Beware the Tax Man

Is this mild-mannered corruption fighter the most dangerous man in India?

For many Indians, their country's most exciting politician is neither the firebrand Hindu nationalist Narendra Modi nor the Nehru-Gandhi dynasty scion Rahul Gandhi, but Arvind Kejriwal, a mustachioed, bespectacled former tax inspector whom most people had barely heard of just three years ago.

In February, Kejriwal resigned as chief minister of Delhi just 49 turbulent days after he took office. Freed from the daily grind of running a megacity of 17 million people, the 45-year-old former anti-corruption activist can now concentrate on pole-vaulting his fledgling Aam Aadmi (Common Man) Party into Parliament in national elections in April and May. Although most polls suggest AAP will win fewer than 10 of the 543 seats up for grabs -- coming in far behind the opposition Bharatiya Janata Party (BJP) and the ruling Congress party -- campaigning is far from over and the party has proved naysayers wrong before in Delhi.

Kejriwal's supporters see him as a squeaky-clean outsider who will transcend narrow appeals to caste and community to banish corruption from public life. For them, he stands for qualities all too rare in Indian politics: merit, courage, and simplicity. His detractors see instead a slippery opportunist less interested in governing than in grandstanding for the cameras with outlandish protests and florid allegations against top politicians and businessmen. For them, Kejriwal stands not for the promise of clean government but for the certainty of chaos.

Both versions contain an element of truth. And indeed, even if his party ends up with just a handful of seats in Parliament, Kejriwal's everyman appeal, guerrilla campaign tactics, and relentless attacks on graft may end up transforming the face of Indian politics. In the end, however, the evidence favors the skeptics. Whatever his personal virtues, Kejriwal's rhetoric, economic thinking, and actions in office suggest a throwback to India's pre-liberalization past: He appears to believe that baiting the wealthy is the surest route to popularity with the poor. Kejriwal's popularity raises questions about whether India's democracy can outgrow the socialist bent that has kept the country poor while much of East Asia has raced ahead.

After a decade of policy paralysis under outgoing Prime Minister Manmohan Singh, India's global standing has already taken a beating. With the International Monetary Fund estimating 2014 GDP growth at 4.4 percent, less than half India's historic 2011 high of 10 percent, the last thing the country needs is a charismatic populist who portrays foreign investors as exploiters and Indian businessmen as crooks. Despite occasional lip service to the private sector, at his core Kejriwal is an old-fashioned Indian statist whose ideas belong in a museum, not in Parliament.

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Kejriwal first sprung into national consciousness in 2011 as the architect of an anti-corruption campaign led by then 74-year-old social activist Anna Hazare. Angered by multibillion-dollar government corruption scandals spanning the sale of the telecom spectrum, real estate, and procurement for the 2010 Commonwealth Games in Delhi, India's normally apathetic middle class protested in the streets to back Hazare's demand for a janlokpal -- a powerful anti-corruption ombudsman insulated from political interference. As Hazare's right-hand man, Kejriwal became a fixture on national television, where he bore the brunt of explaining why the janlokpal was necessary and how it would work. His appeal to idealism and his ability to convey a broadly shared sense of outrage quickly made him a hero to much of the middle class.

In August 2011, after the high-voltage drama of Hazare's 12-day hunger strike on live television, the Hazare movement managed to extract a promise from India's government to agree to set up a janlokpal. But once the pressure of the hunger strike was over, negotiations stalled and a rift developed in the movement between two factions. A group led by Kejriwal argued that Hazare's movement, India Against Corruption, needed to transform itself into a political party to force change from within the system. Others countered that it made more sense to stay above the fray as a pressure group that could influence politics without fighting elections itself.

At first, Kejriwal played the role of a good lieutenant, publicly likening himself to Hanuman, a character from the Hindu epic the Ramayana known for his steadfast loyalty to his king. But when it became clear that Hazare had no intention of entering politics, Kejriwal parted ways with his mentor. In the first clear sign of Kejriwal's soaring ambition, he chose Mahatma Gandhi's Oct. 2 birth anniversary in 2012 to announce the creation of a new political party.

