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Bofors yes, AgustaWestland no: Why Sonia Gandhi isn't to blame for VVIP chopper scam

Almost 25 years separate the AgustaWestland scam from that of the Bofors. Both were defence deals. In 1986, the Indian government went for 400 Howitzer guns manufactured by the Swedish company AB Bofors. It was a $1.4 billion deal (Rs 10,000 crore at current prices). In 2010, India signed an agreement with the UK-based AgustaWestland (its parent company based in Italy) for 12 high-altitude-flying helicopters. It was a $530 million (Rs 3,600 crore) deal.

Both Bofors and AgustaWestland had signed no-middleman contract with India; no commission was supposed to be paid by the manufacturing company to any defence agent to secure the deal. But as it turned out, in both cases, the middlemen had received commissions. The Swedish government investigated the Bofors case and the Italian government the VIP choppers case.

What was more damaging was the suspicion that the trail of the commission money led to Indian politicians. In the Bofors case, Rs 64 crore (at the then prevalent prices) supposedly exchanged hands. In the AgustaWestland case, the bribe money is supposed to be more than Rs 200 crore.

 Bofors yes, AgustaWestland no: Why Sonia Gandhi isnt to blame for VVIP chopper scam

File image of Sonia Gandhi. PTI

Although middlemen who received money in both the cases were identified and legal evidence against them was established, no clear case could be made out against the political beneficiaries in both the cases. The political battles, therefore, were fought on the basis of conjecture and speculation.

Incidentally, both the deals were signed during the Congress regimes and the main political targets in both the cases were members of the Nehru-Gandhi family, the political dynasts lording over the party since Independence: Rajiv Gandhi in the gun deal and Sonia Gandhi in the chopper deal. Rajiv had a more direct role in the Bofors deal: he was the prime minister and also the defence minister when the Bofors agreement was signed; Sonia has never been in government; but as the Congress president, she was the ‘driving force’ behind the Congress-led government in 2010 when the helicopter deal was inked.

But there is a crucial difference between the way Rajiv-led Congress handled the Bofors case and Sonia-led Congress dealt with the AgustaWestland case when the scam broke out. On 16 April, 1987, barely a year after the gun deal was signed, Swedish National Radio reported that Bofors had paid bribes to secure the Howitzer contract. The Howitzer deal was swung by the AE Services of Ottavio Quattrocchi, an Italian defence dealer. Sten Lindstrom, the then head of the Swedish police and the main whistleblower in the case (he secretly supplied information and documents to Chitra Subramanyam and N Ram of The Hindu), said that although there was no proof that Rajiv received any pay-off, there was enough evidence that he was responsible for the cover-up to protect Quattrocchi.

It was common knowledge that Quattrocchi and his wife had unfettered access to the prime minister’s house (thanks to the Italian connection with Sonia Gandhi nee Maino). It was easy to surmise that Quattrocchi used his proximity to the Gandhi family to swing the deal. Swedish investigations revealed that his AE Services entered an agreement with the AB Bofors on 15 November, 1985 to clinch the Howitzer deal, with the stipulation that AES was entitled to an attractive commission if the contract was signed before 31 March, 1986.  Quattrocchi’s Sonia connection paid off; the deal was signed on 24 March, 1986, within four months of the agreement between the AES and Bofors.

Evidently, it was done at supersonic speed, going by the average time taken to conclude defence deals.

The AgustaWestland affair, on the other hand, does not suggest any nexus between Sonia and the middlemen in the deal. In fact, neither Guido Haschke nor Christian Michel, the two middlemen named by the Italian court, hadn't met Sonia or Rahul (by their own admission and by the Italian prosecution evidence) even once. AK Antony, the then defence minister, who was notorious for going slow on defence deals to avoid any whiff of corruption, went ahead with the helicopter deal in 2010 after years of deliberations, with a strong belief that no kickback was involved.

But that belief turned out to be false when the Italian authorities revealed that $30 million was paid to the commission agents — a part of which found its way to the Indian officials. Although no politician’s name was mentioned in the chargesheet, the Italian court conclusively held that SP Tyagi, then Air Force Chief, had met the middlemen several times and his cousins received the bribe on his behalf.

The reaction of the Indian government to this revelation was swift.

The defence minister told the Parliament that it was possible that bribes were paid to some people. In order to put all speculation to rest, he declared the chopper deal off for breach of contract by the AgustaWestland management that paid commission to the agents. Indian government moved the Italian court to recover the money paid to the company and got back the entire Rs 2,000 crore that had been paid in the first instalment to procure the helicopters. India was able to recover the full sum (but the three helicopters supplied to India have not been taken back; that is a bonus).

It was a swift move; many international commentators pilloried India for taking such a drastic step on the basis of mere accusations (the accusations surfaced in 2012, the helicopter deal was cancelled in 2013; the Italian lower court gave AgustaWestland a clean chit in 2015 and said that no bribe was paid; but the higher court reversed the verdict in 2016 and found evidence of the kickback).

Contrast this with the Bofors scenario.

When the Bofors scam was unveiled, Rajiv was the prime minister who also held the defence portfolio. The minister of state for defence, Arun Singh, strongly pitched for the cancellation of the Bofors deal. Even the then chief of the army, General K Sundarji, pleaded for the cancellation of the deal ‘to restore the honour of the country and the army’. But Rajiv emphatically said that the Bofors deal was there to stay and that India could not be influenced by the foreign countries with regard to its defence procurement.

Arun Singh showed the courage of conviction to resign and retire from politics.

Bofors became the metaphor for corruption at high places. Rajiv's government went out of its way to do the cover-up. Even the Narasimha Rao government continued the cover-up operation. In 1992, Madhav Sinh Solanki, the then foreign minister, met the Swiss foreign minister, and requested him to ensure that the Swiss authorities did not cooperate with the Indian investigators (regarding information on the Swiss bank accounts of Quattrocchi). When this news became public, Solanki had to resign.

The accusing finger clearly pointed at Sonia-Rajiv for the Bofors cover-up, but, as per the evidence available today, no case can be made out against Sonia in the VIP chopper deal (either in its execution or its aftermath).

The courts in India dropped the Bofors case after 25 years and after the CBI and legal officials had incurred Rs 250 crore worth of expenses by repeatedly travelling to foreign shores for investigation. We will have to wait to see how long it will take for the Indian courts to abandon the pursuit of the AgustaWestland case.

PS: In the Bofors case, Subramanian Swamy was a staunch defender of Rajiv. He had poured scorn on VP Singh and Arun Singh for turning against the prime minister, instead of standing by him, in the Bofors case. He had then accused the BJP of politicising a critical defence deal and, in the process, compromising India’s security. In the AgustaWestland case, Swamy is spearheading the BJP campaign against Sonia Gandhi.

PPS: The chameleon knows when to change its colours.

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Updated Date: May 02, 2016 18:17:05 IST