Jagan Reddy arrested: Late YSR's sins catch up with son

The arrest of YS Jagan Mohan Reddy by the Central Bureau of Investigation (CBI) is as much an indictment of his late father YS Rajasekhara Reddy, former Andhra Chief Minister, as Jagan himself. It is also a clear signal that the Congress has no problems with corruption as long as it delivered votes and served the agenda of the dynasty.

What has changed is the political dynamics of Andhra, with Jagan deciding the Andhra is his patrimony, not that of the Congress.

His arrest will unwittingly bring the spotlight back to YSR’s other sins, for the simple point is that you cannot accuse Jagan of corruption and accumulation of illegal wealth without bringing in his father. Without dad as chief minister, it is unlikely that Jagan Reddy would have had the ability to ratchet up his wealth with such speed. The whole scam is surfacing as the Congress no longer has any need for either YSR’s memory or any love for his son’s vaulting ambitions.

As Firstpost pointed out in an investigative story last May, Jagan managed to increase his officially-declared wealth five-fold in just two years. The CBI accusations, thus, mesh well with this reality.

When YSR was the man who delivered Congress incredible electoral victories, the party needed him. Now that he is gone, and his son is challenging the Congress for political space in Andhra Pradesh, the boot is on the other foot.

Either way, it is useful to put the focus back on YSR and his scandalous side.

For starters, let’s be clear what YSR was not: a messiah of the poor, who built the Congress on the basis of a pure social agenda. In fact, all the documented information about YSR’s family history shows that he ran a mafia-style operation in his home district of Kadapa which he then extended elsewhere as his political clout grew. YSR’s father Raja Reddy and YSR controlled Kadapa’s politics through strong-arm methods that did not exclude murders.

In fact, though we now tend to associate BS Yeddyurappa with the iron ore mining scandals, the Reddy brothers (among others) who ran the scam had close links with YSR, too, as their mining operations were concentrated in Andhra Pradesh’s Anantapur district and Karnataka’s Bellary. The Reddys also had close links with Jagan. With YSR gone, the Congress opted to kill two birds with one stone — Yeddyurappa and Jagan — with the illegal mining scam.

In fact, YSR can probably be called the original mining scamster. He ran a barely-legal mining scam of his own – involving barytes — during his rise to power, as documented by K Balagopal in a 2004 article in The Economic & Political Weekly. Says Balagopal: “For many years in the later half of the 1980s and the early half of the 1990s, YSR’s barytes mining operation was the subject of one scandal after another.

Lease, or sub-lease — after barytes mining became formally the monopoly of the AP Mineral Development Corporation, only to be sub-leased to the same previous lessees — would be taken for a certain extent, but many times more land around would be mined. Even a piece of land on which stood a protected monument so notified by the Archaeological Survey of India was mined, and one and a half lakh tonnes of the mineral (priced at Rs 600 per tonne) was taken away by the time the government woke up and put a stop to it.”

“With the money flowing from the barytes mines in his pockets, YSR was in a position to undertake the transformation of ‘village factions’ into full-fledged instruments of political and economic domination at the highest level,” concludes Balagopal.

If this is the criminal and robber-baron background of the YSR family, is it any wonder that the CBI has found it easy to document corruption cases involving Jagan where YSR may have played a munificent role?

However, there’s still the elephant in the bedroom to talk about: the Satyam scandal. The Satyam scam again had close ties to the YSR government because the promoter, B Ramalinga Raju, had bagged several infrastructure deals with YSR’s government – many of which were barely above board. These deals were done through Maytas, the infrastructure company (Maytas is the reverse of Satyam) that also tanked along with Satyam.

When the Satyam scandal first broke cover in January 2009, everyone and his aunt in Andhra Pradesh knew where the political link was: with YSR.

So when Ramalinga Raju wrote his fateful letter to the stock exchanges confessing that he had fudged accounts and defrauded the company to the tune of over Rs 7,000 crore, the first man to run for cover was YSR.

For two days after his confession, YSR’s police force curiously kept away from Raju. When a man voluntarily confesses to a crime, the first thing to do is to arrest him, interrogate him, and then get a legally-admissible confession and put him away. But YSR did none of that. He chose to help derail the investigation. Raju’s “fast track trial” is currently on, but what is surprising is why a crime that started with a confession two-and-a-half years ago still hasn’t had a conviction as yet.

In January 2009, YSR’s government stayed away from Raju till market regulator Sebi decided to question him. The minute the Andhra government heard this, it moved quickly to take him into safe custody to ensure that Sebi would not open another can of worms. Who knows what kind of beans Raju might spill if given unrestricted access?

In fact, the state government and the courts kept Sebi far away from the accused – till the Supreme Court again intervened to grant Sebi the right to question Raju and his financial wizards on how they managed to hide a fraud of such proportions for so long.

The next thing YSR did was to ensure that the Congress leadership toed his line. He convinced them that they would lose the 2009 elections if they didn’t help him out in containing the political fallout of the Satyam scam. There was clearly a convergence of political and economic interest: while Manmohan Singh wanted to safeguard India’s IT reputation, Sonia Gandhi wanted to reap high parliamentary numbers from Andhra Pradesh. And YSR wanted to save his gaddi.

To hide the twin Satyam-Maytas scandals, the Congress had to do three things. First, take control of the two companies so that no one else starts looking under the carpet for blood stains. Second, make sure that the body is burnt so that there is no autopsy. And third, make sure that the investigations went nowhere.

The first goal was achieved when the government superseded the Satyam board, and then made quick preparations for its sale. The second happened when the Mahindras were sold the company, and control of Maytas was given to IL&FS, an infrastructure and finance company with strong political connections. The third happened when the government sent the CBI in and shifted control of the probe to the Serious Frauds Investigation Office (SFIO). While CBI is prosecuting Raju in a fast track trial court, we haven’t heard much from the exertions of the SFIO.

The Satyam scandal has probably been well and truly buried along with YSR.