Scams through the ages

Acquittal in 2G case follows a pattern. What to do to break it and ensure conviction?

DS Saksena | December 29, 2017


#Bofors   #Lalu Prasad Yadav   #Corruption   #Scam   #2G Scam   #A Raja  


With the acquittal of all the accused in the 2G scam and conviction of Lalu Prasad Yadav in the chara ghotala, scams are in the headlines again. We Indians love scams so much that the word ‘scam’ is now part of all Indian languages though the meaning is not the same as in English. In Indian languages ‘scam’ is not any dishonest scheme but a big-ticket swindle involving top people. Any Indian, whether educated or not, is fully aware of the entire spectrum of scams – from Bofors to 2G.

But looking at the frequency with which scams take place in India the relevant question is: has anyone in authority tried to analyse past scams with a view to prevent their recurrence? The answer appears to be an unambiguous ‘no’. Rather, a good scam is welcomed by all outside the government; it provides good copy for the media, entertainment for citizens and a rallying point for the opposition.

A scam becomes a political issue right from the day it is reported. All opposition parties start demanding the government’s resignation while the government starts listing out the scams which occurred when the opposition parties were in power. Meanwhile, the perpetrators of the scam roam free. Years are taken by investigating agencies to file charge-sheets which typically run into thousands of pages. No wonder, court proceedings drag on for decades. By that time investigating officers have retired, most of the culprits are dead and the persons who had unearthed the scam have lost interest.

The Bofors scam, which first surfaced in 1987, exemplifies the lifecycle of a typical scam. The massive publicity given to the Bofors scam led to the downfall of the Rajiv Gandhi government in 1989. Having won elections on the Bofors plank, VP Singh, the next prime minister, promised that the Bofors culprits would be put behind bars within 15 days. However, the first charge-sheet in the Bofors case was filed in October 1999 which was quashed by the Delhi high court in 2004. By now, the main dramatis personae of the Bofors scam are dead. No part of the alleged illegal commission of Rs 64 crore has been recovered and no one has gone to jail for perpetrating the scam.

But the Bofors scam had a very damaging sequel. After the scam, Bofors was blacklisted and no purchases were to be made from the company. At the time of the Kargil war, we had the Bofors gun but no ammunition to feed it. In desperation, we purchased ammunition at the rate of $10,000 per round from South Africa. The entire cost was never officially revealed but given the fact that the Bofors gun fires three rounds per minute, the cost must have been astronomical. It is a matter of record that the Bofors gun proved itself in battle and turned the tide of the Kargil war decisively in our favour. However, after blacklisting Bofors, we could not get the benefit of the second part of the contract with Bofors – which would have allowed us to manufacture the Bofors gun indigenously. The infamy associated with Bofors has rubbed off on all defence purchases and has ensured that till today essential defence purchases drag on endlessly. Even thirty years after the Bofors scandal, we have not been able to finalise a successor to the Bofors gun. Thus looking back at the Bofors scam we are left wondering if there was any scam at all or whether it was all made up for political benefits. However, what is unquestionable is that our unprepared kneejerk reaction caused untold harm to the country. The Tehelka sting (2001), which showed that everyone from clerks to ministers was willing to sell the security of the country for ridiculously small sums, proved that no steps had been taken to prevent recurrence of a scam of the Bofors type. The only feature distinguishing the Tehelka scam from the Bofors scam was that journalists and investors were jailed after the scam was reported.

The aftermath of the Bofors and Tehelka scams is not exceptional. Other scams like the 2G and organising the 2010 Commonwealth Games also had the same denouement. No one was punished, cases dragged on till eternity in various courts and no part of the defalcated cash was recovered. Why was it so? For one, the investigating agencies prosecute scam cases selectively. They are liberal with some perpetrators and strict with others. Once the government changes; the investigating agencies change their tune. More often than not, it is discovered that personnel of the investigating agencies were colluding with the persons they were supposed to investigate. In Telgi’s stamp-paper scam it was the Mumbai police commissioner, in the 2G scam it was the CBI director and in the Adarsh scam it were the government advocates. No wonder most scamsters go unpunished and after the spotlight fades they coolly enjoy the proceeds of their crime.

The second reason is that once a juicy scam breaks out, all investigating agencies run helter-skelter after the scamsters. This may not appear to be a bad idea; but on the ground this derails the investigation because all agencies pursue different goals and guard (but never share) any information they gather. Thus the CBI would try to prove that the scamsters did not follow proper procedures, the income-tax department would try to prove that the scamsters did not pay income-tax while the enforcement directorate would play on the money-laundering angle. Consequently, the whole case becomes a jigsaw puzzle – too complicated for the courts to resolve in any finite period of time.

Thirdly, the government of the day puts all its might in defending the scamsters. It is a matter of record that the then prime minister Manmohan Singh defended the Coalgate and 2G scams in parliament. The infamous Vyapam scam in Madhya Pradesh found mention in a US state department report on ‘Human Rights Practices in India for 2016’ but the party in power, BJP, promptly issued a statement denouncing the US for daring to comment on the Vyapam scandal regardless of the fact that forty unnatural deaths have taken place since it first surfaced and the press, the whistleblowers and even concerned citizens have been threatened. Of course, no one has been punished in the Vyapam scam except for the 634 students whose degrees were cancelled by the supreme court. Even in light of such disquieting facts the MP government chooses to adopt an ambivalent attitude; playing down the scam in one breath and promising action against the scamsters in another. A charge-sheet has been filed only now; resolution is a long way off.

