Tuesday, September 11, 2012

Fraud at PHFI and the role of the chief executive

Confronted with evidence of forgery at Public Health Foundation of India, an assistant professor employed by the organization makes remarks that reveal ‘production’ of documents and undermining of the RTI Act, 2005, by chief executive K. Srinath Reddy. It's notable that Reddy has long been the sidekick of Rajat Gupta, former global head of McKinsey and a convicted fraudster. 

I was forwarded, on 11 September 2012, an email written by one Dr. Giridhar R. Babu of PHFI – reproduced at the bottom of this article – in which he defended his organization’s forgery and fraud with remarks that are not only childish, but also show that president Dr. K. Srinath Reddy has himself been engaged in ‘production’ of documents and interfering with the functions of a public information officer (PIO) under the Right to Information Act, 2005.

(PHFI, whose governing council is currently chaired by Infosys’ N.R. Narayana Murthy, provided me a forged document as part of generally misleading information in response to my RTI request dated 05 July 2012.
The document in question purports to be a copy of the detailed list of the members of PHFI’s governing council as on 31 March 2006, signed by president K. Srinath Reddy on 03 August 2006, but bears clear evidence of recent tampering or forgery.
PHFI response, dated 13 August 2012, calls into question the veracity and accuracy of information it has been providing to other RTI applicants and to the Central Information Commission or CIC.
It transpires that PHFI – which remained non compliant with the RTI Act for most of its existence since its inception in February 2006 – provided misleading information to Mr. Kishan Lal, a Mumbai-based citizen, as well as to the CIC.
It was Mr. Kishan Lal’s request for information, dated 06 September 2011, which eventually led to the CIC holding on 14 February 2012 that PHFI was a public authority under the RTI Act and should start complying with the law.
One can clearly see a pattern of a falsification and forgery at PHFI that needs urgent response and corrective measures from the government whose representatives sit on the governing body of this organization.)

I would like to believe that Dr. Giridhar R. Babu’s remarks, which he has described as “facts”, can be used as evidence in a court of law and at the Central Information Commission.

1. About the five-page forged document, Dr. Babu says, “The names are entered correctly in the document provided to Mr. Bajaj”.
So PHFI made out this document especially for Mr. Bajaj by “entering the names correctly”, by labelling the document as ‘Details of the Governing Council, As at 31st March 2006’, by stamping each page of it with PHFI seal, by Dr. Reddy signing each page of it with the last page clearly bearing the date 03 August 2006 and place New Delhi, and by giving the addresses and occupations of the members of the board – except a few – as they were on 31 March 2006.

It’s clear that PHFI takes great trouble in manufacturing documents for RTI applicants. Instead of just typing out the names of the members of the board on a plain paper, they went through the rigmarole described above just to make me believe that I am being sent a copy of the composition of the governing council as stamped, signed and certified on 03 August 2006.

My RTI request was only for “a list of the members of PHFI’s governing body, including the chairperson, which came into effect on 27 March 2006, with their designations”.

2. Dr. Babu bolsters his assertion that the document was especially made out for Mr. Bajaj by adding, “The designations were wrong and was entirely due to the clerical error of a junior staff who entered the current designation instead of earlier designations. This was an inadvertent error, a clerical one, without any reason behind it”.

3. Dr. Babu then adds, “These minor and harmless errors were not noticed by PIO. Subsequently Dr.Srinath Reddy has seen the names but not taken cognizance of the incorrect designations”.

So the PIO at PHFI, in her statutory role, is completely innocent of the fact that a document is being manufactured to resemble an originally signed and certified list of the members of the governing council to be sent to an information seeker under RTI Act 2005.

The PIO is innocent enough not to wonder that the requested information might as well be provided on a plain paper instead of being made to look like the composition of the board as signed, stamped and certified on 03 August 2006.

And why, on earth, does PHFI have to make out a list of the members of the board as on 31 March 2006 to be provided to an RTI applicant? Where is the originally certified document?

