Prime Minister Narendra Modi’s warning to the nation about the depredations of “hawaladars” is timely and it is expected that these words will be followed up by action against such networks. Experts tracking the global hawala trade warn that terror-funding groups based in Pakistan and Turkey are using the “hawaladar” network in India to set up extremist cells in major cities in the country, including those comprising of ISIS sympathisers, so as to “keep them in readiness for a coordinated attack on civilian targets”. Recent media coverage has shown that “international media devotes significantly more space to mass civilian casualties than to those taking place in military conditions,” and an explosion in publicity is seen by ISIS as essential to its growth. They say that Prime Minister Modi’s just-issued warning of the “hawaladar” network was “extremely timely”, and expect that “the Ministries of Finance and Home will take their cue from the PM and go after such networks in a manner not seen for two decades”. Such a counter-strategy needs to get implemented before the “hawaladars” can implement the terror attack plans of their ISI controllers and associates.
These sources claim that “eleven of the twelve major hawala networks in India are controlled by retired and serving officers of the Pakistan military’s ISI”, which is also heavily involved in the narcotics trade. Six of these networks were created in the 1980s to fund the Khalistan agitation, but were subsequently used to cover Kashmir in 1987. “From that time onwards, the situation in Kashmir began to boil”, a key source claimed, adding that from that year, “funding was provided to any Valley youth ready to take up arms against India”. Such networks are also “hyperactive in scams such as illegal betting in cricket, as well as in some sections of the film industry”, both of which are “sources for the funding of ISI-linked operations in India”.
In order to protect the politicians involved, there was “deliberate mishandling of the Jain hawala case by investigating officials during the 1990s, despite conclusive evidence of the link of the ‘hawaladars’ involved to Pakistan’s shenanigans in Kashmir”. Such intentional laxity, made the ISI appreciate the fact that if India’s political leaders got involved with the networks, they would shield and thereby protect such channels against closure, “even if they funded terror and narcotics-related activities”. From around 1993, “selected ‘hawaladars’ themselves approached key politicians and volunteered their services in shifting cash around the country and abroad”, thereby gaining protection on a scale which in effect has meant that for the past 18 years, no serious action has been taken by any Central or state authority to uproot the key (ISI-linked) hawala networks. Another reason why they have been safe thus far is that “the same channels funding terror activities are also used to transmit money to candidates during election campaigns”. The sources say that since 2013, there has been a “huge increase in the business transacted by hawala channels funnelling moneys out of India, mainly because of an increase in the number of corrupt officials seeking to park their wealth offshore rather than keep it within India”. Such elements are afraid that Prime Minister Modi — who emerged into prominence as the future leader of the country during that period — will locate and punish them, and believe that they and their assets are safer abroad than in India.
The expert sources claim that such hidden capital flight has persisted “because since 2011, most big ticket bribes are getting paid abroad rather than in India”. They say that over the past few years, “most senior politicians and officials insist on payment abroad”, and that “the rise in (post-2011) frequency of visits and length of stay abroad to key offshore banking centres of the family and associates of key officials and politicians will demonstrate this, as also their call records”.
Interestingly, these experts pointed out that “hawala has yet to be made illegal in India”, and that the Foreign Exchange Management Act 2000 and Prevention of Money Laundering Act 2002 are “wholly ineffectual” in curbing this menace, so much so that “the major operators function from Dubai, London and Singapore and not only visit India regularly, but are hosted by top leaders of political parties and high officials on such visits”. The investigating authorities have to prove that the proceeds of hawala come from criminal activities, and this is often impossible in the absence of tangible evidence. According to those tracking the industry in India, “not a single major ‘hawaladar’ has been seriously pursued and prosecuted”, although they expect the immunity to end now that Prime Minister Modi has himself warned the nation of the danger from “hawaladar” networks. They claim that “from 10% of hawala transfers in India going to foreign countries in 1998, the figure is now close to 60%”. Large sums of money are being repatriated abroad rather than kept in India by officials, businesspersons and politicians through ISI-controlled networks, “as these have the best access to London and Dubai”. Increasing sums of cash are also coming into the country in order to fund potential terror networks.
According to them, “the six top cities for hawala trade in India are Delhi, Mumbai, Surat, Kolkata, Hyderabad and Kanpur”, the latter being the preferred channel for the Nepal route. “In most locations, local police and other authorities get neutralised through bribes or by influence, including that exercised by more senior officials on their subordinates”, an expert warned, adding that “often officials using the networks (for example to fund children studying abroad or for visits by family members to exotic locations) are themselves not aware of the error links of the hawaladars, and believe them to merely be conduits for businesspersons and politicians”. Human couriers are being used, and these days, “much of the travel of cash couriers is by luxurious cars rather than by air or rail, as big cars seldom get checked, out of fear that those inside have influence”. They say that both “the hawaladar network as well as the human carriers used to ferry cash around come from all communities and even comprise foreign nationals, especially those from Europe, as in India they seldom incur suspicion of being involved in criminal activity”.
Although the trade done by “hawaladars” has wreaked significant damage to national security and other interests, thus far “no government has revealed to the public the facts in its possession about the networks”, with even the 1993 Vohra committee report still kept secret. Occasionally, courts have got into the act, as in 2014, when the Gujarat High Court issued notice to the Enforcement Directorate on a PIL seeking the investigation of two police cases in Surat in connection with a Rs 10, 000 crore hawala scam, but “which still remains under investigation”. Another ploy of the ISI-linked hawala networks is to “channel the money through religious organisations, as experience has shown that the police are more reluctant to move against such bodies because of the political and societal sensibilities involved”. This is apart from the fact that the personnel assigned to investigate such cases usually have scant understanding of such subjects, which are in several cases too complex even for specialised agencies such as the ED, DRI and the RBI. The latter has comprehensively failed to curb the hawala menace in India and has paid little attention to the fact that several overseas financial entities patronised by its top echelons are in numerous instances “facilitating such transactions in order to increase profits”. Thus far, monetary authorities in India have not followed the example of the US and the UK in curbing such practices through steep billion dollar fines but have administered only a “slap on the wrist”, that too in a “very limited number of cases that have mostly been flagged first by the media”.
The revelations made by the experts include the fact that “10-15% of the money made by some ISI networks in India, including those run by the D-Company, gets paid as protection money to select politicians”, and that the “agencies have evidence of this”, but have thus far refused to act against such politicians. After years of governmental inaction, experts feel heartened by Prime Minister Modi’s forthright condemnation of “hawaladars”. They expect the PM to begin the process of rolling up the ISI-linked hawala networks operating in India, so that these may cease trying to create mayhem within the country at the behest of their controllers, facilitate corruption and capital flight, and seek to use popular pastimes such as cricket and feature films for multi-million dollar gains which thereafter get recycled in the terror and narcotics trades.