The Lindstrom disclosures

Congress president Sonia Gandhi at a press conference in New Delhi. - SHANKER CHAKRAVARTY

The revelations made by former Swedish investigator Sten Lindstrom provide campaign ammunition for the NDA but its government will have to account for the loss of momentum in the CBI's pursuit of Quattrocchi.

STEN LINDSTROM, the Swedish police officer who led the investigations into the Bofors-India payoffs scandal, naturally has much to contribute to the public discourse in India. That Indian media interest in his revelations should periodically spike upwards in the lead-up to national elections that feature the Congress party leadership in a potentially decisive role, is quite in the order of things. When he chose to speak to The Asian Age - a multi-edition newspaper headquartered in Delhi - to put on record his frustration at the manner in which the course of justice in the Bofors investigation had been thwarted, he presumably thought he was doing little else than performing his civic duty. That his intervention turned into campaign ammunition for ruling National Democratic Alliance (NDA), does not reflect any political calculation on his part.

The choice of timing, said M.J. Akbar, editor-in-chief of The Asian Age, was entirely Lindstrom's. Akbar chose to make this claim at the launch event for a book on the suitability of a naturalised citizen to hold high elected office in India. The focus of the book was, naturally enough, Congress president Sonia Gandhi. This made for a curious coincidence, since the novelty of Lindstrom's disclosures lay partly in the six questions that he had posed rather sharply to Sonia Gandhi. Congress spokesmen were quick to brush off the entire Asian Age expose as a motivated piece of journalism - a "plant" in the trade jargon. The Bharatiya Janata Party (BJP), for its part, urged that journalistic motives were immaterial. Rather than divert attention to a debate on media ethics, the Congress leadership, they said, needed to answer the questions that had been posed.

The substance of Lindstrom's revelations, shorn of the details that are by now familiar to anyone who has followed the media investigation into the Bofors scandal and the subsequent phase of prosecution by the Central Bureau of Investigation (CBI), is merely that he encountered bad faith at every stage of his inquiries. When the scandal broke in 1987, he managed to make rapid progress, impounding crucial documents that pointed unequivocally towards promising lines of investigation. He then ran up against a stonewall. In the words of Seema Mustafa, the senior Asian Age journalist who reported the Lindstrom disclosures after extensive interviews in Stockholm: "The Swedish investigation into the kickbacks in the Bofors deal became hostage to a major cover-up launched by the governments of both Sweden and India at the time. The investigation hit roadblocks at every corner with the enthusiasm of the investigators turning into frustration as they encountered witnesses who would not speak, trails that led nowhere, and pressure from their own authorities to go slow on the case... "

In Lindstrom's account, Martin Ardbo, president of AB Bofors when the deal was struck, seemed to act with a deep sense of conviction in his own impunity. "When I asked Martin Ardbo about his diaries, when he met who, where and things like that, he just said: "I won't answer that question. He was very confident", he recalls. This suggested a measure of certainty and a brazen defiance of the law that would be inexplicable in the normal course. The sanctions available in Swedish law for obstructing the course of justice are stringent. As Lindstrom points out, in the normal course, Ardbo "would have been jailed until he answered the question".

Ardbo clearly knew a great deal that was potentially explosive. Towards the final stages of closing out the Bofors howitzer deal, he signed an agreement that established a 3 per cent entitlement of contract value for a mysterious shell company, A.E. Services, which had not featured in any capacity in prior negotiations. Dated November 1985, the agreement bears a "sunset clause": that it would stand cancelled if the howitzer gun contract is not awarded to Bofors by April 1 the following year. As Bofors president, Ardbo attached great importance to the deal, departing from the convention of fielding the company sales manager as signatory to commission agreements. And Lindstrom's assessment here, derived from years of investigative experience, is unambiguous: "He (Ardbo) was especially quiet about the last-minute contract with A.E. Services, a deal that he personally oversaw. It was clear to me that this was the political pay-off. Police officers know that the person who comes in last and walks off with a sum of money for no apparent work is a political payment made to people who have the power to close the deal."

Lindstrom is convinced that the political payoffs were negotiated through A.E. Services by Ottavio Quattrocchi, the Italian businessman then resident in Delhi. Documents have been unearthed detailing a commission payment of over 50 million Swedish kronor from Bofors to A.E. Services. Lindstrom recalls that the money then "moved very fast to avoid detection". Within a fortnight, the money had been transferred to accounts held in the name of Colbar Investment Ltd., for which Quattrocchi held the power of attorney.