Even more strange is the case of the Adarsh Housing scam, where top politicians, bureaucrats and army officers cornered flats meant for Kargil widows. Despite indictment by a judicial commission in 2011, the four former chief ministers and two ministers are still at large. Some bureaucrats have been suspended and some army officers have been arrested and released on bail but the case is nowhere near resolution. Astonishingly, the Bombay high court has even withdrawn the sanction for prosecution of Ashok Chavan, an ex-CM.

The failure of investigative agencies to nail the culprits in high profile cases has led to justified resentment and anger among the public. A number of WhatsApp messages are circulating which list the cases where courts acquitted the accused after much hype by the media and political parties. Needless to say, such messages implicitly question the very basis of our system. To restore the confidence of the public in the government, it is essential that the divergence between public and judicial perception should be bridged.

Ideally, a standard operating procedure (SOP) should be devised to deal with scams with a view to (a) punish the guilty, (b) recover the money earned illegally, and (c) prevent the recurrence of similar scams. The first step would be to have a separate law for scams. Once a crime is classified as a scam, an inter-ministerial special investigation team (SIT) would be constituted. The team would have people from the CBI, ED and income tax department. If necessary, banks and customs would also be associated. The jurisdiction of all other agencies would be ousted. The SIT would be required to submit a report within a definite period, say three months or six months, and file a charge-sheet simultaneously. The court would be obliged to hear scam cases on a day to day basis and decide such cases expeditiously. Public servants (politicians and bureaucrats) found guilty of participating in a scam would be debarred from holding public office for ever. The SIT would also be obliged to suggest ways to recover the money lost in the scam. Every year the SIT would submit a public report so that the scam does not vanish from public memory.

Of course, what I have suggested is not foolproof. A law can only be as strong as its enforcers. Haphazard action by the investigating and regulatory agencies has become so farcical that top serving bureaucrats publicly lay the blame for their inaction on the ‘5Cs’ – CBI, CVC, CAG, CIC and the courts. This view is not as irrational as it seems. If we look at the 2G scam, we cannot help but notice that the decision to allot airwaves on ‘first come first served basis’ was a very sound policy decision of the government. This policy ensured that mobile telephony rates in India are the cheapest in the world. Even the poorest Indian has a mobile phone and all Indians can participate in the digital revolution. Prime minister Modi has repeatedly stated that all government programmes, be it subsidy handouts or digital payments, would have mobile telephony as their delivery platform. This would not have been possible if the airwaves had been auctioned and mobile had been that much expensive. Of course, the persons dispensing airwaves made sure that they had feathered their nests before benefits reached anyone. Ditto for Coalgate.

Not auctioning coalmines was a sound policy decision. Had coalmines been auctioned, coal which is an essential input in electricity generation and many other industrial processes would have been much more expensive. This would have pushed up prices of all commodities and would have hit all manufacturing industries badly. But here also, the persons in power allotted coalmines to undeserving persons enriching themselves in the process. Thus in the ultimate analysis, both 2G and Coalgate were instances of common corruption and not scams in which the interests of the country were sold down the river. Looked at in this perspective, even Bofors was hardly a scam. The Bofors gun was the best in its class and was selected after a series of trials. Bribes were paid because politicians never do anything without ‘Vitamin M’ and arms dealers have an unbroken history of paying money to whoever buys their outrageously priced goods.           

Of course, all instances of corruption in high places lower public confidence irretrievably. People begin to think that if their rulers are engaged in massive corruption they would be justified in engaging in corruption in their small way. In this way, the moral fabric of the entire country is destroyed. Moreover, after being perceived as corrupt, the moral authority of leaders diminishes so much that fringe elements peddling communalism and casteism assume leadership roles.  

Regrettably, sometimes scams are “invented” to score brownie points little realising that such allegations harm the reputation of the entire political and bureaucratic structure – not only political opponents. In the 2G case, the theory of presumptive loss, so assiduously peddled by the CAG and accepted by the public was not enough to establish the criminality of the persons but nonetheless damaged the reputation of the then government and scores of people through a media trial. The outcome would have been different had the investigative agencies cool-headedly evaluated their chances of success before embarking on a wild goose chase. Of course, the agencies should also have avoided selective leaks while the case was still under investigation, which tarnished the reputation of the persons involved and raised the expectations of the public for a quick conviction. Even now, the Bofors scam is being resurrected for political gains. If the prosecution fails again (as it possibly would), it would be another blow to the credibility of the system.

In the final analysis, to prevent scams, the ruling classes have to realise that there is no good scam – even if their own friends and party members are involved. Till this realisation dawns, we will continue having unresolved scams which would make corruption a way of life in our country.

Saksena, IRS, retired as principal chief commissioner of income tax.

(The column appears in the January 15, 2018 issue)

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