Agusta is no Bofors
Will we ever know for sure who received the AgustaWestland bribes? The money trail abroad has long gone cold. The small fry who got "chillar" (loose change), as defence minister Manohar Parrikar colourfully put it in Parliament, may be booked. But the big political fish, as always, could get away. They have powerful friends and protectors.
Investigations might eventually hit a brick wall.
And yet, Parrikar says the AgustaWestland corruption case is unlike Bofors. He meant there will be a definitive outcome – investigation, prosecution, trial, arrests.
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| Parrikar says the AgustaWestland corruption case is unlike Bofors. |
Several questions swirl around the case. Who altered the specifications of the helicopter’s altitude limit (from 6,000 metres to 4,500 metres) and cabin height (from 1.40 metres to 1.80 metres)?
Parrikar says the Vajpayee government lowered the altitude requirement in 2003 only to ensure more bidders were eligible. Competitive bidding would reduce the final price. He alleges that the UPA 1 government increased the cabin height to eliminate all other bidders and ensure only AgustaWestland was eligible. As a single vendor, the price could be fixed arbitrarily.
Crucially, in 2006 a revised Request for Proposal (RFP) officially reduced the altitude requirement for the helicopter from 6,000 metres to 4,500 metres. Simultaneously, the cabin height requirement was increased from 1.40 metres to 1.80 metres.
Conveniently, AgustaWestland was the only vendor which qualified. The stage was set.
The original benchmark price for the VVIP helicopters was around Rs 780 crore. In 2005, the Cost Negotiating Committee (CNC) in an inexplicable fit of generosity increased the price by nearly 600 per cent to over Rs. 4,700 crore.
The final negotiated price was Rs. 3,726 crore – nearly five times the original estimate. Corruption in the deal should have been red-flagged at this stage by those privy to the price negotiations in the UPA I government. It wasn’t.
Who were the negotiators on the Indian side? Among others, the defence secretary Shashi Kant Sharma was a key figure. He was in effect given immunity by the UPA 2 government from any future prosecution by appointing him to a Constitutional post: Comptroller and Auditor General (CAG), a position he still holds.
Meanwhile, prominent journalists wrote gushing stories from 2009 to 2013 on AgustaWestland. Some did emollient print and television interviews with arms broker Christian Michel, now a fugitive.
In 2013, even after the scam had been revealed by an Italian court and top Finmeccanica executives arrested, over a dozen journalists were taken on a fully paid-for trip to Finmeccanica, AgustaWestland’s parent company in Italy. Laudatory articles followed. The Indian Express and The Pioneer were honourable exceptions. They reported the scam accurately. Others did not.
Former defence minister AK Antony, who saw, spoke and heard no evil but apparently allowed venality free rein on his watch, did nothing about the scam till circumstances compelled him to.
What were those circumstances? In February 2013, jolted by the arrest of Guiseppe Oris, Finmeccanica’s chief executive for paying bribes to Indians in the AgustaWestland deal, Antony acted with extraordinary speed to cancel the contract.
The Agusta file moved through several levels in the Ministry of Defence (MoD) and was cleared in a record of three hours.
All actions the UPA 2 government now took to distance itself from the tainted deal it had engineered were based on self-preservation. It encashed AgustaWestland’s bank guarantee of Rs 2,062 crore and began the process of blacklisting the firm. It had 14 months do so – from February 2013 to April 2014. But in these 14 months, it couldn’t bring itself to complete the blacklisting process.
The Milan court judgment states that in 2013 (during UPA 2’s tenure) the Indian government took 11 months to send the Italian authorities just three publicly available documents. The Italian judge said this showed “disregard” for the court process.
The Central Bureau of Investigation (CBI) registered a preliminary enquiry (PE) on February 12, 2013. At that point Michel was in India; 24 hours later he left the country.
It was left to the NDA government in July 2014 to officially blacklist AgustaWestland. Why then was Agusta given Foreign Investment Promotion Board (FIPB) approval to take part in a Make in India event in February 2015 in collaboration with the Tatas?
The argument that the NDA government’s ban in AgustaWestland applied only to government contracts and not to private sector tie-ups in a private sector event such as Make in India, seems flimsy.
The FIPB is a government body. It works under the finance ministry. Permission to AgustaWestland to participate in the Make in India event should have been withheld despite its private sector status.
What happens now?
The judgment of the Milan court of appeals on April 7, 2016 set the cat among the pigeons. It convicted Finmeccanica CEO Guiseppe Orsi and Bruno Spagnolini, head of the company’s helicopter division, on charges of bribery in the Agusta deal.
In India, the Italian court’s judgment sparked a furore. The Enforcement Directorate (ED) works under the ministry of finance. Till recently it had moved slowly in the Agusta case. This has given rise to the suspicion that the NDA government – or at least some elements within it – are not enthusiastic about investigating the case.
Parrikar, whose laid-back Goan susegad style conceals a sharp mind and steely resolve, seems aware of this possibility. On Friday, May 6, he told the Lok Sabha that even though the ED and the CBI don’t come under his ministry’s direct jurisdiction, he will monitor the investigation into the case.
The prognosis, however, is not good. In the One Rank, One Pension (OROP) issue, Parrikar cleared the file quickly. It took the finance minister nearly six months – after media and public pressure – to reluctantly sign off on it. Parrikar should not underestimate the power and intent of those in his government who have an interest in protecting rather than prosecuting the bribe-takers in AgustaWestland.
So who might the bribe-takers be?
In Guido Haschke’s hand-written note which the Italian authorities seized from his home in a raid and which the Italian judge declared authentic, there were three categories of people earmarked for bribes: "AF" (air force); "Bur" (bureaucrats, presumably in the MoD); and "Pol" (politicians).
The Italian court said "AP", written immediately below "Pol", could refer to Ahmed Patel, Sonia Gandhi’s longtime political advisor (and a powerful, much-feared figure from Bharuch, Gujarat).
Who did "FAM" refer to? Since it too is written in the "politicians" column, immediately under "AP", it clearly refers to a powerful political family. The obvious inference is the Gandhi family through no direct proof has emerged.
The Italian court of appeals in Milan addressed this question in its verdict on April 7, 2016. It said there were "traces" of Indian politicians involved in the corruption in AgustaWestland but that this was beyond the purview of the present case. It said the matter would have to be investigated by Indian agencies.
In Parliament last week, BJP MP Anurag Thakur claimed that an as yet unnamed former UPA cabinet minister (whose NGO faces charges for financial misappropriation) had recently met the fugitive Michel in Dubai to discredit the Modi government’s probe into AgustaWestland.
If true, this suggests an even deeper nexus between the bribe-givers and bribe-takers – and their efforts to subvert the new investigation.
The Congress, sections of the compliant media, tainted armed forces officers, and complicit elements in the NDA government with a penchant for a Lutyens’ lifestyle, have much to answer for.
Parrikar too has much at stake. He said he won’t let AgustaWestland become another Bofors. In India’s fevered political environment today, that might be easier said than done.