To spare Rajiv Gandhi 'embarrassment', Sweden called off Bofors scandal probe: Declassified CIA doc

The Swedish government knowingly called off the probe on Bofors scandal in order to prevent any embarrassment to Rajiv Gandhi, the then prime minister of India, a confidential CIA assessment which was declassified in December 2016 has revealed.

FP Staff January 25, 2017 09:17:10 IST

The Swedish government knowingly called off the probe on Bofors scandal in order to prevent any embarrassment to Rajiv Gandhi, the then prime minister of India, a confidential CIA assessment which was declassified in December 2016 has revealed.

The document reveals that the Swedish government called off investigations into the Bofors scandal "in an effort to prevent future revelations of bribes to Indian officials that could embarrass Prime Minister Gandhi (sic)".

"Stockholm wanted to save Gandhi the troubles caused him by the Swedish leak, and Nobel Industries (a sister company of Bofors AB which took over Bofors AB in 1985) wanted to avoid a bribery indictment. The two sides cooperated, therefore, on a scheme to keep details of the payments secret. "

A file image of Rajiv Gandhi. AFP

What's equally interesting is that even though the Indian connection to the scam where Bofors AB allegedly bribed Indian middlemen and officials, had come to light in 1987, the company was already under investigation for bribery since 1984, something New Delhi ignored.

"Stockholm called off a Swedish police investigation in late January 1988 after, following a trip by Gandhi to Stockholm," the document revealed. Sweden claimed inability to track the payments through Swiss bank accounts after making a half-hearted request for Swiss assistance, it adds.

The new revelations are party of an assessment report titled Sweden's Bofors Arms Scandal: A Summary of the Diversions, Investigations, and Implications (also available on CIA's online library) was prepared on 4 March 1988, two years after the government of India signed a $1.5 billion deal to purchase 410 155mm howitzer guns.

The latest CIA files are likely to give more firepower to the Narendra Modi-led government to attack the Congress ahead of the Assembly elections in the five states — Uttarakhand, Uttar Pradesh, Manipur, Punjab and Goa. Congress, which is looking at making a comeback after its failed performance in the 2014 Lok Sabha Election. Especially as the BJP government continues on its path to fulfil the promise of a Congress-mukt India.

The Swedish angle

The document cites a lack of evidence in order to form a complete picture of the scandal but offers a few speculated scenarios that seem interesting.

According to the CIA report, the Swedish government and the Swedish arms manufacturers were worried that its restrictions on arms export to countries that are under conflict (or likely to be a part of) affect the companies profitability and may lead to possible layoffs in the country, and that the government likely ignored controversial transactions made by Swedish arms manufacturers before the Bofors scandal came to light in 1984.

"The Bofors scandal was supposed to be a scapegoat for the Swedish government, and the government knowingly tried to subside interest in the case by carrying it forward at a very slow pace. However, it was due to the efforts of the Peace and Arbitration Society in Stockholm kept the case alive. Interest in the case further increased after Nobel Industries' takeover of Bofors in 1985.

"The government began to lose control of the case," it said.

In January 1987, Anders Carlberg, head of Nobel Industries had information on government's involvement and is likely to have forced the government to agree to its new strategy, it said. According to this new strategy, Bofors would be blamed for using third countries for reexporting weapons and Nobel Kemi executive Mats Lundborg and private trader Karl-Erik Schmitz would be put on trial. Though Carlberg promised to Carl-Fredrik Robert Algernon, the leading investigator into the case, Algernon feared that the new strategy would eventually expose his failure to stop the deals. He probably committed suicide, the document said. Another theory suggests that an Iranian spy killed Algernon, something the CIA report claims is very unlikely.

The Swedish government has charged only two people — Lundborg and Schmitz — with violating the Swedish law in connection to the Bofors scandal.

You can read the full declassified document here:


Updated Date: January 25, 2017 10:22:37 IST

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