Slush fund claims set India awhirl
By Priyanka Bhardwaj
NEW DELHI - India has done it again in corruption!
The latest scandal rocking the South Asian powerhouse is the 3.7 billion rupees (US$6.8 million) worth of kickbacks allegedly received from Finmeccanica for winning the bid to supply 12 AgustaWestland helicopters, valued at 35.5 billion rupees, for use by the elite Communication Squadron of Indian Air Force for ferrying the president, prime minister and other VIPs.
A British subsidiary of the Italian state-supported firm called Finmeccanica, AgustaWestland is a helicopter design and manufacturing company that has had a presence in India since the 1970s. The firm has sold a record 40 such eight-seater
helicopters to various Indian business houses and state governments.
And to make selling easy the parent firm has reportedly been hiring influential and powerful people, retired officials and sometimes even ministers, in a common method followed by many other private firms, not just for their expertise but also for their keen knowledge of flaws of the system that can be used to win deals.
The extent to which AgustaWestland went to win the tender is implicit in that an official sent a champagne bottle to its rival firm along with a message that read "you cannot win always".
Since national defense deals demand secrecy they also opens doors for unscrupulous middlemen. Deals, and money and girlfriends are part of the "favors" that grease the palms of those who pass the contract or formulate specifications in the tenders. One can only imagine how much of the taxpayers' money is wasted in buying such products whose costs, profits and bribes are incorporated together to make final invoices.
But the smell of a possible scam put Italian investigators on a secret chase and tapping of phones followed by cross-examinations got the cat out of the bag, all delineated in a 64 page report.
The report talks of how the Finmeccanica head, Guiseppe Orsi, the then chief of AgustaWestland got hold of middlemen, Guido Haschke, Carlo Gerosa and Christian Michel, to make payments to intermediaries, Julie Tyagi, Docsa Tyagi and Sandeep Tyagi (all cousins of the Indian Air Chief, SP Tyagi), to influence the Air Chief and other Indian officials.
It sums up the astounding role of the air chief in the manipulation of critical technical requirements criteria to allow the Italian manufacturer to qualify for the bidding competition.
The knowledge and network of Swiss middleman Haschke, designated as a consultant in Project Advisory Services, in the Indian defense sector helped forge intimate ties with crucial defense officers and ministry men.
Immensely assured that the mode of cash payment would leave no money trail and that the slow and tedious legal process in India has come up with not a single conviction in any corruption case in on defense procurement, the wheeler-dealers freely bragged about Indian investigators not being able to identify Sanjeev Kumar Tyagi as the person behind the affair over the telephone.
But this time Italian investigators were listening. Their recordings of conversations finally established a trail of complicity in money-laundering.
Interestingly, the case came to light only when media found that the story of the Italian pursuit was worthwhile to highlight.
The Indian government, which is facing the prospect of upcoming Assembly elections in many states and general elections next year, was pushed into a corner.
India's Minister of Defence AK Antony hastily ordered an inquiry led by the Central Bureau of Investigation (CBI), an Indian equivalent of FBI, into the whole shady saga. But given the fact that the Indian law does not mandate CBI to register a criminal case against any alleged offender merely on basis of press reports, it will have to depend on legal documents from Italy that too if the Italian government is willing to share.
The government has recruited an Italian lawyer to assist CBI team and a defense official is visiting Rome to try to get hold of evidence.
A notice has been sent to AgustaWestland by the Minister after his public declaration that, "Nobody will be spared. If a company violates the conditions, they are liable for criminal action. The company is liable to be blacklisted," and visiting UK Prime Minister David Cameron was also asked for supporting investigations into the case.
Opposition members of the parliament are far from convinced, and term the punitive measure of blacklisting (it comes as a result of violation of the integrity clause, fitted into every agreement) as merely a face-saving exercise from a government that has been tainted with an assortment of big-ticket corruption, especially in its second term.
They have speculated that the government delay in carrying out a conclusive enquiry in the helicopter case might be indicative of their knowledge of the pockets where these slush funds ended up.
Indian law holds that it is an offense to both give and receive bribes, so the government finds itself accused of being lax on arresting the receivers living on its soil, even when the givers in Italy have been arrested.
Some defense experts also feel that the minister could have instituted a verification committee to decide if technical eligibility requirements were changed deliberately to favor the Italian firm, before imposing a blanket ban. India's defense preparedness, they say, has been hampered as there are few competent defense companies around and far too many have already been banned from doing business with India.
Sharing this view is Salman Khurshid, the Indian External Affairs Minister and a member of the Cabinet Committee of Security. "We need to examine why corruption has happened on a defense deal like this," he has said. "I can understand it when a poor quality product has been pushed through as a result of corrupt practices. But this chopper is not a poor quality product. So we need to get to the bottom of this. All I can say is that we have followed all the procedures, and there was no deviation from that."
As much as a nation has no option but to demand for more transparency in defense systems for the sake of its interests and security, the ruling political party also cannot afford to forget how the Bofors gun controversy had led to a direct trouncing of Rajiv Gandhi's ruling Indian National Congress in the November 1989 general elections.
Priyanka Bhardwaj is a New Delhi-based freelance journalist. She can be reached at priyanka2508@yahoo.co.in.
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