Corruption - Towards solutions?

V Raghunathan

At the outset, it must be reiterated that corruption is a function of both greed and fear. When the benefits of greed exceed the intensity of fear, corruption is imminent, as is the case in our country. Now the intensity of fear is a product of the probability of being caught and the consequences of being caught. In less corrupt countries, the corrupt have a high probability of being caught and when caught, may have to cough out up to three times the loot and serve stiff sentences, all of which make the intensity of fear very high - typically higher than the benefits of greed. In a country like ours on the other hand, particularly for the big crooks, fruits of greed are plentiful, while the probability of being caught is very low and so are the consequences of being caught. In short, unless we try to create systems which ensure that the intensity of fear exceeds the fruits of greed, we are unlikely to be able to tackle corruption.


Now that is the theory of corruption. Also in theory, it is not as if the law of our land is silent on corruption. It does provide for sundry punishment for the corrupt. Also, in the imagined 'majesty of law' all are equal. But in practice, the seriously rich and the powerful are far more equal than the lesser mortals! For instance, with the enforcement directorate and the CBI operating as the handmaidens of the Government or the ruling political party, the actual probability of bringing the big crooks to book is very small. Also, even in theory, unfortunately, our laws don't provide for very stringent punishment for the guilty. Rarely does it call for exemplary financial penalties even if that means bankrupting the guilty (think back on all the financial scamsters whether Harshad Mehta, Ketan Mehta, Telgi, et al. In practice, even the legal provisions for the guilty are substituted with mere transfers or resignations or molly-coddling in VIP suites of hospitals (think Ramalalinga Raju) when the crooks should be in prisons.


Given this huge gap between the theory and practice of how corruption is to be tackled, here are some suggestions (borrowing from my article 'Beyond the Year of Scams', ET, December 25, 2010), particularly in the light of Mrs. Sonia Gandhi's averred intent to fight corruption.


1. Pass a bill in parliament for transparent state funding of all elections in the country - an issue at the very root of rampant corruption, which trickles corruption down from the very top downwards.


2. Establish a rigorous regulatory regime with fast track courts exclusively for corruption cases. This will also call for fast-tracking of judicial reforms, and brining about extremely stringent punishment for the corrupt.


3. We are aware how corruption hacks away at the roots of patriotism (for example a corrupt sim-card vendor selling away sim-cards to Pakistani Terrorists, or Army Generals usurping apartments meant for war widows, thus demoralizing the armed forces, etc. If Dr. Binayak Sen's playing a postman between some key Maoists is sedition, it is difficult to see why corruption cannot be equated with un-patriotism.


4. Taking a cue from on-line railway reservations that reduced corruption in railway reservations, much of the discretionary powers at lower levels of the government mechanism must be dispensed with in favour of transparent web-based technology for routine governmental payments and receipts, and tracking of all property taxes, tax refunds, stamp duty, passport or RTO applications, licenses and what have you. Apprehensions on how the rural India will make use of such a system may be addressed though internet kiosks manned by ex-service men or self-employed graduates could be a good starting point, much like the STD booths of yore.


5. Discretion on the part of Government minions can also be minimized by simplifying many of the processes. For example, in Scandinavian countries, property taxes are paid on the basis of the frontage of the houses, which entails little computational complications and hence relatively little room for corruption, since there can be little scope for hanky-panky in measuring the frontage of a property.


6. Provide a constitutional status to the Enforcement Directorate and the Central Bureau of Investigation along the lines of the Election Commission, so that they are not handmaidens of any government or political party, and ensure that they shall have the freedom to act independently and speedily against the erring big fish.


7. Along similar lines, the more enlightened states should place the state police force under the powers of a politically insulated Lokayukta.


8. All natural resources and all land owned by the government (local governments included) for sale should be legislated to be offered transparently through on-line bidding mechanism, with highly restricted discretionary powers or exceptions. What is more, the entire process should be available for perusal in the public domain.


9. Concessional land allocation (mostly restricted to prime properties in practically every city) to civil servants, members of judiciary, armed forces, police et al, should be through a clearly spelt out process with due justification which should be made available for scrutiny on the public domain, before the allocation is made.


10. Both parliamentarians and bureaucracy should be extremely well paid, but tolerance for corruption should be brought down to zero. A parliamentarian or a Secretary in the Government of India may be paid a salary as high as, say, Rs. one crore a year, but a corrupt Minister or Secretary should be divested of several times the stolen assets and also awarded rigorous imprisonment of several years.


The problems with such "solutions' is who implements them? How or why would the polity muster the necessary political will to put such reforms in place? To these questions all one can say is that one hopes that by introducing some of these reforms, also inherent in some of the measures announced by the Congress President, the incumbent party in power will hope to emerge more credible than ever before, unless the opposition wrests that credibility - either of the two riding the wave of mass-scale public disillusionment with the wide-spread corruption. Depending on who dithers the fight against corruption, we the public will know who stands for or against corruption.


But no solution to corruption can be entirely outward looking. A country of a billion people cannot be corrupt merely because a handful of politicians or civil servants are corrupt or unwilling to change their corrupt ways. The fact is, as a people, we have become slaves to corruption. If we have to free ourselves from this slavery as Mahatma Gandhi advocated, each and every one of us must become the change we want to see in ourselves. We cannot wait for others to change themselves first. Because if doing so is good strategy for us, it must be good strategy for others as well, so that no one ever makes a beginning at the change, waiting for others to change first (I have expanded on this theme in my book Games Indians Play (Penguin).


And finally, we must learn to socially boycott those whom we know to have come to wealth through corrupt means. We must stop inviting them to public seminars, conferences and functions or to our weddings. The press should black out such characters except to expose their dark deeds. They should be treated with the contempt they deserve for looting our country. We must recognize that corruption is not a 'victimless' crime. In fact it is a crime of which each and every Indian is a victim. It is this crime that ensures that only 13 paise of every rupee of the public spend reaches the target. And this is the reason why six decades after independence, a large majority of our people does not have access to the most basic amenities of life, while our rulers -- some of whom are supposedly our servants - amass wealth in Swiss Banks.


So let us all, including the four estates of the nation, make a resolution for a 2011 that will define a new India that will go to war against corruption.

http://blogs.timesofindia.indiatimes.com/Outraged/entry/corruption-towards-solutions

How to eliminate corruption? Abolish the laws

(Former telecom minister A Raja (C) arrives at a court for a hearing in New Delhi.

M R Venkatesh


As the 2G scam is now reaching its home stretch the Union Law Minister set the cat amongst the pigeons when he is reported to have stated that the judiciary needs to understand the "political economy" of the country.

Speaking to The Indian Express last week, he is reported to have stated: "What will affect the functioning of the government if other institutions do not understand the kind of political economy we are faced with today: what is needed to encourage growth and investment? If you lock up top businessmen, will investment come? What optimal structure should be put in place for investment to come?"

Naturally, this observation did not go well with the Hon'ble Supreme Court. Taking exception to these remarks the Court expressed its displeasure amidst hearing of the bail pleas of a number of corporate executives in the 2G case.

Justice H L Dattu reportedly told Additional Solicitor-General (ASG) Harin P. Raval:  "If reports of the Minister's comments are true, it is disturbing. Are you supporting the stand of the minister? Are we wasting our time? If you file a memo, please release them, we will release them on bail."

Justice G S Singhvi is reported to have told the ASG "the news item was a surprise for us. It appears as if we are interested in keeping these businessmen behind bars. Is this news report/statement and what has been reported in the newspaper totally correct? It was in the headline of a leading newspaper. We are not interested in keeping them behind bars."

Union Law Minister Salman Khursheed.

Almost simultaneously and perhaps on cue, the Union Law Minister Salman Khursheed is also reported to have said that while it was for the courts to decide as to who should be locked up, he pointed out to the dictum of bail being the rule and jail an exception has been laid down by the Supreme Court itself.

In the process the Union law minister has inadvertently opened a Pandora's Box. Is jailing of the corrupt marring the investment climate in India? Is the minister completely oblivious to the extent of damage created by the scourge of corruption and its impact on the image of India? Is not corruption per se impacting investment into India?

Or is he attempting to re-define political economy of India of modern times – one which can be best described as "cash and carry?" What does he mean by "optimal structure" when world over governments claim to have a "zero tolerance" to corruption.

In short, is the law minister of the Union of India suggesting that we improve our tolerance to corruption and balance between corruption and growth? Is he suggesting that corruption is inevitable in a robust, growing and emerging economy?