Dr. Srinath Reddy, on the other hand, not only dutifully signs each stamped page of the document that says, ‘As on 31st March 2006’, but also signs it alongside the date of 03 August 2006 to make the RTI applicant believe that they are getting the real McCoy.

So according to Dr. Babu, Dr. Reddy has not only been violating the RTI Act 2005 by interfering in what information is to be provided and in what manner under the law (which is the statutory duty of the PIO), but actually producing documents and committing forgery in the process.

4. Dr. Babu then makes some truly laughable assertions: “Also, there is no date mentioned beneath the signature of Dr.Reddy. If he had mentioned date, then it would could have been construed as deliberate attempt to provide wrong information”.

Well, date is “mentioned” not beneath the signature of Dr, Reddy, but alongside and it is 03 August 2006. Why does Mr. Giridhar require the date to be mentioned “beneath the signature” – and not alongside – for a document to constitute a “deliberate attempt to provide wrong information”?

There is no reason for anyone to add date beneath their signatures, when the document they are signing on already bears a date.
One would have to discard such a document if one really wanted a date different from the one it bore.

5. The response I received from PHFI, dated 13 August 2012, is not the only false or falsified information that PHFI has been providing under RTI Act 2005.
The evidence I have reveals a pattern of fabrication and provision of misleading information, not only to the RTI applicants but also statutory authorities like CIC.

(a) For example, PHFI sent what it described as a “certified true copy” of its Memorandum of Association (MoA) to Mr. Kishan Lal with a copy to CIC Mr. Shailesh Gandhi on 28 March 2012, which listed only eight members as registering themselves as society. (K. Srinath Reddy, R.A. Mashelkar, Rajat Gupta, Gautam Kumra, Prashanth Vasu, Ashok Alexander, Ajay Bahl and Raman Sharma.)

After Mr. Kishan Lal pointed out that this “certified true copy” does not even have signatures of the founding members and demanded that he be sent “copies of signed documents submitted to Registrar of Societies”, PHFI produced for him, on 25 April 2012, another MoA that showed 16 persons as the founding members.
(The additional eight − Probal Bhaduri, Anirudh Lakshman-Katre, Gautam Verma, Ishila Bhattacharya, Kumal Katre, Bishambhar Basu, Rameshwar, Sanjay Kumar − have been added at the back of the last page of the MoA in type-written script.)

(b) Through its response of 28 March 2012, PHFI informed Mr. Kishan Lal and the CIC that “The Governing Council with 21 members came into effect on March 27, 2006.”
And through its response of 13 August 2012, PHFI informed me with another “certified true copy” that its Governing Council that came into effect on 27 March 2006 had 24 members.

(c) Through its response of 13 August 2012, PHFI informed me that the meeting of PHFI’s governing council on 09 February 2006 was attended by “the first members of the Society” (which would purportedly mean 16) while the copy of the minutes of the meeting that she sent me showed that the meeting was attended by only five members of the society (Reddy, Kumra, Vasu, Alexander and Sharma).

And the additional eight names, appended in type-written script at the back page of the MoA, purportedly join PHFI on 08 February 2006 and resign the very next day, as the minutes of the meeting of the governing council show.

(d) That’s not all.
The four of the original eight (Kumra, Vasu, Bahl and Sharma) disappear from the governing council on 27 March 2006 and four government bureaucrats − Nirmal Ganguly, Prasanna Hota, Sujatha Rao and RK Srivastava – make an appearance, without there being any public announcement that the four bureaucrats had ever been authorized by the government to join PHFI board.

(Bear in mind that PHFI had earlier informed Mr. Kishan Lal and the CIC that “The Governing Council with 21 members came into effect on March 27, 2006”.)
If PHFI decides finally to stick by the number 24, can it show us all the letters of authorization from the government for the four bureaucrats to join its board?

