Hiding Under Legalities?

WAS H.D. Deve Gowda unaware of the legality of tabling the Bofors documents in Parliament? Or did he change his mind in view of political compulsions? Within a fortnight of the Prime Minister's categorical assurance that the Bofors papers would be tabled in Parliament, it became clear that it was not to be. Three days later Law Minister Ramakant Khalap and then Speaker P.A. Sangma told BJP members, who had been demanding the placement of papers, that it was not possible in view of 'sovereign guarantees' given by the Indian Government to Sweden in 1989.

Sovereign guarantees, according to a Law Ministry official, were given by the V.P. Singh Government, which was trying to negotiate the transfer of Bofors papers from Switzerland to India. As per the terms of the agreement, the papers could be transferred to India on certain grounds: they could not be used to effect a witch hunt or a 'human rights' violation and could only be used for a police investigation or in the courts.

Accordingly, on February 24, the Union Law Ministry faxed the Swiss Justice Ministry, asking whether the bank documents could be placed in Parliament. "We told them that it could not be done, as part of the guarantees given by the Indian Government. Plus all the papers have not yet been transferred to India. It could hamper investigations," Michel Andre Fels, the Swiss investigator following the case, told Outlook.

But Arun Jaitley, who was advocate general during the V.P. Singh regime and was instrumental in framing the letter rogatories in the Bofors case then, says the Government is deliberately broadening the interpretation of the agreement. "As far as I can remember, it was agreed that the papers could not be used for purposes other than the Bofors issue. There was certainly no clause which said it could not be made public," Jaitley avers.

But in the never-ending Bofors saga, things seem to have settled down a bit since the CBI announced the names of Ottavio Quattrocchi and Win Chadha as recipients of the kickbacks. The predictable, however, happened. Former defence secretary S.K. Bhatnagar, one of the dramatis personae in the Bofors agreements, was quizzed for several hours at the CBI headquarters. CBI sources said the former bureaucrat had given them a sheaf of papers detailing the entire agreement from day one. These papers are considered crucial because he was given two extensions in office by Rajiv Gandhi. Immediately after his retirement in 1989, he was made governor of Sikkim.

Says a CBI official: "As chairman of the technical and price negotiating committee (PNC), Bhatnagar was the officer most formally associated with the award of the Bofors contract. He was involved in every discussion with the manufacturers, often alone. Every file relating to the Bofors deal and every noting passed through him. He made all the crucial notings on the files and he personally communicated the Government's decision to abolish agents to the manufacturers." Bhatnagar reportedly became so close to Bofors boss Martin Ardbo that when Ardbowas sacked by his company in March 1987, Bhatnagar wrote to him, expressing his sense of "personal loss because I have had the pleasure of knowing you for well over a decade during which the relationship between the Ministry of Defence and Bofors continued to grow significantly". He hoped Ardbo would soon be back with Bofors as he was 'indispensable' to the Swedish industry.

Bhatnagar also told the Joint Parliamentary Committee that in July 1984 he had informed the PNC about the agents employed by the four firms bidding for the Howitzer contract. On May 3, 1985, he called representatives of all the firms and informed them about the Government's decision not to permit agents. Soon after, three of them—Sofma of France, Voest Alpine of Austria and IMS of Britain—gave in writing that no middlemen would be employed.

Interestingly, when Bofors declined to comply with the directive, Bhatnagar didn't seem too concerned. It was only on March 10, 1986, that Bofors communicated to the Government that they had no other agent in India other than Chadha's Anatronic Corporation as 'administrative consultant'. Within hours of this letter, Bhatnagar recommended that the letter of intent be placed on Bofors and, three dayslater, the contract was awarded.

But CBI officials say Bhatnagar's version may have loopholes. As chairman of the PNC, he denied other committee members access to unit trial reports as "they would be too technical" for them. For two years after its constitution in May 1984, the PNC could not finalise its recommendations, though all along the Army headquarters favoured Sofma. But no sooner did the Army change its opinion in February 1986 favouring Bofors, the PNC in its first sitting on March 3 recommended a letter of intent for Bofors.

The next day Bhatnagar put up a note before the PMO, saying Sofma had offered credit in German marks as well, which would in effect lower the cost, but cauti-oned against the offer. He argued that as the mark was a strong currency, it could entail a higher cost in rupee terms if it gained in the forex market when the time for payments came. He added that Bofors was offering the gun against kronor and only the ammunition cost would be in marks. He failed to point out that 58 per cent of the total value of the contract was for ammunition and would be subject to the same problems indicated with regard to Sofma.

Later the Comptroller and Auditor General estimated that if the French credit offer in marks had been accepted, their price would have been reduced by 5 per cent (or Rs 75 crore as per prevailing exchange rates)

. THE CBI also grilled the then additional secretary (defence), N.N. Vohra. The questioning revolved largely around acrucial meeting held by Rajiv Gandhi in 1986 when the latter upbraided his officers, including Vohra, for being hostile to the Bofors offer. Vohra also told the CBI that an informal inquiry which he had started in 1987 regarding the payoffs was scuttled on orders from the PMO and senior Defence Ministry officials.

Meanwhile, on February 28 the Government announced that it had cancelled Chadha's passport and initiated proceedings for his extradition from Dubai. But many crucial questions are unanswered. Among them, the role of Arun Nehru—reportedly referred to as 'Nero' in Ardbo's diaries which are central to the Bofors probe. CBI officials say Nehru has been served summons for interrogation, but is out of the country and expected back only in early March. His role, they say, is limited to the early negotiations between the Indian Government and Bofors at a time when he was regarded as Rajiv Gandhi's 'fixer'. According to the CBI, in June 1985, nine months before the contract was finalised, Nehru called a senior Swedish Embassy official, Rolf Gauffin, and told him the Swedes had a chance of getting the contract—but they to mention his or Rajiv's name.

Nehru is also said to have laid down the schedule for negotiations. He told Gauffin that Bofors should send their top man and keep its representative Chadha out of the deal. On July 10, Nehru reportedly called Gauffin again, saying his meeting with Ardbo a week earlier had been 'positive'. He told the Swede that he had done his bit in the deal and it was now up to the Swedes to clinch it. This was immediate