Corruption derailing investment in India

In contrast, a widely circulated and hotly debated article titled - Warning Signs in Over Crony capitalism in India (by James Lamont and James Fontanella-Khan, Financial Express, (FE) March 21, 2011) captures the entire issue succinctly - "Even as the country becomes one of the great economic growth stories of the 21st century, significant members of the Indian elite fear it may be following Russia in developing a kind of crony capitalism dominated by powerful insiders."
The article goes on to add "A slew of recent corruption scandals - notably in telecommunications - has nourished anxieties that the combination of fantastic wealth creation and weak governance threatens to undermine India's long-term success."

Twenty years since reforms one is sure that the system still favours those with the right connections. Call it cronyism or corruption; it harms the Indian economy.

According to FE "Accusations of influence-peddling by powerful entrepreneurs, combined with a colluding state bureaucracy, has led commentators such as Arun Poorie, editor-in-chief of India Today Group, to identify corruption as the biggest issue confronting the country."


 
Crucially, the article points out that the international investor sentiment has turned sharply for the worse.
 
"Foreign capital flows have fallen. Nine out of 10 clients are not positive on India in the near future," says Suresh Mahadevan, head of research at UBS Securities in Mumbai. "Most of the bad news is already in the (market) price."
 
"We met with about 50 investors in Singapore and Hong Kong last week," says Rohini Malkani, economist at Citigroup in Mumbai. 

"About 70 per cent remain bearish on India, with investments, inflation, and politics topping the list of worries." That was in spring of 2011. As winter sets in, things have got bad to worse.
 
In short, the fact remains that corruption and not jailing industrialists (as suggested by the Union Law Minister) that is causing consternation amongst global as well as local investors.


 
Scam a way of life?

It may be noted that all these negative developments were hastened since late eighties when Indian economy underwent mild doses of reforms.

Contrary to popular belief that liberalisation of our economy would prevent corruption, the reforms process since the early 1990s is seen as having increased the opportunities for corruption. This is a paradox that remains unexplained.

The emergence of globalised corporations with huge financial and political powers disproportionate to the power of our local governments (manned by people without adequate understanding of the emergent situation) has provided an impetus for a very high level of corruption.

Perhaps we began liberalising, privatising and globalising the Indian economy without adequate preparation of our administration for the same.


 
The net consequence is that the nation has been a silent witness to massive doses of corruption.

Bofors, procurement of armaments for our armed forces, imports and exports of various edible items, food for oil and, of course, licensing spectrum for our telecom companies are a few cases in point not to speak of massive evasion of taxes.

The corruption involved in all these cases has been brazen, so much so that despite the availability of overwhelming evidence, precious little has been done, lest the system becomes dysfunctional. (In fact, in a hearing connected with the 2G issue, the counsel for the central government is reported to have said that probe by the court against high functionaries could "destabilise the system.")

Interestingly, all these point to a seamless integration of all players involved and it becomes virtually impossible to distinguish one from the other.

As Mrs. Indira Gandhi famously remarked in the 70's corruption is a global phenomenon. And it involves the business houses, politicians, bureaucracy, media, professionals and academicians.


 
But in the Indian context, there is something more - it is complex, sinister and crucially despite such massive levels of corruption, we have not been able to get at big fishes in any meaningful manner.

Therefore, it is rationalised that corruption has become a way of life in India. In the process, scam is India's gift to the English language which suggests the following paradigm - one, that indicates massive levels of corruption; two, the availability of irrefutable evidence; and three, the impotency of the law enforcers to punish those who violate the law with impunity.

It is this that is traumatizing the collective conscience of the nation is the fact that the judicial system has been unable to convict anyone from the ruling elite, despite overwhelming evidence available in such high-profile cases of corruption till date.

Corruption, according to John Christensen, (an authority on the subject of Tax Havens), is "the abuse of public interest and the undermining of public confidence in the integrity of the rules, systems and institutions that promote the public interest." In fact, market economics is all about the rules, systems and institutions.

Whenever rules are broken by those who seek to profit on the sly - as it happens more often than not in India - genuine investors turn negative about India.

Corruption is a Public-Private Partnership affair in India or simply PPP. It includes every possible economically corrosive activity such as insider-trading, tax evasion, rigging of markets, policy hijack, and plain embezzlement, all of which occur through a well-defined and pre-planned structure. 

Inexplicably, the law minister does not realise that all these economic crimes are highly damaging to our economy and social fabric.

Naturally, if excesses are committed by the courts, it is seen by all right thinking citizens as to remedy the excesses committed by every other player in our economy.

Surely, when courts do their duty and jail errant industrialists as the prescribed by the law of the land, the rule of law will once again be established. And when it happens genuine investors will flock back to India - a fact that is lost on the Union Law Minister. And that to me is the sad state of affairs.

It is preposterous for him in blaming the law of the land for impeding investment into the country! Perhaps to remedy the situation, it is suggested that he may well use his authority and delete corruption laws from the statute book.

Needless to emphasise, if there are no corruption laws, there would be no enquiry, FIR, arrests, bail, trials and jailing of industrialists.
That in turn could possibly eliminate both corruption and jailing big industrialists. What an idea Sirji?

---

The author is a Chennai-based Chartered Accountant. Comments can be made to mrv@mrv.net.in

 http://www.rediff.com/business/slide-show/slide-show-1-column-how-to-eliminate-corruption-abolish-the-laws/20111021.htm

Zero tolerance, secret billions

 

S Gurumurthy

  Jan 2011

 


What was Rajiv Gandhi’s fatal error in politics? It does not need a seer to say that it was his claim to honesty — branding himself as ‘Mr Clean’ — that proved fatal to him. Indira Gandhi was his contrast. Asked about corruption in her government, she said nonchalantly, ‘it was a global phenomenon’. This was in 1983. An honest Delhi High Court judge even lamented how could corruption be controlled when someone holding such a high position had almost rationalised it. The result, no one could ever charge Indira Gandhi with corruption, because she never claimed to be clean. But, ambitious to look ideal, Rajiv proclaimed honesty and so provoked scrutiny; in contrast, Indira, opting to be practical, immunised herself against scrutiny. Eventually, Rajiv’s claim to honesty became the very cross on which he was crucified in the 1989 elections when the Bofors gun shot the Congress out of power. The lesson to the political class was: don’t claim to be honest, if you really are not so. The hard lesson seems forgotten now by the Gandhi family itself. Sonia Gandhi, instead of following Indira’s safe path, is wrongly caught on Rajiv’s risky steps. The consequences seem to be ominous. Will the politics of 1987 to 1989 repeat?

Following Rajiv and forgetting Indira, Sonia Gandhi proclaimed ‘zero tolerance’ to corruption at a party rally in Allahabad in November 2010. She repeated it at the Congress plenary in Delhi weeks later. 
Asking the cadre to take the corrupt head on, she said that her party was ‘prompt’ in acting against the corrupt; ‘never spared the corrupt’ because corruption impedes development’. This was almost how Rajiv Gandhi spoke in the Congress centenary in Mumbai 25 years ago. Two crucial differences marked Rajiv away from Sonia. First, when Rajiv claimed to be ‘Mr Clean’, he had no scams to defend against. But, Sonia claims to be honest amidst huge and continuing scams — CWG, Adarsh, 2G Spectrum allocation scam…. Next, Rajiv had a clean slate to begin with, with no known skeletons in his cupboard till the Bofors scam smashed his ‘Mr Clean’ image. In contrast, Sonia’s slate is full of credible exposures of bribes and pay-offs in billions of dollars secreted in Swiss bank accounts, not counting Quattrocchi’s millions from Bofors. To make it worse, for almost two decades now, she has not dared to deny the exposures or sue the famous Swiss magazine or the Russian investigative journalist who had put out evidence of bribe against the Sonia family. Seen against this background, Sonia’s vow to act against the corrupt seems like a suspect hooting ‘catch the thief’ and scooting away. This is the main story that unfolds here.

$2.2 billions to 11 billions! 

