2G: It was all Raja's scam; but PM, Chidu let him do it

Where do Prime Minister Manmohan Singh, Home Minister P Chidambaram and former Communications Minister A Raja stand when it comes to their respective roles in the 2G spectrum scam?

All the evidence suggests that Singh and Chidambaram can be accused of sins of omission (not acting against Raja when they knew what he was up to), but in terms of sins of commission - the conspiracy to defraud - Raja stands alone.

The facts are like this. All three, Singh, Chidambaram and Raja knew that spectrum would be sold in 2008 at 2001 prices. The former two did not try to block Raja when he allocated 122 licences on 10 January 2008 at 2001 prices. But this does not put them in the same category as Raja in terms of criminal intent - and Raja does not stand vindicated, as claimed by DMK supremo M Karunanidhi.

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Can the Central Bureau of Investigation (CBI) charge Chidambaram for conspiracy to cause loss to the government exchequer?

The answer is ’no’, though it is clear that it was a political and administrative blunder on the part of the UPA cabinet led by Manmohan Singh to allow Raja to sell spectrum cheap. The opposition thus gets another opportunity to pounce over yet another failure of the government and project Singh and Chidambaram as blunderers who willy-nilly helped Raja with his plunder.

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In fact, Raja may even succeed in getting Manmohan Singh, Chidambaram and Pranab Mukherjee to the witness box in his case, but in the end he will have to carry the can all by himself.

Reason: the core of the CBI case against him is not that he sold spectrum in 2008 at 2001 prices. The CBI case is that he conspired with others to change the rules of the telecom game to benefit some companies. And here Raja stands alone. At least in terms of credible evidence, no member of the Cabinet seems to have helped Raja further his conspiracy.

Raja, however, did manage to blur the lines by declaring in court that he had informed everybody, including the Prime Minister, before taking his decision. Raja is in a very good position to prove this, and embarrass both the PM and Chidambaram. This is what the various letters exchanged with the PM show:

On 2 November 2007, Raja wrote to Manmohan Singh arguing that there was an unprecedented situation as his ministry had received 575 applications for spectrum. The law ministry suggested referring this to an Empowered Group of Ministers (EGOM), but Raja said the issue was procedural and thus could be tackled within his ministry.

Raja informed the PM that his ministry was going ahead with the existing first-cum-first-served policy and process all the applications received on and before 24 September 2007 as eligible. “You will appreciate that I am writing this letter to apprise you about the latest developments in the department,’’ Raja wrote.

On the same day, Manmohan Singh, in his reply, expressed concern over Raja’s moves. Among several things, Manmohan asked him to consider auctioning spectrum in view of the surfeit of applications. Please ensure “fairness and transparency and let me know of the position before you take any further action in this regard,’’ Manmohan Singh says.

Promptly, Raja shot back another letter to the PM on the same day (2 November 2007). “I would like to inform you that there was, and is, no single deviation or departure in the rules and procedures contemplated, in all the decisions taken by my ministry and as such full transparency is being maintained by (my) ministry and I further assure you same in the future also,’’ Raja wrote.

On Manmohan Singh’s suggestion to auction the spectrum, Raja clarifies that both the regulator Trai and the Telecom Commission had considered the issue of auction of spectrum and they were not in favour of it, because existing licence holders had not paid any spectrum charge and “it will be unfair, discriminatory, arbitrary and capricious to auction the spectrum to new applicants as it will not give them a level playing field.''

Assuring the PM that there was enough spectrum for every telecom player, Raja told Manmohan Singh that “an increase in the number of operators will certainly bring real competition which will lead to better services and increased teledensity at lower tariffs.''

On 6 November 2007, Raja’s Telecom Secretary DS Mathur wrote to the PMO that the ministry was processing pending applications for the grant of Unified Access Services Licences (UASLs).

On 26 December 2007, Raja told Manmohan Singh that he had discussed the issue further with the then External Affairs Minister Pranab Mukherjee, who was also heading the EGOM. And then he said that the Department of Telecom (DoT) had been following the first-cum-first-served policy for granting licences.

In a three-stage process, an application received first will be processed first and, if found eligible, will be granted a letter of intent (LoI). In the second stage, any applicant who complied with the conditions of the LoI would be granted a UAS licence first. He clarified that he had introduced this new stage because there were several applicants and thus if one fulfilled the conditions of the LoI first he would get the licence first. “The same has been concurred by the Solicitor General of India during the discussions,’’ Raja added.

The third stage would be the grant of wireless licences. “In these circumstances, the discussions with the External Affairs Minister (Pranab Mukherjee) and the Solicitor General of India have further enlightened me to take a pre-emptive and proactive decision on these issues as per the guidelines and rules framed thereunder to avoid any further confusion and delay,’’ wrote Raja

Ten days later, on 6 January 2008, Manmohan Singh wrote to Raja: “I have received your letter of 26 December 2007 regarding recent developments in telecom sector.''

In this last communication, Manmohan Singh did not oppose Raja on any grounds and Raja took it as approval and went ahead with announcing 122 LoIs on 10 January 2008. 6 January can this be taken as the date the PM (by not dissenting) gave Raja consent for his spectrum policy.

The problems cropped up when Raja was implicated in the 2G scam case and the rest of the ministers and the PM tried to distance themselves from his decision to sell spectrum in 2008 at 2001 prices. “We kept telling him (Raja), but he refused to listen to us’’ was chorus of Manmohan Singh, P Chidambaram and the rest of the UPA government.

But there is enough proof on the table, in the PM’s letter and the conversations between the communications and finance ministries that everyone in the UPA government, including Manmohan Singh, finally agreed to let Raja sell spectrum at 2001 prices. The UPA is thus collectively responsible for the loss of revenue.

On the conspiracy front, though, Raja stands alone. None of his ministerial colleague is apparently involved. The sequence tells the story:

• After Raja took over as minister, there was a spurt in the number of applications for UAS licences.

• The cutoff date for receiving the applications was 1 October 2007 and the ministry decided to follow a first-cum-first-served basis to issue LoIs.

• Seven days before the cut-off date, on 24 September 2007, Raja enquired from the concerned officer if Unitech and Swan had filed their applications. The moment he confirmed this, he changed the cutoff date from 1 October 2007 to 25 September 2007.

• Raja seems to have manipulated the first-cum-first-served principle to help Swan and Unitech get spectrum in areas like Delhi and Mumbai, where spectrum was scarce. He deleted a para in the draft LoI, which made payment of the entry fee the priority date for the licence.

• A draft press release spelling out the new LoI conditions was put to the Solicitor General for his opinion. The Solicitor General okayed it. But Raja amended the said press release and fraudulently portrayed the amended draft as one approved by the Solicitor General.

• Shahid Balwa, one of the beneficiaries of Raja’s licences, gave Rs 200 crore to Kalaignar TV, a DMK-controlled entity.

In all the above actions, none of Raja’s ministerial colleagues is involved. Raja is alone in this conspiracy. But his ministerial colleagues cannot distance themselves from blame for selling spectrum in 2008 at 2001 prices - causing losses to the exchequer.

View letters written by Raja to PM and PM to Raja below: