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Chopper deal shows Antony's marginal influence in MoD

Last updated on: February 20, 2013 20:19 IST
The AgustaWestland AW-101 helicopter that India purchased for its VVIPs

For a man revered for his probity, Defence Minister A K Antony was caught napping when bribes were paid over the AgustaWestland VVIP chopper deal.

With the UPA government staring at another scam, nothing, it seems, will change, reports Sheela Bhatt.

Christian Michel, one of the middlemen and arms dealers named by Lorenzo Borgogni, the Italian whistle-blower in the l'affaire AgustaWestland VVIP helicopters, avoided speaking on the issue when called him on his cell phone, claiming that he was in Singapore.

Michel is the most important link in the unfolding defence scam that has added to the United Progressive Alliance government's woes. He is known to have close links with Indian intelligence agencies and the defence and political establishment.

His father Wolfgang Richard Max was a regular visitor to New Delhi with known contacts in the Congress party, the Indian bureaucracy, in the top level of the Indian military establishment, and with chiefs of the Research and Analysis Wing, India's external intelligence agency.

Max did his networking quite openly, staying at the Hotel Claridges, which is owned by the family of arms dealer Suresh Nanda, former naval chief Admiral S M Nanda's son.

Max died some years ago, but had a legendary reputation in his fraternity for selling arms to high and mighty leaders.

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The 21 mn euros handled by middlemen must have largely gone to non-political players

Last updated on: February 20, 2013 20:19 IST
The AgustaWestland AW-101 helicopters.

Borgogni, a company insider and dissenter, has provided information to the Italian police. He reportedly told them that his arch-rival and company CEO, Giuseppe Orsi, who has been arrested, paid 51 million euros to get the contract for AgustaWestland from the Indian establishment through middlemen.

He reportedly revealed the names and details of Swiss businessman Guido Ralph Haschke and Christian Michel who is a resident of the United Kingdom, but shuttles between Dubai and Singapore.

The Italian investigators commenced their investigation after getting this information from Borgogni.

The deal, at the Indian end, is worth Rs 3,546 crore/Rs 35.46 billion -- with a bribe of Rs 362 crore/Rs 3.62 billion.

Borgogni alleges that Michel handled kickbacks of 30 million Euros in the deal for 12 VVIP helicopters.

Michel's reputation for such deals is so well-recognised in the arms merchants fraternity that it is believed that bribes to political personalities and civil servants at India's ministry of defence must have been handled by him.

The 21 million euros handled by middlemen like Haschke must have largely gone to non-political players in the deal. The Italian probe into the deal says Haschke handled Juli Tyagi, Docsa Tyagi and Sandeep Tyagi and through them he reached out to Air Marshal S P Tyagi, the then chief of the Indian Air Force.

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Allegations against Air Chief Marshal Tyagi cannot be taken lightly

Last updated on: February 20, 2013 20:19 IST
Former Air Chief Marshal S P Tyagi

A huge reaction followed Air Chief Marshal Tyagi's name being drawn into the scam.

It is the first time that a defence service chief's name has been dragged directly into a corruption scandal.

If the Italian prosecutors put Air Chief Marshal Tyagi's name on record they knew well that India is one of the biggest buyers of arms in the world and that the political reaction would be immense.

It is precisely for this reason that the allegations against Air Chief Marshal Tyagi cannot be taken lightly.

Those who support the former air chief argue that all arms companies keep an 'exit route,' which is fed to convince the media if and when they are caught.

Also, they keep a space for deniability if the bribe amount is traced.

Arms manufacturers are aces in misleading the media, and Air Chief Marshal Tyagi's name may have been one of the first 'shields' to protect the real culprits.

The most important character in this deal is likely lawyer Gautam Khaitan who is connected to Aeromatrix, the front company for the middlemen.

Khaitan is a legal advisor to middlemen Haschke and Carlos Gerosa and is also connected to Emmar-MGF, the real estate giant.

So far, the most important element in the AgustaWestland chopper scam is that Defence Minister A K Antony has clearly accepted that wrongdoing -- meaning, bribes were given by AgustaWestland and taken by people on the Indian side -- happened.