A stunning exposure on Sonia Gandhi’s secret billions in Swiss banks came, surprisingly, from Switzerland itself, where the world’s corrupt stash away their booty. In its issue of November 19, 1991, Schweizer Illustrierte, the most popular magazine of Switzerland, did an exposé of over a dozen politicians of the third world, including Rajiv Gandhi, who had stashed away their bribe monies in Swiss banks. Schweizer Illustrierte, not a rag, sells some 2,15,000 copies and has a readership of 9,17,000 — almost a sixth of Swiss adult population. Citing the newly opened KGB records, the magazine reported ‘that Sonia Gandhi the widow of the former Prime Minister Rajiv Gandhi was controlling secret account with 2.5 billion Swiss Francs (equal to $2.2 billion) in her minor son’s name’. The $2.2 billion account must have existed from before June 1988 when Rahul Gandhi attained majority. The loot in today’s rupee value equals almost Rs 10,000 crore. Swiss banks invest and multiply the clients’ monies, not keep them buried. Had it been invested in safe long-term securities, the $.2.2 billion bribe would have multiplied to $9.41 billion (Rs 42,345 crore) by 2009. If it had been put in US stocks, it would have swelled to $12.97 billion (Rs 58,365 crore). If, as most likely, it were invested in long-term bonds and stocks as 50:50, it would have grown to $11.19 billion (Rs 50,355 crore). Before the global financial meltdown in 2008, the $2.2 billion bribes in stocks would have peaked at $18.66 billion (Rs 83,900 crore). By any calculation the present size of the $2.2 billion secret funds of the family in Swiss banks seems huge — anywhere between Rs 43,000 plus to some Rs 84,000 crore! 

KGB papers

 The second exposé, emanating from the archives of the Russian spy outfit KGB, is far more serious. It says that the Gandhi family has accepted political pay-offs from the KGB — a clear case of treason besides bribe. In her book The State Within a State: The KGB and its Hold on Russia-Past, Present, and Future, Yevgenia Albats, an acclaimed investigative journalist, says: “A letter signed by Victor Chebrikov, who replaced Andropov as the KGB head in 1982 noted: ‘the USSR KGB maintains contact with the son of the Premier Minister Rajiv Gandhi (of India). R Gandhi expresses deep gratitude for the benefits accruing to the Prime Minister’s family from the commercial dealings of the firm he controls in co-operation with the Soviet foreign trade organisations. R Gandhi reports confidentially that a substantial portion of the funds obtained through this channel are used to support the party of R Gandhi’.” (p.223). Albats has also disclosed that, in December 2005, KGB chief Victor Chebrikov had asked for authorisation from the Central Committee of the Communist Party of the Soviet Union, “to make payments in US dollars to the family members of Rajiv Gandhi, namely Sonia Gandhi, Rahul Gandhi and Ms Paola Maino, mother of Sonia Gandhi.” And even before Albats’ book came out the Russian media had leaked out the details of the pay-offs. Based on the leaks, on July 4, 1992, The Hindu had reported: “the Russian Foreign Intelligence Service admits the possibility that the KGB could have been involved in arranging profitable Soviet contract for the company controlled by Rajiv Gandhi family”.

Indian media

 Rajiv Gandhi’s sad demise delayed the Swiss and Russian exposé on Sonia being picked up here. But Indian media’s interest in it actually coincided with Sonia Gandhi assuming leadership of the Congress. A G Noorani, a well-known columnist, had reported on both Schweizer Illustrierte and Albats’ exposés in Statesman (December 31, 1988). Subramanian Swamy had put out the photocopies of the pages of Schweizer Illustrierte and Albats’ book in his website along with the mail of the Swiss magazine dated February 23, 2002 confirming that in its article of November 1991 it had named Rajiv Gandhi with a total of Swiss Franc 2.5 billion ($2.2 billion) in secret account; it had also offered to supply a original copy of the magazine to Swamy. (See: http://www.janataparty.org/annexures/ann10p43.html) These facts were again recalled in my article in The New Indian Express (April 29, 2009) written in response to Sonia Gandhi speech at Mangalore (April 27, 2009) declaring that, “the Congress was taking steps to address the issue of untaxed Indian money in Swiss banks”. The article had questioned her about her family’s corrupt wealth in Swiss banks in the context of her vow to bring back the monies stashed away abroad. Rajinder Puri, a reputed journalist, has also earlier written on the KGB disclosures in his column on August 15, 2006. Recently, in India Today (December 27, 2010) the redoubtable Ram Jethmalani has referred to the Swiss exposé, asking where is that money now? So the Indian media too has repeatedly published the details of the secret billions of the Gandhi family investigated by the Swiss and Russian journalists. Amal Datta (CPI(M)) had raised the $2.2 billion issue in Parliament on December 7, 1991, but Speaker Shivraj Patil expunged the Gandhi name from the proceedings!

Self-incriminating

 But, what has been the response of Sonia or Rahul, major after June 1988, to the investigation by Schweizer Illustrierte and Albats and to the Indian media’s repeated references to their investigation? It can be summed up in one word: Silence. Thus, apart from the exposés, the deafening silence of the Gandhis itself constitutes the most damaging and self-incriminating evidence of the family’s guilt. When Schweizer Illustrierte alleged that Sonia had held Rajiv Gandhi’s bribes in Rahul’s name in Swiss banks, neither she nor the son, protested, or sued the magazine, then or later; nor did they sue A G Noorani or Statesman when they repeated it in 1998, or later; nor would they sue Subramanian Swamy when he put it on his website in 2002; neither did they sue me, or the Express when the article was carried in April 2009. When major papers, The Hindu and The Times of India included, had carried the expose on KGB payments in the year 1992 itself adding that the Russian government was embarrassed by the disclosures, neither of the Gandhis challenged or sued them; nor did they sue Yevgenia Albats when she wrote about KGB payments to Rajiv Gandhi in 1994. Neither did they act against  Swamy when he put Albats’ book pages on his website or when Rajinder Puri, a well-known journalist, wrote about it in his column on August 15, 2006. However, a feeble but proxy suit was filed by Sonia loyalists to defend her reputation when Albats’ exposé was made part of the full-page advertisement in The New York Times in 2007 issued by some NRIs to ‘unmask’ Sonia to the US audience, as they claimed. The suit was promptly dismissed by a US court because Sonia herself did not dare file the suit. Shockingly even that suit did not challenge the $2.2 billion Swiss account at all!Imagine that the report in Schweizer Illustrierte or in Albats book was false and Sonia Gandhi did not have those billions in secret accounts in Rahul Gandhi’s name or the family was not paid for its service to the KGB as alleged. How would they, as honest and outraged people, have reacted? Like how Morarji Desai, then retired and old at 87, responded in anger when, Seymour Hersh, a Pulitzer Prize-winning investigative journalist, had mentioned in his book that Morarji Desai was a ‘paid’ CIA mole in the Indian Cabinet. Morarji Desai forthwith filed a libel suit. Commenting in The American Spectator, Rael Jean Isaac wrote in 2004, five years after Morarji Desai had passed away, that Hersh habitually indulged in character assassination; and in his attempt to do down Henry Kissinger, Morarji Desai became the victim. Isaac added that Desai, 87, calling it a “sheer mad story”, reacted in outrage with a libel suit seeking $50 million in damages. When the suit came up, as Desai, 93, was too ill to travel to US, Kissinger testified on Desai’s behalf, flatly contradicted Hersh’s charge and stated that Desai had no connection to the CIA. That is how even retired and old persons, honest and so offended and outraged, would act. But see the self-incriminating contrast, the complete absence of such outrage, in Sonia, who is reigning as the chairperson of the UPA now, neither retired or tired like the nonagenarian Morarji Desai, being just 41 when the story broke out in Schweizer Illustrierte. Imagine, not Sonia or Rahul, but Advani or Modi had figured in the exposés of Schweizer Illustrierte or Albats. What would the media not have done to nail them? What would the government of Sonia not have done to fix them? 

Rs 20.80 lakh-crore loot

 The billions of the Gandhi family being both bribes and monies stashed away in Swiss banks, they are inextricably linked to the larger issue of bringing back the huge national wealth stashed abroad. All world nations, except India, are mad after their black wealth secreted in Swiss and like banks. But India has shown little enthusiasm to track the illicit funds of Indians in Swiss and other banks. Why such reticence?When during the run-up to the 2009 Lok Sabha elections, the BJP leader L K Advani promised to bringing back, if voted to power, Indian monies estimated between $500 billion and $1.4 trillion stashed abroad, the Congress first denied that there was such Indian money outside. But when the issue began gathering momentum, Manmohan Singh and Sonia Gandhi had to do damage control and promise that the Congress too would bring back the national wealth secreted abroad. Global Financial Integrity (GFI), a non-profit institution working against global black funds, has recently estimated that the Indian wealth secreted away is about $462 billion, approximately equal to Rs 20.80 lakh-crore. The GFI says that more than two-thirds of it was looted away under the liberalisation regime. This is what the GFI says about the character of the loot: “From 1948 through 2008, India lost a total of $213 billion in illicit financial flows (or illegal capital flight)” through “tax evasion, corruption, bribery and kickbacks, and criminal activities”. Does one need a seer to say under what head would the $2.2 billion in Sonia family’s secret account (which would have grown to $9 to $13 billion by now) fall? But accretions, if any, from the loot in 2G and CWG where the numbers are even bigger are not still accounted. Now comes the more critical, yet practical issue. When the Sonia Gandhi family is among the suspects who have secreted away monies abroad, how will it affect the efforts to bring back the wealth stashed away by others?

