July 05, 2020
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Nothing Ventured, Nothing Gained?

The inbox is full. But the legal war is a function of the political one.

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Nothing Ventured, Nothing Gained?

Ever since the 2G scam came to light, a couple of things have been whispered around, almost attaining the status of full-fledged conspiracy theories. There’s the one that “deals” will be made to ensure that the big guns in the corporate sector escape punishment. (This matter continues to simmer; public anger and PILs being a catalyst.) And, secondly, that the army of lawyers—within the government and in the courts—will play around with the devil in the details to ensure that the extent of government involvement is limited to the cabal of officials close to disgraced (though not yet proven guilty) telecom minister A. Raja.

It’s always been an uneasy tightrope walk for the government. But apart from key ministers in the UPA—the prime minister and, in particular, the then finance minister—having to put up with continuous sniping, the strategy had worked thus far. The CBI has desisted from framing charges against key ministers in the UPA. But suddenly, the paper trail has come home to roost. With each passing day, an avalanche of government documents is bringing to light even more unpleasant surprises for the ruling party. And the voices are becoming louder: a scam of this magnitude could not have happened without the blessings of “higher powers”.

Maran’s letter to the PM on the GoM’s terms of reference (28-2-2006); and PC’s Jan 15, ’08, letter to the PM suggesting spectrum auction

The trigger, of course, is the now-infamous office memorandum, dated March 25, 2011, from the finance ministry. It states that then FM P. Chidambaram could have prevented the scam. This once again injects a crucial counterfactual question into the investigation—what if the other arms of government had done their job to stop the potential (at that stage) wrongdoing by A. Raja? It also adds another page to the long-known differences between Chidambaram and his successor in the finance ministry, Pranab Mukherjee.

The language and tenor of the note was clear in its intent—to reveal that the people at the highest level could have prevented the scam. While it does not prove Chidambaram’s culpability in the scam and might not even stand in court, the coming months could be tough going for the former FM. His image has already taken a hit. Things could get worse with the Supreme Court considering a plea by Janata Party’s Subramanian Swamy to investigate his involvement in the scam. The court will continue hearing the plea on October 10, after it studies all documents relating to the case.

On the note itself, experts say there’s no doubt the office memorandum is a loaded one. While P.G.S. Rao, a deputy director in the finance ministry, signed the note, it is unusual that such an important, explosive document—one that questions the actions of a former finance minister, that too in a multi-crore scam—could have been released without the approval and blessings of the incumbent boss at North Block. Says a former senior bureaucrat: “They have come to a conclusion on a factual note and held him (Chidambaram) responsible. It is an inter-ministerial note and has gone through the secretaries and ministry officials.”

While the legal stalemate continues for now, the topmost layer of an already beleaguered government is looking vulnerable and shaky. The government has predictably jumped into firefighting mode for it cannot afford to let Chidambaram fall—he is the last big figure standing before the matter reaches the door of the prime minister.

“Till Nov 2007, the then finance secretary pressed for auctions of 2G spectrum. Why did he become silent after that?”
M.M. Joshi, BJP, PAC chief on 2G scam

Opposition parties are already seeking an explanation from Manmohan Singh on why he himself did not step in to stop the scam. Documents and evidence collected during the investigation have suggested that Manmohan was kept informed about every development in the telecom ministry, including changes in the terms of reference of the GoM on spectrum. The PM’s defence—that he went by the advice of his ministers—is now being questioned a lot more. In times when even the average Indian is charged up about corruption, the government, and the prime minister in particular, may find it hard to provide convincing answers.

Vivek Garg, RTI activist and lawyer who petitioned and got the March 25 note, feels the documents clearly point towards negligence by the prime minister. As he puts it, “The evidence against the PM cannot be ignored. His inaction has led to huge losses for the nation. Morally, he should answer to the people.”

That task, for now, has been given to the senior-most minister in the UPA. Finance minister Pranab Mukherjee is to do this job, present the “clean face” of the government before the public. It’s common knowledge that Pranab was calling the shots in the telecom ministry during Raja’s last days. And despite assertions by the latter that he had apprised Pranab of all the developments, few have pointed fingers at the present finance minister on this issue. Given the tenuous situation, it seems this is the best the Congress and the UPA government can do.

