The discovery of more than US$750,000 in foreign currency equivalents in the administration office of the 17th Karmapa Lama, Tibetan Buddhism's third highest religious leader, threatens to tarnish what heretofore has been a heroic golden story and could put the future leadership of the Tibetan religion in doubt.

Many see the Karmapa, Ogyen Trinley Dorjee, as a living Buddha as well as the next world Buddhist leader and political successor to the Dalai Lama. The latter defended the 25-year-old lama, telling reporters in Bangalore that "The Karmapa is an important lama, a spiritual leader. People from different parts of the world including many Chinese, come to seek his blessing and offer money." However, the Tibetan leader said, "The foreign and Indian currency should have been deposited in a bank and not kept in cash at the monastery."

Officials in Dharamsala held a press conference Sunday to say the money, in nearly two dozen different foreign currencies, was given by the Karmapa's followers in connection with a land deal with an Indian businessman. Reportedly a Dharamsala-based businessman is being questioned after Rs10 million (US$217,800) was found in his possession. An official said the money was a payment made by the Karmapa's trust to buy land near Dharamsala. However, even if the money came from followers, there are questions whether the foreign currency violates India's foreign currency laws.

Indian intelligence officials quizzed the Karmapa for hours, seeking details of the source of the foreign currency. Reports have emerged that he was questioned over whether he has connections with the Chinese government as a large part of the currency seized was in Chinese yuan, in wads of successive serial numbers.

Despite his escape from China in 1999 and his subsequent acceptance by the Dalai Lama as the true Karmapa Lama, Ogyen Trinley Dorjee has always been suspect to a portion of the Tibetan Buddhist community. Another monk, Trinley Thaye Dorje, 28, was enthroned independently as the 17th Karmapa Lama by a minority of the Karma Kagyu monasteries and lamas.

In December 1999 the then-14-year-old Dorjee, who was anointed by the Chinese government as the true Karmapa, pretended to go into seclusion but instead slipped out a window of the Tsurpu Monastery in Tibet with a handful of attendants. He began a daring 1,450-kilometer winter trip across some of the most forbidding terrain on the planet by foot, horseback, train and helicopter to Dharamsala, making world headlines and embarrassing Beijing. He was given refugee status by India in 2001.

Skeptics in India have continued to question whether Dorjee could possibly have managed such a spectacular escape without the help of the Chinese government. They have alleged that he is actually a Chinese spy. Thus the allegations of the seizure of the foreign currency have rocked not only Buddhist followers across the globe but also much of India, which in recent months has been hit by a series of black money scandals.

The Indian press has had a field day with the story, with news channels running headlines asking whether the Karmapa could be a Chinese agent."

In the two-day search operation led by the Indian state police at the Gyuto Tantric monastery, the temporal base of the Karmapa, his close aide and accountant, Rabjaychojan, alias Shakti Lama, was arrested and placed in police custody. Gompu Tsering, his secretary, was also questioned. At the time of the raid, the Karmapa was in the monastery.

"The raid came in connection with the arrest of two Indians on Wednesday at the Una border of the Indian state of Himachal Pradesh, recovering Rs10 million in cash, said Santosh Patial, a senior district policeman. "Upon investigation the two said they had received the money from the monk, an Indian national, to buy a plot of land near Dharamsala. The cash was allegedly brought to the state to clear some payments in connection with a land deal involving a Tibetan institution,"

The Karmapa's officials, under tight security, were all tightlipped. After 48 hours they gave an official statement upon consulting the Karmapa's lawyers, saying that "We would like to categorically state that the allegations being leveled against the Karmapa and his administration are grossly speculative and without foundation in the truth….We categorically deny having any link whatsoever with any arm of the Chinese government.

"The cash in question under the current investigation by the police is offerings received for charitable purposes from local and international disciples from many different countries wishing to support His Holiness' various charitable activities. Any suggestion that these offerings were to be used for illegal purposes in libelous," the statement added.

The Tibetan government-in exile also appears to be continuing to back the Karmapa amid the rampant media speculation. "There is no basis for media speculation linking the Karmapa Lama with the Chinese government," said Penpa Tsering, the speaker of the Tibetan Parliament in exile. "Both the Tibetan Parliament and the Kashag (the advisory board of the government in exile) stand behind the Karmapa and have been extending all necessary support to come out with the truth about the matter."

At the Gyuto Monastery where the Karmapa resides, large numbers of Tibetan and Indian Buddhists have come to show their solidarity with what they consider to be the future head of their religion. Sonam Tenzing, a young monk who lives in the Gyuto monastery, told Asia Sentinel that "probing the money is very much legitimate if Indian officials think there is some foul play but Indian media blaming the Karmapa as a traitor is simply not acceptable."

The Indian government at New Delhi has for far not reacted. However, some media agencies have reportedly quoted an investigating officer as saying: "Sources say that there are enough indications that the Karmapa was in regular touch with the Chinese authorities to help Beijing control Buddhist monasteries from Ladakh in Jammu and Kashmir to Tawang in Arunachal Pradesh. The huge recovery, including 11 lakh (110 million) Chinese yuan, substantiates what we have always suspected. The Enforcement Directorate and Income Tax authorities have been asked to probe this."

That is regarded as specious media hype in Dharamsala. Despite backing from Buddhists across the globe, nonetheless the mystery revolving around the Karmapa is deepening, with both Tibetans and Indians keeping a close watch. Even if he is absolved, however, the question remains over how a living Buddha could have amassed so much temporal cash, and why.

Saransh Sehgal is a writer based in Dharamsala, India