Looters safe 

Just a couple of examples will demonstrate how the government is unwilling to go after Indian money secreted abroad. As early as February 2008 the German authorities had collected information about illegal money kept by citizens of different countries in Lichtenstein bank. The German finance minister offered to provide the names of the account holders to any government interested in the names of its citizens. There were media reports that some 250 Indian names were found in the Lichtenstein Bank list. Yet, despite the open offer from Germany to provide the details, the UPA-II government has never showed interest in the Indian accounts in Lichtenstein Bank. The Times of India reported that “the ministry of finance and PMO have, however, not shown much interest in finding out about those who have their lockers on the secret banks of Liechtenstein which prides itself in its banking system”. But under mounting pressure the Indian government asked for details not under the open offer but strategically under India’s tax treaty with Germany. What is the difference? Under the tax treaty the information received would have to be kept confidential; but, if it were received openly, it can be disclosed to the public. Is any further evidence needed to prove that the government is keen to see that the names of Indians who had secreted monies abroad are not disclosed?The second is the sensational case of Hasan Ali, the alleged horse-breeder of Pune, who was found to have operated Swiss accounts involving over Rs 1.5 lakh-crore. The income tax department has levied a tax of Rs 71,848 crore on him for concealing Indian income secreted in Swiss accounts. This case is being buried now. The request sent to the Swiss government was deliberately made faulty to ensure that the Swiss would not provide details. Some big names in the ruling circles are reportedly linked to Hasan Ali. That explains why the government would not deepen the probe. It is Hasan Alis and the like who transport through hawala the bribes of the corrupt from India. If Hasan Ali is exposed, the corrupt will stand naked. This is how the hawala trader and the corrupt in India are mixed-up.Is it too much to conclude that thanks to Sonia family’s suspected billions in Swiss accounts the system cannot freely probe the $462 billion looted from India at all? Tail-pieces: The total wealth of both Gandhis, as per their election returns, is just Rs 363 lakh, Sonia owning no car. Sonia lamented on November 19, 2010, that graft and greed are on the rise in India!! Rahul said on December 19, 2010, that severe punishment should be given to the corrupt!!! Amen. 

comment@gurumurthy.net

About The Author:S Gurumurthy is a well-known commentator on political and economic issues

 http://expressbuzz.com/opinion/columnists/zero-tolerance-secret-billions/236261.html

Forbes on Bofors : Money! Guns! Corruption!

By Pranay Gupte and Rahul Singh, 07.07.97

NINETEEN EIGHTY-SIX. Two prime ministers chatted amiably as they strolled through a lush garden in New Delhi. Sweden's Olof Palme, 58, was the darling of the international socialist set, outspoken critic of U.S. "imperialism," self-proclaimed friend of the world's oppressed. India's Rajiv Gandhi, 41, had just come into office as "Mister Clean," promising to get rid of the high- and low-level corruption that has plagued democratic India almost from its birth in 1947. A modern man in an ancient land, Rajiv Gandhi was an aircraft pilot by profession, not a professional pol, and he came from a distinguished family, his mother the assassinated prime minister, Indira Gandhi, his grandfather the esteemed hero of Indian independence, Jawaharlal Nehru.

The one man stood for an Indian Camelot. The other for world peace and brotherhood.

During the course of that walk, Palme and Gandhi apparently agreed to a secret arms arrangement. India's military wanted powerful, high-tech howitzers to counter state-of-the-art artillery that the U.S. was selling India's old enemy, Pakistan. Palme wanted the contract for Bofors, an old-line Swedish gunmaker that badly needed the business if it was to avoid layoffs that would be politically costly for Palme's government.

Bofors got the business, a huge $1.3 billion order, even though India's generals had preferred a French artillery piece. Of the $1.3 billion, $250 million went for bribes. There can be no doubt that Rajiv Gandhi got a piece of the action. Whether Palme personally got anything is less clear, but few believe he did the deal just to preserve several hundred jobs.

The guns? Today the 410 Bofors howitzers gather dust in Indian military depots and may soon be decommissioned. When fired they overheated so badly that the barrels frequently had to be changed. And there were other technical defects.

Both prime ministers died before the affair was fully aired. In 1986 Palme was shot to death on a Stockholm street in a crime that has been neither solved nor seriously investigated. Gandhi was blown to pieces by a Tamil terrorist in 1991.

But despite determined efforts at cover-ups in India and Sweden;and in Switzerland, where some of the loot was stashed;the case refuses to die. In May India's Central Bureau of Investigation drew up a charge sheet;roughly equivalent to an indictment;containing bribery charges against 5 men and women and naming Rajiv Gandhi as one of 16 conspirators.

Among those named as conspirators is Ottavio Quattrocchi, an Italian dealmaker who was a close friend of Rajiv's wife, Sonia. Also linked to the case are the notorious Hinduja brothers of London, Srichand and Gopichand, who have denied receiving any bribes (Forbes, Dec. 28, 1987).

It is painfully clear that neither the Swedish nor the Indian government is anxious to delve deeply. Although some of the bribe money was long ago traced to Swiss Bank Corp., Cr dit Suisse, the Union Bank of Switzerland, Nordfinanz and Manufacturers Hanover Trust Geneva, it was not until this year that much was done about it. Indian prosecutors had asked Switzerland for more information, but the Hindujas and Quattrocchi went to Swiss cantonal courts to block the handing over of Bofors documents on the ground that their lives would be in danger if this were done.

After considerable delay, in July 1993 the Swiss Federal Court ruled that India was entitled to the documents. The Hindujas and their pals kept appealing, and not until January of this year were three cartons containing more than 500 bank documents and witness statements flown from Zurich and Geneva to New Delhi under heavy guard.

Four months later, despite continued foot-dragging by higher-ups, Joginder Singh, chief of the Indian Central Bureau of Investigation, launched his formal charges against Rajiv Gandhi and the 20 others.

The CBI charge sheet names known recipients of $40 million of the $250 million in bribes, among them Quattrocchi and his wife, Maria, and Washeshar Nath Chadha and his wife, Kanta. Among the conspirators named in the cover-up are Rajiv Gandhi, a former Indian foreign minister and India's onetime executive director of the International Monetary Fund. But many doubt that "conspiracy" was the full extent of Rajiv Gandhi's participation in the sorry affair.

Still unresolved are many questions: 1) Who got the other $210 million? 2) Did money go directly to Rajiv Gandhi and his wife? 3) What was in the deal for Olof Palme? and 4) Was Palme's mysterious death connected with the scandal?

India paid Bofors $1.3 billion for 410 dud Howitzers that overheated when fired.;

Sten Lindstrom is the chief investigator in the Bofors case in Sweden, where he heads the National Investigation Department, the equivalent of the FBI. He wants to see the Swiss documents, but says that the Swedish government is not giving him much support. Of course not. The government is dominated by Palme's old party, which has turned him into something of a saintly figure. This much is certain: The India deal wasn't Palme's only involvement in arms peddling. Though Swedish law clearly barred companies from selling weapons and ammunition to regions in tension, such as the Middle East and South Asia, Palme personally helped negotiate deals for Bofors with both Iraq and Iran.

In India, meanwhile, Inder Kumar Gujral, the current Indian prime minister, is reportedly under great pressure from Rajiv Gandhi's widow, Sonia, to play down the Bofors investigation. Though the CBI has implicated Rajiv, under Indian law the government is under no obligation to prosecute even if the equivalent of an indictment is handed down.

Gujral, though not personally involved in the scandal, depends for his majority on India's Congress Party, which is controlled by;Sonia Gandhi. To say that Gujral is in the hot seat is to understate the situation.

That the case stayed alive so long was because a courageous Indian-born reporter, Chitra Subramaniam, who braved death threats against herself and her children, resisted bribes from some of the involved middlemen. She persisted on the story, thus helping keep it alive in India. Subramaniam, who received a master's degree from Stanford University, is a resident of Geneva, Switzerland and now works for the Indian Express newspaper chain. "When you work on a story like this, some amount of caution gets built into you," Subramaniam told Forbes. "My phones were tapped, there were midnight calls. Then one fine day someone from London started depositing large sums of money in my personal bank account." She returned the money and discovered that the Union Bank of Switzerland, implicated in the Bofors case, had had a hand in it but would not disclose the source of the funds.

