March 15, 2001


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The Rediff Interview/ Central Vigilance Commissioner N Vittal

'India's security has been compromised'

Central Vigilance Commissioner Nagarajan Vittal is a Maharashtrian settled in Tamil Nadu who is fluent in Gujarati. "I want to memorise 700 shlokas of the Gita. I have completed the first four chapters," says 63-year-old Vittal, who is currently in the hot seat after having just concluded investigations into Indian defence deals between 1989 and 2001. He was to send his report to the government at the end of March.

But the Tehelka expose has made him change his plan. He will now go through all the facts and allegations brought out by the web site.

In an exclusive interview to Senior Editor Sheela Bhatt, recorded before Defence Minister George Fernandes resigned, he angrily spoke about the government's lack of initiative to cleanse the system. Vittal now wants the government to immediately release his preliminary findings for the benefit of the public, by tabling the report in Parliament.

As the CVC, what's your reaction to the Tehelka revelations?

People are shocked. Many retired service chiefs themselves have said that right from 1947, corruption existed in defence deals. So corruption is like nirgun brahma… everywhere. One person in the Jain hawala case said, 'I have taken money,' but still he was not convicted. Krishnamurthi was hounded for years, later the court discharged him because the CBI could not produce evidence to frame charges against him.

The Delhi high court said that at the time of filing nominations, candidates should file an affidavit to record their criminal records. Now the government is going against the decision in a higher court. Why? To protect the criminals?

The Tehelka exposure happened because systematically our government encourages corruption. Forty per cent of India's GDP is black money. Rs 58,000 crores come from non performing assets and when I asked the Reserve Bank of India to put up the names on their web sites -- these names are respectable people of society -- the argument given to me was that chapter III of the RBI manual and Article 14 of the Constitution does not allow them. Why don't you change the Banking Secrecy Act?

India is a corrupt country. We are 69th on the list of 90 countries. All the cash seen in videos is nothing but unaccounted money.

What about the corruption in defence deals?

It hurts, because it is the issue of national security. But corruption has existed in defence deals since the day India became independent. There was an air of secrecy in defence deals. It is said that grandma's gown covers a multitude of sins. In the same way, this secrecy was covering a multitude of corrupt defence deals.

We were asked to inquire the deals after 1989. We were asked to look into:
1. Whether there were middlemen after 1989 too.
2. 20 allegations made by Jayant Malhoutra, MP.
3. Rear Admiral Suhas Purohit's allegations in court about corruption in the navy and;
4. Lastly, we were asked to examine the deals of purchases over Rs 75 crores from April 17, 1989, when the decision to ban middleman was taken.

Mr Fernandes spoke to me over the telephone on February 6, 2000. A formal communication came to me from the ministry of defence on February 14. On August 7, 2000 we submitted the preliminary reports and we were about to finalise the report when this Tehelka thing happened. So now we will go in much more detail. Our report is a secret.

Tehelka used a modern method while the CVC used the standard method of checking files. Crooks are cleverer. They don't put their names on paper. As CVC, I have found that ministers, secretaries and chairmen are not touched, only lower clerks are punished.

Do you have the power to take cognisance of Tehelka's exposure?

Yes. Why not? One, (we can ask) the defence secretary what actions they have taken? Asking the facts of the case. We will study whether it fits into our terms of reference. We will ask Tehelka whether they have more information. We have examined many retired officials like generals and admirals. We have gone through 400 defence files. We sought information from the Central Bureau of Investigation and Information Bureau also. We also met some senior retired officers and media people. Based on that we have come to the conclusions.

Even though the CVC report of the defence deals is a secret document, considering the fact that the whole inquiry was ordered in response to the comments made by Jayant Malhoutra, member of Parliament in the Rajya Sabha -- it's only now fair to let Parliament know what has come out of the inquiry. This is necessary in context of Tehelka's expose. This will provide the total perspective to the people of this country to understand what are the ground realities in defence purchases.

What's the modus operandi in defence purchases?

The modus operandi is, I think, like this. Quite a few retired army, navy and air force officials probably become middlemen and contact points. Because in the armed forces there is lot of respect for seniority and hierarchy etc. They are able to influence. They have access. They have credibility. They have information. A person who has retired from the services knows a lot more about the actual need.

Various people have now been suspended. Who are they? What's their trump point? Of course, they are in a position to know what the need of the army is. They had the insider's knowledge, they had the advantage of seniority. And generally seniority is given respect in the disciplined forces. And they provide access, that's how the middleman operates!

Isn't it objectionable?

Middlemen are not only in India. All over the world, middlemen exist and kickbacks are given to them. It is a norm. A given thing. What has happened in our case is that the policy of 1989 says we will not allow middlemen in defence deals. That they will not be open. As a result, the whole process has gone underground. There is no transparency at all. The Bible says the path to hell is paved with good intentions. And that is what has happened.

You have just completed the mega inquiry into defence deals, are you surprised by the revelations?

I am not surprised at all. Not at all.


Because that's the truth! Whatever is exposed is basically the truth. And it's not that it's happening in 2000 or 2001, it was on right from 1947. I am only quoting a retired chief executive of the army. Read the book Foul Play, you will find how second-hand and broken jeeps were repainted and purchased when V K Krishna Menon was defence minister. We have heard about Bofors and HDW and so many other deals.

What's the major issue in defence deals?

The issue I reinforce in defence was the lack of planning. When the world was divided between the two superpowers we were with the Russians, we may call ourselves nonaligned but for all practical purposes we were in the Russian camp. We were getting lots of aid from Russia with respect to defence.

In 1990, the Soviet Union collapsed. Should not someone in 1990 have thought about the next 10, 20, 30 years? How would India meet its defence requirements? Instead, we are still importing. Look at China, they are a little bigger than us. But they have a military industrial complex. We don't have it. They are exporting arms to Pakistan, Saudi etc. What are we doing? We are the biggest importers.

