AgustaWestland deal: How govt was forced to act

After remaining passive for almost a year after it first came to light, the VVIP chopper deal controversy has gone through a whirlwind in the past six days. The action – which has now finally led to the cancellation of the Rs 3,546 crore contract – started with the arrest of the Finmeccanica CEO Orsi in Italy on Tuesday.

While arrests and investigations reports on the chopper deal have been made in the past, Tuesday's arrest was a turning point as a very detailed account of the latest in the Italian investigation also came out. This was in the form of a 64 page report by the Italian prosecutors that described the case as it stands now.

Besides Orsi's arrest, the Italians also issued extradition requests to Switzerland for the custody of two key middlemen, Guido Haschke and Carlo Gerosa. More importantly, the report had explosive details of the investigations that included the names of Indians alleged to be. The first reaction of the government after the arrest was that it would conduct a CBI probe with Defence Minister AK Antony vowing that `no guilty will be spared'.

However, on Wednesday when the Indian Express broke the story that the report alleged that former air chief sp tyagi had received bribes to swing the deal in favor of the Italians, the government was forced into action with Antony saying that the deal will be cancelled if charges are credible.

The Indian Express also detailed how the kickback money was routed through elaborate engineering contracts that were bogus . The money was routed through Tunisia and Mauritius. By the same evening, Tyagi came on record to say that the technical specifications of the contract – the timing of which is key to the investigation – were made in 2003 when the NDA was in power and were on the directions of the then NSA Brajesh Mishra.

On Thursday, the Indian Express  carried an exclusive story detailing the confession of middleman Haschke to Italian investigators in which he said that he met Tyagi several times and discussed the deal with him. He also admitted that he was paid a commission of Euro 20 million in the contract from Finmeccanica.

Hours after the story appeared, the Defence Ministry came out with its first detailed comment on fact sheet and timeline of the procurement. In this document, the government clearly says that the technical requirements were actually changed in 2005-06. However, the statement put the blame on the NDA government that a policy decision on the parameters were made in 2003 by Brajesh Mishra.

The ministry also said for the first time that the chopper deal has been put on hold with all payments to the firm being formally frozen.

The drastic action on the deal however came on Friday when the government put out a short statement to say that the deal has been cancelled and that a show cause notice has been served on AgustaWestland to terminate the contract. The government had taken a decision to recover the money and return the choppers, just three days after the CEO was arrested.

Also on Friday, the Indian Express reported that the web of defence agents involved in the deal went beyond the VVIP chopper. Christian Michel who got Euro 30 million was also a commission agent for French aircraft manufacturer Dassault between 1996-99. He had a contract for 2.5 percent commission for a deal to sell Mirage 2000 fighters to the Indian Air Force.

While revelations on the scam will keep on unfolding, the express reported on Saturday that despite claims by the MoD that it made all efforts to investigate the case ever since it was first reported by the newspaper in February 2012, it had ignored a CVC query for details on the procurement. The CVC query had gone In October, asking MoD for the contract details on the basis of an Express story that was carried on October 22.

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