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Kickbacks in $208-million Embraer deal: What should we expect next?

Concurrent to the breaking news about kickbacks in the $208 million jet deal with Brazilian aircraft maker Embraer, comes media report that Embraer has set aside $200 million to pay for any fines following an investigation by US authorities. According to media reports in Sao Paulo, Embraer is being probed by prosecutors in Brazil and the US Justice Department over commissions allegedly paid to a UK-based defence agent for clinching the 2008 deal.

This is quite a circuitous probe considering that the Embraer jets were purchased by India. The deal in question was signed between Embraer and the Defence Research and Development Organisation (DRDO) in 2008 for three aircraft equipped with indigenous radars for airborne early warning and control systems (AEW&C). But the probe by US Justice Department is not because of the deal between Embraer and India, because Embraer has done similar deals with other countries including Saudi Arabia, and the Dominican Republic in the Americas.

 Kickbacks in 8-million Embraer deal: What should we expect next?

Representational image of Embraer jets. Wikimedia Commons

The mere fact that Embraer has set aside $200 million to pay for any fine is proof enough that bribes have been paid.

While American prosecutors have been told that a former sales director of Embraer who worked in Europe admitted to American investigators that a payment of commissions to facilitate the sale of aircraft to the Saudis had been made, in case of India, the plea bargainer has said that Embraer had contracted a representative to assist in the sale of a surveillance system to the Indian government. But what happens beyond the tumult of excitement between now and say the elections next year in UP, Punjab, Uttrakhand, Himachal and Goa?

Plenty of political mudslinging earning brownie points and blunt denials — till the next scam takes over? Take the revelation that Zakir Naik paid Rs 50 lakh to the Rajiv Gandhi Foundation, to which the response is that money was never used and returned in 2016 — end of story. After all Rs 50 lakh is pocket change that perhaps wouldn’t cover a month or two worth of expenditure on Hurriyat separatists.

In the Embraer case, the usual narrative is unfolding, perhaps with slight variance.

This time it is the DRDO that has asked Embraer to forward details of bribes paid within 15 days. The 15-day bit couldn’t have scared Embraer, but the simple question is why the DRDO and not the Ministry of Defence (MoD) has asked Embraer for these details. No such deal would have been possible without the express sanction of the MoD and consequentially the higher cut of the alleged bribes would have been secured by MoD incumbents, aside from the PMO and the political head of the then ruling party.

It is a well-established fact the joint secretaries of MoD are on the boards of all DRDO-DPSUs and Ordnance Factory Board and not a rat can sigh without the sanction of the bosses. The well-knit mafia handles kickbacks in defence deals whether indigenous or imports. Then there is also the grapevine of monthly pay packets and sponsored tours at home and abroad that even include holy places like Tirupati for the pious, much before the present government thought about religious circuits by Indian Railways.

So, where do we go from here? The so-called “UK-based defence agent” may in all probability be part of the same clique that channelises western funds to all major political parties in India for subsidising massive election expenditure year-by-year in a major way. To what extent the clique contributes to Club 160 is unknown, but its power can be gauged from the fact it has had effective say in the appointments in the cabinet even to the extent of allotment of portfolios of Union ministers — which has been the nukkad talk by common man past few years. This is besides exerting power through perception-management and manipulating events in India through NGOs.

For that matter Hillary Clinton too admits in her book Hard Choices that she prefers to operate through NGOs. I wonder who prepared the Indian invitee list for the recent canonisation of Mother Teresa at the Vatican anyway. Apparently, the present government has scanned in detail all defence deals in past years, which is a good beginning. But when it comes to translating the findings on ground, anything worthwhile against the kingpins has yet to be seen. Take the hullabaloo created in the AugustaWestland VVIP helicopters case, where it has even emerged that considerable amount of bribes was paid to the media, nothing much has come out aside from pointing fingers at the Tyagi brothers.

Which bureaucrat or government official has been prosecuted and punished despite the scores of defence scams that India has suffered? The only case that comes to mind is the Sudipta Ghosh case in 2009, wherein Sudipto Ghosh, director-general, Ordnance Factory Board was arrested by the CBI for allegedly taking bribes from two Indian and four foreign companies that had been blacklisted. He probably took the foolish step of pocketing the bribe individually without sharing the booty. But this is unlikely to be the case in the Embraer kickbacks.

The mere fact that Embraer has set aside $200 million to pay for any fine is proof enough that bribes have been paid.

To top this, the recent orders that no government official can be investigated by intelligence agencies without the sanction of the government automatically works to the advantage of the mafia, especially when the intelligence and investigative agencies are not even under parliamentary oversight. Obviously any findings would be first weighed ‘politically’ before being made public and follow up action taken accordingly. That is why the Tatra truck scam spanning many decades and governments is not talked about at all.

So in all probability, the Embraer kickback scam will follow the same pattern as AugustaWestland; there will be lots of media activity, TV channels will earn TRPs, teams may fly to Brazil and London as part of investigative tourism, probes may be on for some period of time, names of one or few smaller fish may be splashed all over the media and all before the dust settles to set the stage for more sensational news: Like who is pumping crores worth of marijuana through Tripura — China, Myanmar, Southeast Asian narcotics mafia and who is facilitating it from within India. And don’t tell me you believe the Purulai drop arms were for Anand Margis!

The author is a veteran Lieutenant-General of the Indian Army

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Updated Date: Sep 12, 2016 10:41:19 IST