ON THE DEFENSIVE: Malik, who was booked under POTO, says he was framed in the case

Police say the money was meant to fund activities that would hinder the state elections to be held soon.

On March 24, the Jammu police recovered $100,000 (Rs 48 lakh) neatly stitched on to the salwar of a young Kashmiri woman at a check-post on the Jammu-Srinagar highway. What was significant was not the quantity of money or the ingenuity in its smuggling. It was the sheer timing. The case came in the run-up to the high-stake battle by the A.B. Vajpayee Government to push the controversial Prevention of Terrorism Ordinance (poto) through Parliament.
The Government could not have asked for a more telling example to press its point home. Two days after the police booked Jammu and Kashmir Liberation Front (jklf) Chairman Yasin Malik in Srinagar, the intended recipient of the seized dollars, under poto, the terror bill was passed by a joint sitting of the Parliament.

The dollar grab—the latest in a string of at least eight cash and hawala seizures in Kashmir and Delhi in the past three months—highlights the increased importance of foreign funding in sustaining militancy in Kashmir and the growing desperation of secessionists for hard cash to keep their operations running. It also underlines the fact that the hawala route in the Valley is intact and active as ever.

Intelligence officials in Srinagar believe the latest consignment was part of the funds Malik had raised during his trip to the US in July-September last year. But the funds could not be channelled to Kashmir in the wake of 9/11. It was only in March this year that Altaf Qadri, a pok-based jklf leader known for his proximity to Malik, got the money in Pakistan through hawala channels. Qadri had the money delivered in Kathmandu to Mushtaq Ahmed Dar, a former district commander of jklf. Dar used his fiancee Shameema alias Shazia Begum as a cover and the plan worked during their travel from Kathmandu to Jammu.

Police say the JKLF planned to host a meeting of the Hurriyat’s parallel election commission—with members from India and Pakistan—in the US before the assembly elections due in September-October. It needed funds to finance the trip of the Indian members to the US. The money, the police say, was meant for that—a charge Malik denies. “It’s a dirty trick by the Government to thwart the Hurriyat’s proposal to prove its true representative character in a parallel election,” he says.

But police officials sense a sinister dimension. Says ig (Kashmir) K. Rajendra Kumar: “The terror funds have a clear trail leading to Pakistan.” Pakistan has to fund not only militant groups and the secessionists—allegedly the Hurriyat too—but also the families of dead militants in the state. Only small consignments of cash come into Kashmir from across the loc. With militancy losing popular support, local financial help is hard to come by. So militants have come to rely heavily on hawala money.

The terror funds from Pakistan get routed to the Gulf countries before being sent to India. “Unearthing hawala routes is an uphill task,” says a top police officer in Jammu. “Only one end gets busted in such operations, the other remains elusive.” According to intelligence estimates, Pakistan has been pumping in about Rs 6 crore every month for sustaining its covert operations in Kashmir. Police officials admit that they are able to seize only a fraction of this money.

The key to rooting out militancy may lie in stopping the fund flow. “Money is the oxygen on which militancy survives,” says a top intelligence official. Whether poto can increase the choking effect on terror funds is a million-dollar question.