Bofors: How Rajiv Gandhi did everything to scuttle the probe

Congress spokespersons believe that trying to bring the Bofors payoff scandal back to life is like flogging a dead horse. But they have been quick to latch on to retired Swedish police chief Sten Lindstrom’s recent statement (read here) that there was no evidence to directly link Rajiv Gandhi to the payoffs.

But the main point that was missed is that Rajiv Gandhi moved heaven and earth to scuttle the investigations, and various Indian governments – even opposition-led ones like the NDA – failed to put in real efforts to get to the names, which would ultimately have led to Ottavio Quattrocchi, close friend of Sonia and Rajiv Gandhi. Thus the question is not whether Rajiv received any bribe for the Bofors deal, but why did he and his close ring of officials go out of the way to protect Quattrocchi – unless it was to protect the linkage to him and Sonia.

Firstpost sifted through some of the old papers relating to the Bofors case in the late 1980s, and what Rajiv Gandhi’s role was in scuttling efforts to get to the bottom of the scandal.  Here’s what we found (with some background included).

The Bofors deal was struck in 1986 and months later Swedish Radio reported that Bofors had paid commissions to middlemen for securing the Rs 1,600 crore deal in contravention of Indian laws. But for three years, the Rajiv Gandhi-led Congress government did not let the Central Bureau of Investigation (CBI) register an FIR in the case. The FIR happened only on 22 January 1990, when VP Singh ousted Rajiv Gandhi in the 1989 election.

The CBI’s old Bofors files bear out the statements of Sten Lindstrom. They did not find a payoff link to Rajiv Gandhi, but there is no doubt he held up the investigations for fairly obvious reasons: his family’s proximity with Ottavio Quattrocchi, who was a proven recipient of illegal money.

Rajiv Gandhi moved heaven and earth to scuttle the investigations, and various Indian governments – even opposition-led ones like the NDA – failed to put in real efforts to get to the names, which would ultimately have led to Quattrocchi. Reuters

The Bofors FIR begins with a note: “Subsequent to the Bofors contract, when allegations of bribery were repeatedly made by the media and in Parliament from April 1987 onwards, only ineffective and half-hearted steps were taken and no serious or purposeful effort was made by the concerned public servants of the government of India to get the true facts. On the other hand, whenever any occasion arose or specific suggestions were made of steps that could be taken to find out the truth, efforts were successfully made, as set out hereafter, to foil all attempts at it and to suppress the same.’’

Although the CBI’s own role appears shady during stints of Congress-led governments, it did not deter the organisation from documenting how the investigations were systematically delayed over the years. And Rajiv Gandhi’s role is quite evident in the CBI files.

In June 1987, when the entire country was concerned about the Bofors scandal, the then Minister of State for Defence Arun Singh prepared a note and got ratified it by the then Defence Minister KC Pant. The note was categorical that the Indian government should threaten to snap diplomatic ties with Sweden and cancel the Bofors gun deal if Bofors would not give names of middlemen.

“In my view we must be prepared to go to this extent of cancellation because our very credibility as a government is at stake and, what is worse, the credibility of the entire process of defence acquisitions is also at stake,’’ Arun Singh said in his 'draft’ letter.

When the letter was sent to Rajiv Gandhi for final approval, he wrote back on 15 June 1987: “It is unfortunate that MOS/AS has put his personal prestige above the security of the nation before even evaluating all aspects. I appreciate his feelings as he had been dealing with defence almost completely on his own with my full support but that is not adequate reason to be ready to compromise the security of the nation.

“Has he evaluated the actual position vis-a-vis security? Has he evaluated the financial loss of a cancellation? Has he evaluated the degree of breach of contract by Bofors, if any? Has he evaluated the consequences for all future defence purchases if we cancel a contract unilaterally? Has he evaluated how rival manufacturers will behave in the future? Has he evaluated how GOI prestige will plummet if we unilaterally cancel a contract that has not been violated?

“To the best of my belief the Swedish Audit report upholds GOI position and does not contradict it. What we need to do is to get to the roots and find out what precisely has been happening and who all are involved. Knee-jerk reactions and stomach cramps will not serve any purpose. RRM (Arun Singh) has run the ministry fairly well but there is no reason to panic, specially if one’s conscience is clear.”

Clearly, Rajiv Gandhi played the national security card to stymie the probe.

Continues on the next page

This note of Rajiv Gandhi set the tone for further investigations into Bofors. The first result was Arun Singh’s resignation three days later.

