February 27, 2020
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The Colour Of Money

Indian donors to presidential campaigns come under scrutiny

The Colour Of Money

 A California-based Indian, Yogesh Gandhi, is one of the players in a new controversy on campaign finance involving foreigners giving large sums of money to the Democratic Party in return for favours such as access to the Oval Office. Republican presidential nominee Bob Dole accused the White House of Watergate-style campaign fund-raising that includes illegal laundering of donations from foreigners and demanded that President Bill Clinton reveal the identity of foreign donors, the sources of their money and the amounts of their contributions.

 Dole raised questions about Yogesh Gandhi, head of the San Francisco-based Gandhi Foundation, who presented Clinton with the Gandhi World Peace Award at a Democratic fund-raiser on May 13 and subsequently donated $325,000 to Clinton’s re-election effort. Gandhi claims to be a great-grand-nephew of Mahatma Gandhi although the Mahatma’s descendants have accused him of being an imposter cashing in on their name.

According to press reports, Gandhi, whom the Dole campaign has called a "scam artiste", owes $10,000 in back taxes, had his driver’s licence revoked because he did not pay traffic fines, claimed pauper status and did not pay the $20 filing fee for his divorce. And yet he was able to buy 13 tickets at a $25,000 per couple fund-raiser and be photographed with Clinton. The Democratic National Committee has said that since Gandhi is a greencard holder, his contribution is legal; but it has asked the Federal Election Commission to investigate him along with other large contributors.

Dole’s allegations come in the wake of questions about the Democrats receiving $425,000 from an Indonesian couple, an illegal $250,000 contribution from a South Korea firm that was returned, and $140,000 at a Buddhist temple fund-raiser in Los Angeles, attended by Vice-President Al Gore, where at least one participant allegedly received $5,000 in cash and then wrote a cheque for that amount to the Democrats. Because of Gandhi, other fund-raisers—and what they receive in return for the money they donate—are coming under scrutiny. In fact, on October 30 the Democrats released a list of major donors to its campaign.

One of the biggest Indian fund-raisers this year is India-born Niranjan Shah, a Chicago businessman, who serves on the Clinton campaign’s national finance board and is on a first-name basis with the president. Although he says that his purpose is to "promote our community in this country", his company has received a series of Commerce Department grants for minority business consulting since the mid-80s, including two current grants totalling $1.2 million, according to a Commerce Department spokesperson. But Shah says that the grants had nothing to do with his political contributions. He accompanied Energy Secretary Hazel O’Leary on a 1994 trip to India to pursue a power plant project that did not materialise. Clinton has nominated Shah to the National Institute of Building Sciences, a position that requires Senate confirmation.

India-born Florida cardiologist Zach Zachariah raised more than $1 million, about a quarter of it from other Indian Americans, for Republican presidential candidates, including Dole. Zachariah was interviewed by CNN in 1992 and identified as the largest single fund-raiser for the GOP. He said at the time that he was supporting George Bush because he did not care for Clinton’s health care plans. Zachariah was a delegate at the last two Republican National Conventions, most recently in San Diego where there were only a sprinkling of Indian Americans. He was one of the first Indians to attend a state dinner at the Bush White House.

Ethnic fund-raising first drew national attention with the rise of pro-Israel political action committees (PACs) in the ’80s that raised millions of dollars from Jewish donors for congressional candidates who vowed to support foreign aid and other pro-Israel policies.

This spurred other ethnic groups, including Arab-Americans and Cuban Americans. In 1988, Democratic presidential nominee, Michael Dukakis, attracted millions of dollars from Greek American donors.

While accepting money from ethnic PACs is legal, contributors have to be US citizens or residents at the time of making the donation. "Sometimes the lines are fudged," says Bart McKinley, who heads a non-partisan watchdog group lobbying for campaign finance reform. "Both parties are equally guilty. Sometimes there are instances of money laundering."

The Indian Embassy was involved in one such unsavoury instance of money laundering that came to light last year. India-born Lalit Gadhia, a Maryland Democrat fund-raiser, was accused of laundering over $46,000 in political contributions from the Indian Embassy to Members of Congress. He reportedly used the money provided by the Embassy to reimburse Indian Americans for contributions they made to candidates the Embassy supported. But it is doubtful whether the Embassy will come under scrutiny when Gandhi is investigated. 

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