How the system of bribery works in military — Agusta-Westland case

In the context of huge bribes/payoffs being basic to the Indian military procurement system, and which reputation has been burnished with every big arms deal since the Jaguar deal in the late Seventies — the trend-setter in this respect, the foreign vendor companies happily and eagerly make illegal payments to secure rich, perpetually paying, contracts. This system of bribery/payoffs for military buys is entrenched and flourishes and is based on three conditions: (1) The political top order’s treating procurement of military hardware as channel for making often huge amounts of money ostensibly for the ruling party but actually to enrich itself, (2) a crooked service chief inclined to make his tenure as profitable (in the filthy lucre sense) for himself as possible, and (3) the chief exercising his administrative right to post any senior officer anywhere, carefully selecting officers for certain key posts in the service hierarchy on the basis of his having come to know over the years as persons willing to bend a little or a lot and otherwise to facilitate the skimming off of the cream in arms deals.

The most important thing for a service chief with a mind to laying his hands on a helluva lot of ill-gotten funds from arms contracts in the pipeline is to post the right sort of pliable officers as Deputy Chief (Plans) and the Assistant Chief (Plans). As reward for being pliant these two officers can expect to benefit from the payoffs and/or get guaranteed sought after postings post-time as Assistant Chief (Plans) and Deputy Chief (Plans). With these two posts filled with your own men, the path is cleared for the service chief to rake in the monies.

Now consider what happened in the Agusta-Westland VVIP helicopter deal with the Italian firm Finmeccanica. Soon after the Congress Party returned to power in 2004, the grapevine was that the VVIP helo deal on the anvil was to be milked, that the word had come down from the political high that the new regime was sticking with the Agusta-Westland rotary aircraft selection, and the IAF better get a move on with the procurement process. The political was managed by, yes, “AP” in the Italian court documents, who the media has speculated is Ahmed Patel — the closest confidante of Sonia Gandhi, but the routing had to be through the distaff side of the First Congress family with varied business interests.

The Central Bureau of Investigation is on the right track by calling in the then Deputy Chief of Air Staff (Plans) Air Marshal JS Gujral (retd) for questioning. Assuming he’s prepared to sing, there’s no better placed person to explain just what happened and how in the Agusta deal with the then Chief of Air Staff Air Chief Marshal SP Tyagi in the saddle. Tyagi has been named, along with the strangely sissyish-named first cousins of his from Chandigarh — longtime middlemen in import deals — the entire caboodle comprising the “Fratelli Tyagi” of the Italian indictment. But why is ex-chief Tyagi fairly confident Gujral will reveal nothing? Because as the protocol among thieves goes, if you rat to the authorities, there’s goods against you too that will be leaked to the same investigators. Gujral is thus stuck even as Tyagi, who the BJP govt is intent on sending to the slammer, is twisting slowly in the wind. Unless SP Tyagi’s association with the Vivekananda International Foundation — NSA Ajit Doval’s baby, can save him, which isn’t likely because then the ruling party won’t be able to get to the Gandhis — Sonia, Rahul, Priyanka (and Vadra) via Ahmed Patel and his characteristic role reportedly as bagman for the family.

But how did the payoffs reach SP Tyagi? Tyagi is listed as a consultant to the software development firm IDS Chandigarh owned by Tyagi cousins. What Tyagi knows about software one cannot say for certain, except to note he’d barely to do much advising besides identifying a laptop computer. So the consultancy was the payoff route to the former air chief, with the Italian vendor possibly using the IDS Chandigarh as the channel, perhaps, handing over a CD with some software development information which could be passed off as part of the offsets obligation worth $10-odd million.

CBI may already be on to this SP Tyagi payoff mode.

The larger issue remains unaddressed though. And it is not just the Western vendor companies that are in the business of buying into arms deals in the above fashion. The Russians have been just as active, where IAF is concerned, starting with the Su-30MKI contract. If the BJP is serious about making the defence procurement system “corruption mukt”, about rooting out corruption, it can task CBI to do time bound investigations beginning with the Su-30 deal in the 1990s and every procurement contract since then, including for the MiG- 21 bis upgrade, British Hawk, the Mirage 2000, the Mirage 2000 upgrade, and now the Rafale. Were the CBI to dig a bit it’ll find a whole slate of Chiefs of Air Staff, Deputy Chiefs of Air Staff, and Assistant Chiefs of Air Staff to hunt down. To just hang Tyagi or some other service chief would be to leave the corruption system in place intact.

MOD has to also alter the system to take the administrative power of posting away from service chiefs and to seriously vet officers shortlisted for the posts of deputy chief (plans) and assistant chief (plans) of all the services before they are appointed. That will be the first and significant step to end the rot in the military.

