Why PM's 2G credibility ultimately depends on Raja

What is one to make of Andimuthu Raja’s 116-page reply sent to the Joint Parliamentary Committee (JPC) probing the scam?

Three things are clear.

One, Raja has put up a spirited defence of his actions, and politically placed himself in the same boat as the PM and FM (P Chidambaram). The underlying refrain is: “I am not alone in this alleged crime.” Conversely, the PM cannot be given a clean chit if he himself is not given one.

Two, on the criminal conspiracy part of the allegations against him, he has done the opposite - distanced himself from the bureaucracy that decides mundane things like cut-off dates for receiving licence applications.

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Three, on the broader aspects of policy, especially the first-come-first-served policy (FCFS), his arguments are exactly the same as the Congress party’s - the policy was created by the NDA.

But the big statement he seeks to make is this: the Comptroller and Auditor General’s claim of presumptive losses of Rs 1.76 lakh crore was not only bogus, but there was a real gain of Rs 1.5 lakh crore to consumers due to his actions. He says: “Average revenue per user (ARPU) (for telecom companies) in December 2010 had fallen to Rs 107 per month, from Rs 298 per month in March 2007. (It has fallen to Rs 95 per month by September 2012.) The increase in teledensity and fall in ARPU translates into a real gain of over Rs 1.5 lakh crore per annum. This is the money that consumers all over India have saved. Unlike the so called ’notional’ loss, this is a very real gain.”

But none of this will get him off the hook in his trial, where the Central Bureau of Investigation (CBI) has charged him with manipulating procedures to help three real estate players - Shahid Balwa and Vinod Goenka of DB Realty and Sanjay Chandra of Unitech, all co-accused in the 2G scam. Raja came to know them during his stint as Environment Minister. They used to come to Raja’s office and even his house while seeking environmental clearances for their real estate projects.

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After assuming charge as Communications Minister, Raja allegedly manipulated procedures to benefit these three individuals in the 2G scam. And, in a quid pro quo, Shahid Balwa is alleged to have given Rs 200 crore to a television company run by his party, Kalaignar TV, owned by M Karunanidhi’s wife and daughter Kanimozhi. Other quid pro quos in the cases of Sanjay Chandra and Vinod Goenka are still under investigation.

When it comes to specific charges - like changing the cutoff date for licence applications arbitrarily from 1 October to 25 September 2007 - Raja takes the high ground and claims that a Union Minister is only concerned with policy matters, and not with the mundane procedures like issuing a press release, deciding on the cutoff dates, etc. Thus the procedural lapses, if any, should not be laid at his door.

“It is not the practice in the DoT (Department of Telecommunication) or any other ministry for the minister to approve a press release - his/her job is to take the final decision on policy. Issuance of the press release is a departmental function to inform the public at large as to what decision has been taken’’, Raja says while distancing himself from the procedural lapses.

[caption id=“attachment_724795” align=“alignleft” width=“380”] PM’s credibility depends on delinking himself from Raja. But Raja’s defence depends on tying himself to the PM. AFP[/caption]

But Raja’s biggest fig-leaf is obviously the political one. He says there was no criminal intent in the award of licences or spectrum because Prime Minister Manmohan Singh, former External Affairs Minister Pranab Mukherjee and Attorney General GE Vahnavati were all on the same page while allocating 2G spectrum in January 2008.

He claims he had taken legal opinion even on procedural matters and had informed Manmohan Singh and Pranab Mukherjee, who headed the Empowered Group of Ministers on telecom policy. This is surely a contradiction to his earlier claim that he doesn’t deal with the minutiae of procedures.

In the first 60-and-odd pages, Raja gives a blow-by-blow account of how he discussed ‘policy matters’ with Manmohan Singh and Pranab Mukherjee. Whether it was fixation of entry fees or the matter of auctioning 2G spectrum, he wrote to the PM and the latter acknowledged his letters. He had frequent meetings with Pranab Mukherjee and he even argued for continuing with the existing system of allocation of spectrum. And everybody in the UPA government, including Manmohan Singh, finally accepted it.

While the record shows that Manmohan Singh did advise Raja to adopt a cautious approach, the PM ultimately fell in line with Raja’s wishes.