As the scandal erupted and public pressure mounted in both Sweden and India, Ardbo began showing signs of worry, which he recorded in his personal diary. Among the few candid remarks he allowed himself under interrogation was his conviction that he was being made a scapegoat to protect big people. On July 2, 1987, he recorded a meeting with Bob Wilson, a retired British army officer turned liaison agent for weapons contracts, and a mysterious individual referred to as a "Gandhi truste (sic) lawyer". His diary is also full of cryptic references to "R", who must be protected at all costs, and his worrying links to "Q".

For the seasoned policeman, now Detective Superintendent in the Swedish Economic Crimes Bureau, six questions seem logically to arise from this sequence of events. In Lindstrom's own words, these are:

* Who introduced Ottavio Quattrocchi to Bofors officials?

* What was (his) value proposition that led him to assure Bofors contractually that he need not be paid if the deal was not closed in their favour?

* Why did Bofors pay (him)?

* What services did his company A.E. Services offer?

* What are the links between Ottavio Quattrocchi and Sonia Gandhi?

* Who is the Gandhi trustee lawyer that Martin Ardbo met in Geneva?

The identity of the Gandhi trustee lawyer was revealed to the Central Bureau of Investigation in 1997 by one of the journalists involved in the media investigation of the Bofors scandal. His interrogation, however, is believed to have produced nothing beyond stout denial and disavowals of all knowledge.

The Congress for its part made an attempt to answer Lindstrom's six questions by targeting the individual code-named "N" in the Ardbo diaries. It is widely believed that the coded reference is to Arun Nehru, till mid-1987 an influential Minister in the Rajiv Gandhi government. But that effort to deflect the focus has not worked simply because Arun Nehru's name does not feature in any of the documentation uncovered by the media investigation, nor in any of the records transferred from Sweden and Switzerland in the course of the CBI inquiries.

Lindstrom suggests that the Swiss banking system was thoroughly impermeable to all his requests for assistance: "We ran into a wall in Switzerland that refused to answer our queries about the accounts." By this account, the fact that the CBI managed, after arduous legal effort, to obtain the transfer of vital Swiss bank documents that decisively moved its prosecution forward in 1997, must count as a tribute to the diligence and professionalism of the Indian agency. Experts in international criminal law then pointed out that the Swiss authorities, who are zealous guardians of banking secrecy, had in transferring the documents, effectively conceded that Bofors involved a major criminal offence.

Quattrocchi had sensed that the net was closing in on him as early as 1993, when he quietly left India after being named as one of the appellants against a lower Swiss court's decision to transfer the bank documents. His Malaysian sanctuary was to prove relatively hospitable until his dramatic arrest in December 2000, in response to an extradition request from India. He won a reprieve in December 2002, when a Sessions court in Malaysia ruled that there were no grounds for his extradition. Soon afterwards, India lost an appeal at a Malaysian High Court. In delivering his verdict, High Court Judge Augustin Paul ruled that "an act or omission complained of in India must also be an offence in Malaysia in order to qualify as an extradition offence". "Sufficient material", he said, "must be placed before the court at the commencement of the extradition inquiry to show, inter alia, that the fugitive criminal is an accused person. If he is not an accused person, then there can be no extradition proceedings against him".

That the CBI had managed to pass the crucial test of "dual criminality" in the Swiss courts, only to fall at a Malaysian legal hurdle, points either to serious differences in criminal law in the two countries, or to a failure to make the case with similar logic and coherence. Whatever the underlying judicial reasoning, Quattrocchi was clearly in no mood to wait around to bask in his moment of victory. He left Malaysia the day after the High Court verdict. Two days later, the Malaysian court of appeals admitted an Indian appeal and directed that his passport be impounded. Quattrocchi's whereabouts were by then a mystery. It was a dramatic reprise of his great escape from India nine years before. More durable solace was to come his way in April 2003, when the Malaysian court of appeals dismissed the Indian appeal against the two successive orders of the lower courts.

The CBI has since made some patchy progress. In July last year, it managed to obtain the freezing of an account held by Quattrocchi in a British bank. It has also since submitted a number of suspect sites to Interpol for verification as possible sanctuaries of the fugitive businessman. But in February 2004, its investigations were set back by the Delhi High Court, which held the Bofors charge-sheet invalid since it named Rajiv Gandhi as an accused without a "scintilla of evidence". The CBI now intends to appeal this ruling in the Supreme Court and to make a renewed effort to gain access to Quattrocchi. But in the light of the Lindstrom revelations, the Ministries that exercise administrative control over the CBI need to explain how a case that was strong enough to run the gauntlet of Swiss legal procedures, suddenly ran out of momentum in the Malaysian courts. Beyond the temporary political gratification that Lindstrom's disclosures have afforded, there is a more fundamental question of administrative accountability involved here.