(e) There is a lot more I can point out.
For example, in the MoA showing 16 members, Mr. Rajat Gupta − a US citizen − has given the registered address of PHFI as his address, which would be unacceptable for such function as registration of society under law.

In the same MoA, Messrs Reddy and Mashelkar have given their office addresses (AIIMS and CSIR), which is an illegality − within the larger illegality that they were prohibited by the rules as government employees to participate in the formation of such an organization and from soliciting funds; they had no authorization from any public authority for doing so, I have been informed under RTI Act.

The following is the email written by Dr. Giridhar R. Babu of PHFI.
Prabir’s question made me respond to this.
Firstly, the entire matter is under appellate process at PHFI and would be resolved at the earliest.
From what I found out, here are the facts:-
1. The names are entered correctly in the document provided to Mr.Bajaj.
2. The designations were wrong and was entirely due to the clerical error of a junior staff who entered the current designation instead of earlier designations.
3. This was an inadvertent error, a clerical one, without any reason behind it.
4. These minor and harmless errors were not noticed by PIO. Subsequently Dr.Srinath Reddy has seen the names but not taken cognizance of the incorrect designations.

It is clear that there was erroneous information provided but it was inadvertent, minor and without any intention to hide any information. A strong term such as "forgery" can be used when the erroneous information is provided with view of 'material gain' or "malicious intention". However, in this case, it was purely a clerical error without any intentions. Also, there is no date mentioned beneath the signature of Dr.Reddy. If he had mentioned date, then it would could have been construed as deliberate attempt to provide wrong information. Every organization will have some clerical errors as part of their routine activities.

The earlier information was sent in good faith. After completion of appellate authority's action, Mr.Bajaj will be sent in the response from PHFI. What we have here is an obvious clerical error that was not subsequently noticed by PIO. I am certain that the response of PHFI would be made available in public domain soon after completion of action by appellate authority, before which I thought this response would help to allay some misconceptions.

warm regards,
Giridhar R Babu

With PHFI, falsification is the truth

Recently subjected to the RTI law, Public Health Foundation of India seems to have been unravelling like the plot of a B-grade movie from Bollywood. As it turns out, the very formation and continued existence of the organization is based on fraud.

On 14 February 2012, in a significant decision, the Central Information Commission noted “with some dismay that the highest levels of public servants in India did not accept the citizen’s enforceable right to information in PHFI, despite the government substantially funding it and exercising some control”.
The CIC was referring to Public Health Foundation of India remaining non-compliant with the RTI Act 2005 for six years since its inception in February 2006 despite the presence of T.K.A. Nair (Advisor to Prime Minister Manmohan Singh), Montek Singh Ahluwalia (Deputy Chair, Planning Commission) and a few other high-ranking bureaucrats on its governing board.
The phrase “highest levels of public servants in India”, however, might well apply to Prime Minister Manmohan Singh himself, who personally implanted PHFI into the heart of India’s public health policy and administration while describing it as a “public-private partnership” (PPP).
In that decision, the CIC countermanded the will of “the highest levels of public servants in India” by ruling that PHFI was a public authority under Section 2(h) of the RTI Act 2005 and must start complying with the law.
Subsequent developments not only vindicate the CIC, but also suggest, quite scandalously, that the public and private patrons of PHFI have been hiding a lot from the citizens.