The date was no coincidence. Kejriwal calls his fight against corruption "India's second independence struggle." AAP supporters sport the cloth caps associated with India's independence movement, emblazoned with the words "I am a common man" in Hindi to set them apart from run-of-the-mill politicians, most of whom have abandoned the old-fashioned headgear. In 2012, Kejriwal published a slim book called Swaraj (Self-Rule), which echoes Gandhi's Hind Swaraj (Indian Self-Rule), written in 1909. (Swaraj has been republished in several Indian languages but remains better known to journalists than the general public.) Written before the demands of full-time electoral politics took over, it remains the single best guide to Kejriwal's core beliefs.

If Kejriwal stands for one thing to his fans, it's a fierce sense of morality. For party supporters, AAP, whose symbol is a broom, will sweep away the rot of the old order to usher in a clean and accountable government. During his brief stint as Delhi chief minister this year, Kejriwal eschewed common trappings of political power, such as a gaggle of machine gun–toting bodyguards and a car with a flashing red light that cuts through traffic. On the stump, Kejriwal never tires of reminding voters of how he could have made a fortune shaking down businessmen as a corrupt tax official but instead chose to quit and become a social activist before turning to politics. "I was an income tax commissioner," he declared in October at a typical campaign rally in Delhi. "With just one raid, 2 crore rupees [$327,000] would have landed in my home."

AAP's transparent approach to finances -- it holds U.S.-style fundraising dinners and says it lists all donations on its website -- and inexpensive campaign tactics, such as door-to-door canvassing by unpaid volunteers, contrast sharply with the usual murk of Indian politics. While Congress and the BJP plastered Delhi with expensive billboards, AAP relied on volunteers to stand on overpasses with party banners. And Kejriwal's willingness (some would say eagerness) to be grilled by journalists on television is a departure from the aloofness of established politicians like the BJP's candidate, Narendra Modi, and the Congress party's Rahul Gandhi. By publicly hurling accusations of corruption against some of India's most powerful people -- including Congress President Sonia Gandhi's son-in-law, the businessman Robert Vadra, and India's richest man, Reliance Industries Chairman Mukesh Ambani -- Kejriwal has built a reputation for raw courage that few of his peers possess.

Kejriwal's uncommon biography also helps. Unlike most professional politicians, whose chief qualification for public life is usually either a family pedigree or a talent for sycophancy or rabble-rousing, Kejriwal passed two of India's most competitive exams: those for the Indian Institutes of Technology and the Indian Revenue Service. Unlike the archetypal rustic politician, he's fluent in both Hindi and English. Despite the occasional nod to Muslim clerics, for the most part Kejriwal avoids naked pandering to caste and religion. His two main policy goals -- a janlokpal with teeth and radical decentralization of power to neighborhoods and village councils -- are big ideas, not narrow appeals to identity.

It's hardly surprising then that Kejriwal has struck a chord with many middle-class Indians fed up with politics as usual. For those uncomfortable with the muscular Hindu nationalism of front-runner Modi, Kejriwal offers change without the baggage of religious chauvinism. For those underwhelmed by the dilettantish Gandhi -- with little to show for a decade in Parliament despite his famous last name -- the former tax man stands for merit and hard work. For those who despair of the enduring pettiness of India's regional and caste-based parties, AAP offers a bracing dose of idealism. Since its establishment less than 18 months ago, the party has signed up more than 10 million members and has established chapters among overseas Indians in 31 countries across five continents. On Twitter and Facebook, reliable proxies for middle-class sentiment, Kejriwal has quickly built a vast following.

Despite this impressive start, to most observers AAP's prospects in the forthcoming elections, which begin April 7 and conclude May 12, don't look bright. Notwithstanding the usual caveats (election surveys in India remain as much crapshoot as science; most polls underestimated AAP's performance; and campaigning for the national elections has only just gathered steam), only an audacious gambler would bet on AAP. India's gargantuan democracy -- with 814 million eligible voters picking 543 directly elected members of Parliament in a first-past-the-post system akin to Britain's -- doesn't usually favor newcomers.