So I wrote to the defence minister and defence secretary. Should not somebody have kept a 30 years perspective and thought what should we do to become self-reliant? Nobody is responsible because no one raised the question! Why is it that 11 years after the collapse of the Soviet Union, we don't have a strategy to meet our defence requirement. Why? Who will do that?

Is there a scandal behind continuing with imports?

I don't know whether you can call it a scandal or not.

But why was it not done? I want a military industrial complex because there are many technologies which are used in both, military and civil. Particularly information technology. We should consciously develop this technology, instead we are thinking of export only.

You have just concluded the inquiry and now this latest exposure, we want to know from a concerned person like you: Is India's national security being compromised?

YES! I would say yes. It is being compromised. Definitely. Why not? This deals show India's defence security has been compromised. I can't reveal more information because it will put somebody in difficulty.

But how?

One thing is to the extent we import things we are sacrificing and hurting our indigenous efforts. For example, I am told in certain defence equipment where we have developed our indigenous technology, an attempt is being made to import the technology which will mean we will lose Rs 3,500 crores.

Whatever we have developed through indigenous technology and are using successfully that will be set aside and we will be paying about Rs 3,500 crores to other countries by way of the purchase of equipment. Even though India has brains and scientists and technology development, we are sacrificing our own technology at the altar of imports aided by corruption.

Can we talk about some deals... the Baraks and Su-30s?

I don't want to say anything more. Whenever we come across any such complaints we write to the defence secretary and get a reply. We don't poke our nose unnecessarily. Because the CVC can become a convenient excuse for avoiding decisions. Therefore, one of the first things I did -- on February 14, 2000 -- when the task was given to me to inquire into defence deals was to write to the defence secretary.

I wrote to him that merely because the CVC inquiry was on I don't want the nation's security to be compromised. People in the services and others will say the CVC report is pending so we will not take any decisions. Because then they can blame it on the CVC. After that I raised this issue. We are still dependent -- 11 years after the collapse of the Soviet Union. Why? People should raise this issue. Who is taking care of us? Corruption is one aspect. Look at China. Why are we not exporting?

Why is it that we are still the biggest dumping ground, and are importing technology? When we have Indian technology, why do we want to enter a deal which will mean the loss of Rs 3,500 crores?

This information is given to me by somebody, I will have to inquire into the matter. But then, the decision is of Rs 500 crores, a potential loss because of the likely, sacrificing of Indian technology. These are the deals which are probably not yet finalised. They are very hot in the army. I don't know the precise description of the equipment.

Is there any impact of your ongoing inquiry on the deals?

Ask others. Because, it is said that a husband whose wife is unfaithful is the last man to know! Similarly, the CVC will be the last person to know.

Some files were missing from the defence ministry… what happened?

See the decision was taken that no middleman will be allowed In defence deals, that was a top secret file. That was missing, that they will not give me. I made it public, and I raised an issue with (T S R) Prasad, then defence secretary, now the Cabinet secretary. Then they started the search, and found the file in a cupboard in the barracks near South Block, which was not opened in the last nine years.

Don't you think you can do a lot in the current situation?

Two days back, I was invited at 1.30 pm at the Imperial hotel to watch the video. I said I'll not come. For the simple reason that I was making an inquiry into defence deals. If I went, it would appear that I was officially promoting the whole thing. It was good I didn't go. The immediate reaction was that it was a political conspiracy, it had political implications. But then I didn't keep quiet, I saw it and downloaded it.

I will be taking up this matter with the ministry of defence, we are going to examine this, and make an addition in our second report. We will examine the evidence value so that whatever we recommend should be legally tenable.

How do you see the future?

I met the PM on February 15 and spent 35 minutes. I gave him the plans to clean up the country. I asked him: 'Can't you be the Gladstone of India?'

Gladstone was British prinme minister for four terms and made drastic changes. Because you have the credibility you can do it. First, get rid of black money. Second, prevent criminals from entering politics, third, the nexus between corrupt politicians and corrupt bureaucrats should be cut.

For some 3,000 sensitive posts neutral committees should be appointed. The officers should not be moved for three years. Then reform the income tax department. There are 130 exemptions. They should be reduced to zero. Two thirds of the Act pertains to exemptions. There is no tax for (income) up to Rs 2 lakhs and (for income) above it a 20 per cent flat tax should be charged. Agriculture income should be brought in the net. Every Indian who earns more than Rs 2 lakhs should pay tax. Customs and excise are one of the corrupt departments. They have discretionary powers.

Kit-Kat -- is it a chocolate or a biscuit? A fellow (a custom officer) in Mumbai has taken a decision that it's a biscuit so the company's tax is saved. Officers say, "I am using my discretionary powers as per the law."

Corrupt officers are making money because of such powers. Corruption flourishes only because there is less risk and more profit. The Law Commission has drafted an act to confiscate the property of corrupt public servants. Since the last two years the government is sitting on it. There is the Benami Transaction Prohibition Act 1988, but so far no guidelines have been issued. I wrote to the government (asking them) to issue the guidelines, they are saying we want to withdraw the Act, why?

See how they want to protect people with black money. If India is corrupt it is because we have designed our legal system to protect and encourage the corrupt. Everybody says do according to the law, take action within the law.

I support Tehelka's method. Because that's the way corrupt people can be trapped. Otherwise, who allows you to shoot when they are taking money? The middlemen's names are not written in files. Though in defence deals we have examined the files. Our chief technical examiner's division -- including a dozen people -- examined the files. Even if the perfect murder takes place, the truth can't remain hidden.

There was no time limit, I could have gone on and on like others but I finished the job quickly. My report was ready when this scandal broke.

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