonymity is insured because only the lawyer’s name will be notarised and visible in the corporate registry. The true beneficiary’s name is not notarised or publically evidenced in any form. The private contract, known as a hidden Treuhand, documents the arrangement between the lawyer and client, and only they are privy to its contents.
“Despite the secretiveness, there are nonetheless quite a few examples of hidden Treuhands causing severe concern,” Stark said, noting the case of the Bawag bank in Austria and hidden losses of €1.4 billion through Treuhands established in Liechtenstein, the Refco case, which became the 14th largest bankruptcy in America, and the UBS bank vs US attorney generals. “Germany is deeply embattled with regards to Treuhand banks accounts in Liechtenstein siphoning off millions in taxable income from Germany”, Stark added.
Is It The Operation Maoist Hunt?
By Gladson Dungdung from Ranchi
After a long preparation, debate and politics, finally the Indian government launched the “Operation Green Hunt” (OGH) in Jharkhand on March 10 with the objective of cleansing the Maoists from the state. Though P Chidambaram the CEO of the OGH declines it calling the Operation Green Hunt but his officers are using the term shamelessly. Nearly 10,000 security forces consisting of CRPF, Cobra, Jaguar, STP and other groups have been deployed in the forests, choppers are roaming over the forests, schools are converted into military camps, forests are sealed and the combing operations are being carried out in the forests with the support of local adivasi youth who are named as the Special Police Officers (SPO) duplicated from the Salwa Judum theory of Chhatisgarh.
Since, there was huge media hype on the operation green hunt therefore the Maoists fled from the vicinity much before arrival of the security forces in the region. As a result, the security forces are targeting the innocent villagers. The operation has created uncertainty, brought threat to life and seized the freedom of the villagers mostly the adivasis in different parts of the state. The adivasis who live in or around
the forests and depend on it for their survival, are not allowed to enter or roam in the forests, the water sources are captured, the villagers are unnecessarily harassed, children are denied their right to education and women are also misbehaved by the security forces. However, the billion dollar question is, is it really the operation for hunting the Maoists?
The concept of operation green hunt is itself a questionable term. Theoretically, it is supposed to be the ‘Operation Red Hunt’ rather than ‘Green Hunt’ as the Maoists neither look green nor depend on forests for their survival but it is the adivasis who completely depend on Agro-forest (greeneries). The government has been telling us for the several years that the Palamu region of Jharkhand is the most Maoists infested area. Presently, Simdega district comes under the same category but it is strange that the anti-naxal operation was firstly launched in the Kolhan region. Needless to say that the Jharkhand government has signed most of the MoUs with the corporate houses for establishing the mining industries, the power projects and the steel plants in this region. It is obvious that the anti-Naxal operations are being carried out in those districts (East Singhbhum, West Singbhum, Khunti, Gumla, Bokaro, Giridih, Chatra, Latehar, Ramgarh and Hazaribagh) where either the villagers are opposing the proposed development projects or the government foresees as the investment corridor.
Ironically, the Government of India has launched another operation on March 17 in Chotanagpur region of Jharkhand where the anti-Naxal operations are being carried out, which can be called the “Operation Mineral Hunt”. According to the latest report, the choppers are being engaged for conducting an aerial survey to find out the existence of minerals in the region. Both the operations are being carried out simultaneously in the region by the Government of India. Secondly, just after a week of flagging off the Operation Green Hunt, the world’s second largest steel company POSCO has announced for shifting its 12 metric tonne proposed steel project from Orissa to Jharkhand, where it will invest Rs 54 thousand crore in a joint adventure with the SAIL in Bokaro. The POSCO will have 60 per cent share and would get the Chiria Mines (2000 metric tonne reserved) easily for which the Arcellor Mittal Company was also bargaining hard.
Similarly, the Chief Ministers of the so-called Red Corridor are attending the series of meetings with P Chidambarm on the issues of the Operation Green Hunt on one hand and they are also attending the similar kind of meetings with the corporate houses for investment on the other. Of course, there is an investment competition going on among the Chief Ministers of several states as the present era of development is measured on the basis of the investment. Now the decline of hunger, illiteracy and malnutrition do not matter for the state. Therefore, one has every reason to believe that the so-called operation green hunt or anti-Naxal operation is to get the adivasis and other local settlers lands clear for the corporate houses rather than cleansing the Maoists from the region.
