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BRP Bhaskar: Another scandal playing out
May 03, 2016
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Exclusive to The Gulf Today

The raging controversy over the Agusta Westland bribery brings to mind the Bofors scandal which reverberated in India’s political space for a quarter century before petering out with the bribe-takers getting away unpunished.

The Bofors case related to a 1986 contract for the purchase of 410 field guns for the army from Sweden for $825 million. The Swedish radio reported that the company had bribed Indian politicians to get the contract.

The Agusta Westland case relates to a 2010 contract under which the British subsidiary of the Italy’s Finmeccanica was to supply 12 helicopters for the air force’s VVIP squadron for Rs35.46 billion. Italian investigators said the company had paid commissions to three middlemen and bribed the then Indian Air Force chief SK Tyagi through his cousins to clinch the deal.

The Bofors scandal brought down Rajiv Gandhi’s government. The Central Bureau of Investigation which probed the matter registered a case in which Rajiv Gandhi, Bofors chief executive Martin Ardbo and Ottavio Quattrochhi, an Italian businessman and friend of the Gandhi family, figured among the accused. Rajiv Gandhi was assassinated and the others died of natural causes without facing trial.

In the Agusta Westland corruption case, Italian prosecutors cited Air Chief Marshal Tyagi as an accused in a Milan court along with Finmeccanica chief executive Giuseppe Orsi, former AW head Bruno Spagnolini and three middlemen.

The trial court acquitted Tyagi, who was tried in absentia, of all charges. Orsi and Spagnolini were acquitted of charges of “international corruption” but were given two years in jail for “false invoicing”.

Last month the appeals court overturned that judgment. It held Orsi and Spagnolini guilty of bribery and indicted Tyagi as a beneficiary of corruption.

When word of the Italian prosecution came AK Antony, Defence Minister in the United Progressive Alliance government, ordered an Indian investigation. By then India had received three helicopters and paid Rs16.20 billion. Further payments were frozen and the money already paid was recovered by encashing the bank guarantees the company had provided.

In March 2013 the CBI filed a first information report and began investigation. The FIR named the Italian company, its UK subsidiary, two Indian companies which were believed to have been used as conduits for payment, Tyagi, who had retired by then, and three cousins of his, among others. Simultaneously the Enforcement Directorate started a probe under the Prevention of Money Laundering Act.

In May 2014 the Bharatiya Janata Party-led government under Narendra Modi took office. The two investigations made little progress even after the change of government.

Following the Milan appeal court verdict, the investigations have come to life again.

Seventeen cops headed the CBI while it probed the Bofors scandal. One of them claimed in his autobiography that Rajiv Gandhi had told him he wanted defence deal commissions to be used to meet the Congress party’s expenses.

Like the Bofors case, the Agusta Westland deal too has an Italian angle, and that comes in handy for political rivals to embarrass the Congress, which has an Italian-born president in Sonia Gandhi. Bits of information embarrassing to the Modi government and the Indian media have also come to light.

In a letter to an international tribunal James Christian Michel, one of the middlemen, alleged that Modi, in a meeting with Italian Prime Minister Matteo Renzi during the last UN General Assembly session, offered to free the two Italian marines facing murder charges in India in exchange for evidence against Sonia Gandhi in the helicopter deal.

The External Affairs Ministry and the Information and Broadcasting Ministry rebutted the allegations in statements which are studies in prevarication. The former said there was no Modi-Renzi meeting “as part of bilateral meetings” during the UN session and the latter said Modi did not “cut any deal” with Renzi.

Michel had said the Prime Ministers had a “brush-by meeting”, not a scheduled bilateral meeting. He had said Modi had offered a deal, not that he had cut a deal.

According to a Milan court document, Agusta Westland had paid Euro 6 million to Michel to manage the Indian media. The beneficiaries of the pay-out remain unnamed.

The Congress party has alleged that Tyagi was associated with Modi’s Principal Secretary Nripendra Mishra and National Security Adviser Ajit Doval in the Vivekananda International Foundation, a pro-Hindutva think tank.

Recalling the Bofors experience 25 years later, Chitra Subramaniam, a journalist who investigated clandestine payments in that case, said, “It showed us how every political party sought to protect its space without thinking of us as a nation.” That story is being played out again.

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 The author is a political analyst of reckoning

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