LOKAYUKTA REPORT The baron might go. The robbery goes on

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LOKAYUKTA REPORT

The baron might go. The robbery goes on

Karnataka was once the poster for India's growth story. Today, it's a flag for everything that can go wrong.Ashok Malik sounds the alarm calls from the state. With Imran Khan

IT IS now fairly clear that the BJP is going to replace BS Yeddyurappa as chief minister of Karnataka. The second and final report of Justice N Santosh Hegde, Karnataka's Lokayukta, on the extent and consequences of illegal iron ore mining in the state, have left the ruling party in Bengaluru with little choice. As a senior BJP leader put it: "Even those who have been supporting Yeddyurappa in the BJP central leadership have had to stay quiet this time. It has reached the line of no return."

In many ways Yeddyurappa is the perfect villain. He is manipulative and runs a government that has won over — with a series of inducements — Congress MLAs by getting them to resign and contest by-elections as BJP candidates. He is cynical in that he has made ministers of three of the state's most infamous mining contractors (including the Reddy brothers, Gali Karunakara and Gali Janardhana). A prominent newspaper columnist recently accused him of running India's most corrupt state government.

While that final epithet may be usual editorial exaggeration, the point is Yeddyurappa — and his family, particularly his sons, BY Vijayendra and BY Raghavendra, and son-in-law, RN Sohan Kumar — has come to symbolise the junction at which two of the most pernicious influences on contemporary Karnataka society meet: its real estate and mining syndicates.

In particular, one example is telling, and telling of a continuum. It forms part of a set of five petitions — recording 15 individual cases of abuse of authority — that Bengaluru lawyer Sirajin Basha has filed in a local court. The case goes back to 2003, when the Bangalore Development Authority (BDA) acquired over 3,000 acres of land in Greater Bangalore for group housing projects. The 3,000 acres included a patch of one acre and 12 guntas (40 guntas make an acre) acquired in Rachenahalli village, near Bengaluru's new airport. Of this patch, 26 guntas belonged to a man called Panduranga and 26 guntas to a lady called Gowramma.

Later in 2003, SN Krishnaiah Shetty, then an MLA, registered a power-of-attorney in his favour that was apparently executed by Gowramma and Panduranga. In March 2006, Shetty used the power-ofattorney to execute and register two sale deeds, selling the land of the two villagers for a total of Rs 40 lakh. The buyers were Vijayendra, Raghavendra and Sohan Kumar. Having sold land that had already been acquired by the government (and for which compensation had been paid), Shetty then waited till 2008. In September that year, he applied to the BDA for denotification of the patch. In a petition on behalf of Gowramma and Panduranga, he insisted they needed the land for family use.

This wish was granted in a quick 11 days. The denotification order was passed by the chief minister himself. The story doesn't end here. The land, a little over one acre, was then sold to South West Mining Company — part of the Jindal Group, and with iron ore mining interests in Karnataka — by Yeddyurappa's children. A trust run by them received Rs 20 crore for the transaction. The market value of the land was less than Rs 2 crore.

Coincidentally or otherwise, Yeddyurappa was the chief minister who denotified the land. At the time, he handled the portfolios for the BDA, forests and mining. As such, he had conflicts of interests written into every element of the larger transaction. In a sense, this case mirrors the sweetheart deals companies run by DMK family members have been accused of, in return for favourable policy changes by DMK telecom ministers. It leaves Yeddyurappa and the BJP with very little defence.

II THE KARNATAKA corruption saga is an endless soap opera that has dragged on for months, if not years. It goes back really to the BJP's Assembly election victory in 2008. Yet, it is not one that lends itself to pat assessments. For one, as a visit to the state would testify, Yeddyurappa is hardly the hate figure there that he is in New Delhi and the national media.

Neither the man nor his methods are easily dismissed. Yeddyurappa has made the BJP a formidable electoral force in the state, far stronger some argue than it was when it came to power (see box). Even political opponents acknowledge that he is a clever and hard-working man. As a Janata Dal (Secular) or JD(S) functionary says, almost in admiration: "He is an astute politician. He has delivered on social welfare schemes, particularly those aimed at the girl child and at farmers in BJP strongholds in central and north Karnataka."

As for his way of doing things, "crass and vulgar corruption" has become something of a Karnataka trademark says Sandeep Shastri, Bengaluru-based academic and convenor of the Lokniti Network. One of Yeddyurappa's potential successors in the BJP is very critical of him. "What's been revealed is the CM's 'pickpocket corruption'," he says, in the stylised rhetoric that seems to come to politicians south of the Vindhyas. "What remains unrevealed is his 'robbery corruption'."

All very well — but surely the Reddy brothers should also be removed if Yeddyurappa is. Suddenly the would-be successor is not too sure. "They are very essential to the party," he says. "They have given the BJP a hold in Bellary and Raichur. We were nothing there even 10 years ago. Besides, you can call them early investors in the party."

"Early investors in the party"? It is an astonishing description of the brothers, political fixers and small-time businessmen, who rode the commodities boom and the pre-2008 OIympics steel demand surge in China to ravage the earth of Bellary for iron ore.

The Bellary brothers come with their political clout. Their business and strongarm network in the district gives them enormous leverage at election time. In 2009, they are believed to have funded the BJP in Karnataka and their friend, the late YS Rajashekhara Reddy, then the Congress' Andhra Pradesh chief minister, in the neighbouring state.

At one stage, the Reddy brothers led a revolt of some 40 MLAs — a third of the BJP's legislative strength in the 224-member state Assembly. "Their actual influence," says a leading businessmen in Bengaluru, "should be about 17-20 MLAs. These are people they have financed and got elected. But of course, money could get them to buy more."

The Reddy brothers' business partner is B Sriramulu, Karnataka's health minister and a Scheduled Tribe (ST) strongman in Bellary. Sriramulu's community appeal and the Reddys' mobilisation capacities have helped convert Bellary — which even at the turn of the millennium was one of the Congress' safest seats in the country — into a BJP bastion. It has also savaged the ecology of the district, and made them laws unto themselves as mining barons.

III NEVERTHELESS, THE Reddys are not alone. Bellary district, with three iron-rich talukas of Bellary, Hospet and Sandur, is home to over 1,000 mining leases. The adjoining districts of Chitradurga, Tumkur and Raichur have another 30-odd leases. Much of the mining is in the Bellary reserved forest, among the greenest expanses in peninsular India and declared a protected area by the British in the 1890s.

Iron ore began to be mined here as far back as 1873, but has reached frenetic proportions in the past 10 years. As an environmental activist puts it: "This is a problem that extends across parties. Even SM Krishna's Congress government expanded the area of legal mining by under- reporting the forest and tree cover."

The consequence is Wild West lawlessness. Mining companies keep breaching state borders (Andhra Pradesh is on the other side of the forest and has limited iron ore reserves). Illegal mining, meaning encroaching upon a another miner's lease area and then threatening him into surrender, as well as mining in no-go forest areas, is rampant. The implications are truly frightening. SR Hiremath, engineer activist and executive director of the Samaj Parivartana Samudaya, an NGO that took the issue of ecological damage caused by illegal mining to the Supreme Court, points to a National Environmental Engineering Research Institute (NEERI) report: "It estimated that about 10 million tonnes of iron ore extraction per year was ecologically sustainable."
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Peace Is Doable