One glance at the Second Report of the Task Force appointed by the Bharatiya Janata Party (BJP) to probe black money stashed away by Indians in secret bank accounts abroad and you will wonder whether the Constitution we adopted in 1950 is still in operation; whether there is anything called `rule of law’ in the country; whether we have a government at the federal level or whether it has just withered away!

Apart from providing citizens a comprehensive view of the illegal
 funds parked in tax havens, the report zeroes in on some specific cases which highlight the reluctance of the United Progressive Alliance (UPA) government to go after the wrong-doers. The case of
 Ottavio Quattrochchi is well known. But, there are others and among them the case that constitutes a damning indictment of the Manmohan Singh government is that of Hasan Ali Khan, a Pune-based stud farm owner with billions of dollars in Swiss Banks and deep connections within the Congress Party.

The extraordinary case of Khan, who has been described by a national weekly as the `Billion Dollar Bandit’, gives us an idea of the rot that has set in. According to the task force, Khan ventured into the hawala business in the 1990s and his bank balance grew from U.S $1.5 million in 1982 to U.S $ 8 billion in 2006. Among his associates and clients was Adnan Khassogi, the international arms dealer who supplied arms to the LTTE. He received U.S $ 300 million from Khassogi, which was identified as “funds from weapons sale” by a Swiss Bank.

The big picture vis-à-vis Hasan Ali Khan emerged between January 2-7, 2007 when the Income Tax Department and the Enforcement Directorate (ED) carried out raids on his premises. Tax officials unearthed three secret accounts held by him in Swiss banks with deposits aggregating to U.S $ 8 billion ( Rs 36,000 crores) and documents establishing
Khan’s nexus with Khassogi. They also concluded that Khan’s illegitimate funds were linked to heinous crimes such as terrorism, gun running and bribes and suspected that he was probably fronting for some politicians.

What happened, or to be more precise, did not happen, pursuant to these raids, raises the suspicion that Khan has some political godfathers within the Congress Party. The documents procured by the ED showed that on the date of the raid, Khan had liquid funds totaling U.S $ 6 billion in his accounts, which he could move right away. The remaining U.S $ 2.04 billion had a lock-in period until January 15, 2007 (which was just 8 days from the last day of the raid). The documents also established that the Swiss Government had acted suo moto and frozen an account with U.S $ 300million held by Khan because it suspected that this money related to “funds from weapons sale”.


As the task force report says, this should have resulted in the registration of an FIR immediately under the Unlawful Activities Prevention (Amendment) Act, 2004 so that India could have legitimately moved for freezing Khan’s accounts soon after the raids on the ground that these monies were terror-related. This was precisely what the
 V.P.Singh government did when it directed the Central Bureau of Investigation to register an FIR in the Bofors Case and sent a request for freezing the bank accounts of the recipients of the kickbacks.

That was under the anti-bribery law. In Khan’s case, the UPA government ought to have acted under the anti-terrorism law. According to the authors of this report, Khan should have been arrested and taken in for custodial interrogation in regard to money laundering, arms deals and his possible links to organizations. However, the Manmohan Singh Government took no action either to freeze the accounts or to prosecute him under the anti-terrorism law.

Surprisingly, the Income Tax Department, which customarily issues lakhs of notices every year to tax payers with paltry salaried incomes, took no action at all on Khan, who had illegal funds amounting to Rs 36,000 crores. It neither accused him of tax evasion nor of money laundering. Instead, it sent a Letter Rogatory to the Swiss Government merely complaining that Khan had not filed his tax returns in India! The Swiss Government dismissed the request for assistance and said non-filing of tax returns was no offence at all under the Swiss law. This was how the Khan case was deliberately botched. Even more shocking was the Swiss government’s declaration that the documents attached to the Letter Rogatory were forged.

Further, laughable as it may seem, the E D served a “show cause notice” on Khan a good two years after the raids and “demanded” that he repatriate U.S $ 8.04 billion with updated interest to India. Needless to say, Khan had cleaned out these accounts in the meantime
and this has since been confirmed by the Finance Minister, Mr.Pranab Mukherjee. He informed media persons recently that there were no funds in these accounts. Khan, like Quattrochchi, must be laughing all the way to the new bank where he has shifted his ill-gotten wealth.

Thus far, despite clear evidence of money-laundering, involvement with international arms dealers etc, Khan has never been arrested for any of these offences. He was however booked in a fake passports case (he has three passports). Thereafter, he obtained bail and did the disappearing act. But, the Task Force says, the police have a video
 recording of his interrogation done later, in which he confesses that while he ducked the police, he met a key Congress leader in Ms.Sonia Gandhi’s establishment, the Maharastra Chief Minister, the state’s Home Minister and the Commissioner of Police, Mumbai.

The Congress Party may cursorily dismiss these findings on the ground that this is a BJP report. But, that will not carry conviction because the main opposition party has carefully chosen four citizens with impeccable credentials (Mr.Gurumurthy, a Chartered Accountant and a crusader against corruption, Mr.Ajit Doval, former Director, Intelligence Bureau, Prof.R.Vaidyanathan, Professor of Finance, IIM-Bangalore and Mr.Mahesh Jethmalani, a noted lawyer) as members of this Task force. As the report says, this case is the “smoking gun” and there is so much loaded in this single bullet called Hasan Ali that it has the potential to prematurely terminate the life of UPA-II.

Meanwhile, we must ask Mr.Manmohan Singh, the “Mister Clean” of yester years as to why he was in cahoots with India’s biggest money launderer?