dna special: Pay-offs in J&K help counter Pakistan's plans, say experts

As former army chief Gen VK Singh’s revelation on pay-offs to Kashmiri politicians continues to stir controversy, intelligence sleuths who have worked in Kashmir say that paying money to buy loyalty and generate intelligence was a key device to counter Pakistani designs in the state.

More than Gen Singh, it was former US ambassador David C Mulford who had come up with startling disclosures of a money trail. During his tenure in New Delhi (2004-09), he sent scores of cables to the US state department mentioning the vested interests of ‘stakeholders’ in keeping the Kashmir pot boiling.

In one of his cables, leaked by WikiLeaks, he says, “Omar and Farooq Abdullah, descendants of the Sheikh who first figured out Delhi’s money game, live in fabulous houses in Srinagar and Delhi, wear matching Panerai watches, and serve Blue Label to guests and travel all over the world first class courtesy the Indian government.” He mentioned that the state administration gets rivers of money for development but the streets in J&K are appalling.

The streets of Kashmir have always been hush-hush about this dirty money trail. Despite militancy, there has been a boom in Kashmiri household incomes and in real estate it was anybody’s guess to judge the source of this money.

A former top intelligence officer posted in Kashmir in the early 1990s recalls that the security agencies were then more or less convinced that Kashmir was lost. “There was complete disenchantment in Kashmir with India; intelligence sources had dried up and then there was the violence. In 1989 and then again in May 1996 parliamentary elections, it was not possible to even find candidates in the wake of militant threats,” he said.

The celebrated counter-intelligence expert MK Dhar, who was given charge of the Kashmir cell in the early 1990s, recalls in one of his books that he had approached a Muslim woman from old Delhi to seek “actionable intelligence”  when the intelligence sources had “completely dried up”. Dhar, who passed away recently, said the woman recruited many boys and girls and even got intelligence from across the LoC. And such operations could not have been done without loosening your purse strings.

Even though militancy has largely subsided, intelligence assessments suggest that Pakistan was disbursing Rs 25 crore to Rs 30 crore to its loyalists and terrorist groups in Kashmir every month. In a research paper for the Institute of Peace and Conflict Studies (IPCC), researchers Kanchan Lakshman and Ajaat Jamwal calculated that though Pakistan has decreased disbursements by 30 to 50 per cent, it was enough to maintain the infrastructure for militancy.

“This includes funding for recruitment, arming the militants, funds for training and camps, paying for their survival on the ground, maintenance of their families (both in J&K and Pakistan), and all associated operational needs,” th e researchers said.

Therefore, intelligence operatives say it was necessary to counter terrorism through money as well. “Yes, it has its drawbacks; many security officials would bribe their way out to get posted in Kashmir. There are loopholes, but remember this money is secret but not unaccountable, as it is believed to be. There is an audit, but it not made public,” a former operative told dna.

Former US ambassador Mulford even talks about a top separatist leader acquiring properties in Dubai thorough intelligence agencies and a minister for irrigation and flood control, incidentally now again in Omar Abdullah’s cabinet, embezzling funds to construct two large houses in Srinagar.

“While this river of dirty money has led to a boom in Kashmiri household income and real estate prices, it also calls into question whether the Kashmiri elite truly want a settlement to their problems.

The minute a deal is struck, some must surely worry that the funds will dry up,” says  Mulford. The cables even quoted PDP president Mehbooba Mufti alleging that the Intelligence Bureau had paid J&K People’s Conference leader Sajjad Gani Lone Rs 1 crore to support an independent candidate secretly affiliated to him.

Intelligence sleuths recall that when former IB chief MK Narayanan took over as National Security Advisor in 2005, he ordered an audit of secret funds spent in Kashmir.

Analysts believe that in the absence of any political personality in Delhi to handle covert contacts like Arjun Singh did in Punjab or Rajesh Pilot in Kashmir during Narasimha Rao’s period, spies have stepped in to fill the political vacuum in Kashmir. “They have money, ears and power. In the absence of any political interlocutor, we are also forced to keep contacts with them,” says a Kashmiri politician.