Well-placed sources in SIT told Outlook that Rajiv's name appears—not as a beneficiary—but because as prime minister and defence minister, he was involved in one of the swiftest government decisions ever of awarding a hefty defence contract. And, of course, for the subsequent cover-up operation, which was handled quite clumsily by the prime minister's office (PMO), leading to the suspicion that Rajiv Gandhi had a personal stake in the matter.
The SIT report points out that on the basis of the Swiss bank documents, it is clear that AE Services—the firm in whose name part of the Bofors kickbacks was paid—was represented behind the scenes by close Rajiv aide Ottavio Quattrocchi. The bank papers show that an equivalent of Rs 24 crore was moved into the account of AE Services: Quattrocchi's bank account number 254.561.60W was later moved from a Swiss Bank to an account in Guernsey in the Channel islands. Last fortnight, the CBI sent letters rogatory to the bank in an effort to retrieve more names and trace the route to tax-free havens where Bofors beneficiaries have accounts.
According to SIT, the Italian connection evolved between October 1985 and March 1986 and calls upon the government—if it is interested in getting to the bottom of it all—to re-evaluate the meetings between Rajiv and Swedish prime minister Olof Palme. "Quattrocchi was merely a conduit for siphoning off money. He was not a regular arms dealer. His company Snamprogetti dealt in fertilisers and petrochemicals. He was a nobody in India without the backing of Rajiv Gandhi. Even in the early '80s, when Rajiv was not in the government, Quattrocchi had free access to senior officials of the Finance Ministry."
Who introduced Quattrocchi to Bofors? According to details available, the contract between Bofors and AE Services was peculiar. It was signed in November 1985 and terminated in March 1986. One of the questions thrown up in the SIT report: "What did AE Services do for Bofors in just five months?" Says the SIT report: "A new performance-related commission agreement was concluded by Bofors with AE Services with only a short term validity till March 31, 1986." It was almost as if AE Services had assured Bofors that it would get the gun deal—the Swedish company clinched the contract by March 24.
Admits a senior official connected to the SIT team: "The investigation by the CBI was leading directly to Rajiv Gandhi and his coterie. Though the SIT did not have access to any direct evidence naming Rajiv, whichever lead they pursued ultimately pointed to Rajiv and his coterie." The SIT lightheartedly termed it "the highway of the deal making a U turn" at a particular stage. And at that U turn stood Rajiv and his coterie: Quattrocchi, Gen. Sundarji, Bhat-nagar and Arora. "Whoever dealt with the Bofors files at the highest level had colluded in the payoffs. But the deal was made to seem like it was a natural decision with the involvement of all senior bureaucrats," says the former SIT official.
Interestingly, the SIT was very keen to interrogate Sonia as that would have been the natural corollary to the entire investigation. But apart from sending her a questionnaire, the SIT could not have progressed to the stage where they would need to question her.
The SIT report is culled from Swiss bank documents that were handed over to the CBI last year, statements made by a host of former generals and officials connected to the Rajiv administration, interviews with a clutch of Defence Ministry and PMO officials and the revealing personal account of former Indian ambassador to Sweden B.M. Oza, who had a ringside view of how the Bofors contract was swung and the PMO's vital role in the deal.
The SIT makes a distinction between those who directly received Bofors monies like Quattrocchi and wife Maria, former Bofors representative in India Win Chadha and family, and those who 'influenced' the decision to award the contract and the subsequent cover-up operation "engineered" mainly by Rajiv, former defence secretary S.K. Bhatnagar and Arora, then principal secretary in the PMO.
By all accounts, it's an explosive subject. So why has Sonia raked up the Bofors issue just when it had seemed to quieten down? According to political observers, Sonia's calculation is based on the view that the current lot of UF leaders would certainly need the Congress or vice versa once the electorate throws up a fractured mandate and so would be wary of angering her by playing the Bofors card. By now, it is quite clear who calls the shots in the Congress. As Prime Minister I.K. Gujral seemed to confirm last week when he granted another extension to CBI chief R.C. Sharma, a man regarded as the ultimate softpedlar in the Bofors case. Sharma is regarded to be close to the Congress in general and Sonia in particular and has publicly remarked that "there is no evidence to connect Rajiv or Sonia to the Bofors payoffs."
But more importantly, is Sonia's broadside on Bofors premature? According to well-placed sources, the second set of documents contains the vital Hinduja account. According to what the Swiss authorities have told the CBI informally, the Hindujas made the mistake of channelling monies from other deals through the same account into which the Bofors payoff was transferred. The main cause of worry for the Hindujas is that the account would expose many of their illegal gun deals with Iran and Contra rebels. Therefore, since 1991, the Hindujas have been protecting their Bofors account by imposing legal hurdles in the form of appeals and so on.
While there may be no evidence as yet of money being paid to the Gandhis, there are varied accounts of how Rajiv pushed the deal with the help of his cronies in the PMO and the Defence Ministry. The SIT report refers to the letter issued by AB Bofors to the government of India on March 10, 1986,telling the Indians that no middlemen would be allowed in the deal, as per the Indian demand. So, who would the company deal with? Technically, any deal is signed between two countries, but in practice, it is helped along the way by some individuals—middlemen or brokers—who are not only resourceful but extremely influential as well.