Subramaniam's then employer, the Madras newspaper the Hindu, abruptly stopped publishing her articles in 1989. "Too controversial," said her editor.

Controversial, indeed. Rajiv Gandhi had always claimed that no commissions would be paid. So did Palme. It was strictly government to government. That was not true. Subramaniam discovered that in 1985 Bofors had signed on with a company called A.E. Services, granting A.E. a 3% commission if it could win the gun contract by Mar. 31, 1986. Who was A.E. Services? A mail drop in Guilford, Surrey, U.K.

  Bofors got the contract just one week before its contract with A.E. Services was to end. Complicating the signing was the opposition from within the Indian army: In field trials, the French Sofma gun showed "acceptable parameters" in 18 characteristics against 11 for the Bofors howitzer. Moreover, the military requirement was for a range of 30 kilometers; the Sofma gun's range was 29.2 kilometers, while Bofors' had 21.5 kilometers. Years later, in an interview with the BBC, General Krishnaswami Sundarji, India's chief of army staff at the time of the Bofors deal, indicated that political pressure was put on him to select the Swedish gun and that he finally acceded.

Prime Minister Palme was murdered on Feb. 28, 1986, as he and his wife, Lisbeth, left a movie theater in Stockholm. No assassin has ever been found or identified. Palme was posthumously awarded India's Jawaharlal Nehru Prize for promoting world peace and understanding!

More mayhem: Barely a year after Palme's assassination, Carl-Fredrik Algernon, director of Sweden's arms agency, a key figure in a Bofors inquiry that had been secretly initiated by the Swedish police, fell;or was pushed;to his death before an incoming subway train at Stockholm's Central Station. His death was ruled a suicide, a verdict that almost no one in Sweden accepts. An hour before his death Algernon had had a heated argument with Bofors officials.

What's in those Swiss bank records now in New Delhi? Forbes has learned a few things about them. For example, that 188 million SEK (US $27 million) was traced to a Bofors agent in India, Washeshar Nath (Win) Chadha, in an account called Svenska Inc. at Swiss Bank Corp. Where's Chadha? When his name cropped up in the press in 1987, he fled from India to New York. When Indian authorities asked the U.S. to send him back to India for questioning, Chadha obtained a doctor's certificate showing that he had high blood pressure and therefore could not travel. This didn't stop him from emplaning almost immediately for Dubai, where he has been living in comfort since.

It took ten years of scandal and intrigue, but the truth about the Bofors arms deal is finally coming out.;

A few years later, Rajiv and Sonia's pal Ottavio Quattrocchi also fled India, and he now lives in Kuala Lumpur, Malaysia. Though Quattrocchi denies any involvement, Subramaniam confirms that some of the money went into his account.

The scandal has already taken a huge toll on Indian faith in democracy. In the 1989 general election the huge majority of Rajiv's Congress Party was wiped out, largely because of the Bofors scandal, though no official charges had been levied against Rajiv. The victor took as his slogan: "From all the streets, they are shouting that Rajiv Gandhi is a thief."

As the new prime minister, V.P. Singh launched a new investigation, but he lasted nine months. Another general election was called in 1991. Campaigning for a return to power, Rajiv Gandhi was assassinated in May 1991. In the resulting wave of public sympathy, his party returned to power, under the prime ministership of P.V. Narasimha Rao. As expected, the investigation was forgotten in the furor over the assassination and a subsequent financial crisis. The team that Singh had set up to investigate the scandal was disbanded.

But the scandal wouldn't die. On Feb. 17, 1991 a Swedish daily, Dagens Nyheter, carried a story by a respected journalist, Bo Andersson, quoting a Bofors source that "the money went to Rajiv."

Still the Indian government stonewalled. In February 1992 at the World Economic Forum in Davos, Indian Foreign Minister Madhavsinh Solanki slipped a letter to his Swiss counterpart. The letter asked the Swiss government to stop the investigation into the Bofors kickbacks. The Indian government denied that this had happened, but reporter Subramaniam, who was given a copy of the letter, broke the story, and Solanki resigned.

 Soon afterward, the Swiss authorities found that Quattrocchi had $7 million in a Swiss bank. When he failed to respond to an official letter asking that he prove that the account was not linked to the Bofors deal, the Swiss authorities froze the account.

Foreigners like to lecture the U.S. about our untrammeled greed and supposed materialism, but the U.S. remains the only country in the world with an official Foreign Corrupt Practices Act. We alone make it illegal for our businesspeople to bribe foreigners. For the other countries, all's fair in business.

Does this ten-year-old scandal really matter? Yes. It matters very much. If democracy is to survive in the developing world, it will have to clean up its image. The most hopeful word on this sorry affair comes from Sten Lindstrom, the honest Swedish cop who is still prodding his government to be more aggressive in its investigation of the Bofors affair. "I think," he says, "that the primary lesson of the Bofors story is that the truth will always come out. It may take years, in this case a decade, but you cannot hide the truth."



 http://www.forbes.com/forbes/1997/0707/6001112a.html

The PMO systematically and deliberately bypassed the embassy and dealt directly with the Swedish authorities

The Rediff Special/B M Oza

The mafias in Rajiv Gandhi's PMO were not as uncivilised as the likes of R K Dhawan, a stenographer-turned-politician, even a former minister. But the style was basically the same. Bluff and bluster. For example, immediately after the release of the Swedish Audit Board Report in early June 1987, I told Ronen Sen in one of our many telephonic exchanges that we should suspend the contract and sue Bofors for fraud and that I would call the Bofors management and give a dressing down for giving us false and misleading information in their report to me. He advised me not to do any such thing and warned that it may amount to breach of parliamentary privilege as a parliamentary committee was in the making to look into the matter. The parliamentary committee remained in the making for three months after that. I asked Ronen to send his instructions in writing. He never did. I sent my recommendations in writing. I never received any reply to them.

Similarly, I asked him to put down all his queries about my contact with Lars Ringberg in writing. He did not. Lars Eric Thunholm, chairman of the Nobel Group said in a public statement that Bofors paid commissions to its agents: if they were passed on as bribes to anybody in India, Bofors was not responsible. I was asked by the media to react. I reacted by saying that it was a highly irresponsible statement, as Bofors had given an undertaking not to have any middlemen in this contract and they were responsible to ensure that no commissions were paid to middlemen and that there were no bribes in this business.

The next day, Bofors apologised for Thunholm's statement. Ronen Sen rang up to admonish me. He emphatically asked me not to make any statements on Bofors in the future. I asked him to put down his instructions in writing. He did not.

Similarly, several instructions were given to me about calling Bofors representatives for JPC hearings and conditions governing these hearings. All this was done on the telephone. I insisted to have them in writing. It never happened. I repeatedly asked if the PMO was to function as the secretariat or channel of communication with the JPC. I never got any clarification. Yet orders and instructions kept coming from the PMO on behalf of the JPC. This culture of bluff and bluster should be remedied. The PMO should be made as much accountable for its conduct as other ministries and departments of the Government of India are.

The third important irregularity committed by the PMO was to systematically and deliberately bypass the embassy channel and deal directly with the Swedish authorities. This was highly undesirable. It undermined the importance of the traditional channels of diplomacy and lowered the prestige of the embassy in the eyes of the Swedish officials. The most guilty in the long line of officials was the top man, Rajiv Gandhi himself.

His telephone call to Ingvar Carlsson ostensibly to thank him (for what, one does not know) tied him in knots and caused a lot of confusion and embarrassment to the embassy and to me personally as already indicated in the previous pages. Minister of state Natwar Singh appeared to be in the habit of calling Sten Anderson, the Swedish foreign minister, for only he knew what. Other officials habitually called officials in the Swedish prime minister's office and transacted business on telephone. 'Hi Hans, Hi Chinmay' or 'Hi Ronen' were common greetings in exchange of telephone calls to transact business directly.

One did not mind that the officials were on first name terms. But by passing the embassy channel in dealing with a foreign government was a serious lapse. One can understand that in an emergency one had to resort to the instrument of a quick telephone call. But as a habitual way of transacting business it was not correct. Even when such calls were made in exceptional circumstances, a note recording the gist of conversation should always be prepared and placed on the file. This was never done.

These are the days of summit diplomacy. Heads of state/government consider it important to remain in personal touch with one another on important international or bilateral issues. But such calls should be few and about really important and urgent matters. They should not be just to say thank you for nothing.
 
