Bofors 2.0 - Agusta Westland returns to haunt Sonia Gandhi
- In Current Affairs
- 08:47 PM, May 10, 2016
- Navroop Singh
The recent Italian High Court judgment convicting the officials of Agusta Westland for paying bribes to Indian Officials and politicians has virtually raised a storm in Indian political spectrum with the Gandhi family being at the center of it. The ruling dispensation of Modi Government has been successful in cornering the Opposition Congress party and the Gandhi family in the alleged corruption in the Chopper Scam. The fact that the Bribes were paid in the Chopper deal is now an established fact as per the Italian HC judgment, which has also been admitted by the political parties across India. Now what remains to be unearthed is to whom were these bribes paid. This will require extensive investigations by Government agencies like ED, CBI to find out the financial trail of shell companies and tax havens to get to the real bribe takers.
To understand the Agusta deal, one needs to first go through its time line and certain facts to understand the colorable actions of Omissions/commissions that lead to this bribery scandal. In August 1999, the Indian Air Force mooted a proposal to replace MI-8 VVIP helicopters who were becoming old & outdated to carry VIPs to far off areas places in India. A Global RFP was issued in 2002 whereby 11 vendors applied out of which 3 were shortlisted; they were MI-172, EC-255, AW-101 (Earlier EH101). After Flight evaluations only EC 225 (Eurocopter Model) was found suitable as the others did not meet the operational requirements of 6000 meters flying height. The reason this was made mandatory by the air force was that these helicopters would carry Indian VVIPs to Higher altitude regions like Siachen, Srinagar, North East India where they could be targeted by terrorists and to avoid the range of hand held rocket launchers this condition of altitude limit was considered as necessary.
The PMO in December 2003 concluded that Mandatory Operational Requirements of 6000 meters had led to a single vendor situation and hence it was decided to modify the ORs with operational altitude of 4,500 meters with a ceiling of 6000 meters with Cabin height of 1.8 meters. However, in March 2005, then NSA under PMO agreed to the parameters of MI-8 helicopters and the Defense secretary agreed to finalize the ORs after consultation with Air Force, SPG that was duly affected in May 2005. It was also agreed in the meeting to avoid a single vendor situation again. Despite the decision of Defense Secretary to avoid a single vendor situation, the mandatory cabin requirement of 1.8 meters of height was approved for procuring 12 Helicopters for 793 Crores (as estimated by the Air Force) by Defense Acquisition council in January 2006. The RFP was issued in September 2006 for 6 vendors including M/s Agusta Westland. The change of specifications of 1.85 meters in Cabin height eliminated all other vendors and only Agusta Westland’s AW-101 qualified making a single vendor, a fact that was even highlighted by the CAG report laid out in the year 2013.
The events as they further unfolded tell you the whole story. The RFP was issued in the name of Agusta Westland, Italy but the response or Memorandum of Association was signed with Agusta Westland UK which as per records was a customer service branch and not even an OEM of AWIL. The RFP ought to have been rejected by the previous government but strangely then Government pushed ahead with the deal. Another controversial aspect of the deal was the Field Trials of the Choppers. As per the CAG report of 2013, the field trials of AW-101 were conducted on representative choppers like MK-3A and CIV-01 and not on actual chopper. While in reality Sikrosky S-92 helicopter was evaluated as AW-101 was still under development phase contrary to DPP requirements on field trails of equipment in Indian conditions and terrain. The RFP specifically mandated Field trials in India as the terrain & altitude issues were different compared to countries like UK or USA, a critical aspect which was neglected by then Congress government.
There were various other deviations made by then Congress regime like giving option of 3 years flying time as requirement, Deletion of Active missile warning system, enhancing the time lines to 39 months for delivery which raise suspicions on the concessions given to Agusta Westland. It is also worth pointing that the CNC (Contract Negotiation committee) in 2006 while approving acquisition of 12 Choppers fixed a price of 4,877.50 crores which six times the cost estimated the Air Force i.e. 793 crores in 2006. The CAG report too questioned the acquisition price. When the acquisition of these choppers came to CCS, then Ministry of Finance objected to the higher acquisition costs, change in ORs, Single vendor, AWIL was allowed to make corrections in Integrity clause and lack of field trials etc. The CCS on 18th January 2010 overruling all these objections went ahead and cleared the acquisition of 12 AW-101 choppers from Agusta Westland. After the signing of Contact, 15% of the payment was made in February 2010 while the 2nd tranche of 30% was made in March 2011.
In February 2012, many media reports in Italy started appearing of bribes and unethical conduct on part of M/s Finmeccanica the parent company of AWIL, UK. Then UPA Government moved very sluggishly on the reports of corruption and bribes in the deal by dispatching letters to Italian Embassy seeking documents but no further action was taken on the same. While the investigations were going on in Italy, then Congress government accepted 3 helicopters. It was only after the arrest of Mr Orsi, the chief of M/s Finmeccanica in February 2013 that Ministry of Defence asked the CBI to conduct an inquiry into alleged bribery allegations. Subsequently the agreement with AWIL, UK was put on hold and show-cause notice was issued in February 2013. The Italian authorities too commenced criminal proceedings in June 2013. Meanwhile, AWIL, UK sought to invoke the Arbitration clause upon which then Government in consultation with AG cancelled the contract on 01.01.2014 and bank guarantees/bonds were invoked.