However, the efforts to get to the truth did not stop here. Even as Rajiv Gandhi was berating Arun Singh for not considering security interests while threatening Bofors with cancellation, the army saw no concerns with Arun Singh’s strategy.

CBI files show that the then Indian Army chief, General K Sundarji, wrote a note to then Defence Secretary SK Bhatnagar: “If India threatened to cancel the contract with Bofors, there was a 99.9 percent chance that Bofors would ‘cough up’ the information about the persons who had received the money and that in the event of actual cancellation of the contract, the delay caused in acquiring an alternate gun could be borne by India.”

In an interview to India Today, General Sundarji also disclosed that he had conveyed the same view to Gopi Arora, then Special Secretary in the Prime Minister’s Office.

General Sundarji’s note, however, was found awkward by the Rajiv Gandhi administration. And SK Bhatnagar did ask him to modify the note. When he refused to do so, Bhatnagar returned his note. “I recommended that in the interest of vindicating National Honour we apply full pressure on Bofors to part with the information needed for legal action against the culprits and accept the risk that this might, in the worst case, lead to a cancellation of the contract,’’ General Sundarji stated in the interview (which the CBI has quoted during the Bofors investigations).

So here was a situation when all the top brass of the Indian government were on the same page in June 1987. The country’s army chief asserted that cancellation of the Bofors deal would not affect security. The Attorney General for India too had given advice to the Ministry of Defence that the Bofors contract could be cancelled. Arun Singh and KC Pant had already spoken in favour of threatening Bofors with cancellation for getting names of the middlemen. Even SK Bhatnagar was for serving the 'cancellation’ threat.

In his recent interview, Lindstrom notes that even without these threats, but fearing cancellation, Bofors actually “sent its top executives to India with the one-point task of giving out the names. Nobody of any consequence received them.”

How could this have happened without pressure from the highest in the land?

The pressure was evident from the fact that a month later, in July 1987, Bhatnagar did a volte face and expressed a totally different view opposing the threat of cancellation of the Bofors contract. “There are reasons to believe that SK Bhatnagar did so either on his own or was prevailed upon to do so,” the CBI FIR says.

Not only this. On 16 September 1987, the CBI files say, Swedish Chief Prosecutor Lars Ringberg made a request to India, through Interpol, for assistance in his enquiries from the government of India. “Are the Indian investigation authorities interested in exchange of information with the Swedish preliminary leaders?” asked Ringberg’s letter.

“Apart from referring the message of Lars Ringberg to JPC (Joint Parliamentary Committee in India), no further action was taken on the message,’’ the CBI files say. In fact, Ringberg had to withdraw the inquiry inconclusively because of non-assistance of the Indian government.

“A judicial inquiry similar to our preliminary inquiry concerning possible bribery offences has not been commenced in India. Thus, neither written nor oral evidence has been obtained through the inquiry undertaken with regard to whom payments were made and the reasons for them. In view of this, and since it cannot be expected that information of decisive importance for the matter of prosecution could be obtained by continuing the inquiry, the preliminary inquiry is withdrawn,’’ remarked Ringberg in his statement recorded on 28 January 1988.

In 1989, Rajiv Gandhi was ousted and VP Singh replaced him. In May 1991, Rajiv Gandhi was killed in a terrorist attack in Chennai. The Bofors case literally crawled despite conclusive evidence of Quattrocchi receiving illegal money as middleman even after Rajiv Gandhi’s death.

On 20 October 1993, the CBI, for the first time, put up a proposal for issuing a letter rogatory to the Liechtenstein government for help in the Bofors probe, since the government was willing to help. But Prime Minister Narasimha Rao did not agree to the CBI’s request.

When Joginder Singh joined as CBI Director in 1996, only one witness, that is a retired under-secretary in the defence ministry, had been examined three times. “It was a hot case and nobody was willing to touch it, much less investigate it. Even I was advised that it would be in my interest not to wake the sleeping giants,” Joginder Singh said.

Despite a Bofors charge-sheet naming Rajiv Gandhi and dropping charges against him at the same time because he was dead, the truth has not come out so far. Despite recording consistent delays by the Rajiv Gandhi-led administration (in which Gopi Arora, Special Secretary to Rajiv Gandhi, and Sarla Grewal, Principal Secretary to Rajiv Gandhi, were prominently mentioned) in the Bofors probe, the CBI rather chose to close the case.

Updated Date: Apr 27, 2012 13:28 PM

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