The Daily Fix

The Daily Fix: Rahul Gandhi can no longer afford to play the role of an outsider looking in

Everything you need to know for the day (and a little more).

The Big Story: The outsider

Delivering a lecture at the University of California, Berkeley, on Tuesday, Congress vice president Rahul Gandhi slipped into his favourite role: that of the “reluctant politician”, of the outsider looking in. Asked about dynastic politics, he reportedly said that is how things worked across organisations in India, from political parties to industrial empires. He is then believed to have said, with some drollery, that while some in the Congress did not come from dynasties, others happened to have had a father, grandmother and great-grandfather in politics. “Not much I can do about it,” he said.

Gandhi’s remarks now, good humour notwithstanding, are reminiscent of the sentimental speech delivered to Congress followers in 2013, when he declared that “power is poison”. That was when he was anointed Congress vice president, and not many outside the party were convinced by the image of the noble scion forced to take up the mantle reserved for him. In the four years since then, he has done little to correct the systemic flaws of the party he inherited, let alone the politics he joined.

As Gandhi points out, the Congress stopped having the “conversation” that parties need to have, both within the organisation and with the electorate, sometime in 2012. The Congress Working Committee, once a forum for political brainstorming, is now irrelevant, according to observers, and the party’s decision-making mechanisms remain opaque and centralised. While senior party leaders believe the party should be expanding its base and firming up its internal structures, the Congress’s election strategy in key states like Bihar and Uttar Pradesh has been to tie up with regional parties in the hope that it will boost its appeal to a frankly disenchanted electorate.

In the lead up to polls in Assam, the Bharatiya Janata Party’s regional offices bustled with activity while most of the Congress leadership departed for Delhi to take orders from the high command. Even now, many question the wisdom of Gandhi’s two week tour to the United States on the eve of the Gujarat elections. Meanwhile, BJP president Amit Shah, immediately after engineering a spectacular election victory in Uttar Pradesh, started planning a countrywide tour to meet booth-level workers. In state after state, the BJP has reached out, projecting itself as an attractive political prospect, picking off many of the Congress’s own local leaders. The grand old party seemed to have folded into itself, growing increasingly insular, offering few channels for the political ambitions of leaders outside the established dynasties.

Gandhi can no longer pretend to be powerless in the face of a ruthless political machinery. As the anointed leader-in-waiting for years now, he has set the tone of the party and has a considerable say in how it functions. Contrary to his claims at Berkeley, there is much he can do about it.

The Big Scroll

Anita Katyal writes how the Congress Working Committee meets have been hollowed out. She also points to the difference in the way Amit Shah and Rahul Gandhi are preparing for the Gujarat elections.

Rohan Venkataramakrishnan on the long wait for Rahul Gandhi to become Congress president.

Punditry

  1. In the Indian Express, Ravi Nair points out that Delhi is impervious to the United Nations’ criticism about its stance on the Ronhingya issue.
  2. In the Hindu, C Rangarajan on the course correction the Indian economy needs.
  3. In the Telegraph, Samantak Das on the dangers of silence, in both India and the United States.

Giggles

Don’t miss...

Deepanjan Ghosh writes about the misdirected anger against a Jawed Habib advertisement for Durga Puja:

 “Bengali children grow up with stories of Durga slaying Mahishasur, the demon who took the form of a buffalo. Durga’s children are treated more like distant cousins than distant gods – each has a distinct character. Ganesh is the plump, obedient, occasionally mischievous, child who is bullied by others. Kartik is always nattily dressed, and perhaps a little vain. Lakshmi is the naughty one and Saraswati the studious, serious one. If one were to think of gods as family, it would logically follow that one could sometimes josh with them, the way Bengalis are known to do.” 

We welcome your comments at letters@scroll.in.
Sponsored Content BY 

Behind the garb of wealth and success, white collar criminals are hiding in plain sight

Understanding the forces that motivate leaders to become fraudsters.

Most con artists are very easy to like; the ones that belong to the corporate society, even more so. The Jordan Belforts of the world are confident, sharp and can smooth-talk their way into convincing people to bend at their will. For years, Harshad Mehta, a practiced con-artist, employed all-of-the-above to earn the sobriquet “big bull” on Dalaal Street. In 1992, the stockbroker used the pump and dump technique, explained later, to falsely inflate the Sensex from 1,194 points to 4,467. It was only after the scam that journalist Sucheta Dalal, acting on a tip-off, broke the story exposing how he fraudulently dipped into the banking system to finance a boom that manipulated the stock market.

Play

In her book ‘The confidence game’, Maria Konnikova observes that con artists are expert storytellers - “When a story is plausible, we often assume it’s true.” Harshad Mehta’s story was an endearing rags-to-riches tale in which an insurance agent turned stockbroker flourished based on his skill and knowledge of the market. For years, he gave hope to marketmen that they too could one day live in a 15,000 sq.ft. posh apartment with a swimming pool in upmarket Worli.