Although AAP plans to contest an ambitious 350 to 400 seats, it lacks the organization, rural name recognition, and grassroots support outside Delhi to make a serious electoral impact or to significantly dampen the wave of support Modi appears to be riding. The arguably best-regarded Indian poll, by the Delhi-based research institute Centre for the Study of Developing Societies, gives the party only between one and five seats in Parliament and just 3 percent of the national vote. (Modi's BJP appears on course to emerge as the big winner, with between 193 and 213 seats and 33 percent of the vote.)

Nonetheless, AAP has already changed the grammar of Indian politics. By capturing power in Delhi, it showed that a party rooted in a middle-class ethos can challenge an entrenched political class. Kejriwal is also arguably India's first truly television-savvy politician. No other Indian leader owes as much to nonstop (much of it fawning) coverage by India's Delhi-based national news channels. He has mastered the art of the TV interview and appears to have an instinctive sense of what will capture the headlines: reconnecting power for a poor consumer who couldn't pay his bills, taking the Metro to a public swearing-in before thousands of supporters, or spending the night on the street to demand control of Delhi's police force. By contrast, the election front-runner, Modi, appears limited: master of the televised speech, but reluctant to grant interviews and flat-footed when it comes to exploiting the power of the visual image. (The less said about Gandhi's gaffe-prone and lackluster efforts the better.)

AAP has already forced its competitors to mimic it. At party rallies, the BJP has also taken to supplying its supporters with cloth caps, albeit in saffron, the color of Hinduism. Its website too calls for donations, in part to blunt AAP charges that Modi is beholden to corporate fat cats like Ambani and the infrastructure and commodities billionaire Gautam Adani. And, somewhat ironically for a party associated with the most staggering corruption scandals in Indian history, Gandhi too has now made graft-busting a central feature of his campaign.

In Delhi, AAP mostly ran fresh-faced outsiders rather than career politicians. The party's slate of parliamentary candidates includes India's most prominent election pollster, a fiery former television anchor, a prominent anti-dam activist, a flamboyant Hindi poet, a peace activist grandson of Mahatma Gandhi, a former Miss India, and the former head of Royal Bank of Scotland in India. By running untainted candidates new to politics, AAP may force other parties to widen their nets instead of only nominating the usual cast of thugs, crooks, and dynasts invariably chosen purely for their chances of getting elected.

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But Kejriwal's gift for grabbing headlines also underscores AAP's essential problem: It's heavy on symbolism and light on substance. Kejriwal has yet to show the faintest temperament for governance. Instead of sticking it out as chief minister, he resigned after just 49 days, citing an inability to get his version of the janlokpal passed in Delhi. And Kejriwal's economic ideas are a blueprint for disaster.

When he took power in Delhi in December, after one of the most stunning campaign debuts in Indian politics, Kejriwal set about implementing a populist agenda. Keeping a campaign promise, he halved power tariffs. He also dropped legal proceedings against anyone who hadn't paid an electricity bill in the previous 10 months. (He had claimed, without evidence, that private power companies were cooking the books to gouge consumers.) In an arid region, Kejriwal granted Delhi residents, including the rich, 20,000 liters of free water per month. In February, Delhi became the first Indian state or union territory to scrap foreign direct investment in big-box stores such as Tesco and Walmart, rolling back a 13-month-old reform by the federal government meant to modernize India's retail sector. (The BJP-ruled state of Rajasthan quickly followed suit.)

And instead of focusing on the city's real problems -- such as pollution, traffic, and drainage -- Kejriwal spent his time in office preening for the cameras. In January, he brought life in central Delhi to a halt by taking to the streets over a squabble with Delhi's police force, which the federal government controls. He also managed to get bogged down in warding off allegations against his law minister, Somnath Bharti, who organized a bizarre midnight vigilante raid against African immigrants he accused of prostitution.

In a February speech to the Confederation of Indian Industry, an influential association of Indian businesses, Kejriwal tried to calm fears that he's just another fiscally reckless populist eager to squabble publicly with the private sector in order to garner votes. He spoke with feeling about his grandfather's small oil mill and the harassment he faced from petty officials. He distinguished between capitalism and crony capitalism and conceded that the vast majority of businessmen were forced to pay bribes by India's complex bureaucracy swaddled in red tape. AAP's economic agenda talks of restoring high growth and boosting manufacturing. Not coincidentally, the election front-runner, Modi, is campaigning partly on the strength of his pro-business record running the western state of Gujarat.

