FCRA violations: MHA officials, NGO representatives under CBI lens
What's the story
The Central Bureau of Investigation (CBI) on Tuesday conducted a nationwide operation at about 40 locations in connection with Foreign Contribution (Regulation) Amendment Act, 2020 violation. Following a complaint from the home ministry, the sleuths apprehended around 14 people including home ministry officials, NGO representatives, and middlemen for allegedly facilitating the clearance of foreign donations in violation of the FCRA, officials said on Tuesday.
Context
Why does this story matter?
From 2011 to September 2020, the MHA had canceled the registration of 20,664 associations for violations such as non-submission of mandatory annual returns, diversion, and improper utilization of foreign funds for other purposes. Since 2020, the home ministry has refused FCRA licenses to 466 NGOs of which 100 were in 2020, 341 in 2021, and 25 organizations till March 2022.
Crackdown
Officials exchanged money, took bribes
The CBI found several officials allegedly exchanging money to facilitate clearances of foreign donations to NGOs in violation of the FCRA Act, 2010, agency officials said. The crackdown was conducted at around 40 locations including in Delhi, Chennai, Hyderabad, Coimbatore, Mysore, and some places in Rajasthan, officials said. Hawala transactions of around Rs. 2 crore have been disclosed so far, they said.
Investigation
Ministry letter to CBI triggered raids
The official letter from the MHA mentioned a detailed note on three "FCRA-clearance networks which are reportedly operating and have linkages with government officials and are charging speed money or problem resolution money." "It has been decided, with the approval of the competent authority, that the CBI should immediately investigate into this matter for taking necessary action," the letter stated.
'Zero tolerance for corruption'
Strongest possible action for those involved: Amit Shah
Home ministry officials said when the issue of alleged violations of the Foreign Contribution Regulation Act (FCRA) was flagged, Home Minister Amit Shah directed that the strongest possible action should be taken against those involved. The MHA then lodged the complaint with the CBI as this was in line with the Narendra Modi government's "zero tolerance for corruption" policy, officials said.
Under the radar
Bribes paid to lower-level officials in MHA's foreign division
The middlemen took money from NGOs that were denied FCRA approvals and paid bribes to lower-level officials in the foreign division. This helped the NGOs get the approved license. So far, no senior officials were found to have any connection with the case. However, several NGOs are still under the scanner. A possible money laundering angle is also being investigated.
Under scanner
Why were FCRA applications of some NGOs denied?
Some NGOs that are under the CBI scanner for allegedly bribing MHA officials to get their FCRA license renewed are Jharkhand's Sreejan Foundation, Jahangirabad Educational Trust in Delhi, and Reformed Presbyterian Church in Manipur's Churachandpur. The FCRA applications of these NGOs were denied because contrary to their claim, foreign funds for helping the tribals and minority communities were being utilized elsewhere.
Guidelines
What is FCRA?
To receive foreign funding, it is mandatory for all non-government organizations (NGOs) to be registered under the Foreign Contribution (Regulation) Act. The government's FCRA guidelines state that "all registered organizations are required to submit an online annual report comprising income and expenditure statement, receipt and payment account, balance sheet, etc., for every financial year within nine months of the closure of the financial year."