Even the JPC has been guilty of bypassing the embassy channels. It could be argued that the JPC was not part of the Indian government machinery and therefore not obliged to use the embassy channels. But the selective use of the embassy channel was not in order. It used the embassy channel -- of course, through the PMO -- to call Bofors officials for its hearings in September 1987. But it did not use the embassy, nor did it even inform the embassy when it sent a CBI team to meet with Swedish government officials, viz the state secretary for foreign trade, director of the Swedish Central Bank and the war material inspector.

After all, they used the Indian government organ for this purpose, viz the CBI. It had to deal with Swedish government officials and not Swedish parliamentary organs. So what harm was there in informing and associating the Indian embassy in this exercise? The only explanation could be that they had no confidence in the head of the Indian mission in Stockholm, viz the Indian ambassador. The Indian ambassador did not suffer in the process. But the credibility of the JPC suffered.

Finally, corruption in politics and public life has spread to alarming proportions. It should be an urgent task to address how to deal with the monster of corruption. Clearly, parliamentary probe is not an answer as the JPC probe in the Bofors business has demonstrated. A parliamentary probe cannot be a substitute for an investigation by a professional criminal investigating agency. 

 http://www.rediff.com/news/jul/08bofor2.htm

In the Bofors scandal, if Rajiv Gandhi was the prime suspect, the PMO was the prime tool

The Rediff Special/ B M Oza

The long saga of the still continuing and still unfolding Bofors scandal, has been a chapter of our national shame and trauma. In fact, since Bofors several other and bigger scandals have surfaced involving politicians and bureaucrats. Clearly, the quality of our public life has gone down. The growing nexus between politicians and bureaucrats is as disturbing as it is ugly. Why? What are the reasons? What is the way out? Taking Bofors as a case study one can examine this phenomenon.

In the case of the Bofors scandal, if Rajiv Gandhi was the prime suspect, the PMO was the prime tool. The major irregularity committed by the PMO was violation of the Allocation of Business Rules. These Rules define the scope, content and jurisdiction of work of each individual ministry of the central government. These rules are not just a technical formality. They are intended to draw clear demarcation in the work of the ministers, avoid overlap and ensure proper coordination. The PMO is not supposed to deal directly with substantive matters which fall in the purview of the line ministries. The job of the PMO is to prepare summaries, notes and put up papers received from various ministries for orders of the prime minister.
In fact, there are written orders that nobody should address direct communications to the PMO. Communications should be addressed to the concerned line ministry, which may refer the matter to the PMO for PM's orders, if required. This is to ensure that the PMO is not saddled with too much work and there is not concentration of too much power in the PMO and it does not degenerate into a Super-Secretariat and undermine the work of other ministries.

According to these rules of business, all substantive work concerning Bofors fell in the jurisdiction of the ministry of defence. Even if Rajiv Gandhi was defence minister, all work at the official level had to be handled in the ministry of defence. In regard to communicating with the concerned Indian mission (embassy) abroad, the line ministry or the concerned ministry is required to route its communications through the ministry of external affairs or, in case of urgency, directly address them to the mission while keeping the ministry of external affairs in the picture by endorsing copies of these communications to the concerned territorial division of the ministry of external affairs.

This principle was systematically and consistently violated by the PMO. Everything in this matter, right from my recall from leave was handled by the PMO from the nodal point of Ronen Sen, joint secretary in the PMO. This was wrong. The dealing levels should have been Joint Secretary Daulet Singh in charge of Europe West division, which included Sweden, or Additional Secretary Arjun Asrani, who supervised Europe West division or Foreign Secretary K P S Menon, the head of the foreign office.

It was said that while the PMO sidelined the ministry of external affairs, the ministry of external affairs did not do anything to stand its ground in spite of my pleadings. In fact, the ministry of external affairs abdicated its authority to the PMO. As a foreign service officer who worked under the MEA for more than 33 years, nothing has hurt me more than the steady erosion in the role and the standing of the MEA within the government of India.

It is not only vis-a-vis the PMO. It spreads to the inter-ministerial dealings with other ministries as well, such as finance, commerce, industrial development, etc. They all habitually bypass the MEA and deal directly with their foreign counterparts in violation of rules. It is bad for the MEA, bad for the morale of the Indian Foreign Service officers and bad for the country. This rot should be arrested urgently.


The disadvantage of making the PMO the nodal point in dealing with the Bofors scandal was that it got interpreted as an indirect acknowledgment of the role of Rajiv Gandhi as the prime suspect in the Bofors scandal long before the media and the public and lately the CBI accused him of complicity and kickbacks in business with Bofors.

Second, all the instructions and messages came down to me from the PMO over telephone. In spite of my repeated pleadings, nothing was put down in writing. Most of my telephonic contacts were with Ronen Sen, the joint secretary in the PMO. But there was nothing from him in writing. One can understand the need for conveying instructions telephonically in view of urgency. But it should generally be followed up with a written communication or at least a note recorded on the file.

In course of my recent interaction with the CBI, I asked why Ronen Sen, the then joint secretary in the PMO who was instrumental in sending or rather telephonically conveying all these instructions, was not being summoned for questioning. I was told that the CBI worked on the basis of a availability of written evidence. They did not find his signature on any paper on the file. So how could they call him for questioning? I saw the file. Indeed, there was no record of any message or instruction given to me telephonically by Ronen Sen. The reason was easy to understand. One would be accountable for a written communication or order. But if nothing was put in writing, one could get away with bluff and bluster. 


 http://www.rediff.com/news/jul/08bofor1.htm

Did Rajiv take the Bofors bribes?

The Rediff Special/B M Oza

In a startling revelation this week, B M Oza, India's ambassador to Sweden between 1984 and 1988, has accused then prime minister Rajiv Gandhi of having taken bribes to sign the Bofors gun deal. We reproduce an exclusive extract from the ambassador's memoirs, a ringside view of the Bofors drama.
 
The time was Easter of 1997. Exactly ten years after Good Friday of 1987. The place was Delhi. I had retired from the Foreign Service and settled in my small apartment in the IFS complex in Delhi. I was about to leave for a game of golf. Then the phone rang. 
This time it was not from the PMO. It was from the CBI. I was asked if I could make myself available for a discussion with them in connection with their investigation into the Bofors deal with India. I wondered what had provoked this fresh investigation in a ten-year-old scandal. I was told that they had decided to hold a fresh probe in the light of the documents received by them from the Swiss authorities recently.

I went and saw them. They asked me to recount the entire story of the Bofors deal. I did it. They showed me the files carrying the letters, messages and the telegrams, etc. Sent by me ten years ago from Stockholm. They asked me if I stood by the views and recommendations expressed in them. I said that I did. They recorded my statement -- a rather lengthy one-based on those documents. They asked me if I wanted to add anything with the hindsight of ten years. I said that the latest documents received by the CBI from the Swiss authorities confirmed the Quattrocchi link in the deal. On that basis, I said that the Italian connection evolved during the period October 1985 to March 1986 should be thoroughly investigated. Also, I suggested that the meetings between Rajiv Gandhi and Olaf Palme during this period should be re-evaluated and the conduct of the Swedish officials and Bofors functionaries during this period should be subject to fresh scrutiny.

They asked me if, in my view, Rajiv Gandhi received bribes in the Bofors deal. I said that my appreciation of Rajiv Gandhi's role in this business had undergone quite a bit of metamorphosis. Elaborating this point, I said that when Rajiv Gandhi conveyed to Swedish Prime Minister Ingvar Carlsson on March 14, 1986 his decision to give the howitzer gun contract to Bofors, I thought he was forthright and clean. When he strongly reacted to the Swedish Radio broadcast of April 16, 1987 by calling it mischievous and a conspiracy to destabilise India, I thought he was being impetuous.

I said that when he telephoned Swedish Prime Minister Ingvar Carlsson on April 27, 1987 and asked him to terminate the official probe earlier requested by the GOI, I thought he was being naive to trust that Bofors had told the truth in their report to me on April 25, 1987. I thought he was clumsy when he called off the visit of Bofors officials in early July 1987. I thought he was confused when he refused to take action on any of my recommendations against Bofors. I thought he had something to hide when he refused to support Lars Ringberg's investigation in Sweden.

Now with the revelation of the evidence that Quattrocchi received commissions from Bofors, I said, I had no doubt in my mind that they were actually the bribe money for Rajiv Gandhi paid by Bofors through Quattrocchi. Quattrocchi was merely a conduit for siphoning money. 
He was not a regular arms dealer. His company Snamprogetti dealt in fertiliser and petrochemicals. He was nobody in India without the backing of Rajiv Gandhi. Even in the early eighties, when Rajiv Gandhi was not in the government, Quattrocchi had free access to senior officials of the finance ministry where I worked as joint secretary at that time. 