Unfortunately, Kejriwal's attempted makeover lacks credibility. AAP's top leadership draws heavily from grizzled foes of liberalization and globalization. A senior AAP leader, Prashant Bhushan, has reportedly called for the nationalization of airports and power plants. And the only time Kejriwal sounds remotely reasonable about business is when he's speaking to a business audience. For the most part, a common theme runs through his writing and speeches: Foreign investment is evil, and businessmen who make profits are crooks unless proven otherwise. His book, Swaraj, opens with a laughable anecdote about an honest income tax official bullied by a corrupt multinational executive who claims that India's Parliament is in his pocket. In reality, multinationals in India often complain of harassment by whimsical tax men with vast discretionary powers.

In his campaign speeches, Kejriwal sometimes sounds as though AAP is running against Ambani -- whom Kejriwal regularly accuses of colluding with the government to inflate gas prices -- rather than against the BJP or Congress. Journalists who question this shoot-from-the-hip style are immediately dismissed as being on the take.

And AAP's signature idea -- a janlokpal tougher than the one Parliament established in December in response to the 2011 protests -- fundamentally misreads the causes of corruption in India. It assumes that a new layer of bureaucracy, staffed by officials miraculously immune to bribery, will solve a problem caused by too much bureaucracy in the first place. The World Bank ranks India 134 out of 189 countries in terms of ease of doing business, behind such exemplars of free enterprise as Pakistan, Ukraine, and Uganda. On average, starting a business in India requires 12 procedures and takes 27 days; in Singapore it takes three procedures and less than three days.

Kejriwal also shows a capacity for hypocrisy unusual even for a politician. Throughout 2013, he repeatedly promised Delhi voters that AAP would never work with Congress to form a government, only to swiftly reverse himself once the results came in and showed him short of a majority. After campaigning against ostentation in public life, he shocked many supporters by commandeering two houses luxurious by Delhi standards, before an outcry forced him to change his mind. Despite frequently attacking Modi for using private jets, Kejriwal hopped onto one himself in early March to return to Delhi in time for a speech at a high-profile media conclave. And after claiming that AAP representatives elected as state legislators would not contest parliamentary elections, Kejriwal himself is poised to run against Modi in the northern city of Varanasi.

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In the long term, anyone serious about ending corruption in India must fight it while growing the economy. For all his graft-busting zeal, Kejriwal appears to have ignored a simple fact: Governance in rich countries is usually cleaner than in poor ones. Average per capita income in the five countries perceived as the least corrupt, according to Transparency International's 2013 ranking, was about $40,000. For the five most corrupt countries it was $1,500; India's is roughly $4,000.

With the possible exception of tiny Singapore, countries became rich before they became clean. To emulate them, India needs private firms to be treated as job creators, not criminals, and it needs plenty of foreign investment by multinationals. The last thing it requires is a return to the reflexes of the license-permit raj, when government was the solution to every problem and anyone who ran a successful business immediately became an object of suspicion.

In a March 2013 speech at the Wharton India Economic Forum, Kejriwal observed that "when Indians go abroad they have excelled in every field" because "Indians are first-class people who are victims of third-class governance." There's a grain of truth in those statements. But if Kejriwal wants people to trust him to fix the problem, he ought to consider earning that trust by running a state effectively for a full five-year term. Until he can prove that he won't shred business confidence and turn government into a kind of vaudeville act for the cameras, India is better off with Citizen Kejriwal as a maverick on the sidelines rather than as a serious contender for power.

Photo: PUNIT PARANJPE/AFP/Getty Images


Putin's Legalism

Why did Moscow take such careful steps to ensure its annexation of Crimea didn’t break Russian law?

