The New York District Attorney’s prosecution of Rajat Gupta, the former head of McKinsey and a member of the boards of some of the world’s most powerful companies — such as Goldman Sachs and Proctor & Gamble — has set off a firestorm of questions about South Asians and white-collar crime. The DA’s office has accused Gupta of tipping off Galleon hedge fund founder Raj Rajaratnam in what could be the biggest insider trading scam involving South Asians to date. Rajaratnam’s coterie includes Wharton classmates Rajiv Goel and Anil Kumar (who was also Gupta’s protégé at McKinsey) as well as Roomy Khan, an ex-Galleon employee.
The Gupta case has upended the well-entrenched stereotype of the Indian immigrant being an honest, nose-to-the-grindstone type. Certainly, the first wave of engineers and doctors in the 1960s who set up practices in hinterland areas like Alabama or worked for semiconductor firms in Silicon Valley have a right to be incensed at him (if he’s found guilty) for undermining an image built by years of toil. Ditto, the New York cab driver, the New Jersey gas station attendant and the Chicago Dunkin Donuts proprietor, who are known to slave 20 hours a day so they can send their children to good schools and colleges, as well as wire some money back home to their extended families.
That said, immigrant South Asians and crime have never been mutually exclusive. The town of Surrey, near Vancouver, has been ravaged by South Asian gangs who are largely the progeny of Sikh immigrants who migrated to the area as lumberjacks in the early 1900s. In the last few decades, hundreds of young people in Surrey have been killed — many of them completely innocent — over feuds, drug trafficking and auto theft.
However, this is the first time that South Asians abroad have showed an aptitude for white-collar crime, at least in such magnitude. But can one go from there to the claim that this signals a whole community’s new demographic disposition to it? Surely not — for, if so, then what about those involved in alleged insider trader Michael Milken’s ring in the 1980s? After all, Martin Siegel, Ivan Boesky, Dennis Levine and Robert Freeman were all Jewish, as was Milken. Can one make a similar claim about Jews in finance? Or for Caucasians vis-a-vis the debacle at Enron? Or, closer to home, Gujaratis (Harshad Mehta, Ketan Parekh) or Andhra-ites (Telgi, Ramalinga Raju)? Clearly not.
Ethnic stereotyping can be a dangerous preoccupation, since it is more often than not completely inaccurate, and because it essentialises groups rather than historicising their experiences. For instance, the United Kingdom’s 2007 crime survey found that for 90 per cent of crimes where the victims were white, at least one of the offenders was also white — and not Black or Asian, as was often claimed. Statistics on crime perpetrated by African-Americans in the US often conveniently leave out the fact that the majority of victims, too, are African-Americans.
So, while stereotyping isn’t helpful, it may be more instructive to use a somewhat more anthropological approach — say, by taking a closer look at the specific background of those involved in the Gupta case. The majority of Rajaratnam’s tipsters, including Gupta, grew up in South Asia where the socialist state forced you to look for alternative ways of doing things, and where networking is the backbone of how business is transacted. The ones who jumped around the globe as consultants and bankers were arguably never rooted in any one system. Deep down inside, they still had instincts that were shaped by an imperfect legal environment. Low wages ensured that a handful of rupees could allow you to escape a traffic violation, or land a coveted telephone line with international dialing capabilities. For this generation of globetrotters, getting ahead was top priority, unlike Indian immigrants to the US in the 1960s who often found themselves in remote places, and had to re-wire themselves to play by the rules. Their progeny, who have grown up in the US, are even more assimilated into the fabric of social and legal institutions and are therefore, by and large loath to engage in criminal activity.
In 2011, there were 57 insider trading cases enforced by the US Security and Exchange Commission, Rajat Gupta’s being just one of them. While Gupta is a big name, the sum of the transactions under scrutiny in his case is relatively insignificant. Could Gupta’s visibility be the victim of an over-zealous prosecutor (ironically, the son of an Indian immigrant, Preet Bharara) who may be using this trial to make a name for himself?
More From This Section
Perhaps, many of these explanations have some grain of truth in them. Ultimately, however, the fact remains that South Asians have finally become corporate stars on the world stage — Anshu Jain, Vikram Pandit and Indira Nooyi are just a few examples. Thousands are now part of the global banking, consulting and entrepreneurial systems, and are straining mightily to get into the big leagues, where the rewards of doing so is a font of money and power. Don’t be shocked to see more cases like this in the future.