The questions to be answered now are: Who introduced Quattrocchi to Bofors? Where? When? Why? His was a peculiar kind of contract with Bofors. It was signed in November 1985 and terminated in March 1986. It was a performance-related contract. What job did he do for Bofors in those crucial five months? The answer is clear. He got the deal swung in favour of Bofors and that too in a record time. He could not have done this without Rajiv Gandhi's support. What more evidence do you want?

They asked me if in my view any other politician in India received any bribes in this deal. I said that I did not know. They asked me if, in my view, anybody from the Prime Minister's Office was guilty of receiving bribes. I said that to the best of my knowledge no officials in the PMO received any bribes of pay-offs, but they were all guilty of acting as accomplice to Rajiv Gandhi in the cover-up of his crime. They asked me if, in my view, anybody in our defence ministry or any of our military officers received any bribes from Bofors. I said that I did not know.

 http://www.rediff.com/news/jul/08bofors.htm

Spy story: Rajiv Gandhi hushed up Bofors probe

Apr 28, 2009

New Delhi: For 14 years, the Bofors arms deal scam has been an unfolding soap opera in Indian politics. The scam tainted the reputation of former prime ministers and many top politicians and the Gandhi family has been forever targetted for their links with main Bofors accused, Italian businessman Ottavio Quattrocchi.

Now, in a latest allegation, a former deputy chief of RAW -- India's External Intelligence Agency -- writes that former prime minister, Rajiv Gandhi, mounted a cover-up operation to hide the truth behind the infamous deal.

In his forthcoming book, The Kaoboys of R&AW, B Raman writes:

"He (Rajiv Gandhi) mounted a cover-up operation and personally got involved in the cover-up exercise. He also encouraged officials and others close to him to create pin-pricks for V P Singh, who was in the forefront of those against a cover-up. At the instance of Rajiv Gandhi, a Joint Parliamentary Committee (JPC) chaired by B Shankaranand, a Congress (I) MP, had been set up to inquire into the allegations of commission payments."

He further writes:

"The JPC had deputed to Geneva and London, a team of investigators. I got the impression that they met only those who had little or no knowledge of the Bofors payments and avoided meeting those, who claimed to have knowledge of the payments."

B Raman told CNN-IBN, "The cover up was done by Rajiv Gandhi with the help of a group of officials -- some of whom are now working in the PMO and some of whom belong to intelligence investigating agencies. Some are even from Indian diplomatic missions abroad."

Raman, one of the best intelligence officers India has had, says that the CBI officers never interrogated the right people during their foreign trips to get to the bottom of the Bofors scam and even dined with the accused Hinduja brothers -- whom they were supposed to interrogate.

He writes in his book:

"While visiting dignitaries thus started exercising caution about interactions with the Hindujas after their name cropped up in connection with the Bofors scandal, I did not notice any inhibitions coming in way of the interactions of senior officers of the Central Bureau of Investigation with the Hindujas during their visits to Geneva. Even after the scandal broke out, I had occassionally seen senior CBI officers having lunch with Prakash (Hinduja) or Srichand (Hinduja) or both in Geneva restaurants."

The book, which also exposes how German intelligence on Rajiv Gandhi's assassination plot was ignored, is expected to provide an insiders perspective of all that has gone wrong in India's sometimes amateurish intelligence efforts. 

 http://ibnlive.in.com/news/spy-story-rajiv-gandhi-hushed-up-bofors-probe/45610-3.html

Henchman politics : Being on the right side of the law in UP has nothing to do with abiding by it

J P Shukla Lucknow
 2007

Whenever the focus is on Uttar Pradesh's (UP) mindless law-and-order situation, Chief Minister Mulayam Singh Yadav and Samajwadi Party (SP) general secretary Amar Singh are quick to claim that the situation is far better than that in most other states. The example that keeps coming up is Delhi, where, they claim, the crime rate is higher. And then they go on to advise Congress leaders to mind their own business.
What makes UP under SP rule distinct, however, is the utter fearlessness with which criminals and ganglords violate the law, and the calculated unwillingness of the law-enforcing authorities to bring them to book. This disinclination becomes particularly noticeable if the criminals happen to be political associates of the ruling party.

Recently, a notorious bandit, Kalua, raided Gadua village in Farrukhabad  district and shot dead two people. He then ordered 32 others to lie down on the ground and drove a tractor over them, maiming them and fracturing their limbs. According to eyewitnesses, this gruesome action continued for four hours but the police were absent. Kalua escaped.

In another incident, Dadua, wanted by police in UP and Madhya Pradesh and carrying a reward of Rs 200,000, attended a temple opening ceremony in Narshinghpur village in Fatehpur district. He had generously donated funds for the construction of the temple and announced that he would personally perform the pran pratishtha (initiation) ceremony for the deity. Dadua reportedly came to the village in his car escorted by armed guards in two other vehicles. Those present at the ceremony confirmed that Dadua stayed till the ceremony's end, performed the ceremonial worship and inaugurating a bhandara (community kitchen).

He also made offerings to his family priest and received his blessings as the crowds raised the slogans chanted, "Jangal ke raja ki jai" (Long live the king of the forest). As Dadua retired to his forest hideout, the claimed repeatedly that reports of Dadua's participation in the temple ceremony were false. SP leaders in Chitrakoot say that Dadua has now become a supporter of their party. He had also put his weight behind the party campaign to ensure victory for the SP candidate in the previous Lok Sabha elections.

Dacoit Nirbhay Gujar is known to have said that SP leaders function as "shareholders" in the "industry of crime". He has also revealed the names of ministers to whom he had gifted gold and silver crowns.
So, it's no wonder that crime and political high-handedness go hand in hand in UP. Recently, in Lucknow, Kushal Tiwari, son of UP Handloom and Sericulture Minister, Hari Shanker Tiwari, smashed his car into that of the son of a High Court judge just to show that he was a privileged scion. As the judge's son fled to a nearby police station, Tiwari kept up the ramming in the presence of police personnel.
According to UP Congress Committee president, Salman Khursheed, the deterioration of law-and-order may have various reasons, the foremost being the inefficiency of the administration and its lack of resources to deal with criminals. But there is every evidence that the true culprit is the political patronage given to criminals. Criminals have been co-opted by the SP to serve its interests and have been provided pride of place in the party hierarchy. The more notorious a criminal, the more important he is: this, says Khursheed, has led to competition among criminals to outdo each other.

Certainly, instances of the SP patronising criminals for political gain are not rare on the ground. Amarmani Tripathi, a former Bahujan Samaj Party (BSP) minister in Mayawati's government and prime accused in the Madhumita Shukla murder case, joined the SP after the change in government and has since been openly favoured by the government. Even when he was arrested, he wasn't short of all the luxuries of life. He is now on bail; the Central Bureau of Investigation (CBI) has moved Supreme Court that he has kept himself busy threatening witnesses.

In another instance, SP Member of Parliament from Phulpur, Atiq Ahmed, was accused of murdering BSP legislator Raju Pal, whose body was then cremated without his family members being allowed to attend. Atiq Ahmed and his brother, both named as accused in the case, have been arrested. But since they happen to be "valuable political assets" of the ruling party, few feel that they will be brought to justice.

The BSP has demanded a CBI probe. Mayawati charges that the murder was part of a conspiracy hatched at the behest of the state government to eliminate a BSP legislator. Mulayam Singh Yadav has consistently refused to hand the investigation over to the CBI. Political murders have been rife in Uttar Pradesh under all regimes, including those of the Bharatiya Janata Party (BJP) and the BSP, argue SP politicos. In most murders, they say, the motive is personal enmity, and it is wrong to give Raju Pal's murder a political angle.

UP BJP president, Kesri Nath Tripathi, who has demanded the dismissal of the Mulayam Singh Yadav government, says Raju Pal's murder was a natural corollary to the criminalisation of the state. According to crime figures compiled by his the BJP, more than 6,000 murders occurred in the state during SP rule.

Tripathi claims that district and police authorities have been given standing instructions to be "careful" while dealing with ruling party supporters. In many cases, such as the kidnapping of Dr Kartikeya Sharma in Allahabad, the police had found evidence of the direct involvement of SP activists. The police impounded a vehicle belonging to a local SP leader that was used in Sharma's murder. A prominent SP worker was also found to be involved in the murder of one of his own party leaders in Mau. But the police did not proceed against the culprits. Tripathi adds that SP activists and legislators have also launched a land-and-property grabbing drive in UP.