The state is essentially batting for the corporate houses in the name of the Maoists and instead of creating peace the government is creating insecurity in the region. Therefore, the adivasis are in the state of uncertainty precisely because the way they have been treated in the country despite being the indigenous people, who always live with peace and paid the heavy price for the development of the nation.
However, the adivasis are not against the development but they would never like the foundation of development laid down over their graves. In the present circumstances, the adivasis are being targeted from each and every corner. They are the victims of either kinds of violence (Maoists or State).
After kidnapping of Dhalmugarh BDO Prasant Kumar Layak, the Maoists had demanded for release of innocent villagers from the jail. In response to their demand, the Zonal Inspector General of Police, Regi Dungdung publicly announced that the police have registered false cases against the innocent villagers and Jasmi Mardi and Bahadur Mardi of Gurabandh village of Ghatshila were found innocent after reviewing their cases therefore they were released.
Ironically, the police had portrayed them as the Maoists, thrown them behind the bars and charged them under the sections 302, 120b, 349 of IPC, 27 of Arms Act and 17 CLA Act. But now the same police found them innocent. The question is how can an innocent person be charged under such sever criminal acts? The Chief Minister of Jharkhand has also publicly accepted that there are many innocent people put in jail after branding them as the Maoists. The question is that is it the role of state towards its own people?
Ironically, the country faced series of massive terrorists’ attacks including Parliament, Akshardham, Hyderabad, Ahmadebad and 26/11 however our Corporate Home Minister has different view about the Jehadi terrorists now. In his latest discovery he has found that the ‘Maoists are more dangerous than the Jehadi terrorists for the country’ therefore the UPA government envisages to eliminate the Maoists before completion of its present term. Of course, one can understand it easily. The Jehadi terrorists have nothing to do with the minerals but the Maoists, who are very much associated with it. Since, the national and multi-national companies are eying on it but not able to establish their projects in the so-called Red Corridor due to the people’s protests and the Maoists never hesitate to take its credit. That’s the main reason why the India Government is always ready to go for unconditional talk with the Pakistan whereas it wishes to eliminate the Maoists rather than going for a peace talk with them. It merely proposes for a pre-condition peace talk with the Maoists to mislead the people of India.
Perhaps, the history suggests that the adivasis dominated areas were never the matter of concern for the Indian state but after the liberalisation these areas were identified as the heaven for investment and propagated as the mineral corridor. Meanwhile, the Indian state attempted to convert these areas into the corporate corridor by allowing the corporate sharks to enter into the mineral corridor. In 2005, Indian Government brought a legislation for establishment of the corporate corridor, which is called the ‘Special Economic Zone’ (SEZ) but it failed in implementation of the Act due to the mass people’s protest. Finally, these areas were coined as the ‘Red Corridor’ so that the state can use the power of gun to convert these areas into the corporate corridor, as the licensed killings are very much welcomed, appreciated and even rewarded in our democratic setup.
In fact, the issue of Naxalism is four decades old, which emerged in 70s but the Indian state was not much concerned about it. However, when the villagers attacked the West Bengal Chief Minister Buddhadeb Bhattacharjee and then the Union Steel and Mines Minister Ram Vilas Paswan while they were returning from the inauguration of the Jindal’s Project at Salboni in West Midnapore district of West Bengal in November 2008, the issue of Naxalism was brought into the centre stage of the public debates. Finally, the joint operation was called off in the name of cleansing the Maoists from the country propagating it as the biggest security threat to the nation.
Indeed, the operation green hunt is a license to kill the adivasis who oppose the unjust development process, protest against the state suppression and determined to protect their ancestral heritages. It is to transform the adivasis lands into the corporate corridor, where these corporate sharks will swallow the minerals and produce money for the country and the India will become the super power with the blood of the adivasis and other local settlers. All three economists of India-Montek Sigh Ahluwalia, Manmohan Singh and P Chidambaram are working toward the vision 2020 and they would do anything for it.
Obviously, the Indian state sees the Maoists as a severe threat to the investment climate rather than the security threat to the nation. Therefore, our ruling elites want to suppress, shoot and bury the dissent voice. They are more worried about the corporate houses than the communities, they are more concerned about the GDP growth than feeding the country’s hungry people and they are more worried about the investment climate than the impact of the climate change. Therefore, those who are still confused about the India’s Operation Green Hunt must be clear, at least now, it is not the operation to cleansing the Maoists but it is to hunt the minerals for the corporate sharks therefore it is the ‘operation mineral hunt’ my friends.