This much is evident from the facts themselves. On 10 January 2008, Raja had issued 122 telecom licences to various companies but not the spectrum. The PM and his other senior colleagues could have stopped him if they wanted to, but the PM merely asked his officials “to keep the PMO at arm’s length” from the telecom ministry’s decisions, and Finance Minister P Chidambaram suggested burying the matter and starting afresh on telecom policy.

Raja, however, grows very defensive, when he comes to some of the policy aspects of 2G allocations.

At the outset, he declares that the First-Come-First-Served (FCFS) system has no statutory basis. “The DoT was apparently following the FCFS system, but this was not provided in the UASL (unified access service licence) guidelines. It was also not defined anywhere,’’ Raja writes.

Thus Raja maintains it was an extraordinary situation in 2007 which needed an extraordinary decision. And he did all the changes to increase the teledensity and ultimately pass on the benefits of cheap telecom licences to people at large. The cost of mobile calls came down from Re 1 per minute to 30 paise per minute during his regime.

There was a flood of applications for telecom licences and his officers mooted several ideas to handle them. Raja claims he acted only as facilitator.

The issue of seniority - whose applications should be considered first - never arose in the past as DoT handled telecom applications sequentially in the order of receipt and took up the next applicant after the earlier applicant had been given an LoI (letter of interest).

“However, the DoT officials understood that the above procedure could not be followed in the 2007 scenario,’’ Raja contends. And he names his directors in DoT and Secretary (Telecom), who took initiatives and proposed changes in the FCFS system. Raja’s main argument seems to be that it wasn’t his initiative; it was his officers’ initiative and thus where is the criminal conspiracy?

His officials proposed the cutoff date. Raja says he even discussed FCFS with Pranab Mukherjee and the PM.

“It must be noted here that the issue of FCFS was purely within the domain of the DoT and I had no obligation under the Allocation of Business Rules or Transaction of Business Rules to discuss this matter with any other minister, but still out of respect for the Hon’ble PM and the EAM (external affairs minister), I did so”, Raja writes.

But it is only verbal claim. He can’t defend it even if he had met them on the FCFS issue.

And this is the crux of the criminal conspiracy. “In the LoIs, an arbitrary condition was incorporated that whosoever deposits the fees first, would be the first to get a licence,’’ the CBI alleges. Shahid Balwa and Sanjay Chandra were ready with their bank drafts at least a month in advance!

Then comes the press release controversy. The press release announcing the rules for licences had this paragraph: “However, if more than one applicant complies with LoI condition on the same date, the inter se seniority would be decided by the date of application.’'

Raja admits that he deleted this para because “this was a totally new stipulation that was not to be found in the file notes, the original note of the SG (Solicitor General), or the letter written to the Hon’ble PM. It would in fact be an entirely different method of determining seniority.”

Raja says that he deleted the para and then sent it for legal vetting to Goolam Vahanvati, the SG. But Vahanvati, in his deposition before the court, has stated that the press release had the para when it came to him for legal vetting. Later, it was deleted when sent for publication in newspapers.

Raja’s defence fades away in the face of evidence offered by some of his officers on the `press release’ issue.

Raja has, however, politically scored over the Manmohan Singh-led UPA government. The CBI says Raja misled the PM. But Raja takes on the CBI to ask - not unreasonably - by asking: have you taken the PM’s statement on this?

“On what basis do they (CBI officials) then say the he (the PM) was misled? I do hope that the JPC will not commit the same blunder: if they wish to draw any conclusions on this issue, it is mandatory to record both my statement and the statement of the Hon’ble PM.”

The JPC clearly is trying to duck the issue of seeking to confirm Raja’s statement with the PM. It is, therefore, finding it extremely difficult to ‘democratically’ obtain approval for its drafted report.

Raja’s statement sets the stage for a dramatic finale to the trial.

The CBI is folding up its list of witnesses by May-end. And Raja’s statement hints that he is all set to request the CBI-designated court to summon Manmohan Singh and Pranab Mukherjee - Prime Minister and President of the country - to the court. A strategy to embarrass the government is on the cards.

The irony is this: the PM’s credibility depends on delinking himself from Raja. But Raja’s defence depends on tying himself to the PM. It follows that the PM can’t get a clean chit from CBI or courts without the consent of Raja.