There's been no shortage of commentary on how Russia's invasion of the Crimean peninsula in late February was a flagrant violation of international law. Less attention has been paid to whether it was a breach of national Russian statutes too. By some simplified accounts, President Vladimir Putin sent in the troops, then annexed Crimea willy-nilly -- without so much as a nod to Moscow's legal process.

But that's not entirely true. Russia's invasion and annexation of Crimea may have violated world order, and the Crimean referendum may have been a fraud carried out at the barrel of a Russian gun. Nevertheless, for the last three weeks, Russian politicians have been working feverishly to add a sheen of legality at home to Moscow's activities abroad. It's part of a broader trend of sham legalism that was a hallmark of Soviet despotism and remains firmly entrenched in the Kremlin today. "Putin has this obsession with the letter of the law, with no regard to the spirit," says Maria Lipman, chair of the Carnegie Moscow Center's Society and Regions Program.

Indeed, Putin has managed to "legally" justify his country's first absorption of new territory since the collapse of the Soviet Union. In doing so, he has perhaps revealed a blueprint for future incursions into other parts of the former Soviet space. As if on cue, politicians in the pro-Russia breakaway region of Transnistria (part of Moldova) asked Moscow to draft legislation that would join the territory to Russia, and the eastern Ukrainian city of Kharkov has called for a Crimea-like referendum of its own. In addition, a Russian diplomat has reportedly expressed concern about the safety of ethnic Russians in Estonia.

If or when Russia would make another Crimea-style move remains to be seen. But what's certain is that Russia now has a tested domestic process for realizing its revanchist claims.

In late February, the Russian troops flooding into Crimea -- seizing buildings, encircling airports, and blockading thoroughfares -- stood in violation of Russia's Constitution, which does not allow for a foreign state to simply be tacked onto existing Russian borders. For a new territory to be absorbed into the Russian Federation, the state to which the territory belongs (in this case, Ukraine) has to agree -- and a formal interstate treaty must be signed. 

From day one, politicians in Moscow made vague legal references to a Russian duty to "protect" ethnic Russians in Crimea from "ultranationalist and extremist forces" in Kiev. These hazy allusions to Russia's supposed obligations within the post-Soviet sphere inspired many an analogy between Putin and Hitler -- specifically Hitler's annexation of Austria in 1938, which was justified as a means of protecting ethnic Germans. Putin also declared that Russia had the right to take action in Crimea and that Crimea had the right to secede from Ukraine, despite many arguing that international law says no such thing. "There is no internationally recognized right of 'external' secession, [as in] separation from the parent state of a region (whatever the talk of self-determination)," emphasizes Roy Allison, a lecturer in the international relations of Russia, Eastern Europe, and Eurasia at Oxford University. "Much less is there a right for states to annex parts of their neighbor states."

Yet the Duma wanted annexation to be legal, at least according to the letter of Russian law, and set about to make it so. A hastily proposed draft bill was introduced to the parliament on Feb. 28, which would have amended existing law to make it easier for Russia to annex foreign territories that are inhabited by ethnic Russians. The bill, reported the Moscow Times, would have recognized situations in which a sovereign state was not "effectively protecting the rights of its citizens" and, in these circumstances, would allow a foreign territory to "join Russia on the basis of a referendum." In other words, if a state were neglecting or endangering Russian speakers (as Moscow claimed Ukraine was doing in Crimea), then Russia could do away with the legal requirement for an interstate agreement. Russia's state-owned news agency RIA Novosti reported that the bill was "widely interpreted as a signal that Moscow may be planning to gain control over … Crimea."

Europe, unsurprisingly, was not pleased by Russia's moves on the legal front. Quickly, the Venice Commission of the Council of Europe, an advisory body of constitutional law experts, passed a draft opinion declaring the bill "not democratic" and "not in line with the Constitution of Ukraine." To the surprise of some, Russia ceded on March 17, citing the Venice Commission's decision as it withdrew the proposed bill. It was a superficial appeasing nod to European legal procedure. Lipman at Carnegie Moscow, however, says, "It doesn't matter because in the meantime, Russia found a way to 'legally' annex Crimea without any such piece of legislation."

