From
Bofors to 2G, the same fate
The
parliamentary committees on the howitzer scam and the stock market scandal
protected the powerful and failed to fix accountability. The same is true in
the spectrum case
The current political situation brings back
memories of 1989. The Prime Minister then was under a cloud in the Bofors scam.
Many of his close associates like Lalit Suri and Ajitabh Bachchan were accused
of wrong-doing. Today, Prime Minister Manmohan Singh and many around him are
under a cloud. The Congress president has been weakened by allegations against
her son-in-law. The Joint Parliamentary Committee report on Bofors was rejected
by the Opposition. It resigned en masse from Parliament forcing national
elections. Presently, the JPC draft report on 2G has been rejected by the
entire Opposition.
In 1989, Rajiv Gandhi was protected by the
ruling party members in the JPC. The Opposition felt that some key people
associated with the Bofors deal were not called to depose or had not been
adequately questioned. Now too, A. Raja has not been called to depose, even
though he is the key accused in the 2G scam, lest he should implicate the Prime
Minister and the Finance Minister.
COALGATE
As in 1989, governance has taken a beating
today with the government getting caught in one scam after another. In an
attempt to brazen them out, the government is committing mistakes and
compounding its problems. The mess created by the former Law Minister vis-à-vis
the Central Bureau of Investigation and the Supreme Court, in an attempt to
save Dr. Singh (who was also the Coal Minister when the scam took place), has
embarrassed the government.
As the Bofors scam unravelled in 1987-88,
India’s international standing plummeted. The GATT Uruguay round of
negotiations was at a crucial stage with India acting as the leader of
developing countries in negotiating with the advanced countries. India’s stand
softened perceptibly at that time. Consequently, in 1999, in Seattle, India was
not trusted by other developing countries. Today also, India’s stock has
declined and its neighbours are taking advantage of the situation.
In 1987, it was the Swedish radio that brought
to light the payoffs in the Bofors deal. In Parliament, Rajiv Gandhi denied any
wrong-doing. His government argued that Bofors was a good gun but investigators
in Sweden revealed that payoffs had been made. The UPA government, too, has
denied wrongdoing in the various scams that have come to light and argued that
its actions have furthered policy and helped keep prices down. It is the
intervention by courts that has led to progress in investigations into scams
like the CWG, Hasan Ali case, Liechtenstein disc, 2G and Coalgate.
In the Bofors case, the true beneficiaries
could not be identified because of manipulation at the highest levels. This
became clear soon enough but the matter was nailed when Madhav Singh Solanki
passed on a note to the Swiss Minister — to slow down the case. This led to a
furore in Parliament but rather than reveal the content of his note, he
preferred to resign. Who sacrifices one’s career unless the stakes are very
high? Ottavio Quattrocchi escaped from India and has been repeatedly helped by
our agencies (which weakened the case) so that he does not return to India to
face trial and questioning.
The Congress has accused the Opposition of
playing politics with the Bofors scam saying even when the Opposition was in
power, it was not able to unravel the case and find the ultimate recipient of
the Bofors money. This is a pointer to how important cases are spoilt so that
it becomes difficult even for an Opposition party to solve it when it comes to
power. The system works like a mafia — in secrecy and silence. The institutions
that should help expose scams are unable to do so because of the silence of
those who know. The selection of people for key posts is often based on their
pliability. IAS officers like Arun Bhatia or Khemka are marginalised. Some
honest individuals who do get to the top typically keep their counsel and avoid
ruffling the system much. They become the fig leaf behind which the system can
hide its true nature.
In the Coalgate scam, it has emerged that the
CBI is not independent of the political authority which it is supposed to
investigate. It has now been confirmed that cases against politicians are
activated or put on the back burner depending on the needs of the ruling
dispensation. It is the Supreme Court that placed the CBI under the Central
Vigilance Commission to introduce a degree of autonomy in its functioning. But
it has now been proved beyond doubt that the administrative machinery under
which the CBI personnel function can twist its arms, undermining its autonomy.
In India, Parliament is the ultimate watchdog
to check wrong-doing by the authorities. The increasing number of scams is a
testimony to its failure. JPCs are an instrumentality of Parliament and an
analysis of their inability to make a dent is a pointer to what is wrong in the
system. Their lack of success is due to their inability to pinpoint
responsibility in the issues they have investigated, and this is largely due to
the partisan attitude of the members of the JPCs. They have acted to protect
the powerful. The JPC of 1992 on the stock market scam in which Harshad Mehta
was the key player is a case in point.
Mehta played havoc with the financial system,
including the RBI. He was the blue-eyed boy of the Finance Ministry at that
time. In October 1991, when in spite of the crisis confronting the economy —
high inflation, declining growth rate, and the BoP crisis — the stock market
kept rising, concerns were raised in Parliament. The then Finance Minister
replied that “he would not lose sleep” over the matter. A clear signal to
people like Mehta that the government would not check their speculation in the
stock market. However, when members of the JPC wanted this to be recorded in
the report, the Congress members resisted and the report did not incorporate
it. Clearly, accountability could not be established.
The Finance Minister met Mehta a few days
before the budget in 1992 and accepted his demand that shares should be
exempted from wealth tax. The markets rose sharply on the day of the budget and
Mehta made a killing because he had advance information. Mehta was raided by
the Income Tax department that day because of the huge amount of funds he had
been moving around for some months but the Minister stopped the raid a few hours
after it started. So the source of funds could not be traced and the scam could
not be prevented. It was never revealed in the JPC who stopped the raid and
why, because the officer concerned did not appear before the JPC. Again
accountability could not be established.
The Janakiraman Committee report on the scam
estimated a loss of Rs.3,128 crore to the public — huge compared to the Bofors
scam of Rs. 64 crore. Today, the Coalgate and the 2G scams dwarf all other
scams. It is clear that stock market scams have continued because
accountability was not fixed in 1993. A large number of people lost their
lifetime savings (as in the Saradha chit fund scam). Now again, accountability
is not being established in the 2G scam.
ROT RUNS DEEP
Waves of scams have occurred in the stock
market. Timber companies, granite companies and dotcom companies were floated
only to disappear with the public money. It was estimated that 2,500 companies
disappeared in the 1990s, leading to huge losses to the public. No one was prosecuted
and that emboldened the scamsters. The collapse of the UTI had much to do with
the manipulations in the stock market and the pressures from the Ministry of
Finance but no responsibility was fixed. The problem is not peculiar to the
Congress. Since 1989, almost all parties have been in power but the system has
hardly changed. The rot of unaccountability runs deep and is visible in all
institutions, including hospitals and universities where the most literate and
conscious population of the country works.
Herein lies the lesson for the nation facing
an increasing number of scams and breakdown of systems. Those in power are
unaccountable since they operate in a system of silence and surround themselves
with sycophants. Since little has been learnt on this score since 1989, the
scale of disruption has grown manifold. When will we learn to fix
responsibility?