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Season of scams

The craft of graft

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Three scams - Commonwealth Games, Adarsh, and now the allocation of 2G spectrum - appear to have knocked the wind out of the Congress-led government. It's not much better for the BJP, which is being rocked by land and mining scams involving its Karnataka government. Look hard, and it is apparent that this is not a challenge facing just the Congress and the BJP. The political class as a whole is battling its worst crisis of confidence yet.

This is not the season for politicians. Even before the dust had settled on the corruption scandals that marred the Commonwealth Games and the Adarsh housing scam that scalped Maharashtra's former chief minister, Ashok Chavan, a fresh set of explosions has rocked the political class, cutting across political parties. In Delhi, a blast from UPA-1 returned to shake the Manmohan Singh government in the form of the colossal swindle involving 2G spectrum, which the Comptroller and Auditor General (CAG) of India estimated to be as high as Rs 1. 76 lakh crore. The political gale not just swept aside telecom minister A Raja of the DMK, but has now put the prime minister in the dock for alleged inaction. In Bangalore, the BJP faced the heat as flames from dubious land deals threatened to consume the Yeddyurappa government. The alleged involvement of the chief minister's relatives in land grab has not just cleaved the party;it is also threatening the future of the first saffron government south of the Vindhyas. In a season of scams, skeletons are tumbling out of every party's cupboard with stunning speed and mind boggling figures.


There may be some comfort for the Congress in the plight of the BJP, but not much. The Congress has borne the brunt of the serial scams, having lost one chief minister, a parliamentary party secretary (Suresh Kalmadi) and a union minister, albeit from an allied party, in quick succession, and the challenge that confronts it is particularly daunting. This is a Bofors-scarred party, vulnerable on corruption issues. The sudden eruption of scams around its senior leaders in less than three months is an unwelcome reminder of its Achilles heel.


It is, indeed, ironic that the man who shielded the party's weak spot from public gaze with his squeaky clean image, Manmohan Singh, is today being tarred by the same brush, even if as a passive bystander.


"The Prime Minister's personal honesty is not relevant, " says CPM leader Nilotpal Basu. "What the 2G scam shows is that he has facilitated the engineering of scams and allowed the country to lose out on so much of money while he is at the helm. This has punctured his credibility, which was the USP of the UPA government. " BJP leader Arun Jaitley concurs: "The government presents an image of helplessness to check corruption. It has taken away the sheen from the government. "


There is palpable disquiet in the Congress over the unexpected turn of events. "The Prime Minister and Sonia Gandhi have such a good image that it continues to be a bulwark against criticism. But if corruption scandals continue to erupt, the bulwark may not hold, " acknowledged a senior party leader who did not want to be identified.


Many in the Congress fear that more scam stories are waiting to break because corruption is so endemic in the political system. It is imperative then for the party to somehow insulate its top brass, namely Sonia and Rahul Gandhi, from the muck that is bound to fly. The aggressive sacking of Ashok Chavan, Suresh Kalmadi and Raja was part of this strategy - an image-building exercise to showcase "strong, clean leadership". While Chavan and Kalmadi were axed in one fell swoop on the same day, the decision to get rid of Raja was taken in an equally assertive manner, claim party sources.


It happened on Sunday, November 14, minutes after a function at Parliament House to mark Jawaharlal Nehru's birthday. According to one leader, the PM requested Sonia, Pranab Mukherjee and Ahmed Patel to step into his room to discuss Raja's fate. The discussion finished in a few minutes with a unanimous decision that Raja must go before Parliament met on Monday, the day the Supreme Court was to hear the Raja case. Mukherjee was assigned the task of conveying this to DMK boss M Karunanidhi, which he did immediately from his room in Parliament. By late evening, Raja had sent in his resignation.


"We may have some bad eggs, but we have shown that we will take action against them, " said one Congress MP. "Are the others ready to do the same? Will the BJP do it? We even sacked (former minister of state for external affairs) Shashi Tharoor even though his was a case of impropriety rather than corruption and did not involve government resources. " Tharoor had to resign following reports that he had secured "sweat equity" for his girlfriend-turned-wife Sunanda Pushkar in the Kochi IPL team.


With scams, political impropriety, corruption or just plain loot claiming four heads, some in the Congress are beginning to question the wisdom of this muscular approach. "It's a high-risk game, " said a leader, recalling the way Narasimha Rao's aggressive hawala gambit against his opponents boomeranged on him in the 1996 general elections. But there are many who disagree. They believe that there is now an opportunity to clean out the Augean stables and present Rahul with a party free of unwanted encumbrances of the past.