BSP leader Mayawati, fiery and verbally uncontrolled, has gone on record to saying that she would find her own "match" to handle known SP mafia dons. Her pronouncement led to politicians with criminal backgrounds flocking to her party. Rama Kant Yadav and Uma Kant Yadav, two unscrupulous brothers, are today both BSP MPs. D P Yadav, who was admitted to the BJP on the eve of the previous Lok Sabha elections but hastily expelled when the media raised the issue of his open criminality, is sitting comfortably in Mayawati's company.

Recently, the wife of Brij Bhushan Sharan Singh, BJP MP from Balrampur known both for his links with the underworld and his "infamous" record during the Ayodhya movement, joined the BSP. While allowing her entry into her party, Mayawati said that Brij Bhushan Sharan Singh also wanted to join the BSP but that she asked him to wait a while.

The only difference between the SP and the BSP lies in the open patronage the state administration provides to criminals linked with the SP. With the influence of the Congress and the BJP on a decline, it seems inevitable that the SP and BSP will meet head on. The underworld has a good understanding of political realities and sees much good sense in joining ranks with the two leading contenders. The SP, being the ruling party, is obviously the first choice. Opposition parties describe the present regime as "jungle raj". It is an expression that has become hackneyed by overuse.

 http://www.hardnewsmedia.com/2007/11/1774

India in Transition : Lies, Damn Lies, and UP Crime Statistics

Arvind Verma

07/08/2007

In the recent assembly elections in Uttar Pradesh (UP), Amitabh Bachchan, Bollywood's biggest icon, proclaimed on behalf of Chief Minister Mulayam Singh Yadav that "UP may hey dam, jahen jurm hey kam" (UP is strong and has less crime). This turnaround by the angry young man of yesteryear symbolizes the banal, corrupt, and valueless politics prevailing in the country. For politicians, the pursuit of power is ruthlessly followed using every trick, falsehood, and opportunity. They are certain that Amitabh's lies, if repeated a thousand times, will take the mantle of truth. The lies about crime statistics are a convenient tool for politicians to cloud the facts and hide their poor governance.

By any account, Mulayam Singh's UP (2002-2007) was not a place where crime was under control. Insecurity and the threat of violence remained daily hazards of life. Most parts of the state, steeped in backwardness, were hostage to extortionist gangs and hired killers. Murder, rape, and kidnapping were rampant, mostly directed against the minorities, lower castes, women and children. The example of Nithari alone—where helpless children were lured, raped, murdered and then eaten in gruesome cannibalistic rituals—is sufficient to denounce any claim of crime control. When in the capital city of Lucknow a woman is murdered in a crowded marketplace for protesting the obscene comments of anti-socials, where a young idealistic manager is murdered for attempting to expose dishonest traders, and where a young couple is brazenly lynched for daring to break caste taboos, the prevailing insecurity and lawlessness cannot be brushed aside.
A careful scientific examination of crime statistics provided by the government of Mulayam Singh leads to the same conclusion. Police data do not reflect the actual number of crime incidents because only a small fraction are registered, usually following determined and desperate efforts by the victims. The need to go to the police station to lodge a complaint, the poor communications and transport systems, and the vast illiteracy of the masses are the primary reasons for poor registration. Furthermore, officers are notorious for ignoring citizen complaints and usually have to be bribed to lodge the complaint. The "dark" (non-reported) figure of crime in India is at least 10-20 times more than is reported by the police. Whenever honest efforts are made to register citizen complaints, crime data show a sharp upward trend. When NS Saxena, as Inspector General of Police of UP in the early 1970s, brooked no interference and ensured that law prevailed, crime figures dramatically soared because the pressure to manage the statistics was removed.

Moreover, there is no criminological reason to explain a decreasing crime rate in UP. There is no evidence to suggest that people became more honest or that the police became more effective at preventing crimes. What is clear is that politicians like Mulayam Singh dabble with the crime figures, for that is what they understand best. Murder figures are difficult to manipulate because dead bodies have to be counted, but dacoity-robbery figures can be controlled through non-registration. Not surprisingly, UP registered only 286 cases of dacoity-robbery (from the 2005 report of the National Crime Records Bureau) which is now less than what was recorded in the district of Mainpuri alone in the eighties. The mere 80 cases of juvenile delinquency registered in the same year reflect the unreliability of the figures. Either the state is blessed with little angels or these figures are completely wrong, for even a small state like Himachal Pradesh or Mizoram reported more cases (136 and 297, respectively). Furthermore, if Mulayam Singh claims credit for these falling figures, then he may want to explain why crimes in other categories remained high.

For example, in the same year UP registered 5,511 murders—almost double the number in other large states like Maharastra (2,621) and Andhra Pradesh (2,750). Even Bihar, considered a more notorious state, reported 3,471 murders in the same period. UP also reported the highest number of violent crimes (25,322), kidnappings (2,955), and crimes against scheduled castes (4,397) in the country. Amitabh Bachchan would certainly not like to live there, as UP also reported the largest number of crimes against the elderly and the highest number of prisoners escaping from police custody (64). Furthermore, Singh may wish to explain why in a "peaceful state" there were 251 incidents of deadly firing by the police that led to the death of 42 citizens and the injury of 122 others? Compare this to Jammu and Kashmir where, despite the insurgency, there were only 50 incidents of police firing in the same period.

UP reported other worrisome statistics as well. During this period there were 41,224 under trials languishing in prison, half of whom waited more than a year for their trials to begin, while 96 inmates died in their cells due to the dismal conditions in prison. Despite possessing an army of bureaucrats, the UP government could still barely organize 94 medical inspections in the prisons, as compared to 1,129 in Andhra Pradesh that year. By his own data Mulayam Singh stands exposed—UP was one of the most dangerous and poorly administered places in the country during his government's rule.

Mulayam Singh is also guilty of deliberate attempts to politicize the criminal justice institutions of the state. During my field research in UP, a large number of officers acknowledged that the police were under orders to keep crime figures down, with daily figures monitored from headquarters. Many young SPs confessed that they had to maintain a downward trend of dacoity-robbery statistics or else they would be penalized. The corruption and shenanigans of ruling party politicians was well documented. Mulayam Singh himself now faces a vigilant inquiry into his large assets, reportedly running into the hundreds of crores. A recent scandal revealed how public land in Noida city was illegally allotted to favorite officers, including many district police chiefs who faithfully carried out his orders to "control" crime.
Unfortunately, every political party and its leaders, by the use of sticks and carrots, have systematically tamed the bureaucrats and forced them to be partners in their nefarious activities. Now, police officers not only manipulate crime statistics but also have become willing tools used by politicians to commit crime. The incident in Gujarat, where three senior police officers were exposed for murder on behalf of a politician, is not an isolated incident but simply the logical conclusion of criminal politicization of the Indian bureaucracy. Politics is now vitiated with considerations of personal benefits, status and power of office. There are no meaningful qualifications and even an uneducated Rabri Devi can become the chief minister of Bihar. Furthermore, the fortunes that can be made through the exercise of political power are immense. Hence, winning elections, controlling public offices, and quickly making money are the common concerns of Indian politicians today. The police are a useful instrument in these pursuits; as well as in political battles. Thus, the destruction of the mosque at Ayodhya, the communal killings in Gujarat, and the killing of Sikhs in Delhi could be organized by shackling timely police action. The politicization of the police is an accepted and obvious fact today. The recent change in government from Mulayam Singh to Mayawati is therefore unlikely to bring any meaningful transformation of the police. During her last tenure she too played the numbers game and has already started transferring and suspending officers not aligned to her. She is embroiled in a Taj corridor corruption case and her ministry reeks of criminals facing serious charges in the courts.

The sad realization is that despite democracy, the criminal justice system remains a colonial model with no citizen participation. There is no mechanism to make the political class and bureaucracy responsible for their actions and omissions. Citizens only vote in elections and have no other way to demand accountability from their elected leaders. Unless this system changes, Amitabh Bachchan will continue to unashamedly sing praises of his political friends. The day is still far away for our hero to realize that UP (and India) is not where "jurm hey kam" but where politicians "mae hey sharm kam" (are shameless).
Arvind Verma is Associate Professor of Criminal Justice and the Associate Director of India Studies at Indiana University, Bloomington. He is managing editor of Police Practice and Research: An International Journal, and consultant to the Bureau of Police Research and Development, Government of India.

 http://casi.ssc.upenn.edu/iit/verma