Ford Foundation has funded a political party and profit making organisations 'illegally' which has resulted in the outfit coming under MHA scanner.

New Delhi: US-based Ford Foundation has funded a political party and profit making organisations "illegally" which has resulted in the foreign outfit coming under the Home Ministry scanner and put on the "watch list".

A senior Home Ministry official said an investigation has found that funds sanctioned by the Ford Foundation to an NGO have reached a political party which automatically makes the donor liable to face action. But the Ford Foundation has rejected the charge.

The probe has also found that Ford Foundation has funded several organisations which do not fall in the category of NGOs, which are eligible for receiving foreign funds, as they make profits, the official said.

The international donor strongly refuted the charge of funding political parties but accepted that it worked with various entities including those which work for profits.

"We wish to affirm that the foundation does not fund political parties. The foundation does, however, work with a range of other entities, including non-governmental organisations, government and quasi-government entities, universities, and for-profit entities, depending on the needs of the particular work involved.

"This includes engaging for-profit entities to provide services to the foundation and its grantee communities," Ford Foundation spokesperson Joshua Cinelli told PTI in a statement.

Under the Foreign Contribution Regulation Act, no donor can fund political parties or any organisation which makes profits.

Following the investigation, the Home Ministry has put the Ford Foundation on its "watch list" and ordered that all funds coming from the US-based donor have to be routed only with its nod due to "national security concerns".

The Reserve Bank of India has been requested to instruct all the banks and their branches to ensure that any fund flow from Ford Foundation to any person, NGO or organisation in India should be brought to the notice of the Home Ministry so that funds are allowed to be credited into the accounts of the recipient only after clearance of the Ministry.

The Home Ministry has also found that Ford Foundation has given funds to at least six NGOs which were not registered under the FCRA, making the payment "illegal", the official said.

The Ford Foundation said it would continue to respond fully to official queries directed to it but was yet to hear directly from the Home Ministry.

"Our aim is to work closely with government partners to clarify any area of question or concern. If the Government suggests methods by which we can strengthen and improve our grant-making processes, we will take swift and appropriate steps to incorporate them.

"We are confident in our work and compliance with law and look forward to a constructive outcome. Most importantly, we appreciate the privilege of supporting the people of India and look forward to continuing to do so," Ford Foundation said.

Interestingly, Gujarat government had recently asked the Home Ministry to take action against Ford Foundation, alleging that the US-based organisation was "interfering in internal affairs" of the country and also "abetting communal disharmony" through an NGO run by social activist Teesta Setalvad.

The action against Ford Foundation came weeks after the Home Ministry froze seven bank accounts of Greenpeace India and barred it from receiving foreign funds for allegedly violating FCRA and "prejudicially" affecting the country's public and economic interests.

PTI