The veteran politician, on his part, has played his cards well. In a public relations exercise, the two ministers have come before the media and asserted that all was well between them—even stressing the point that Pranab was not behind the controversial note. Investigating agency CBI, on its part, has been repeatedly giving a clean chit to Chidambaram in the scam. Pranab, though, has been careful in not commenting on the legal or factual aspects of the note. For that’s what the Supreme Court will weigh in on—and not whether the two ministers have differences of opinion.

As expected, the opposition parties are not buying the bonhomie bit and are gunning for Chidambaram’s head. “I am shocked and surprised that the CBI is saying that Chidambaram is not guilty. They are investigating Raja, (Dayanidhi) Maran and Kanimozhi but not Chidambaram. The (March 25) note is a confirmation of the evidence before the Parliamentary Accounts Committee (PAC) regarding the role of the then finance minister and reaffirms the demand for a look into his conduct,” BJP leader and chairman of the PAC Murli Manohar Joshi told Outlook. The Joshi-headed PAC report on the 2G scam continues to be in a sort of limbo, with many members rejecting its initial findings, and the whole exercise having to be gone through again.

“Senior people in the ministries had said that market prices were not the same in 2008 as in 2001. Who overruled them?”
T.S.R. Subramanian, Former cabinet secretary

What would be crucial in this investigation is the deposition of former finance secretary, Duvvuri Subbarao, before the PAC. In this, Subbarao (currently the RBI governor) records that meetings and consultations between the finance and telecom ministries did take place on the issue. In fact, Subbarao had even ordered a stay on allocation of licences and spectrum in November 2007, an order that was summarily overruled. M.M. Joshi asks: “Till November 2007, the (then) finance secretary pressed for auctions, but why did he become silent after that?” These are part of the questions the SC will seek to find answers to as it investigates the documents.

Other issues will also come to the fore now and matters related to licence and spectrum pricing and the role of the bureaucrats will have to face public scrutiny. Says former cabinet secretary T.S.R. Subramanian, “On several occasions, people in the ministries have pointed out that market prices were different in 2008 as compared to 2001. Normally, when senior people in the ministries make a point, it is obeyed. It will be interesting to see why it was overruled and by who.”

The role played in all this by former telecom secretary D.S. Mathur is also sure to come into play. As Subramanian asks, “Why did Mathur play ball till mid-November and then refuse in the final stage?” The unceremonious exit of Manju Madhavan, member (finance) in the telecom ministry, who objected to Raja’s pitch against ‘discovering’ prices through auction, is another issue that will come up again. As will Chidambaram’s unwillingness to stop the issuance of fresh equity by new licence-holders like Unitech and Swan. In sum, there are numerous reasons why the government should feel vulnerable about the Supreme Court’s fresh look at the government documents and notifications in the run-up and after the sale of fresh telecom licences in 2008.

Predictably, amid all this, there is a continued effort by the government to obfuscate the extent of losses it suffered on account of the scam. This, in fact has become a crucial component of the government’s defence. Earlier, current telecom minister Kapil Sibal had tried to propagate a zero loss theory, an attempt that came under severe attack from several quarters. More recently, the Telecom Regulatory Authority of India (TRAI) seems to be toeing the same line, saying there was, after all, no loss because of the 2G spectrum scam, something even the Supreme Court has expressed surprise about.

But even the CAG, which gave a staggering loss figure of Rs 1.76 lakh crore, is under attack. Another RTI cache has revealed that internal auditors at the office of the Comptroller and Auditor General of India had in fact put the losses at just a little over Rs 2,600 crore. Senior auditors at CAG clarified that the internal noting is part of the process and internal debate before the report is finalised. As one auditor put it, “The final conclusions are the CAG’s prerogative. It is consistent with the auditing practice that some estimate of the loss to the exchequer is given by the auditors. The CAG is ready to provide all background papers used in the 2G audit if and when asked by the JPC.”

All the muck being raked up the 2G scam investigations has already hit the government’s reputation and credibility in a big way. The current developments have only made matters worse. The pace of the investigations has been tardy and could go on for the next couple of years. With the government set to go on election mode from next year, this obviously does not augur well for it. While legal cases can go around in circles, fighting public perception is another, more loaded ballgame.

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