Bofors and the BJP

The BJP's seriousness about discovering the truth on Bofors will be tested in the coming months.

WHEN Sonia Gandhi demanded that the Union Government make public the names of Bofors payoff recipients and end her family's supposed harassment, L.K. Advani, who is now Union Home Minister, was among her most severe critics. Advani observed to journalists in Chennai that Sonia Gandhi had yet to come clean about her family's relationship with Italian businessman and the key Bofors payoff suspect, Ottavio Quattrocchi.

Advani pointed out further that she had not chosen to use legal means to rebut explicit charges in The Hindu, Frontline and elsewhere that Rajiv Gandhi and his family trust were implicated in the Bofors kickback scandal. He and other Bharatiya Janata Party leaders demanded that documentation on the accounts held by Quattrocchi and others in Switzerland be made public, and that the Bofors payoffs investigation be vested with the seriousness of purpose that it deserved.

Both the Home Minister and Prime Minister Atal Behari Vajpayee now have the opportunity to turn campaign-trail polemic into hard action. With Central Bureau of Investigation (CBI) officials engaged with the process of locating the final beneficiaries of accounts held by Quattrocchi and others in Switzerland, the BJP's seriousness about discovering the truth on Bofors will be tested in the coming months.

The BJP must show that its commitment to the truth is more earnest and substantial than that of predecessor governments, notably those of Prime Ministers P.V. Narasimha Rao and I.K. Gujral. Among the core issues will be the initiation of legal action against those whom the CBI believes it has enough evidence for prosecution, and the gathering of adequate evidence to build a legally sustainable case against the final recipients of the Bofors payoffs.

The progress made by CBI Senior Superintendent of Police D.P. Galhotra and Deputy Legal Adviser U.S. Prasad in the Channel Islands could be crucial to establishing conclusively for whom Quattrocchi was holding the funds. The Indian officials have visited the offshore banking haven at the invitation of the Attorney-General's Office in the Channel Islands to discuss the possibility of obtaining information on three Bofors-related accounts.

CBI officials believe that some 15 million Swedish kroner was transferred to these Channel Island accounts from Quattrocchi's Swiss bank holdings shortly after the Bofors gun deal was finalised in 1986. Although it is possible that the three accounts were emptied years ago, the CBI hopes that the Island's Attorney-General will let it know the identity of the account holder, and the onward destination of funds held there. The rigid banking secrecy laws on the Channel Islands sustain the business of the estimated 400 banks operating from its soil.

THE Gujral Government's curious handling of the issue did not aid the CBI's work. In February last year, the agency officially revealed five names as recipients of payments from Bofors on the basis of a first set of documents received from the Swiss authorities. Quattrocchi and his wife Maria along with one-time Bofors agent Win Chadha, his son Harsh and late wife Kanta, the documents showed, held Swiss accounts into which possible payoffs for the Rs.1,400-crore howitzer contract were funnelled. The funds had been subsequently moved on, and establishing the identity of their intended final recipient required official letters rogatory to be issued to possible destination countries. Inexplicably, nothing was done for nine months.

In November 1997, the letters rogatory were finally sent to the Channel Islands, which are governed under British law, as well as to Luxembourg and the Bahamas. Of the three countries, only the Channel Islands responded, agreeing to initiate preliminary negotiations on making available information on the three accounts. There has been no official word on the outcome of the visit by Galhotra and Prasad, but CBI sources told Frontline that further effort will be required if the inquiries in the Channel Islands are to show results. Sustained official pressure will be required to persuade the Bahamas and Luxembourg to waive their banking secrecy laws. While agreements between offshore banking havens and some countries exist to fight money laundering and transfers of narcotics-related cash, India has no similar legal instruments at its disposal.

Diplomatic effort will also be needed to bring Quattrocchi and Win Chadha before Indian investigators. In a scandalously motivated move, the Narasimha Rao regime allowed the Italian businessman to leave India shortly after news came on his appeal to Swiss authorities against Indian efforts to secure information on his Swiss bank accounts. He has since been living in Malaysia, where laws bar extradition for all but the most serious offences. Chadha long ago fled to Dubai protesting his innocence, taking refuge in a place where Indian extradition attempts have long been unsuccessful.