Fabrication given away
In August 2012, in response to my RTI request, Kalpana Swamy, the public information officer (PIO) at PHFI, sent me what appears clearly to be a forged document as part of information that’s dubious and contradictory in general.
The document in question came as a five-page ‘Annexure B’ with PHFI’s response dated 13 August to my request dated 05 July. It is purported to be a photocopy of an officially certified document setting out the composition of the governing council of PHFI as on 31 March 2006.
The original document has ostensibly been stamped with PHFI’s seal and signed by president K. Srinath Reddy on 03 August 2006, but contains several instances of asynchronous information that shows that it has recently been forged.
(a) For example, R.A. Mashelkar, who was Secretary of DSIR (Department of Scientific and Industrial Research) and Director General of CSIR (Council of Scientific and Industrial Research) in March 2006, has been listed as ‘CSIR Bhatnagar Fellow, National Chemical Laboratory’ which he became only after his retirement in December 2006.
(b) K. Sujatha Rao has been listed as ‘Former Secretary, Ministry of Health & Family Welfare’. Rao retired from her post as Secretary of the health ministry in November 2010.
(c) The “occupation” of Rajat Gupta – the prime mover in the formation of PHFI and its chairman until March 2011, who is going to jail after being convicted of securities fraud in the US – also seems to be a recent addition. According to publicly available information, he was Senior Partner at McKinsey & Co. in the year 2006, but has been listed in the forged document as ‘Former Partner, McKinsey and Co.’.

Pattern of misleading info
Further, while the ‘Annexure-B’ lists 24 persons as making up the governing body that came into effect on 27 March 2006, the same PIO at PHFI had earlier informed Kishan Lal, a Mumbai-based RTI applicant, with a copy to CIC Shailesh Gandhi, that, “The Governing Council with 21 members came into effect on March 27, 2006”.
(This information was provided as part of the same case that resulted in PHFI being held a public authority – decision No. CIC/SG/C/2011/001273/17356; I had represented Kishan Lal at the CIC.)
The day of 27 March 2006 is important, being the eve of PHFI’s “launch” by Prime Minister Manmohan Singh.
Strangely, the ‘Annexure-B’ shows four top bureaucrats − Nirmal Ganguly, Prasanna Hota, K. Sujatha Rao and R.K. Srivastava − as members of PHFI board on 27 March 2006, even though there is nothing in the public domain that attests to the government authorizing these four to join the board on or before that date.
There are more such mysteries about the composition of the board as also instances of dubious and contradictory information in PHFI’s response of 13 August.
PHFI’s baleful influence also seems to have spread to the Union health ministry one of whose CPIOs sent me an itemized “PHFI Response” in reply to another request that was specifically addressed to the government, not PHFI.
The first point in my request, for instance, enquired as to whether the health ministry recognized PHFI as an ‘autonomous body’ and, if it did, whether it obtained the approval of the Cabinet for the formation of the organization as an ‘autonomous body’.
In his reply of 16 August, the CPIO not only allowed this and other points in my request to be answered by PHFI, but labelled the itemized response generally as “PHFI Response”. Needless to say it is full of misleading information.

The larger deception
Since the CIC decision of 14 February, a lot more has come out in the open that shows that the very formation and existence of PHFI is based on fraud.
For more than six years the government has been advertising PHFI, alternatively and according to its convenience, as a “public-private partnership” or an “autonomous body” or an “autonomous PPP” – the last descriptor being compounded from the preceding two and invented especially for PHFI.
These promotions include several formal statements made to the Parliament and a parliamentary committee.
For example, in mid-2006, PHFI was introduced as a PPP to the Parliamentary Standing Committee on Health and Family Welfare, which was considering the demand for grants (2006-07) of the department concerned.
On 24 November 2006, Panabaka Lakshmi, the then minister of state for health, described PHFI as an “autonomous body” to the Rajya Sabha.
On 31 August 2007, speaking again in the Rajya Sabha, Lakshmi described PHFI as an “autonomous public-private partnership”.
It transpires now, according to government’s own responses to RTI requests, that PHFI was never intended to be and never was a “PPP” or an “autonomous body” in the senses that the government rules assign to these two descriptors.
In responding to Kishan Lal, for instance, in another case that went up to the CIC, the health ministry not only denied the existence of any PPP initiated by the government in the health sector, but also the existence of any “PPP policy for the social sector, viz. education and health.”.
Needless to say no contractual agreement was ever signed between the supposed ‘private partners’ and the supposed ‘public partners’ to form PHFI.
In other words, PHFI is not only a law unto itself, but is meant to be a durable, flexible, first-AC-railway-coach-like arrangement carved within the government for the well connected to use as they like and when they like.
The “autonomous body” cover has been even more fraudulent. (“PHFI cannot be defined as an autonomous body,” I was informed by the health ministry hiding behind its “PHFI Response” of 16 August.)
It was needed only for the “grant-in-aid” of Rs 65 crore, which the government had earlier approved as a “one-time contribution” to PHFI corpus on 06 July 2006, to pass muster. Setting up PHFI as an “autonomous body” was out of question for the government and its private collaborators as it would have meant meeting the very elaborate conditions laid down by the General Financial Rules 2005 (GFR 2005) for forming such bodies.
One of those conditions is a prior Cabinet approval, which was never obtained and never intended to be obtained. In fact, the so called “grant-in-aid” of Rs 65 crore was rendered illegal from the moment it was conceived because it was provided in violation of GFR 2005.
As for “autonomous PPP”, this special coinage simply meant, ‘Let me pull some more wool over your eyes’.

