Chidambaram in Parliament’s 2G standoff; 15 questions can clear the air: Open letter by Shalini Singh

Dear Mr. Chidambaram,

Your silence is deafening.

As home minister and former finance minister (2006-8), one of India’s leading and arguably most articulate lawyers and politicians, who is now at the centre of a Parliamentary slugfest, your silence is also inexplicable.

You face multiple allegations for your role in the 2G scam with evidence ranging from finance ministry documents, your own letters, minutes of meetings and other related papers, yet, for the first time in your career, you – a man not known for meekness or reticence – have chosen the path of silence. Are you guilty or could you be protecting someone in high office?

On February 16, 2011 at a TV Editors’ Conference, the Prime Minister said he did not insist on 2G spectrum auctions since apart from the TRAI, you and jailed ex-telecom minister A Raja had ‘concurred’ on the issue.

If the PM is correct, why should you be held any less guilty than Raja? And if you didn’t, where is the evidence in your favour? Is the PM misrepresenting facts to save himself from being accused of supporting Raja? Why don’t you lift the veil on a matter of such gravity that implicates you directly?

As India’s finance minister when the 2G scam was played out in full public view, there are some questions for this term that you will eventually need to answer.

2006:

1. February 23, 2006: a GoM on spectrum issues, including spectrum pricing as its Terms of Reference (ToR), was constituted. Dayanidhi Maran, then telecom minister objected and practically directed the PM to rewrite the ToR sans spectrum pricing. On December 7, 2006, spectrum pricing was eventually removed from the ToR by the PM on Maran’s request. But you, as FM, did not protest officially or otherwise during this entire period did you? The PM appears compromised by coalition pressures, while Maran’s motive was to benefit Aircel (14 licenses were awarded to Aircel in December 2006 at 2001 rates), but what is the reason for your inaction?

2007:

1. April 19, 2007: Three months after the PM removed spectrum pricing from the ToR and Aircel was awarded spectrum by Maran, your ministry, on April 19, 2007, wrote to the Cabinet Secretariat, indicating that “Since these issues would have economic and financial ramifications, they need to be discussed in GoM.” So essentially, you suddenly woke up after a long period of silence and after Aircel had been handsomely rewarded. Why did you do that? Can you explain why revenue implications were not a concern in 2006 but suddenly became important in 2007?

2. May 17, 2007: The Cabinet Secretariat directed the finmin and the DoT to discuss the inclusion of spectrum pricing in the ToRs of the GoM and report back. It is well known that the DoT never agreed. But can you explain why the finmin never reverted to the Cabinet Secretariat despite explicit direction to advise them “about the decision taken”? When you found Raja, like Maran before him, blocking spectrum pricing from the ToR of the GoM, why did you once again retreat into passiveness and inaction?

3. June 6, 2007: In less than a month, on June 6, 2007, the finmin sent a letter to the DoT, insisting on the inclusion of spectrum pricing in the ToRs, following advice from the Cabinet Secretariat. The DoT, on June 15, 2007, refused point blank, citing Maran’s agreement with the PM. Maran, however, had already been removed from the post of telecom minister by June 2007. What prevented your office from escalating the matter to the PM, first against Maran and later against Raja (both DMK)? Apart from the fact that this lapse appears inconsistent for a man with your acumen, it also violates basic provisions and powers bestowed to you as a finance minister to protect India’s exchequer revenues.

4. October 19, 2007: Raja’s press release, the first indication that auctions would be ruled out, compromising revenues on account of AGR and spectrum fees from dual technology operators. Why did you not object to such a public announcement without any prior consultation with the finmin?

5. November 22, 2007: Your finance secretary, Dr Subbarao wrote to the DoT, expressing shock over the decision to issue licenses and linked 2G spectrum at 2001 prices. He even conveyed that “further action to implement the said licenses may be stayed.” Records show that the letter was copied to your private secretary, Rohit Consul. The DoT on November 29, 2007, refused to concede to the finmin’s demand, citing a Cabinet decision of October 2003 and the TRAI’s recommendations of August 28, 2007. Clearly, this letter was placed in front of you. You could have overruled the DoT on any of the grounds listed below:

i) The Cabinet decision of October 2003, which allowed the DoT to decide spectrum pricing, placed a rider in Section 2.1.2(3) that such pricing would have to be decided through an agreement between the MoF and the DoT. Had you flagged this, you could have stopped the scam. What stopped you?

ii) The TRAI recommendations of August 28, 2007 required the approval of the Telecom Commission. The Telecom Commission comprises of two senior secretary-level officers from the finance ministry. It is well known that the Telecom Commission never once met between August 2007 and January 10, 2008 (the day that 122 letters of intent towards 2G licences were awarded and the scam successfully implemented). You failed to point out that the TRAI recommendations could not be accepted or implemented in the absence of the Telecom Commission’s approval, even though you knew that this meeting had not occurred, nor was there an approval?iii) The March 25, 2011 note to the PMO, along with the DoT’s affidavits in the Supreme Court dated November 11, 2010 tells us that your ministry never responded to this blatantly dishonest letter from the DoT. Why this compromise?

