THE chicks have finally come home to roost. On the evening of May 12, 1997, a special courier of the CBI left with three sealed packets. Identical packets addressed to three people: the cabinet secretary, home secretary and the personnel secretary The content--a status report on the Bofors payoffs--was explosive. After over a decade of political and legal giant-wheeling, it was answering one basic question: Rajiv Gandhi, it states, was aware of the 'commissions' to several Indians and foreigners and was responsible for covering up the tracks.
Typically, this happened in the midst of attendant hullabaloo in Parliament. Members cutting across party lines protested against what they called "selective leaks" to an English daily, at a time when a House in session was "kept in the dark". A privilege motion was promptly moved against CBI director Joginder Singh, who has since been targeted by outraged politicians for his autonomous style of functioning.
Rajiv's name is among the 21 who may be charged with receiving bribes outright or having been involved in a 'conspiracy' to cover up the payoffs, say sources privy to the report. As supporting material, it collates information from bank papers from Switzerland, the kangaroo JPC report which believed all was well with the deal, the Bofors FIR lodged in January 1990, Comptroller and Auditor General (CAG) T.N. Chaturvedi's report of 1989, statements of Rajiv aides and defence officials during interrogations this year, and news-clippings.
Technically, the ball is now in the government's court--it has been presented with a case for clearance to launch prosecution against the accused as the eel believes there is a prima facie case of graft and/or conspiracy against them. If and when the clearance comes, the status report will form the basis of the first chargesheet in the decade-old Bofors case. Those named include Rajiv Gandhi; Ottavio Quattrocchi and wife Maria; former Bofors agent Win Chaddha and son Hersh; former Congress minister Madhavsinh Solanki; key Rajiv aide Gopi Arora and defence secretary S.K. Bhatnagar. Some former key AB Bofors officials like Martin Ardbo, PO. Morberg also figure.
So what was Rajiv's role? A perusal of the status report suggests that the evidence against him is largely circumstantial and deductive, relating to the PMO's role in covering up the probe. Rajiv, it says, personally took over the defence portfolio from Narasimha Rao on September 25,'85, when the negotiations were in full swing. By this time, it says, the Army headquarters had explicitly stated its preference for French system Sofma five times in succession since December '82. Since mid-'84, when the price negotiating committee was constituted, the Sofma Howitzer weaponry system was offered several times at considerably cheaper rates than Bofors.
DAYS after he took over Defence, Rajiv met Swedish premier Olof Palme-they agreed that there would be no middlemen in the deal. On November 15 '85, within a month of this meet, Bofors entered into a pact with a new agent, AE Services. later traced to Quattrocchi.
The report says that in February '86, Rajiv appointed Gen. K. Sundarji as army chief. By February 17, Sundarji had made a 'final technical evaluation', giving a nod to Bofors. At its very next meeting--on March 11, '86--the negotiation panel recommended the award of the letter of intent to Bofors.
The status report also quotes extensively from the CAG report on the deal, which had raised a storm in '89. Said the report: "The final evaluation had been loaded heavily in favour of Bofors. A charge of Rs 35.5 crore on the credit offer by Bofors had not been taken into consideration. Bofors' credit offer of 58 per cent in German Marks was accepted whereas a similar offer from Sofma was turned down on the grounds that the Mark was a strong currency and would go up against the rupee."
The status report is sharply critical of the PMO's role under Rajiv in getting the deal through and catalogued his many attempts to bulldoze any opposition to Bofors. Crucial among them are the papers handed over by his former aide Arun Singh to the CBI during his questioning early this April. Singh, Rajiv's Doon School buddy, was sufficiently shaken up by the uproar to record his anguish in his letter of June '87 to then defence minister K.C. Pant. The letter, which Singh wanted forwarded to Rajiv, said: "In sum, the Swedes have confirmed the following. (a) 100000 SEK (Swedish kroner) was paid to Anatronic General Corporation in India (belonging to Win Chaddha); (b) payment of 31.5 million SEK to an account in Switzerland in Nov/Dec 1986. The payment is not stated but could be 'Lotus'-one of the unnamed accounts into which Bofors money could have gone; (c) payments of something between 175-250 million SEK as 'winding up charges'."
The CBI report quotes the letter: "Taking this logic further...we as the government are very interested in finding out if anything has been paid.... If we find something has been paid, we will definitely pursue each of these questions. What? When? Where? How? To whom and why? It is my understanding that the National Audit Bureau report has confirmed unequivocally that payments have been made and I stand by my statement made in the Rajya Sabha that such payments are grossly violative of all stated government policy as communicated to and understood by both the Swedish government and Bofors. It must, therefore, follow that we must pursue this matter to a logical conclusion." In the letter, Singh said the answers should be sought and, if need be, the contract should be cancelled: "In my view we must be prepared to go to this extent...our very credibility as a government is at stake and, what's worse, so is the credibility of the entire process of defence acquisitions."