Prime minister Narendra Modi and defence minister Manohar Parrikar have so far proved they are clean and above board. They can make this basic systemic change in the military service chiefs’ authority to make it impossibly difficult for the political top order in the future to initiate corrupt deals and see them through to fruition. This small change will be like taking an ax to a major source of corruption in government — the biggest, most lethal, internal security threat to the Indian republic, and far more dangerous than terrorism, Naxalism, or even extremist Islam. Corruption has already eaten away at the entrails of the government, the armed services, and the nation.

About Bharat Karnad

Senior Fellow in National Security Studies at the Centre for Policy Research, New Delhi, he was Member of the (1st) National Security Advisory Board and the Nuclear Doctrine-drafting Group, and author, among other books of, 'Nuclear Weapons and Indian Security: The Realist Foundations of Strategy', 'India's Nuclear Policy' and most recently, 'Why India is Not a Great Power (Yet)'. Educated at the University of California (undergrad and grad), he was Visiting Scholar at Princeton University, University of Pennsylvania, the Shanghai Institutes of International Studies, and Henry L. Stimson Center, Washington, DC.
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13 Responses to How the system of bribery works in military — Agusta-Westland case

  1. Received this emailed response from Aditya Phatak, Senior Researcher, Gateway House, Mumbai:

    I hold your analysis in highest regard. But your suggestions in Agusta case are in my opinion not going to do the job. Because the ability to not salivate over the amounts of money changing hands in defence deals will demand super human control. Something which we have seen rarely if at all in such places of power. I would implore you to talk about how India can import for time being while building an ecosystem that (acquires-assimilates-innovates-produces) to keep this temptation and strategic choke points down to a minimum.

    • Aditya — Valid point about the sums dangled being just too large not to tempt even the most righteous. But your solution about importing arms while “building an eco-system” in practice will, for the same reasons of external inducements, always remain in the process of being built even as arms continue to be imported.

  2. &^%$#@! says:

    Pilatus needs to be added to the list. Quite a few gymnastics were performed to accommodate this a/c. On the IN side, there’s the Scorpene,…….

  3. ~!@#$%^&*()_+ says:

    Problem with waiting till we get help from foreigners in building the eco-system is that it still does not address the issue of tighter controls. In fact this still does not stop the corrupt people from within to make their moves. For example in the Akash Radio Line Modem case where scientists who had worked under the Ministry of Communication and IT had been arrested.

    Unless the domestic Intel agencies actually begin to chase and harass the middlemen there will never be any hope. Any unregistered and/or unauthorized person, who is trying to influence the process, in secrecy, instead of speaking in public and submitting to public scrutiny should be treated as a potential espionage agent.

  4. &^%$#@! says:

    I believe that this article is fancifully over optimistic about the virtues of Modi and Parrikar. Going through with the monstrously expensive and needless Rafale deal, even after the Law Ministry has “red flagged” the French refusal to provide sovereign guarantees:
    http://indianexpress.com/article/india/india-news-india/india-france-law-ministry-redflags-liability-issues-in-rafale-deal/
    does not display any change from previous regimes. Further, even the actual nature, content, and percentage of the offsets are dubious, and are merely an eyewash to showcase the “Make in India” slogan which now rings hollow.

    I believe it is too late to make any changes to the system. The corruption and rot has spread too far and too deep. All that an enemy needs to do is to kick the door open, and the whole rotting edifice will come crashing down.

    • Asking a Question who is Rafale India partner can answer several other questions.

      • And dont give up yet if nothing can be done(about corruption) then might as well not crib about it. Technology can change a lot of things. Lets not start with big things start with small, like land registrar offices.

        Streamlining procedure that leave loophole for corruption. E-auction, service rules and contract obligation for senior officers on revolving door etc more important than calling for moral certitude. A test which even Yudhistar failed.

        Only correct assumption is that given circumstances and situation everyone is potentially corrupt.

      • &^%$#@! says:

        And then one will get to more rot like the C-17 and P-8 deals with their famous offsets, the EMALS craze which is tailor made to hobble India’s small strategic program,……

    • &^%$#@! says:

      And then one will get to more rot like the C-17 and P-8 deals with their famous offsets, the EMALS craze which is tailor made to hobble India’s small strategic program,……

  5. KP says:

    It is not just the Services but the entire politico-bureaucratic system that needs a complete overhaul. When an Officer is cleared for Flag Rank, the bureaucracy will try and get him over to their side. 90% of the (till then) upright officers fall into this trap as they are keen on good appointments and promotions. The balance 10% who dont bother are given silly desk jobs. The Chief and CinCs are then chosen from the ones who are willing to play ball. That is the begining of the rat race.

  6. quickboy says:

    Well none of this will work, especially when you have a MEDIA intended to do foreign bidding, Well it was all ARJUN TANK DEFIENCY AND TEJAS DEFICIENCY till now, The MIG-21s were called flying coffins, when their crash rate was not much to be embarrassed about and also if we take the number of bird hits etc, which are by the way the direct consequence of allowing real estate mafia, which is always patronised by politicians encraoching around the air bases, well the scene is clear. The news that Indian Meida can be reduced to monitored and managed employees for a price is the biggest threat.

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