Against the advance payment of 250.32 million euros the Government recovered only 199.62 million towards 3 choppers that were delivered and suffered an estimated loss of 398.21 million euros. Strangely the CBI who registered the FIR on 12th March 2013 did not bother to send the same to ED which was the only that agency that could track the financial trails of the bribes. Even more strange that after receiving the FIR in December 2013, then ED sat on it till July 2014 when the NDA government had just come into power. The Internal MoD note says an Invisible hand was instrumental in guiding the CBI & ED go slow on the probe the Chopper Gate. The Delay in launching prosecutions from the year 2012 when media reports first surfaced to sitting over FIRs till 2014 are clear acts of omission and commission of the investigating agencies as well as the political executive of that time i.e. Congress lead UPA Government. The delay of nearly 2 years proved fatal as it gave sufficient time to accused and bribe takers to cover their tracks.
It was only on 12th May 2014 when it became clear that UPA Government was on the verge of losing power that Agusta file in the MoD moved with lightening speed and the UPA in its final hours gave nod for approval of blacklisting of M/s Agusta Westland Int Ltd, M/s Finmeccanica and its other group companies. Yet it has to be pointed out the notification to blacklist these companies was issued by the NDA Government on 03.07.2014. While Blacklisting of the companies by NDA Government was a welcome move yet keeping in the mind the defense needs and security preparedness, it was decided that while Government Deals with Agusta or its group companies wont be done yet it should not hamper Indian Navy’s requirement for Torpedos or Spare parts of already purchased defense equipment from M/s Finmeccanica.
Post 2014, the NDA Government vigorously pursued the matter with request for arrests/ extradition of Carlos Gerosa, Guido Haschke and Christian Michel the middleman who were instrumental in this deal. The red corner notices were issued in December 2015-January 2016 against them. ED filed its charge sheet claiming that 18 million euros came into India through shell companies in Mauritius and Tunisia. The ED in the year 2015 also approached various Tax havens for details of the same but those countries were evasive, as the Italian Trial court has rejected the charges of Fraud or Bribery in the case.
It was only after the Italian HC in Milan overturned the Trial court verdict and convicted the officials of M/s Agusta Westland and M/s Finmeccanica that ED has once again swung into action interrogating Former Air Chief Marshal SP Tyagi who has been referred to as FAMILY in the note of payments the middle man Christian Michel before the Italian Court. The Judgment of the Italian Court inter alia also produces the content of the letter of Christian Michel dated 15th March 2008 stating that Mrs Gandhi is the driving force behind VIP Chopper Deal and that she will no longer fly MI-8 and that she and her political advisors should be tapped for this deal. The judgment also produces a hand written note exchanged with Haschke of distribution of 30 million euros as payments to Officials in the Air Force and Political brass where the name mentioned is initialed as AP. The Judgment also records a handwritten note of Mr Orsi of July 2013 found from his cell saying ask Monti or Ambassador Teraccianio to call PM Singh.
The Italian Court judgment also records a stunning revelation that Agusta Westland gave 6 million euros in a contract to Christian Michel to deal with negative coverage of the deal in Indian Media. The contract signed by Christian Michel in March 2010 clearly details about how to deal with hostile media coverage, something which clearly depicts the ugly nexus between the Arms Lobbies and Journalists in Media who openly lobby for defense deals with corporations and countries. This is a matter that ought to thoroughly investigated by Indian authorities as to who were the journalists who were lobbying for Agusta Westland. The Italian judge who delivered the judgment later in interviews to Indian Media channels confirmed that ‘AP’ as mentioned in the note of the middleman Christian Michel meant Ahmed Patel (who is Principle Secretary to Sonia Gandhi) and the FAM meant the Tyagi Family. The judge however cautioned that his domain and jurisdiction was confined to indicting Italian officials in bribery case and it was up to Indian investigating agencies to nab those who got the bribes.
The Italian Court judgment also records non-cooperation by then Indian Government who in response to requests made by Italy only provided the CAG Report and RFP to the Italian investigators. In addition to the Italian Court judgment, the ruling BJP has further upped the ante against the Gandhis with BJP MP Kirit Somaiya raising the issue of Middleman Haschke being director with Emar MGF company in the year 2009, this company has been linked to Kanishka Singh who has been the political aide of Congress VP Rahul Gandhi. This high voltage corruption case has raised the stakes further for the Congress party and the Gandhi family whose names featuring in this judgment has caused a storm in the Indian Politics. Whether the Gandhis can be indicted or not will depend a lot upon the investigative skills of the Indian agencies specially the ED to look into financial trails to establish a watertight case. However, from a bare reading of the above facts one thing is admitted bribes were given and that acts omissions/commissions were committed to let this scandal happen. The heat of this scam is unlikely to die down any time soon and it is likely to erode further political capital of Congress party that it was aiming to gain 2 years into Modi Government’s rule.
Comments