Thursday, February 14, 2013

Anyone care for the truth in the helicopter deal??? Read the MoD fact sheet….

Unfortunately, most of us know of this case through media. Unfortunately, most of our media outlets fail in their duty to research a subject and present facts accurately. Unfortunately, most of them prefer sensationalism over truth (here I must point out CNN-IBN’s mature handling of the issue). Unfortunately, opposition parties want to make this a political issue. Unfortunately, most people will fall victim to this malicious design and fault the wrong guys. So unfortunately, no one will know the truth. But this since blog is called therealtruth, it will throw the light on all sides of the story.

The Ministry of Defence (MoD) website ( hosts the factsheet put out yesterday under its “Press Release” tab. It’s a must-read for all those seeking the truth. It puts out the “facts” of the case in a manner in which nothing can be doubted or disputed. It refutes – by providing accurate and time-stamped data – all charges made against the Government by the opposition and media. I am just summarizing some key portions of the factsheet here.

Part 1: The procurement process:

Aug 1999 to Dec 2003: IAF proposes replacement of MI-8 helicopters. Global tenders floated. Three parties (Agusta Westland, Russian MI-172 and Eurocopter of France) chosen for flight evals. Eurocopter found suitable as others don’t meet all requirements. That’s when Brajesh Mishra decides to change specs; in fact he chides Tyagi (Air Chief Marshal then) for not consulting PMO/SPG before freezing specs earlier. 

Cut to UPA government. IAF/NSA/PMO/SPG/MoD review new specs and approve them. Add 4 additional helicopters to earlier demand of 8, but in non-VIP configuration. New RFP issued. Three vendors apply (Sikorsky, USA; Agusta Westland, UK and Rosoboronexport, Russia). Russian offer rejected because they didn’t submit integrity pact and earnest money deposit. Remaining two conduct field trials in Jan-Feb 2008. Field Trial team recommends Agusta Westland because Sikorsky failed on four counts. Government’s “Tech oversight committee” finds all in order. By Jan 2009, the Contract Negotiation Committee finalizes a price of 556 million euros. In Jan 2010, Cabinet Commiittee on Security clears proposal and in Feb 2010, MoD issues order. Order has specific provisions against bribery and the use of undue influence (Article 22) and use of agents (Article 23). 

Part 2: Allegations of scam:

Story first breaks in The Hindu in Feb 2012. Next day, Defence ministry seeks factual report from our embassy in Rome. Hindu story of Feb 28th, 2012 publishes denials from Finmeccanica, the Italian owner of Agusta Westland. MoD also receives “more than one” letters from Agusta Westland that reports are malicious. In April 2012, MoD seeks update from Rome embassy. In May 2012, embassy mentions difficulty in getting information as matter is with judiciary. In July 2012, MoD asks embassy to approach judiciary directly. Formal request made by embassy to the Naples prosecutors office on July 16, 2012. In Oct 2012, Government writes to Italy and UK for help with information. UK government says it was itself awaiting information from Italy. There are also details mentioned about MoD passing on information to CBI and Enforcement Directorate in April 2012 and the Income Tax Department in Jan 2013.

Part 3: Protection of India’s interests:
Articles 22 and 23 in the contract give India wide flexibility in protecting its interests. Not only can we cancel the contract without any compensation, we can blacklist the vendor, seek a return of all payments made with interest, cancel other contracts of the vendor etc. The MoD assures us that it will do everything that the contract specifies.

Now lets look at some specific allegations made by the media and opposition parties:

1)    That no action was taken by the Government since the time the story broke. Well, the factsheet says otherwise. The story only broke in Feb 2012. Since then, the MoD has done everything possible. Even the CBI was informed in April 2012. Information was sought from Italy and the UK. The Italian judicial authorities also were contacted. What more could the government have done?

2)    That UPA government is involved in this scam. It is Bofors 2 as per BJP. My request to the BJP is to offer specific comment on this factsheet. Which part of this factsheet is a lie? What would they have done differently had they been in power? The BJP usually has no ideas of its own; it only knows how to accuse others. I hope they take up this challenge.

3)    In the first couple of days since this scam broke, there was an allegation that the UPA had changed the tech specs, and that was supposed to be a clear sign of corruption. That’s now proven wrong. The tech specs were changed by Brajesh Mishra during NDA rule (I am not alleging that there was any hanky panky though).

My own feeling is that in the governmental system, decisions are taken by committees. No one person can clear a deal. However, many people can scuttle a deal by raising objections. In many cases, bribes are paid to mute such objections. Just like there is “speed money” to rush governmental processes up (though nothing wrong is done otherwise), there is “hush money” (to hush up objections). Most public officials know what hush money is. It is impossible that ACM Tyagi could have influenced the tech specs or the deal himself; but he could have (I am not saying he did) taken hush money. He may also have given updates to the Italians as alleged.

However, on the flip side, this dosen’t seem logical. Hush money would be paid by someone who wouldn’t otherwise have got the order. In this case, Agusta Westland appears to have qualified fully. No deviations needed to be made, except the ones made by Brajesh Mishra in the early stages. Of course, even here a game could have been played. Agusta could have been told (mischievously) that their deal had several problems (even though there were none), and hush money demanded. Anything is possible in the hands of a motivated, corrupt and innovative government official.

What the Government should do now is recover the bribe money from Agusta. There is no point in canceling the order, since the helicopter is the best in class. But given the political rabble rousing, it is likely the Government will over-react and cancel the order. The country will be pushed back by a decade (the fact sheet shows just how slow the government works – it took 14 years from the time the demand was raised to get the goods).

The real truth is that bribes appear to have been paid, but only to defence officials, not politicians. All due processes appear to have been followed. Maybe the processes need more beefing up to prevent hush money. But all existing processes appear to have been followed. Also, MoD does appear to have taken action since the media reports emerged. This appears to be more a political matter than a factual one….

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