'We followed all procedures and took all precautions,' Antony said. 'Despite all that, now it is clear something happened somewhere.'

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The government simply cannot escape the scam fallout

Last updated on: February 20, 2013 20:19 IST
Prime Minister Manmohan Singh with Defence Minister A K Antony

So, the scam in the purchase of the helicopters occurred and the defence minister under whose supervision the deal was negotiated, finalised and signed is also convinced of it.

Which means the UPA government simply cannot escape the fallout from the scam.

Antony and Prime Minister Manmohan Singh were -- and even now -- known to be honest leaders, but they have ruled so hopelessly that they have made the virtue of honesty meaningless by not guarding the people's money while running the country.

Antony said he was upset that despite blacklisting six firms such an incident of bribery happened as 'there is no end to human greed and still greedy people are working around the world.'

This is an unacceptable statement. Greed is as old as the universe. Did Antony know of it only now?

Naturally, few will believe the defence minister when he says, 'It is the decision of the government that we must get to the root of the controversy to find the truth and must find out the culprits. And whosoever is responsible, must be brought to justice at the earliest and then ensure maximum punishment. It is the resolve of the entire government.'

Antony's comments reminds us of the Bofors scam of the 1980s. At one meeting after the Bofors expose, then army chief General Krishnaswamy Sunderji is said to have told then prime minister Rajiv Gandhi, 'Tell yourself your version as you shave in the morning. See whether it is convincing.'

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Why didn't Antony act 11 months ago?

Last updated on: February 20, 2013 20:19 IST
Defence Minister A K Antony

It is clear that more than 27 years later, the Congress government has learnt nothing from the Bofors scandal.

Just as Dr Singh will never be able to clear his name for the one-year delayed probe into the 2G scam, Antony's name is tainted for the 11-month delay in getting transparent about the chopper deal.

Indians are unlikely to get quick access to the original account books of Finmeccanica, the parent company of AgustaWestland, or the trail of money from companies owned by the middlemen so soon.

The Central Bureau of Investigation will have to do a huge amount of 'data exploration' to get to the bribe money trail. But the CBI itself has little credibility these days.

Just last week, former CBI director A P Singh, who retired two months ago, got a plum posting, as a member of the Union Public Service Commission.

Nobody is accusing Antony of being part of the scandal, but when he discovered it, the defence minister should have been prompt, above board and should have furiously pursued the truth with a strategic plan to save the money already paid and also pursued the company to help Indian investigators because, after all, India is one of the most attractive defence markets for such companies.

So why didn't he act 11 months earlier?

Why did he follow his dull and routine ways? The fact sheet issued by his ministry is more damaging. His writing to Italy six times in the last 11 months through the ministry of external affairs is not enough for a man who enjoys a reputation for being honest.

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In political terms, Antony is a big loser

Last updated on: February 20, 2013 20:19 IST
The AgustaWestland AW-101 helicopter

In political terms, Antony is a big loser because of this scam. A career built with patience, honesty and meticulously navigating the choppy waters of Kerala politics is being tarnished for not guarding the treasury well.

If Finmeccanica can spare Rs 362 crore as bribes, then it is clear that the deal of Rs 3,546 crores for 12 Augusta Westland 101 helicopters was inflated.

The Indian government's price negotiation committee had been fooled. One hope that Antony will rise above his party and the pressure from his colleagues in the government to save his credibility and help India get to the truth of the matter.

Scams are unearthed only when the looters indulge in infighting or the connivers of the scams fall out among themselves. Orsi, Finmeccanica's CEO who is in jail, allegedly brought Michel into the picture due to the latter's India connections.

Haschke and Gerosa, the two middlemen who did hard work on the nitty-gritty of the chopper deal, felt the pinch after Michel's entry.

Finmeccanica SpA has offices in 100 countries. In 2011, its then chairman was forced by the Italian government to retire because of allegations of slush funds. It is said the Indian deal for AgustaWestland helicopters, manufactured by the company's subsidiary in the United Kingdom, was investigated by Prime Minister Mario Monti's caretaker government because Borgogni turned whistle-blower.