One such marketman was Ketan Parekh who took over Dalaal Street after the arrest of Harshad Mehta. Ketan Parekh kept a low profile and broke character only to celebrate milestones such as reaching Rs. 100 crore in net worth, for which he threw a lavish bash with a star-studded guest-list to show off his wealth and connections. Ketan Parekh, a trainee in Harshad Mehta’s company, used the same infamous pump-and-dump scheme to make his riches. In that, he first used false bank documents to buy high stakes in shares that would inflate the stock prices of certain companies. The rise in stock prices lured in other institutional investors, further increasing the price of the stock. Once the price was high, Ketan dumped these stocks making huge profits and causing the stock market to take a tumble since it was propped up on misleading share prices. Ketan Parekh was later implicated in the 2001 securities scam and is serving a 14-years SEBI ban. The tactics employed by Harshad Mehta and Ketan Parekh were similar, in that they found a loophole in the system and took advantage of it to accumulate an obscene amount of wealth.

Play

Call it greed, addiction or smarts, the 1992 and 2001 Securities Scams, for the first time, revealed the magnitude of white collar crimes in India. To fill the gaps exposed through these scams, the Securities Laws Act 1995 widened SEBI’s jurisdiction and allowed it to regulate depositories, FIIs, venture capital funds and credit-rating agencies. SEBI further received greater autonomy to penalise capital market violations with a fine of Rs 10 lakhs.

Despite an empowered regulatory body, the next white-collar crime struck India’s capital market with a massive blow. In a confession letter, Ramalinga Raju, ex-chairman of Satyam Computers convicted of criminal conspiracy and financial fraud, disclosed that Satyam’s balance sheets were cooked up to show an excess of revenues amounting to Rs. 7,000 crore. This accounting fraud allowed the chairman to keep the share prices of the company high. The deception, once revealed to unsuspecting board members and shareholders, made the company’s stock prices crash, with the investors losing as much as Rs. 14,000 crores. The crash of India’s fourth largest software services company is often likened to the bankruptcy of Enron - both companies achieved dizzying heights but collapsed to the ground taking their shareholders with them. Ramalinga Raju wrote in his letter “it was like riding a tiger, not knowing how to get off without being eaten”, implying that even after the realisation of consequences of the crime, it was impossible for him to rectify it.

It is theorised that white-collar crimes like these are highly rationalised. The motivation for the crime can be linked to the strain theory developed by Robert K Merton who stated that society puts pressure on individuals to achieve socially accepted goals (the importance of money, social status etc.). Not having the means to achieve those goals leads individuals to commit crimes.

Take the case of the executive who spent nine years in McKinsey as managing director and thereafter on the corporate and non-profit boards of Goldman Sachs, Procter & Gamble, American Airlines, and Harvard Business School. Rajat Gupta was a figure of success. Furthermore, his commitment to philanthropy added an additional layer of credibility to his image. He created the American India Foundation which brought in millions of dollars in philanthropic contributions from NRIs to development programs across the country. Rajat Gupta’s descent started during the investigation on Raj Rajaratnam, a Sri-Lankan hedge fund manager accused of insider trading. Convicted for leaking confidential information about Warren Buffet’s sizeable investment plans for Goldman Sachs to Raj Rajaratnam, Rajat Gupta was found guilty of conspiracy and three counts of securities fraud. Safe to say, Mr. Gupta’s philanthropic work did not sway the jury.

Play

The people discussed above have one thing in common - each one of them was well respected and celebrated for their industry prowess and social standing, but got sucked down a path of non-violent crime. The question remains - Why are individuals at successful positions willing to risk it all? The book Why They Do It: Inside the mind of the White-Collar Criminal based on a research by Eugene Soltes reveals a startling insight. Soltes spoke to fifty white collar criminals to understand their motivations behind the crimes. Like most of us, Soltes expected the workings of a calculated and greedy mind behind the crimes, something that could separate them from regular people. However, the results were surprisingly unnerving. According to the research, most of the executives who committed crimes made decisions the way we all do–on the basis of their intuitions and gut feelings. They often didn’t realise the consequences of their action and got caught in the flow of making more money.

Play

The arena of white collar crimes is full of commanding players with large and complex personalities. Billions, starring Damien Lewis and Paul Giamatti, captures the undercurrents of Wall Street and delivers a high-octane ‘ruthless attorney vs wealthy kingpin’ drama. The show looks at the fine line between success and fraud in the stock market. Bobby Axelrod, the hedge fund kingpin, skilfully walks on this fine line like a tightrope walker, making it difficult for Chuck Rhoades, a US attorney, to build a case against him.

If financial drama is your thing, then block your weekend for Billions. You can catch it on Hotstar Premium, a platform that offers a wide collection of popular and Emmy-winning shows such as Game of Thrones, Modern Family and This Is Us, in addition to live sports coverage, and movies. To subscribe, click here.

This article was produced by the Scroll marketing team on behalf of Hotstar and not by the Scroll editorial team.