New Delhi, February 13, 2013 -Coming as it does, when the country’s political parties are squaring off for the next general elections, a scandal involving defence purchases is the worst possible news for the ruling Congress party.
The arrest of Italian defence giant Finmeccanica’s chief executive Giuseppe Orsi in Milan on allegations of corruption in the deal to supply 12 Agusta Westland helicopters for Indian VVIPs has triggered political tremors in New Delhi, forcing the government to order a CBI inquiry.
The unfolding scandal could well reprise the Bofors scandal, which brought down the Rajiv Gandhi government in 1989.
Orsi was arrested after months of investigation ordered by an Italian court into Finmeccanica’s affairs in procuring defence contracts in various countries, including India.
The company was awarded a 560 million Euro (Rs.3,546-crore) contract in 2010 to supply 12 AW101 helicopters for IAF’s Communication Squadron that flies the country’s VVIPs. It is believed that the payoff could be in the vicinity of 51million Euros (Rs.362crore).
Three of these helicopters were delivered last month in the middle of the Italian corruption probe. IAF sources said three more would arrive by April and the remaining subsequently. In a statement, Finmeccanica said the operating activities and ongoing projects of the company will continue as usual and expressed support for its chairman and CEO hoping that “clarity is established quickly.”
Finmeccanica was also in the competition to fill India’s order for 197 light surveillance helicopters but it failed to meet the specifications and was disqualified from that order in 2010. “We have heard this information from news reports. As far as we are concerned, we had through our embassy in Italy requested the Italian government to provide us information that they may have in connection with the allegations which have been made on the matter. We have not received any response from them so far, the argument being that in Italy it’s a judicial process. Because the prosecutors are perhaps working under judicial supervision, therefore, the executive is not able to share that information with us. That is where we stand on that,” Syed Akbaruddin, spokesperson of the Ministry of External Affairs, said.
Italian prosecutors had been on the corruption trail since the last two years after former head of the company’s external relations wing Lorenzo Borgogni made disclosures about the payment of around 51million Euros in the Indian contract during his interrogation.
Borgogni had named two middlemen hired to swing the Indian contract – Swiss businessmen Guido Ralph Haschke and Christian Michael. Haschke, who holds American and Italian citizenship, worked with his partner Italo-Swiss citizen Carlo Gerosa. Michael, who reported to Orsi, is alleged to have received 30million Euros out of the 51million Euros. It is learnt that Haschke has also been arrested.
Subsequent investigation by Italian authorities circled around recorded conversations of Haschke and Michael with their various contacts. Michael is said to be deeply entrenched in India’s defence and political circles.
According to the report of the Italian investigators, a copy of which is with Mail Today, Indians whose names have appeared in the Haschke conversations include Pravin Bakshi of Chandigarh-based Aeromatrix Solutions Pvt Ltd, lawyer Gautam Khaitan, businessman Sanjeev Kumar Tyagi alias July (who is said to be a relative of former air chief S.P. Tyagi) and others.
Boastful
It is alleged the 51million Euros were paid to many people including Haschke, Gerosa, Orsi, Bruno Spagnolini (AgustaWestland CEO) and unnamed Indians. At one point in the 566-page report, Haschke is mentioned talking to his partner that Indian judges will never be able to find the money trail. The funds were allegedly routed through Mauritius and Tunisia.
