The Commonwealth Scam

It gives an overview of the background of Commonwealth games and Suresh Kalmadi. It covers the facts of the scam, how it was exposed and the allegations which were imposed after the scam. Further, it talks about the legal actions which were taken place and the impact of the scam including the changes brought in legislation. Lastly, it covers the aftermath of the scam.
Estimated Reading Time: 10 minutes

Introduction 

Even after experiencing the largest money laundering scams by Harshad Mehta, Andimuthu Raja and Vijay Mallya in 1992, 2007 and 2008 respectively, there was another massive financial scam known as Commonwealth Scam reported in 2010 by Suresh Kalmadi.

Anything which is gained by deception and illegal means is termed as a scam. Most common of all is the financial scam. It is commonly known as the ‘white collar crimes,’ which is a form of non-violent offence committed by the people of higher social status. These offences go unreported in majority of the cases because it is difficult for the prosecution to detect where the fault lies. There are seven types of financial scams; money laundering, embezzlement, credit and fraud, securities and investment fraud, identity theft and phishing, counterfeiting, and mail fraud.[1]

India is one of the countries that has faced huge economic loss in scams. It has been observed that the scams are done on the public sector undertaking banks, which are government-owned financial companies.

Background of Commonwealth Scam 

Commonwealth Games (CWG) is an international multi-sports event which takes place in every four years. It was founded by Melville Marks Robinson and was first held in Canada in 1930 consisting of 400 competitors from 11 different nations. It was formerly known as British Empire Games, British Empire and Commonwealth Games and British Commonwealth Games because the idea behind this event was to unite the members of different empires under the control of Britain to increase the goodwill and better understanding among them. Today, it is the third largest sports event after Olympic and Asian games. There have been 21 events taken place and hosted by 19 different countries with Australia having the maximum number of times.

In November 2003, India was elected with 46 votes against Canada as the host country for conducting the XIX Commonwealth games in 2010 during 3-14 October. It was the first time for the event to be held in India and second time for an Asian country after Malaysia. It was inaugurated by the former President of India, Srimati Pratibha Patil in Jawaharlal Nehru Stadiumlocated in New Delhi.

There were 4352 participants from 71 different nations. The maximum number of medals were won by Australia followed by India. The event took place for 12 days. The official mascot was ‘Shera’ and the official song was ‘JeeyoUthoBadoJeeto’ which was composed by A. R. Rahman. There were 20 cities in India which got developed to become a tourist destination with regard to the event, and a special village was established known as ‘Game village.’ The total expense of the developmentwas estimated to be Rs. 1,200 crores.[2]

Facts of the Commonwealth Scam

Organizing Committee:

On 10th February 2005, an Organizing Committee (OC) was formedunder the Societies Registration Act, 1860 for the CWD 2010 consisting of 350 members including Suresh Kalmadi, Randhir Singh, Lalit Bhanot, Anil Kumar Khanna, Michael Fennell, Mike Hooper, Rakesh Mehta and N. Ramchandaran, who were the prominent members. Suresh Kalmadi became the Chairman of the committee by consultation of the Indian Olympic Association.[3] He was a former member of the Congress political party from the Pune constituency. He has been a representative of the Lok Sabha (House of People) for 15 times.

The committee took the responsibility for fulfilling the obligations as perclause 2(c) of Host City Contract and in compliance with Article 27 of the Constitution of India. They also got the approval from the Commonwealth Games Federation (CGF). The OC was thus, empowered to plan, manage and deliver the CWG 2010 in New Delhi.It aimed towards setting new benchmarks for the future host countries with regard to urban sustainable development.

Host City Contract:

It is a contract consisting of principles and commitments with regard to the WCG. It provides the terms and conditions which would be applied if the commitments are not met by the host country. Shri Suresh Kalmadi as the President of IOA, Shri. Rajeeva Srivastava as the Secretary General of the Sports and Youth Affairs and Lt. Vijay Kapoor as the Governor of Delhi were the signatories on behalf of India to the Host City Contract. On behalf of Commonwealth Games Federation (CGF), it was signed by Mike Fennel and Michael Hooper.The following were the obligations imposed on India by the said contract;

  1. To facilitate, finance and support the organization of the event.
  2. To ensure that the host country has free access and to minimize taxes in this regard.
  3. To ensure appropriate security.
  4. To take the responsibilities of the maintenance and infrastructure of the game venues and accommodation.