The other way came through Crimea's referendum. The date of the vote was moved from March 25 to March 16, and the ballot was changed so that the referendum was a vote on accession to Russia, rather than a simple up-or-down vote on Crimean autonomy. When the referendum passed, Russia was able to quickly recognize Crimea as a "sovereign and independent" state (much as other countries have done with new states like South Sudan or Kosovo) -- thus theoretically doing away with the need for negotiations with Kiev, as stipulated under the Russian Constitution. This "sovereign" state of Crimea then asked to become part of Russia, and Moscow said hurrah in the form of a treaty annexing the region.

On March 18, Putin addressed both chambers of the Russian parliament with an hourlong speech. In it, he announced the union of Crimea and Russia -- that is, when he could get a word in edgewise. Putin was interrupted numerous times by thunderous applause and ecstatic ovation: "cheers and tears," reported Reuters.

Moscow declared the annexation treaty in effect at the moment of its signing.

Subsequent "due process" was also ostensibly observed and tracked in excruciating detail by Russian news outlets. The draft treaty signed by Putin and Crimean leaders was passed to Russia's Constitutional Court for review; that court worked through the night and declared the accession to be legitimate by the following morning. A day later, Russia's lower house rubber-stamped the union. On March 21, the upper house did the same. Russia has reportedly begun issuing passports to Crimean residents.

It all happened so quickly that critical details -- like what currency Crimea will use (likely the ruble) and what time zone it will follow (probably Moscow time) -- still need to be worked out. There has also been little time in which Crimean opponents of the move to join Russia could air their concerns.

And here's where others of new legal measures Putin has pushed will come in handy. On Jan. 30, Putin signed a new law allowing his government to block (without a court order) any websites that contain "extremist" material or that call for unauthorized public gathering. Over the last few weeks, under this law, several major opposition news organizations and blogs that have criticized Russia's Ukraine maneuverings were blocked. A statement from Russia's state communications monitoring agency explained, "These sites contain incitement to illegal activity and participation in public events held in violation of the established order."

Moreover, a month prior, Putin had signed a law that criminalized public calls "for action to violate the territorial integrity of the Russian Federation." This might mean that citizens of Crimea -- now "Russians," by the Kremlin's logic -- could be imprisoned for speaking out against the annexation. 

In other words, Putin's legal edifice regarding annexation has built-in reinforcement.

Why bother with this pretense of legality? In part, it might have been because Putin wanted to play domestic politics in his favor. In being able to claim that he was acting in accordance with Russian law, it was all the easier for him to paint the United States and Europe as infringing on domestic affairs. (As it stands, many analysts believe that a majority of Russians support the Crimea annexation.)

This also ties into Putin's eagerness of late to point out "Western double standards" -- for instance, the United States supporting Kosovo's independence, but not Crimea's. Putin and his aides have declared repeatedly that Russia's actions regarding Crimea are "in full accordance with democratic procedures and international law" -- the former of which is now at least somewhat true -- while the West is inconsistent in its respect for principles like self-determination and sovereignty. Crimea is thus a proxy in a broader ideological contest, in which Russia's new laws are weapons for battling with the West.

But this insistence on "legal" process is likely also a forward-looking move: a strong signal to other pro-Russia territories of what will follow if they too hold referendums. On Thursday, Foreign Minister Sergei Lavrov added a footnote to Russia's de facto appropriation of Crimea when he said Russia would continue to employ "political, diplomatic and legal methods" to protect ethnic Russians abroad. It is now certainly possible that Russia will use the tools and machinations again, to "legally" absorb other territories like Transnistria, or South Ossetia and Abkhazia (in Georgia). Already, on Thursday Russian ministry officials discussed the plea of politicians in Transnistria for a Russian annexation.

When the Crimea annexation was presented to the Russian parliament's lower house, it passed almost unanimously -- with only one objector voting against the bill. "The best intentions have led us to a big mistake," Duma dissenter Ilya Ponomaryov later tweeted. "I vote against the war."

Lipman says Moscow's savvy, unchallenged moves are nothing new -- part of a pattern that will likely keep repeating in both foreign and domestic policy. "[N]onsense egregious lawlessness is declared legal," she says, "and all you are left to do is rage and feel your powerlessness."