Two senior MPs were paid several crore Rupees in undisclosed legal retainer contracts over several years by Reliance Industries, raising questions of transparency and potential for conflict despite being completely legal, reported the UK’s Financial Times on its frontpage this morning.
Senior Congress politician and ex-broadcasting minister Manish Tewari and senior BJP politician Ravi Shankar Prasad were both paid monthly retainers respectively by Reliance and Reliance affiliate Fine Tech Corporate, which were not disclosed to the public by the company or the politicians.
A large number of Indian parliamentarians have flourishing and lucrative legal practices as counsel and are in high demand by corporates for their legal advice. However, according to two experts from thinktanks and academia interviewed by the FT, undisclosed retainers of this nature raised a “very serious problem” of transparency, while in the US such contracts would be banned and under UK law would be permitted only if disclosed to avoid any conflicts of interest.
According to documents seen by the FT, Prasad sent Fine Tech Corporate an invoice for legal services of Rs 84 lakh ($135,506) between April 2013 and March 2014, before he was appointed Narendra Modi’s telecoms minister in May 2014.
According to the FT, Tewari received a total of Rs 1.2 crore ($193,580) from Reliance between June 2010 and 2012 via a monthly legal services retainer, which he asked to be renewed at his request for two years in June 2012, receiving a further Rs 1.44 crore ($232,295). He became information and broadcasting minister on 28 October 2012, but told the Times of India that he surrendered his licence to practice and the Reliance contract two days later.
Prasad and Tewari told the FT that they, as required under the ministerial code, had not done any commercial legal work while ministers but Prasad noted that he had undertaken legal work as an MP “purely in professional capacity, only like a lawyer and client and nothing else”, while Tewari told the FT that although he had complied with the rules, regulations should be changed to ensure such retainers were declared in future “to keep everything above board”.
Reliance told FT in a statement: “RIL has large and varied demands for legal assistance. We work with various lawyers from time to time for such legal assistance. The details of such engagement are contained in our accounts and are available with tax authorities. Several eminent lawyers in India are and have historically been in active politics and have been rendering legal services to leading corporates in India. There is no bar against an elected representative to continue his or her practice while being an MP or MLA. Our selection of lawyers is basis [sic] our needs and their expertise and that has nothing to do with their being in politics or being MP/MLA. As is the common practice and legal requirement, when such an MP/MLA has joined as a Minister in the Union Cabinet, the engagement discontinues. Communication with lawyers are privileged and are protected by the law.”
Coincidentally, the Aam Aadmi Party (AAP) raised the issue yesterday independently, reported PTI.
Also worth reading documents posted by @ManishTewari yesterday evening, linked to this morning’s #FT Reliance story —http://t.co/LT7AKEX64q
— jamescrabtree (@jamescrabtree) December 19, 2014
Response from BJP telecoms minister Ravi Shankar Prasad to allegations linked to today’s #FT story on Reliance — http://t.co/YoKS6qAFH6
— jamescrabtree (@jamescrabtree) December 19, 2014
Comments
I believe even Vodafone pays a retainer to Harish Salve!
All the Law Firm Associates must be thinking what the big deal this is about apart from the big amount mentioned offcourse!! #Retainer
If a private company is paying MPs millions of Rupees for god-knows-what "professional services" and doesn't disclose this, how is this demonstrably any different in theory from private companies giving MPs suitcases of cash in secret? How are we to know that they're being paid at market rate and entirely for their awesome legal expertise rather than in-part for their political office?
I assume the theory is that 'legal professionals' have higher standards of ethics than other humans and millions in legal fees paid by a private company will not pre-dispose them towards that company throughout their political career. Well, less said about that the better.
But more importantly, the perception that this kind of thing can create alone should be reason for at least mandating transparency for these kinds of arrangements, if not banning them outright.
Have you bothered to check how many top SC's in India are on RIL's retainer ? Please do most of them are and several of these are simply not to accept a brief against them.
There is absolutely nothing wrong.
Regds
In case the MP sits on a parliamentary committee or other public body where he is dealing with issues/ facts/ policy and his work on those issues /facts/ policy is likely to affect/ benefit a private entities' present or future interests, then his receiving any kind of payment from such entities even for unconnected legal work will raise serious concerns of corruption, conflict of interest and illegality.
Also, as Kian points out, the need for transparency/ disclosure is undisputed.
Such arrangements which will involve attorney client privilege issues and therefore confidentiality issues are not in the public interest at all. Because the perception/ suspicion that some corruption was involved will always be there. Even an MP's vote on a bill will be open to doubt, was he paid for it?
If these companies ask for a favour from such MPs, will they be able to say no to their financial masters?
When did it become 'left' to ask for clean, ethical politics? Or is it too much to ask for such a thing these days?