As the practice is completely legal, Halliburton was able to establish a shell company in Austria called
Halliburton International GmbH that contains no employees and generates no income. Because 51 per cent or more is controlled by a Taker (secretly controlled by a Giver), Halliburton was able to circumvent international sanctions and conduct business in Iran legally.
“All that is needed for a US company to be completely independent of the parent company in America is to have 51 per cent of the company owned by a foreigner, or someone without American citizenship. With a Hidden Treuhand embedded in the corporate structure, a Taker, who is a foreigner, can hold the 51 per cent on behalf of the company. With little effort, any company could slip under that radar,” Stark said. Thus, profits generated from these ventures cannot publicly be traced back to Halliburton’s American headquarters.
VIOLENCE AGAINST CHRISTIANS IN INDIA
This writer was part of a fact-finding team that inquired into the “attack” on the Holy Family Church, Hinkal, in Mysore in February 2002. The team had found out, among other things, that the incident was a minor one – a minor scuffle in the church premises and a broken window-pane. The incident should have been localised and contained. But, it was blown out of proportion and internationalised by the media and the self-styled leaders and spokesmen of the minority communities. It was a classic example of vested interests making a mountain out of a molehill and spreading distress and divisions among neighbours of different faiths and provoke religious sentiments and fan the flames of hatred”. (Report attached)
I was again part of another fact-finding team that visited Managalore and Udupi following violent incidents there in September 2008.
Yes, no civil society can condone violence. But mere condemnation is not a method to avert the repetition of violence. We have to find out if the violence is deliberate and unprovoked, or due to provocation. If it is the former, then there is one set of solutions, which mostly involve applying the law and severely punishing the perpetrators of the violence. However, if there is provocation, then we have to study the issue in greater detail. We have to understand why there has been a provocation for the violence, and who are the persons or organisations behind the provocation.
The real source of danger to the Indian Christian community is not the handful of Hindu extremists. Most of the violent incidents have been due to aggressive evangelisation and faith-marketing. Other than this there have been few attacks on Christians. Finally the sensitive and sensible Christians must realise that acts of certain “born-again”, cultic and splinter groups among them who denigrate Hindu gods and abuse Hindu rituals as ” barbaric” are the root cause of tension between Christian and Hindu communities. Christian leaders known for their erudition, equipoise and empathy should come out in the open to disown such acts of intolerance.
It is worth recalling at this juncture what Fr Adolf Washington, media coordinator, Archdiocese of Bangalore, wrote in Deccan Herald some time ago:
“There are several groups of people doing the rounds in Bangalore adopting persuasive techniques not just to convert people but also to spread animosity against mainstream Christian denominations.”
They hurl invectives against the teachings of Christian denominations and even induce people to tender a written “resignation” to the pastor or priest. Since some of these groups do not even accept the divinity of Christ, in effect, their conversion should not
be understood as conversion to Christianity but to their organisation. Mainstream Christian denominations do not go on a conversion spree, only splinter groups and cultic groups do so probably for some self-gain.”
Terms such as “evangelistic campaign”, “missionary strategy”, “campus crusade”, “occupying non-Christian areas”, a “blitzkrieg” of missionaries, and sending “reinforcements” sound more appropriate to military enterprises than to Christian witness to God’s redeeming love in Jesus Christ. The statistical approach implied in the words “the unreached millions” is derogatory to neighbours of other faiths.”Unreached” by whom? When Indian Christians themselves use these phrases, which have originated outside the country, to describe their neighbours living next door to them in the community, Christians should not be surprised if the nehigbours are offended. (Courage for Dialogue- Dr Stanley Samartha).
Call it the irrational Hindu anger at being cheated of destiny. Call it the Hindu backlash at the growing fanaticism in other communities. Call it the end of the tether for Hindu patience and tolerance. India’s cycles of violence continue because it is only seldom that we have allowed healing to take place. It is imperative that our ears be made sensitive to the heartbeat of the ‘other’ community or caste. And we must all assist and permit a true healing. Stop spreading hatred, against any particular community, Hindu or Muslim, or those who are branded as our enemies, like butter on hot bread. And stop being merchants of hate. We must learn to overcome hatred by love.
All of us would be doing a great service to the cause of communal and religious amity and peace in this country if we learn to show a little humility and a little diffidence about the correctness of our views. We should not seek to satisfy our thirst for ego and vanity by drinking from the cup of bitterness and hatred and jealousy. We have to teach ourselves that consideration for others is nobler than muscling our way to the front.