Another issue that the BJP will have to confront is the prosecution of those who played a key role in the clinching of the Bofors contract and in subsequent efforts to cover up evidence of corruption. In May 1997, former CBI Director Joginder Singh submitted a formal report to the Government on the findings of the Special Investigation Team probing the Bofors payoffs. The agency sought officially required government sanction for the prosecution of former Finance Secretary Gopi Arora, former Defence Secretary S.K. Bhatnagar and some others. Sanction has not yet been granted, the reasons for which remain somewhat opaque since the CBI report has not been made public.

Similarly, no clear reason has been assigned for not charge-sheeting Quattrocchi. Although Indian law does not provide for trials in absentia, the filing of a charge-sheet means that the Italian businessman will be required to appear before a court in India. If he chooses to defy summons to a trial, that will constitute a powerful resource in future efforts to secure his extradition from Malaysia or any other country he might choose to flee to.

How keen will the BJP be about pushing ahead with locating the final recipient of the Bofors payoffs, and filing charge-sheets against those whom the CBI believes there is a plausible case to prosecute? BJP watchers point to ambivalence in its inner-party sympathies on the issue.

Several senior party figures were involved in the Bofors-centred campaign that brought V.P. Singh to power in 1989, but the personal closeness of some top persons in the BJP hierarchy to the Hinduja family is an open secret. Documentary evidence published by The Hindu in 1988-89 clearly links some of the Hinduja brothers to the Bofors payments and the prolonged attempt to cover up the scandal. The second set of documents expected from the Swiss authorities (but much delayed in the arrival) is reported to be connected to the Hindujas. They have apparently appealed against the disclosure of account-related documents, but if recent reports from Geneva are to believed their prospects of blocking the transfer to India are thin.

Efforts to ensure a rapid transfer of the second set of documents have been premised on new Swiss laws on mutual assistance in criminal investigations which came into effect in February 1997. The laws enable a fast-track procedure where both the Investigating Magistrate and those appealing against disclosure of information can agree which documents can be made available to the country seeking assistance. The fast-track procedure was intended to expedite criminal proceedings, since prosecutors would then have not had to wait for cumbersome Swiss legal procedure to play itself out.

In this case, however, negotiations between Geneva Investigating Magistrate Paul Perraudin and the appellants against disclosure broke down, reportedly after the latter placed unacceptable conditions on what documents could and could not be sent to India. The case will now again be heard in Perraudin's court. The appellants have the right to appeal against his decision at both Cantonal and Federal Courts. It is not entirely certain how long the process will last, but given the fact that the appellants have been admonished by the courts in the past for their delaying tactics, observers believe that the documents will be available by the end of this year.

The arrival of the second set of Bofors documents could place those BJP leaders who are close to the Hindujas in an embarrassing situation. Assuming that prosecution against Quattrocchi and bureaucrats like Gopi Arora and Bhatnagar will have been launched well before the arrival of the second set of documents, there will be no reason for failing to charge-sheet the second set of appellants as well. Significantly, at least some voices in the BJP have begun to suggest, albeit in muted tones, that action against Sonia Gandhi and those associated with her would be counter-productive.

Letting loose the CBI against Sonia Gandhi might be perceived as a vindictive action, one BJP leader told Frontline, and as has been seen from Indira Gandhi to Jayalalitha, "such action is not approved of by the electorate". This line of argument, although obviously self-serving, illustrates a certain mentality within the BJP. The party's aggressive polemics have been more than tempered by its discovery of allies from among the ranks of those it railed against as emblems of high-level corruption not too many months ago.

The new Prime Minister has already made clear that he will not, as his party had done before the elections, promise that the CBI will be removed from the control of his office to that of the Union Home Ministry within six months. No word has come from the party, either, of its understanding of how and when Supreme Court directions to grant the CBI autonomy of action will be legislated into practice. The pursuit of the truth, it would appear, may well be subordinated to the dictates of self-interest.