Rafale ‘Kickbacks’ Come back to Haunt Congress and BJP
Asia News Agency
French portal Mediapart, in its latest disclosures, has alleged that Dassault paid at least €7.5 mn to middleman Sushen Gupta from 2007 to 2012 through “overbilled” IT contracts with a shell company to secure the €7.87 bn deal Rafale deal with India. Despite the existence of related papers since October 2018, the Central Bureau of Investigation (CBI) has not yet taken up a probe, it alleged.
Three-part investigation: In a three-part investigative series in April, Mediapart said Dassault paid €1 mn to Defsys Solutions, one of the Gupta family’s Indian companies, for the production of 50 replica models of the Rafale jet, but French authorities were not shown any proof that they were actually made.
Further in July, the French publication reported that a French judge will conduct a judicial investigation into the Rafale deal on charges of corruption following a decision by the French national financial prosecutors' office (PNF).
The Rafale deal has faced several questions in the past pertaining to allegations of corruption, favoritism and deviations in procedure. The political controversy has now escalated with the BJP accusing the Congress-led United Progressive Alliance (UPA) government of irregularities in its attempted deal to purchase the fighter jets in 2012. The Congress on the other hand, alleges a “cover up” by the current National Democratic Alliance (NDA) government when the deal was finally sealed and executed in 2016.
BJP’s argument
Citing claims of a French media report on “commissions” being paid during the UPA rule, BJP spokesperson Sambit Patra said “The documents say Dassault, which was been described as D, paid €7.5 million or ₹65 crore as a commission to a middleman for 36 Rafale aircraft. This happened during 2007-12.” Patra referred to the alleged middleman in the deal, Sushen Gupta, and added that he was also involved in the AgustaWestland corrupt deal for VVIP choppers. “It is too much of a coincidence and too much of a coincidence is a conspiracy.”
He said the Congress misled the country ahead of the 2019 general elections by insinuating the BJP was responsible for irregularities in the deal.
Patra said the Congress should clarify the alleged irregularities when the UPA was in power. “For 10 years, the IAF (Indian Air Force) was deprived of fighter aircraft. There were negotiations without conclusion... now we know the negotiation was about the commission, not the aircraft.”
Patra also referred to a Supreme Court verdict saying it saw nothing wrong in the current deal and the government’s auditor Comptroller and Auditor General of India’s (CAG) conclusion the same year that India had not overpaid for the jets.
Congress argument
Congress spokesperson Pawan Khera hit back, saying an “operation cover-up” was on by the government to bury the corruption, kickback, and collusion in the deal. He called the “Rafale scam” the biggest in the history of free India. Khera said that Mediapart revealed a “dubious nexus” between the government, the Central Bureau of Investigation (CBI), and the Enforcement Directorate (ED).
The Congress focussed on a second claim by Mediapart that Indian investigative agencies were aware of these kickbacks at least as early as 2018 -- when the current NDA regime was in place -- but chose not to probe the charges. The report added that the deal involved offshore companies, dubious contracts, and false invoices. Mediapart said detectives from CBI and ED have had proof since October 2018 that Dassault paid commissions to Gupta.
“Were the anti-corruption clauses deleted to escape responsibility from bribery and commission to be paid in the Rafale deal? Why was the deletion of anti-corruption clauses approved by the Prime Minister and the Modi government in September 2016, despite the defence ministry’s insistence upon including it in the inter-governmental agreement in July 2015,” Khera asked. “Is this the reason that CBI-ED refused to probe the corruption in Rafale deal since October 11, 2018, till date?” he asked.
India’s decision to sign an $8.7 billion government-to-government deal with France to buy 36 Rafale warplanes made by Dassault was announced in April 2015, with an agreement signed a little over a year later. This replaced the previous Congress-led UPA government’s decision to buy 126 Rafale aircraft, 108 of which were to be made in India by the state-owned Hindustan Aeronautics Ltd (HAL).
Pricing controversy: allegations and counter allegations
The Opposition, led by the Congress, has previously claimed that the price at which India was buying Rafale aircraft was ₹1,670 crore for each, three times the initial bid of ₹526 crore by the company when the UPA was trying to buy the aircraft. It also claimed the previous deal included a technology transfer agreement with HAL.
The government has said that its deal includes several specific ready-to-fly security enhancements, and that it cannot disclose the details of the price because of a confidentiality agreement with France, and the strategic reason of not showing its hand to India’s enemies. The government submitted details of the price of the jets in a sealed envelope to the Supreme Court, and the court said it would not get into the pricing issue.
Role of defence middlemen
In its price related report, the CAG (Comptroller and Auditor General of India) report, tabled in Parliament in February 2019, while examining the earlier bid process between 2007-12, had pointed out procedural violations in defence procurement — Dassault’s technical bid was rejected and later it was allowed to incorporate India-specific enhancements to meet bid-compliant qualitative requirements. The report also unequivocally stated that the defence acquisition process needed reforms and streamlining — points, writes The Hindu “that are buttressed by the new revelations that shed light on the role of defence middlemen in mucking up the procurement process to favour a particular vendor. At the very least, investigative agencies such as the CBI and the ED must probe Mr. Gupta’s role in the bid process and the IGA. The Government cannot just wish away the questions that are repeatedly emerging about the Rafale deal and must open an investigation into the procurement process. After all, defence preparedness and national security interests dictate that operational readiness goes hand-in-hand with procedural propriety in defence procurement.”
Method in BJP’s anti-Congress stance
Allegations of corruption against the Congress in the Rafale deal between 2007 and 2012 have given the BJP fresh ammunition against the Congress. Ruhi Tiwari (News Editor, ThePrint) writes “by bringing up past instances with which it can drag the Congress down, the ruling party is trying to blunt any Opposition attack that comes its way and deflect any criticism it may be facing……..Attacking its current leadership — especially Rahul Gandhi — is enough for Modi’s BJP to ensure the Congress remains electorally inferior. In fact, targeting it for what happened a decade earlier is something that does not even perhaps resonate with many young voters…..” The BJP essentially “just wants to ensure Congress can never raise its head again and remains so bogged down trying to defend its past that it gets little time to focus on its future.
“The BJP is also using this opportunity to change the conversation and steer it in a direction that benefits it. In the latest instance, Rafale has meant even the Congress has got busy talking about it and counter-attacking the BJP. This suits Modi-Shah just fine, as they saw in the 2019 Lok Sabha polls how Rafale is a complete non-issue and wouldn’t mind bringing it back to the spotlight if it meant the discourse can shift away from farmers, Lakhimpur Kheri, fuel prices and the economy.”