The Italian government is a partner in the company, so it has deep political interests in its operations

Dr Monti saw to it that Borgogni's allegations were properly investigated because the Italian political establishment thinks that the money to see the deal through in New Delhi changed hands with the help of members of former prime minister Silvio Berlusconi's People of Freedom party and his ally, the Lega Nord (Northern League).

The political battle between Dr Monti and Berlusconi-Lega Nord, and Finmeccanica's internal corporate power struggle, resulted in the unfolding of the Indian scam.

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When it comes to feathering their nests, politicians whether of the Congress or the BJP are the same

Last updated on: February 20, 2013 20:19 IST
An AgustaWestland AW-101 helicopter undergoing tests

Prime Minister Monti is in power only till the election due at the end of February. He is a technocrat who came to power due to Italy's debt crisis.

The fate of the Indian case to be investigated by the CBI against Indian bribe-takers will totally depend on who comes to power next in Italy.

If Berlusconi's party becomes the 'king-maker,' the case is likely to be over for India, for now.

Italy's judicial system has shown an independent streak though and in the long run if Italian law permits, some steps may be taken by the court at ground zero which may help India.

Another factor that should be a real embarrassment about the deal, which was written about by columnist Tavleen Singh, is that the 12 AgustaWestland helicopters, bought at a high price of Rs 3,600 crore, were meant only for very, very important people like the President, prime minister and other Special Protection Group protected personalities like Sonia Gandhi, Rahul Gandhi etc.

To think that a poor country like India went in for a deal which was rejected by US President Barack Obama for being too costly!

Also, why blame the Congress or the UPA government when the deal was initiated by then prime minister Atal Bihari Vajpayee's National Democratic Alliance government.

When it comes to feathering their nests, politicians -- whether of the Congress or the BJP -- are the same, it seems.

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This deal has less to do with defence preparedness or the nation's security

Last updated on: February 20, 2013 20:19 IST
Prime Minister Manmohan Singh with then defence minister Pranab Mukherjee and Congress President Sonia Gandhi

It is ridiculous to think that buying or not buying the helicopters will affect India's defence-preparedness in any way.

This deal has less to do with defence preparedness or the nation's security, and is entirely about the VVIP's comfort and safety during air travel. This costly shopping by the Indian Air Force was for the luxurious use of VVIPs alone.

There are cheaper and not-so-stylish helicopters available, but the Indian VVIPs went in for the high-end product. Then Special Protection Group chief B V Wanchoo supervised the specifications along with the IAF which is technically getting the helicopters because its pilots operate the choppers to ferry VVIPs.

Three helicopters have arrived and more than 40 per cent of the money has been paid after the scam broke.

The defence ministry factsheet indirectly suggests that when the AgustaWestland 101 choppers was being zeroed in on, Pranab Mukherjee was involved in the deal in different capacities at various levels.

The current President was India's defence minister between May 22, 2004, and October 26, 2006. Mukherjee, Air Marshal S P Tyagi, then defence secretary Ajay Vikram Singh and SPG chief Wanchoo, it is said, know the truth about this deal.

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It's a shame that the government is going round in circles

Last updated on: February 20, 2013 20:19 IST
Defence Minister A K Antony with Prime Minister Manmohan Singh

If Air Chief Marshal Tyagi takes the lead, a lot more can come out in the open.

When the deal was to be finally approved, Mukherjee was on the Cabinet Committee on Security.

As it is well-known, of those who constituted the CCS then, only two voices could influence decisions. One was Mukherjee's, the other was Antony's.

The worrying issue that has, once again, emerged through the scam is that in the last eight plus years of its rule the UPA government has not been able to simplify the weapons purchase system and make it transparent enough to ensure that the scope for corruption remains minimum.

Not reducing the complexities of defence purchases is a huge failure of this government.

Currently, India has a budget of more than Rs 150,000 crore for defence shopping. But it is a shame that the government is going round in circles and not eliminating middlemen or making them accountable to streamline purchases.

The UPA, like earlier governments, has failed in saving a poor country's money going to international arms dealers. The same old faces are in the Indian arms bazaar. The same influential middlemen with links to powerful politicians float around in Delhi, Dubai and London.

It is now established that Antony's influence has proved marginal at the ministry of defence.

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