According to SIT, five days after AB Bofors issued the 'no-middlemen' certificate to India, Rajiv was in Stockholm to attend the funeral of Palme. He met the new prime minister, Ingvar Carlsson, "and came straight to the point. He (Rajiv) told Carlsson that he had recorded his decision on the file approving the award of the contract for the Howitzer gun to Swedish company AB Bofors subject to certain clarifications from the Swedish government regarding the financial terms of the contract."
On March 16, Rajiv left Stockholm. The SIT report says "things started moving very fast after Rajiv's return to India. Bofors files started flying at breakneck speed.... The approval of minister of state for defence Arun Singh was sought and obtained orally on March 21 as he was about to board a flight to Bhutan. It was recorded on file. Then the approval of Rajiv Gandhi as defence minister was sought and received the following day. Finally, the approval of Rajiv Gandhi as Prime Minister was sought and received on March 24, 1986."
The SIT report traces the chronology of how the Bofors offer even came into reckoning. Palme came to Delhi in January 1986. Till then, AB Bofors was not even in the picture. Not surprisingly then, the first PMO note equating Bofors with French company Sofma emanated around this time. By February 1, 1986, Gen. Sundarji was appointed Chief of Army Staff. On February 17, Sundarji, who had earlier opposed the Bofors Howitzer, revised his opinion, clearing the ground for approvals leading to the final awarding of the contract.
SIT sources claim that the investigation carried out until they appeared on the scene was shallow. For instance, an under secretary in the Ministry of Defence had been examined on 30 different occasions over five years with little or no reason. Their officials say it was not just that the CBI could not work against the diktats of its political bosses: there were serious moves afoot to seek the extradition of Quattrocchi from Malaysia, but they had to be dropped as the UF government developed cold feet when it came to pursuing the case to its logical conclusion.
The SIT has come down heavily on the role of the PMO—and by extension the man who headed it—for gross violation of the conduct of business rules. "The major irregularity committed by the PMO was violation of the allocation of business rules. These rules define the scope, content and jurisdiction of work of each individual ministry.
These rules are not just a technical formality. They are intended to draw a clear demarcation line in the working of ministries, avoid overlap and ensure proper coordination. The PMO is not sup -posed to deal directly with substantive matters which fall in the purview of other ministries." The Bofors deal seems to have changed the equation.
INDIA'S then ambassador to Sweden Oza recalls in his book Bofors: The Ambassador's Evidence that the Ministry of External Affairs was constantly bypassed by the PMO and its joint secretary Ronen Sen,who claimed to represent the interests of Rajiv—always verbally, never in writing. "The disadvantage of making the PMO the nodal point in dealing with the Bofors scandal was that it got interpreted as an indirect acknowledgement of the role of Rajiv Gandhi as the prime suspect, long before the media and the public and, lately, the CBI accused him of complicity," Oza points out, saying that all his instructions came over the telephone.
"In spite of my repeated pleadings, nothing was put down on paper. Most of my telephonic contacts were with Ronen Sen.... In the course of my recent interaction with the CBI, I asked why Ronen Sen was not summoned for questioning. I was told that the CBI works on the basis of the availability of written evidence. They did not find his signature on any paper on the file," adds a peeved Oza.
In an investigation spreading over a decade, some questions remain unanswered. Who, for instance, is Virginia de Rodrigues? According to some former investigators working on the case, much before Sonia became the political heir apparent to the Indian throne, she was managing director of a firm called Maruti Technical Services, which once collaborated with a US company called Tribute Caskets.One of its key employees was Virginia de Rodrigues. Not coincidentally, a Virginia de Rodrigues also happens to be vice-president of Svenska, the code name ofone of the accounts where Bofors paid its commission; the identity of the account holder, of course, is under wraps.
When lawyer Ram Jethmalani released details of this equation and the role played by Rajiv aide Satish Sharma in liaising between Maruti Technical and Tribute Caskets, the ex-MP from Amethi hit back, saying that the documents were fake and produced letters from Tribute Caskets to buttress his claims.
Clearly, the last word on Bofors is yet to be said. The final bunch of papers are lying in the Swiss courts—with one powerful appellant trying to stop them from reaching India. Well-placed sources say a government not interested in the case can seek shelter in the excuse that prosecution can be launched only after all the documents are handed over by Switzerland to India. The SIT report had strongly recommended that prosecution should be initiated since the case had dragged on for too long. But the UF government did not budge due to its own political compulsions.
The coming days are going to be interesting. After Bangalore, Sonia has so far not broached Bofors again. The BJP is trying to turn the issue to its own advantage. Gujral, after some hedging, said as he filed his papers from Jalandhar—where the BJP, in a gesture of reluctant goodwill, is not fielding a candidate—that he would consider A.B. Vajpayee's request to go public with names. One thing is clear. If the Swiss papers don't reach India soon and its contents made public, interest in the celebrated case will turn even more cynical, even if for politicians of all hues it continues to be a favou-rite battering ram, especially on poll-eve.