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A scandal past its sell-by date

It is nobody’s case that we ignore a scam [Bofors] only because people are bored of it. But surely, after 25 years of fruitless inquiry, we should admit that this case is never going to get anywhere? Every day the people of India are ripped off by some corrupt politician. And yet we go on and on about this relatively minor league deal from a quarter century ago, writes Vir Sanghvi.

columns Updated: May 03, 2009 10:31 IST
Vir Sanghvi

Bofors! no, don’t turn the page. I know your eyes glaze over every time you see the word, and that the people of India have been bored to death by 25 years of a scandal that has reached no kind of conclusion.

But I come to bury Bofors, not to praise it.

There was a phase in my life when I was what you might call a Bofors junkie. I was obsessed with the case. I knew every last detail of the deal. I could tell you exactly how much money was paid into each of the three accounts that received the commissions/kickbacks.

I interviewed CBI directors about the investigation. I went to Guildford in Surrey to trace the office of AE Services, one the three companies in question. I asked the Hindujas for their side of the story. I did one of the first interviews with Win Chaddha. I followed the libel case filed by Ajitabh Bachchan in London against a Swedish newspaper which claimed that he received the kickbacks.

But now, I am as fed up as you are.

If Bofors means nothing to you — and I suspect that’s probably true — then a brief history lesson may be in order. I promise I’ll try and keep it as short and simple as possible.

The case dates back to 1985 when India ordered howitzers from a Swedish company called Bofors. Nobody disputes that the weapons are good but the case took a different turn when Bofors itself was the subject of a corruption scandal in Sweden. As part of its investigations into this scandal, Swedish Radio reported, in early 1987, that Bofors had paid bribes to get the Indian contract.

In the arms business, the difference between illegal bribes and legitimate commissions can be difficult to discern. But clearly some money had been paid out. Chitra Subramaniam of The Hindu found documents proving that three companies had received money from Bofors: Svenska, Pitco and AE Services.

We know now that Svenska was run by Win Chaddha who was Bofors’ official agent in India. Pitco was a Hinduja company. But the identity of the owner of AE Services remains a mystery.

Even if Chaddha and the Hindujas received money from Bofors, this is not a big deal. Companies pay commissions all the time. It is not corruption unless you can prove that a) this money was passed on to a politician or an official and b) that it influenced the purchase decision.

So, the Government of India’s investigators focused on AE Services which, Bofors had claimed, was a “legitimate consultant”. It was no such thing. I traced its registered office to a post box in a lawyers’ firm in Surrey. I tried to find its owners but the trail led to a secret trust registered in Vaduz, Liechtenstein.

The government’s investigators had their own theory — backed by gut instinct rather than evidence. They thought that AE Services was a Congress front which had been set up by Arun Nehru (by then Nehru had switched sides, so perhaps he told them this) and then, after Nehru left the party, been taken over by Satish Sharma or Ottavio Quattrocchi or Ajitabh Bachchan.

Twenty-five years later, we still haven’t solved that mystery. Arun Jaitley, who has investigated Bofors since 1989, says that he has proof that Quattrocchi was the beneficiary of the AE Services accounts. (But he also had ‘proof’ at one stage that Ajitabh was the beneficiary).

Perhaps Arun is right. But the Bofors investigators face three problems.

One, the ‘proof’ against Quattrocchi has not convinced courts of law in two countries. The BJP government tried to extradite Quattrocchi from Malaysia, but four different Malaysian courts threw out the evidence as not being good enough. The CBI tried again when Quattrocchi was located in South America. Once again, the courts decided there was no merit in the case.

Two, even if Quattrocchi took the money, this is not proof of corruption. Quattrocchi was a boastful, wheeling-dealing kind of guy who represented an Italian infrastructure projects company. Allegations that he made deals were routinely levelled by the Opposition in the 1980s.

To prove corruption, you need to prove that he was more than just a wheeler-dealer. You need to prove that he passed the money on to Rajiv Gandhi or somebody else in a position of authority. So far, there’s not a shred of evidence to support that claim.

Three, even if you can’t prove that Quattrocchi passed the money on to an official or a minister, you must be able to show how a bribe influenced the decision to buy Bofors.

It’s here that the Opposition runs into its biggest problem. The Army headquarters (and not the government) chose the Bofors gun over its rivals. From the time that the Army’s recommendation reached the government to the time that the decision was taken, only 24 hours elapsed.

So, even if it can be proved that Quattrocchi took the money, he could not possibly have influenced the decision unless he bought off the Indian Army as well.

And I don’t see the BJP making that allegation.

Why, then, is the Opposition still so obsessed with Bofors? Why has it lost interest in Chaddha or the Hindujas? Why is it focusing only on Quattrocchi, against whom the case seems so weak that it keeps being thrown out by courts?

Let me ask you a counter-question. Supposing the alleged beneficiary of the AE Services account had been called Golu Mittal or Mottu Singh, would the BJP have cared so much?

I think we know the answer.

The only reason they go on and on about Quattrocchi is because he is an Italian.

That, they think, is one way of getting at Sonia Gandhi. As Narendra Modi suggests, sons of the soil are persecuted while sons of spaghetti run free.

It’s a nasty, xenophobic agenda based on little more than innuendo, gossip, speculation and rumour. The case itself is full of gaps and holes.

And how much money are we talking about? Well, the entire kickback amount was Rs 64 crore. I think AE Services got something like a third of that. That’s not huge by the standards of today’s multi-crore scams.

The government has probably spent more money investigating Bofors than the beneficiary of AE Services ever earned from the deal!

It is nobody’s case that we ignore a scam only because people are bored of it. But surely, after 25 years of fruitless inquiry, we should admit that this case is never going to get anywhere? Every day the people of India are ripped off by some corrupt politician. And yet we go on and on about this relatively minor league deal from a quarter century ago.

Does this make sense?

To the BJP it does: because it keeps the Italian issue alive.

But for the rest of us?

Well, I’ll go back where I started. Yes, Bofors is a tiresome irrelevance.

And it’s no wonder that our eyes glaze over when it is mentioned.