About 250 leaders from 11 Churches and denominations who met recently in Bangalore resolved not to condemn or denigrate deities of other religions, or the traditions that other religious believers hold as sacred. They also have decided to “work positively to build a harmonious relationship with people of all religions and cultures.”
I have written these lines at the risk of being branded as anti-Christian, anti-Church and ‘the blue-eyed boy” of RSS. But, I muster courage from the following a couplet from the famous Urdu poet, Faiz Ahmed Faiz:
Speak: your lips are free
Speak: your tongue is still yours
Speak: this lissome body is yours
Speak: this life is yours
Speak: so that the truth can prevail…
(Bol ke lab azaad hain tere Bol Zabaan ab tak teri hain Bol yeh sutwan jism hai tera Bol ke jaan ab tak teri hai Bol ke sach zinda hai ab tak…)
By PN Benjamin from Bengaluru
“Halliburton uses it subsidiaries in Europe, especially Austria, to move funds without transparency and also profits from the few regulations in the accounting standards. Its Austrian subsidiary receives all income from other subsidiaries (in Russia and Kazakhstan, for example), zeros out the book value, loses the paper work, and the these firms disappear from records, ostensibly hidden in other Treuhands,” Stark explained.
A recent New York Times investigative story discovered that more than $100 billion was awarded to multinational corporations for contracts while conducting business in Iran – $15 billion of which went to companies that “defied American sanctions law by making large investments that helped Iran develop its vast oil and gas reserves.”
The issue of the hidden Treuhand raises concerns about companies that are financially powerful enough to penetrate a global market and supply sensitive infrastructure, private security and intelligence for international clientele. That large financial institutions can affect or alter state-to-state relations speaks volumes about the cult of deregulation, a core feature of present day globalisation.
INDIA: Corruption Deprives The Tribal Community Of Right To Food
Mr Debiprasad Jena, Supervisor of the Soil Conservation Department (Machhkund, Orissa) allegedly misappropriated INR 49,490 (USD 1000) from 16 workers under the National Rural Employment Guarantee Scheme (NREGS), which aims at ensuring the right to work and food security of all in India.
After the victims’ complained to the different government authorities, and civil society exerted some pressure Mr Jena visited the village. Early on the morning of March 10 between 6.30 to 8.30am he distributed INR 36,850 (USD 810) out of the INR 49,260 (USD 1083) owed. A balance of IRN 12,650 (USD 278) is outstanding, while two workers are still waiting for relief
All of victims are illiterate landless labourers and can be classified among the most vulnerable to food insecurity in India. The Hunger Alert for this case is here.
Moreover, Mr Jena who is suspended has still not been prosecuted according to the domestic laws such as Section 13 (c); d (i), (ii) and (iii) of the Prevention of Corruption Act, 1988 and Sections 403 (dishonest misappropriation of property), 409 (criminal breach of trust by a public servant), the Indian Penal Code, 1891. This kind of impunity remains the widespread privilege of corrupt officials, and commonly leads to failure in ensuring the food security of the poor.
India has managed to weave a solid net of public food security programmes that addresses the specific needs of different vulnerable categories of the population. Its Supreme Court has adopted a very dynamic approach to the economic and social rights of the people and in a certain number of landmark interim orders has given clear instructions to the States to guide them in the proper implementation of those public schemes. Therefore, on paper, India has all the tools to guarantee the food security of all.
However, in practice, as is seen in the case, rampant corruption and default of governance and transparency have seriously hampered the functioning of these programmes and undoubtedly weakened their impact on the food security of the poor. With 38 per cent of its population belonging to the Scheduled Castes and Tribes, i.e. very vulnerable to poverty and malnutrition, and the dubious distinction of having the highest percentage of population living below the poverty line (47.15 per cent officially but more than 60 per cent in reality) among the States, Orissa is unfortunately a case in point.
Corruption in Orissa ranges from bribes to general and systematic deductions, diverting essential resources from the public programmes and thus directly or indirectly jeopardising the realisation of the right to food of the poorest households. Transparency International and the Center for Media Studies recently estimated the level of corruption in the State as “high”, in a 2007 Corruption Study focusing on the BPL households.