"We have fresh faces, young talent, and many good people. We should push them forward. The problem with us is that we don't field our A-team, " said one leader. Another agreed. "This is our chance to make sweeping changes and show that we mean business. We must get our act together, " he said.


The Congress has managed to roll with the punches so far. And it has been helped by the fact that the shadow of corruption is lengthening over the BJP as well. Before the land scam hit the Yeddyurappa government, the party was embroiled in scandals over illicit mining deals that caused huge losses to the state exchequer. The notorious Bellary brothers were at the centre of the mining scandal and their links allegedly extended all the way to Delhi, to some central leaders of the BJP such as Sushma Swaraj and Ananth Kumar.


Simultaneously, the name of a BJP national executive member, Sudhanshu Mittal, has cropped up in investigations into the transfer of over Rs 7, 300 crore from one Mauritius address to several companies that are linked to Mittal's brother-in-law Lalit Goyal. This embarrassing disclosure came even as he was raided soon after the Commonwealth Games, reportedly for his involvement in some controversial CWG project contracts (it is now said the raids were actually because of the huge fund transfers from Mauritius).


Even as it grapples with the crisis generated by these allegations of corruption, the BJP is also going at the Congress-led government on account of the Games, Adarsh and now Raja. But somewhere, the need to watch its rear has cramped the BJP. So far, it has pressed for a Joint Parliamentary Committee (JPC) probe into the 2G scam, but hasn't gone for the jugular with a demand, for instance, for the PM's resignation. This has given the Congress an opportunity to seize the moment and steady its rocking boat.


With the BJP on the defensive, there is no numbers game playing out in Parliament. And general elections are far away - a good three-and-a-half years off. Congress leaders feel they have sufficient time to control the damage. "Public memory is short and people will forget. What we need to do is come up with a big idea so that we can put these scams behind us, " said a leader.


The search is on. UPA-1 rolled out several big ideas: the National Rural Employment Guarantee Act (NREGA), which has changed the economics in rural India, the Right to Information (RTI), which has made governance more transparent and accountable, and the loan waiver scheme which brought some relief to lakhs of debt-ridden farmers. So far, UPA-2 has come up with two: the Food Security Bill and the Women's Reservation Bill. But neither has been rolled out yet. In the meantime, the power of these ideas has been abridged - the Food Security Bill is said to have been watered down so much that when it is passed by Parliament, it might not have the potency to fire the people's imagination.


There is growing anxiety in the Congress about the corruption stain - party leaders say it must be washed away, the sooner the better. Next month, Sonia Gandhi has to revamp the Congress organisation and appoint a new working committee. Although she is inclined to play safe, there is pressure on her to make a statement through a drastic overhaul. The party will also hold a plenary session at which it could come out strongly against corruption. This would make up partially for the inexplicable silence at the November party meet in Delhi.


A cabinet reshuffle is also due and is widely expected to take place in January. Manmohan Singh and Sonia can turn the challenge into an opportunity and carry out a major image makeover of the government. The expectation is that the reshuffle will knock out deadwood and those with questionable reputations while inducting fresh faces and giving younger people more prominent positions than they have held so far. Can this really be done by a coalition government ? That's a nagging doubt voiced by many Congress leaders.


But beyond the here and now, beyond the Congress and the BJP, a wider crisis appears to be gripping the political class. Politicians are increasingly battling an image problem and the recent rash of scams has created their most severe crisis of credibility yet. "At this rate, people will lose faith in us and in the democratic system we have, " lamented one leader. "A change of personnel is a half-cosmetic measure. Its impact will last only till the next scandal surfaces. But do political parties have the will to clean up the system?"


"Unless we cut the nexus between corporate lobbies and politicians, scams will continue to happen, " says Nilotpal Basu. "We are presiding over a paradigm whose natural consequence is crony capitalism and scams are only about crony capitalism. " He pointed out that virtually every important corporate house in India in the telecom sector had benefited from the questionable manner in which 2G spectrum licenses were handed out.


Indira Gandhi had once famously described corruption as "an international phenomenon". Sure, but the rash of corruption in India appears to be more virulent than in any other part of the world.