Here is more wool
Insinuating PHFI − which amounts to a corporate coterie sprinkled with an Amartya Sen and a Mirai Chatterjee (of SEWA) to make it palatable − into the public health set-up has not been just about the misuse of certain descriptors, but is much more than that.
The government misled the citizens, the Parliament and the parliamentary panel into believing that PHFI would limit itself to public health education and, at the most, some research work that can be put to use in policy making.
While the parliamentary panel – for instance – was specifically assured against its serious misgivings that “this experiment will be confined to the area of public (medical) education only”, PHFI was turned gradually into virtual government.
It has been allowed to participate directly and widely in policy formulation, bag very lucrative public procurement jobs without any competitive bidding, and even receive aid as part of the health-related agreements that the Centre signs with the foreign governments.
PHFI acted − to take a few examples − at full public cost as the secretariat for the High Level Expert Group on Universal Health Coverage that was chaired by its president Srinath Reddy and whose report is meant to be a blue print for national health policy for many years to come.
PHFI was chosen without any competitive bidding as technical partner in the National Initiative for Allied Health Services (NIAHS), a Rs 1100 crore project of the health ministry for expanding paramedical capacity. (The list of handsomely paid central and state projects that it has bagged is too long to be given here.)
And PHFI received a hefty funding from the Norwegian government as part of the Norway India Partnership Initiative (NIPI) for reduction of child mortality in five states.

Encouraging corruption
The parliamentary panel was also given an exaggerated sense of government’s ability and intent to influence decision making in PHFI board. It transpires that the government has never had any significant power − or even intention − to influence any decision in PHFI board, not even the ability to convene a meeting.
PHFI’s rules not only limit the number of government representatives on the board to a meagre proportion of the total membership, but also give non-government members (read Big Business) the super-majority to decide who would be recognized as a “government representative”.
“MS Ahluwalia is a member of the PHFI board as MS Ahluwalia, not as deputy chair of the Planning Commission,” a counsel for PHFI informed the CIC on 24 January at a hearing that this writer attended.
This “individual capacity” membership of the board – a new record in pushing public servants into lawlessness and corruption – was termed by the CIC as “untenable”.
“It is difficult to assume that senior public servants can be on the board of an organization like PHFI, which has numerous interactions with the government, in private capacity. In fact, this would necessarily imply a conflict of interest. The Commission can only assume that such public servants must necessarily be acting on behalf of the government, when they are required to take executive decisions as members of the board… Any other conclusion would be an improper slur on their integrity,” the CIC wrote in its decision of 14 February.
This “improper slur on their integrity” was, nevertheless, written into the rules of PHFI with the connivance of the “senior public servants” themselves.