Under the NREGS, every household willing to do manual work for minimal wage is entitled to 100 days of employment per year. Its implementation has been internationally welcomed as a big step toward the realisation of the right to work of all, an essential component of their right to food. Nevertheless, it has been found by a FIAN Parallel Report (2008) that ‘barely 3.2 per cent of the registered households could avail 100 days of employment’. The 2007 Corruption Study found out that 15 per cent of the Below the Poverty Line (BPL) households in India had to use a contact or to pay bribes to access the NREGS. In total INR 70 million (USD 1.54 million) were spent as bribes by BPL households to access the scheme. Worrying impact of this extent of corruption: four per cent of them could not access the service because they could not afford the bribes.
The attribution of a BPL Card that formally entitles the poorest of the poor to a large number of benefits
plays a crucial role in securing their right to health and right to food. The design of the BPL list in Orissa has been crippled with corruption at all the levels of the government. The head of the Orissa Chapter of Transparency International admitted that 30 per cent of the BPL families do not have a BPL card because they “cannot afford to bribe officials to procure the card”. In a previous hunger alert, the AHRC has denounced the corruption of the system in which officials resort to their influential position to be granted a BPL card. As the BPL card system is submitted to quotas, this corruption result in excluding poor household from its entitlements.
The victims are often left without legal remedies to these abuses, either because no independent legal redress procedures are available to them or, sometimes, simply because are unaware of their existence and mode of functioning. The 2007 Corruption Study found out that only 3.8 per cent of the BPL households in Orissa were aware of their rights under the Right to Information Act, which mandates the public authorities to answer to the information request of the citizens within 30 days. It is a key component of the transparency of the public systems. Therefore, corruption remains the main obstacle blocking the villagers’ participation in the realisation of their right to food.
The Second Administrative Reform Commission of India acknowledged that; “The grievance redressal machinery should reach out to the people in order to redress the grievances as the poor workers who are denied their rights may not be easily forthcoming in complaining against established authorities.” Concrete measures have been taken to increase the accountability of the public food security programmes such as the obligation to hold social audits for each project launched under the NREGA.
Nevertheless, the villagers are often unaware of this obligation and in some cases social audits have been held without the villagers’ participation and used to cover up a case of corruption. Actually, the 2007 Corruption Study discovered that a higher percentage of households thought that grievance redressal mechanisms for the malfunctioning of the PDS or the NREGA had deteriorated rather than improved over the previous year.
The access to those legal procedures is simply denied to them because of discrimination or, as a further effect of corruption: indeed, according to a 2005 survey by Transparency International, the judiciary in Orissa ranks among the top four corrupt in the country. An interim field report by the right to food campaign India concluded that the NREGA was particularly vulnerable to corruption partly because of the lack of distinction between the grievance redressal authorities and the implementing authorities.
The consequences of this exclusion from legal grievance redressal procedures were dramatically felt last year in a village of Balangir district in which five persons from the same family died of hunger and malnutrition. Field reports showed that some benefits never reached the entitled households in the village, in spite of the villagers repeated complaints in this respect.
Strong lip-service paid by high-ranking government official and punctual measures such as the establishment of internet-based grievance procedures for instance will be useless if the government refuses to acknowledge the cases of right to food violations brought to its attention. This denial only contributes in hampering the transparency and the accountability of the public distribution system and thus creates an environment favourable to the development of corruption.
Of course, as often in those cases, all the citizens of India are not equal in front of the consequences of the corruption of the public distribution programs. The most vulnerable and isolated groups of the population, the scheduled tribes and castes, bear the heaviest fruits of the diversion of resources from the food security programmes. Corrupt civil servants often benefit from the discrimination against Dalit or tribal communities to demand bribes in exchange of a civil service. When the tribal or Dalit victims search redress against those practices, discrimination further creates violence faced by the victims to gain legal remedies to the deprivation of their rights. This violence can go as further as the murder of those who complained as reflected in the Narayanpatna case.
By Bidyut Mohanty from Bhubaneswar
While Stark maintains that Halliburton is just one of many large multinationals that makes use of Treuhand practices, the use of Treuhands – not only by mammoth defense contractors – raises serious questions over corporate accountability for both taxpayers and shareholders. But the implications for national security becomes even more dire, as Hidden Treuhand contracts can enable large, private companies to directly interfere and affect interstate relations. Stark recently wrote about how hidden Treuhands have the ability to fund organised crime, money laundering operations or covertly finance terrorist groups.
“The impact of hidden Treuhands for International Relations and Security is enormous. Foreign policy decisions can be rendered moot when a foreigner owns 51 per cent of the subsidiary. This fortuitous loophole allows a US subsidiary to effectually not be subject to US foreign policy decisions and speaks volumes for how ineffectual sanctions really are,” Stark said. (ISN)