A week later says the report, Rajiv shot back his reply, again through Pant: "It is unfortunate that the MOS/AS (the latter initials obviously standing for Arun Singh) has put his personal prestige above the security of the nation. I appreciate his feelings as he has been dealing with defence completely on his own with my full support, but that is not adequate reason to be ready to compromise the security of the nation. Has he evaluated the actual position vis-a-vis security? Has he evaluated the financial loss of a cancellation? Has he evaluated the consequences for all future defence purchases if we cancel a contract unilaterally? Has he evaluated how rival manufacturers will behave in the future? Has he evaluated how GOI prestige will plummet if we unilaterally cancel a contract?"
As per Rajiv's interpretation, the Swedish Audit Bureau report did not contradict the government's position, rather it upheld it. "What we need to do is to get to the roots and find out what precisely has been happening. Kneejerk reactions and stomach cramps will not serve any purpose," he wrote. Within a month, Arun Singh put in his resignation papers.
But can the cat report actually nail the people it names? Take Martin Ardbo, former Bofors president, who was actively involved in the negotiations. The report says on November 4, 1987, the Swedish police seized a diary of Ardbo, photocopies of which were later published by The Hindu. In this diary, most of the entries pertain to the period after April 1987 when the scandal broke out. In the diary, Ardbo referred to various persons in abbreviated forms such as 'R', 'G', 'P', 'H', 'Nero', 'Hanssons', 'Win', 'W', 'GPH' and 'BAE'.
"The entries show that certain coverup operations were under way and Shri Ardbo was meeting and contacting various persons. In an entry dated July 2, 1987, Shri Ardbo wrote 'Miles Stott -- Bob has spoken with Gandhi Trustee lawyer," the report says. It points out that when the ca conducted enquiries, both Stott and Maj R.A. (Bob) Wilson of AE Services confirmed meeting Ardbo. In an entry dated September 1, 1987, Ardbo mentioned that everyone was afraid that he may tell the truth. In yet another entry the next day, Ardbo wrote "while one did not care about the consequences to 'N', the involvement of 'Q' was a problem because of his close relationship with 'R'.
Says the CBI report: "These entries in Shri Ardbo's diary are very relevant and reflect his guilt. As the top executive of Bofors at the relevant time, he had handled the contract and used to visit India frequently for negotiations. He had signed the contracts dated March 24, 1986, (as) president of Bofors and had also signed most of the letters to the government of India." Despite fully knowing that agents were officially to be treated as persona non grata by the government, he had not only persisted with the existing agents but also engaged AE Services as an agent, the report points out. "Large sums were paid as commission to these agents. There are reasons to believe that these payments were made with illegal objectives and for illegal purposes. There are, therefore, reasons to believe that he was a member of the criminal conspiracy along with the other accused persons," it adds.
On the role played by two senior bureaucrats in the Rajiv government, Bhatnagar and Arora, the report suggests they be brought under the ambit of 'conspiracy'. Arora, says the report, was the key man in the PMO. He was in charge of the Bofors file there and was monitoring the contract's movement on a day-to-day basis under the direct supervision of the then prime minister. According to Gen. Sundarji's statement before the car, his view at the time was that Bofors could be made to "cough up" the details of the payoffs if threatened with the cancellation of the contract. The former army chief, who changed his opinion subsequently, had conveyed this both to Arora and defence secretary Bhatnagar.
Sundarji, who has managed to get away by a hair's breadth of being named as a conspirator in the Bofors case, told the eel that on June 12, 1987, he was asked by Bhatnagar to put down on paper all that he had said earlier. Sundarji's note to Bhatnagar was delivered on June 13, 1987. In the first week of July, Sundarji said Bhatnagar got back saying his note was "awkward" for the government and could he modify his views? When Sundarji declined, Bhatnagar returned his note too.
The CBI report concludes that after much cross-examination, and scrutiny of documents, it became clear that payments worth 319.40 million SEK were paid to three front companies (a) Ms. Svenska Inc., Panama-188.40 million SEK; (b) Moresco-Moineao-SA/Pitco, Geneva--81 million SEK; and (c) AE Services, UK--50 million SEK.
According to the report, which quotes the Swiss bank documents, the payment to Svenska was deposited by Bofors in three code names--'lotus' in Suisse Bank Corporation; 'Tulip' in Hanover Trust; and 'Mont Blanc' in Credit Suisse. "These payments to codenamed accounts without the mention or disclosure of the payers' names--and thereby not following the normal banking channels--shows clandestine action which was not required at all unless the payments were by way of 'commissions' or even 'winding up costs'. These three codenames also indicate that the funds were to be credited to the account of three separate persons or beneficiaries," it concludes.
Some basic questions still remain unanswered. Why was Sundarji's name not included: after all, it was he who finally changed his opinion on the Bofors contract? And what of Gopichand Hinduja, who was reportedly one of the appellants blocking the transfer of Bofors papers to India for years? Top CBI officials maintain that some of these answers may be available in the two other bank documents that are scheduled to arrive in India later this year. Given the rigmarolish delay in the arrival of the first lot, there can clearly be no guarantees on this score. From the smoking gun to the finger on the trigger may be more than a matter of simple deduction.