Preparation done by OC:

Initially, the OC made extra-ordinary plans for organizing the CWG 2010, however, their promises became an illusion. In reference to a report by the Housing and Land Rights Networks (HLRN), there were many irregularities and corruption in the organization of the event. the following are the mainfindings of the report;[4]

  1. The decision for India to be a candidate in the selection of host country for CWG 2010 was not transparent and undemocratic in nature. The expense was also very high. Besides, the country offered Rs. 54 crores for the training of athletes across globe who would participate in the event along with other promises. Hence, the selection process resulted in India’s favor.
  2. The expenditure on security, infrastructure and development of 20 cities to make it seem like a tourist destination, was not estimated and never revealed by the government of India.
  3. Around 1,00,000 families were evacuated from certain regions with regard to the CWG developments and about 30,000 were displaced.
  4. The workers appointed for the development were exploited by not giving them good working conditions and ruthless working hours. Also, they were not paid wages on time.
  5. The OC failed to meet the deadline of 1st August to construct and enhance the infrastructure of certain venues like the Jawaharlal Nehru Stadium tracks and fields and swimming pools.
  6. The construction done was of low quality and not up to the mark. For instance, the false ceiling at the table tennis facility collapsed, the vinyl flooring of the weightlifting site started peeling off, and boxing stadium had the issue of water seepage from the walls. Moreover, it was reported that Lalit Bhanot, who was the Secretary General of OC, was found saying,
Also Read  Buy-Back of Shares by a Company

Some false ceiling has fallen down which means nothing. These things happen even at your home.”

  • The expenditure of the sports infrastructure increased massively than the initial value. The original estimate was Rs. 1,900 crores which increased to Rs. 11,000 crores.
  • According to the RTI Application, the funds were also taken from the ‘Schedule Caste Sub Plan.’ It was worth Rs. 263 crores. Besides, most of the fund was generated from the taxpayers of India.
  • When a team from abroad came to India, as per the Host City Contract, for the inspection of the place constructed for the accommodation of the participants of CWG 2010, they were astonished to find dog’s paw marks on the bedsheet, human waste lying on floor by the construction workers and unhygienic washrooms. They published it as their headlines which was an embarrassment for the country.[5]

Exposition of scam:

On 28th July 2010, the Central Vigilance Commission released a report which showed that there were irregularities in 14 CWG projects including 129 works of 71 organizations. It also exposed that the construction work was done at higher prices with low quality assurance and management.[6]Consequently, the investigation took place to find the truth.

Allegations:

On 25th October 2010, the then Prime Minister of India, Manmohan Singh appointed Group of Ministers (GoM) to look into the matter of the conduct of the OC for the CWG 2010. Accordingly, the committee found and imposed the following allegations;

  1. The OC was responsible for intentionally delaying the overlay contracts by not providing an estimated amount of Rs. 630 crores, instead it could have saved Rs. 130 crores if they had negotiated for the overlay contracts.
  2. It hired the employees and consultants based on criteria instead of merit. Most of them with a questionable background were given a senior position for the decision-making process.
  3. In August 2010, Suresh Kalmadi, who was the chairman of OC, asked for an additional Rs. 900 crores from the government of India when there was no such requirement of that huge amount.
  4. The OC never revealed the bill or an exact figure of the expenditure of construction work and other developments with regard to the CWG as they tried to hide the value of their spending.
  5. Suresh Kalmadi awarded an illegal contract for installing the Time-Scoring Result System to the Swiss Firm at a very high price of Rs. 141 crores which caused a loss of Rs. 95 crores.
  6. The OC rejected the firms offering sports equipment and services at better deals instead they chose to deal with the companies who offered inflated deals for the same. They were also labeled as the ‘Badmaash company’.
  7. The OC was also alleged for discrimination on the basis of race. The participants from African countries complained that they were second-class treatment as compared to the white men.

Suresh Kalmadi was considered as the primary accused of the Commonwealth Scam and charged under section 120B of Indian Penal Code for the offense of criminal conspiracy read with sections 420, 467, 468 and 471 of IPC for the offenses of cheating and forgery, and under the section 13(2) read with section 13(1)(d) of the Prevention of Corruption Act, 1988. The charge sheet stated,

Kalmadi is the main accused as he was the person with all supreme powers. He had the supreme overriding powers in the organizing committee of the Commonwealth Games 2010[7]

Also Read  JOHN DOE ORDER AS REMEDY FOR INFRINGEMENT OF COPYRIGHT

Legal actions taken

After the ending of CWG 2010, the OC was asked to give a detailed report on the organization of the event including the total expenditurewith regard to the event. However, the report was never revealed in public. On 25th April 2011, Suresh Kalmadi was arrested by the Central Bureau of Investigation (CBI) and the first charge sheet was filed against him. He was sent to Tihar jail for 11 months until his bail was granted. Following his arrest, he was removed from his post by the Indian Olympic Association (IOA). The Delhi High Court banned him from the 2012 London Olympics to avoid the embarrassment of the country. However, he was not banned from IOA.