The great telecon job

May 2007 | A Raja takes over as telecom minister


Aug 2007 |
TRAI recommends no cap, no M&A and no change in roll-out obligations and market-based pricing for determining entry fee


Sep 25 |
Raja sends press release to announce sudden cutoff date of Sep 25, 2007


Oct 1 |
575 applications at an average of 26 applications for each of the 22 circles received


Oct 15 |
TRAI protests against issuing fresh licenses, DoT ignores


Oct 19 |
DoT sends out press release announcing 'no cap' is accepted, but change in roll-out obligations and M&A norms. TRAI protests, ignored again

Oct 25 |
Secretary, DoT, D S Mathur and Manju Madhavan write detailed note seeking auctions for allocation of licenses as the only legally defendable option


Nov 1 |
DoT sends request for law ministry opinion. Law ministry declines. Says send matter to EGOM. Raja declines


Nov 2 |
PM cautions Raja, informs about TRAI recommendations and spectrum shortage. Direction to consider auction and benchmark pricing at 2007 rates. Raja refuses. Says he will proceed with FCFS - first-come-first-served


Nov-Dec 2007 |
D S Mathur refuses to sign files. Manju Madhavan, member finance, proceeds on leave in protest, takes premature retirement in February 2008. D S Mathur retires on Dec 31


Jan 1, 2008 |
Siddharth Behura joins as secretary, DoT


Jan 10 |
LOIs issued, pricing licenses/2G spectrum at 2001 prices of Rs 1, 658 cr for pan India licenses. FCFS definition changed by Raja. Fist fights ensue in Sanchar Bhawan over who would pay first. Outrage in the media


Jan 14 |
TRAI writes 3rd protest letter. Raja ignores

Feb-Mar |
Licenses granted


Apr 22, 2008 |
New M&A guidelines issued, TRAI recommendations circumvented. Acquisition allowed


Nov 4 |
Swan and Unitech inform DoT of 45% and 60% stake sale to Etisalat and Telenor for Rs 9, 800 cr and Rs 11, 620 cr respectively - valuing their firms 7 times higher than the price of their licences - with no customers or income/cash flow


Nov 5 |
Raja directs Telecom Commission to ban sale of promoters' equity after Swan/Unitech deals are done


May 2009 |
Raja retains telecom portfolio in UPA-2


Oct 22 |
CBI registers FIR against DoT and private companies citing criminal conspiracy and loss to the exchequer under Prevention Of Corruption Act. A K Srivastav, DDG, interrogated. Files seized. Company representatives also questioned


Mid-2010 |
3G auctions/BWA auctions yield over Rs 1 lakh cr. All money is deposited within 10 days. CAG launches investigation. PIL filed in Supreme Court


Oct 2010 |
DoT provides para-by-para reply to CAG. Supreme Court raps CBI for dragging its feet


Nov 2010 |
CAG report finalised. Says Rs 1. 76 lakh cr loss to exchequer. Indicts Raja. Media and opposition parties cry for Raja's head. Parliament stalled


Nov 14 |
Raja forced to resign after PM returns from Korea. Hands over resignation to PM in late night meeting

Reader's opinion (8)

Arjun SoodDec 4th, 2010 at 03:05 AM

engineering scams with the 'right' people at concerned places(e.g.the CVC)and then letting the guilty go away from the public gaze with no concrete inquiry is only draining out public money.
With both the major national parties equally involved in it,citizens must do more than being a spectator.

Vikas JainNov 25th, 2010 at 20:53 PM

greed greed greed.... that is the summary of the story, politicians are not coming out of vaccum, they are the products of this society. when we see people in general, nobody is immune to idea of making quick bucks, ultimate aim of this life is to amass wealth this seems to be taking its toll.

Sachin JainNov 25th, 2010 at 15:25 PM

Sometimes, we, common Man feels that its a part and parcel of the democracy but we forget that we should give them a lesson (While casting our votes)and a clean image personnel should be given a fair chance. What is done by Bihar Voters is the latest example of it.

Birendra ChatterjeeNov 25th, 2010 at 01:01 AM

Some of the questions posed by the writer are VERY difficult to answer. Although DEMOCRACY is by and large the BEST political system which works over a long period, it has some built in snags nearly impossible to remove as argued by SPENGLER in his DECLINE OF THE WEST. We have to keep trying.

Saritha SasiNov 23rd, 2010 at 16:39 PM

When all parties are sailing in the same boat. What is all this rubbish and countering each other. Let all parties pledge that they would not field any candidate who has bad record.Also there should some age limit in politics too. Once elected as MP let him sit at home and give change to young one

Deepak SahrawatNov 23rd, 2010 at 15:06 PM

Ya media should also focus on the beneficiaries of this scam. Ultimately these are the ones who prompted the scam in first place. And lets hope Raja gets justice for misusing his powers.

Chetan DaveNov 21st, 2010 at 08:27 AM

sunil Jain of Business Standard has been detailing the scandal even as it unfolded. No one picked up the story. Those of us who have been reading have known about this for a while. Still there is no media focus onnthe ultimate beneficiaries, I.e. swan and unitech. Why not? Follow the money!!!!

Parul AgarwalNov 20th, 2010 at 21:28 PM

This is so sad, why so much greed?

 
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