2008:

1. 2006 to January 9, 2008: Why is it that you never wrote a single letter to either Maran or Raja in this period on the issue of spectrum pricing or auctions or revenue or any of the issues that could have easily prevented the 2G scam?

2. January 9, 2008: A comprehensive file was placed for your consideration, with a concept paper including all correspondence between the DoT and the finmin. The MoF note prepared by your officers specifically recommended market-based price determination of start-up spectrum even in absence of auctions. The CBI has used the same methodology in its April 2, 2011 chargesheet. This was a day before the 2G scam. Why did you not enforce the advice of your ministry? What prevented you from logging in your dissent to Raja, especially since you knew that the Telecom Commission meeting scheduled to be held on this day was mysteriously postponed at the last minute?

3. January 15, 2008: Five days after the 2G scam, based on the finmin note (which you never supported in writing), you despatched a secret note to the PM without a single word on auctions or start-up 2G spectrum. In fact, you said, “The past may be treated as a closed chapter.” It is frankly inexplicable why you actually went out of your way to reverse your own ministry’s stance seeking a revision of entry fee either through auction or indexation in this note. You knew that only LoI’s had been given and the scam could still be stopped. Yet you did not insist that the decision be reversed, even though the full Telecom Commission had not approved the TRAI’s recommendation. Why? You did not officially complain about Raja’s action. You went a step further to state that spectrum till 6.2 MHz does not need to be subjected to market price, but beyond 6.2 MHz does? Can you justify all this?

4. Why was your first letter on the 2G scam written only after the scam had been perpetrated on January 10, 2008 despite the fact that the media was exposing every twist and turn of the intended plan from as early as 2007?

5. January 30, 2008: In your meeting with Raja you both agreed that there was every possibility of companies had made speculative bids for spectrum and could make windfall gains through M&A transactions purely based on spectrum value. So you knew that such windfall gains were possible, and you still allowed Raja to run amok?

6. You further agreed with Raja that there was a need to put a mechanism in place to protect government revenue in case of such windfall gains. Yet you did not institute any such mechanism despite the fact that you continued to be the finance minister for almost another year after this meeting. What possibly could have prevented you from implementing this easy task?

7. February 8, 2008: The DoT secretary’s note to the Department of Economic Affairs recorded the finance secretary’s position that auction was legally feasible even for start-up spectrum given by Raja. If this was your secretary’s position, why did you not seek a legal opinion apart from the fact that you could have enforced the Government of India (Transaction of Business) Rules? A simple legal opinion could have completely blocked Raja’s shenanigans. Why was there such wide divergence between you and your finance secretary? Subbarao was shouting from the rooftops, while you refused to state a word on paper until after the scam had been perpetrated.

8. April 22, 2008: Raja announced new M&A norms in violation of the TRAI Act and designed for private gain, but you turned a blind eye despite the fact that Raja and you had just recently agreed that protecting revenue was the right thing to do?

9. July 4, 2008: Your meeting with the PM and Raja. The minutes record your agreement that it was legally and administratively possible to charge entry fee and revenue share, but you then went on to discuss spectrum charge beyond start-up spectrum rather than entry fee or auctions. Why is it that you never discussed spectrum allocation by Raja in this meeting? If it is the Congress’ position that expensive spectrum raises tariffs why do you believe that it is okay to revise spectrum charges beyond 6.2 MHz but not for spectrum till 6.2 MHz that Raja allocated? Why, as the FM, do you think higher revenue from spectrum other than Raja’s is critical to the exchequer and needs further revision?

I have no doubt that you probably have adequate responses to each of these questions. All it takes is one press conference to clear your name and demolish the Opposition’s strategy to boycott you and embarrass the Congress in Parliament. If not for the Opposition or the Congress, you owe the people who put you in this office an explanation.

As you well know, the cruellest lies are often told in silence. I hope you will break yours.

Respectfully,

Shalini Singh

http://blogs.timesofindia.indiatimes.com/Mindboggling/entry/chidambaram-in-parliament-s-2g-standoff-15-questions-can-clear-the-air