Impact of Commonwealth Scam

Social impact:

There was a massive exploitation of the labors appointed for the construction work with regard to the CWG 2010. The OC violated the Minimum Wages Act, 1948 by not paying the workers appropriately. It was reportedly found that the unskilled workers were paid Rs. 80-100 and skilled ones were paid Rs. 120-130 per day for an 8-hour work. They were not provided good working conditions. There were more than 70 cases reported where the workers lost their lives while doing the construction work. The children were also found working under hazardous conditions.

Environmental impact:

The plan of OC to develop 20 cities to make it tourist destination for the foreign participants, it impacted in making 4,00,000 people living in slums homeless. According to Gautam Bahan, who is a reputed Indian Urban Planner, the organization for the CWG resulted in a large number of evacuations without any arrangement for the resettlement. There were ‘no tolerance zones’ which displaced beggars ruthlessly.[8]

Economic impact:

According to Miloon Kothari, who is a reputed expert on the socio-economic development, the 2010 Commonwealth Scam would create a negative financial legacy for India. Moreover, the social activists questioned by stating, “despite the fact that India is one of the poorest countries consisting of 40% hungry people of the world and the majority of the country’s population live below poverty line, it became a host country and spent millions for its organization. Is this a county’s gain or shame?” Moreover, it was also criticized on the fact that India requires a massive plan and investment in it social and economic development, India spent Rs. 70,000 crores on a sports event. The decision taken by the IOA for conducting the CWG 2010 was considered as a ‘drain on the public funds’ by an Indian industrialist named Azim Premji.

Political impact:

Since Suresh Kalmadi was a member of the Indian National Congress (INC), he was not refrained from the appointment in the IOA. It came out as a controversy that the mere appointment of Suresh Kalmadi is an embarrassment for the nation as it gives an image that how corrupt India is. Moreover, the former Sports Minister of India, Shri Ajay Maken criticized the decision of IOA by stating,

All the members are related to political parties, and I would like to urge them to take back the decision. Despite it being an honored position, the appointment should be immediately revoked since it will only reduce India’s credibility in the Sports world.[9]

Moreover, another main accused of the Commonwealth Scam was Lalit Bhanot who was imprisoned for 11 months in the Tihar jail with Suresh Kalmadi, but after coming out, he was again appointed as the Secretary General of IOA. The political influence was greatly ignored by the IOA during the tenure of INC as the central government.

Conclusion 

One of the worst social issues of India is corruption. No matter if the briber is a government official or a common man, corruption has its roots spread in every corner of the country. In the case of Commonwealth Scam, everyone is aware about the hidden reason behind the increase in expenditure of the organization is none other than corrupt practices of the government servants. Ultimately, it’s the money of the tax-payers who pay their hard-earned money to the government for the welfare of the society.

Also Read 2G Spectrum Scam


[1]Robert Roohparver, What is scam and its types?,Infoguard Cyber Security (June 23, 2019),http://www.infoguardsecurity.com/what-is-scam-and-types-of-scam/.

[2]Rumu Banerjee, Commonwealth Games theme song unveiled, The Economic Times (Aug. 29, 2010), https://economictimes.indiatimes.com/news/politics-and-nation/commonwealth-games-theme-song-unveiled/articleshow/6454360.cms.

[3]Shivay Singh, Centre announces committees for CWG 2010, The Newswire (Jan. 30, 2005), https://www.outlookindia.com/newswire/story/centre-announces-committees-for-cwg-2010/276492.

[4]Ravi Shankar, Payoffs & bribes cast a shadow on CWG, Magazine (Aug. 16, 2010), https://www.indiatoday.in/magazine/sport/story/20100816-payoffs-bribes-cast-a-shadow-on-cwg.

[5] Heather Horn, India’s Embarrassing Commonwealth Games, The Atlantic (Sept. 23, 2010), https://www.theatlantic.com/international/archive/2010/09/india-s-embarrassing-commonwealth-games/344065/.

[6]Satbir Singh, Delhi 2010: Where did it all go wrong, Open Democracy (Oct. 6, 2010), https://www.opendemocracy.net/en/openindia/delhi-2010-where-did-it-all-go-wrong/.

[7]Vinay Kumar, CWG scam: Kalmadi named ‘main accused’ in first CBI charge sheet, The Hindu (May 20, 2011), https://www.thehindu.com/news/national/cwg-scam-kalmadi-named-main-accused-in-first-cbi-charge-sheet.

[8] R. Gururajan, CWG scam, The Hindu (Oct. 21, 2010), https://www.thehindu.com/opinion/letters/CWG-scam/article15786857.ece.

[9] Ramya Patelkhana, CWG Scam: Manmohan Singh PMO recommended Kalmadi’s appointment, says PAC, News Bytes (Apr. 11, 2017), https://www.newsbytesapp.com/timeline/India/6037/36702/the-delhi-2010-commonwealth-games-corruption-scandal.

Hey there!

come here often?

Login To Come In