Illegal origins
Government’s covert and overt support to PHFI has been illegal − from its deliberately obfuscated beginnings to the present time. It was illegal when, in February 2006, Srinath Reddy, then head of the cardiology department at AIIMS, and R.A. Mashelkar, then Secretary-DSIR, were encouraged to team up with Rajat Gupta, his two McKinsey colleagues and two corporate lawyers to register PHFI as a society.
The Central Civil Services (conduct) Rules 1964 don’t allow a government employee to form an organization that will replicate or resemble the work of his parent organization on a significant scale and explicitly prohibit him from soliciting funds.
Information obtained through RTI shows that Reddy’s “deputation” from AIIMS to PHFI – effected by a ministerial fiat – was irregular and arbitrary; neither the AIIMS rules allow any such deputation, nor the proposal was ever placed before AIIMS governing body.
(Reddy is currently improving public health and public finances by drawing a salary of Rs 60 lakh a year plus a bungalow.)
In fact, “deputations” of all government employees to PHFI can only be regarded as illegal because PHFI does not fit any description of any organization to which rules would allow public servants to be seconded.
Information released by DSIR under RTI shows that it hastily certified PHFI as a Scientific and Industrial Research Organization (SIRO) without there being any worthwhile record of research work and without ever visiting the latter’s facilities.
Likewise, PHFI’s public health management courses have no recognition or accreditation from any statutory regulator in the country.

Trampling democracy
“The PHFI initiative has been collaboratively developed over the last two years under the leadership of Rajat Gupta of McKinsey, the Ministry of Health, and Srinath Reddy,” The Indian Express wrote on 29 March 2006.
News reports such as these suggest that the government worked secretly with certain well connected manipulators and front men to plan the formation of PHFI. This sly and undemocratic way has often been portrayed by the cronies-in-arms as “smart ways of working together to overcome national challenges” or “innovative models of public-private partnerships”.
If these are really “smart ways of working together to overcome national challenges” or “innovative models of public-private partnerships”, why can’t they be encapsulated in a publicly discussed and properly formulated public policy?
Why do they fall foul of laws, rules and regulations as they actually did at every step in the design, formation and functioning of PHFI?
The criminal streak built in PHFI is best illustrated by the forgery described above and the fact that a soon-to-be-convicted fraudster was allowed to continue – until some protests – to chair a body privileged to influence public policy and having the representative of no less than the Prime Minister.
Also illustrative is the example given above of how the health ministry has allowed itself to be suborned by PHFI.
In fact, PHFI represents a new low in the ongoing degradation of the concept of democratic governance and rule of law; a new record in the ill-treatment of public health of a billion-strong population by the government; and the very worst of crony capitalism that India has ever known.

Whys and the wherefores
(a) Why would the government implant so deceptively what is essentially a private club into the sensitive area of public health policy where decisions would be of vital concern to a population of over a billion?
(b) If the government really wanted a PPP to take care of India’s public health policy and administration, why didn’t it first introduce a PPP policy in the health sector?
(c) Why would the government lavish vast public resources on an organization without demanding transparency, public accountability and public audit?
(d) Why would the government parcel out the ability to influence public policy and administration to people according to the influence they wield, the connections they have and their ability to pay?
(e) Why would the government choose to have no power to influence decision making in an organization packed with Big Business representatives, the prime mover among whom managed to commit fraud, get caught and convicted?
(f) Why would the government not see the obvious conflict of interests in the roles of Big Business in increasingly privatized provision of medical services while also wangling a seat in a forum privileged to influence policy that will affect the size of medical services market?
(g) How can the government accept the market principle in provision of health services while still gifting lucrative public procurement jobs to its cronies without competitive bidding?
The answers to these questions are a matter of life and death for us and our children.

This is the full and unedited version of the two-part article first published on 10-11 September 2012 on Moneylife website. The writer has since made his formal complaint about forgery, in the form of first appeal, to PHFI. He has also sent letters of complaint to a dozen members of PHFI’s governing body, including T.K.A. Nair, M.S. Ahluwalia, P.K. Pradhan (Secretary Health), Amartya Sen and Mirai Chatterjee, but has not received any reply from any of them. 

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