March 02, 2007

The ineluctable Quattrocchi

http://www.asianage .com/



Kuldip Nayar

Remember the Jain hawala scam? You knew it was about corruption in high places. But you could not get hold of the details at that time. The details have now been given by a top retired official of the Central Bureau of Investigation (CBI) in a book which says as much as Rs 1,000 crores passed hands and the persons involved were the then Prime Minister P.V. Narasimha Rao, the then chairman of Steel Authority of India, V. Krishnamurthi and the ineluctable Quattrocchi, an Italian national who was known for his contacts. His detention in Argentina is accidental, a fallout of the worldwide alert issued at CBI’s insistence some years ago.

The Jain hawala scandal which rocked the country in the Nineties was before the Supreme Court for more than two years. The then Chief Justice of India, J.C. Verma said that he was under pressure from an individual on the issue. He threatened to speak out, but never did. (Sic: He was later rewarded with a high post after retirement.) The case is not dead yet, but is gasping for breath. It all began with the arrest of Ashfaq Hussain, engaged in funding terrorist activities in Kashmir. He received money from abroad through hawala, a private channel which foreign banks used through Dubai. While conducting raids on a hawala dealer in Delhi, the CBI seized some diaries which contained the abbreviated names of serving and former ministers and bureaucrats. The money given was indicated against the abbreviated names. The amounts were kickbacks officials and politicians holding high positions had received for favours shown to Jain in various projects and economic deals.

As many as 115 people were booked, among whom J.K. Jain was the main culprit. He told the CBI about the mechanism: how he managed to get sanctions for various projects at inflated rates and how he distributed money thus earned among the high-ups. Quattrocchi worked at the highest political level — with the Prime Minister’s Office and the Prime Minister. Jain also helped senior politicians and senior civil servants "for transfer of their own funds from abroad." During the interrogation, according to this top retired CBI official, Jain said, "he had passed on Rs 3.35 crore to P.V. Narasimha Rao" who took over as Congress president after Rajiv Gandhi’s assassination and subsequently became Prime Minister. "On the direction of Narasimha Rao, the money was moved to his account through Captain Satish Sharma, Chandraswami, etc." Jain also narrated the details of how and where a small part of the money was placed in the cupboard in a room at Narasimha Rao’s residence as directed by him.

Kickbacks averaged 10 per cent. Jain got three per cent and Quattrocchi seven. Not long ago, the Congress-led government helped Quattrocchi first to escape from India and then to get the kickbacks which the banks abroad had frozen at the request of the Central government. The Supreme Court asked the CBI how Quattrocchi got the money. Krishnamurthi was the chairman of Steel Authority then and the Durgapur steel plant was being modernised at a high cost. A Russian firm gave a cheque of Rs 15 crores as kickbacks under the cover of payment for a consignment of some cast iron equipment that was taken from India but shipped back in the form of components. The firm inflated the cost of the consignment to pay the Rs 15 crores. But the transaction was on paper.

The retired CBI official says that he wanted to "investigate Narasimha Rao, search if need be and charge-sheet if the evidence so warranted." The then CBI director not only stopped him from going ahead but shunted him out of the agency. I corroborated the facts when I met the retired official. I found him a forthright person who was punished through transfers: 23 times in 12 and half years.

A few days ago when the present CBI director told newsmen in Delhi how successful the agency had been last year, he could not naturally talk about pressures. But he was quite embarrassed when asked why the CBI was tardy in taking action against BSP leader Mayawati in the Taj corridor case. Since his press conference the CBI has filed a case against Mayawati. The Central government has yet to give permission because this is the practice for action against state chief ministers. The Congress president may think twice before giving permission because Mayawati has seats in the Lok Sabha and also counts in the UP election. Again, the Centre has dragged its feet on giving permission to the CBI to take action against former Bihar chief minister Lalu Prasad Yadav and his wife Rabri Devi for accumulating assets disproportionate to their known sources of income. The Bihar government has filed an appeal last week to the embarrassment of the CBI.

Unfortunately, some CBI directors were more loyal than the king. They did not want to take any action against people who were either in authority or had connections with them. For example, retired CBI director K. Vijaya Rama Rao did not want to move against Narasimha Rao. Present director Vijay Shanker has taken too long to consider the pros and cons in the case of Lalu Yadav. It is apparent that the Manmohan Singh government does not want to displease Lalu Yadav. The Congress-led coalition needs to keep its brood intact.

The CBI is a special police establishment which was founded in 1948. It cannot move in any matter that takes place in a state without local permission. This can create problems at times. I think that the National Human Rights Commission’s suggestion to put the CBI on the Concurrent List has merit. Federal crimes are increasing and New Delhi cannot institute even an inquiry without the consent of the state concerned. But then the Centre too is not an honest broker. It plays politics.

There is no way other than making the CBI autonomous, not even under supervision of the Vigilance Commission, as was once suggested. It should report directly to Parliament. Only then would it be able to perform independently. Whatever else is done may only be a palliative. The malady is too deep. As long as the chief ministers in the state and the Prime Minister at the Centre are the ones to decide who will be prosecuted by the CBI and when, corruption in high places cannot be eliminated.

The Administrative Reforms Commission, appointed by the Manmohan Singh government, has said that the Prime Minister should not be brought under the ambit of Lokayukta (ombudsman). The suggestion has a point because the Prime Minister should not be involved in false cases to bring the government to a standstill. Yet, how does one deal with corruption cases against Prime Ministers like Narasimha Rao?

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