None come clean in Agusta scam

The continuing AgustaWestland slugfest has exposed both the previous UPA regime and the incumbent Narendra Modi government even as the much-needed arms procurement project suffers.

Documents in the possession of the Italian courts confirm that approximately  €400 million were allegedly paid as bribe to politicians, bureaucrats, air force personnel, middlemen and others in the Rs 3600 crore AgustaWestland deal during the UPA regime. This happened despite “Mr Clean” AK Antony presiding over the Defence Ministry as Union Minister of Defence.

Such was the aura created in the then Defence Ministry under Antony that not even the specially accredited Defence Correspondents were allowed entry into South Block beyond a point. The ministry apparently feared sensitive leaks. Defence procurement processes were at their slowest pace during Antony’s stewardship. 

Disappointed, top serving defence personnel across the three services teamed up to secretly brief the media that the country’s security was in jeopardy because of a shortage of  high-grade weapons. They argued that this shortage was due to indecision or the slow pace of decision-making at the highest level. 

Imagine how much time it took to sort out the Rafael aircraft purchases from France during Antony’s regime. No matter how vital these aircraft are for India’s airspace security in the face of Pakistan’s acquisition of the deadly F16s from the US, it virtually took all of ten years of the UPA regime.

It is entirely sound and prudent to take all possible precautions to prevent slush payments in big defence deals. But is it wise to inordinately delay decisions affecting national security for fear of getting a bad name? And look at the end result: AgustaWestland bribes to the tune of €400 million were anyway paid under the very nose of “Mr Clean”.

It is true that Antony moved fast once the facts about the bribery came out in the open. Proceedings against the helicopter company began in April 2012. The Central Bureau of Investigation (CBI) and Enforcement Directorate (ED) were immediately involved in the investigation. Agusta’s contract was cancelled on January 1, 2014, by the Ministry of Defence under Antony.

Moreover, in a move to ensure that the public exchequer was not compromised, the UPA Government encashed the bank guarantees given by AgustaWestland and recovered Rs 2068 crore. The Government also kept in its possession the three AgustaWestland helicopters it had received. In other words, the financial loss was almost eliminated. To that extent, credit must go to Antony and the UPA government.

But look where the UPA government erred again, perhaps unknowingly. Towards the end of its regime, it appointed in constitutional positions two senior functionaries who were involved in the decision making on AgustaWestland deal. While the then Defence Secretary Shashikant Sharma was appointed as Comptroller and Auditor General (CAG), immediately upon retirement, former Prime Minister Manmohan Singh’s close advisor MK Narayanan was appointed Governor.

Questions are now legitimately being asked if the UPA government appointed the two persons to shield them from possible enquiries in future. Both Sharma and Narayanan were placed in key positions at the time the AgustaWestland helicopter deal was taking place. Sharma, indeed, was a key figure in the entire deal, first involved as Director (Acquisitions) in the Ministry of Defence and later as Defence Secretary.

What was the response of the Narendra Modi government? The NDA Government failed to supply documents to the Italian courts for all of the two years it has been in office in spite of the full knowledge of the demand for documents. Defence Minister Manohar Parrikar told the Rajya Sabha earlier this week that the documents could not be supplied to the Italian courts because they were in the possession of the CBI. This is a very weak argument. Is the CBI away from the Government of India?

Similarly, a decision to ban AgustaWestland was taken by the UPA government and the order for the ban was actually issued by the NDA government as late as July 2014. 

Surprisingly, within 40 days of the ban order, AgustWestland was allowed backdoor entry as a sub-contractor and vendor in all defence contracts despite the corruption charges and the CBI enquiry. Not just that. The Narendra Modi government even allowed AgustaWestland to participate in the PM’s flagship “Make in India” programme and gave FIPB (foreign investment) approval to it for setting up a joint venture in defence production.

The Modi government seems to be pursuing just a facade in the name of the enquiry perhaps believing that it would be a wild goose chase ending up with nothing. Or is there a tacit complicity?