- Associated Press - Thursday, April 28, 2011

MUMBAI

For the past 12 years, a businessman in the northern Indian city of Kanpur has been paying a $113 bribe to government officials to get his income tax refund. The difference now is that he’s talking about it on ipaidabribe.com, a website that serves as an outlet for pent-up frustration with corruption in India.

That discontent - fueled by India’s vociferous media and a blossoming sense of empowerment among the middle class - has burst into the open after a series of galling corruption scandals began roiling Asia’s third-largest economy late last year.

Thousands have taken to the streets, the courts are pursuing rare high-level prosecutions, and the government is scrambling to enact a tougher anti-corruption law.

The website is Raghunandan Thoniparambil’s way of fighting endemic graft, which many say has worsened as India’s economy has grown and opened up, creating enormous wealth without adequate regulation and fostering a culture in which everything - from pilot’s licenses to school admissions and telecom spectrum - seemingly is for sale.

“Contrary to popular perception, economic liberalization increases corruption in the short term,” Mr. Thoniparambil said. “What people do not realize is that liberalization and opening markets require regulation.”

Privatization has thrown open huge infrastructure contracts ripe for kickbacks, and increasing competition for votes has encouraged India’s patchwork of political parties to use any means possible to build up their war chests, he said.

In just over eight months, the site has documented $8.1 million worth of small bribes paid - the largest number of them to police.

More than 9,000 messages have been posted, and the site has gotten more than 426,000 hits from viewers. The White House was impressed enough to schedule a chat between the site’s founders and President Obama when he visited India in November.

Mr. Thoniparambil, who spent 26 years working for the elite Indian Administrative Service, said bribery has existed since his early days in government - but cases were isolated.

Today, he said, “every department has their supply chain for corruption.”

“It has massive social costs,” he added. “It transfers a lot of wealth to those who do not deserve it.”

The Asian Development Bank has warned that India - which last year was ranked 87 out of 178 countries on Transparency International’s corruption perceptions index - is in danger of sliding into Russian-style oligarchic capitalism if it doesn’t shape up.

Allegations of graft involving last year’s Commonwealth Games, legislative vote-buying, and a rigged auction for 2G telecom spectrum that auditors estimate cost the national treasury $39 billion have spooked investors, many of whom long tolerated corruption.

Aging Gandhian activist Anna Hazare successfully tapped into the mood of outrage, demanding that India’s Parliament create a powerful, independent watchdog committee to investigate corruption.

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